Company Purchase - external contractors can we remove?

[DanB]

The company (lets call this company A) has recently purchased a competitor company (Company B). All employees from company B will be transitioned into Company A.

In Company B there are 5 external contractors whom invoice Company B for their work they provide. As Company A do we need to continue with these contracted employees or can we just say thats but no thanks? What is the legal process that as Company A we need to follow to remove these contractors and what information (if any) should be consider before doing so?

Any feedback is appreciated.

[Moz]

In Company B there are 5 external contractors whom invoice Company B for their work they provide. As Company A do we need to continue with these contracted employees or can we just say thats but no thanks?

I'm quite sure that just because Company B has been acquired by Company A, it does not mean that all of Company B's contracts are null and void.

So what do their contracts say in the section titled "Termination" ?

[DanB]

Unfortunatley I wont be privy to that information until tomorrow - company B is still not providing the documents requested.

[Moz]

Unfortunatley I wont be privy to that information until tomorrow - company B is still not providing the documents requested.

In that case I don't think there is much you can do until you find out.

Most contracts for individual contractors (for labour) are usually for a fixed period and have a minimal termination clause, but it would be wise to check before you do anything.

Worse case scenario would be that there isn't a termination clause and you have to pay out the contract to it's end date!

[Qld IR Consultant]

I agree with Moz. I can't find where contractors have been caught up in a transition of business dispute but thats not to say there hasn't been one, and you certainly don't want to be the first.

[DanB]

I met with the employees yesterday. Only one of them from has a signed contract for there services and includes a termination clause - good news. The other two was simply by verbal agreement, which creates a slight problem. I am of the opinion I could offer them to come under the umbrella of Company A as a permanent employee or terminate their services?