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By: Jan Dop, Esq.
Russell Advocaten B.V.
Amsterdam, Netherlands

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 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: Obligation to inform employees.

Information obligation

The employer is obliged to inform the employees who are involved in the transfer of undertaking “in good time” on the following matters:

  • The intended decision on the transfer
  • The intended date of the transfer
  • The reason for the transfer
  • The legal, economic and social implications of the transfer for the employee, and
  • Any measures envisaged in relation to the employees.

The information obligation extends to all employees concerned, including those who are not transferred themselves. The information obligation rests on the transferor as well as the transferee.

Dutch law does not prescribe a particular term which is considered to be “in good time”. However, it is relevant that the employees are informed at such a time when the decision on the transfer is not yet definitive and the date of transfer has not yet been fixed (depending on the circumstances of the case, even a term of approximately two months might be sufficient).

Failure to inform employees

Failing to inform the employees in good time will not have any consequences for the validity of the transfer of undertaking, but might result in liability of the employer (transferor and/or transferee) to pay damages due to an unlawful act. Furthermore the employees are allowed to derive rights from the given information regarding the transfer of undertaking and can address the employer based on “good employment practice” in case the information appears to be incorrect.

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