CELEX: 51997DC0085
Language: en
Date: 1997-03-04 00:00:00
Title: Memorandum from the Commission on acquired rights of workers in cases of transfers of undertakings

COMMISSION OF THE EUROPEAN COMMUNITIES
                                   Brussels, 04.03.1997
                                   COM(97) 85 final
        MEMORANDUM FROM THE COMMISSION
on acquired rights of workers in cases of transfers of undertakings
 ---pagebreak---  ---pagebreak---                         MEMORANDUM FROM THE COMMISSION
            on acquired rights of workers in cases of transfers of undertakings
       GUIDELINES ON THE APPLICATION OF COUNCIL DIRECTIVE
   77/187/EEC O F 14 FEBRUARY 1977 BASED ON THE CASE LAW OF THE
           COURT O F JUSTICE OF THE EUROPEAN COMMUNITIES
INTRODUCTION
1       SCOPE
        1.1       Which countries?
        1.2       Which undertakings?
        1.3       Which employees?
        1.4       Which operations?
                  1.4.1 Fundamental concept
                  1.4.2 Change of employer
                  1.4.3 Successive transfers
                  1.4.4 Transfer operations associated with insolvency proceedings
2       C O N S E Q U E N C E S O F TRANSFER
        2.1       Transfer of rights and obligations to the transferee
        2.2       Transfer of undertaking and collective agreement applicable
        2.3       Transfer of undertaking and changes in working conditions
        2.4       Non-entitlement to waive the rights conferred by the Directive
        2.5       Non-application of the Directive to benefits outside statutory social security
                  schemes
        2.6       Protection against dismissal
        2.7       Protection of the functions of the employees' representative
3       INFORMATION AN» CONSULTATION
4       CONCLUSION
                                              ANNEXES
I - TWENTY QUESTIONS AND ANSWERS ON SAFEGUARDING YOUR RIGHTS
II - JUDGMENTS OF THE EUROPEAN COURT OF JUSTICE AND THE EFTA COURT ON
TRANSFERS OF UNDERTAKINGS
III -CASES PENDING BEFORE THE EUROPEAN COURT OF JUSTICE AND THE EFTA
COURT CONCERNING TRANSFERS OF UNDERTAKINGS
IV - NATIONAL PROVISIONS TRANSPOSING DIRECTIVE 77/187/EEC OF 14 FEBRUARY 1977
                                                   A
 ---pagebreak--- GUIDELINES ON THE APPLICATION OF COUNCIL DIRECTIVE
                      77/187/EEC OF 14 FEBRUARY 1977
INTRODUCTION
According to the preamble, the aim 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
businesses1 (subsequently referred to as the "Directive" or "Transfers Directive"), is "to
provide for the protection of employees in the event of a change of employer, in
particular to ensure that their rights are safeguarded". To this end, the Directive
states that the transferor's rights and obligations arising from a contract of employment
or from an employment relationship are, by reason of such transfer, transferred to the
transferee. ït also provides for the protection of the workers concerned against dismissal
by the transferor or the transferee, but does not stand in the way of "dismissals that
may take place for economic, technical or organizational reasons entailing changes
in the workforce". Furthermore, in accordance with Article 6 of the Directive, the
transferor and transferee are required to inform and consult the representatives of the
employees affected by a transfer. The essential objective of the Directive is thus to ensure
that the restructuring of undertakings within the European Community does not have
adverse consequences for the employees of the undertaking concerned.
Generally speaking, as far as legislation is concerned, the effectiveness in social terms
of the protection afforded by the Directive is beyond dispute. The Directive has proved
to be an invaluable instrument for the protection of workers in the event of the
reorganisation of an undertaking, by ensuring peaceful and consensual economic and
technological restructuring and providing minimum standards for promoting fair
competition in the context of such changes.
The Commission, in paragraph 11.3.2 of the Medium-term Social Action Programme
(1995-1997), decided to produce a memorandum on acquired rights of workers in cases
of transfers of undertakings, with a view to increasing information and guidance on the
application of Community law, taking into account the large number of cases which have
come before the Court of Justice of the European Communities.
        OJ No L 61/27, 5.3.1977.
 ---pagebreak--- O       SUBJECT
The Commission sees this Memorandum as a useful tool for a better understanding of
Community law in a very complex area which is not always easy to interpret. The main
purpose of the Memorandum is make it easier for the public at large to understand
Directive 77/187/EEC         in the light of the criteria established by the European
Court of Justice. Hence the objective is to tell European citizens how Council
Directive 77/187/EEC has been construed by the European Court of Justice. It satisfies
the requirement that Community rules should be transparent by facilitating correct
application of European law and serving as a guide for representatives of employees and
employers on their rights and obligations in the area of transfers of undertakings.
