CELEX: 52000PC0259
Language: en
Date: 2000-05-02
Title: Proposal for a 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)

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                  Brussels, 02.05.2000
                                                  COM(2000)259 final
                                                  2000/0108 (CNS)
                                   Proposal for a
                             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)
 ---pagebreak---                                  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
 ---pagebreak---                                          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.
 l 1) OJ C
(12) OJC
 (3 OJC
 ~)
 \~
   4
    ~   OJ L 61, S.3.lm, p. 26.
       See Annex I, Part A.
                                                    3
 ---pagebreak--- (2) Economic trends are bringing in their wake, at both            1.     77/187/EEC
       national and Community level, changes in the                       (adapted)
       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              2.
       employees in the event of a change of employer, in
        particular, to. ensure that their rights are
        safeguarded
 (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               1.    98/50/EC
         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                2.   (adapted)
           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                  3.    (adapted)
            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
 ---pagebreak--- (8) The Social Charter recognises the importance of    . 13. 98/50/EC
    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
 ---pagebreak---                           CHAPTER I                             98/50/EC Art. 1.2
                     Seope and definitions
                            Article I                                             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                                            Alfide 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
 ---pagebreak--- 2. This Directive shall be without prejudice to national        98/50/EC Art. 1.2
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                                             Anide3
 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
 ---pagebreak--- 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                                             AC(icle 4a
  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
 ---pagebreak--- ~ 2.     Where Articles 3 and 4 apply to a transfer during           98/50/EC Art. 1.2
  insolvency proceedings which have been opened in relation          (adapted)
  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
 ---pagebreak---                              Anicle 6                              98/50/EC Art. 1.2
 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
 ---pagebreak---                         CHAPTER UI                            98/50/EC Art. 1.2
                Information and consultation
                           Anide 7                                              Article 6
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
 ---pagebreak--- S. Member States may limit the obligations laid down in       98/SO/EC Art. 1.2
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                                           Article?
 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                                          Anjcle Zq
 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                                          Altide7b
  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
                                                                                          ,.
                                                                                          .i
 ---pagebreak---                                                                         ,"'
                          Article.JJ                         77/187/EEC     Anjcle 8
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
 ---pagebreak---                                                              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
 ---pagebreak---                                        PARTB
                     Deadlines for tnnsposition into national law
                              (referred to in Article 12) ·
           Directive                                           Deadline for transposition
17/187/EEC                                  16 February 1979
98/SO!EC                                    17 July 2001
                                            15
 ---pagebreak---                                    ANNEX I/
                               CORRELATION TABLE
          Directive 11ntr1fEZ£                      This Directive
Article 1                               Article 1
Artide 2                                Article 2
Artide 3                                Article 3
Artide 4                                Article 4
Artide 4a                               Article 5
Artide S                                 Anicle 6
Artide 6                                 Article 7
Artide 7                                 Article 8
Artide 7a                                Article 9
~de7b                                    Article 10
Artide 8                                 Article 11
                                         Article 12
                                         Article 13
                                         Artide 14
                                         ANNEX I
                                         ANNEXD
                                        16