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09. Transfer of Undertakings
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09. Transfer of Undertakings

Employees’ Rights in Case of a Transfer of Undertaking

Employees’ rights in the case of a transfer of undertaking are defined in the Labour Code. Under the law, the new employer becomes a party to the current work relations. Consequently, under the principle of a legal successor, the new employer acquires any and all rights resulting from the work relations established with the previous employer, and all obligations which the previous employer owed to the employees of the entity. This entity’s employees preserve the rights they were entitled to prior to the business transfer, and they are bound by the same duties they had toward the previous employer.

It is the new employer’s duty to inform the company trade unions, and in the case of their absence, the employees, about the planned transfer of the company at least thirty days before the planned transfer of the business. This information should include the planned transfer date, the reasons for the transfer, the legal, economic and social effects thereof on the employees, as well as the intended activities concerning the conditions of employment, in particular the working conditions, salary and retraining.

An employee of the business being transferred may end the employment relation with the new employer. Within two months from the transfer, the employee can terminate the employment relation with a seven-day notice. However, the transfer to a new employer cannot constitute a reason for the employer to terminate the employment relation.

Requirements for Predecessor and Successor Parties

The new employer is bound by the content of the employment relations in force at the time of the transfer. The content of the employment relation is shaped not only by the employment contract, but also by any normative agreements which the previous employer was a party to. The new employer is obligated to apply the provisions of collective labour agreements to those employees who were covered by such agreements, for a period of one year prior to the day of the business transfer.

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