        SCOPE
        1.1    Which countries?
               The Directive applies "where and insofar as the undertaking, business or
               part of the business to be transferred is situated within the territorial scope
               of the Treaty" (Article 1.2) or a member country of the European
               Economic Area (Norway, Iceland, Liechtenstein).
        1.2    Which undertakings?
               The Directive applies to the transfer of any type of undertaking, business
               or part of a business, whether public or private, to another employer.
               The fact that an undertaking is engaged in non-profit-making activities is
               not sufficient to remove the undertaking from the scope of the Directive2.
               Only transfers involving sea-going vessels are specifically excluded by the
               Directive.
        1.3    Which employees?
               The persons the Directive aims to protect are persons with a contract of
               employment or persons in an employment relationship as defined by the
               employment law of the Member States at the time of the transfer.
               The Court feels that it is for the national courts to establish to what extent
               the persons concerned are to be regarded as employees and that,
               consequently, whether or not an employment contract or employment
        CJEC, 8 June 1994, Commission v UK, paragraph 45, ECR 1994, 6-2435.
                                                      3
 ---pagebreak---           relationship exists on the date of transfer must be established on the basis
          of the provisions of national law3.
         The Directive does not apply to the transfer of rights and obligations in
          respect of persons who were employed by the transferor on the date of
          transfer but, of their own free will, do not continue to occupy an
         employee's post with the transferee4.
  1.4    Which operations?                                   ~~ '
          1.4.1 Fundamental concept
          First of all, it should be noted that the Court of Justice of the European
          Communities has ruled that the Directive applies to all transfers resulting
          from a contract, an administrative or legislative act, or a court decision5.
          The Court has also held that the essential criterion for the recognition of
          a transfer is whether the transferee has received an existing undertaking so
          as to be able to continue its activities or, at least, activities of the same
          type. It follows that the decisive criterion for establishing whether there is
          a transfer for the purposes of the Directive is whether the economic unit
          retains its identity6. The assessments necessary in order to establish
          whether or not there is a transfer in the sense indicated are a matter for the
          national courts, in view of the specific interpretation factors involved:
          -       type of undertaking or business,
          -       whether or not tangible assets such as buildings and movable
                  property are transferred,
                  the value of intangible assets at the time of transfer,
         -        whether or not the majority of employees are taken over by the
                  new employer,
         -        whether or not the customers are transferred,
         -        the degree of similarity between the activities carried on before and
                  after the transfer,
         -        the period, if any, for which those activities were suspended.
         The Court has held that these circumstances are merely single factors in
         the overall assessment which must be made and cannot therefore be
         considered in isolation7. In its opinion, the case law referred to above
          assumes that the transfer relates to a solidly organised economic unit,
3
  CJEC, 11 July 1995, Case 105/84, A/S Danmols Inventar, ECR 1985, 2639 and 2654.
4
  CJEC, 7 February 1985, Case 19/83, Wendclboe, ECR 457.
5
  CJEC. 7 February 1985, Case 135/83, Abels, ECR 469.
  CJEC. 14 April 1994, Case C-392/92, Schmidt.
7
  CJEC, 18 March 1986, Case 24/85, Spijkcrs.
 ---pagebreak---          whose activities are not limited to a specific task. For a transfer of an
         undertaking to be covered by the Directive, it should involve the transfer
         of an organised set of assets by means of which the activities or certain
         activities of the transferor undertaking can be carried on in a solid
         manner8.
          1.4.2 Change of employer
          The Court has ruled that the Directive applies to all situations in which
          there is a change in the legal or natural person responsible for carrying on
          the business9. As soon as the economic unit continues its activity, the mere
          fact of the change in the natural or legal person who is responsible for
          carrying on the business is sufficient to make the Directive applicable,
          regardless of whether or not ownership of the undertaking is transferred10.
          The transfer of ownership of most of the shares in a company or a change
          in the majority shareholder does not constitute a transfer of the
          undertaking, as the employer's legal personality remains the same.
           1.4.3 Successive transfers
           -        The owner of a leased undertaking takes over its operation
                    following a breach of the lease by the lessee:
           The Directive is applicable, its purpose being to ensure, as far as possible,
           that the rights of employees are safeguarded in the event of a change of
           employer by enabling them to remain in employment with the new
           employer on the terms and conditions agreed with the transferor11.
