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Updated 10/10/2016

Updated 10/10/2016

Redundancies

Collective redundancies

If your business faces economic difficulties and you are contemplating to lay off staff, then you should know your obligations with regard to collective redundancies.

What counts as a collective redundancy?

Whether or not a lay‑off is considered a collective redundancy depends on the overall head‑count and the number of staff you contemplate to lay off:

Overall head-count

Staff to lay off

Period of lay off

20-100

Minimum 10

30 calendar days

100-300

Minimum 10%

30 calendar days

300 or more

Minimum 30

30 calendar days

 

In some EU countries the collective redundancy rules are more protective to workers and the above thresholds may be lower.

Your obligation to inform and consult

If you are planning a collective redundancy, you must begin consultations with staff representatives in good time and give them written notice of:

  • the reasons for the collective lay-off
  • the number of staff to be made redundant
  • the number of staff employed
  • the period over which the lay‑off will take place
  • the criteria for the selection of staff to be made redundant.

You should also inform your public authority of the points above, in writing.

When the rules do not apply

Information and consultation before the collective lay off are not obligatory for:

  • staff with fixed‑term contracts - unless the lay‑off takes place before the completion of their contract
  • staff employed by public administrative bodies.

During the consultation with staff representatives you should talk through different options for avoiding collective redundancies, or if this is not possible, for reducing the number of staff affected. Social measures to retrain or redeploy the redundant staff should also be negotiated.

Time to take effect

If, after the consultations with staff representatives, you decide to lay off staff, you have to notify in writing the competent public authority in your country.

National law may waive this obligation if the collective lay‑off is due to the termination of your business activities following a judicial decision.

The collective lay‑offs can take effect no sooner than 30 calendar days after you send your written notification to the competent authority. This period is used to seek solutions to the problems raised by the lay-offs. EU countries can reduce it or extend it to 60 days in certain cases.

Rights of workers when a business is taken over

When taking over a business, you acquire obligations towards the employees concerned. EU rules lay down the minimum requirements. Note that in some EU countries the rules may be more favourable to employees.

No automatic right to lay off

Taking over all or part of a company does not automatically give you the right to lay off the employees. All rights and obligations from employment contracts existing on the date of the takeover are transferred to you.

You will also have to continue to comply with the terms of any collective agreement already in force, until it is terminated, expires or a new agreement enters into force. The period during which you must comply with an existing agreement can be reduced in some EU countries, but it must be at least 1 year.

However, if economic, technical or organisational circumstances require changes to the workforce, you can dismiss employees.

Exceptions

Unless national law requires otherwise, you are not obliged to take over the previous employer's obligations regarding employees' rights to old-age, invalidity or survivors' benefits under non‑statutory supplementary company or intercompany pension schemes.

If you take over a company going through bankruptcy or insolvency proceedings, supervised by a competent public authority, to liquidate its assets, the rules above no longer apply - unless national law requires otherwise.

Collective rights after takeover

Employees' representatives

If you take over a business but preserve its autonomy, the employees' representatives must keep their status and function. If the business no longer operates autonomously, the employees must continue to be properly represented until the employees' representatives are reconstituted or reappointed.

Obligation to inform and consult

Employees' representatives, and in some cases employees themselves, must be informed about:

  • the date of and reason for the transfer
  • the legal, economic and social implications of the transfer for employees
  • any measures planned for employees.

The representatives must also be consulted in good time on any measures envisaged in relation to employees.

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