AMENDED PROPOSAL FOR A COUNCIL DIRECTIVE AMENDING DIRECTIVE 77/187/EEC 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 BUSINESSES
Date: 1997-02-24
Institutions: European Commission
Subjects: EC Directive, approximation of laws, job security, labour law, transfer of businesses

COMMISSION OF THE EUROPEAN  COMMUNITIES 

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if 

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Brussels,  24.02.1997 
COM(97) 60  final 

94/0203  (CNS) 

AMENDED PROPOSAL FOR A COUNCIL DIRECTIVE 

AMENDING DIRECTIVE 77/187/EEC 

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 BUSINESSES 

(presented  by the Commission  pursuant  to Article  189 a (2) 
of the  EC-Treaty) 

Explanatory  memorandum 

The European Parliament, the Economic and Social Committee and the Committee of the 
Regions  have adopted  their  respective  opinions  on the  proposal  for  a  Council  Directive 
amending Directive 77/187/EEC on the approximation of the laws of the Member  States 
relating to the safeguarding  of employées* rights in the event of transfers of undertakings. 

The  present  amended  proposal  for  a  Directive,  submitted  in  accordance  with  Article 
189A(2)  of  the  EC  Treaty,  takes  into  account  the  amendments  of  the  European 
Parliament  approved  on  16  January  1997,  the  opinion  of  the  Economic  and  Social 
Committee adopted  on 30 March  1995 and the opinion of the Committee of the Regions 
adopted on 21 April 1995. 
Several  technical  improvements  have  been  made  in  the  interests  of  legal  certainty  and 
consistency. 

Title 

In connection  with the discussion  of Article  1(1),  second  subparagraph,  of the  reference 
proposal  for  a Directive1,  which  we  shall  examine  below,  the  European  Parliament  had 
already requested,  in its Resolution  of  18 January  1996, that the proposal for  a Directive 
replacing Directive 77/187/EEC be transformed  into a proposal  for  a Directive amending 
Directive  77/187/EEC. The title of the present  proposal  takes  account  of the  opinion  of 
the  European  Parliament  on  this  point.  As  soon  as  the  amended  proposal  has  been 
adopted by the Council, the Commission will initiate the codification  procedure laid down 
in  the  Interinstitutional  Agreement  of  20  December  19942  designed  to  ensure  that 
Community  legislation  is clear  and is understood  correctly.  In the light  of the above, the 
first recital has therefore been deleted, as requested by Parliament. 

Article 1 

COM(94) 300 final, of 8.9.1994, 94/0203(CNS), OJ C 274 of  1.10.1994,  p. 10 

Interinstitutional  Agreement  of 20.12.1994.  Accelerated  working  method  with  a view to the  official 
codification  of  legislative  texts  signed  by  the  Commission  of  the  European  Communities,  the 
European Parliament and the Council of the European Union. 

d 

Article  1,  paragraph  1,  of  the  Commission  proposal  was  analysed  several  times  in  the 
Council's Working Party on Social Questions under both the German Presidency  (second 
half  of  1994)  and  the  French  Presidency  (first  half  of  1995).  These  meetings  revealed 
certain  problems  of  comprehension  relating  to  the  definition  of  the  transfer  of 
undertakings as set out in this Article (clarification  of the transfer  of only an activity of the 
undertaking). 

The Economic and  Social Committee delivered  an opinion on this proposal  on 30 March 
19953, as did the Committee of the Regions on 21 April  19954. The scope of the Directive 
(the transfer  of only an activity of an undertaking) has always been the most  controversial 
point.  In  particular,  the Economic  and  Social  Committee  questioned  the ability of a new 
Article ,L^P.aragraph  1,  to  clarify  this  issue  and  proposed  a  new  text.  The  employer' 
group  tabled  an  amendment  designed  to  exclude  subcontracting  from  the  scope  of  the 
Directive. This amendment was rejected. 

The  European  Parliament  was  highly  critical  of  the  concept  of  the  transfer  of 
undertakings,  as defined  in Article  1, Paragraph  1, of the  proposal.  The various  political 
groups  in  the  Parliament  took  the  view  that  the  proposed  amendments  to  Article  1, 
Paragraph  1, did not improve legal certainty and, on the contrary, introduced new sources 
of uncertainty which might prove detrimental to the rights of workers and the interests of 
firms. A resolution  was therefore  adopted  at the plenary  sitting of  18 January  1996 with 
the unanimous agreement of all the political groups, calling on the Commission to propose 
an amended version of Directive 77/187/EEC, without  replacing it by a new text,  and  to 
leave Article  1(1), second subparagraph, unchanged. 

In  the  light  of  the  opinions  adopted  by  the  Economic  and  Social  Committee  and  the 
Committee of the Regions, the progress of discussions in the Council's Working Party on 
Social Questions, and Resolution  B4-00033/96  of  18 January  1996 adopted  unanimously 
by  the  European  Parliament,  the  Commission  decided  on  7  February  19965  to  inform 
Parliament  that  it  would  be  willing  to  accept  amendments  designed  to  transform  its 
proposal  for  the  revision  of  Council  Directive  77/187/EEC  into  a  Directive  amending 
Directive  77/187/EEC  and  to  delete  the  proposed  amendment  to  Article  1(1),  second 
subparagraph, contained in the initial proposal. 

