1. Employees’ Rights
Employee rights in the case of a transfer of undertaking are defined in the Labour Code. Under the law, the new employer becomes a party to the current work relations. Consequently, under the principle of a legal successor, the new employer acquires any and all rights resulting from the work relations established with the previous employer and all obligations with which the previous employer was burdened toward the employees of the entity. This entity’s employees preserve the rights they were entitled to prior to the business transfer and they are bound by the same duties they had toward the previous employer.
An employee of the business being transferred may end the employment relation with the new employer. Within two months from the transfer, the employee can terminate the employment relation with a seven-day notice.
However, the transfer onto a new employer cannot constitute a reason for the employer to terminate the employment relation.
2. Requirements for Predecessor and Successor Parties
The new employer is bound by the content of the employment relations in force at the time of the transfer. The content of the employment relation is shaped not only by the employment contract but also by normative agreements the hitherto employer was a party to. The new employer is obligated to apply the provisions of collective labour agreements of employees who were covered for a period of one year prior to the day of the business transfer.