EMCC European Monitoring Centre on Change

Legal framework for restructuring

  • Observatory: EMCC
  • Topic:
  • Labour market change,
  • Date of Publication: 13 May 2010



About
Author:
John Morley
Institution:

This study provides an overview of the legal framework within which restructuring takes place. It sets out the main points of the national legislation that applies to cases of restructuring, covering grounds for dismissal, the enterprises covered by the legislation, the consultation procedures laid down, the period for notification stipulated, the arrangements in place for enforcing the legislation, and the penalties for non-compliance.

Download the full report in Excel format [130kb].

Recent developments

There have been a number of legal changes since 2006. Such changes may be designed to ensure full coherence with the objectives of EU legislation, or in some cases, to respond to the specific challenges of the recession. Most of the changes relate to the Member States that have entered the EU since 2004, although there have been some changes in other Member States.  Some examples include:

  • In Estonia, the Employment Contracts Act, which came into effect in July 2009, introduced significant changes to the arrangement of redundancies. This included an obligation on employers to provide additional time for workers to seek alternative employment before the actual dismissal, but it also included reductions in the period of advance notice to be given and in severance pay
  • In Hungary, bankruptcy law has been amended to provide companies with a more effective defence against bankruptcy
  • New legislation which provides increased protections for workers in cases of collective redundancy/company restructuring was introduced in Ireland
  • Companies employing fewer than 20 workers in Belgium, previously exempt from the legislation, may now have to comply under certain conditions. 
  • In Portugal, a Salary Guarantee Fund has been established to ensure that workers who lose their jobs because of companies going bankrupt receive any wage or salary payments owed to them.
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