Merger and acquisition (merger and
Acquisition) is an economic and legal concept, which is the general name of merger and acquisition. China's current laws and regulations have not made a unified definition of "M&A". In theory, the company law translates merger into merger, which means that one company is absorbed by another company, and the latter retains its name and independence and obtains the former's property, responsibilities, privileges and other rights, while the former loses its independent legal person status, that is, absorption merger. Acquisition refers to the act of legally obtaining the ownership of specific property, while acquisition mainly refers to the tender offer to acquire shares related to the enterprise.
Stock) or acquisition of assets.
The act of obtaining control, controlling interest or representation of another company in the form of assets, while the legal person status of the company continues to exist. Therefore,
M&A refers to the merger and acquisition of enterprises. The former refers to the act of an enterprise being absorbed by other enterprises and losing its legal person status, while the latter refers to the act of obtaining the control right of an enterprise by means of asset transfer or share acquisition.
Whether enterprise merger or enterprise acquisition will cause changes in the legal status and economic structure of enterprises, and then cause changes in labor relations.
(A) the impact of enterprise mergers and acquisitions on labor relations
Enterprise merger is enterprise absorption merger. An enterprise expands its business scale by absorbing another enterprise. Absorption and merger will not produce a new enterprise subject, but will make another enterprise's legal subject qualification disappear. Once an enterprise is eliminated, the labor contract signed before its elimination will be affected. After the enterprise is eliminated, one party of the subject of the labor contract will no longer exist, and the labor contract will not be able to continue to be performed. The absorbing enterprise has obtained the substantial commercial assets and business activities of the absorbed enterprise. According to the principle of "debt follows things", it generally undertakes the creditor's rights and debts of the merged enterprise, including the human resources of the enterprise. Because the labor contract is also a kind of contractual debt, while protecting the rights and interests of workers, we should also pay attention to the principle of freedom of contract in the contract, and public power should not interfere with private power too much.
As far as the general civil contract is concerned, when the subject of the contract changes, the contract will be transferred. Labor contracts have strong personal attributes. While protecting the rights and interests of workers, how to ensure that labor contracts conform to the basic characteristics of general contracts and achieve effective unification.
(B) the impact of equity acquisition and restructuring on labor relations
Although the legal status and legal person qualification of reorganization under enterprise merger and acquisition remain unchanged, the operation and development mode of the original enterprise will change because of the intervention of the third party.
Equity acquisition is one of the ways of enterprise acquisition. By purchasing the shares of the target company, the target company can gain control, thus making the target company a subsidiary of the buyer. Therefore, share purchase will not change the legal status and legal personality of the target enterprise. However, the buyer can participate in the actual operation and management of the company in a way permitted by law through equity control. Specifically, the shareholders' meeting can elect its own interest representatives to the board of directors, indirectly making the affairs of the target company under the control of the acquirer. This reorganization of corporate governance structure, because it does not change the legal status of enterprises, will naturally not cause the problem of labor contract inheritance. The shareholder investment enterprise pursues the maximization of interests and controls the target company through equity acquisition. The purpose of becoming a shareholder of the target company is often not to focus on the development and growth of the target company, but to seize short-term interests. Many corporate shareholders will sacrifice the interests of their subordinate enterprises by transferring high-quality assets after gaining control of other enterprises through equity acquisition. Once the interests of enterprises are damaged, the workers are the first to bear the brunt. Subsequently, enterprises will lay off employees or affect the normal performance of labor contracts for various legal reasons such as management difficulties and poor efficiency. In order to prevent shareholders from harming the interests of enterprises and affecting the interests of employees, employees, as stakeholders of enterprises, should participate in the operation and management of enterprises and have certain rights to participate in mergers and acquisitions and know.
(C) the impact of asset acquisition and reorganization on labor relations
Enterprise acquirers sometimes choose asset acquisition instead of equity acquisition, that is, by purchasing some or all of the substantial operating assets and activities of the acquired party, the creditor's rights and debts of the acquired party are avoided. The acquisition of general enterprise assets is only the property resources of the enterprise, excluding the human resources of the enterprise, unless the two enterprises clearly stipulate in the acquisition agreement that the asset transfer is related to the human resources. In this enterprise restructuring mode, the acquirer can avoid generally accepting the non-performing assets and defective resources of the acquired party and save the cost of human resources adjustment. However, whether or not both parties agree that the acquired substantive business assets and business activities, including laborers, will have an impact on the labor contracts of these laborers.