Given that Parliament proposes in its opinion that Article  1(1), second  subparagraph, be 
deleted, and in the light of the above analysis, the Commission has amended its proposal 
accordingly and has deleted the seventh recital, as requested by Parliament. 

Paragraph 1, second subparagraph 

Article 3 

Parliament calls for joint and several liability of the transferor and the transferee in respect 
of  obligations which  arise from  a contract  of  employment.  The Commission's  proposal 

3  CES 317/95 

4  CdR 143/95 

5  PV (96)  1279, pages 23 and 24 

had  already  taken  this  aspect  into  account.  Nevertheless,  in  order  to  make  the  wording 
clearer  and  more  precise,  and  to  avoid  false  interpretations,  the  Commission  now 
proposes that this liability be limited to the obligations that fall due prior to the date of the 
transfer. 

Paragraph  5  (new) 

The  main  objective  of  Directive  77/187/EEC,  according  to  its  recitals,  is  to  protect 
workers in the  event  of a change  of employer,  in particular to  ensure that their rights are 
safeguarded.  Consequently,  any  amendment  which  reduces  the  protection  afforded  to 
certain  benefits  connected  to  the transfer  rule (as provided  for  in Articles  3  (4)  and 4  (3) 
and  (4)  of  the  proposal  for  undertakings,  businesses  or parts of businesses  transferred  in 
the  context  of  certain  insolvency  proceedings)  must  be  examined  with  particular  care. 
Accordingly,  it is necessary to bolster the adoption  of measures to  prevent  the  fraudulent 
use of insolvency proceedings,  as requested by Parliament. 

Paragraph  3 

Article 4 

The responsibility  of  the  employees'  representatives,  given  that they  may permit  changes 
to  the  terms  and  conditions  of  employment  with  the  agreement  of  the  employer  or  his 
representatives, means that they must enjoy sufficient  independence to be able to carry out 
the functions assigned to them (see Article 5 A (new)). 

The Commission proposal now takes account of Parliament's amendment on this point. 

Paragraph  4 

The  amended  proposal  takes  into  account  the  amendment  of  the  European  Parliament, 
which  adds  the  terms  "referred  to  in  the  agreement"  to  paragraph  4.  By  improving  the 
text's clarity, this will make it easier to understand. 

Paragraph  5 

The  powers  given  to  the judicial  authorities  to  terminate a contract  of  employment  or an 
employment  relationship  may  cause  considerable  difficulties  in  the  national  law  of  some 
Member  States  which  do  not  provide  for  such  a  possibility.  The  Commission  welcomes 
Parliament's comment concerning the deletion of this paragraph, and its proposal  removes 
potential  legal obstacles at a non-essential  point in the text. 

Article 6A  (new) 

In  view  of,  inter  alia,  the  powers  granted  in  Article  4,  paragraph  4,  to  the  employees' 
in  certain  cases,  amend  the  terms  and  conditions  of 
representatives,  who  may, 
employment,  it  appears  necessary  to  strengthen  their  role  so  that  they  enjoy  sufficient 
independence to accomplish their tasks. 

This effectively  reflects  the idea expressed by Parliament on this point. 

Paragraph  I 

Article 6 

3 

Technical  improvements have been made to the text so that it is clearer and more legally 
precise, and hence easier to understand: when the transfer of an undertaking, business or 
part of a business is planned, the transferor and the transferee  are obliged to inform the 
representatives of their respective employees affected by the transfer. 

Paragraph 2 

This  small  grammatical  change  ("when")  makes  the  wording  of  the  proposal  for  a 
Directive more precise. 

Paragraph 4 

The inclusion of the spirit of the European Parliament amendment improves the wording 
of  the  proposal.  Accordingly,  any failure  to  comply  with  the Directive's  provisions  on 
consultations,  which  results from the  fact  that  the  undertaking  or  the  natural  or  legal 
person who/which  took  the transfer  decision failed  to  inform the employer in due time, 
cannot be tolerated. Recital No  13 has been drafted in harmony with this paragraph. 

Paragraph 5 

Given  that  the  adoption  of  minimum  rules  at  European  level  on  information  and 
consultation in national undertakings could be planned under the Communication from the 
Commission on Worker Information and Consultation6, and that such rules could stipulate 
a minimum threshold concerning the obligation to provide for employees' representatives, 
it would be wise not to make any changes in this area for the time being and to leave the 
wording of the existing directive in its current form, as requested by Parliament. 

Article 7 A (new) 

To ensure that Community law is properly implemented, the Member States must provide 
for effective,  proportionate and dissuasive sanctions in the event of failure to comply with 
the national  provisions adopted under the Directive.  Parliament's amendment adopted in 
the light of the case-law of the Court of Justice strengthens the Commission's text. This 
amendment is in keeping with the Commission's Medium-Term Social Action Programme 
1995-19977,  point  11.1.8  of which  states  that "Member  States'  authorities  must ensure 
that Union legislation is fully enforced through inter alia appropriate systems of control or 
sanctions, which are effective  in practice and have a deterrent value". In the same point, 
the Commission also commits itself to insert in all  future  legislation  a "standard clause" 
establishing  an obligation  for  Member  States  to  impose  sanctions  which  are  effective, 
proportionate and dissuasive. 

