Transfer of an undertaking
If all or part of an enterprise is taken over, this may constitute a 'transfer of an undertaking'. If that is the case, this means that all the employees are transferred as well as a rule, while retaining all the rights and duties in their employment contract. This principle raises many questions. Parties may have to deal with unforeseen, far-reaching consequences, as we have seen in our own practice and in countless court decisions. Answering these questions requires not only knowledge of the relevant legal precedents but also experience and an understanding of business processes and strategies. And that is precisely what we can offer.

Transfer of an undertaking

The transfer of an undertaking can take the form of asset/liability transactions, outsourcing, changes to the distribution arrangement, contract switches, the relaunch of a business after liquidation, franchise changes and so on. Often the new employer will want to know whether it is possible for employment conditions to be brought in line with the conditions for existing staff. There may be conflicting stipulations in the collective labour agreements or in the different pension schemes. Situations are conceivable in which some employees are not transferred, for example employees who are suspended or sick, or employees working in corporate support departments. Our experience shows that it is extremely important to inform all stakeholders in good time of the consequences of a transfer of an undertaking. Particular attention should be given to informing and consulting participatory bodies (the Works Council, Clients' Council and so on). There is a statutory ban on the termination of employment during the transfer of an undertaking but dismissal is not always impossible. One example is in the case of excess capacity following the takeover. In short, this is a complex subject.

 Our lawyers have wide-ranging expertise in this specialist field on the interface between employment law and company law. Indeed, the Employment Law and Company Law Practice Groups collaborate closely whenever necessary.

Want to know more?

Do you have a question or want more information about our expertise in Transfer of an undertaking please contact Robert Kütemann. You can send an email to:

P: +31 70 374 64 22