1. Employees’ Rights
Under Belgian law, the transfer of an undertaking (or of a division thereof) is governed by Collective Bargaining Agreement n° 32bis of 7 June 1985.
If a business or a division of a business, forming an economic entity, is transferred to a new employer, so that there is a ‘going concern’ of the activity of the business (division) after the transfer, there is a transfer of undertaking as referred to in CBA 32bis.
2. Requirements for Predecessor and Successor Parties
Under Belgian law, the transferor and the transferee have an obligation to inform their respective employee representative bodies (i.e. the Works Council, or in the absence thereof, the Trade Union Delegation, or in the absence thereof the Committee for Prevention and Protection at Work) about a proposed transfer (which includes a merger, concentration, take-over, closure or other important structural change negotiated by the company). The employees must be informed individually about the proposed transfer in case (i) there is only a Committee for Prevention and Protection at Work, or (ii) there are no employee representative bodies within the undertaking.
The transferor and the transferee must also consult the employee representative bodies in particular with regard to the repercussions on the employment prospects for the personnel, the work organization and the employment policy in general.
The information and consultation process should take place before a decision on the planned transfer is made. Failure to comply with this obligation would render the employer liable to criminal sanctions (a fine of 300€ to 3.000€, multiplied by the number of employees employed in the company, up to a maximum of 300.000€).