Transfer of undertakings: procedural aspects

On August 25, 2011, in Transfer of undertakings, by Kalina Jaroslawska

Employers participating in the transfer of undertakings must meet certain procedural requirements to make sure the the transfer complies with the labour legislation and measures for protection of employees.

First, they must notify their trade unions or – where there are no trade unions present – their employees of the transfer and related matters (such as reasons for the transfer and its predicted effects as well as plans concerning employment or work and pay conditions). Notification must be made in writing at least 30 days before the planned date of the transfer. However, failure to provide notification does not render the transfer null and void.

Second, the employer may not terminate the employee solely on the grounds of the transfer. Such termination will be considered unjustified and trigger employee remedies I discussed in some of the blog entries before. However, there may be other reasons to justify termination, e.g. the need to restructure or reduce the employer’s workforce, or an employee’s poor performance. The important thing is that any such reason must be genuine and concrete.

Third, employers partaking in the transfer of undertakings must bear in mind that in connection with the transfer an employee is entitled to make use of a “summary” termination procedure, that is, an employee may terminate the employment contract on 7 days’ notice within 2 months of transfer, without giving reasons. An employment contract so terminated will be understood to have been terminated by the employer with the applicable period of notice. Since the procedure of transfer is aimed at protecting the employee in the first place, there is no equivalent right for the employer and no “summary” termination procedure is available for them. As mentioned above, even regular dismissals solely on the grounds of the transfer are limited.


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