If a workplace is transferred from one employer to another, it is important to protect the employees’ rights. The EU has acted to ensure that this takes place.
The Directive regulating this issue (2001/23/EC) emphasises that the transfer of an undertaking does not in itself constitute valid grounds for dismissals. They may occur, however, for economic, technical or organisational reasons, or for certain categories of worker not covered by legislation protecting against dismissal. Rights and obligations under the employment contract or relationship pass from the previous employer to the new one. But a Member State may decide that both of them are to be liable for any such obligations which arose before the date of transfer. Collective agreements continue to apply until they expire or are terminated or replaced. But the period for observing them may be limited, provided it is not less than one year.
Continued observation of rights does not apply, unless Member States provide otherwise, to old-age, invalidity or survivors’ benefits under non-statutory, supplementary pension schemes.
Unless a Member State provides otherwise, the obligation to retain rights and the prohibition of dismissals do not apply to transfers during bankruptcy proceedings instituted with a view to the liquidation of the assets of the previous employer, but Member States must take steps to prevent the misuse of insolvency proceedings to deprive employees of their rights.
Employees' representatives remain in office if the economic entity preserves its autonomy after the transfer. In other cases, Member States must ensure that transferred employees continue to be properly represented until the new representation of employees is reconstituted or reappointed. Representatives must be consulted in good time on any measures envisaged in relation to employees as a result of the transfer. Moreover, representatives and, in certain cases, employees themselves must be informed about the date, reasons and implications of the transfer as well as the measures envisaged in relation to the employees.
The Directive (2001/23/EC) codifies a previous Directive (77/187/EEC) which was amended by a third (98/50/EC).
Directives
Previous Directives:
- Directive 77/187/EEC on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses
- Directive 98/50/EC amending Directive 77/187/EEC on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses
Preparatory Documents
- First phase consultation of Social Partners concerning cross-border transfers of undertakings (June 2007)
- Proposal for a Directive on the harmonisation of the legislation of Member States on the retention of the rights and advantages of employees in the case of mergers, takeovers and amalgamations COM (74) 351
- Proposal for a Directive on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses COM (1994) 300
- Amending proposal for a Directive amending Directive 77/187/EEC on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses COM (1997) 60
- Proposal for a Directive on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses COM (2000) 259
Implementation Reports
- Commission Memorandum - acquired rights of workers in cases of transfers of undertakings
- Commission Report - Directive on Transfer of Undertakings 2001/23/EC
- Memorandum - Rights of workers in cases of Transfer of Undertakings
- Commission Report - Progress with regard to the implementation of Directive 77/187/EEC relating to the safeguarding of employees' rights SEC (1992) 857
- Report on the implementation in Austria, Finland and Sweden of Directive 77/187/EEC Relating to the Safeguarding of the Rights of Employees in the Event of the Transfer of an Undertaking, Business or Part of a Business