Employees’ Rights in Case of a Transfer of Undertaking
Under Belgian law, the transfer of an undertaking (or of a division thereof) is governed by Collective Bargaining Agreement n° 32bis of 7 June 1985. If a business or a division of a business, forming an economic entity, is transferred to a new employer, so that there is a ‘going concern’ of the activity of the business (division) after the transfer, there is a transfer of undertaking as referred to in CBA 32bis. In the event of a transfer:
- all employees working in the transferred business division are automatically transferred to the transferee. In principle, the employees may not oppose the transfer, unless the transfer would entail serious modifications to an essential element of the employment contract (e.g. salary, place of work, duties). In the absence of such modifications, a refusal on the part of the employee could be considered as an implicit resignation. Alternatively, the employer (the transferee) could also dismiss the employee concerned for serious cause.
- the rights and obligations of the transferor arising from the employment contracts existing on the date of transfer are automatically transferred to the transferee.
- it is prohibited for both the transferor and the transferee to dismiss employees on the grounds of the transfer of undertaking, besides dismissals for just cause and dismissals based on technical, economic or organisational reasons. Any employee illegally dismissed by the transferor will have the possibility to introduce a court procedure against both the transferor and the transferee in order to obtain the payment of a termination indemnity and/or damages (the illegality of the dismissal does not have, as a consequence, that the dismissal would be considered null and void). Case law generally sets the amount of the damages between 500€ and 5.000€.
- a joint and several liability of transferor and transferee vis-à-vis the transferred employees and the National Social Security Office, is in place for the debts existing on the date of the transfer.