Terminating employment contracts

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:

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.

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.

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.

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.

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.

If you acquire a business and it continues to operate as a distinct, independent entity, the existing employee representatives (such as union representatives or works council members) must retain their roles and responsibilities. If the acquired business is integrated into the new owner's organisation in such a way that it loses its independent operation (for example, if it's merged into a larger unit and no longer functions separately), the transferred employees must continue to be properly represented until their representation is 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 with a view to reaching an agreement.

Unless national law says otherwise, you don't have to take on the previous employer's responsibilities for employees' benefits like pensions or disability payments under supplementary company schemes.

If you take over a company in bankruptcy or insolvency and supervised by a public authority to sell off its assets, the rules about transferring employment contracts and collective agreements don’t apply at all, unless required by national law.