Transferee liable for wrongful dismissal

Case no. 284/2016
Judgment delivered on 17 October 2017

Danish Metalworkers’ Union acting for A
vs.
The Danish Chamber of Commerce acting for B A/S

A was employed by company C and was a union representative. When C was put into liquidation, the insolvent estate concluded an agreement with B on the transfer to B of the part of the company where A was employed.

The insolvent estate dismissed A and released him from his duties a few days before the transfer, which meant that he was not transferred to B, the transferee.

A raised a claim for wages during the notice period and for compensation for wrongful dismissal.

The main issue in the case was whether B was liable for A’s claim, considering that A had been dismissed by the insolvent estate and released from his duties before B’s takeover of the company.

The Supreme Court stated that the transferee would not assume the obligations towards such dismissed employees, unless their dismissal was in contravention of section 3(1) of the Danish Act on Transfer of Undertakings.

The Supreme Court held that A was dismissed by reason of the transfer and that the dismissal was in contravention of section 3(1) of the Act on Transfer of Undertakings. Consequently, B, as the transferee, was liable for the claims raised by A.

The High Court had reached a different conclusion.