SSS · Transaction Advisory

Do a demerger or a change of legal form affect employees and contracts?

As a rule yes, but most relationships continue without interruption. In a merger, a demerger or a change of legal form, assets, rights and obligations pass to the new structure largely by u…

Updated · July 20261 min readCategory · Transaction Advisory
Short answer

As a rule yes, but most relationships continue without interruption. In a merger, a demerger or a change of legal form, assets, rights and obligations pass to the new structure largely by universal succession under the Turkish Commercial Code (No. 6102). For employment contracts the transfer-of-workplace provisions in Article 6 of the Labour Law (No. 4857)…

As a rule yes, but most relationships continue without interruption. In a merger, a demerger or a change of legal form, assets, rights and obligations pass to the new structure largely by universal succession under the Turkish Commercial Code (No. 6102). For employment contracts the transfer-of-workplace provisions in Article 6 of the Labour Law (No. 4857) apply: the employment relationship continues, with the employees’ rights and their accrued seniority preserved.

The exposure sits in the commercial contracts. Change-of-control clauses, and clauses prohibiting transfer, can give the counterparty a right of approval or a right to terminate. So we scan the critical supply, credit and licence agreements before the transaction is structured, and put the approvals and notifications that turn out to be needed into the transaction plan — which is what stops an unexpected termination arriving in the middle of it.

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This content is for general information only and does not constitute legal advice. Please contact our team for an assessment of your specific circumstances.

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