                    At the end of a non-transferable lease, the owner of the
                    undertaking transfers the undertaking to a new lessee who carries
                    on the business without interruption, with the same staff as were
                    dismissed on expiry of the first lease:
           The Directive is applicable where, on expiry of a non-transferable lease,
           the lessee ceases to be the employer and a third party becomes the
            employer under a new lease concluded with the owner. The fact that the
            transfer is affected in two stages does not prevent the Directive from
            applying, provided that the economic unit in question retains its identity.
            This is so in particular when the business is carried on without interruption
    CJEC, 19 September 1995, Case C-48/94, Rygaard.
9
    CJEC, 15 June 1988, Case 101/87, Boric International.
10
    CJEC, 10 February, Case 324/86, Daddy's Dance Hall.
 11
    CJEC, 17 December 1987, Case 287/86, Ny Molle Kro.
 ---pagebreak---            by the new lessee, with the same staff as were employed in the business
           before the transfer12.
            1.4.4 Transfer operations associated with insolvency proceedings
            According to the Court of Justice the Directive does not impose on the
           Member States the obligation to extend the rules laid down therein to
           transfers taking place in the context of insolvency proceedings instituted
           with a view to the liquidation of the assets of the transferor, without
           prejudice to the national legislator'srightto decide otherwise13.
           The Court has also ruled that the Directive does not apply to transfers of
           undertakings made as part of a creditor's arrangement procedure .of the
           kind provided for in the Italian legislation on compulsory administrative
           liquidation but that it does apply when, in accordance with a body of
           legislation such as that governing special administration for large
           undertakings in critical difficulties, it has been decided that the
           undertaking is to continue trading for as long as that decision remains in
           force14.
           By contrast, the Directive does apply to the transfer of an undertaking,
           business or part of a business to another employer in the context of
           proceedings of the type "surséance van betaling" (suspension of payments)
           under Netherlands law, as such proceedings may allow the continuation of
           business.
           The fact that the transfer of an undertaking, business or part of a business
           takes place after the suspension of payments by the transferor is not in
           itself sufficient to exclude such transfers from the scope of the Directive15.
           Furthermore, the Directive applies to undertakings in which a state of
           crisis has been recognised, as the procedure leading to identification of this
           state tends to favour the maintaining of the undertaking's activity with a
           view to a subsequent takeover16.
12
   CJEC, 10 February 1988, Case 324/86, Daddy's Dance Hall.
13
   CJEC, 7 Febniaiy 1985, Case 135/83, Abels; CJEC, 7 Febniaiy 1985, Case 179/83 FNC; CJEC,
   7 Febniaiy 1985, Case 186/83, Botzen; CJEC, 25 July 1991, Case 362/89, dTJrso.
14
   CJEC, 25 July 1991, Case C-362/89, d'Urso.
15
   CJEC, 11 July 1985, Case 105/84, Mikkelson.
16
   CJEC, 7 December 1985, Case 472/93, Spano.
 ---pagebreak---    CONSEQUENCES OF TRANSFER
   2.1     Transfer of rights and obligations to the transferee
           In accordance with Article 3.1 of the Directive, the transferor's rights and
           obligations arising from a contract of employment or from an employment
           relationship existing on the date of a transfer are, by reason of such
           transfer, transferred to the transferee. However, Member States may
           provide that after the date of transfer the transferor continues to be liable,
           side by side with the transferee, in respect of obligations arising from a
           contract of employment or an employment relationship.
           Thus, the transferee is bound by all the transferor's obligations resulting
           from an employment contract or an employment relationship, including
           those which arose before the date of transfer. In the Court's view, the
           Directive refers unreservedly to the transferor's rights and obligations
           arising from a contract of employment or from an employment relationship
           existing on the date of transfer. It is the transferee who assumes liability
           for bearing the burdens resulting from employees' rights existing at the
           time of transfer17. The objective of the Directive is to safeguard the rights
           of employees in the event of a change of employer by making it possible
           for them to continue to work for the transferee under the same conditions
           as those agreed with the transferor. Its purpose is not, however, to ensure
           that the contract with the transferor is continued where an employee does
           not wish to remain in the transferee's employ18.
   2.2     Transfer of undertaking and collective agreement applicable
           Article 3.2 of the Directive requires the transferee to continue to observe
           the terms and conditions agreed in any collective agreement on the same
           terms applicable to the transferor, until the date of termination or expiry
           of the collective agreement or the entry into force or application of another
           collective agreement.
           In the Court's view, Article 3.2 of the Directive must be interpreted as
            obliging the transferee to continue to observe the terms and conditions
            agreed in any collective agreement in respect of workers who were already
            employed by the undertaking at the time of transfer, thus excluding those
            who were recruited subsequent to that date19.
