COMMISSION OF THE EUROPEAN COMMUNITIES 
Proposal for a Brussels, 02.05.2000 
COM(2000)259 final 
2000/0108 (CNS) 
COUNCIL DIRECTIVE 
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 
(codified version) 
(presented by the Commission) 
BXPJ..iNATORY MEMOildNDUM 
1. In the context of a people's Eur~, the CommisSion attaches great import:ance to 
. simplifying and darifying Community law so as to make it clearer and more access.ible 
to the ordinary citizen, thus giving him new opportunities and the chance to make use 
of the specific rights it gives him. 
This aim cannot be. achieved so long as numerous provisions which have been 
amended several· times, often quite substantially, remain scattered, so that they must 
be sought partly in the original instrument and partly in later amending ones. Consid­
erable research work, comparing many diffe.-ent ins~ents, is thus needed to identify 
the current rules. 
For this reason a consolidation of rules that have frequently been amended is also 
essential if Community Jaw is to be clear and transparent. 
2 · On 1 April 1987 the Commission therefore decided to instruct its staff that. all legis­
lative measures should be codified after no more than ten amendments, stressing that 
this was a minimum l'equirement and that departments should endeavour to codify at 
even. shorter intervals the texts for which they were responsible, to ensure that the 
Community rules were clear and r~adily understandable. 
3. The Conclusions of the Presidency of the Edinburgh European Council (December 
1992) confirmed this, stressing the importance of lc;aislative codific;;ation as it offers 
certainty as to the law applicable to a given matter at a given time. · 
It must be undertaken in full compliance with the no~al Community legislative 
procedure. · ' 
Oiven that no changes of substance may be made to the instruments affected by k&i1: 
lative codjficatjgn, Parliament, the Council and the Commission have agreed, by an 
interinstitutional agreement dated 20 December 1994, that an' accelerated procedure 
may be used for the fast~track adoption of codification instruments. 
4. The purpose of this proposal (.1) for the legislative codification of 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 undertakings or businesses, is to undertake official 
codification of this type. The new directiVe will supersede the various directives incor­
porated ·in it (2); their content is fully preserved, and they are brought together with 
only such formal amendments as are required by the codification exercise itself. 
S. This leaislatiye cocljficatioo proposal was drawn up on the basis of a preliminaxy con­
so)jdation, in all the official languages, of Directive n/187/EEC, and the instrument 
amending it, carried· out by the Office for Official Publications of the Europe;m 
Communities, by means of the dita-processin& aystem referred to in the conclusions 
of the European Council meeting at Edinburgh. Although the articles have been given 
new numbers, the old numbering has been retained in the· margin for ease of refer­
ence; the correlation between the old and new numbers is shown in a table set out in 
Annex 11 to· the •codified Directive. 
{t) Jmterecl in the. Jeplativc propmme·.for 2000. 
{"') See Annex l. Part A of dUI Proposal. 
2 
Proposal for a · 
COUNCIL DIRECTIVE 
of 
OD the approximation or the laws of the Member States relating to the safeguarding of 198/50/EC 
employees' rights in the event ·or transfers of undertakings, businesses or parts of 
undertakings or businesses 
THE COUNCD.. OF 1HE EUROPEAN YNION, 
Having regard to the lfeaty establishing the European 
Community, and in particular Article 94 thereof, 
Having regard to the proposal from the Commission; 
Having regard to the opinion of the European 
Parliament (1 ), 
Having regard to the opinion of the Economic and 
Social Committee (2), . 
Having regard to the opinion of the Committee of the 
Regions(3), 
Whereas 
(1) Council Directi~e 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 undertakings or businesses (4) 
has been substantially amended (s). In the interests 
of clarity and rationality, should ir therefore be 
codified. 
l1) OJ C 
(12) OJC 
3 ( 
~ OJC 
4 ~) OJ L 61, S.3.lm, p. 26. 
\~ See Annex I, Part A. 
3 
(2) Economic trends are bringing in their wake, at both 
national and Community level, changes in the 
structure of undertakings, through trmsfers of 
undertakings, businesses or parts of undertakings or 
businesses to other employers as a result of legal 
transfers or mergers. 
(3) It is necessary to ·provide for the protection of 
employees in the event of a change of employer, in 
particular, to. ensure that their rights are 
safeguarded 1. 
