Employee Transfer in Europe

Several situations may arise that involve an employee transfer, an example of which is an acquisition. Below, EuroDev HR Consultant Romy Brugge outlines interesting insights that one has to take into consideration when transferring employees in Europe.

When do we speak of a transfer of employees or transfer of employment? An example of a situation that involves an Employee transfer is an acquisition or a reorganization. The basic assumption of an employee transfer - rather than dismissal - is that nothing will change for the employee. As several parties are involved in an employee transfer, this can be complicated. Every situation requires customization but there are topics that apply to every situation.

Terms of employment

When an employee transfer occurs, it is expected that the employee will have the same terms of employment. In other words, the employee will keep their existing rights and obligations. Consequently, it is not always necessary to offer a new employment contract. However, it is recommended because the new contract indicates not only the terms of employment, but also the details of the new employer. This creates clarity and prevents misunderstandings. As stated earlier, it is important to keep in mind that the employees keep their rights and obligations. Hence, conditions may not fall short on their previous conditions.

In case you acquire a company, but you do not employ employees yet, you do not have to take into account the conditions of existing employees, as there are none.  But normally, when you already employ staff, all employees must have the same conditions. Examples of such conditions are:

• Holiday accrual 
• Salary
• Pension scheme
  
  

The new employees must have equal or better conditions than their current contract, but ultimately the same conditions as the existing employees. However, you may propose better terms of employment for both new or existing employees. If your employees are subject to different applicable (country) laws, this can make the situation even more complex. In such cases, an expert who has dealt with these kinds of international transfers is needed.

Bonus read: Employment Differences Between US and Europe

Dismissal

An employee may not be dismissed solely by reason of the transfer. However, should it turn out that you have too many employees after the transfer, the 'normal' dismissal process will follow. This process depends on the country law which is applicable to the employee. Because the years of service of the transferred employees remain the same, there may be long notice periods or high severance payments. Take into account these factors when you have a dismissal case and consult an expert before taking action.

Transfer of information

In the case of an acquisition, the former employer may also transfer the personnel file or staff record to the new employer. Often this is also desirable for the new employer. Although this is permitted,  the privacy of the transferred employees need to be protected. So, it is important to keep the GDPR rules in mind. For example, no additional data may be provided other than strictly necessary for the execution of the employment contract. Therefore, all personnel files will have to be cleaned up and all old data that is no longer relevant has to be deleted. In addition, employees must be given the opportunity to object to the file transfer.

What if the staff resists?

In the event of a company acquisition with personnel, the employee is not obliged to accept the transfer. If an employee does not wish to transfer, they must inform you of this in a written statement. This must clearly state that the employee opts for contract termination, which means that they are not entitled to unemployment benefits at the end of the employment. A verbal statement is not sufficient. If this employee has specific knowledge, keep in mind that it is important to keep them at the company. Therefore, when setting up the communication strategy, the way in which the message is conveyed is crucial.

In short

If you are dealing with a transfer of employees, take at least these things into account:

• Same conditions as other staff;
• Original start date remains in force;
• Dismissal is not possible;
  
  

Good preparation and communication are key in overcoming these challenges, along with expert consultation.

Please keep in mind that exceptions can exist in all circumstances. In case you would like to have more information, do not hesitate to connect with Monique Ramondt-Sanders - VP of Human Resource Outsourcing at EuroDev.

Interested in more information concerning our HR Outsourcing services? Please have a look at our HR Outsourcing page or click below to read more articles about Human Resources in Europe. 

About EuroDev

EuroDev, established in 1996 with offices in The Netherlands, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. We have created a proven, successful business development model and since our founding, have partnered with over 300 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing and Digital Marketing.

Glossary:

• Country laws: every country in Europe has its own employment law.
• GDPR: General Data Protection Regulation in EU law
• Holidays: Paid days off at least 20 days in Europe. Excluding bank holidays
• Notice period: Period that someone is still employed after the termination of the contract. Often this is at least 4 weeks in Europe.
• Severance payment: Additional compensation for the loss of an employees’ job