Article 7 - B (new) 

A clause has been inserted banning discrimination on the basis of race, sex, age, handicap, 
sexual  orientation,  skin  colour,  religion  or  nationality,  which  is  in  line  with  the 
Communication  from  the  Commission  on  racism,  xenophobia  and  anti-semitism  of 

6  COM (95) 0547 

7  COM (95) 134 

13 December  19958.  The  Commission  therefore  welcomes  the  European  Parliament's 
approach in this area. 

Recital  No  18 (new) has been drafted  in line with this Article. 

8  COM (95) 653 final 

S 

AMENDED  PROPOSAL  FOR  A  COUNCIL  DIRECTIVE  AMENDING 
DIRECTIVE 77/187/EEC  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 BUSINESSES1. 

TEXT OF THE INITIAL PROPOSAL2 

TEXT OF THE AMENDED PROPOSAL 

on 

Proposal  for  a  Council  Directive  amending 
Directive 
the 
77/187/EEC 
approximation  of  the  laws  of  the  Member 
States  relating 
the  safeguarding  of 
employees'  rights  in  the  event  of  transfers 
of  undertakings,  businesses  or  parts  of 
businesses. 

to 

Proposal  for  a  Council  Directive  on  the 
approximation  of  the  laws  of  the  Member 
the  safeguarding  of 
States  relating 
employees'  rights  in  the  event  of  transfers 
of  undertakings,  businesses  or  parts  of 
businesses. 

to 

THE  COUNCIL  OF  THE  EUROPEAN 
UNION, 
Having regard to the Treaty establishing the 
European  Community,  and  in  particular 
Article 100 thereof. 

Having  regard  to  the  Proposal  from  the 
Commission' 

Having  regard 
European Parliament» 

to 

the  opinion  of  the 

Having  regard 
Economic and Social Committee' 

to 

the  opinion  of  the 

Having  regard 
Committe of the Regions. 

to 

the  opinion 

of 

the 

Deleted 

1. Whereas  Council  Directive  77/187/EEC 
concerns  the  approximation  of  the  laws 
of  the  Member  States  relating  to  the 
safeguarding  of employees' rights in the 
transfers  of  undertakings, 
event  of 
businesses  or  parts  of  businesses; 
whereas, in the interests of clarity, rather 
than  amend  the  existing  Directive,  it 
would  be  preferable  to  replace  it  with  a 
new text; 

1  OJ No L 61,  5.3.1977. 
2  COM(94) 300 final, 8.9.1994, 94/0203(CNS) OJ C 274,  1.10.1994. 

C 

2.  Whereas  the  Community  Charter  of  the  Unchanged 

Fundamental  Social  Rights  of  Workers 
adopted  by  the  Heads  of  State  or 
Government  of eleven Member  States at 
the  Strasbourg  European  Council  on  9 
December  1989  states,  at  point  7, first 
paragraph,  first  sentence  and  second 
paragraph,  point  17, first paragraph  and 
point  18(ii) that: 

"7.  The  completion  of  the  internal  market 
must  lead  to  an  improvement  in  the 
living  and  working  conditions  of 
workers in the European Community. 

necessary, 

The 
where 

improvement  must 
cover, 
the 
development  of  certain  aspects  of 
employment 
as 
regulations 
procedures  for  collective  redundancies 
and those regarding bankruptcies. 

such 

17.  Information, 

consultation 

and 
participation  for  workers  must  be 
lines, 
developed  along  appropriate 
taking account of the practices in force 
in the various Member States. 

18.  Such 

information,  consultation  and 
participation  must  be  implemented  in 
due  time,  particularly  in  the  following 
cases: 

- 

in  connection  with  restructuring 
operations  in  undertakings  or  in 
cases of mergers having an impact 
on the employment of workers;" 

~\ 

Unchanged 

Unchanged 

Unchanged 

3.  Whereas 

to 

States 

relating 

Directive 
Council 
77/187/EEC  of  14  February  1977  on 
the  approximation  of  the  laws  of  the 
Member 
the 
safeguarding  of employees' rights in the 
event  of  transfers  of  undertakings, 
businesses  or  parts  of  businesses 
promotes  the  harmonisation  of  the 
relevant  national 
laws  ensuring  the 
safeguarding  of the right of  transferred 
employees  and  requiring  transferors 
and  transferees  to  inform  and  consult 
employees'  representatives 
in  good 
time; 

amend 

Council 

Whereas the purpose of this proposal  is 
to 
Directive 
77/187/EEC  of  14  February  1977  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 
European Court of Justice, the adopted 
revision  of  the  Directive  on  collective 
legislation 
redundancies 
already 
in  most  Member 
States; 

the  case 

in  force 

law  of 

and 

the 

5.  Whereas 

of 

legal 
considerations 
security  and  transparency  require  that 
the legal concept of transfer be  clarified 
in  the  light  of  the  case  law  of  the 
European  Court  of  Justice;  whereas 
such a concept  must  cover any  transfer 
of an undertaking, business or part of a 
business  to  another  employer  effected 
deed, 
by  means 
administrative 
judicial 
decision  or  operation  of  law,  including 
mergers and divisions; 

measure, 

contract, 

of 

8 

6.  Whereas  requirements  of legal  security  Unchanged 

and transparency  also require that it be 
expressly  provided  that  the  Directive 
should  apply  to  private  or  public 
undertakings  carrying  out  economic 
activities,  whether  or  not  they  operate 
for gain; 

