The Prohibition of Dismissal in Sweden and Germany: A Comparative Study of the Scope of Article 4.1 in the Transfers of Undertakings Directive

Sammanfattning: This study aims to clarify the current state of the law regarding the prohibition of dismissal in the context of transfers of undertakings in Sweden and Germany. The prohibition of dismissal originates from Article 4.1 of the Transfer Directive (2001/23/EC) and is an integral part of the European Union’s employment protection framework, primarily aimed to protect employments by restricting dismissals grounded in transfers. The study analyses the subject matter through a comparative perspective, as well as reflects on its results in light of the European Union’s flexicurity strategy. In order to functionally compare the two jurisdictions, a broad account of the national employment protection systems has been employed, detailing primarily the requirements for ordinary dismissal, re-engagement norms, and the principles for selection in dismissal of employees. The underlying Union law is also thoroughly illuminated as the principle of primacy and the obligation of conform interpretation makes its understanding essential for the interpretation of national law. The prohibition of dismissal as prescribed in Union law establishes an order where a transfer in itself must be the sole reason for dismissal in order for the prohibition to be invoked. The exemption for economic, technical and organisational reasons also detailed in Article 4.1 is in the study concluded to primarily constitute an illumination of the prohibition, intended to clarify that lawful grounds for dismissals of such character, already prescribed in the Member States national legal order, do not invoke the prohibition. The German national implementation in § 613a para. 4 BGB closely adheres to the order prescribed by the Union. The Swedish implementation in 7 § 3 para. LAS in contrast, divergences from the Union order by constructing an absolute prohibition of dismissal, invoked at a point in time of the transfer process. The divergence from Union law favours employment protection over the freedom to conduct business and the managerial prerogative, potentially in conflict with the Directive’s dual purpose as reformulated through the case Alemo-Herron, and in breach of the obligation to conform interpretation. In light of flexicurity, the study concludes that the German implementation of the prohibition better balances the two interests of flexibility and security. The Swedish order, while it temporarily leads to slightly prolonged employments in the transfer situation, significantly infringes on the managerial prerogative and the flexibility of the transferor and transferee.