First of all, if the acquisition agreement between the two parties does not stipulate that employees are included in the acquired substantive operating assets or business activities, it can be introduced according to the basic concept of asset acquisition, and the acquirer does not accept relevant employees. This part of the workers have been transferred because of their original business activities, and the labor content agreed in the original labor contract no longer exists. Workers can't provide the labor services stipulated in the labor contract, and the acquired party needs to reorganize its organization to provide new jobs for these workers or terminate the labor contract with them. Secondly, if the substantial assets or business activities in the asset purchase agreement include the corresponding employees, then these employees will enter the acquirer's enterprise with the assets and business activities, and the subject of labor relations has changed at this time. When there is a labor dispute, it will easily lead to the legal problem that the legal responsibility of the enterprise to the workers before and after the acquisition is unclear.
Two, the legal issues of labor contract inheritance in enterprise merger and reorganization
1986 promulgated and implemented Article 44 of the General Principles of Civil Law of People's Republic of China (PRC) stipulates that,
The division, merger or other important changes of an enterprise as a legal person shall be registered with the registration authority and announced. When an enterprise as a legal person is divided or merged, its rights and obligations shall be enjoyed and assumed by the changed legal person. The Labor Contract Law of People's Republic of China (PRC) promulgated in 2008 continued this legislative idea, and adopted a broad inheritance method for the provisions of labor contract inheritance in enterprise restructuring. Article 34 of the Labor Contract Law stipulates that if an employer is merged or divided, the original labor contract will remain valid, and the employer who inherits its rights and obligations will continue to perform it. This is the first time that China has established the principle of automatic succession of labor contracts when enterprises merge or split up in the form of law. It can be seen from this article that in the process of enterprise merger and reorganization, the labor contract will not be changed due to the change of the main body of the employer. The original labor contract will continue to be performed by the new enterprise on the basis of the same content, and the rights and obligations in the labor contract will generally be borne by the new enterprise, and the length of service of the workers will be continuously calculated. The legislature chose this mode entirely from the perspective of protecting workers, and ensured the continuous performance of labor contracts to the maximum extent. But under this principle, there are still many problems.
Lack of choice between employers and employees
According to the generalized inheritance principle stipulated in Article 34 of the Labor Contract Law, the state public power intervenes in labor relations based on the unequal status of employers and laborers, and interferes with the autonomy of the will of labor contract inheritance, which may protect the economic interests of laborers to some extent. However, because workers are deprived of the basic right to choose, once they are unwilling to work for a new enterprise, they can only choose to resign based on the existing legal provisions. According to China's labor contract law, it is impossible for workers to get economic compensation if they resign voluntarily. For enterprises, the purpose of reorganization is to realize the sustainable development and growth of enterprises through the effective allocation of resources. However, due to the improvement of production efficiency, enterprise reorganization will inevitably involve the problem of excess personnel. If the law clearly requires enterprises to accept all workers before reorganization, it will inevitably affect the effect of reorganization. In fact, excellent workers are the great wealth of enterprises. The important purpose of many enterprise reorganization behaviors is to obtain excellent human resources of the target enterprise. Competitive workers are welcome in any enterprise. Giving enterprises the right to choose will help them to grow and develop continuously. If we look at the current provisions of the Labor Contract Law and don't give enterprises the right to choose, there is no way to solve some problems. For example, when an enterprise is separated, the original enterprise disappears, and the new enterprise after separation has overlapping obligations. At this time, how the employees of the original enterprise should be assigned to the new enterprise has become a difficult problem. Does the original enterprise have the right to decide which new enterprise these workers will go to? And do workers have the right to choose which new enterprise to go to? At present, a series of difficult problems cannot be solved in relevant legislation. Therefore, the mandatory provisions of the Labor Contract Law on labor inheritance in enterprise restructuring are too rigid, which is not conducive to protecting the independent personality rights of workers. In enterprise restructuring, employees should have the right to raise objections and make choices. The author thinks that the labor contract law establishes the principle of law application in general, and at the same time, it should give employers and workers more freedom of choice, which can be used for reference by rules of shanghai labor contract adopted by Shanghai People's Congress 200 1. Article 24 of the Regulations stipulates that if the employing unit is merged or divided, the merged or divided employing unit shall continue to perform the labor contract; The parties to a labor contract may modify or terminate the labor contract through consultation; Unless otherwise agreed by the parties, such agreement shall prevail. This undoubtedly established the guiding principle of generalized inheritance, and gave both employers and employees a certain choice in the complicated merger and reorganization.