7.  Whereas the principles of legal security  Deleted 

demand that a clear distinction be made 
between 
transfers  of  undertakings, 
businesses  or  parts  of  businesses  and 
the  transfer  of  only  an  activity  of  an 
undertaking; Whereas the transfer of an 
activity which does not also involve the 
transfer  of  an  economic  entity  whose 
identity  is affected  by such transfer,  an 
economic  entity  being  understood  to 
consist  of  several  parts  operating 
autonomously  and  pursuing  a  specific 
objective,  even  if  a  partial  one,  is  not 
covered by the Directive; 

8.  Whereas  considerations  of  flexibility  Unchanged 
the  exclusion  of  sea-going 
justify 
vessels from  the scope of Section III of 
the  Directive,  but  not  from  its  other 
provisions; 

9.  Whereas  a  minimal  harmonisation  of  Unchanged 

the concept  of "employee" is necessary 
in  order  that  there  may  be  a  uniform 
application  of  the  Directive  in  the 
different  Member States; 

10.  Whereas 

differences 

still 

remain  Unchanged 

between  the Member  States' legislation 
concerning  the  joint  liability  of  the 
transferor  and the transferee; 

3 

Unchanged 

framework 

11.  Whereas,  with  a  view  to  ensuring  the 
survival  of 
insolvent  undertakings. 
Member  States  should  be  expressly 
allowed  not  to  apply  Articles  3  and  4 
of  the Directive  to  transfers  effected  in 
the 
liquidation 
proceedings,  and  certain  derogations 
from the  Directive's  general  provisions 
should  be  permitted  in  the  case  of 
transfers  effected 
in  the  context  of 
insolvency  pre-liquidation  proceedings; 
whereas  such  provisions  constitute  a 
measure  of  deregulation  in  comparison 
with the existing legal  situation; 

of 

12.  Whereas  the  circumstances  in  which 
the  function  and  status  of  employee 
representatives  are  to  be  preserved 
should be  clarified; 

Unchanged 

13.  Whereas, 

to 

that 

in  order  to  ensure  equal 
treatment  of  similar  situations,  it  is 
ensure 
necessary 
the 
and 
consultation 
information 
requirements 
in  Council 
laid  down 
Directive  77/187/EEC  are  complied 
the 
irrespective  of  whether 
with 
decision  leading to  the transfer  is taken 
by  the  employer  or  by  an  undertaking 
controlling the employer; 

Whereas, in order to ensure equal treatment 
of  similar  situations, 
it  is  necessary  to 
ensure that the information  and consultation 
in  Council 
laid  down 
requirements 
Directive  77/187/EEC  are  complied  with 
irrespective  of  whether  the decision  leading 
to  the  transfer  is  taken  by  the  employer  or 
by another natural or legal person: 

14.  Whereas  the  Member  States'  faculty 
not  to  apply  the 
information  and 
consultation  requirements  to  certain 
undertakings  on  grounds  of  workforce 
size thresholds must be clarified; 

Deleted 

15.  Whereas  it  is  necessary  to  clarify  the 
circumstances 
in  which  employees 
must  be  informed  where  there  are  no 
employee representatives; 

Unchanged 

16.  Whereas  considerations  of  efficacy 
require  that  the  Member  States  take 
appropriate  measures  in  the  event  of 
failure to comply with this Directive; 

Unchanged 

17.  Whereas  the  present  Directive  shall  be 
the  Member 
without  prejudice 
States'  obligations 
the 
deadline  for  transposai  of  Directive 
77/187/EEC indicated in Annex I; 

concerning 

to 

Deleted 

18. 

(new) 

Whereas,  when  the  Member  States  applv 
the  provisions  contained  in  this  Directive, 
they may under no  circumstances  introduce 
discrimination on the basis of race, sex, age. 
handicap, 
colour, 
religion or nationality. 

orientation, 

sexual 

HAS  ADOPTED THIS DIRECTIVE: 

Section  I 

Section  I 

Scope and  definitions 

Scope and  definitions 

Article  1 

Article  1 

to 

1.  This  Directive  shall  apply 

the 
transfer  of  an undertaking,  business  or 
part  of  a business  to  another  employer 
effected  by  contract  or  by  some  other 
disposition  or operation  of law, judicial 
decision or administrative measure. 

Unchanged 

A A 

retains 

The  transfer  of  an  activity  which  is  Deleted 
accompanied  by  the  transfer  of  an 
economic  entity  which 
its 
identity  shall  be  deemed  to  be  a 
transfer  within  the  meaning  of  the 
Directive.  The  transfer  of  only  an 
activity  of  an  undertaking,  business  or 
part  of  a  business,  whether  or  not  it 
was  previously  carried  out  directly, 
does  not  in  itself  constitute  a  transfer 
of  an  undertaking  within  the  meaning 
of the Directive. 

2.  This  Directive  shall  apply  where  and  Unchanged 

insofar  as the  undertaking,  business  or 
part of the business to be transferred  is 
situated  within  the  territorial  scope  of 
the Treaty. 

