TUPE newsletter series PART 2 - Information and consultation in case of a transfer of (part of) an undertaking
04 Jul 2023
In a series of newsletters, we want to give you a better understanding of the legal aspects relating to transformation projects that include a transfer of undertaking, in both the preparation and implementation phase.
In our first newsletter, we explained when a transformation can trigger the so-called ‘TUPE-Directive’, and – from a Belgian perspective – Collective Bargaining Agreement (CBA) No. 32bis (which is the transposition of the Directive into Belgian legislation). These legal instruments safeguard employees’ rights in the event of a change of employer resulting from a transfer of (part of) an undertaking.
In this second newsletter, we want to give you a better understanding of the procedural obligations that come with CBA No. 32bis.
Based on CBA No. 32bis – and in combination with other related national legislation – employers are required to inform their personnel and consult the employee representatives in case of a transfer of (part of) an undertaking. Below, we’ll explore the specifics of this obligation, touching on who to inform and consult, the extent of the information and consultation, and its timing. This will show that getting all aspects of information and consultation right is a complex challenge and that it's paramount to take these procedural requirements into account as from the very start of the project.
Who to inform and consult?
The first step is identifying who exactly must be informed and consulted. This heavily depends on how the employee representation is structured in the company. If there’s an employee representative body in the company, the applicable regulations provide for a cascading system; from works council to union delegation to committee for prevention and protection at work.
In case there is no employee representative body, the information regarding the proposed transfer must directly be provided to the individual employees impacted by the transfer, however, no consultation is required (also see below).
Example: A company has no works council and no union delegation, but there is a committee for prevention and protection at work. In such a case, the employer must inform and consult the members of the committee on the transfer. If there wouldn’t be a committee either, the individual employees must be informed.
Information and consultation – what’s in a name?
After having determined who to inform and consult, the next step is making sure the necessary information is provided and consultation on the required topics is set up. In this respect, the employer must inform the designated employee representative body about the economic, financial and technical factors that give rise to the transfer of undertaking, as well as the transfer’s economic, financial and social consequences.
In addition, the employee representatives must be consulted on the transfer’s impact on the staff’s employment outlook, the organisation of the work and the company’s general employment policy. It’s important to point out the extent of this consultation obligation: where the information obligation constitutes a more one-sided disclosure by the employer, the consultation obligation includes the right of the employee representatives to have their questions on the relevant topics answered and therefore presupposes a real dialogue between employer and employee representatives. This back-and-forth preferably results in an agreement, however, this is not required.
As mentioned above, the individual employees will have to be informed about the transfer if there’s no employee representative body in the company. This includes inter alia information on the date of the transfer, the reasons for the transfer and the transfer’s legal, economic and social implications for the employees. Contrary to what’s applicable when there’s an employee representative body in the company, no consultation with the individual employee is required.
The timing of information and consultation
The last, and arguably the most complicated and procedurally intricate, question is when the information has to be provided.
In accordance with the underlying legislation, the information and consultation towards/with the designated employee representative body must occur ‘at an opportune time’, i.e. before the decision to proceed with a transfer is effectively taken and before any public announcement is made, nonetheless without that information hampering the normal course of any possible negotiations or undermining the prerogatives of the head of the company in respect of decisions of an economic nature.
Although the applicable regulations provide some guidance on the topic, it remains a complex exercise, the outcome of which heavily depends on the specific circumstances. Moreover, this timing cannot be dissociated from the timing of certain corporate law or corporate tax steps that are vital within these types of projects. As a result, it will be paramount to, at the very start of the project, draw up a detailed timeline that fully takes into account these different interdependencies.
In case there is no employee representative body, the underlying legislation is a lot clearer. The employees will have to be informed individually prior to the effective date of the transfer.
The above shows that compliance with the information and consultation obligations in case of a transfer of undertaking should be carefully managed as of the conception of the project. Moreover, the possible interdependencies with other aspects of the transfer must be examined and taken into account in this respect.
If you have any questions regarding these requirements or are looking for guidance with a future reorganisation project, don’t hesitate to get in touch with any of our lawyers; we’d love to hear from you!
