When one company acquires another or when two companies merge, it involves what is known as the general succession of rights and obligations. On the day of the merger, the acquiring company or the newly established one (as a result of the merger) assumes all the rights and obligations of the company being acquired or the companies merging to create a new company, as stipulated in Article 494 § 1 of the Commercial Companies Code. This also applies to rights and obligations within the field of labor law because mergers involve what is known as the “transfer of an establishment,” as referred to in Article 231 § 1 of the Labor Code. Does the same apply to employment relationships with foreign workers?
Transfer of an Establishment and Employment of Foreign Workers
To employ a non-European Union or European Economic Area citizen in Poland, their employment must be legalized. In general, the employer applies for a work permit, but in certain situations, it is possible to authorize work based on a declaration, and in the case of Ukrainian citizens, through a subsequent notification. If a foreign worker, along with the work permit, applies for temporary residence due to employment, the foreign worker themselves submits this application, not the employer. In any case, the legalization of employment pertains to a specific employer. In the event of a change in the employer, a new document is required. So, if an employer is involved in a merger (is being acquired) or a merger process, should new documents be sought?
Merger/Acquisition of a Company and Work Permit
According to Article 88f § 1a of the Act on the Promotion of Employment and Labora Market Institutions, the acquisition of an employer or part of an employer by another employer (transfer of an establishment or part of an establishment to another employer) does not require the issuance of a new work permit, provided that the scope of duties performed as part of the employment does not change. If only the working hours increase, along with a proportional increase in compensation, a new permit is also not necessary. However, it is a condition to maintain the same scope of duties performed in the position. Note that the employer must notify the voivode who issued the permit of the transfer of the establishment within seven days from the registration of the merger/acquisition in the National Court Register.
Merger/Acquisition of a Company and Unified Permit: Temporary Residence and Work
Regarding the unified permit for temporary residence and work, applied for by the employee, a similar regulation is found in Article 119 of the Act on Foreigners. According to this provision, the acquisition of an employer or part of an employer by another employer (transfer of an establishment or part of an establishment to another employer), while retaining the scope of duties or increasing the working hours with a proportional increase in compensation, does not require a change or issuance of a new unified permit for temporary residence and work. What about the obligation to notify? It exists but, in this case, it is the employee who initiates the procedure for the unified permit. A foreigner staying in Poland based on such a permit should notify in writing the voivode who issued the decision within 15 business days about the loss of employment with any of the entities mentioned in the permit. This means that they should inform the authority that they have formally lost their job with the company being acquired or involved in the merger, but their employment is being continued by the acquiring company or the newly established one.
Merger/Acquisition of a Company and Declaration of Work Assignment or Notification
In the context of employing foreigners under the simplified procedure, there are no specific regulations addressing the transfer of companies directly. It is unclear whether the absence of regulations regarding the transfer of an establishment in the case of work assignment declarations and notifications results from an unintended gap or intentional legislative action. In this situation, it seems reasonable to assume that the acquiring company or the newly established one automatically steps into the role of the employer in such legalized employment relationships, and no notification is necessary. However, some employers, in an abundance of caution, choose to send the appropriate notification in this regard.