2. 77/187/EEC 
(adapted) 
( 4) Differences still remain in the Member States as 3. 
regards the extent of the protection of employees in 
thiS respect and these differences should be 
reduced. 
(S) The Community· Charter of the fundamental social 
rights of workers adopted on 9 December 1989 
('Social Cbarter') states, in points 7, 17 and 18 in 
particular that: 'The completion of the internal 
market must lead to an improvement in the living 
and working Conditions of workers in the European 
Community. The improvement must cover, where 
·necessary, the development of certain aspects of 
employment regulations such as procedures- for col­
lective. redundancies. and those regarding bank­
ruptcies. Information, consultation and participation 
for workers must be developed along appropriate 
lines, taking account of the practices in force in the 
various Member States. Such information, consulta­
tion and participation must be implemented in due 
time, particularly in connection with restructuring 
operations in undertakings or in cases of mergers 
having an impact on the employment of workers'. · 
(6) In 1977 the Council adopted Directive 77/187/EEC 
to promote the · hannonisation of the relevant 
national laws ensuring the safeguar4ing of the rights 
. of employees and requiring transferors and trans­
ferees to inform and consult employees' representa­
tives in good time. 
(7) That Directive was subsequently amended in the 
light of the impact · of the internal market, the 
legislative tendencies of the Member States with 
regard to the rescue of undertakings in econoMic 
diffiCUlties, the case-law of the Court of Justice of 
the European Communities, Council Directive 
151129/Bf!£ of 17 ·February 1975 on the approx­
imation of the laws of the. Member States relating 
to collective redundancies (1) and the legislation 
already in. force in most Member States. · 
(1) OJ L 48, 22.2.1975, p. 29. Directivo replaced by Directive 
91159/BC (OJ L 225, 12.8~1998, p. 16). 
4 1. 98/50/EC 
2. (adapted) 
3. (adapted) 
(8) The Social Charter recognises the importance of . 13. 
the fight against all forms of discrimination, 
especially based on sex, colour, race, opinion and 
creed. 
(9) This Directive should be without prejudice to the 
time-limits set out in Annex I Part B within which 
the Member States are to comply with Directive 
77/187/EEC, and the act amendin$ it, 
HAS ADOPTED nns DIRECTIVE: 
5 98/50/EC 
CHAPTER I 
Seope and definitions 
Article I 
1. (a) This Directive shall apply to any transfer of an 
undertaking, business, or part of an undertaking or 
business to another employer as a result of a legal 
transfer or merger. 
(b) Subject to subparagraph (a) and the following 
proVisions of this Article, there is a transfer within 
the meaning of this Directive where there is a 
transfer of an economic entity which retains its 
identity, meaning an organised grouping of 
resources which has the objective of pursuing an 
economic activity, whether or not that activity is 
central or ancillary. 
(c) This Directive shall apply to public and private 
undertakings engaged in . economic activities 
whether . or not they are operating for gain. An 
administrative reorganis~tion of public administra­
tive authorities, or the transfer of administrative 
functions between public administrative authorities, 
is not a transfer within the meaning of this 
Directive. 
2. This Directive shall apply where and insofar as the 
undertaking, business or part of the undertaking or 
bilsiness to be transferred is situated within the territorial 
scope of the li'eaty. 
3. This Directive shall. not apply to sea-going vessels: 
Article 2 
1. For the purposes of this Directive: 
(a) 'transferor shall mean any natural or legal person who, 
by reason of a transfer within · the meaning of 
Article 1 (1 ), ceases to be the employer in respect of 
the undertaking, business or part of the undertaking or 
business; 
(b) 'transferee' shall mean any natural or legal person 
who, by reason of a transfer within the meaning of 
Article 1(1),' becomes the employer in respect of the 
undertaking, business or part of the undertaking or 
business; · 
(c) 'representatives of employees' and related expressions 
shall mean the representatives of the employees 
provided for by the laws or practices of the Member 
States; 
(d) 'employee' shall. mean any person who, in th~ Member 
State concerned, is protected as an employee under 
national employment law. 
6 98/50/EC Art. 1.2 
Article I 
Alfide 2 
2. This Directive shall be without prejudice to national 
law as regards the definition of contract of employment or 
employment relationship. 
