Takeover of Incapacitated Employee’s Contract in Transfer of Undertaking

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Leeuwarden Court of Appeal, 14th June 2012, www.rechtspraak.nl, LJN: BX4509


The buyer of a company also had to pay wages to an incapacitated employee who was excluded in the transfer of the undertaking by the seller. The statutory transfer of rights and obligations under the employment contract to the buyer of the undertaking was also valid for this employee, even though he was incapacitated.

The employee had been working as a shipyard completion ironworker at a location in Foxhol (Groningen) since 17th May 1996. The employee suffered from diabetes and dropped out in February 2006 due to heart problems. On 21st May 2007 the yard where the employee works is sold, but the employee (at the time partially working with limitations) is informed that he will not move with the others to the buyer of the company. The employee is told by the employer to go and work in Harlingen, which he does under protest. Then, on 1st September 2009, the employee is dismissed by the employer for business economic reasons, after the employer received permission from the Public Employment Service (UWV WERKbedrijf) to terminate the employment. The employee then claims that the Sub-district Court will rule that, because of the transfer of the undertaking, he has entered service at the buyer of the company. The Sub-district Court finds for the plaintiff. In appeal the Court of Appeal confirms the Magistrate’s judgment. From a judgment of the Supreme Court of 2005 the Court of Appeal deduces that in case of the transfer of an undertaking no statutory transfer of the rights and obligations of an employee’s employment contract arises in case the employee is permanently unable to do the assigned work. In case of incapacity, according to the Court, this could be the case for a sustainable disability, but for the employee involved this was not the case.


Given the protective nature of the legal provisions on the consequences of the transfer of an undertaking for employees (which provisions are based on a European Directive), it will not easily be assumed that an employee is not subject to these statutory provisions. If, however, an employee is permanently incapacitated for work at his own employer, it could be argued, based on case law of the Court of Justice of the EC and the Supreme Court, that the rights and obligations arising from the employment contract with such an employee are not passed over to the buyer of the enterprise.

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