Original scientific paper
https://doi.org/10.3935/zpfz.72.12.18
Factual (Indirect) Transfer of Economic Entity and Influence on Employment-Related Legal Position of Workers
Ivana Vukorepa
orcid.org/0000-0001-6759-9992
; Faculty of Law, University of Zagreb, Zagreb, Croatia
Abstract
The transfer of undertakings, businesses or their parts, consequently leading to an ex lege transfer of an employment contract to the transferee as a new employer usually formally takes place on the basis of a direct legal transaction, usually directly between the transferor and the transferee, e.g. purchase, lease, or merger. However, in order to protect workers' rights, the case law of the Court of Justice has established that transfer may also occur in situations where there is no classical direct contractual relationship between the transferor and the transferee, but rather a third party's will (e.g. one company loses the right to provide a certain economic service and the other gains it), as a result of which the transferee actually continues to perform the economic activity that was previously performed by the transferor, provided that the subject of the transfer is an economic entity that retains its identity. In such situations, the safeguarding of workers' rights also depends on whether it is a labour-intensive business (an activity based mainly on the labour force) or asset-intensive business (an activity based mainly on expensive equipment). Therefore, I refer to this situation a factual (indirect) transfer, because it does not occur directly on the basis of a formal legal transaction between the transferor and the transferee, but in fact indirectly, depending on the circumstances of the case and the economic activity being transferred. Given that such case law of the Court of Justice of EU can result in a significant cost in the form of a de facto obligation to take over workers and their acquired rights that the transferee did not count on, the primary purpose of this paper is to identify the preconditions and the main features of the factual (indirect) transfer of an economic entity that retains its identity, and to pinpoint in what circumstances there may be an obligation to take over workers.
Keywords
transfer of undertakings; transfer of businesses; economic entity; protection of workers' rights; transfer of employment contract
Hrčak ID:
280155
URI
Publication date:
1.6.2022.
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