3.  This Directive  shall  apply  to  public  or  Unchanged 

private  undertakings 
in 
economic activities whether or not they 
are operating for gain. 

engaged 

4.  Member  States need  not  apply  Section  Unchanged 

III  of 
vessels. 

this  Directive 

to  sea-going 

5.  The  Member  States  need  not  apply  Unchanged 

Articles 3 (1, 2 and  3) and  4 (1  and  2) 
of  this  Directive  in  cases  where  the 
undertaking,  business  or  part  of  a 
business being transferred  is the subject 
of bankruptcy proceedings or any other 
analagous proceedings instituted with a 
view to the liquidation  of the  assets of 
a natural or legal person and under the 
supervision  of  a  competent  public 
authority. 

Article 2 

Article 2 

1.  For the purposes of this Directive: 

Unchanged 

)^ 

Unchanged 

Unchanged 

Unchanged 

Unchanged 

a)  "transferor"  means  any  natural  or 
legal  person  who,  by  reason  of  a 
transfer  within  the  meaning  of 
Article  1(1),  ceases  to  be  the 
the 
employer 
undertaking,  business  or  part  of 
the business; 

respect 

in 

of 

b)  "transferee"  means  any  natural  or 
legal  person  who,  by  reason  of  a 
transfer  within  the  meaning  of 
the 
Article 
employer 
the 
undertaking,  business  or  part  of 
the business; 

becomes 
of 

1(1), 
in 

respect 

c)  "representatives  of the employees" 
means  the  representatives  of  the 
employees  provided  for  by  the 
laws  or  practice  of  the  Member 
States. 

This  Directive  is  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 
solely 
because: 

relationships 

a)  of  the  number  of  working  hours 

Unchanged 

performed  or to be performed,  or 

Unchanged 

b) 

they  are  employment  relationships 
governed  by  a  fixed-duration 
contract  of  employment  within  the 
meaning of Article  1(1) of  Council 
Directive  91/383/EEC,  aimed  at 
encouraging  improvements  in  the 
safety and health of workers with a 
employment 
fixed-duration 
relationship 
temporary 
employment relationship; 

or 

a 

•1  3 

c) 

they  are  temporary  employment 
relationships within the meaning  of 
Article  1(2)  of  Council  Directive 
91/383/EEC. 

Unchanged 

Section  II 

Section  II 

Safeguarding  of employees' rights 

Safeguarding  of employees' rights 

Article  3 

Article  3 

Unchanged 

The  transferor's  rights  and  obligations 
arising  from  a contract  of  employment 
or  from  an  employment  relationship 
existing on the date of a transfer  within 
the  meaning  of  Article  1(1)  shall,  by 
reason  of  such  transfer,  be  transferred 
to the transferee. 

the 

transferor  and 

Member  States  shall  provide  that,  after  the 
date  of  transfer  within  the  meaning  of 
Article  1(1), 
the 
transferee  shall  be  jointly  and  severally 
liable  in  respect  of  obligations  which  arose 
from  a  contract  of  employment  or  an 
employment  relationship and fell  due  before 
the date of transfer. 

Member  States  shall  provide  that,  after 
the  date of  transfer  within  the  meaning 
of  Article  1(1)  and  in  addition  to  the 
transferee,  the transferor  shall  continue 
to  be  liable  in  respect  of  obligations 
from  a  contract  of 
which  arose 
employment 
employment 
or 
relationship.  However,  in  respect  of 
obligations  that  fall  due  after  the  date 
of transfer,  the transferor  shall be liable 
only to the extent  corresponding  to  the 
portion  of  the  relevant  period  which 
expired  on  the  date  of  the  transfer. 
the 
Member 
States  may 
transferor's 
those 
obligations which arose before  the date 
of  the  transfer  and  fall  due  within  the 
first  year following  that date. 

limit 
to 

liability 

joint 

IV 

Unchanged 

2.  Following 

the 

transfer  within 

the 
meaning  of  Article  1(1),  the  transferee 
shall  continue to  observe the terms and 
in  any  collective 
conditions  agreed 
terms 
the 
agreement 
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. 

same 

on 

Member States may limit the period for 
observing  such  terms  and  conditions 
with the proviso that it shall not be less 
than one year. 

Unchanged 

Unchanged 

Unchanged 

survivors' 

Paragraphs  1  and  2  shall  not  cover 
employees' rights to  old  age,  invalidity 
under 
or 
inter 
supplementary 
company  pension  schemes  outside  the 
statutory  social  security  schemes  in 
Member States. 

benefits 
company  or 

shall 

adopt 
to  protect 

the 
Member  States 
measures  necessary 
the 
interests  of  employees  and  of  persons 
no  longer  employed  in  the  transferor's 
business  at  the  time  of  the  transfer  in 
the  meaning  of  Article  1(1)  in  respect 
of rights conferring  on them  immediate 
or  prospective  entitlement  to  old  age 
benefits,  including  survivors'  benefits 
under  supplementary  schemes  referred 
to in the first subparagraph. 

