TERRALEX Article on employment and labour law aspects of the transfer of business

Dr. Detlef Grimm and Dr. Sebastian Pelzer have published an article on employment and labour law aspects of the transfer of a business. The article describes which provisions of German and European law apply if a business or a part of a business is transferred to a new owner. Emphasis is placed on the explanation of cross-border measures and their employment and labour law consequences.

There are various options how to acquire an existing operational unit or company. Such acquisition is likely to trigger a transfer of a business which for the employees affected by such transfer results in the transfer of their employment relationships to the new owner of the business by operation of law. According to most recent case law of the German Federal Labour Court (Bundesarbeitsgericht), a transfer of a business may even exist if a business is being relocated from Germany to a neighbouring foreign country. Moreover, as a rule, co-determination rights of employees’ representatives have to be observed. The authors present the legal as well as strategic aspects involved. The English text of the essay which was published on the TERRALEX homepage can be found here.