(B) There are loopholes in the dismissal protection system
Once an enterprise is merged and reorganized, it is very likely to cause a large number of layoffs for the benefit of enterprise operation. However, workers do need employment security to maintain their basic needs and development needs. In order to balance the independent interests of business owners and the post protection interests of workers, the state often protects workers from dismissal and restricts the right to freedom of dismissal of enterprises. There is no concept of "collective dismissal" in China's labor law, but "economic layoffs", which refers to the conditions for the employer to unilaterally terminate the labor contract with most workers. Paragraph 1 of Article 41 of the Labor Contract Law stipulates that in any of the following circumstances, if it is necessary to lay off more than 20 employees or less than 20 employees, but it accounts for more than 10% of the total number of employees in the enterprise, the employer shall explain the situation to the trade union or all employees 30 days in advance. After listening to the opinions of the trade union or employees, the layoffs can be carried out after the layoff plan is reported to the labor administrative department: (1) Rectify according to the provisions of the enterprise bankruptcy law; (two) serious difficulties in production and operation; (three) the enterprise has changed production, major technological innovation or adjustment of business mode, and it still needs to reduce staff after changing the labor contract; (4) Other major changes have taken place in the objective economic situation on which the labor contract was concluded, which makes it impossible to perform the labor contract. At the same time, Article 46 of the Labor Contract Law stipulates that if the employer terminates the labor contract (economic layoffs) in accordance with the provisions of the first paragraph of Article 41 of this law, it shall pay economic compensation to the workers. Through the literal analysis of the above legal provisions, as long as the number of employees laid off by the enterprise is less than 20 and does not exceed 10% of the total number of employees, the obligation to listen to the opinions of employees and report to the labor administrative department can be exempted, and the enterprise can think that the failure to perform the labor contract due to mergers and acquisitions can be attributed to the above situation (4). This is facing the loophole that the company may pay economic compensation if it does not lay off employees according to the regulations. This is why the legislation of the Labor Contract Law has been questioned by some scholars, who think that this part of the legislation is not rigorous. Of course, in the later judicial practice, this was strictly applied. Only "reducing more than 20 employees or less than 20 employees but accounting for more than 10% of the total number of employees in the enterprise" constitutes economic layoffs. Paragraph 1 of Article 4 1 applies. If other enterprises lay off less than 20 employees but not more than 10% of the total number of employees, they cannot be dismissed in batches based on the substantive conditions of economic layoffs, and they can only be dismissed according to other provisions of the Labor Contract Law, and other provisions apply. Nevertheless, the loopholes and defects in the legislative provisions still need to be improved.
In addition, under one of the circumstances stipulated in Article 40 of the Labor Contract Law, the objective conditions on which the labor contract was concluded have changed greatly, resulting in the inability to perform the labor contract. If the employer and the employee cannot reach an agreement on changing the contents of the labor contract through consultation, the employer may terminate the labor contract after notifying the employee in writing 30 days in advance or paying the employee an extra month's salary. This provision does not specify the contents of major changes in the objective situation, so whether the merger and reorganization of enterprises belongs to it, if so, it will be merged and separated from Article 34 of the employing unit, and the original labor contract will remain valid, which is contradictory or partially conflicting. Enterprises can use the above reasons to achieve the purpose of layoffs. However, according to 1994, the explanation of "objective circumstances" in Article 26 of the former Ministry of Labor: force majeure or other circumstances that make it impossible to perform all or part of the terms of the labor contract, such as enterprise relocation, merger and enterprise asset transfer. And exclude the objective conditions listed in Article 26 of the Labor Law. Merger and reorganization of enterprises is a situation in which the objective situation has undergone major changes. This brings challenges to the application of laws and regulations by labor arbitration committees and courts. Of course, if the enterprise dismisses employees on this basis, and at the same time, it has to complete the proof that "the labor contract cannot be fulfilled and the employer and the employees cannot reach an agreement on changing the contents of the labor contract through consultation", then the employees can be dismissed according to law.
(3) The distribution of legal responsibilities is not clear.
Before the reorganization of enterprises, there are sometimes cases of wage arrears, welfare benefits and compensation for work-related injuries, especially the year-end bonus of enterprises is generally paid at the end of the year. Once the enterprise is reorganized, how to bear the above responsibilities between new and old enterprises and between new and old shareholders becomes a difficult problem. The Labor Contract Law stipulates that the labor contract in the process of enterprise division or merger shall be continued to be performed by the employer who inherits its rights and obligations. Assuming that Company A is divided into two companies, namely Company B and Company C, it is unclear whether the wages and industrial injury compensation owed by Company A before the division and reorganization are borne by Company B and Company C or jointly and severally.
Thirdly, the problem of employee placement in enterprise merger and acquisition.
