Ensuring the Principle of the Stability of Labour Relations in the Event of a Transfer of Undertakings, Businesses or Parts of Undertakings or Businesses

Vilius Mačiulaitis


Employees are the most likely to become an extremely vulnerable link in labour relations during various employer initiated reorganisation processes. This situation remains despite the nature of reorganisation processes, i.e. local adjustment, reorganisation, transfer of business or its share to another legal entity, or, simply, the replacement of the main shareholder. As a rule, all the aforementioned situations are very stressful for employees because the adjustment of work organisation and integration of additional organisational structures leads to alterations in working conditions as well as to giving cause for lawful dismissal. In most cases such actions are justified by economic logic, economic rationality, allocation of resources, etc. But sometimes such actions hide things that have nothing to do with economic logic, for example, the change of work organisation due to the specific attitude of new management, stereotypes or even different organisational understanding.
The European Community has spotlighted these problems long ago. The development of a single market led to quite a number of reorganisations as these processes involved international components. The free movement of services has determined the various ways and forms for the transfer of undertaking, the whole or any part of the business. In order to make these changes more acceptable and to soften their effect on employees, employers and their representatives, a number of initiatives on safeguarding employee rights emerged from the Community’s Social Action Programme of 1974. It was the so-called triad of safeguarding employee rights— directives related to consultations in collective redundancy situations with the aim to protect the employee rights during the transfers of undertakings, business and its parts, and those of which the employer had become insolvent. Later these directives were revised and consolidated.
The subject of the research in this article is the consolidated Council Directive 2001/23/ EC of March 12, 2001 on the approximation of the laws of Member States relating to the safeguarding of employee rights in the event of transfers of undertakings, businesses, or parts of undertakings or businesses. Various reorganisation processes of undertakings have significant impact not only on business development, but also on safeguarding employee rights, as well as retention of workplaces. In other words, the principle of the stability of employment relationships in such cases must be secured. The intent of this article is to analyze the influence of the changes in business on the principle of the stability of employment relationship and also to find out how the reorganisational processes, transfers of undertakings, businesses or parts of undertakings or businesses affect employee guarantees and retention of workplaces.


Principle of stability of labour relations; the transfer of undertaking; business or part of the undertaking or business; termination of labour contract; guarantees; protection of labour rights

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"Societal studies" ISSN online 2029-2244 / ISSN print 2029-2236