Termination of Employment in Regards of an M&A Deal: An Analysis of Council Directive 2001/23/EC of 12 March 2001, art.4(1)

Frederik Suetta

Student thesis: Master thesis


This thesis will investigate whether the Council Directive 2001/23/EC of12 March 2001 art.4(1) is implemented correctly in Danish legislation. Furthermore, this thesis will contain an economic section that investigates how an employer under certain assumptions will terminate the contracts of employees in the workforce. The applied framework from this study support an integrated analysis which purpose is to bring suggestions for improvement in Danish law, which will entail that the directive will be correctly implemented. In order to investigate the Danish implementation of art. 4(1), the thesis will apply a legal analytical framework. Initially, the content of the art. 4(1) will be investigated, afterwards which Danish legislation will be examined. Case law will be included when relevant to the thesis. The basis of the examination is therefore a legal dogmatic analysis of both legislations. The economic section will investigate the employer’s economical motivations for terminating employees, including the employer’s options to maximize profit by termination. This will be done by analyzing the employer from a perspective of decision. Afterwards the thesis will investigate the relationship between the employee and employer and how they maximize their own utilities and production. In this section the employer will be analyzed from a perspective of exchange. Lastly, the thesis will entail an integrated analysis that will investigate which options Denmark has to correctly implement the directive. In this section both the legal and the economic sections will be included. The thesis concludes that the Council Directive art. 4(1) is not correctly implemented in Danish legislation, as Danish legislation only protects employees, who have been employed at a company for one year or longer. Therefore, Danish legislation does not protect all employees, as it should according to the Council Directive. In an economic point of view the employer will terminate those employees, who have the lowest human capital due to the productivity that they will produce within the organization. The employer will most often retain employees that produce most, as the company thus will obtain a higher profit. Finally, the thesis concludes that the Danish Act on employees’ rights in the event of transfers of undertakings will have to be revised. This may be done in two different ways. The first is to change the paragraph itself and add a section thus all employees will obtain the same protection. The other option is to change the Danish salaried employees Act paragraph 2b section 1, so all employees are protected and not only the employees that have been working for one year within the same organization.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
Publication date2020
Number of pages84