Commission publishes amended proposal on transfer of undertakings

The European Commission adopted a new version of its draft Directive amending Council Directive 77/187/EEC on 24 February 1997. It reflects the Opinions submitted by theEconomic and Social Committee, theCommittee of the Regions and the European Parliament.

The European Commission has published its amended proposal for a Council Directive amending Directive 77/187/EEC on the safeguarding of employees' rights in the event of transfers of undertakings. The amended proposal reflects the Opinions submitted by the Economic and Social Committee and the Committee of the Regions, as well as the many amendments put forward by the European Parliament. Soon after the publication of the amended draft, the Commission also issued a Memorandum on the interpretation of the Directive (Record EU9703109F)

The main elements of the amended proposal, which was adopted by the Commission on 24 February 1997, are essentially the same as in the original 1994 draft with one major exception: the deletion of proposed second Paragraph of Article 1.1, which would have meant that the provisions of the 1977 Directive did not apply in cases where the transfer was limited to an activity of an undertaking.

The provisions remaining the same as in the original draft are as follows:

  • the application of the Directive in cases where the decision leading to a transfer of an undertaking is taken by a multinational located outside the EU is clarified. The new text will emphasise that the requirements relating to information and consultation must be compiled with "whether the decision leading to the transfer is taken by the employer or by an undertaking controlling the employer";
  • greater flexibility in the application of the provisions relating to the safeguarding of employees rights is allowed in the case where transfers are taking place in the context of liquidation proceedings in order to, wherever possible, ensure the survival of undertakings; and
  • the complex question of who is liable in respect of obligations arising from a contract of employment which fell due before the date of transfer is clarified by making both the transferor and the transferee "jointly and severally liable".
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