Employee protection in M&A transactions: TUPE

What triggers a TUPE transfer?

Can a third party like an employee or trade union stop or delay a TUPE transfer?

Is post-transfer reorganisation (termination) admissible?

Austria

Austrian case law defines a TUPE transfer as the transfer of an economic unit that retains its identity, meaning an organised grouping of resources that has the objective of pursuing an economic activity (depending on (i) the takeover of tangible/intangible assets, key employees or a significant number of employees, clients or customers, (ii) the level of similarity of the activities carried out prior to and after the transfer, and (iii) the duration of the interruption).

Furthermore, TUPE transfers can automatically occur in case of specific reorganisations (e.g. mergers).

No.

Post-transfer reorganisation measures (terminations) are only permissible for economic, technical or organisational reasons. However, any transfer-related termination (prior to or following the TUPE transfer) is null and void. Thus, the employer bears the burden of proof that the termination was not related to the transfer.

Bulgaria

A TUPE transfer can be triggered in case of (i) the reorganisation of a legal entity (merger, takeover, spin-off, split, change of the legal form), (ii) the transfer of a going concern or part thereof, (iii) the assignment or transfer of an activity, together with tangible assets related to it, (iv) the rent or concession of the going concern or part thereof.

No.

Yes, but the TUPE transfer per se may not be the reason for any redundancies (thus reorganisations are usually postponed to a later stage after the transfer to avoid any claims). Such reorganisation is generally substantiated by an economic, technical or organisational reason (e.g. reduced production, which leads to the necessity to reduce staff). If such terminations are likely to occur, they would qualify as measures envisaged in relation to the employees and thus would trigger the obligation for consultations.

Croatia

A TUPE transfer can be triggered as a result of a statutory change (e.g. merger) or a legal transaction, when an undertaking or part thereof or business or part thereof, which retains its economic integrity, is transferred to a new employer (e.g. organised group of employees, retaining the character post-transfer, transfer of assets, etc.).

No.

Generally, yes; however, the TUPE transfer per se may not be the reason for any redundancies (thus reorganisations are usually postponed to a later stage after the transfer to avoid any claims).

Czech Republic

A TUPE transfer can be triggered in two situations:
(i) in case of a transfer of activity meeting certain legal criteria (e.g. organised group of employees, retaining the character post-transfer, transfer of assets, etc.); or (ii) automatically in specific situations, e.g. merger.

No.

Generally, yes; however, the TUPE transfer per se may not be the reason for any redundancies (thus reorganisations are usually postponed to a later stage after the transfer to avoid any claims).

Hungary

A TUPE transfer can be triggered in two situations:
(i) a transfer activity that qualifies as the transfer of an organised group of material or immaterial resources based on a transaction (e.g. transfer of assets, transfer of organised group of employees, etc.); or (ii) automatically in specific situations, e.g. merger, demerger, etc.

No.

Yes, it is admissible; however, the TUPE transfer cannot serve as the basis for the employer to terminate the employment relationships of the affected employees or for mass redundancies. Therefore, reorganisations are typically carried out after a TUPE transfer at a later stage to avoid any claims.

Poland

Polish law does not define TUPE transfer or acts of law resulting in such a transfer. Assessing whether there has been a TUPE transfer requires a test consisting of the following steps:
(i) identification of the unit which is the subject of the TUPE transfer;
(ii) determination of what kind of entity is the subject of the TUPE transfer (based primarily on material components or employees and their qualifications);
(iii) examination of whether the entity has retained its identity after the TUPE transfer.
All the above circumstances are merely single factors in the overall assessment that must be made. Thus, the degree of importance of each criterion will vary according to the type of business and activity.

No.

Generally, yes. The law does not regulate this matter. In practice, post-transfer reorganisations (terminations) commence 6-12 months after the TUPE transfer. However, the TUPE transfer itself may not be grounds for the employer's termination of the employment contract by notice. 