            The transferee has to continue to observe the terms and conditions agreed
            in any collective agreement on the same terms, until the date of
17
   CJEC, 7 February 1985, Case 135/83, Abels.
18
    CJEC, 5 May 1988, Cases 144/87 and 154/87, Berg and Busschers.
19
    CJEC, 17 December 1987, Case 287/86, Ny Molle Kro.
 ---pagebreak---           termination or expiry of the collective agreement or the entry nto force or
          application of another agreement. In accordance with Article 3.2 of the
          Directive, Member States may limit this period, provided it is not less than
          one year20.
   2.3    Transfer of undertaking and changes in working conditions
          If the contract of employment or the employment relationship is terminated
          because the transfer within the meaning of the Directive involves a
          substantial change in working conditions to the detriment of the employee,
          the employer is regarded as having been responsible for termination of the
          employment contract or employment relationship (Article 4.2).
          Employees' remuneration rights arising from their employment contract or
          employment relationship may not be changed even if the overall amount
          of their wages remains unchanged. However, in so far as national law
          makes it possible to amend an employment relationship in a way which is
          disadvantageous to employees, such changes are not ruled out merely
          because the undertaking has in the meantime been transferred. Thus, the
          rights and obligations may be changed vis-à-vis the transferee subject to
          the same restrictions as could have been applied to the transferor,
          assuming that the transfer in itself is not the reason for this change21.
   2.4    Non-entitlement to waive the rights conferred by the Directive
          The Court of Justice has held that the protection conferred by the
          mandatory provisions of the Directive is a matter of public policy. It has
          ruled very clearly that an employee cannot waive the rights conferred upon
          him by the Directive and that these rights cannot be restricted, even with
          his consent and even if the disadvantages resulting from his waiver are
          offset by such benefits that, taking the matter as a whole, he is not placed
          in a worse position22.
          As the Court has specified, the Directive's rules apply to all, including the
          employees' representatives, who may not agree different arrangements in
          an agreement with the transferor or the transferee.
          According to the Court, it is not permissible to derogate from the rules in
          a manner unfavourable for the employees and hence the implementation
          of the rights conferred on employees may not be made subject to the
          consent of either the transferor or the transferee nor the consent of the
          employees' representatives or the employees themselves, with the sole
20
   CJEC, 11 December 1992, Case 209/91, Rask and Christensen.
21
   CJEC, 11 December 1992, Case 209/91, Rask and Christensen.
22
   CJEC, 10 Febniaiy 1988, Case 324/86, Daddy's Dance Hall.
                                                  8
 ---pagebreak---           reservation, as regards the workers themselves, that, following a decision
          freely taken by them, they are at liberty, after the transfer, not to continue
          the employment relationship with the new employer23. In this event it is
          for the Member States to determine what the fate of the employment
          contract or employment relationship should be. Notably, they may provide
          in such circumstances that the contract must be regarded as terminated
          either by the employee or by the employer. They may also provide that the
          contract be maintained with the transferor24.
   2.5    Non-application of the Directive to benefits outside statutory social
          security schemes
          The transfer of rights and obligations arising from a contract of
          employment or an employment relationship does not cover employees'
          rights to old-age, invalidity or survivor's benefits under supplementary
          company or inter-company pension schemes outside the statutory social
          security schemes in Member States (Article 3.3, first paragraph).
          Thus there is no transfer of the transferor's obligations based on non-
          statutory schemes. Nevertheless, in order to avoid the adverse
          consequences for employees which could result from this exclusion,
          Member States must adopt the measures necessary to protect the interests
          of employees and persons no longer employed in the transferor's business
          at the time of transfer (Article 3.3, second paragraph).
   2.6    Protection against dismissal
          The transfer of an undertaking, business or part of a business does not in
          itself constitute grounds for dismissal by the transferor or the
          transferee (Article 4.1), but this provision does not stand in the way
          of dismissals that may take place for economic, technical or
          organisational reasons entailing changes in the workforce.
          Thus the Directive is limited to prohibiting dismissals where the only
          reason is the transfer.
          The Court has held that the protection afforded by the Directive against
          dismissal applies to any situation in which employees affected by a
          transfer enjoy some, albeit limited, protection against dismissal under
          national law, with the result that such protection may not be taken away
          from them or curtailed solely because of the transfer25.
23
   CJEC 25 July 1991, Case 362/89, d'Urso.
24
   CJEC 16 December 1992, Case 132/91, Katsikas, ECR 92, I 6577.
25
   CJEC, 15 April 1986, Case 237/84, Commission v Belgium.
