Transfer of undertakings/transactions

The regulations introduced by virtue of the European Transfer of Undertakings Directive play an important role in various areas of employment law. They concern operations or parts of operations which are to be sold or bought, or simply certain services which used to be rendered internally and are now to be outsourced.

It should always be kept in mind that wherever the operation or its part is deemed to be transferred, this might bring about major consequences for the transferee. Unclear issues, such as which employees and, first of all, how many the buyer has to take over, as well as the conditions of the takeover, should be settled in advance and, if necessary, taken into consideration during the negotiations of the sales agreement. It is important to gain legal clarity based on an information letter duly drafted by the employees affected by the transfer, specifying which of them do not object to the transfer of their employment relationship to the buyer.

Our services related to the transfer of undertakings include:

Conducting due diligence audits in order to determine the status quo prior to the transfer and participation in the drafting of the takeover agreement in order to account for the legal risks associated with pricing
Structuring of transferee concepts to minimise the legal consequences of transfers of operations, especially the insolvent ones
(Co-)drafting of information letters to the affected employees during transfers of operations
Preparation of a structuring and mitigation strategy, taking into account current judgements of the ECJ and the German Federal Labour Court (BAG)
Assistance in and structuring of the employment transition process in state-owned enterprises