AS 

wrriR 

Unchanged 

Unchanged 

Unchanged 

or 

an 

the  opening  of 

Notwithstanding  paragraphs  1, 2  and  3 
of  this  Article,  the  laws  of the  Member 
States  may  provide  that  the  transferor's 
debts  -  arising  from  a  contract  of 
employment 
employment 
relationship  - due before  the transfer  or 
before 
insolvency 
proceedings,  shall  not  be  transferred  to 
transfers 
the  transferee 
effected  in  the  context  of  insolvency 
proceedings  other  than  the  proceedings 
mentioned 
in  Article  1(5),  such  as 
administration  or judicial  arrangements, 
compositions,  suspension  of  payments, 
or  other  analogous  non-liquidation 
such 
provided 
proceedings, 
proceedings: 

in  cases  of 

that 

(a)  are 

under 

conducted 

the 
supervision  of  a  competent  public 
authority,  which  may  be  an 
insolvency  practitioner  authorised 
by  a  competent  public  authority, 
and, 

(b)  give 

to 

rise, 

according 

level  of  protection  at 

the 
legislation  of  the  Member  State  in 
question,  to  the  protection  laid 
down  by  its  national  law,  ensuring 
a 
least 
equivalent  to  that  provided  for  by 
Council  Directive  80/987/EEC  on 
the  approximation  of  the  laws  of 
the  Member  States  relating  to  the 
in  the 
protection  of  employees 
event  of  the  insolvency  of  their 

employer-

Member  States  shall  provide  for  the 
5. 
necessary  measures  to  ban  the  use  of 
fraudulent  insolvency  proceedings  intended 
to  deprive  employees  of  the  rights  laid 
down in this Directive. 

AC 

Article 4 

Article 4 

1.  The 

transfer  of  an  undertaking,  Unchanged 

.-~*M»«^ 

^«•**.-^.. 

itself 

business or  part  of a business shall not 
for 
in 
constitute  grounds 
dismissal  by  the  transferor  or 
the 
transferee.  This  provision  shall  not 
stand in the way of dismissals that may 
take  pace  for  economic,  technical  or 
entailing 
reasons 
organisational 
changes in the workforce. 

Member  States  may  provide  that  the  Unchanged 
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  Unchanged 
employment  relationship  is  terminated 
because the transfer within the meaning 
of  Article  1(1)  involves  a  substantial 
change  in  working  conditions  to  the 
the 
the 
detriment  of 
employer  shall  be  regarded  as  having 
been  responsible for  termination  of the 
contract  of  employment  or  of  the 
employment relationship. 

employee 

1 } 

the 

exercising 

Notwithstanding  Article  3(1,  2  and  3), 
the  laws  of  the  Member  States  may 
allow  the  employer  or  the  person  or 
persons 
employer's 
powers,  on  the  one  hand,  and  the 
employees'  representatives,  on 
the 
other  hand,  to  change  the  terms  and 
conditions  of  employment  by  an 
agreement  concluded  as  a  means  of 
-ensuring the^suBdyal of an undertaking, 
business  or  part  of  a  business 
the 
transferred 
proceedings  referred  to  in Article  3(4). 
Such  an agreement  may also  determine 
whether  and  to  what  extent  dismissals 
may take  place  for  economic,  technical 
or  organisational 
reasons  entailing 
changes in the workforce. 

the  context  of 

in 

the 

the 

and 

hand, 

Notwithstanding  Article  3(1  and  2), 
3. 
the  laws  of  the  Member  States  may  allow 
the  employer  or  the  person  or  persons 
exercising  the  employer's  powers,  on  the 
employees' 
one 
representatives,  on  the  other  hand,  insofar 
as  they  enjoy  sufficient  independence  to 
carry out the functions  assigned  to them,  to 
change 
terms  and  conditions  of 
employment  by  an agreement  concluded  as 
a  means  of  ensuring  the  survival  of  an 
undertaking,  business  or  part  of  a  business 
transferred 
the 
proceedings  referred  to  in  Article  3(4). 
Such  an  agreement  may  also  determine 
whether  and to  what  extent  dismissals  may 
take  place  for  economic, 
technical  or 
organisational  reasons  entailing  changes  in 
the workforce. 

context 

the 

in 

of 

4.  Without  prejudice  to  paragraph  2  of 
this  Article,  where 
the  agreement 
referred to in paragraph 3 is concluded, 
it  shall  be  presumed,  unless  proved  to 
the  contrary,  that  the  alteration  of  the 
terms  and  conditions  of  employment  is 
made  as  a  means  of  ensuring  the 
survival  of  the transferred  undertaking, 
business  or  part  of  a business  and  that 
the  dismissals  concerned  are  effected 
and 
for 
organisational 
entailing 
reasons, 
changes in the work  force. 

economic, 

technical 

the 

4. 
Without  prejudice to  paragraph 2  of 
this  Article,  where  the  agreement  referred 
to  in  paragraph  3  is  concluded,  it  shall  be 
presumed,  unless  proved  to  the  contrary, 
that  the  alteration  of 
terms  and 
conditions of employment  referred  to  in the 
agreement  is  made  as  a  means  of  ensuring 
the  survival  of  the  transferred  undertaking, 
business  or  part  of  a  business  and  that  the 
dismissals  referred  to  in  the  agreement  are 
effected 
technical  and 
organisational  reasons,  entailing  changes  in 
the work force. 

for  economic, 

Deleted 

authorities 

5.  The Member  States  may  confer  on  the 
competent 
the 
judicial 
power to alter or terminate contracts  of 
employment 
or 
employment 
relationships  existing  on  the  date  of  a 
transfer  effected  in  the  framework  of 
insolvency  proceedings  referred  to  in 
Article  3(4)  to  ensure  the  survival  of 
the  undertaking,  business  or  part  of  a 
business. 

