Employees’ Rights in Case of a Transfer of Undertaking
When proceeding to the business transfer that involves the transfer of undertaking (one or more business units or parts of business units, i.e., organised means pursuing an economic activity) transferor and transferee must consult with employee representatives and provide relevant information on the planned transfer. The employee is entitled to maintain his job position previously held with the predecessor, with all existing terms and conditions, with the successor, once the transfer of the undertaking occurs.
The employee has the right to oppose the transfer of the employer’s position in his employment contract when i) the transfer may cause serious damages to the employee; or ii) if the organisation’s policy does not merit the employee’s trust.
If the employee wishes to oppose the transfer of the employer, he/she must do so in writing to the transferor, identifying himself, the contracted activity and the grounds for opposition – this may result in the maintenance of the employment relation with the transferor.
In the 30 days following the day the worker gained knowledge of the transfer, the employee may also terminate the employment contract by written letter to the employer. In this case, the employee will have the right to the compensation provided for a collective dismissal.
During the 2 years subsequent to the business transfer, the transferor is jointly liable with the transferee for employee credits arising from the transferred employment agreements, which became due prior to the business transfer date.
Requirements for Predecessor and Successor Parties
Prior to transfer, employee representatives (Works Council and trade union representatives) or, in their absence, employees directly have to be informed in writing prior to the transfer about the transfer’s date, motives and legal, economic and social consequences, as well as measures envisaged in relation to the employees and the content of the contract between the predecessor and the successor. Where there are employee representatives and special measures are put in place as result of the transfer, employee representatives have to be consulted prior to the transfer. These obligations encumber both the transferor and the transferee, in relation to their respective employees or their representatives.