 ---pagebreak---          However, in the case of dismissals the Directive's scope may be curtailed
         by the right, recognised in the Member States, of withdrawing protection
         from "certain specific categories of employees who are not covered by the
         laws or practice of the Member States in respect of protection against
         dismissal"26.
2.7      Protection of the functions of the employees' representative
         Article 5 of the Directive aims to ensure continuity of the function of
         representation and protection of the persons concerned. As regards
         continuity of the function of representation (Article 5(1)), it should be
         borne in mind that if the business transferred preserves its autonomy, i.e.
         continues to exist as a separate operating unit rather than being absorbed
         by a more complex structure, the status and function of the representatives
         or representation of the employees affected by the transfer, as laid down
         by the national law of the Member States, must be preserved. However,
         this does not apply, if in accordance with national legislation the
         conditions necessary for the re-appointment of the employees'
         representatives are fulfilled.
         The representatives of the employees affected by a transfer whose term of
         office expires as a result of the transfer "continue to enjoy the protection
         provided by the laws, regulations, administrative provisions or practice of
         the Member States" (Article 5.2).
INFORMATION AND CONSULTATION
The transferor and transferee are required to inform the representatives of their
respective employees affected by a transfer of the following (Article 6.1):
         -        the reasons for the transfer,
                 the legal, economic and social implications of the transfer for the
                  employees,
         -        measures envisaged in relation to the employees.
This information must be provided in good time before the transfer is carried out,
and in any event before the transferee's employees are directly affected by the
transfer as regards their conditions of work and employment.
Whereas the obligation to provide information is general, the consultation
obligation is limited. This obligation exists when the transferor or transferee
envisages measures in relation to his employees (Article 6.2), e.g. a reduction in
Article 4(1), semence 2, of Council Dircclivc 77/187/EEC of 14 Fcbniary 1977.
                                              10
 ---pagebreak---     the size of the workforce. Consultation takes place "with a view to seeking
    agreement". The Court of Justice has interpreted a similar provision in Directive
    75/129/EEC (collective redundancies) as not creating an obligation with regard to
    results27. This consultation must be made "in good time" with the employees'
    representatives.
    According to the Court, the Directive was not intended to bring about global
    harmonisation of the national systems of employee representation in the firm.
    However, the limited nature of such harmonisation should not frustrate the
    purpose of Article 6 of the Directive. Notably, it should 'not absolve Member
     States from their obligation to take all the necessary measures to ensure that the
    employees' representatives may be designated with a view to the information and
    consultation provided for in the Article in question. This being the case the
    Directive leaves it to the Member States to determine the arrangements for
    designating the employees' representatives28.
    Member States may limit the obligations referred to above to undertakings or
    businesses which, in respect of the number of employees, fulfil the conditions for
    the election or designation of a collégial body representing the employees (Article
    6.4).
    They may also provide that, where there are no representatives of the employees
    in an undertaking or business, the employees concerned must be informed in
    advance when a transfer is about to take place (Article 6.5).
    It must be emphasised that national law must provide for effective, proportionate
    and dissuasive sanctions in the event of the employer's failure to inform and
    consult the employee representatives29.
    CONCLUSION
    The Transfers Directive has formed the basis for a large number of cases brought
    before the Court of Justice of the European Communities. A total of 25 judgments
    have been handed down, most of them in connection with references for
    preliminary rulings (see Annex II). At the moment there are several cases pending
    before the Court (see Annex III).
    In its judgments, the Court has in particular clarified the concept of transfer, ruled
    that a contractual link is not necessary between the transferor and transferee for
    the Directive to apply, excluded from the scope of the Directive liquidation
    proceedings but not suspension of payment proceedings, clarified the meaning of
27
    CJEC 12 February 1985, Case 284/83, ECR, p. 553.
28
    CJEC, 8 June 1984, Case 382/92, Commission v UK.
2»)
    CJKC, 8 June 1984, Case 382/92, Commission v UK.
 ---pagebreak--- the term "employee", and ruled that employees and their representatives cannot
waive the rights conferred on them by the Directive as implemented by national
legislation.
                                       12
 ---pagebreak---                                      ANNEX I
 TWENTY QUESTIONS AND ANSWERS ON SAFEGUARDING YOUR
                                     RIGHTS
             A GUIDE FOR EMPLOYEES' AND EMPLOYERS1
        REPRESENTATIVES CONCERNING THEIR RIGHTS AND
 OBLIGATIONS IN THE FIELD OF TRANSFERS OF UNDERTAKINGS
1) Does the Directive also apply to the transfer of an undertaking situated in the
territory of a country which is not a Member State of the European Union?
