Council Directive 2001/23/EC 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 businesses
Date: 2001-03-12
Institutions: Council of the European Union
Subjects: approximation of laws, labour law, transfer of businesses, worker consultation, worker information

L 82/16

EN

Official Journal of the European Communities

22.3.2001

COUNCIL DIRECTIVE 2001/23/EC

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 businesses

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty 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),

Whereas:

(1)

(2)

(3)

(4)

(5)

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 (3) has been substantially
amended (4). In the interests of clarity and rationality, it
should therefore be codified.

Economic trends are bringing in their wake, at both
national and Community level, changes in the structure
of undertakings, through transfers of undertakings, busi-
nesses or parts of undertakings or businesses to other
employers as a result of legal transfers or mergers.

is necessary to provide

It
the protection of
in
employees in the event of a change of employer,
particular, to ensure that their rights are safeguarded.

for

Differences still remain in the Member States as regards
the extent of the protection of employees in this respect
and these differences should be reduced.

The Community Charter of
the Fundamental Social
Rights of Workers adopted on 9 December 1989 (‘Social
Charter’) 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 collective redundancies and those regarding bank-
ruptcies. Information, consultation and participation for
workers must be developed along appropriate lines,
taking account of the practice in force in the various
Member States. Such information, consultation and
participation must be implemented in due time, particu-
larly in connection with restructuring operations in
undertakings or in cases of mergers having an impact on
the employment of workers’.

(1) Opinion delivered on 25 October 2000 (not yet published in the

Official Journal).

(2) OJ C 367, 20.12.2000, p. 21.
(3) OJ L 61, 5.3.1977, p. 26.
(4) See Annex I, Part A.

(6)

(7)

(8)

(9)

(10)

In 1977 the Council adopted Directive 77/187/EEC to
promote the harmonisation of the relevant national laws
ensuring the safeguarding of the rights of employees and
requiring transferors and transferees to inform and
consult employees' representatives in good time.

That Directive was subsequently amended in the light of
the impact of the internal market, the legislative tenden-
cies 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 75/129/EEC of 17 February 1975 on the
approximation of the laws of the Member States relating
to collective redundancies (5) and the legislation already
in force in most Member States.

legal

security

Considerations of
and transparency
required that the legal concept of transfer be clarified in
the light of the case-law of the Court of Justice. Such
clarification has not altered the scope of Directive 77/
187/EEC as interpreted by the Court of Justice.

The Social Charter recognises the importance of the
fight against all forms of discrimination, especially based
on sex, colour, race, opinion and creed.

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 amending it,

HAS ADOPTED THIS DIRECTIVE:

CHAPTER I

Scope and definitions

Article 1

1. (a) This Directive shall apply to any transfer of an under-
taking, 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
the objective of
resources which has
grouping of
pursuing an economic activity, whether or not
that
activity is central or ancillary.

(5) OJ L 48, 22.2.1975, p. 29. Directive replaced by Directive 98/

59/EC (OJ L 225, 12.8.1998, p. 16).

22.3.2001

EN

Official Journal of the European Communities

L 82/17

(c) This Directive shall apply to public and private under-
takings engaged in economic activities whether or not
they are operating for gain. An administrative reorgani-
sation of public administrative authorities, or
the
transfer of administrative functions between public
is not a transfer within the
administrative authorities,
meaning of this Directive.

2.
This Directive shall apply where and in so far as the
undertaking, business or part of the undertaking or business to
be transferred is situated within the territorial scope of the
Treaty.

3.

This Directive shall not apply to seagoing 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, busi-
ness 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 the Member
is protected as an employee under

State concerned,
national employment law.

2.
This Directive shall be without prejudice to national law
as regards the definition of contract of employment or employ-
ment relationship.

However, Member States shall not exclude from the scope of
this Directive
employment
contracts of
relationships solely because:

employment or

(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(1) of Council Directive 91/383/EEC of 25 June
1991 supplementing the measures to encourage improve-
ments in the safety and health at work of workers with a
fixed-duration employment
relationship or a tempory
employment relationship (1), or

(c) they are temporary employment relationships within the
meaning of Article 1(2) of Directive 91/383/EEC, and the
undertaking, business or part of the undertaking or busi-
ness transferred is, or is part of, the temporary employment
business which is the employer.

(1) OJ L 206, 29.7.1991, p. 19.

CHAPTER II

Safeguarding of employees' rights

Article 3

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

Member States may provide that, after the date of transfer, 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 those 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 obliga-
tion.

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.

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

4. (a) Unless Member States provide otherwise, paragraphs 1
and 3 shall not apply in relation to employees' rights to
invalidity or survivors' benefits under supple-
old-age,
mentary company or intercompany pension schemes
outside the statutory social security schemes in Member
States.

(b) Even where they do not provide in accordance with
subparagraph (a) that paragraphs 1 and 3 apply in rela-
tion to such rights, Member States shall adopt the meas-
ures necessary to protect the interests of employees and
of persons no longer employed in the transferor's busi-
ness at the time of the transfer in respect of rights
conferring on them immediate or prospective entitle-
ment to old age benefits, including survivors' benefits,
under supplementary schemes referred to in subpara-
graph (a).

