If a business unit (a company or a part of a company) or a task or activity of the company or part thereof is transferred to another employer (company), the rights and obligations arising from the relationships governed by labour law with the transferred employee shall be transferred to the transferee employer.
At least one month before the transfer of an undertaking the employer is obliged to inform employees' representatives (or the employees directly if there are no representatives at the employer) and consult with them regarding relevant issues (the date of transfer, its reasons, the implications of the transfer to employees and projected measures). The National Labour Inspectorate can impose a penalty on the employer if they fail to do this.
If a transfer results in significant changes in an employee's working conditions and the employee does not agree with the change, employment shall be deemed terminated by agreement and the employee is entitled to severance payment.
The new employer is obliged to adhere to the collective agreement as agreed upon by the preceding employer, and the legal position and function of employees' representatives shall be retained until the termination of their function period.
According to the trade unions, some practical problem emerges when the business transfer concerns more than one company, e.g. several companies are taken over by the new owner. If there were several collective agreements valid in the concerned companies, the legislation does not specify which of the agreements should be applied in the new company.
Cost covered byNot applicable
Involved actors other than national government
- Trade union
- Works council