- The Directive applies to the extent that the undertaking to be transferred is
within the territorial scope of the Treaty on European Union or a Member State
of the European Economic Area (Norway, Iceland, Liechtenstein).
1) For the Directive to be applicable, must the undertaking exercise its activity
with a view to making a profit?
- The fact that an undertaking is engaged in non-profit-making activities is not
sufficient to remove the undertaking from the scope of the Directive.
3) Which operations are excluded from the scope of the Directive?
- The Directive specifically excludes operations involving sea-going vessels.
However, France, Germany, Italy, Portugal and Spain have applied the principles
of the Directive to sea-going vessels.
4) Who is covered by the Directive?
- Anyone with a contract of employment or in an employment relationship on the
date of a transfer.
Public service employees are not covered by the directive insofar as they are not
subject to the labour law in force in the Member States.
5) Who decides whether a person has a contract of employment or is an
employment relationship on the date of a transfer
- This question is subject to the jurisdiction of each Member State and the
provisions of national law.
6) Does the Directive apply to employees who have left the undertaking by the
date of transfer?
- No, the provisions of the directive cover only employees in the service of the
undertaking on the date of transfer.
                                          13
 ---pagebreak--- 7) After a transfer, who is responsible for existing obligations, the transferor or
the transferee?
- The transferee is liable for all the transferor's obligations, including those arising
prior to the date of transfer.
Except where national legislation provides for joint liability of the transferor and
transferee after the transfer, the consequence of the transfer is to release the
transferor from his obligations.
Joint responsibility has been adopted by France, Germany, Greece, Italy, the
Netherlands, Portugal and Spain.
8) Where an undertaking is transferred, which collective agreement applies, the
transferor's or the transferee's?
- The Directive requires the transferee to continue to observe the terms and
conditions of 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 of another collective agreement.
However, Member States may limit this period, provided it is not less than one
year.
9) May conditions of employment be changed following the transfer of an
undertaking?
- The rights of employees arising from a contract of employment or employment
relationship may not be changed because of a transfer.
However, rights and obligations may be changed vis-à-vis the transferee subject
to the same restrictions as applied to the transferor, provided that the transfer in
itself is not the reason for the change.
 10) May employees waive the rights accorded by the Directive?
- No. Employees may not waive the rights conferred on them by the Directive,
 and those rights may not be restricted even with their consent and even if the
 disadvantages resulting from the waiver are offset by similar benefits.
 11) Does the protection given by the Directive apply to benefits under non-
 statutory social security schemes?
 - No. The transfer of rights and obligations arising from an employment contract
 or employment relationship does not cover employees' rights to old-age, invalidity
 or survivor's benefits under supplementary company or inter-company pension
 schemes outside the statutory social security schemes in Member States. However,
 Member States must adopt the measures necessary to protect the rights acquired
                                             14
 ---pagebreak--- or being acquired by employees and persons no longer employed in the business
at the time of transfer.
12) May dismissals for economic, technical or organisational reasons take place
on the transfer of an undertaking?
- Yes. The Directive is limited to prohibiting dismissals where the only reason is
the transfer.
13) What are the rights of the representatives of employees affected by a
transfer whose term of office expires as a result of the transfer?
- They continue to enjoy the protection provided by the laws, regulations,
administrative provisions or practice of the Member States.
14) What are the transferor's and transferee's obligations as regards providing
information for the representatives of their respective workers?
- They must provide information on the following points:
- the reasons for the transfer,
- the legal, economic and social implications of the transfer for the employees,
- measures envisaged in relation to the employees.
15) Is it compulsory to consult the employees' representatives in the event of the
transfer of an undertaking?
- Such an obligation exists if the transferor or transferee envisages measures in
relation to their respective employees, e.g. a reduction in the size of the
workforce.
16) At which point in time must they be informed and consulted?
- The employees' representatives must be informed and consulted "in good time"
and in any event before the transferee's employees are directly affected by the
transfer as regards their conditions of work and employment.
17) Are there any derogations from the principles of informing and consulting
employees ' representatives?
- Yes. Member States may limit these obligations to undertakings or businesses
which, in respect of the number of employees, fulfil the conditions for the election
or designation of a collégial body representing the employees.
 18) Does the Directive require Member States to provide for systems of
employee representation even if there is no such representation in the
 undertaking under national law?
                                         15
 ---pagebreak--- Yes. Member States must adopt all necessary measures for designating the
employees' representatives who have to be informed and consulted pursuant to
Article 6 of the Directive. It is for the Member States to determine the
arrangements for designating the employees' representatives.
19) Are the obligations to inform and consult employees' representatives
binding?
