The finding is generally transaction-ready.
Record the assumptions in the data room and reflect them in the appropriate warranty or condition.
Employment law
Collective bargaining classification in an acquisition: wage and social dumping risks before closing
Collective agreement classification in acquisitions: pay, all-in clauses, back pay, LSD-BG risks and SPA indemnities.
Your law firm
BRANDAUER Rechtsanwälte
Salzburg law firm for corporate, company and transaction law
Every transaction is handled by a coordinated team of lawyers, legal staff and specialists. In company acquisition matters we look at structure, contract, tax and liability together.
10 August 2026 · Mag. Bernhard Brandauer, Rechtsanwalt
In an acquisition it is not enough to ask whether employees transfer. Buyers must review whether the correct collective agreement was applied, classifications are right and wage dumping risks can lead to back pay, penalties or provisions.
This post is not another overview of transfer of undertaking under Austrian employment law. It focuses on pay review, classification, all-in coverage, wage dumping risks and contractual protection before closing.
Review pay risk
Can pay risks be quantified before closing?
Two questions show whether the point needs deeper review before signing or closing.
Already know you want to get in touch? Go straight to the enquiry form.
Are there employee groups with unclear collective agreement allocation?
If the answer is yes, the point belongs in the deal risk list.
All paths at a glance
Overview of all answers.
The finding needs a clear solution before signing or closing.
If documents or responsibilities are missing, the buyer should not move the point into a vague post-closing list. Clarify risk, price effect and contract protection before the next milestone.
Why this is not a general transfer-of-undertaking post
Why this is not a general transfer-of-undertaking post
The post on transfer of undertaking asks whether employment relationships transfer. Collective agreement classification asks more narrowly whether the target paid correctly in the past.
That review matters for price, provisions and indemnities. A stable workforce can become expensive if pay claims were classified incorrectly.
Test classification, overpayment and all-in clauses
Test classification, overpayment and all-in clauses
Due diligence should not stop at sample employment contracts. Actual duties, pay groups, seniority steps, overpayments, all-in clauses and lived working time are relevant.
The post on employee provisions adds the balance sheet effects of leave, severance and time credits.
Employment-law grid
From pay finding to deal consequence
The overview separates finding, review and agreement consequence.
| Point | Review | Consequence |
|---|---|---|
| Collective agreement Correct agreement and pay group? | Warranty and sample test | |
| Pay Overtime, all-in, seniority steps? | Provision or indemnity | |
| Audit Open payroll or wage dumping issues? | Condition or price adjustment |
The concrete drafting depends on the data room, deal structure and specialist advice.
Practical point: This point should not be phrased as a post-closing task without responsibility. If it can affect price, approval or liability, it belongs in the data room and SPA before closing.
Reflect wage dumping risk in purchase price
Reflect wage dumping risk in purchase price
Back pay and administrative proceedings can burden the business case. Buyers should request samples, payroll reports and pending audits without assuming exact penalties if the facts are not established.
False self-employment can increase pay risk. The separate post on freelancers and false self-employment covers that point.
SPA: warranty, indemnity and holdback
SPA: warranty, indemnity and holdback
The SPA should not merely state in general terms that pay was correct. If findings appear, it needs specific warranties, indemnities or a purchase price holdback.
The due diligence checklist helps request documents in a structured way.
Frequent questions
Collective bargaining classification in an acquisition: wage and social dumping risks before closing.
Should collective agreement allocation be reviewed in every acquisition? +
Yes, if the target employs staff. The depth depends on sector, workforce structure and first payroll findings.
Is a wrong collective agreement only an HR issue? +
No. It can trigger back pay, administrative proceedings, provisions and price consequences.
Can the buyer exclude the risk completely? +
No. But sample testing, disclosure, warranties, indemnities and holdbacks can manage it much better.
Going deeper
Further reading for the review
Transfer of undertaking
Direct follow-up for the deeper review.
Employee provisions
Direct follow-up for the deeper review.
False self-employment
Direct follow-up for the deeper review.
Social security debts
Direct follow-up for the deeper review.
Due diligence checklist
Direct follow-up for the deeper review.
Topics
Collective agreementClassificationWage dumpingEmployment lawDue diligence
Structuring a deal, reviewing a contract, securing the risks?
When buying a company, structure, review and contract decide. Call us directly or send an email, callback within one business day.
Contact
A direct line to the firm.
Address
BRANDAUER Rechtsanwälte GmbH Giselakai 51 5020 Salzburg
Phone
+43 662 6280000