Hedge funds and Private Equity - PES

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The following are regarded as serious breaches of the obligations laid down in the Directive:
total absence of information and/or consultation of the employees’ representatives prior to a
decision being taken or the public announcement of such decision;
withholding of important information or provision of inaccurate information rendering ineffective
the exercise of the right to information and consultation.
In the event of a serious breach with direct and immediate consequences in terms of substantial
change or termination of employment contracts or relationships, the decisions taken have no
legal effect. This situation continues until such time as the employer has fulfilled his information
and consultation obligations. If this is no longer possible, the employer must establish adequate
redress in accordance with the arrangements and procedures in place in the Member States.
Since economic trends are bringing in their wake, at both national and Community level, changes
in the structure of undertakings, there is a need to provide for the protection of employees in the
event of a change of employer, and in particular to ensure that their rights are safeguarded. To
that end, the Council Directive 77/187/EEC on the approximation of the laws of the Member
States relating to the safeguarding of employees’ rights in the event of transfers of undertakings,
businesses or parts of businesses foresees that the rights and obligations arising from a contract
of employment or from an employment relationship existing at the time of the transfer are transferred
to the new employer. Member States are required to adopt the necessary measures to
protect the rights of employees and of persons no longer employed in the transferor’s business.
The transfer does not constitute grounds for dismissal, which may only take place for economic,
technical or organisational reasons or when Member States make exceptions in respect of
certain specific categories of employees.
The status and function of employees’ representatives are preserved unless, under the provisions
or practice of a Member State, the conditions necessary for re-appointment of employees’
representatives are fulfilled.
The former employer and the new employer are required to inform the representatives of their
respective employees in good time of the reasons for the transfer, the legal, economic and social
implications, and the measures envisaged in relation to the employees. This information must be
given for the employees transferred before their transfer is carried out and in any event for all
employees before they are directly affected as regards their conditions of work and employment.
When the former employer or the new employer envisages measures in relation to their
employees, they must consult the employees’ representatives in good time with a view to seeking
agreement.
It should be also underlined that referring to Art. 137 i lit. f of the EU treaty, the European
Commission is provided with a power of initiative to create a European provision on obligatory
employee involvement on boardrooms as a European wide standard.