Outsourcing

The outsourcing of production or services is not just a commercial, tax and corporate issue, it can also involve significant changes on the employment front. If employment aspects are not prioritised early enough, the entire process can falter or result in significant extra cost. It is first necessary to determine whether a (partial) transfer of business under Section 613a Civil Code is at hand or merely what is known as a transfer of function. If there is a (partial) transfer of business, employees must be specially notified (see also section on transfer of business). It will be difficult to meet the notification requirements without taking specialist employment advice. The Federal Employment Court has developed a so called no tolerance approach to the information notice, where staff affected by a (partial) transfer of business can effectively challenge the process at any future point in time even if the notice contains only minor errors. In cases of outsourcing, whilst there are many complex employment law rules to consider, there is also considerable space as regards structuring options. We show our clients the different options, advise them on the implications of the outsourcing measures under employment law and help them put together the information notice under Section 613a (5) Civil Code.