Article 4

The transfer of the undertaking, business or part of the
1.
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.

L 82/18

EN

Official Journal of the European Communities

22.3.2001

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.

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.

If the contract of employment or the employment rela-
2.
tionship is terminated because the transfer involves a substan-
tial 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 practioner authorised by a competent public
authority).

2. Where Articles 3 and 4 apply to a transfer during insol-
vency proceedings which have been opened in relation to a
transferor (whether or not those proceedings have been insti-
tuted with a view to the liquidation of the assets of the trans-
feror) and provided that such proceedings are under the super-
vision of a competent public authority (which may be an
insolvency practioner 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 employment rela-
tionships and payable before the transfer or before the
opening of the insolvency proceedings shall not be trans-
ferred 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 of 20 October 1980 on
the approximation of
the Member States
relating to the protection of employees in the event of the
insolvency of their employer (1), and, or alternatively, that,

the laws of

(b) the transferee, transferor or person or persons exercising
the transferor's functions, on the one hand, and the repre-
sentatives of the employees on the other hand may agree
alterations, in so far as current law or practice permits, to
the employees'
terms and conditions of employment
designed to safeguard employment opportunities by
ensuring the survival of the undertaking, business or part of
the undertaking or business.

3.
A Member State may apply paragraph 20(b) to any trans-
fers where the transferor is in a situation of serious economic
crisis, as defined 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 shall present a report on the effects of this
provision before 17 July 2003 and shall submit any appro-
priate proposals to the Council.

(1) OJ L 283, 20.10.1980, p. 23. Directive as last amended by the

1994 Act of Accession.

Article 6

the representation of

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 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 provi-
sion or agreement, provided that the conditions necessary for
the constitution of the employee's representation are fulfilled.

The first subparagraph shall not supply if, under the laws,
in the
regulations, administrative provisions or practice
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 fulfilled.

Where the transferor is the subject of bankruptcy proceedings
or any analoguous 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 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 busi-
ness does not preserve 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
the representation of
employees in accordance with national

reappointment of

law or practice.

If

the term of office of

the
2.
employees affected by the transfer expires as a result of the
transfer, the representatives shall continue to enjoy the protec-
tion provided by the laws, regulations, administrative provi-
sions or practice of the Member States.

the representatives of

CHAPTER III

Information and consultation

Article 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 implications of the transfer

for the employees,

— any measures envisaged in relation to the employees.

22.3.2001

EN

Official Journal of the European Communities

L 82/19

The transferor must give such information to the representa-
tives of his employees in good time, before the transfer is
carried out.

The transferee must give such information to the representa-
tives 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. Where the transferor or the transferee envisages measures
in relation to his employees, he shall consult the representa-
tives of this employees in good time on such measures with a
view to reaching an agreement.

3. Member States whose laws, regulations or administrative
provisions provide that represenatives 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.

— 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 provi-
sions 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
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.

employees who consider

Article 10

The information and consultations shall cover at
measures envisaged in relation to the employees.

least

the

The Commission shall submit to the Council an analysis of the
effect of the provisions of this Directive before 17 July 2006. It
shall propose any amendment which may seem necessary.

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

4.
The obligations laid down in this Article shall apply
irrespective of whether the decision resulting in the transfer is
taken by the employer or an undertaking controlling the
employer.

In considering alleged breaches of the information and consul-
tation requirements laid down by this Directive, the argument
that such a breach occurred because the information was not
provided by an undertaking controlling the employer shall not
be accepted as an excuse.

5. 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 representing the
employees.

6. Member States shall provide that, where there are no
representatives of the employees in an undertaking or business
through no fault of their own, the employees concerned must
be informed in advance of:

— the date or proposed date of the transfer,

— the reason for the transfer,

— the legal, economic and social implications of the transfer

for the employees,

Article 11

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 obliga-
tions of the Member States concerning the time limits for
implementation set out in Annex I, Part B.

References to the repealed Directive shall be construed as refer-
ences to this Directive and shall be read in accordance with the
correlation table in Annex II.

Article 13

This Directive shall enter into force on the 20th day following
its publication in the Official Journal of the European Communities.

This Directive is addressed to the Member States.

Article 14

Done at Brussels, 12 March 2001.

For the Council

The President

B. RINGHOLM

L 82/20

EN

Official Journal of the European Communities

22.3.2001

ANNEX I

PART A

Repealed Directive and its amending Directive

(referred to in Article 12)

Council Directive 77/187/EEC (OJ L 61, 5.3.1977, p. 26)

Council Directive 98/50/EC (OJ L 201, 17.7.1998, p. 88)

PART B

Deadlines for transposition into national law

(referred to in Article 12)

Directive

Deadline for transposition

77/187/EEC

98/50/EC

16 February 1979

17 July 2001

ANNEX II

CORRELATION TABLE

Direrective 77/187/EEC

This Directive

Article 1

Article 2

Article 3

Article 4

Article 4a

Article 5

Article 6

Article 7

Article 7a

Article 7b

Article 8

—

—

—

—

—

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 14

ANNEX I

ANNEX II