Romania

A TUPE transfer can be triggered in case of transfer of ownership of undertaking, units or parts thereof aiming at the continuation of a main or secondary business object, whether profit-driven or not.

No.

Generally, yes; however, the TUPE transfer may not be grounds for individual or collective dismissal of employees.

Slovakia

A TUPE transfer can be triggered in two situations:
(i) in case of a transfer of unit/activity meeting certain legal criteria (e.g. organised group of employees, retaining the character post-transfer, transfer of assets, etc.); or (ii) automatically in specific situations, e.g. merger.

No

Generally, yes; however, the TUPE transfer per se may not be the reason for any redundancies (thus reorganisations are usually postponed to a later stage after the transfer to avoid any claims).

Slovenia

A TUPE transfer can be triggered in two situations:
(i) a legal transfer of an undertaking or a part of an undertaking (the criteria for what constitutes an undertaking are not specified in the legislation but are derived from case law, e.g. transfer of substantial assets, organised group of employees, continuous performance of the same business activity, etc.); or
(ii) merger or demerger.

No.

Generally, yes; however, the TUPE transfer per se may not be the reason for any redundancies.

Türkiye

No TUPE regulation. However, there are similarities with the consequences of a "Business Transfer" in Turkey

Employees are automatically transferred in the event of a Business Transfer. The process cannot be delayed or stopped by a third party.

Yes. However, the rights of the employees (e.g. re-employment lawsuit) arising out of individual contracts and collective bargaining agreements (if any) are protected.

Is there an information duty? If yes, who must be informed/consulted?

What must be communicated?

Austria

Yes, the works council must be informed of the envisaged TUPE transfer in a timely manner and in sufficient detail. If no works council is established, the affected employees must be informed in writing.

(i) The (envisaged) date of the TUPE transfer; (ii) the reason for the TUPE transfer; (iii) the legal, economic and social consequences for the employees; and (iv) any employee-related measures in connection with the TUPE transfer.

Bulgaria

Yes. The trade union and the employee representatives of the transferor and the transferee must be informed. If none is present, directly affected employees must be informed. Consultations will be held only in case of measures envisaged in relation to the employees.

The employers must provide information regarding: (i) the envisaged transfer (type of commercial transaction) and its date; (ii) the reason for the transfer; (iii) the potential legal, economic and social implications for the employees; and (iv) the measures envisaged in relation to the employees, including for obligations which arose before the transfer.

Croatia

Yes. The works council or the union representative (if no works council exists) must be consulted. Also, the works council as well as all directly affected employees must be informed about the TUPE transfer.

(i) The proposed or determined date of the transfer; (ii) the reason for the transfer; (iii) the legal, economic and social consequences for the employees; and (iv) the envisaged measures regarding the employees.

Czech Republic

Yes. The trade union and works council must be consulted. If none is present, directly affected employees must be informed.

(i) The proposed or determined date of the transfer; (ii) the reason for the transfer; (iii) the legal, economic and social consequences for the employees; and (iv) the envisaged measures regarding the employees.

Hungary

Yes. The trade union and works council must be consulted. If none is present, directly affected employees must be informed.

(i) The date of the transfer or planned date of transfer; (ii) the reason for the transfer; (iii) the legal, economic and social consequences affecting the employee; (iv) the planned measures affecting the employee.

Poland

Yes.

Information provided to:
(i) each employee affected by the TUPE transfer (no trade unions);
(ii) trade unions (if operating) / often in practice: trade unions and employees affected by the TUPE transfer;
(iii) works council (if operating).
 
Consultation with works council (if operating).

Intention to undertake actions affecting employment conditions > negotiations with trade unions.

(i) The expected time of the TUPE transfer;
(ii) the reasons for the TUPE transfer;
(iii) the legal, economic and social consequences for the employees, and;
(iv) intended actions relating to the conditions of employment of employees, in particular conditions of work, pay and requalification.

Romania

Yes. The trade union/employee representatives or employees (if there is no form of representation) must be informed; moreover, if any changes to the employment and working conditions are envisaged, they must be consulted as well.

