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How to Consider Employee Settlement Issues in the Early Stage of Merger & Acquisition Deals? By David Wang Jingan Yang 2018-01-24

1.前言

 

Introduction 

在目前中国律师界实践中,并购律师在大型的并购案件的早期就介入商业合同的谈判和起草,但对于涉及大规模员工安置的案件,劳动法律师却往往仅在合同签订后的执行阶段才实质性介入。大家往往容易忽略的一个问题是,并购交易结构的设计、合同条款的内容和谈判过程都有可能会对后续的员工安置产生重大影响。如果并购交易律师能在案件前期就充分考量这些因素,将会有助于员工安置的稳定进行,也能帮助客户节省不少交易成本。下面特举一案例予以说明。

In the current Chinese legal practice, merger and acquisition (“M&A”) lawyers will be engaged in the large-scale M&A deals at the outset, i.e. when the M&A agreement is negotiated and drafted. However, employment lawyers will normally only participate substantially in the deal after the execution of the M&A agreement in order to implement the employee settlement work.  This may result in a problem which is normally ignored by companies, i.e. the design of the structure of the merger and acquisition deals and the content and negotiation process of the M&A agreement may have a significant influence on the follow-up employee settlement work. If M&A lawyers can consider these issues at an early stage, the subsequent employee settlement project will be implemented more smoothly and it will save much transaction cost for companies.  The case below illustrates this point. 

 

2.案例简述(注:为避免披露客户商业信息,以下具体细节有虚拟部分)

 

Summary of the Case (Please note some detailed information below is fictional for confidentiality purpose.)

并购交易的买方是一家从事第三产业的知名国企(以下简称“收购方”),欲收购一家中外合资公司(以下简称“公司”),从事制造业,公司的大股东为外资,小股东为国企。

The acquirer (“Acquirer”) is a well-known state-owned enterprise engaged in tertiary industry who intended to acquire a Sino-foreign joint venture company engaged in manufacturing industry (“Company”). Majority of the Company’s equity was held by a foreign shareholder and the minority shareholder is a state-owned PRC enterprise.

 

出于诸多并购交易的考虑,股权转让分三步进行:

Out of various transaction considerations, the equity transfer was structured into three phases: 

1.

 

外方股东先向收购方转让超过50%的股权,使收购方取得控股权;但因为收购方缺乏管理制造业企业的经验,在收购方取得公司100%股权之前的过渡期内,外方股东仍持有极小部分的股权,继续管理公司的日常运营;

transfer of more than 50% shares held by the foreign shareholder to the Acquirer, so that the Acquirer became the controlling shareholder; since the Acquirer was inexperienced in managing manufacturing enterprises, the foreign shareholder kept holding a minimum portion of shares and continuing to manage the Company on a daily basis in the transaction period before the entire 100% shares of the Company was transferred to the Acquirer;

2.

 

随后,中方股东通过挂牌竞拍的方式向收购方转让其持有的全部股权,以实现中方彻底退出(但这一步骤因为竞拍中可能出现出价更高的第三方而存在不确定性);

transfer of all shares held by the Chinese shareholder to the Acquirer through bidding and auction, after which the Chinese shareholder would completely quit from the Company (however, this step cannot be guaranteed because a third party other than the Acquirer might win the bidding in the auction by offering a price higher than that of the Acquirer);

3.

 

由于收购完成后公司将从生产型企业转型为第三产业企业,收购方要求公司与现有的所有员工解除劳动合同,安置事宜由外方全权处理,在中方退出后启动。公司所有员工的劳动合同解除后(或收购方届时认可的其他条件成就时),外方股东方向收购方转让剩余的股权,收购方实现100%控股。

Since the Company would be changed from a manufacturing enterprise into an enterprise engaged in the tertiary industry, the Acquirer required the Company to terminate labor contracts with all of its employees. The employee settlement work would be handled by the foreign shareholder after the completion of the Chinese shareholder’s equity transfer.  After termination of all employees’ labor relationships or achieving any other settlement results acceptable to the Acquirer, the foreign shareholder could transfer the remaining shares to the Acquirer and the Acquirer would become the sole shareholder of the Company.   