- National law must provide for effective sanctions in the event of the employer's
failure to inform and consult employees' representatives.
20) Is the protection accorded by the Directive the upper limit?
- No. The Directive does not affect the right of Member States to apply or
introduce laws, regulations or administrative provisions which are more favourable
to employees.
                                         16
 ---pagebreak---                                   ANNEX II
JUDGMENTS OF THE COURT OF JUSTICE OF THE EUROPEAN
COMMUNITIES AND THE EFTA COURT RELATING TO TRANSFERS
OF UNDERTAKINGS - COUNCIL DIRECTIVE 77/187/EEC OF 14
FEBRUARY 1977
Wendelboe, Case 19/83, 7 February 1985, ECR 1985, p. 457
Abels, Case 135/83, 7 February 1985, ECR 1985, p. 479
Industriebond FNV, Case 179/83 7 February 1985, ECR 1985, pp. 511 and 517
Botzen, Case 186/83, 7 February 1985, ECR 1985, pp. 520 and 523
A7S Danmols Inventar, Case 105/84 11 July 1985, ECR 1985, pp. 2639 and 2654
Republic of Italy, Case 235/84 10 July 1986, ECR 1986, pp. 2291 and 2304
Kingdom of Belgium, Case 237/84, 15 April 1986, ECR 1986, pp. 1247 and 1257
Spijkers, Case 24/85, 18 March 1986, ECR 1986, pp. 1119 and 1130
Ny M0lle Kro, Case 287/86, 17 December 1987, ECR 1987, p. 5465
Daddy's Dance Hall, Case 324/86, 10 February 1988, ECR 1988, p. 739
Bork, Case 101/87, 15 June 1988, ECR 1988, p. 3057
Berg and Busschers, Cases 144 and 145/87, 5 May 1988, ECR 1988, p. 2559
D'Urso, Case 362/89, 25 July 1991, CJEC,91, 1-4105
Redmond Stichting, Case 29/91, 19 May 1992, CJEC 92, 1-3189
Anne Watsen, Case 209/91, 12 November 1992, CJEC 92, 1-5755
Schmidt, Case 392/92, 14 April 1994, CJEC 94, 1-1311.
Commission v United Kingdom, Case 382/92, 8 June 1994, CJEC 94, 1-2435
Rygaard, Case 48/94, 19 September 1995.
Luigi Spano, Case 472/93, 7 December 1995.
Merckx et Neuhuys, Cases 171/94 and 172/94, 7 March 1996.
Eilert Eidesund v Stavanger Catering A.s., Case E - 2/95. Judgment of the EFTA
Court of 25 September 1996.
Torgier Langeland v Norske Falnicorn A.S., Case E-3/95.
Judgment of the EFTA Court of 25 September 1996.
Annette Henke v Gemeinde Schierke and Verwaltungsgemeinschat "Brocken".-
Case C-298/94, 15.10.96.
Claude Rotsart de Hertains v. S.A. J. Benoit in receivership and I.G.C. Housing
Service Case C - 305/94, 14.11.96.
                                       17
 ---pagebreak---                                  ANNEX HI
 CASES PENDING BEFORE THE COURT OF JUSTICE OF THE
EUROPEAN COMMUNITIES AND THE EFTA COURT RELATING TO
COUNCIL DIRECTIVE 77/187/EEC OF 14 FEBRUARY 1977
- Case C-319/94, Jules Dethier Equipment v Jules Dassy, Sprl Sovam in
receivership.
- Case C-13/95, Ayse Siizen v Zehnacker Gebandereinigung Gmbh.
- Case C-229/95, Simone Moll v Berhane Mesghena.
- Case C-336/95, Pedro Burdalo v Fondo de Garantia Salarial.
- Case E-2/95, Eilert Eidesund v Stavanger Catering A.S.
- Case E-3/95, Torgeir Langeband v Norske Falnicorn A.S.
- Case C-336/95 Pedro Burdalo v Fondo de Garantia Salarial.
- Case E-2/96 J. Ulstein & P.Otto Raiseng v A. Meller.
- Case E-3/96 Tor A.Ask v ABB AS and AKER AS.
- Case C-121/96 Sultan Bulut v Deutsche Bundespost.
- Case C-127/96 Prudencia Gomez Perez v Contrtas y Limpiensas S.L. and F.
Hernandez Vidal S.A.
- Case C-173/96 Francisco Hidalgo v Asociaciôn de Servicios ASER and Sociedad
Cooperativa Minerva.
- Case C-204/96 E.f. Liebelt GmbH v Marianne Seidel.
- Case C-229/96 F. Santner v Hoechts A.g.
