Business Sale: What Happens To Your Migrant Workers?

Small businesses (fewer than 20 employees) are the backbone of New Zealand’s economy. 97% of our registered companies are a small business employing nearly 30% of New Zealand’s workforce. The baby boomer generation are reaching retirement age and are looking to sell their businesses, the next generation are considering purchases in their first journey of self-employment or to expand their exisiting offering.

Business acquisition usually looks like the purchase of the vendor’s assets and goodwill, not a share purchase of the existing legal entity. The Employment Relations Act 2000 specifies the requirements for staff members from an employment law perspective, but what happens to Accredited Employer Work Visa (AEWV) holders who have a work visa tied to an Accredited Employer, a specific legal entity?

Up until 06 November the new employer had to apply for Employer Accreditation and a valid Job Check if they did not have it. I worked with business with migrant staff who were going through the acquisition process and many new owners did not have accreditation as the business was newly formed to take over the existing business. Once this was done migrants would need to apply for a Job Change.

This meant that when the acquisition was completed many migrants were in breach of their visa conditions as their employment with their seller of the business ended. Migrants were disadvantaged as they had to stop working. This caused disruption for the new business owners who were busy enough learning all they could from vendors in what is usually a busy transition period.

The good news is this changed on 06 November with an easier transition process. The new employer still needs to have or apply for Employer Accreditation but no longer has to apply for a Job Check. The migrant will still need to apply for a Job Change but they can do so once their new employer has applied for Employer Accreditation, even if it the Employer Accreditation application has not been decided.

With a well planned immigration strategy, it could be possible to have a smooth transition process where migrants do not have to stop work. This would come down to a lot of factors, such as when the business transfer will occur and whether new employment terms have been agreed to by the new business owner and migrant. Getting immigration advice from a trusted professional is critical to ensure a smooth transition. If you are looking to buy or sell a business with migant staff, get in touch today to see how we can make the sale process easier.