CELEX: 51997PC0060
Language: en
Date: 1997-02-24
Title: 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

COMMISSION OF THE EUROPEAN COMMUNITIES
 •ir    it
if        *
                                                 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)
 ---pagebreak---  ---pagebreak--- 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
 ---pagebreak--- 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.
                                           Article 3
Paragraph 1, second subparagraph
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
 ---pagebreak--- 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.
                                             Article 4
Paragraph 3
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'
 representatives, who may, in certain cases, amend the terms and conditions of
 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.
                                             Article 6
 Paragraph I
                                                         3
 ---pagebreak--- 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
 ---pagebreak--- 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
 ---pagebreak--- 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
Proposal for a Council Directive on the          Proposal for a Council Directive amending
approximation of the laws of the Member          Directive       77/187/EEC      on      the
States relating to the safeguarding of           approximation of the laws of the Member
employees' rights in the event of transfers      States relating to the safeguarding of
of undertakings, businesses or parts of          employees' rights in the event of transfers
businesses.                                      of undertakings, businesses or parts of
                                                 businesses.
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 to the opinion of the
European Parliament»
Having regard to the opinion of the
Economic and Social Committee'
Having regard to the opinion of the
Committe of the Regions.
 1. Whereas Council Directive 77/187/EEC Deleted
    concerns 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;
    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
 ---pagebreak--- 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.
                 The improvement must
     cover,       where     necessary,    the
     development of certain aspects of
     employment regulations such as
     procedures for collective redundancies
     and those regarding bankruptcies.
17. Information,        consultation      and
     participation for workers must be
     developed along appropriate lines,
     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;"
                                              ~\
 ---pagebreak--- 3.  Whereas          Council        Directive Unchanged
    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 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;
    Whereas the purpose of this proposal is Unchanged
    to       amend     Council      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 case law of the
     European Court of Justice, the adopted
     revision of the Directive on collective
     redundancies and the legislation
     already in force in most Member
     States;
 5.  Whereas considerations of legal Unchanged
     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
     by means         of    contract,    deed,
     administrative      measure,      judicial
     decision or operation of law, including
     mergers and divisions;
                                      8
 ---pagebreak--- 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
     justify the exclusion of sea-going
     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
 ---pagebreak--- 11. Whereas, with a view to ensuring the Unchanged
    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     framework       of     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;
12. Whereas the circumstances in which Unchanged
    the function and status of employee
    representatives are to be preserved
    should be clarified;
13. Whereas, in order to ensure equal           Whereas, in order to ensure equal treatment
    treatment of similar situations, it is      of similar situations, it is necessary to
    necessary     to     ensure     that    the ensure that the information and consultation
    information        and        consultation  requirements laid down in Council
    requirements laid down in Council           Directive 77/187/EEC are complied with
    Directive 77/187/EEC are complied           irrespective of whether the decision leading
    with irrespective of whether the            to the transfer is taken by the employer or
    decision leading to the transfer is taken   by another natural or legal person:
    by the employer or by an undertaking
    controlling the employer;
14. Whereas the Member States' faculty Deleted
    not to apply the information and
    consultation requirements to certain
    undertakings on grounds of workforce
    size thresholds must be clarified;
 ---pagebreak--- 15. Whereas it is necessary to clarify the Unchanged
    circumstances in which employees
    must be informed where there are no
    employee representatives;
16. Whereas considerations of efficacy Unchanged
    require that the Member States take
    appropriate measures in the event of
    failure to comply with this Directive;
17. Whereas the present Directive shall be Deleted
    without prejudice to the Member
    States' obligations concerning the
    deadline for transposai of Directive
    77/187/EEC indicated in Annex I;
                                               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, sexual orientation, colour,
                                               religion or nationality.
HAS ADOPTED THIS DIRECTIVE:
                  Section I                                      Section I
            Scope and definitions                          Scope and definitions
                  Article 1                                      Article 1
1.  This Directive shall apply to the Unchanged
    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.
                                                AA
 ---pagebreak---    The transfer of an activity which is Deleted
   accompanied by the transfer of an
   economic entity which retains 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 engaged in
   economic activities whether or not they
    are operating for gain.
4. Member States need not apply Section Unchanged
   III of this Directive to sea-going
   vessels.
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
                                         ) ^
 ---pagebreak--- a)   "transferor" means any natural or Unchanged
     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 business;
b)   "transferee" means any natural or Unchanged
     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 business;
c)   "representatives of the employees" Unchanged
     means the representatives of the
     employees provided for by the
     laws or practice of the Member
     States.
