Summary

In accordance with the Estonian Employment Contracts Act, employment contracts transfer to the acquirer of an undertaking or a part of an undertaking. The same principle has been established in the 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. In the application of the former version of the Directive (77/187/EEC), the transfer of undertakings is given broad interpretation by the European Court of Justice. The author examines the positions of the European Court of Justice concerning the transfer of an undertaking and the legal status of employees if a company (or any other legal person) does outsourcing, i.e. purchases services (e.g. cleaning or guarding of premises, catering) from another company. Outsourcing is also becoming more and more popular in Estonian companies. Therefore, judgements of the European Court of Justice serve as a good example for shaping the practice in Estonia, as there is yet no Estonian case law on the transfer of employees.