The transfer of undertakings takes place when a business or undertaking is taken over by another Company (new employer) from the current Company (old employer). Any employee in employment, with the old employer, shall be deemed to be in employment by the new employer who shall also take on all the rights and obligations which the employee had prior to the transfer of the undertaking.

In a recent case at the Industrial Tribunal chaired by Charles Cassar, a former customer service administrator was awarded over to €16,000 in compensation after a tribunal found he had been illegally dismissed after a transfer of business.

The company Gaming VC Corporation terminated the employee’s job following its acquisition by GVC New Limited in 2012.

The tribunal heard how, the employee was offered a job with GVC New but had his working conditions substantially changed, his gross annual salary had been cut by €9,000 and benefits he had, such as a private insurance scheme and a private pension scheme, were stopped.

The employee told the tribunal that, he had received a letter from the GVC Gaming informing him of the transfer of business however, no agreement had ever been reached because of the substantial changes to his working conditions.

Gaming VC argued that they could not be held responsible for what had happened between the employee and GVC New because, at the time of the transfer of business, he automatically became a GVC New employee. The tribunal upheld this argument and ruled that he had become GVC New’s employee and that, according to law, he could not have been offered inferior working conditions.

The law lays down that: “Whenever a transfer which involves a substantial change in working conditions to the detriment of the employee results in the termination of the contract of employment, the employer shall be regarded as having been responsible for such a termination”.

The Tribunal ordered GVC New to pay the former employee €16,250 within eight weeks.

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