 

这一并购交易本身比较复杂,流程较久,因为涉及三方,其中两方是国有企业,另一方是境外上市公司。谁先转让,何时转让,一次转让多少都是三方利益博弈的结果,考量因素有中国法下国有资产处置的特殊规定,各方对商业风险的预判和分担,上市公司公布年度财务报表的需求,以及中国外汇、税收等方面的实践操作要求等。

The deal was complicated and prolonged because it involves three parties, two of which were state-owned enterprises in China and another was an oversea listed company. When deciding which party shall transfer first, when and how many shares should be transferred each time, the parties have considered many factors, such as the special regulations on the disposal of state-owned assets under PRC law, each party’s judgment on potential business risks of the deal and sharing of such risks among the parties, the need to announce annual financial statements by listed companies in the year end, as well as compliance with practical requirements of PRC foreign exchange control and tax payment.  The final arrangement is the result of compromises among three parties.

 

在这一案件后期实施的过程中,员工安置成为了最艰难、历时最久的环节。员工坚持要求公司补偿的金额远超过中国法下规定的解除劳动合同的补偿金。这背后有诸多的原因,主要是员工人数众多,工作年限普遍较长等员工特征决定的,但是并购交易本身对员工的心态也有很重大的影响,因为员工从并购交易中获取的一些信息提高了他们对补偿金数额的预期。

In the implementation stage of this deal, the employee settlement work became the most difficult and stalled step. Employees requested an extremely high compensation which far exceeded the compulsory compensation amount for termination of labor contract under PRC law. Many factors caused this situation, especially the large number of employees involved, long service years of employees and other employee characteristics.  However, the acquisition deal itself had a major impact on employees’ expectation because the information known by the employees during the transaction increased their aspiration on the possible amount of severance fee. 

 

(1)股权转让价款公开挂牌竞拍

Public Bidding of Share Transfer Price

首先,由于中方股东是一家国有企业,为避免国有资产流失,其股权转让依法必须通过公开挂牌的方式进行。本案中根据产交所的要求采纳了网络挂牌竞拍程序,任何公众都可以在网上看到竞拍的全过程。竞拍程序发生在大股东已经出售了公司控制权,小股东又决定出售其持有的全部股权之时,公司究竟何去何从是员工最迫切关心的问题。可以想见,公司的很多员工都一起围观了这一在线竞拍过程。

First of all, since the Chinese shareholder was a stated-owned enterprise, its equity transfer price shall be put up forbidding in order to prevent the loss of stated-owned asset.  In this case, the bidding process was conducted online according to the requirement of the local Assets and Equity Exchange and thus the public could observe the whole process online.  This online bidding occurred at the moment when the previous controlling shareholder had already transferred the majority of its shares and now the minority shareholder decided to sell all shares held by it as well. So which company will obtain these target shares became the top concern of the employees.  When the result of the bidding would decide the fate of the Company, it was predictable that many employees of the Company watched this online bidding process. 

 

包括收购方在内有多家公司一起参与网络竞拍,短短的几小时内,转让价款上涨了好几千万。见证了价格在短时间内飙涨后,再客观理性的员工也会忍不住去想他们是否能从股权转让价款,或者至少竞拍溢价中分到一部分钱,部分员工由此认为经济补偿金应该是人人拿到一百万。

Several companies, including the Acquirer, participated in the online bidding process. The transfer price jumped by RMB several ten millions within several hours.  After having witnessed the skyrocket of such price, even the most objective and rational employee couldn’t help wishing to share a piece of cake in the transfer price, or at least in the bidding premium. Some employees even held that the amount of severance fee should be 1 million per person. 

 

虽然抽离出这一事件本身,旁观的大部分人都能理解股权转让价款的多少与协商解除劳动合同的经济补偿在法律上是两个层面的事情,但是作为对公司做出了长期贡献且面临失业困境的员工而言,很难以如此客观而冷静的态度面对。从他们的角度而言,股东出售股权获取了超额利润,而他们则因此丧失了饭碗,股东与员工进行部分利润分享,是再合理不过的事情。

Although from the legal perspective, most spectators can logically conclude that the share transfer price has nothing to do with the amount of severance fee, it was very hard for the employees, who had made long-term contributions to the Company and faced with the upcoming unemployment crisis, to behave and respond in such an objective and calm way.  From their perspective, they felt they were fully entitled to share the profit gained by the shareholders through the share transfer because such profit was gained at the cost of their jobs.

