Transfer of undertakings

The Act No. 72/2002, on Workers' Rights in the Event of Transfers of Undertakings stipulates that when an undertaking, or part of one, is transferred, (i.e. sold or leased), to another employer the workers' terms and conditions arising from existing contracts of employment and collective agreements are transferred to the new employer.

The former and the new employer are required to inform the representatives of their respective workers affected by the transfer of the following:

  • the date or proposed date of the transfer,
  • the reasons for the transfer,
  • the legal, economic and social implications of the transfer for the workers,
  • any measures envisaged in relation to the workers.

The former employer must give such information in good time, before the transfer is carried out. The new employer must give such information in good time, and in any event before his workers are directly affected by the transfer as regards their conditions of work and employment. 

Where the employers envisage measures in relation to their workers, they are required to consult the representatives of their workers in good time on such measures with a view to reaching an agreement.

A change in ownership or other types of transfers do not constitute grounds for dismissal of workers, unless they are necessary for economic, technical or organizational reasons. Workers are not obliged to continue their employment under a new employer if the change of ownership implies a change for the worse in their pre-existing terms and conditions of employment.

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