This Directive is without prejudice to Unchanged
national law as regards the definition of
contract of employment or employment
relationship. However, Member States
shall not exclude from the scope of this
Directive contracts of employment or
employment         relationships    solely
because:
a)    of the number of working hours Unchanged
      performed or to be performed, or
b)    they are employment relationships Unchanged
      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
      fixed-duration           employment
      relationship or a temporary
      employment relationship;
                                           •1 3
 ---pagebreak--- c)   they are temporary employment Unchanged
      relationships within the meaning of
      Article 1(2) of Council Directive
      91/383/EEC.
               Section II                                     Section II
 Safeguarding of employees' rights                Safeguarding of employees' rights
               Article 3                                       Article 3
The transferor's rights and obligations Unchanged
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.
Member States shall provide that, after      Member States shall provide that, after the
the date of transfer within the meaning      date of transfer within the meaning of
of Article 1(1) and in addition to the       Article 1(1), the transferor and the
transferee, the transferor shall continue    transferee shall be jointly and severally
to be liable in respect of obligations       liable in respect of obligations which arose
which arose from a contract of               from a contract of employment or an
employment           or       employment     employment relationship and fell due before
relationship. However, in respect of         the date of transfer.
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.
 Member States may limit the
 transferor's joint liability to those
 obligations which arose before the date
 of the transfer and fall due within the
 first year following that date.
                                            IV
 ---pagebreak--- 2. Following the transfer within the Unchanged
   meaning of Article 1(1), 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 Unchanged
   observing such terms and conditions
   with the proviso that it shall not be less
   than one year.
   Paragraphs 1 and 2 shall not cover Unchanged
   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.
    Member States shall adopt the Unchanged
    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
    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
 ---pagebreak---                                                                         wrriR
Notwithstanding paragraphs 1, 2 and 3 Unchanged
of this Article, the laws of the Member
States may provide that the transferor's
debts - arising from a contract of
employment        or    an   employment
relationship - due before the transfer or
before the opening of insolvency
proceedings, shall not be transferred to
the transferee in cases of transfers
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
proceedings, provided that such
proceedings:
(a) are       conducted     under     the Unchanged
      supervision of a competent public
      authority, which may be an
      insolvency practitioner authorised
      by a competent public authority,
      and,
(b) give rise, according to the Unchanged
      legislation of the Member State in
      question, to the protection laid
      down by its national law, ensuring
      a level of protection at 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
      protection of employees in the
      event of the insolvency of their
      employer-
                                          5.     Member States shall provide for the
                                          necessary measures to ban the use of
                                          fraudulent insolvency proceedings intended
                                          to deprive employees of the rights laid
                                          down in this Directive.
                                      AC
 ---pagebreak---                  Article 4                        Article 4
1. The transfer of an undertaking, Unchanged
   business or part of a 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         .-~*M»«^ ^«•**.-^..
   take pace for economic, technical or
   organisational      reasons     entailing
   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
   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.
                                             1}
 ---pagebreak---     Notwithstanding Article 3(1, 2 and 3),       3.       Notwithstanding Article 3(1 and 2),
    the laws of the Member States may            the laws of the Member States may allow
    allow the employer or the person or          the employer or the person or persons
    persons exercising the employer's            exercising the employer's powers, on the
    powers, on the one hand, and the             one      hand,     and     the    employees'
    employees' representatives, on the           representatives, on the other hand, insofar
    other hand, to change the terms and          as they enjoy sufficient independence to
   conditions of employment by an                carry out the functions assigned to them, to
   agreement concluded as a means of             change the terms and conditions of
   -ensuring the^suBdyal of an undertaking,      employment by an agreement concluded as
   business or part of a business                a means of ensuring the survival of an
   transferred in the context of the             undertaking, business or part of a business
    proceedings referred to in Article 3(4).     transferred in the context of the
    Such an agreement may also determine         proceedings referred to in Article 3(4).
    whether and to what extent dismissals        Such an agreement may also determine
    may take place for economic, technical       whether and to what extent dismissals may
    or organisational reasons entailing          take place for economic, technical or
    changes in the workforce.                    organisational reasons entailing changes in
                                                 the workforce.
4.  Without prejudice to paragraph 2 of           4.      Without prejudice to paragraph 2 of
    this Article, where the agreement             this Article, where the agreement referred
    referred to in paragraph 3 is concluded,      to in paragraph 3 is concluded, it shall be
    it shall be presumed, unless proved to        presumed, unless proved to the contrary,
    the contrary, that the alteration of the      that the alteration of the terms and
    terms and conditions of employment is         conditions of employment referred to in the
    made as a means of ensuring the               agreement is made as a means of ensuring
    survival of the transferred undertaking,      the survival of the transferred undertaking,
    business or part of a business and that       business or part of a business and that the
    the dismissals concerned are effected         dismissals referred to in the agreement are
    for      economic,      technical      and    effected for economic, technical and
    organisational      reasons,      entailing   organisational reasons, entailing changes in
    changes in the work force.                   the work force.