 

(2)收购协议中股东为员工安置做出的预算

The Shareholders’ Budget for Employee Settlement Work Contained in the M&A Agreement

当公司股东和收购方磋商收购协议条款时,一个重要议题就是哪一方来负责员工的安置以及安置成本如何分担。作为合资企业,成本理应由中外股东双方根据股权比例分担,这点无需多言。但是,在合同谈判阶段,很难预测最终需要多少成本,因此双方必须想出一个方案来分摊风险。经过磋商和博弈,双方同意:(1)外方全权负责员工安置事项以及由此产生的所有成本、风险,包括政府沟通、维护厂区安全、员工谈判及合同的签订、员工离职补偿金的支付、聘请任何专业第三方的成本以及后续潜在诉讼争议的应对等等;(2)作为中方可以退出参与员工安置事宜,不承担任何风险的对价,中方股东愿意按照一个非常高的补偿金总额(远高于合理预期,以下简称“超高额”)来承担相应比例的成本。这一协商结果,在商业上是具有合理性的,是双方对交易风险的分配。

When the shareholders of the Company and the Acquirer were negotiating details of the M&A agreement, one major topic was which party should be responsible for the settlement of the employees and how the settlement cost should be incurred.  It was fair that the Chinese shareholder and the foreign shareholder should apportion such cost according to their respective shareholding ratios.  The difficulty was that the final and actual cost cannot be predicted in advance.  So, there should be a method to share the potential risks.  After negotiation, it was agreed that: (1) the foreign shareholder shall be solely responsible for handling the employment settlement work and bear all costs and risks arising therefrom, including communication with government, maintaining the security of the factory, negotiating with the employees and signing contracts with them, paying severance fee to employees, bearing costs to hire any third party professionals and coping with any potential legal disputes; and (2) as a consideration to exit from the employee settlement work and bearing no risk at all, the Chinese shareholder was willing to calculate its proportional cost based on a very high amount of total severance fee (much higher than reasonable expectation, hereinafter, the “Extreme High Amount”). This negotiation result is an allocation of transaction risks between both parties and has its business rationality. 

 

虽然收购协议谈判是在股东层面进行,公司人员没有参与,但中方股东为员工安置事项承担的赔偿金总额却仍然不胫而走,最终为公司员工所知晓。因为中方在交易中按照超高额为前提承担了对应的成本,于是,员工“默认”股东的预算就是这个超高额,并把这个超高额,而非公司向他们提出的高于法定标准的协商解除方案,视作了谈判起点。他们深信,只要施加的压力足够,即使这个超高额也是可以被突破的。至于股东双方之间为什么会形成这一个预算,这背后的商业原因是什么,则不是员工所关心的问题。总之,并购谈判过程中泄露出去的中方股东承担的员工安置成本让公司在协商解除过程中一直处在非常被动的位置,无法切入正常的谈判区间与员工进行协商。

Although the M&A agreement was negotiated by the shareholders and without any company employee’s participation, the total amount of severance fee borne by the Chinese shareholder for the employment settlement work was still leaked to the employees of the Company.  Since the cost borne by the Chinese shareholder was calculated based on the Extreme High Amount, the employees took the Extreme High Amount as the shareholders’ budget directly.  In the negotiation process, they regarded this Extreme High Amount, instead of the compensation amount as proposed by the Company which was above legal standard, as the negotiation threshold.  They even pushed for more because they thought a budget could always be exceeded as long as enough pressure was imposed.  Employees did not care about how the so called budget was calculated and whether there was any business consideration behind such budget.  In summary, the leakage of the total amount borne by the Chinese shareholder for the employment settlement work placed the Company in a very passive position in the whole negotiation process and made the Company unable to negotiate with the employees in a normal range.

 

3.实践建议

 

Practical Suggestions 

以上案例充分说明了并购交易的协商和实施过程与后续的员工安置息息相关,公司及交易律师必须引起充分重视。根据我们团队同时从事并购和劳动法案件的相关经验,对于后续会发生大规模员工安置的并购案件的操作提出以下实践建议:

The above case fully illustrates that the negotiation and implementation process of an M&A deal can easily affect the subsequent employee settlement work. Companies and M&A lawyers shall pay special attention to this fact. Based on our team’s rich experience in handling both M&A deals and labor law cases, we hereby provide the following practical suggestions for dealing with M&A deals which involves large-scale employee settlement:

 

首先,在并购交易合同中,对于员工安置事宜,一般不宜约定“一刀切”的结果(如必须在某个时点前完成多少员工的安置)。因为员工安置与商业交易的其他环节有本质区别。商业交易的本质是追逐利益,且很多交易步骤大致可控,例如何时支付股权转让款,只要账面上有资金,且中国外汇管控上没有障碍,是可以约定明确的完成时间和罚则的。但员工安置的本质是人和情感,不应期待其过程和结果完全受交易方所控制。所以,交易方宜约定各方应尽最大努力实现某一目标(例如拟定协商解除对象、提前退休对象,转岗对象等),如果不能实现部分目标,各方应及时协商替代解决方案。需要强调的是,无论根据合同是哪一方负责员工安置事宜,在金钱上可以划清责任,但在员工应对上,无论是收购方还是出售方,任何一方都很难独善其身。

