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The
Directive stipulates that any employee's contract of employment will be transferred automatically on the same terms as before in the event of a transfer of the undertaking. This means that if an employer changes control of the business, the new employer cannot reduce the employees' terms and
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Its long title is the
Directive 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
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Council
Directive 77/187/EEC of 14 February 1977 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
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that protects the contracts of employment of people working in businesses that are transferred between owners. It replaced and updated the law previously known as the
Acquired Rights Directive 77/187/EC.
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Article 4 This provides the idea that dismissals should not take place just because there is a transfer. But dismissals can be made for 'any economic, technical and organisational reason'.
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Article 1 This says the directive applies to legal transfers and mergers of an undertaking. The point to note is that it excludes transfers of company control through a simple purchase of
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J Armour and S Deakin, 'Insolvency and
Employment Protection: the Mixed Effects of the Acquired Rights Directive' (2003) 22 International Review of Law & Economics 443-463
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Article 6 This states that employee representatives positions should not change where the undertaking retains autonomy through the transfer. It is talking mainly about
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Article 8-14 These articles are addressed to the Member States, and talk about implementation maps, and notifications to the
Commission of opinions or changes.
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conditions, unless the
Directive's exception criteria are met. This is that there must be a good economic, technical or organisational reason for the change.
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Summaries of EU legislation > Employment and social policy > Employment rights and work organisation > Summary of
Directive 2001/23/EC
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Article 7 This provides that employers thinking of transfers must consult with the workforce beforehand, through employee representatives.
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137:(SI 2006/246) replacing the Transfer of Undertakings (Protection of Employment) Regulations 1981, the
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Article 3 This states the principle that the transferee is bound to the contractual and
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obligations of the transferor. The transferor has to state what these are beforehand.
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Article 5 Member states can derogate from Art. 3 and 4 where the company is
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Article 2 This gives definitions of transferor, transferee and the like.
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Transfer of
Undertakings (Protection of Employment) Regulations 2006
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National implementing measures of the member states
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235:2001 in the European Union
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