However, Member States shall not exclude from the scope 
of this Directive contracts of employment or employment 
relationships solely because: 
(a) of the number of working hours performed or to be 
performed, · 
(b) they are employment relationships governed by a fixed­
duration contract of employment within the meaning 
of Article 1, point 1 of Council Directive 
91/383/EEC (1), or 
(c) they are temporary employment relationships within 
the meaning of Article 1, point 2 of Directive 
91/383/EEC, and the undertaking, business or part of 
the undertaking or business transferred is, or is part of, 
the temporary employment business which is the 
employer. 
CHAPTER 11 
SafeauanliD& of employees' rlcbts 
Article 3 
1. The transferor's rights and obligations arising from a 
contract of employment or from an employment relation­
ship existing on the date of a transfer shall, by reason of 
such transfer, be transferred to the transferee. 
Member States may ptovide that, after the date of trans­
fer, the transferor and the transferee shall be jointly and 
severally liable in respect of obligations which arose before 
the date of transfer from a contract of employment or an 
employment relationship existing · on the date of the 
transfer. 
2. Member States may adopt appropriate measures to 
ensure that the transferor notifies the transferee of all the 
rights and obligations which will be transferred to the 
transferee under this Article, so far as t-hose rights and 
obligations are or ought to have been known to the 
transferor at the time of the transfer. A failure by the 
transferor to notify the transferee of any such· right or 
obligation shall not affect the transfer of that right or 
obligation and the rights of any employees against the 
transferee and/or transferor in respect of that right or 
obligation. 
3. Following the transfer, the transferee shall continue to 
observe the terms and conditions agreed in any collective 
agreement on the same terms applicable to the transferor 
under that agreement, until the date of termination or 
expiry of the collective agreement or ·the entry into force 
or application of another collective agreement 
(1) OJ L 206, 29.7.1991, p. 19. 
7 98/50/EC Art. 1.2 
Anide3 
Member States may limit the period for observing such 98/50/EC Art. 1.2 
terms and conditions with the proviso that it· shall not be 
less than one year. · 
4. (a) Unless Member States provide otherwise, para­
graphs 1 and 3 shall not . apply in relation to 
employees' rights to old-age, invalidity or survivors' 
benefits under supplementary company or inter­
company pension schemes outside the statutory 
social security schemes in Member States. 
(b) Even where they dQ not provide in accordance 
with subparagraph (a) that paragraphs 1 ·and 3 
apply in relation to such rights, Member States 
shall adopt the measures necessary to protect the 
interests of employees and of persons no. longer 
employed in the transferor's business at the time 
of the transfer in respect of rights conferring on 
them immediate or prospective entitlement to old 
age benefits, including survivors' benefits, under 
supplementary . schemes referred to in 
subparagraph (a). 
Article 4 Article 4 
1. The transfer of the undertaking, business or part of 
the undertaking or business· shall not in itself constitute 
grounds for dismissal by the transferor or the transferee. 
This provision shall not stand in the way of dismissals that 
may take place for economic, technical or organisational 
reasons entailing changes in the workforce. 
Member States may provide that the first subparagraph 
shall not apply to certain specific categories of employees 
who are not covered by the laws or practice of the 
Member .States in respect of protection against dismissal. 
2. If the contract of employment or the employment 
relationship is terminated because the transfer involves a 
substantial change in working conditions to the detriment 
of the employee, the employer shall be regarded as having 
been responsible for termination of the contract of 
employment or of the employment relationship. 
Article 5 
1. Unless Member States provide otherwise, Articles 3 
and 4 shall not apply to any transfer of an undertaking, 
business or part of an undertaking or business where the 
transferor is the subject of bankruptcy proceedings or any 
analogous insolvency proceedings which have been 
instituted with a view to the liquidation of the assets of the 
transferor and. are under the supervision of a competent 
public authority (which may be an inSolvency practitioner . 
authorise_d by a competent public authority). 