- Case C-247/96 H. Ziemann v Fa Ziemann Sicherheit GmbH and Fa H. Bohn
Sicherheitsdienst.
- Case C-277/96 H. J.Dick v EB - Schulungs GmbH i.L.
 ---pagebreak---                                    ANNEX IV
NATIONAL PROVISIONS TRANSPOSING DIRECTIVE 77/187/EEC OF
14 FEBRUARY 1977
National provisions communicated by the Member States with reference to
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 businesses:
Austria        Arbeitsvertragsrechts-Anpassungsgesetz-Avrag,BGBlNr459/1993
Belgium :      Arrêté Royal du 19/04/78, Moniteur Belge du 25/08/78
               Arrêté Royal du 31/10/78, Moniteur Belge du 31/10/78
               Convention collective n*32 bis du 7 juin 1985 modifiée par la
Convention             n*32ter du 2 décembre 1986.
Denmark     :  Lov af 21/03/79, Lovtidende à NR.11 AF 21/03/79         p. 326
Finland   :    Act on contracts of Employment 320/70 as amended by Act 235/93
               Act on Co-determination in Companies 725/78 as amended by Act
               236/93
France :       Code du Travail (Art. 122-12, 122-12.1, 132-8, 412-16, 412-18)
               Circulaire n*27/75 du 02/07/75
               Arrêté Ministériel du 27/03/62
               Accord Convention Collective National Retraite Prévoyance Cadres
               du 14/03/47
               Loi n"82-915; Journal Officiel du 29/10/82
               Loi n'83-528, Journal Officiel du 29/06/83
Germany:       Gesetz vom 25/08/69, Bundesgesetzblatt (Teile I, II, III) I, Nr. 83
               vom 27/08/69 p. 1317
               Gesetz vom 15/01/72, Bundesgesetzblatt (Teile I, II, III) I Nr. 48
               vom 20/08/80 p. 1308
Grand Duchy of Luxembourg : Règlement Grand-Ducal du 19/06/70, Memorial
                A n'35 du 30/06/70.
                Loi du 24/06/70, Memorial A n*35 du 30/06/70
                Règlement Grand Ducal du 27/06/70, Memorial A n*35 du
                30/06/70.
               Loi du 12/11/71. Loi du 18/03/81, Memorial A n° 16 du
                26/03/81.
 Greece :       Presidential Decree No 572 of 01/12/88, FEK AN. 269 of 06/12/88
                p. 4099
                                        19
 ---pagebreak--- Ireland :     EC. Safeguarding of Employees on Transfer of Undertaking,
              Statutory Instruments n*306 of 10/10/1980
Italy :       Code Civile (Art.2112)
              Legge N-675 del 12/08/77, Gazetta Ufficiale
              le n. 243 del 07/09/77 p. 6257
              Legge N.215 del 26/05/78, Gazetta Ufficiale N. 145 del 07/05/78
              P.38.03
              Legge N.428 del 29 dicembre 1990, Gazetta Ufficiale n*10 del
              12/01/1991
Netherlands : Wet van 15/07/79, Staatsblad nr 1979/448 van 31/08/79.
              Ministeriele Verordening van 30/01/81, Staatsblad nr. 1981/18 van
               15/02/81.
              Wet van 15/05/81, Staatsblad nr. 1981/400 van 07/07/81.
              Wet van 22/05/81, Staatsblad Nr 1981/416 van 14/07/81.
Portugal :    Decreto - Lei N 49/408, 24/11/69
              Decreto-Lei N'519C/79, 29/12/79
              Lei n'46/79, 12/09/79
              Lei n'68/79, 09/10/79
Spain :       Ley N. 8/80 de 10/03/80, (Boletin Oficial del Estado de 14/03/80).
              Decreto N. 2065/74 de 30/05/74, (Boletin Oficial del Estado de
              30/07/80).
Sweden :      Act. 1982/80 on Security of Employment, section 4,7 and 25-27
              Act. 1976/58 on Co-Determination at Work, section 6, 10-22 and 28
              Annual Leave Act. 1977/480, section 31
              Act 1974/358 on the Position of a Trade-Union Representative at
              the Work Place
              Act 1967/531 on Safeguarding Pension Commitments.
United Kingdom : Regulations 1981, Statutory Instruments n" 1794 of 14/12/81.
              Trade Union Reform and Employment Rights Act, 1993
              Terms and conditions of employment. Regulations, 1995 - N#
              2587.
                                      20
 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                             COM(97) 85 final
                                              DOCUMENTS
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                                    Catalogue number : CB-CO-97-077-EN-C
                                                             ISBN 92-78-16351-1
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