Transfer of undertaking: Prohibition to dismiss in view of transfer of undertaking

Publication date: 26 May 2016
Planning on a merger, acquisition or division of (part of) a business in the Netherlands or any other EU country? Then be aware of the EU law that sets out the strong position of employees in case of a transfer of undertaking (Directive 2001/23/EC). Russell Advocaten will inform you of the EU law on transfer of undertaking and the consequences thereof by a series of newsletters. This time: Prohibition to dismiss in view of a transfer of undertaking.


Dismissal in view of transfer of undertaking not allowed

Dismissing the employee(s) due to or in view of a transfer is prohibited. This applies to both the transferor and transferee of a business. If the employer acts in violation of this prohibition of termination, the employee may within 2 month request the court to quash the dismissal or to grant a compensation. However, dismissal is allowed in case the reason for dismissal does not have any connection with the transfer of undertaking, for instance, because of unsatisfactory performance of the employee or economical, technical or organizational reasons (referred to as “eto-reasons”).

Unwilling employee

In the event the employee unambiguously refuses to become employed by the transferee, the employee will not be transferred by law to the transferee and the employment contract with the transferor will terminate. If the reason for the refusal of the employee is due to a significant disadvantage he will suffer because of the transfer of undertaking (for instance, more time commuting) and this reason justifies termination of the employment contract, the termination will be at the expense of the employer and the latter will have to pay a transition compensation.

More information

Would you like to receive more information about the EU law on transfer of undertaking and the consequences thereof? Or do you have any other questions on employment law? Please contact us:

    Share on social media

    • IT and ICT
    • Employment law and dismissal

    Uber drivers are employees, not self-employed workers

    14 September 2021

    According to the Amsterdam District Court, Uber drivers are employees. Therefore, they are covered by the collective agreement of the taxi industry with all associated rights and obligations. How did the District Court reach this judgement? And what does it mean for other forms of platform work?

    read on
    • Retail
    • Employment law and dismissal

    Questions and challenges during COVID-19: Dutch employment law, tenancy law and contract law

    13 September 2021

    In this article, we will discuss several questions and challenges in the field of Dutch employment law, tenancy law and contract law during COVID-19.

    read on
    • Corporate law

    Is a management agreement an employment contract or a contract for services?

    26 August 2021

    Do the new rules of the Supreme Court for the assessment of employment contracts also have consequence for management agreements? Case law has not decided yet. This can be seen from the judgments of the Arnhem-Leeuwarden Court of Appeal and the District Court of Midden-Nederland about the management agreement of the CFO of Volksbank.

    read on
    • Employment law and dismissal

    Dismissal of sick statutory director

    12 August 2021

    A sick employee may not be dismissed. However, an employee who knows of imminent dismissal, cannot avoid this by reporting sick. But when does the employee know that this is the case? This question was central to the court case concerning the dismissal of a CFO of Volksbank.

    read on
    • Employment law and dismissal

    Personnel: Rules on employee appearance in company regulations

    10 August 2021

    Employers can determine rules on clothing and appearance in company regulations. What do employers have to keep in mind when setting such rules?

    read on
    • Employment law and dismissal

    Three important topics to include in your employment contract under Dutch, US and UK law

    15 July 2021

    In the last issue of Stare Decisis, Priscilla de Leede of Russell Advocaten, Mary Edenfield of Mateer Harbert and Ed Belam of Marriott Harrison discuss the most important topics to include in your employment contracts regarding the termination of the contract. There are some important differences to take into account!

    read on
    • Expats
    • Employment law and dismissal

    17 June 2021: Employment Webinar “Tricky sickness issues”

    17 June 2021

    If your employee reports sick, this may raise many difficult questions. What are your reintegration obligations during the sick leave period? What are you allowed to record about your sick employee with regard to the privacy legislation? We answered these and other questions during a webinar. Watch the video!

    read on
    • Employment law and dismissal

    Be careful with the employer’s statement!

    14 June 2021

    Before obtaining a mortgage or rental contract, banks or landlords often ask for an employer’s statement. Such a statement can sometimes have unintended consequences for the employer. What do you need to be aware of?

    read on