27 Apr 2019: I received a Whatsapp message from my ex-staff about what concept or model should he be applying if there is a need to harmonized benefits for 2 organizations in a post merger and acquisition situation. I shared with him that I don't have any concept or model but I have a checklist based on my last 2 working experiences (e.g., a french having a JV with a local Malaysian conglomerate; Swiss organization acquiring a UK organization).
Listed below are my checklist / key-points to consider: -
- Understand the Post Merger and Acquisition agreement, check if the agreement cover the employ of existing employees or just buying the business only (this would mean the employee's employment will be terminated) and the new owner will have an options to offer re-employment to the former employees with a new employment terms and conditions.
- Is the workforce unionism or none unionism?
- Compare and identify both organization employment benefits.
- Understand the country / local employment benefits that are governed by the local regulations. e.g., Employee in Indonesia is entitled to "long service holiday / leave" entitlement (it can be taken or buy-off) while Singapore and Malaysia does not have such regulated benefits.
- Identify the employees' population of the newly merged / acquired workforce are under the scope of the union / under local employment act (EA) and those above the EA.
- Identify special benefits approved by former employer or Personal-To-Holder (PTH) benefits.
- Identify if the benefits are subjected to personal income tax, e.g., in Singapore Per Diem within IRAS (Inland Revenue Authority of Singapore) is tax exempted which in Malaysia, Per Diem is taxable under the JHDN (Jabatan Hasil Dalam Negeri).
- Identify which employment benefits the new employer willing to "buy-off".
- Obtain a reliable source (e.g., Mercer WBEG Report, Mercer Employment Benefits, etc.) on the local employment benefits.
The above checklist are just some of the key-points to consider.
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