Act no 72/2002 guards the rights of employees when their workplace merges with another. It applies to public and private undertakings engaged in economic activities whether they are operating for profit or not. An example of such transfer is when a municipal makes a special deal with a private company to run a kindergarten under the municipals name. It would not be the case when a reorganisation of a public administration takes place.
The transferor or the transferee are not permitted to dismiss employees because of this action unless such a dismissal is done for economic, technical, or organisational reasons entailing changes in the workforce.
When a workplace is transferred to new business owners the rights and obligations to the employees are automatically transferred to the new owner. This also applies to failure to fulfil obligations of transfer. The new business owner is obliged to pay all debts to the employee. The transfered employee must respect the terms and working conditions according to valid collective wage agreements and the terms of the employment contract.
If the employee is a civil servant and has therefore the rights and obligations as such according to collective wage agreements, he/she keeps the rights even though the business of his former employment becomes private. This happens for example when a business that is run by a municipal move over to a private business. The employees that had a contract with the former employer before the transfers keep there rights according to collective wage agreements.