Cross border transfers of undertakings are currently at the centre of the European Commission´s concerns as the EC foresees that these transfers will occur more frequently in the future. In the context of its initiative towards better regulation, the EC announced in the Social Agenda 2005-2010 that the Directive 2001/23/EC would be updated. In December 2005, the EC therefore entrusted the CMS Employment Practice Area Group with the realization of a study on the need to adapt the Directive.

The purpose of this study was to identify the main legal and technical problems arising in connection with cross border transfers. The study covers issues related to safeguarding employees rights, protection against dismissal and substantial modification of the employment contract, the right of objection, insolvency procedures and other related issues. Furthermore, the study contains an overview of solutions to cross border transfer problems provided for by national law of the Member States. Finally, CMS has examined how the directive could be clarified or amended in order to cope with the identified problems and to establish a seamless legal framework for cross border transfers.

This project was carried out and coordinated by Stanislas van Wassenhove (CMS DeBacker - Belgium) with the collaboration of Björn Gaul (CMS Hasche Sigle - Germany), Simon Jeffreys (CMS Cameron McKenna - United Kingdom) and Andreas Tinhofer (CMS Reich-Rohrwig Hainz - Austria).

The final report was issued in September 2006 and is now available on the website of the European Commission.