"W 

Article  5 

Article  5 

status  and 

function  of 

If the business  preserves  its  autonomy, 
the 
the 
representatives  or of the  representation 
of the  employees  affected  by  a transfer 
within the meaning of Article  1 shall be 
preserved  on  the  same  terms  and 
subject  to  the  same  conditions  as 
existed  before  the  date  of-the  transfer 
by 
regulation, 
administrative  provision  or  agreement, 
provided  that  the  conditions  necessary 
for  the  constitution  of  the  employees' 
representation are fulfilled. 

virtue 

law, 

of 

the 

the 

laws, 

under 

The  first  subparagraph  shall  not  apply 
if, 
regulations, 
administrative  provisions  or practice in 
the  Member  States,  or  by  agreement 
with 
the 
representatives 
employees,  the  conditions  necessary 
the 
reappointment 
for 
representatives  of the employees  or for 
the  reconstitution  of the  representation 
of the employees are fulfilled. 

the 

of 

of 

shall 

that 
for 

If  the  business  does  not  preserve  its 
the 
autonomy  and  provided 
conditions 
the 
necessary 
constitution of the representation of the 
employees  are  fulfilled,  the  Member 
States 
the  necessary 
take 
measures  to  ensure  that  the  employees 
transferred,  who  were  represented 
before  the  transfer,  continue  to  be 
properly  represented  during  the  period 
or 
prior 
reappointment  of  the  representation  of 
employees. 

reconstitution 

the 

to 

Unchanged 

Unchanged 

Unchanged 

A  9 

Unchanged 

of 

the 

office 
the 

term  of 
of 
transfer  within 

the 
If 
employees 
representatives 
affected  by  a 
the 
meaning  of  Article  1(1)  expires  as  a 
the 
result 
representatives  shall  continue  to  enjoy 
the  protection  provided  by  the  laws, 
regulations,  administrative  provisions 
or practice of the Member States. 

transfer, 

the 

of 

Section  HI 

Section  III 

Information and consultation 

Information and consultation 

Article  6 

Article  6 

required 

1.  The  transferor  and  the  transferee  shall 
be 
the 
to 
representatives  of  employees  affected 
by  a  transfer  within  the  meaning  of 
Article  1(1) of the following: 

inform 

1- 
When  the  transferor  and  transferee 
envisage  a  transfer  within  the  meaning  of 
they  shall  be  required  to 
Article  1(1). 
their 
representatives 
the 
inform 
respective  employees  affected  by 
the 
transfer of the following: 

of 

- 

the reason for the transfer, 

Unchanged 

- 

legal,  economic  and 

the 
social 
implications  of  the  transfer  for  the 
employees, 

Unchanged 

-  any  measures  envisaged  in  relation 

to the employees. 

Unchanged 

transferor  must 

The 
such 
information  to  the  representatives  of 
his  employees  in  good  time  before  the 
transfer is carried out. 

give 

Unchanged 

<?: 

such  Unchanged 

transferee  must  give 
The 
information  to  the  representatives  of 
his employees in good  time, and in any 
event before  his employees are directly 
affected  by the transfer  as regards their 
conditions of work and employment. 

2. 

««employees,  -he*-  shall  consult  -the  employees, 

If  the  transferor  or  the  transferee  When  the  transferor  or  the 
envisages  measures  in  relation  to  his  envisages  measures 

transferee 
to  his 
the 
representatives  of  his  employees  in  representatives  of  his  employees  in  good 
time  on  such  measures  with  a  view  to 
good  time  on  such  measures  with  a 
reaching an agreement. 
view to reaching an agreement. 

in  relation 

consult 

shall 

he 

3.  Member 

States 

whose 

laws,  Unchanged 

regulations or administrative 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  paragraphs  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  Unchanged 
cover  at  least  the  measures  envisaged 
in relation to the employees. 

The  information  must be provided  and  Unchanged 
consultations  take  place  in  good  time 
before  the  change  in  the  business  as 
referred  to  in the  first  subparagraph  is 
effected. 

I  -i 

in 

In 

leading 

controlling 

laid  down 

considering 

undertaking 

shall  apply 

the  decision 

this 
The  obligations 
irrespective  of 
Article 
whether 
the 
transfer  is taken  by  the  employer  or  by 
the 
an 
alleged 
employer. 
breaches  of 
and 
consultation  requirements laid  down  by 
this  Directive,  the  argument  that  such 
breach 
the 
information  has  not  been  provided  by 
the  undertaking  which 
the 
decision  leading  to  the  transfer  shall 
not be accepted  as an excuse. 

information 

because-' 

occurred 

took 

the 

The  obligations  laid  down  in  this 
4 
Article  shall  apply  irrespective  of  whether 
the decision  resulting in the transfer  is taken 
by  a  natural  person  or  a  legal  person  other 
than  the  employer.  In  considering  alleged 
breaches 
and 
consultation  requirements  laid  down  by  this 
Directive,  the  argument  that  such  breach 
occurred  because  the  information  has  not 
been-provided by the natural  or  legal  person 
who/which  took  the  decision  leading  to  the 
transfer  shall not be accepted  as an excuse. 

