When the company you work for is sold, outsourced, or merged, German law does something many expats don’t expect: your employment contract moves to the new owner automatically, with every term intact. Under § 613a BGB you cannot be dismissed because of the transfer, your terms are protected — and you hold a one-month right to object (Widerspruch) that can be either your best strategic card or a serious self-inflicted wound. Which of the two it is depends on facts most employees never check. This article explains how a Betriebsübergang works, what the information letter must contain, and when objecting makes sense.
What counts as a Betriebsübergang
A business transfer occurs when a business or a distinguishable part of it passes to a new owner by legal transaction and keeps its economic identity — the classic asset deal, an outsourcing of a department, the sale of a division, a transfer of a service contract together with staff and equipment. Courts assess identity by the overall picture: tangible assets, workforce taken over, customers, continuity of activity.
The critical distinction:
- Asset deal: the buyer acquires the business itself (machines, contracts, operations). § 613a BGB applies — your employer changes.
- Share deal: the buyer acquires the shares of your employer company. The legal employer — the company — is unchanged, so § 613a does not apply at all: no information letter, no objection right. Your contract simply continues with the same entity under new shareholders.
The automatic transfer — what exactly moves
On the transfer date, the acquirer steps into your employment relationship by operation of law (§ 613a(1) BGB): salary, tenure (Betriebszugehörigkeit — decisive for notice periods and severance formulas), bonus schemes, vacation balance, pension commitments, contractual notice periods. No new contract is needed; signing one is usually against your interest, since „new” contracts tend to reset or dilute terms.
The 1-year protection of collective terms
Terms that governed your employment through a collective agreement (Tarifvertrag) or works agreement (Betriebsvereinbarung) become part of your individual contract at transfer and cannot be changed to your detriment for one year (§ 613a(1) BGB) — unless replaced by another collective agreement applicable at the acquirer. After the year, changes require the normal instruments (agreement or change dismissal with full dismissal protection).
Joint liability
For obligations that arose before the transfer, the old employer remains liable alongside the new one for twelve months (§ 613a(2) BGB) — relevant for unpaid bonuses, overtime, and expense claims.
Dismissal because of the transfer is void
§ 613a(4) BGB prohibits dismissal by the old or the new employer because of the transfer. What remains possible are dismissals on other grounds — a genuine restructuring concept, conduct, illness — under the ordinary rules. In practice the line is fought over constantly: dismissals issued shortly before a transfer „to deliver a lean business” are a classic § 613a(4) violation, attackable by Kündigungsschutzklage within the usual three-week deadline.
The information letter (§ 613a(5) BGB)
Before the transfer, you must be informed in text form about:
- the (planned) date of the transfer,
- the reason for it,
- the legal, economic and social consequences for you, and
- the measures planned regarding employees (restructuring, relocation, training).
The BAG applies demanding standards: the letter must correctly identify the acquirer (name, address, legal form), explain the liability regime between old and new employer, and describe the consequences accurately and specifically for the affected workforce. Boilerplate produced for a hundred deals routinely fails.
The Widerspruch: your one-month objection right
You can object to the transfer in writing within one month of receiving proper information (§ 613a(6) BGB), addressed to the old or the new employer. The consequence: your employment stays with the old employer.
When objecting is dangerous
Here is the trap: if the entire business moved, the old employer has no job for you anymore. The near-certain sequel to an objection is an operational dismissal by the old employer — often with a weak social selection in your favor (there may be nobody comparable left to select among), and often outside any social plan negotiated for the transferring workforce. Objecting „because I don’t like the buyer” without a plan converts protected employment into likely redundancy.
When objecting makes sense
- Acquirer insolvency risk: the buyer is thinly capitalized, a carve-out vehicle, or a known restructuring case. Staying with a solvent transferor — even into a redundancy with a properly funded severance — can beat transferring into a company that fails within a year, when claims are worth little.
- The transferor keeps operations where you could plausibly be redeployed — then the objection preserves employment with the stronger entity.
- Materially worse prospects at the acquirer: announced relocation, pension security concerns, hostile integration plans — weighed against the dismissal risk above.
This is a genuinely strategic decision with a hard deadline. It should be made on facts — acquirer financials, remaining transferor operations, social-plan landscape — not on sentiment.
What to do when the letter arrives
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Day 1: secure and date the letter
The one-month clock (if the letter is valid) runs from receipt. Note the date, keep envelope and letter.
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Week 1: have the letter checked for § 613a(5) defects
Acquirer identity, liability regime, consequences, planned measures. A defect means the window stays open — that changes your entire negotiating timeline.
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Week 2: gather intelligence on the acquirer
Register excerpts, capitalization, track record, integration plans, what the works council knows. The objection decision is only as good as this research. Where a works council exists, its information rights help — see our article on works-council consultation.
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Week 3: decide — transfer, object, or negotiate
Often the best play is neither silent transfer nor objection, but using the objection right as leverage for a negotiated package (retention terms with the acquirer, or a severance exit from the transferor).
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Ongoing: sign nothing that replaces your contract
New „harmonized” contracts after a transfer typically trade away tenure-linked rights. Your old contract transferred automatically — you rarely gain by replacing it.
Worked example
Logistics IT specialist in Cologne, €5,800 gross/month, 12 years tenure. Her division is sold to a private-equity carve-out vehicle. The § 613a(5) letter names the acquirer but misstates the liability distribution and says nothing about planned measures — although a site consolidation is already decided internally.
- Month 0: she does not object; employment transfers.
- Month 5: the acquirer announces relocation of her site 400 km away. Because the information letter was defective, her objection window never started running — she now declares the Widerspruch against the transfer.
- Month 6: the old employer, having no position for her, issues an operational dismissal. She files a Kündigungsschutzklage; we argue defective information, § 613a(4) proximity, and doubtful social selection.
- Gütetermin result: settlement with the solvent transferor at 1.0 monthly salary per year of service — €69,600 — plus garden leave through her 5-month notice period (€29,000 salary value) and a Grade-2 Zeugnis.
Had she stayed silently transferred, she would have faced the relocation-or-dismissal choice against a thinly capitalized employer, with a realistic settlement value closer to €20,000–30,000 — if collectible at all. Benchmark your own numbers with our severance calculation guide.
Frequently asked questions
Can I be forced to sign a new contract with the acquirer?
No. Your existing contract transfers by law. Refusing to sign a replacement contract is not a ground for dismissal — and „signing bonuses” for new contracts are usually priced far below the tenure-linked rights being given up.
Does my tenure reset with the new employer?
No. Betriebszugehörigkeit transfers in full — decisive for statutory notice periods, KSchG protection, social selection, and every severance formula.
The buyer wants to move me onto its worse bonus plan — allowed?
Not unilaterally. Contractual terms transfer; collectively sourced terms enjoy the 1-year protection. Changes need your agreement or a change dismissal (Änderungskündigung) with full dismissal protection — which you can contest.
What happens in insolvency — does § 613a still apply?
Yes, with modifications: the acquirer from an insolvency administrator takes over employment, but liability for claims arising before insolvency opening is limited, and dismissals based on an acquirer’s restructuring concept (Erwerberkonzept) are easier to justify. Objection decisions in insolvency scenarios need particularly fast, particularly careful advice.
Is a Sperrzeit triggered if I object and then get dismissed?
The dismissal comes from the employer, so no Sperrzeit normally applies to the dismissal itself. But the Agentur für Arbeit occasionally probes whether the objection „caused” the unemployment. A documented, objectively reasonable ground for objecting (e.g., acquirer solvency risk) protects you here — another reason to decide on evidence, not instinct.