Acquired Rights Directive

The Acquired Rights Directive is the name given to Council Directive 77/187 of 14 February 1977, which aims at ‘the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of businesses’ (as amended by Directive 98/50/EC of 29 June 1998; consolidated in Directive 2001/23 of 12 March 2001).

The Directive aims to regulate transfer of an undertaking by ensuring that terms and conditions of employment are maintained for the employees affected. For collective agreements, Article 3(3) stipulates that this protection should last until ‘the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.’ However, Member States may limit the period for observing such terms and conditions, with the proviso that it shall not be less than one year. The Directive had important implications for privatisation and contracting-out policies in some Member States. If privatisation includes the transfer of part of the state-owned firm with its workforce, this normally means that the employees transferred benefit from the protection of the Directive. The same happens when the provision of public services is contracted-out to private enterprises which undertake to employ the existing workforce.

See also: outsourcing; restructuring; transfer of an undertaking.