MHP sale to TCS: Your rights as an employee — redundancy pay, protection against dismissal & transfer of undertaking

The sale of MHP Management- and IT-Beratung GmbH to the Indian IT corporation Tata Consultancy Services (TCS) has alarmed many employees. Around 4,500 staff members are getting a new owner — and with them, many unanswered questions: Will my job be safe? What will happen to my employment contract? And if jobs are cut or relocated abroad — am I then entitled to redundancy pay?

As a specialist solicitor in employment law, I have spent years guiding employees through company sales, restructuring and redundancies. In this article, I explain what the sale of MHP means from an employment law perspective — and what you can do concretely in such a situation. These principles apply not only to MHP, but to any company sale followed by restructuring.

What happened during the MHP sale?

According to its own announcement, Porsche AG signed the contract for the sale of its consulting subsidiary MHP to Tata Consultancy Services on 24 August 2026. Completion of the acquisition is still subject to regulatory and antitrust approvals and is expected in the coming months. Even before the sale, there had been talk of job cuts numbering in the hundreds at MHP.

Such takeovers by international IT corporations follow a familiar pattern: after a transition phase, structures are merged, duplicate roles are eliminated and tasks are relocated to more cost-effective locations — often abroad. Whether and to what extent this will happen at MHP remains to be seen. But it is precisely for this scenario that employees should know their rights before the first personnel measure is on the table.

Share Deal or Transfer of Undertakings — a crucial difference

The most important legal milestone is often overlooked: When selling company shares (share deal), there is no transfer of business pursuant to Section 613a of the German Civil Code (BGB). If only the shareholders change—as with the sale of MHP shares by Porsche to TCS—your employer legally remains the same GmbH. Your employment contract continues unchanged, and there is no right of objection and no obligation to provide information under Section 613a of the German Civil Code (BGB).

That sounds reassuring at first, but it also means: the new owner can initiate restructuring via the management just like any other employer.

It looks different when to where businesses or parts of businesses are transferred to other group companies or companies are merged. In such cases, a genuine transfer of business pursuant to section 613a of the German Civil Code (BGB) may exist — with far-reaching consequences:

• Automatic transition: Your employment relationship is transferred to the new owner with all rights and obligations.
• No-detriment principle: Collectively agreed working conditions (collective agreements, works agreements) may not be changed to your disadvantage for a period of one year.
• Duty to inform: You must be informed in writing prior to the transfer about the time, reason and consequences (§ 613a para. 5 BGB).
• Right to object: You can object to the transfer within one month (Section 613a(6) of the German Civil Code (BGB)) — in which case you will remain with your previous employer. Caution: If they no longer have any work available for you, redundancy dismissal may ensue. Therefore, an objection needs to be carefully considered.
• Prohibition of dismissal: A dismissal because of of the transfer of business is invalid (§ 613a para. 4 BGB). Dismissals for other reasons — such as an independent restructuring concept — remain possible.

It is often difficult for laypersons to recognise which constellation is present. This is precisely where an initial legal assessment comes in: I examine what is actually planned and what IP rights arise from it.

Job losses and relocation abroad — what applies?

The decision to offshore tasks is a business decision whose expediency the courts generally do not review. That doesn't mean that employees are unprotected. Every dismissal for operational reasons must clear three hurdles:

• Urgent operational requirements: The workplace must actually and permanently cease to exist. If the job is merely renamed or redistributed among colleagues, the dismissal is open to challenge.
• No possibility of continued employment: If there is a vacant, comparable position within the company — even under modified terms —, this takes precedence.
• Selection based on social criteria (Section 1 (3) of the Dismissal Protection Act (KSchG)): Among comparable employees, the employer must select on the basis of length of service, age, maintenance obligations and severe disability. Errors in the social selection process are practically the most common reason why dismissals fail in court.

reconciliation of interests and social plan

If — as is usual with a major reduction in operations or a relocation — significant operational changes are planned, Section 111 of the Works Constitution Act (BetrVG) applies: the employer must negotiate a [blank] with the works council. reconciliation of interests negotiate (whether and how the measure is implemented) and a Social plan settle (balancing of economic disadvantages, primarily through redundancy payments). If the employer deviates from the social plan without compelling reason or attempts to bypass the works council, employees can [claim/sue for] reasonable adjustment claim pursuant to Section 113 of the Works Constitution Act (BetrVG).

For employees, this means that an existing works council is worth its weight in gold in this situation—and the social plan severance payment is frequently only the starting point, not the end of the negotiation.

