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Transfer of undertaking: Transfer by law of employees’ rights and duties

Publication date: 25 February 2016
Planning 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 which 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: Transfer by law of employees’ rights and duties of employees.

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All rights and duties transfer by law

In case of a transfer of undertaking all rights and duties arising from the employment contract(s) with the transferor existing at the time of the transfer will be transferred to the transferee by law (so without any further proceedings). Only regarding pension rights certain exceptions are being made. Even conditions which are specifically related to the business of the transferor will be transferred to the transferee, unless the performance of these specific business related conditions is impossible (for instance, personnel discounts on business products).

Joint liability of transferor and transferee

During the first year after the transfer, the transferor and transferee are jointly and severally liable for the obligations of the employment contract existing before the transfer. This means within the first year after the transfer both the transferor and the transferee can be addressed by the employee to perform obligations which existed before the transfer, such as payment of salary, holiday allowance, etc.

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:

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