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The company I work for, CompanyA, was recently taken over by CompanyB and all CompanyA employees were asked to sign new contracts which gave us better benefits than we previously had with CompanyA. On the contract it was defined as a contract between myself and CompanyB. I was happy with the contract so signed it and returned it.

Today, several months after returning the new contract, HR have contacted me to say that the contract was wrong and should have been an agreement between CompanyA and myself, and not CompanyB. HR have asked me to sign another letter to confirm they can make the change. This made me wonder why this would be so important as surely we are all part of the happy CompanyB family, and whether this was something I should worry about? For example if they were considering closing CompanyA would this make things easier?

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    Any idea this is only for you for all other employees? Also, the HR might provide a better answer on this than any of us here. – Sourav Ghosh Sep 28 '20 at 13:42
  • I don't know at the moment, but I'm trying to find out. Ah, I didn't see there was an HR forum. I'll ask there then. Thanks. – Moz Sep 28 '20 at 13:44
  • Does companyB have limited liability with respect to companyA? – Daniel Hatton Sep 28 '20 at 14:43
  • "HR have contacted me to say that the contract was wrong and should have been an agreement between CompanyA and myself," Are you the only employee from CompanyA that received this communication? – sf02 Sep 28 '20 at 15:49
  • Your employer is company A so it could just mean the wrong contract was sent out and they need you to sign an amendment. Without knowing who else this affects it's difficult to advise, if you were one of a few who will be staying with company A it could mean they could be selling company A and you'll be TUPE'd over. – Monstar Sep 28 '20 at 16:01
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You did not state a country, but just one important thing from Germany:

At my old company they changed from CompanyA to CompanyB as well. I was the only one who refused to sign the new contract. It was the same salary and the same benefits, so why would I sign it? Half of my team got layed off with minimum notice (2 weeks, in Germany 3 month is usual and you need a good reason to lay someone off at all).

This was only possible because their probation period (Probezeit) started again because the company name changed. So if any of this might apply to you, be careful.

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Yes. Change of anything major within companies is usually followed by THE layoff. That includes rebranding, change of hands, merger-splitter. If I were you, instead of worrying about my current position I would already start searching for a new one. Think about IBM, first step to the rebranding was laying off their current staff.

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    Definitely a realistic consideration. – Mike Robinson Sep 29 '20 at 15:15
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I suspect that was just an oversight on the part of the HR/legal department preparing the new contracts. Maybe HR in CompanyB was requested to send the replacement contracts to your company but forgot to change the contract's header. The HR in your company didn't catch this or maybe thought this is how it works.

After all, acquisitions and mergers are something that most employees may only experience once in their lifetime.

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If company A still exists, then it suggests the "takeover" was company B buying all the shares of company A, rather than companies A and B being merged into a new larger company B.

If that's the case, then the problem at the moment is that you aren't actually an employee of the company you are working for. You're an employee of the parent company. This could have many implications for your employment - who should you report to, who should be paying you, who your HR department is, which pension scheme you should be paying into.

HR have spotted that there's a problem, and are looking for a quick fix.

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There is big overhaul going on, large changes are usually followed by layoffs, so yes, you should be worried.

I am speaking from own experience. My previous company had a merger and about 30% of staff was laid off. Now add all the economic mess caused by COVID19 and you are looking at the layoff.

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    It is true that mergers are usually followed by layoffs since the combined company does not need duplication of roles. Far better to walk out the door than to be walked out. – Mike Robinson Sep 29 '20 at 15:16

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