(i) The proposed or determined date of the transfer; (ii) the reason for the transfer; (iii) the legal, economic and social consequences for the employees; (iv) the envisaged measures regarding the employees; (v) working and employment conditions.

Slovakia

Yes. The trade union, works council or employee trustee must be informed. If none is present, directly affected employees must be informed. Measures regarding employees (if any) must be consulted with employee representatives.

(i) The proposed or determined date of transfer; (ii) the reason for the transfer; (iii) the legal, economic and social consequences for the employees; and (iv) the envisaged measures regarding the employees. The information must be provided in writing.

Slovenia

Yes. The trade unions established at the employer must be consulted. If there are no trade unions, the affected employees must be informed.

(i) The proposed or determined date of transfer; (ii) the reason for the transfer; (iii) the legal, economic and social consequences for the employees; and (iv) the envisaged measures regarding the employees.

Türkiye

The trade unions (if any) should be notified prior to the transfer of a business.

(i) The proposed or determined date of transfer; (ii) the reason for the transfer; (iii) the legal, economic and social consequences for the employees; and (iv) the envisaged measures regarding the employees.

Employees' rights

What specific rights do employees have with respect to TUPE transfer?

Austria

Affected employees may object to a transfer of their employment only if special termination rules are set forth in an applicable CBA or specific company pension commitments are not taken over. If working conditions stipulated in a CBA or shop agreement deteriorate after a TUPE transfer, the employee has the right to terminate the employment by observing the applicable notice periods. The employee's claims are then calculated as if the employer had terminated the employment relationship (e.g. severance payments). 

Bulgaria

If the working conditions at the new employer worsen significantly, the transferred employees can terminate their employment agreements with the new employer, without notice and being paid compensation in the amount of the gross salary for the agreed notice term. The employee representatives remain in office up to one year if the transferred activity / going concern or part thereof preserves its autonomy. The concluded collective bargaining agreement remains in force for up to one year.

Croatia

N/A.

Czech Republic

(i) The affected employees may terminate the employment with a shorter notice period; (ii) the employees may also require severance payment if the employment conditions post-transfer changed to their severe detriment. The rights and duties arising from the collective bargaining agreement (CBA) are applicable for the term of the CBA, but for no longer than until the end of the following calendar year.

Hungary

The affected employee may terminate their employment relationship due to the TUPE transfer if their working conditions have substantially and detrimentally changed, making it disproportionately prejudicial or impossible to continue the employment relationship. The employee can exercise this right within 30 days from the date of the TUPE transfer. If the employee terminates their employment on these grounds, they are entitled to severance pay, and the employer is obliged to release the employee from work for at least half of the notice period.

Poland

(i) Right to terminate the employment contract with immediate effect, by giving seven days' advance notice (within two months following the date of the TUPE transfer).
(ii) For one year after the TUPE transfer: obligation by the new employer to provide benefits guaranteed in a collective labour agreement that applied at the former employer (after the lapse of this period, the new employer may revoke these benefits, but only by formal actions).

Romania

(i) Benefits provided in the employment agreements transfer automatically to the buyer and remain applicable until the individual terms of employment are changed in agreement with the individual employees; (ii) benefits included in the collective agreement are maintained until the expiry date of the collective agreement or for 12 months, whichever occurs earlier.

Slovakia

If the employee's terms and conditions of employment are to be fundamentally changed by the transfer and the employee does not agree to the change, the employment relationship is deemed to have been terminated by agreement due to redundancy and the employee is entitled to severance.

Slovenia

(i) If, within two years from the date of the transfer there is, for objective reasons, deterioration in employment rights or a substantial change in working conditions resulting in the termination of the employment by the employees, the latter will be entitled to the same rights as if the employment had been terminated by the employer (e.g. severance pay); and (ii) the employees will be guaranteed the rights under the collective agreement by which the transferor was bound, for at least one year from the date of the transfer.

Türkiye

N/A