AUSTRALIA Law and Practice Contributed by: Alberto Colla, Keith Tan, Hugh McDonald and Dean Zinn, MinterEllison
Significant reforms to Australia’s merger clear - ance regime are imminent (see 3.2 Significant Changes to Takeover Law ). With effect from 1 January 2026 (with transitional arrangements available from 1 July 2025), Australia’s voluntary notification regime will be replaced by a manda - tory and suspensory model under which trans - actions that satisfy certain prescribed thresholds The Fair Work Act 2009 (Cth) governs Australia’s labour or industrial relations laws. This legisla - tion establishes a range of standards for employ - ment conditions and regulates the relationship between employers and employees. Some important considerations for acquirers in relation to labour laws during M&A transactions are set out below. must be notified to the ACCC. 2.5 Labour Law Regulations • Transfer of business: If a business is sold by way of an assets transfer and the employees accept employment with the new owner, the new owner must recognise their prior service with the old employer to determine entitle - ments such as annual leave and personal/ carer’s leave. • Redundancy: Employees may be entitled to redundancy or severance pay if made redundant due to a business acquisition. The amount is usually based on the employ - ee’s length of continuous service with the employer. However, the employee may not be entitled to redundancy pay if the employee was offered employment with the new owner and refused. • Unfair dismissal: Certain classes of employ - ees who believe they have been unfairly dismissed can apply to the Fair Work Com - mission for a remedy. Any dismissals relating
to a business acquisition must be carried out lawfully. • Long-service leave: Long-service leave enti - tlements are based on the laws of each state and territory and can sometimes be complex in a business transfer situation. Generally, the new employer takes on the liability for employees’ accrued long-service leave. • Superannuation (pension): Employers must contribute a minimum percentage of each eligible employee’s earnings (currently 10%) to a complying superannuation fund. This obligation continues even if the business is sold or transferred. 2.6 National Security Review FIRB reviews certain foreign investment pro - posals, including mergers and acquisitions, to determine whether they are contrary to Austral - ia’s national interest. This entails considering the impact of the proposed investment on national security. In January 2021, a new national secu - rity regime for Australian foreign investment commenced. Under these reforms, the follow - ing apply: Mandatory Notification Foreign persons must obtain prior FIRB approval for starting or investing in “national security busi- ness” , regardless of the foreign person’s coun - try of origin and the investment’s value. This includes businesses in sectors such as defence, telecommunications, and critical infrastructure (such as energy, water and ports). Last-Resort Power The Treasurer has the ability to reassess pre - viously approved foreign investments where subsequent national security risks emerge. This power can be used to make divestment orders and unilaterally impose a new condition or vary existing conditions, even after FIRB approval.
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