Digitalisation and transfer of undertakings

Abstract

The transfer of undertakings rules under Directive 2001/23/EC, implemen ted in Spain through article 44 of the Statute of Workers, essentially aim to protect employees’ rights by ensuring that when undertakings, businesses or parts of undertakings are transferred (i) the employees are taken on by the transferee; and (ii) the transferor and transferee are jointly and severally liable for the labour and social security liabilities that accrued up until the point of the transfer. Inexorable change is transforming the traditional concept of an undertaking from one based on tangible assets and machinery to a new one in which intangible and digital assets (clients, algorithms, apps, software and AI, etc.) feature heavily. This is in turn provoking a significant shift in the concept of a transfer of undertakings. This article analyses the criteria used in the case law on the “value of intangible assets at the time of transfer”.