The Transfers of Undertakings Directive''
2001/23/EC
is a European Union law that protects the contracts of employment of people working in businesses that are transferred between owners. It replaced and updated the law previously known as the Acquired Rights Directive 77/187/EC.

Overview

The Directive stipulates that any employee's contract of employment will be transferred automatically on the same terms as before in the event of a transfer of the undertaking. This means that if an employer changes control of the business, the new employer cannot reduce the employees' terms and conditions, unless the Directive's exception criteria are met. This is that there must be a good economic, technical or organisational reason for the change. ;Chapter I – Scope and definitionsSummaries of EU legislation > Employment and social policy > Employment rights and work organisation > Summary of Directive 2001/23/EC
/ref> Article 1 This says the directive applies to legal transfers and mergers of an undertaking. The point to note is that it excludes transfers of company control through a simple purchase of shares, which is the most common way to effect a change in the

market for corporate control __NOTOC__ The market for corporate control is the role of equity markets in facilitating corporate takeovers. This was first described in an article by HG Manne, "Mergers and the Market for Corporate Control". According to Manne: In this way th ...

. Article 2 This gives definitions of transferor, transferee and the like. ;Chapter II – Safeguarding of employees' rights Article 3 This states the principle that the transferee is bound to the contractual and employment law obligations of the transferor. The transferor has to state what these are beforehand. Article 4 This provides the idea that dismissals should not take place just because there is a transfer. But dismissals can be made for 'any economic, technical and organisational reason'. Article 5 Member states can derogate from Art. 3 and 4 where the company is

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. Article 6 This states that employee representatives positions should not change where the undertaking retains autonomy through the transfer. It is talking mainly about

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s. ;Chapter III – Information and consultation Article 7 This provides that employers thinking of transfers must consult with the workforce beforehand, through employee representatives. ;Chapter IV – Final provisions Article 8-14 These articles are addressed to the Member States, and talk about implementation maps, and notifications to the Commission of opinions or changes.

Notes

References

*J Armour and S Deakin, 'Insolvency and Employment Protection: the Mixed Effects of the Acquired Rights Directive' (2003) 22 International Review of Law & Economics 443-463

External links

Text of Directive 2001/23/ECNational implementing measures of the member states
{{Authority control Labour law European Union employment directives 2001 in the European Union 2001 in labor relations 2001 in law

Overview

See also

Notes

References

External links