Sale or transfer of business (statutory assignment)
Version 2.3
February 2010
Sale or transfer of business (statutory assignment) [PDF 62kB]
What is it?
When businesses are sold or partnerships are dissolved, and apprentices or trainees are involved, a statutory assignment (an automatic transfer), of a registered training contract may be appropriate. As the statutory assignment is automatic in certain situations, the original employer, the new employer, and the apprentice or trainee will not have to cancel the original training contract and enter into a new contract.
A probationary period does not apply in cases of statutory assignment.
The Vocational Education, Training and Employment Act 2000 provides that statutory assignment of a registered training contract occurs in the following circumstances.
If the employer's business is sold or disposed of to someone else ('the purchaser'), who agrees to continue to train the apprentice or trainee under the registered training contract?
Both the employer and the purchaser are obligated to give the Department of Education and Training (DET) written notification of the sale of business and the purchaser's agreement to continue training the apprentice or trainee under the training contract. This written notice must be sent to DET within 14 days after the sale occurs.
The Assignment/change of legal name form [PDF 134kB] on the Apprenticeships Info website is available for use as the written notification.
The training contract is taken as assigned to the purchaser on the day agreed between the employer and the purchaser.
Where the purchaser does not agree to continue to train the apprentice or trainee under the registered training contract, the original employer must apply to DET to cancel the training contract.
More information on cancellation - mutual agreement on the Apprenticeships Info website.
More information on cancellation - application by one party on the Apprenticeships Info website.
Where the employer is in partnership, the partnership dissolves, and a person who was a partner prior to dissolution continues the business
The training contract is taken as assigned to the person when the winding up of the affairs of the dissolved partnership is complete. The new employer must provide written notification to DET within 14 days of the dissolution of the partnership. The Assignment/change of legal name form on the Apprenticeships Info website is available for use as the written notification (see above).
Where the employer is a partnership, the partnership dissolves, and the business is continued under a new partnership by two or more persons who were partners prior to the dissolution
The training contract is taken as assigned to the new partners when the new partnership begins. The new employer must provide written notification to DET within 14 days of the dissolution of the partnership. The Assignment/change of legal name form on the Apprenticeships Info website is available for use as the written notification (see above). The training contract is taken as assigned when the new partnership begins.
Partnerships completely dissolved
Where the employer is in partnership, and the partnership dissolves, and neither of the above scenarios occurs, the original employer must advise DET so that the training contract can be cancelled.
Advising the training organisation
Where statutory assignment occurs, the new employer and the apprentice or trainee must advise the supervising registered training organisation, and arrange for a new training plan to be completed.
If the assignment results in a change of the supervising registered training organisation, a new training plan must be developed and signed by the parties. DET must also be advised of the change of training provider. More information on the process involved in changing the training contract on the Apprenticeships Info website.
Who to contact?
For further information, contact Apprenticeships Info on 1800 210 210.