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?
Staff continuity is one of the most sensitive parts of selling or purchasing a pharmacy. Buyers want clarity, sellers want a smooth transition and staff want certainty. Because pharmacy is a community-focused business, how employment is managed can have a genuine impact on goodwill and customer retention.
Below is a clear guide to what is expected when staff are transferring as part of a change of ownership.
The basics
When a pharmacy is sold, existing employees generally have two options:
- Transfer employment to the new owner
- End employment with the outgoing owner
Where staff are transferring, the outgoing owner must ensure the following is completed before settlement:
- Employment records are accurate and provided to the new owner
This includes classification, pay history, leave balances, performance agreements and award coverage.
- Disclosure of any existing obligations
Such as accrued leave, TOIL, long service leave status, over-award payments or flexible arrangements.
- Notice of termination with the outgoing owner
Employees must be informed in writing that their employment with the seller will cease at settlement and a new contract with the purchaser will commence.
A change of ownership is treated as a transfer of business under the Fair Work Act. This means the outgoing employment ends, and appropriate notice or payment in lieu must be provided.
The new owner may choose to recognise all, some or none of the prior service of transferring employees. What is recognised depends on what is negotiated in the sale contract.
Letting go
Some incoming owners will choose to retain the full team to maintain continuity and community trust, while others may choose a fresh staffing model.
Regardless of direction, the key factor for a successful transition is early and clear communication with staff. This provides:
- time for employees to make informed decisions
- stability during the settlement window
- continued customer confidence
A confidential but timely discussion also reduces anxiety and the risk of unexpected resignations in the lead up to settlement.
Giving notice
Written notice must be provided to employees either:
- in person, or
- by post
Email may accompany formal notice but is not considered a sufficient stand-alone method.
Notice periods depend on length of service and classification under the relevant award. More information can be found on the Fair Work Ombudsman website.
If staff are not transferring, payment in lieu of notice is permitted and commonly used to align with settlement dates and pay cycles.
Entitlements
If employees are transferring, whether the outgoing owner pays out entitlements depends on the commercial agreement reached with the buyer.
If the purchaser chooses not to take on certain liabilities, the seller must finalise them before settlement. Entitlements include:
- annual leave
- personal or carer’s leave recognition
- rostered days off and TOIL balances
- over-award agreements
- long service leave (state-based)
- redundancy (only if applicable under award and business-size thresholds)
Accurate records are critical. Pharmacy workplaces rely heavily on defined award classifications and specific dispensary skill sets, so clarity helps the new owner onboarding staff appropriately on day one.
Pharmacy-specific considerations
Community pharmacies operate in a unique environment where staffing stability directly supports continuity of care. Key considerations include:
- Customer trust and loyalty
Front-of-shop and dispensary staff often hold long-term relationships with regular customers and Webster/DAA clients.
- Professional services
Vaccinations, sleep apnoea clinics, dose administration aids and medication reviews rely on familiar and accredited personnel.
- Operational knowledge
Workflow, QCPP requirements and PBS compliance processes sit with existing staff and are invaluable to new owners.
Maintaining a stable team, where possible, supports a smoother customer experience and protects goodwill.
Final thoughts
Transferring employment during a business sale is more than a procedural step. It is a people transition that requires clarity, fairness and respect.
For both buyers and sellers, the most effective approach includes:
- early and open communication
- compliance with Fair Work requirements
- accurate employment records
- realistic settlement expectations
Handled professionally, the process ensures staff feel respected, the new owner inherits a confident workforce, and customers experience continuity during an important change.
Written by Jack Brown, NSW State Manager – AP Group
AP Group are the leading pharmacy experts in Australia, helping hundreds of pharmacists into ownership every year – our team can help with sourcing finance for your purchase, as well as providing the right legal advice to help you navigate the process.
We connect existing pharmacy owners with over 5000 ready and eager investors via our cutting-edge online Data Room. Our Data Room keeps confidential listing data secure and allows buyers to make informed decisions on each of our pharmacies for sale.
About the Author:
Don’t let the suit fool you. On the weekends you’ll find Jack fly fishing, camping with his kids, rock pooling or cheering for the Tiges (a shame, we know). And just like you’ll find Jack excelling in several outdoor hobbies, you’ll also find he’s excelled across several industries in various roles. From owning small businesses to running bars to working as a strategic consultant for ING — Jack is a man of many talents.
Having bought, built and sold several small businesses over the last 15 years, Jack knows a thing or two about the mechanics of business — and he draws on this experience to help you buy or sell your pharmacy with confidence.
Business aside, Jack has thrived in several senior roles. He worked as a Strategic Consultant for ING (responsible for assessing the existing asset portfolio, feasibility analysis’ and strategic modelling). He also worked as a Strategist and Project Manager at Right Angle Studios, responsible for strategic insights that would inform the overall business strategy. See we told you, a man of many talents.