Handle with care – managing pharmacy staff when ownership is changing

It’s a common question faced by both those selling their pharmacy, and buyers looking to acquire a new opportunity. What happens to the existing staff?

Navigating what is traditionally a challenging and sometimes awkward transition is never easy, so we’ve pulled together a simple guide outlining exactly what’s expected of all parties.

The Basics

Selling and then transferring ownership of any business across to another proprietor leaves existing employees with a couple of options…

1. Transfer with the business to the new owner(s)

2. End employment with the business

If the shoe is on the other foot – you’re selling your pharmacy and existing staff are to be retained by the new owner – then there’s a few boxes you’ll need to tick before the transaction can be completed.

  • You’ll need to let the new owners know of any contractual, leave, financial or legal obligations you have with existing staff, and if any of those obligations are to be transferred across to them
  • Up to date and accurate employee records will need to be handed over to the purchaser
  • Appropriate notice must be provided to employees letting them know their employment arrangement under you is coming to an end, and that a new employment contract will need to be signed, effective from the date of new ownership

To that end, there’s some obligations and entitlements that a new owner must tend to, and some they don’t. It can be a complicated landscape, so to ensure you’ve covered all bases, it’s worth checking out Fair Work Australia’s fact sheet.

As a rule of thumb, a change of ownership ends an employee’s position, so one non-negotiable thing you must do as an owner is provide appropriate notice or provide payment in lieu of notice.

Letting Go

A whole range of issues factor into the decision to either retain or let go of staff in a transfer of ownership. In some cases, a new owner can see benefit in starting fresh and therefore will have no need to retain staff, in other cases, the legacy and goodwill long-serving staff have fostered with their regular customer base are highly valuable and worthy of retention.

Whichever way its heading, for an outgoing owner, the key to a smooth transition is good communication. In most cases, there’s value in letting the staff know what’s happening at the earliest possible juncture. This to ensure they have been afforded as much time as possible to either look for other employment, or consider signing a fresh contract with a new owner.

Giving Notice

Firstly, and importantly, you must give written notice to your employees. This must be done either in person or via the post.

Secondly and equally as important, this communication must be given with the right amount of notice (time frame). This will vary depending on the employee and the amount of time they have been working in the business.

You can find out more about notice periods at the Fair Work Ombudsman website.


If your employees are transferring to a new owner, the entitlements that you must pay will depend on what you’ve negotiated with incoming owner as part of the sale. If a new owner is unwilling to take on some of the final entitlements owed to your staff, then you’ll have to pay them.

The final entitlements you need to pay your employees will vary depending on several factors, including:

  • The terms of your existing contract
  • The relevant Modern Award
  • The number of employees your business has
  • Whether the employee is entitled to redundancy
  • The state your employee is employed in (if long service leave is payable)

Depending on which side of the transaction you find yourself on, the golden rule when it comes to this delicate issue is maintaining clear and concise communication at all times.

As an owner, you really have very little to lose in giving your staff the maximum amount of time to make their next move. They will appreciate the notice and will have a considered plan for transition when the time comes. Conversely, you’ll have a committed workforce right up until ownership changes hands.

– Jack Brown, NSW Sales Manger and Partner at AP Group

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