The Labor Lawestablishes a system of protection of the rights of employees in cases of status changes at the employer, such as merger, acquisition, division, or transfer of a trade company or parts of a trade company to another employer.
The basic principle is to ensure continuity of the employment relationship and preservation of the acquired rights of employees.
The key right of employees is the continuation of their employment relationship with the new employer (the acquirer). This is defined in Article 68 of the Labor Law, according to which it is established that all rights, obligations and responsibilities arising from the employment contract and the employment relationship are fully transferred from the previous employer (transferor) to the new employer (acquirer) when status changes occur.
The law not only guarantees the continuity of the employment relationship, but also protects the material and non-material rights of employees:
• Retention of rights for at least one year: The new employer is obliged to ensure all rights, obligations and responsibilities of the transferred employees for at least a period of one year from the date of transfer. This obligation lasts until the expiration of the employment contract or collective agreement that was binding on the previous employer, if that period is longer than one year.
• Rights of the employee in the event of deterioration of conditions: If, due to the change of employer, the rights under the employment contract deteriorate for objective reasons, the employee has the right to terminate the contract. In such a case, the termination is treated as if it was given for business reasons by the employer.
• Joint and several liability of employers: For all claims arising from a dismissal given by an employee due to worsening conditions, the previous and new employer are jointly and severally liable for compensation to the employee.
One of the most important protective measures is the prohibition on dismissing employees solely because of the fact that a status change is taking place. Article 68-d, paragraph (4) of the Labor Law explicitly states that the transfer of a company or parts of a company in itself does not constitute grounds for dismissing employees. The same article allows dismissals if there are justified economic, technological or organizational reasons that require personnel changes.
The law grants important procedural rights to employees, which are exercised through their trade union organizations, in order to be included in the change process.
Employees and their trade union representatives who consider themselves damaged due to non-fulfillment of obligations arising from the transfer, have the right to seek protection of their rights before a competent court in accordance with Article 68-e of the Labor Law.