8 AC(icle 4a 
~ 2. Where Articles 3 and 4 apply to a transfer during 
insolvency proceedings which have been opened in relation 
to a transferor (whether or not those proceedings have 
been instituted with a view to the liquidation of the assets 
of the transferor) and provided that such proceedings are 
under the supetvision of a competent public authority 
(which may be an insolvency practitioner determined by 
national law) a Member State may provide that: 
(a) notwithstanding Article 3(1), the transferor's debts 
arising from any contracts of employment or employ­
ment relationships and payable before the transfer or 
before the opening of the insolvency proceedings shaD 
not be transferred to the· transferee, provided that such 
proceedings give rise, under the law of that Member 
State, to protection at least equivalent to that provided 
for in situations covered by Council Directive 
80/987/EEC (1); 
and, or akematively, that 
(b) the transferee, transferor, or person or persons exer­
cising the transferor's functions, on the one hand, and 
the representatives of the employees on the other hand 
may agree alterations, insofar as current law or prac­
tice permits, to the employees' tenns and conditions of 
employment designed to safeguard employment oppor­
tunities by ensuring the survival of the undertaking, 
business or part of the undertaking or business. 
3. ·A Member State may apply paragraph 2(b) to any 
transfers where the transferor is in a situation of serious 
economic Crisis, as defmed by national law~ provided that 
the situation is declared by a competent public authority 
and open to judicial supervision, on condition that such 
provisions already existed in national law on 17 July 1998. 
The Commission shaD present a report on the effects of 
this provision before 17 July 2003 and shall submit any 
appropriate proposals to the Council. 
4. Member States shall take appropriate measures with a 
view to preventing misuse of insolvency proceedings in 
such a way as to deprive employees of the rights provided 
for in this Directive.. · 
(1) OJ L 283, 20.l:Cl.1980, p. 23. Directive as Jut amended .by 
the Act of A&x:euion of Austria, Fin1and and Sweden. 
9 98/50/EC Art. 1.2 
(adapted) 
Anicle 6 
1. If the undertaking, business or part of an undertaking 
or business preserves its autonomy, the status and function 
of the representatives or of the representation of the 
employees affected by the transfer shall be preserved on 
the same terms and subject to the same conditions as 
existed before the date of the transfer by virtue of law, 
regulation, administrative provision or agreement, provided 
that the . conditions necessary for the constitution of the 
employees' representation are fulfilled. 
The first subparagraph shall not apply if, under the laws, 
· regulations, administratiVe provisions or practice in the 
Member States, or by agreement with the representatives 
of the employees, the conditions necessary for the 
reappointment of the representatives of the employees or 
for the reconstitution of the representation of the 
employees are fulfdled 
Where the transferer is the subject of bankruptcy proceed­
ings or any analogous insolvency proceedings which have 
been instituted with a view to the liquidation of the assets 
of the transferer and are under the supervision of a com­
petent public authority (which may be an insolvency practi­
tioner authorised by a competent public authority), 
Member States may take the necessary measures to ensure 
that the transferred employees are properly represented 
until the new election or designation of representatives of 
the employees. 
If the undertaking, business or part of an undertaking or 
business does not presetve its autonomy, the Member 
States shall take the necessary measures to ensure that the 
employees transferred who were represented before the 
transfer continue to be properly represented during the 
period necessary for the reconstitution or reappointment of 
the representation of employees in accordance with 
national law or practice. 
2. If the term of office of the representatives of the 
employees affected by the transfer expires as a result of 
the transfer, the representatives shall continue to enjoy the 
protection·provided by the laws, regulations, administrative 
provisions or practice of the ·Member States. 
10 98/50/EC Art. 1.2 
CHAPTER UI 
Information and consultation 
Anide 7 
1. The transferor and transferee shall be required to 
inform the representatives of their respective employees 
affected by .the transfer of the following: 
the· date or proposed date of the transfer, 
the reasons for the transfer, 
the legal, economic and social implicatioBS of the 
transfer for the employees, 
any measures envisaged in relation to the employees. 
The transferor must give such information to the repre­
sentatives of his employees in good time before the 
transfer is carried out. 
The transferee must give such information to the repre­
sentatives of his employees in good tim~ and in any event 
before his employees are directly affected by the tnmsfer 
as regards their conditions of work and employment. 
2. Where the transferor or the transferee envisages 
measures in relation to his empl.oyees, he shall conSult the 
representatives of his employees in good time on such 
measures with a view to reaching an agreement. 
