Transfer of undertakings: resignation or unjustified dismissal?
Contracting involves an agreement between two companies or entities under which one of such companies or entities undertakes to perform work or provide a specific service to the other. In this regard and, due to the structure of our legal system, there is a great deal of labor conflict when a company decides to take over the services or work provided by the other.
The main problem arises when determining whether or not the legal situation of a transfer of undertakings exists and, therefore, if the company taking over the services is required to subrogate the position of the contracted company, become the employer of its workers and respect their working conditions. This is important, given that if the transfer proceeds and the company does not take on the workers, it may be liable for unjustified dismissal. Furthermore, on the other hand, if a transfer of undertakings does not exist, termination of the workers by their former employer could be also be deemed as unjustified dismissal.
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