Myles & Co., Solicitors - Transfer of Business Information

Transfer of business
Information
The transfer of undertakings regulations aim to safeguard your rights as an employee in the event of the transfer of ownership of undertakings, businesses or parts of business, which entails a change of employer.
What is being transferred?
The regulations apply to the transfer of an undertaking, business or part of a business as a result of a legal transfer or merger. As a result, all of the business where you work need not be transferred; if the part you work in is being sold off or contracted out, the regulations will apply.
The regulations apply to an "undertaking" so that the thing being transferred need not be a business intended to make a profit but could be, for example, a charity or non-profit making organisation.
Rules
When does a transfer take place?
The following elements must be present:
There must be a change in the person (either an individual or a company) responsible for running the undertaking/business
The economic identity of the undertaking/business must be resumed by the new employer, for example, the restaurant business is continued and the new owner does not set up a employment agency instead.
The undertaking/business must be transferred as a "going concern".
The regulations apply to the leasing of undertakings/businesses because it is not necessary for there to an actual change in the ownership of the business.
A transfer under the regulations does not occur in the case of a compulsory liquidation of the undertaking/business. In addition, the regulations do not apply to a share transfer of a company. This is because there has been no change in the person responsible for running the business. The identity of the shareholders may change but the legal identity of the company (the employer) remains the same.
Contract of employment
The regulations provide that the rights and obligations of the original owner (the transferor) arising from your contract of employment at the date of the transfer shall be transferred to the new owner (the transferee).
Collective agreement
Following a transfer, the transferee must continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement. This is the case until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.
Pension schemes
The regulations do not apply to your rights under company or inter-company pension schemes outside the social welfare legislation. Employees' pension rights in relation to old age, invalidity or survivors benefits under supplementary company or inter-company pension schemes do not transfer to their new employment.
However, where there is a pension scheme in operation in the original employer's business at the time of the transfer, the Regulation provides that:
if the scheme is an occupational pension scheme within the meaning of the Pensions Act, 1990, then the protections afforded by the Pensions Act apply to any such scheme, and
in respect of the pension schemes that do not come within the remit of the Pensions Act, the new employer must ensure that rights conferring immediate or prospective entitlement to old age benefits, including survivor's benefits, are protected.
Queries/complaints regarding the protection afforded by the Pensions Acts not being properly applied should be referred to the Pensions Board.. Where a complaint arises in relation to a scheme to which the Pensions Act does not apply, it should be referred to a Rights Commissioner under the Regulations.
Dismissal
The transfer of an undertaking, business or part of a business does not in itself constitute grounds for dismissal. However, nothing in the regulations prohibits dismissal if your employer can justify such dismissal for economic, technical or organisational reasons. Whether there are economic, technical or organisational grounds for dismissal will depend on the facts of each case and you can challenge your employer's contention that such grounds exist by bringing a claim for unfair dismissal. It may be useful to note that in the event of a dismissal that results solely from a transfer of undertaking and that the employee considers to be unfair, the employee may refer a complaint under the Unfair Dismissals Acts 1977 to 2001 (if he/she has 12 months continuous service with the employer) or under the Transfer of Undertakings Regulations, 2003 (whether or not he/she has 12 months continuous service with the employer) - but not under both.
If your contract of employment is terminated because a transfer involves a substantial change in working conditions to your detriment, the employer concerned is regarded as having been responsible for the termination of the employment. So, for example, if your new employer cuts your wages because he/she feels you are being paid too much and you resign as a result, your new employer will be regarded as being responsible for the dismissal by failing to honour your contract of employment.
Consultation
The transferor and transferee concerned must inform your trade union in good time (normally 30 days) before the transfer is carried out of:
The reasons for the transfer
The date or proposed date of the transfer
The legal, economic and social implications for the employees
The measures envisaged that may affect the employees
Details of any measures envisaged in relation to employees must be discussed with your representatives with a view to obtaining their agreement to these measures.
If you do not have a trade union, the transferor or transferee as appropriate must ensure that a statement containing the above particulars is given in good time to each employee and that a similar notice is prominently displayed in your workplace.
It may be useful to note that the Transfer of Undertakings Regulations provide that where there are no employee representatives in the transferor or transferee's business, the transferor or the transferee, as may be appropriate, shall put in place a procedure whereby the employees can choose from among their number a person or persons to represent them (including by means of an election) for the purposes of this Regulation.
The Transfer of Regulations provide that where notwithstanding the above, there are still no representatives of the employees (through no fault of the employees) in the business concerned, each of the employees must be informed in writing in good time before the transfer, of the particulars.
Enforcement
Inspectors of the Department of Enterprise, Trade and Employment may request the parties to permit them to inspect any information, books or documents they may reasonably require and to permit them to enter at all reasonable times any place where such documents are kept. There are penalties for failure to comply with these provisions.
Rules governing the transfer of undertakings can be found in SI 131/2003 European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 .
An employee or (his/her trade union acting on the employee's behalf and with his/her consent) may refer a complaint to a Rights Commissioner under the Transfer of Undertakings (oasis.gov.ie)

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