DENMARK Law and Practice Contributed by: Morten Jensen, Elise Ross-Hansen, Frederik André Bork and Paula Grønlund, Bruun & Hjejle
TUPE Under TUPE, employment relationships auto - matically transfer with the business, and the acquirer assumes the rights and obligations towards the transferring employees. In connec - tion with transfer of a part of a business (carve- out), attention should be paid to employees who are partially working with the transferred activi - ties or are indirectly affected by such transfer. Such employees may be eligible to transfer with a part of their working hours or tasks. Recent case law from the Danish Labour Court has confirmed that, for a transfer to fall within the scope of TUPE in relation to the service com - pany in question, the takeover of a substantial portion of the workforce must enable the sta - ble continuation of the activity. If a transfer only allows for the continuation of tasks within spe - cific units, without ensuring the continuity of the overall operation, the transfer may be excluded from the scope of TUPE. Reductions in force and changed employment terms, including changes constituting construc - tive dismissals in relation to a transfer, are per - mitted under TUPE on economic, technical or organisational grounds. Information and consultation requirements must be observed in connection with the transfer of employees. Reductions or constructive dismiss - als affecting at least ten employees may trigger special information and consultation procedures. Collective bargaining If work in an asset sale is subject to collective bargaining, the acquirer has the option of opt - ing out of the applicable collective agreements, provided certain procedural requirements and deadlines are observed. The entitlements awarded to employees under the collective
risk that the merger in question will significantly impede effective competition, in particular as a result of the creation or strengthening of a domi - nant position. This call-in option is, in general, available for the Danish competition authorities for up to three months after signing of the merg - er agreement. However, under certain circum - stances (eg, if the parties have kept the merger confidential from the public), the authorities may call in the merger for up to six months after com - pletion of the merger in question. Besides the Danish merger control rules, the restrictions in Danish competition law against anti-competitive agreements apply to transac - tion processes. Accordingly, during negotiations, under a due diligence process and in the period between signing and closing, the parties to the transac - tion must not engage in anti-competitive prac - tices, such as the exchange of competitively sensitive information. In practice, this is handled by establishing “clean team” procedures when a merger involves competitors. 2.5 Labour Law Regulations Share Sale A share sale generally has limited effect on employment relationships as they are not direct - ly affected by the sale. Danish rules on consul - tation and information will generally not apply if no material changes affecting employees arise in connection with a share sale. Asset Sale An asset sale makes an assessment of the appli - cability of the Act on Transfer of Undertakings (TUPE) relevant – in particular, whether the trans - ferred assets qualify as an economic entity that retains its identity after the transfer, which is a requirement for TUPE to apply.
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