5.  The Member States may confer on the Deleted
    competent judicial authorities the
    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
 ---pagebreak---              Article 5                              Article 5
If the business preserves its autonomy, Unchanged
the status and function of 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 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    Unchanged
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 fulfilled.
If the business does not preserve its Unchanged
autonomy and provided that the
conditions      necessary     for     the
constitution of the representation of the
employees are fulfilled, 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
 prior to the reconstitution or
 reappointment of the representation of
 employees.
                                           A 9
 ---pagebreak---    If the term of office of the Unchanged
   representatives of the employees
   affected by a transfer within the
   meaning of Article 1(1) 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.
                 Section HI                                  Section III
       Information and consultation                 Information and consultation
                  Article 6                                    Article 6
1. The transferor and the transferee shall  1-      When the transferor and transferee
   be      required      to    inform   the envisage a transfer within the meaning of
    representatives of employees affected   Article 1(1). they shall be required to
    by a transfer within the meaning of     inform the representatives of their
    Article 1(1) of the following:          respective employees affected by the
                                            transfer of the following:
    - the reason for the transfer,          Unchanged
    - the legal, economic and social Unchanged
       implications of the transfer for the
       employees,
    - any measures envisaged in relation Unchanged
       to the employees.
    The transferor must give such Unchanged
    information to the representatives of
    his employees in good time before the
    transfer is carried out.
                                                  <?:
 ---pagebreak---     The transferee must give such Unchanged
    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.  If the transferor or the transferee       When the transferor or the transferee
    envisages measures in relation to his     envisages measures in relation to his
   ««employees, -he*- shall consult -the      employees,     he    shall  consult   the
    representatives of his employees in       representatives of his employees in good
    good time on such measures with a         time on such measures with a view to
    view to reaching an agreement.            reaching an agreement.
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
 ---pagebreak--- The obligations laid down in this         4        The obligations laid down in this
Article shall apply irrespective of       Article shall apply irrespective of whether
whether the decision leading the          the decision resulting in the transfer is taken
transfer is taken by the employer or by   by a natural person or a legal person other
an     undertaking      controlling   the than the employer. In considering alleged
employer. In considering alleged          breaches      of    the    information      and
breaches of the information and           consultation requirements laid down by this
consultation requirements laid down by    Directive, the argument that such breach
this Directive, the argument that such    occurred because the information has not
breach      occurred      because - ' the been-provided by the natural or legal person
information has not been provided by       who/which took the decision leading to the
the undertaking which took the            transfer shall not be accepted as an excuse.
decision leading to the transfer shall
not be accepted as an excuse.
The Member States may limit the            5.      The Member States may limit the
obligations laid down in paragraphs 1,     obligations laid down in paragraphs 1. 2
2 and 3 to undertakings or businesses      and 3 to undertakings or businesses which,
which normally employ 50 or more           in terms of the number of employees, meet
employees or which, if employing less      the conditions for the election or
than 50 employees, fulfil the workforce    nomination      of    a    collegiate     body
size thresholds for the election or        representing the employees.
nomination of a collegiate body
representing the employees.
Member States shall provide that Unchanged
where there are no representatives of
the employees in an undertaking or
business, the employees concerned
must be informed in advance when a
transfer within the meaning of
Article 1(1) is about to take place.
                                                             Article 6A
                                            1.  For the purposes of the information
                                                and consultation requirements laid
                                                down in this Directive, the Member
                                                 States shall provide for employee
                                                representatives     who      enjoy     the
                                                 necessary independence to carry out
                                                the functions assigned to them.
              Section IV                                     Section IV
           Final provisions                                Final provisions
               Article 7                                      Article 7
                                          2<i
 ---pagebreak---                                                               ^ttÊÊÊtÊBÊÊÊÊÊlÊm
This directive shall not affect the right of Unchanged
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
                                             When the Member States apply the
                                             provisions contained in this Directive, they
                                             may under no circumstances introduce
                                             discrimination on the basis of race, sex, age,
                                             handicap, sexual orientation, colour.
                                             religion or nationality.
                  Article 8                                      Article 8
Member States shall introduce into their Unchanged
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' This Article shall also apply to employees'
 representatives in respect of their rights representatives in respect of their rights
 under Articles 4(3, 4 and 5), 5 and 6.       under Articles 4(3 and 4). 5 and 6.
                                           ^3
 ---pagebreak---                    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
   employers'           and         employees'
   representatives have introduced 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
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.
   Member States shall inform the Unchanged
   Commission        immediately      of the
   measures they take to implement this
   directive.
                   Article 10                         Article 10
Directive 77/187/EEC is repealed with r) e i e t e d
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.
Any references made to the repealed j} e i et J
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.
                   Article 11                         Article 11
                                                 *1
 ---pagebreak--- 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
 ---pagebreak---                                                                    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