3. Member States whose laws, regulations or administra­
tive provisions provide that representatives of the 
employees may have recourse to an arbitration board to 
obtain a decision on the measures to be taken in relation 
to employees may limit the obligations laid down in para­
graphs 1 and 2 to cases where the transfer carried out 
gives rise to a change in the business likely to entail 
serious disadvantages for a considerable number of the 
employees. 
The information and consultations shall cover at least the 
measures envisaged in relation to the employees. 
The information must be provided and consultations taken 
place in good time before the change in the business as 
referred to in the first subparagrapb is effected. 
4. The obligations laid down in this Article shall apply 
irrespective of whether the decision resulting in the trans­
fer is taken by the employer or an undertaking controUing 
the employer. 
In considering alleged breaches of the information and 
consultation requirements laid· down by this Directive, the 
argument that such a breach occurred because the infor­
mation was not provided by an undertaking controlling the 
employer shall not be aa:epted as an excuse. 
11 98/50/EC Art. 1.2 
Article 6 
S. Member States may limit the obligations laid down in 
paragraphs 1, 2 and 3 to undertakings or businesses which, 
in terms of the number of employees, meet the conditions 
for the election or nomination of a collegiate body repre­
senting the employees. 
6. Member States shall provide that, where there are no 
representatives of the employees in an undertaking or busi­
ness through no fault of their own, the employees con­
cerned must be informed in advance of: 
the date or proposed date of the transfer, 
the reason for the transfer, 
tbe legal, economic and social implications of the 
transfer for the employees, 
any measures envisaged in relation to the employees. 
CHAPTER IV 
Final provisions 
Article 8 
This Directive shall not affect the right of Member States 
to apply or introduce laws, regulations or administrative 
provisions which are more favourable to employees or to 
promote or permit collective agreements or agreements 
between social partners more favourable to employees. 
Article 9 
Member States shall introduce into their national legal 
systems such measures as are necessary to enable all 
employees and representatives of employees who consider 
themselves wronged· by failure to comply with the obliga­
tions arising from this Directive to pursue their claims by 
judicial process after possible recourse to other competent 
authorities. 
Article 10 
The Commission shall submit to the Council an analysis of 
the effects of 'the proVisions of this Directive before 
17 July 2006. It shall propose any amendment which may 
seem necessary. 
12 98/SO/EC Art. 1.2 
Article? 
Anjcle Zq 
Altide7b 
.i ,. 
Article.JJ 
Member States shall communicate to the Commission the 
texts of the laws, regulations and administrative provisions 
which they adopt in the field covered by this Directive. 
Article 12 
Directive 77/187/EEC, as amended by the Directive 
referred .to in Annex I, Part A, is repealed, without 
prejudice to the obligations of the Member States concern­
ing the time-limits for implementation set out in Annex I, 
Part B. 
References tq the repe.aled Directive shall be construed as 
references to this Directive and shall be read in accord­
ance with the correlation table in Annex 11. 
Article 13 
This Directive shall enter into force on the twentieth day 
following that of its publication in the Official Journal of 
the European Communities. 
Article 14 
This Directive is addressed to the Member States. 
Done at Brussels, 
13 ,"' 
77/187/EEC Anjcle 8 
ANNEX/ 
PART A 
Repealed Directive and Its amendina Directive 
(referred to in Article 12) 
Council Directive 77/187/EEC (OJ L 61, 5.3.1977, p. 26) 
Council Directive 98/SO/EC (OJ 1!. 201, 17.7.1998, p. 88) 
14 
17/187/EEC 
98/SO!EC Directive PARTB 
Deadlines for tnnsposition into national law 
(referred to in Article 12) · 
16 February 1979 
17 July 2001 
15 Deadline for transposition 
Article 1 
Artide 2 
Artide 3 
Artide 4 
Artide 4a 
Artide S 
Artide 6 
Artide 7 
Artide 7a 
~de7b 
Artide 8 Directive 11ntr1 fEZ£ ANNEX I/ 
CORRELATION TABLE 
Article 1 
Article 2 
Article 3 
Article 4 
Article 5 
Anicle 6 
Article 7 
Article 8 
Article 9 
Article 10 
Article 11 
Article 12 
Article 13 
Artide 14 
ANNEX I 
ANNEXD 
16 This Directive