Transfer of undertakings: the concept of transfer

On August 11, 2011, in Transfer of undertakings, by Kalina Jaroslawska

sxc.hu

Polish labour law does not give a definition of the transfer of undertakings. However, it is traditionally understood as any organizational change which leads to transfer of ownership and includes mergers, takeovers or divisions of undertakings. Legal titles for such transfers are various: sale, lease, inheritance or other.

In the recent years, mostly under the influence of the Directive 2001/23/EC of 12 March 2001 on 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 undertakings or businesses, and the related EJC rulings, the understanding of the transfer of undertakings has changed, or rather – broadened to include a number of further sets of circumstances. In short, the transfer of undertakings may be considered to occur:

  • on takeover of tasks, not necessarily assets;
  • on subcontracting certain tasks to a third party contractor (in bilateral relationships);
  • on takeover of services, previously outsourced to one party, by another service provider, especially if such takeover of services was accompanied by takeover of assets related to these services (in tripartite relationships).

Obviously, not all situations described above will automatically trigger the transfer of undertakings. There are certain additional aspects which must be taken into consideration, such as:

  • the kind of day-to-day activity of the parties involved;
  • whether the takeover of tasks/services was accompanied by takeover of assets;
  • whether the tasks/services taken over constitute the major or auxiliary part of the business of the party who launched the takeover.

Because of this it is becoming increasingly difficult to state conclusively whether business transactions are caught by the transfer of undertakings. Needless to say, this leads to a lot of legal uncertainty, both on the part of the employee and the employer. Depending on particular circumstances, the party to whom tasks or services have been subcontracted may not even be aware that the transfer of undertakings has taken place, not mentioning the related employees. From this perspective, even though the broadening concept of the transfer of undertakings was originally and is still meant to protect the employees, it may oftentimes backfire rather than help.

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Employment contract – formation

On February 18, 2011, in Employment contract, by Kalina Jaroslawska

Traditionally, under the Labour Code the employment contract is formed by concluding a relevant agreement in writing by the employee and the employer. However, failure to stick to the written form does not nullify the employment contract and does not prevent it from being formed. Oral stipulations exchanged by the parties are valid, effective and binding and lead to formation of the employment contract. Also, the mere fact of entrusting the employee (without written backing documents) with a certain kind of work may give rise to the employment contract.

Because the absence of the written employment contract aggravates the employee’s position, in such an event the Labour Code requires the employer to confirm to the employee, at the latest on the day of commencing work, the mutual arrangements on:

  • the parties to the employment contract;
  • the kind of the employment contract and
  • the conditions of the employment contract.

The employer’s failure to provide the written confirmation is an offence punishable by a fine of 1.000 PLN 30.000 PLN.

The employment contract should at least indicate the following details:

  • the parties;
  • the kind of the employment contract (i.e. whether it is a fixed term contract or a contract for an indefinite period of time);
  • date of signing;
  • the kind of work to be done (e.g. by indicating a position or a job description);
  • salary plus additional pay components (e.g. bonuses, commission, etc.);
  • working time;
  • the day of commencing work (which need not be the same the date of signing of the employment contract – it may be later).

Apart from that, the employment contract may include other clauses which are material to the parties, e.g.:

  • on covenants not to compete;
  • on employee trainings to be financed by the employer;
  • on the confidentiality  obligation;
  • on employment-related employee benefits (e.g. company car or mobile).

The employment contract with Polish nationals should essentially be drawn up in Polish although also a bilingual version is permitted, provided that the Polish language is the prevailing one. Employees other than Polish nationals may ask for a version in a language they have command of.

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International employment law on the web

On January 23, 2011, in General, by Kalina Jaroslawska

A noteworthy source of articles and news on international employment law: Employment Law Alliance.

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I am a foreigner – do I need a work permit to work in Poland?

On January 21, 2011, in Work permits, by Kalina Jaroslawska

The answer to this question, as to most legal questions, is “it depends…”.

  1. First, it depends on the kind of work you are going to do.
  2. Second, it depends on whether you or your relatives are citizens of a country belonging to the EU or, more broadly, to the EEA.
  3. Third, it depends on the kind of legal instrument you hold to legitimize your stay in Poland.

These issues will be discussed in greater detail in the next few posts.

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