EC publishes CMS study on the application of the Acquired Rights Directive
The European Commission has now published the study it commissioned our CMS employment practice area group to write on the application of the Acquired Rights Directive (2001/23/EC) to cross border transfers of undertakings.
The stated aim of the Acquired Rights Directive is "the approximation of the laws of Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses". However it does not directly deal with the situation where an undertaking or business transfers to another jurisdiction. Indeed the Acquired Rights Directive draws no express distinction between cross border and purely national transfers. Consequently the law in relation to employees' rights on a cross border transfer can be confusing and the Directive does not provide solutions where there are conflicting laws.
The study identifies the main legal and technical problems using a comparative law approach. It concludes that some of the provisions of the Acquired Rights Directive need to be clarified and made more precise. In particular the Directive should introduce rules aimed at determining the law applicable to employment contracts in situations where there may be a conflict between the laws of different member states.
CMS are delighted to have been chosen by the EC to make this report which may influence a revision of the Acquired Rights Directive. It can be found on the EC website.
