So you’ve decided it’s time to sell your pharmacy. Stocktake is complete, your financials are looking sweet and you’ve circled the beachside apartment that has your name on it following settlement. But what will happen to your staff? Some of your employees will have been with you for years, and their best interests should be heeded during the process of the sale. As always, these things can differ legally, state to state and business to business, so it’s important to check in with your solicitor or broker early, to avoid being caught unawares. Here, we delve into what to keep in mind – and how to be the best boss you can be, right up to the 11th hour.
For new owners coming in
For most employers coming into a pharmacy business, it makes sense to retain some, if not all the staff during the transfer of the business. This can help make way for a smoother transition – these employees understand the lay of the land, often have community relationships and have shown a commitment to the success of the business.
However, it’s also important to note that there are some cons to maintaining staff during the transfer of a pharmacy. For one thing, they’re used to things being done in a certain way, and could resist change if you’re looking to implement new systems and processes. If they’ve been with the pharmacy a long time, they might remain steadfastly old-fashioned and struggle with updating the business model to maximise efficiencies.
One of the easiest and most respectful ways to navigate this is to interview each of the incoming staff members. Here you can introduce yourself and outline the trajectory and future you envision for the pharmacy, once you step to the helm. By clearly outlining expectations, you can ensure all parties are aware of the direction of the business once under your leadership, and who will be a good fit going forward. This also gives the staff members an opportunity to consider whether they want to remain at the pharmacy themselves.
Here, it’s always a good idea to check in with your solicitor, to ensure you’re not left with any unnecessary legal fees because of a small oversight. An example of this is in some instances, not giving the required notice means you have to pay time in lieu. Not ideal! Legal notice also differs from state to state, as well as how long your staff member has enjoyed employment with you. As a sign of goodwill and to not leave your employees in the lurch, it’s helpful to give them maximum heads up. This provides a base of clear communication, gives them time to think about the transition and if well handled, will ensure a greater sense of loyalty to you right up to the change of hands.
Notice should be given in writing, whether in person at the pharmacy or popped in the post. This should inform each employee that their tenure with you is coming to an end and if they’re being transferred to the new business owner, that they will have to sign a new contract from the settlement date.
When selling your pharmacy, it’s important to note that staff members are entitled to bring their annual, personal and long service accrual across the transfer to the new business. However, the purchaser isn’t responsible for the entirety of this cost, which is something you as the vendor need to be aware of. Having a yarn with your broker or solicitor early on is critical to understand your legal and tax obligations and how you can best serve both your staff and your bottom line come sale day.
Annual leave is often paid for by the vendor at settlement, usually to the tune of around 70%, while personal and long service leave are often negotiated between you and the buyer coming in. So, long before you start shopping around the idea of selling your pharmacy, it’s a good idea to run your eyes over how much annual leave is owed to staff, as the total could come at a significant cost to your bottom line.
For the staff who are not being transferred with the sale of the business, things look a little different.
As they’re not being retained during the settlement, their tenure is based solely with you as a business owner – and as such, need to be treated as if their employment was being terminated during normal business hours.
This means paying out any annual and long service leave owed to them directly (personal and sick leave withstanding). Paying this comes at your discretion, though usually it is deposited in the next pay cycle following settlement.