This Is A Contribution To The European Employment Law Update - August 2012

 
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AN ARRANGEMENT BETWEEN THE SELLER AND THE PURCHASER WHICH AIMS TO REDUCE THE NUMBER OF TRANSFERRING EMPLOYEES, DOES NOT BREACH THE LEGAL REQUIREMENTS IF SUCH ARRANGEMENT IS JUSTIFIED ON ECONOMIC GROUNDS

- Impact date: 8 October 2010

The case concerned an ambulance business (Business) operated by X (Employer) and its 26 employees. As the Business was in financial difficulties, the Employer envisaged transferring it to Y (Acquirer). The Employer and the Acquirer agreed that the transfer would take place on 1 October 2008 and that only some of the 26 employees would transfer on that date. In July 2008, the Employer gave notice to all 26 employees effective on 30 September 2008. In August, the Employer withdrew the notices of termination in respect of 20 employees. The notice period of the 6 other employees lapsed on 30 September 2008, i.e. one day before the transfer date. As a result, the 6 employees did not transfer to the Acquirer. They claimed that their dismissals were null and void. Under Swiss law, the transfer of a business unit from an employer to a third party automatically triggers the transfer of all the employees of that business unit to the third party. The acquirer assumes the benefit and the burden of all employment contracts (i) relating to the acquired business unit; and (ii) existing at the time of the transfer. Employees whose dismissal notices have not expired at the time of the transfer are automatically transferred to the third party acquirer. Any arrangement or agreement to the contrary between an employer and a third party acquirer breaches the legal requirements. In addition, the employer and the third party are jointly liable for any employees' claims which accrue during the period before the transfer and until the expiry of the notice period immediately after the...

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