information 

the 

of 

limit 

the 
The  Member  States  may 
obligations  laid  down  in  paragraphs  1, 
2  and  3  to  undertakings  or  businesses 
which  normally  employ  50  or  more 
employees  or  which,  if  employing  less 
than  50 employees,  fulfil  the  workforce 
the  election  or 
size 
thresholds  for 
nomination  of  a 
collegiate  body 
representing the employees. 

shall  provide 

Member  States 
that 
where  there  are  no  representatives  of 
the  employees  in  an  undertaking  or 
business, 
the  employees  concerned 
must  be  informed  in  advance  when  a 
of 
the  meaning 
transfer  within 
Article  1(1) is about  to take place. 

The  Member  States  may  limit  the 
5. 
obligations  laid  down  in  paragraphs  1.  2 
and  3  to  undertakings  or  businesses  which, 
in terms  of  the  number  of  employees,  meet 
or 
the 
nomination 
body 
representing the  employees. 

conditions 
of 

the 
collegiate 

election 

for 
a 

Unchanged 

Article  6A 

requirements 

1.  For  the  purposes  of  the  information 
and  consultation 
laid 
down  in  this  Directive,  the  Member 
employee 
States  shall  provide 
representatives 
the 
who 
necessary  independence  to  carry  out 
the functions  assigned  to  them. 

enjoy 

for 

Section  IV 

Final  provisions 

Article  7 

Section  IV 

Final  provisions 

Article  7 

2 <i 

^ttÊÊÊtÊBÊÊÊÊÊlÊm 

Unchanged 

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 7-A 

Member  States  shall  provide  for  sanctions 
in  the  event  of  failure  to  comply  with  the 
national  provisions  adopted  under  this 
Directive  and  shall  take  the  necessary 
measures to  ensure that these  sanctions  are 
enforced.  These  sanctions shall be  effective, 
proportionate and dissuasive. 

Article 7-B 

the  Member  States  apply 

When 
the 
provisions  contained  in this  Directive,  they 
may  under  no  circumstances 
introduce 
discrimination on the basis of race, sex,  age, 
handicap, 
colour. 
religion or nationality. 

orientation, 

sexual 

Article  8 

Article  8 

Unchanged 

Member  States  shall  introduce  into  their 
national  legal  systems  such  measures  as are 
necessary  to  enable  all  employees  who 
consider  themselves  wronged  by  failure  to 
comply  with  the  obligations  arising  from 
this  Directive  to  pursue  their  claims  by 
judicial  process  after  possible  recourse  to 
other competent authorities. 

This  Article  shall  also  apply  to  employees' 
representatives  in  respect  of  their  rights 
under Articles 4(3, 4 and 5), 5 and 6. 

This  Article  shall  also  apply  to  employees' 
representatives  in  respect  of  their  rights 
under Articles 4(3  and 4).  5 and 6. 

^3 

Article 9 

Article 9 

1.  Member  States shall bring into  force  the  Unchanged 

laws, 
regulations  and  administrative 
provisions necessary to comply with this 
Directive  within  18 months  at  the  latest 
from  the  date  of  its  adoption  or  shall 
ensure, that, at that date at the latest, the 
employees' 
and 
employers' 
representatives  have 
the 
required  provisions  by  means  of 
agreement,  the  Member  States  being 
obliged  to  take  the  necessary  steps 
enabling  them  at  all  times  to  guarantee 
the results imposed by this Directive 

introduced 

2.  When  Member  States 

adopt 

the  Unchanged 

measures  referred  to  in  paragraph  1, 
such  measures  shall  contain  a  reference 
to this Directive or shall be accompanied 
by  such  a  reference  on  the  occasion  of 
their official  publication. The methods of 
making  such  a  reference  shall  be  laid 
down by the Member States. 

shall 
immediately 

the  Unchanged 
Member  States 
Commission 
the 
measures  they  take  to  implement  this 
directive. 

inform 
of 

Article 10 

Article 10 

Directive  77/187/EEC 
is  repealed  with 
effect  from  the  date  of  transposai  of  the 
present  Directive,  without  prejudice  to  the 
Member  States'  obligations  with  regard  to 
the  deadline  for  transposai  of  Directive 
77/187/EEC, indicated in Annex I. 

r)eieted 

to 

Any  references  made 
the  repealed 
Directive  are  understood  as being  made  to 
the present Directive within the meaning of 
Article  9(1),  and  are  to  be  interpreted  on 
the  basis  of  the  Comparative  Table  in 
Annex II. 

j}eiet  J 

Article 11 

Article 11 

*1 

dtf^liUÉjXP 

This  directive  is  addressed  to  the  Member  Unchanged 
States. 

This directive  shall enter into force  20 days  Unchanged 
after  its  publication  in  the  Official  Journal 
of the European Communities. 

is 

ISSN 0254-1475 

COM(97) 60  final 

DOCUMENTS 

EN 

06  04  08 

10 

Catalogue  number  :  CB-CO-97-050-EN-C 

ISBN  92-78-15675-2 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg