Award to Employee Following Transfer of Undertaking

A transfer of undertaking may take place either when there is an acquisition of shares or when there is a transfer of the business. To ensure that the employee’s rights are safeguarded, the Maltese legislator has enacted the Transfer Of Business (Protection Of Employment) Regulations, which Regulations are heavily based on Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses.

There have not been many cases at the Employment Tribunal with respect to transfer of undertakings, and even less so employment cases at the Employment Tribunal within the iGaming sphere, however there has been a recent dispute which has made the headlines.

At the 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.

For further information about how GVZH Advocates can help you with your employment law requirements, kindly contact us on employment@gvzh.com.mt.

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