Human resources should be considered as a factor from the beginning of enterprise merger and acquisition, and the status of human resources assets and liabilities should be fully considered before making decisions, and the problem of human resources assets should not be dealt with after making decisions based on financial assets and other factors. Otherwise, you may have to face the iceberg of human resources liabilities. In the classical enterprise theory, people uphold the concept of "who invests, who owns", and the shareholders of an enterprise are regarded as the owners of the enterprise and can dispose of the assets of the company at will. In the negotiation process of enterprise merger and acquisition, the transferor and transferee will only pay attention to the explicit material capital of the enterprise-financial statements. If we simply calculate how much money I spent for how much money, ignoring the human factors in the enterprise, then the actual operation results may be quite different from the expectations. In the reorganization of enterprise assets, people should establish the concept of "big assets" and regard human resources as an asset, which may be both benign and the most difficult to get rid of. Whether an enterprise is reorganized or bankrupt, the first problem to be solved is not the distribution of property, but the placement of employees.
(A) How to determine human capital as assets in company mergers and acquisitions
An enterprise is an economic organization, and its operation, management and technology are all related to people. Both intangible assets and tangible assets need people's operation. People are the most important assets of enterprises, especially knowledge-intensive enterprises, among which excellent technical backbones and skilled workers are high-quality assets, and the value they create for enterprises is often greater than the investment made by enterprises themselves. There are still some surplus employees in the enterprise. When the value they create for the enterprise is less than the investment they make, this kind of human capital becomes the liability of the enterprise and will face the fate of being eliminated in the optimization and reorganization of the enterprise.
(B) improve the collective rights of employees to participate in enterprise mergers and acquisitions
China's current legislation does not clearly stipulate the specific rules for workers to participate in enterprise mergers and acquisitions, but some rules that can be applied by analogy can be found in relevant laws such as Company Law, Labor Contract Law and Trade Union Law. 200 1 When the Trade Union Law was revised, the second paragraph of Article 38 was adjusted to read "Enterprises and institutions should listen to the opinions of trade unions when studying major issues of operation, management and development", and the third paragraph of Article 6 was added "Trade unions organize employees to participate in democratic decision-making, democratic management and democratic supervision of their own units through workers' congresses or other forms according to law". M&A is an important decision for an enterprise to expand its business scale, adjust its industrial chain and optimize its market resources through equity acquisition or asset acquisition. These rules of trade union law naturally become the basic legal basis for employees to participate in enterprise mergers and acquisitions collectively. In addition, with the efforts of the All-China Federation of Trade Unions, the Company Law of 2006 further responded to the trend of workers' participation in corporate governance. The third paragraph of article 18 stipulates that "when studying and deciding on major issues in restructuring and operation and formulating important rules and regulations, the company shall listen to the opinions of the company's trade unions, and listen to the opinions and suggestions of employees through employee congresses or other forms. "This provision also implies that employee representatives have the right to put forward opinions and suggestions in enterprise mergers and acquisitions. The Labor Contract Law of 2008 also stipulates the formulation and revision of important contents directly related to the vital interests of workers, such as labor remuneration, working hours, rest and vacation, labor safety protection, insurance and welfare, employee training and labor discipline. Major changes should be discussed with staff representatives or all employees, put forward plans and opinions, and negotiate with trade unions or staff representatives on an equal footing. In addition, the employer shall disclose or inform the major issues that directly affect the vital interests of workers. Although "Trade Union Law", "Company Law" and "Labor Contract Law" all directly and indirectly stipulate that employees should participate in company mergers and acquisitions, there are no regulations on how to participate and what impact employees will have on the agreement and effectiveness of company mergers and acquisitions in the process of not participating. Many times, workers are finally told that the company has been merged and reorganized, and the relevant right to know and participate has not been implemented and guaranteed at all.
Fourthly, suggestions on building harmonious labor relations in enterprise merger and reorganization.
Although "M&A Agreement" was completed through consultation, negotiation and promotion between shareholders and enterprises, from the perspective of enterprise autonomy, workers, as investors of human capital, should also participate in M&A in order to protect their own interests. In the process of merger and reorganization, an enterprise shall send staff and workers' representatives to participate in the process of enterprise reorganization, so that the management of the transferor and transferee of the enterprise can hear the opinions and voices of the staff and workers in time, alleviate the labor-capital contradiction in time, and prevent the intensification of contradictions and collective confrontation. Enterprises should establish and improve the democratic management system of enterprises with the workers' congress as the basic form, standardize the organizational procedures of the workers' congress, improve the operation quality of the workers' congress, and protect the workers' right to know, participate, express and supervise according to law. Give full play to the role of the workers' congress in the merger and reorganization of enterprises, major decisions of enterprises, and the formulation of rules and regulations directly related to the vital interests of employees. Of course, the social responsibility of enterprises is limited, and the government should functionally intervene, improve the social security system, and avoid imposing the social responsibility of employee placement on enterprises. With the development of corporate social responsibility movement, China enterprises will pay more attention to employees' personal dignity and interests protection when dealing with their relationships. At present, most enterprise managers should change their management thinking. Employees are not only an important part of enterprises, but also legal subjects in equal status with enterprises in labor relations.