Ask Gulf News: Who is responsible for your entitlements after a company acquisition?

Question: I worked for a company for five years until a new company, along with its two subsidiaries, acquired the old company. The new company informed me that I would be transferred to their organisation, so I signed a contract with them and worked for two more years. One month ago, I was terminated and requested my entitlements for the full seven years of service from the new company. However, they refused, claiming that I only worked for them for two years. My question is: who is responsible for my previous entitlements?

Answer: According to Article 48 of the Labour Law, the new company is responsible for your previous entitlements. As the new employer (with whom you signed the employment contract and which acquired the company), it is solely responsible for all employee entitlements both prior to and following the transfer of ownership, from the date the establishment’s data was amended with the competent authorities. In such cases, the service is considered continuous by operation of law from the time the employee began working for the previous employer.

The relevant article states that:
“The employment contracts in force shall remain valid in the event of a change in the establishment’s form or legal status. The new employer shall be responsible for implementing the provisions of those contracts, in addition to executing the provisions of this Decree-Law, its Implementing Regulation and the resolutions issued for its implementation, as of the date of amending the establishment data at the competent authorities.”

Cassation Court Judgment No. 147/2025 (Labour) dated 9/12/2025 established and affirmed that the new employer is solely responsible for all employee entitlements both before and after the transfer of ownership.