First of all, as to the employee settlement work, it is usually not recommended to agree on a simple and fixed result of the employee settlement work (e.g. how many employees have to be settled before a certain deadline). Because there is substantial difference between the employee settlement work and other steps of a business deal.  The essence of a business deal is to pursue interests and benefits and most transactional steps are generally controllable.  For example, the date to complete the payment of share transfer price and the punishment for non-compliance can be specified in the agreement as long as there is sufficient fund in the bank account and there is no obstacle under PRC foreign exchange control policies. However, the essence of employee settlement work is about understanding human nature and emotions. The transaction parties shall not expect to fully control the process and its results. Therefore, it is better for transaction parties to agree that they shall try their best to achieve certain target (e.g. propose targets for termination through consultation, early retirement or change of positions) and when part of the target cannot be realized, the parties shall promptly negotiate for an alternative solution. We would like to emphasize that, no matter which party is contractually responsible for employee settlement work, only the pecuniary responsibility can be divided.  It is very difficult for any involved party, either the acquirer or the seller, to stay in a safe harbor and be immune from responding to employees’ emotions and requests.

 

其次,为避免交易信息泄露影响员工期待,交易各方应当严格限制参与并购交易谈判的人数及级别。如有可能,要求所有参与者签署保密协议,承诺其不会向任何第三方披露在谈判过程中取得的任何商业信息,包括收购方的投资人背景,商业预算等。

Secondly, in order to avoid disclosure of deal information which may affect employees’ expectation, the parties should strictly limit the number and level of persons who participate in the M&A deal negotiation and, if possible, request the participants to sign a confidentiality agreement ensuring that they will not disclose any commercial information received (e.g., the background of the acquirer’s shareholders, business budget, etc.) during the deal negotiation to any third party.

 

再次,对于员工的安置需要一定的周期应形成共识,在设置交割条件时应保持足够的灵活性,尤其是负责员工安置的一方,如果将员工安置目标的100%完成作为收取部分股权转让款的条件,很可能会导致该部分转让款的收款延期。

Thirdly, it is important for parties to reach consensus that it may take a long time to complete the employee settlement work and enough flexibility shall be left when setting closing conditions in the agreement. Especially for the party which is responsible for employment settlement work, if the conditions for receiving part of the equity transfer price include the 100% completion of the employee settlement target, the receipt of such equity transfer price may be delayed.

 

最后,负责员工安置的一方需对在并购交易实施过程中要留任哪些员工予以事先规划,例如生产交接、财务、人事、客户沟通等方面所需人员。对于这一部分员工,其劳动关系如何处理,在员工安置计划公布后如何激励其坚持在岗工作等,都需要提前想好,这会对整个员工安置过程是否安全、稳健产生重大影响。

Lastly, the party which is responsible for employee settlement work shall consider and plan in advance the type and number of employees who shall be retained during the implementation stage of the M&A deal, e.g., employees to handle production wrap-up, financial, HR and customer communication matters.   The party should consider how to handle these employees’ labor relationships and how to encourage them to keep working at their original positions after the announcement of the employee settlement plan.  These issues can have substantial impact on whether the employee settlement work can be conducted safely and smoothly.

 

4.结论

 

Conclusion

总之,优秀的并购交易律师应该能够在交易合同条款谈判初期就充分预估后续员工安置的风险,并设计出为员工、政府和当事方均能接受的合法合理合情的处理方案,并将处理的原则在合同条款中予以体现,以促进后续安置工作的顺利稳定进行。如果客户缺乏劳动法的相关经验,建议邀请劳动法专业律师在并购合同签订前就员工安置事宜提出专项法律意见。

All in all, outstanding M&A lawyers shall fully estimate the risks of subsequent employee settlement work during the deal negotiation process, shall design legitimate, reasonable and fair employee settlement plan acceptable to employees, government departments and companies, and shall incorporate the principles of such employee settlement plan in the provisions of the M&A agreement to ensure that the subsequent employee settlement work can be conducted smoothly. If clients are inexperienced in employment law practice, it is recommended that labor lawyers shall be involved and their opinions shall be listened to before the execution of M&A agreements. 

 

 

 

 

特别声明:

以上所刊登的文章仅代表作者本人观点,不代表北京市中伦律师事务所或其律师出具的任何形式之法律意见或建议。

 

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