Tánaiste announces new rules to protect employees in the event of change of ownership in business

Mary Harney, Tánaiste and Minister for Enterprise, Trade and Employment announced today that with effect from Friday 11^th April she has signed into law new Regulations aimed at safeguarding employees' rights in the event of transfers of ownership of undertakings, businesses or parts of businesses, which involves a change of employer. The new regulations, The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 revoke existing regulations in this area.

Making the announcement the Tánaiste said "The new Regulations provide that the rights and obligations of the original owner (the transferor) arising from an employment contract existing at the date of transfer shall, in the event of a transfer of a business or part of a business, be transferred to the new owner (the transferee)."

Complaints that an employer has contravened these Regulations may, generally, be referred in the first instance to a Rights Commissioner and, on appeal, to the Employment Appeals Tribunal.

Further information on these Regulations will be available shortly on the Department's website - www.djei.ie/press.htm

Main provisions of SI No. 131 of 2003

• All the rights and obligations of an employer under a contract of employment (including terms inserted by collective agreements), other than pension rights, are transferred to the new employer on the transfer of the business or part thereof.
• An employee may not be dismissed by reason of the transfer. Dismissals for economic, technical or organisational reasons are unaffected.
• The Regulations do not apply where the outgoing employer is subject to proceedings whereby he may be adjudicated bankrupt, or wound up for reasons of insolvency, by order of the High Court (new as express provision).
• The position of the employees' representatives is protected across a transfer.
• Both the outgoing and incoming employers are obliged to inform their respective employees' representatives of, inter alia, the reasons for the transfer and the legal, social and economic implications of the transfer. Where there are no representatives, the employers must arrange for the employees to choose representatives for this purpose.
• Complaints lie to a rights commissioner and appeals there from to the Employment Appeals Tribunal. Decisions of the first instance decision-maker and determinations of the appellate body are enforceable in the Circuit Court.

EUROPEAN COMMUNITIES (PROTECTION OF EMPLOYEES ON TRANSFER OF UNDERTAKINGS) REGULATIONS, 2003