Severance pay: When you get money — and how much

A widespread misconception: there are in Germany no general statutory right to a severance payment. In practice, however, several roads lead there:

• Redundancy scheme In the case of operational changes, the most frequent source. The formulas are usually based on length of service and gross salary.
• Section 1a KSchG: If the employer offers in the notice of termination that you will receive a severance payment of 0.5 gross monthly salaries per year of service if you waive the protection against dismissal claim, a claim arises upon expiry of the claim period.
• Termination agreement or settlement agreement: Open to negotiation — here, negotiation skills determine the amount.
• Court settlement: The classic. Most employment protection proceedings end with a settlement including severance pay.
• Application for dissolution (§§ 9, 10 KSchG): In exceptional cases, the court dissolves the employment relationship upon payment of compensation.

The well-known rule of thumb — 0.5 gross monthly salary per year of employment — is only a starting point. The crucial factor is the employer's litigation risk: if the dismissal is challengeable (flawed social selection, no genuine redundancy, breach of section 613a(4) of the German Civil Code (BGB)), significantly higher multipliers are negotiable. Those who, on the other hand, 3-week time limit for bringing an action for unfair dismissal (Section 4 of the Unfair Dismissal Act) If this period is allowed to lapse, almost any means of pressure is lost — the notice of termination is then deemed valid, even if it was unlawful.

→ Find out more Severance pay under employment law — your entitlements and Termination & Protection against dismissal

Have you been offered a termination agreement? Don’t sign it straight away

When it comes to restructuring following takeovers, employers tend to rely on Volunteer schemes and settlement agreements — often with short deadlines for acceptance and the note that the offer is valid „only this week“. Do not let yourself be pressured by this. Before signing, these points need to be scrutinised:

• Waiting period for unemployment benefit: Anyone who voluntarily terminates their employment without good cause risks a waiting period of up to 12 weeks (Section 159 of SGB III). You will need to work out whether the severance payment makes up for this.
• Amount and due date of the severance payment — including early termination clauses if you leave early.
• Tax organisation: The one-fifth rule (Section 34 of the Income Tax Act) can significantly reduce the tax liability on the severance payment — the timing of the payment is a factor here.
• Report mark and report text negotiate at the same time — more about the employment reference.
• Time off, remaining holiday entitlement, bonuses and variable remuneration — anything that is still open should be included in the contract.
• Company pension schemes and non-competition clauses Don't forget.

My clear recommendation: Do not sign a termination agreement without having it checked by a solicitor. In most of the cases I review, there’s more to be had — whether it’s the amount of the severance pay, the reference or the period of leave. Here, I explain what is important to bear in mind when drawing up a termination agreement.

Transition company: bridge or dead end?

During larger staff reduction programmes, a Transfer company On offer: You will move to a transfer company for up to 12 months, receive short-time working allowance plus a top-up, and be offered training opportunities. This can be a sensible stopgap — but it also means that you are permanently relinquishing your employment relationship and, with it, your protection against unfair dismissal. Whether the package comprising the transfer company and severance pay is better than taking legal action for unfair dismissal is a decision that needs to be assessed on a case-by-case basis, and one you should not make without seeking advice.

Checklist: What you as an employee should do now

• Keep calm: Your employment contract remains in force as before — a change of ownership alone does not affect it.
• Don’t sign anything in haste — neither termination agreements nor „confirmations“ of new contractual terms.
• Save documents: Employment contract, addenda, performance targets, payslips, request for an interim reference.
• Be aware of deadlines: 3 weeks for the unfair dismissal claim, 1 month for the objection to the transfer of the business.
• Involve the works council and take information from staff meetings seriously.
• Seek advice at an early stage — You’re in the strongest negotiating position before you’ve signed anything.

My conclusion

The MHP sale is a prime example of what employees can expect during company takeovers: initially, little changes from a legal perspective — the crucial decisions are made in the months that follow, when integration plans, voluntary redundancy schemes and restructuring measures take shape. Those who know their rights and seek legal advice in good time negotiate from a position of strength — when it comes to their severance pay, their reference and all the terms of their departure. Those who miss deadlines or sign too hastily are throwing money away.

I am happy to advise you — no-obligation initial telephone assessment, also available at short notice and nationwide by telephone or video: 0351/40436556 or kontakt@kanzlei-reichelt.de.

Note: This post provides general information and does not replace legal advice in individual cases. Information regarding the MHP sale is based on the official announcement by Porsche AG dated 24 August 2026 and public reporting; the completion of the acquisition is subject to regulatory approval.