On 11 July 2025, the Council of Ministers agreed to a bill strengthening the position of employees in a relaunch after bankruptcy. The proposal - Transfer of undertaking in bankruptcy law (Wovof) - should prevent employees from losing their dismissal protection once their employer goes bankrupt.
Current situation: little protection
In an ordinary business takeover, employees automatically go along. In a relaunch after bankruptcy, this does not apply. The relauncher may choose who to employ and under what conditions.
What will change?
Under the proposal, all employees must now be taken over in case of a relaunch. Only in case of demonstrable economic reasons may this be deviated from. In that case, selection must be based on objective and transparent criteria (such as seniority/years of service, position or departments - and not on arbitrariness or preference. This is monitored by the supervisory judge.
Other significant change
Any agreed competition clause will automatically lapse for employees who do not get a new contract in a relaunch. This allows them to find work elsewhere more quickly.
Not applicable to small businesses
Incidentally, the scheme does not apply to companies with fewer than 20 employees, unless the buyer chooses to apply it anyway.
Continued
The bill now goes to the Council of State for advice. This will be followed by consideration in the Lower and Upper Houses.