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Icelandic Parliament amends law on the rights of employees upon transfer of undertakings - PR(10)40


The Authority decided today to close a case against Iceland following an amendement by the Icelandic Parliament on 15 June 2010 to the Act No. 72/2002 on the legal rights of employees in the event of transfer of undertakings.

The Act aims to protect the rights of employees when undertakings employing them are transferred to new business owners. In such an event, the rights of the employees, under their contract of employment, transfer automatically to the new owner. The Directive on the Transfer of Undertakings
[1], on which the Act is based, has been interpreted by the Court of Justice as meaning that claims relating to unpaid wages must also transfer to the new owner.

In a case from 2005 concerning an Icelandic daily newspaper, the Supreme Court of Iceland came to the opposite conclusion, and acquitted a new owner of the newspaper of claims for unpaid wages owed by one of the employees.

In February 2010, the Authority sent a reasoned opinion to Iceland stating that the Act, as interpreted by the Supreme Court, failed to ensure the rights of employees as foreseen by the Directive.[2] The Icelandic Parliament have now amended the Act in order to ensure full compliance with the Directive.

For further information, please contact:

Mr. Ingvar Sverrisson
Internal Market Affairs Directorate
tel. (+32)(0)2 286 1832


[2] See ESA Press Release PR(10)05 of 24 February 2010.

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