A further three studies will look at the situation in other member states to inform work underway inside the European Commission to revise the Directive. Mr Davies' recommendations contradict the UK government view that the Directive should be amended to exclude contracting out. Environment Minister Tony Baldry said there was growing support for the UK view among other member states.
Mr Davies says in Denmark and the UK problems have arisen because of uncertainty on whether the Directive and implementing national legislation applies to contracting out. In the UK the Directive is implemented by the Transfer of Undertakings (Protection of Employment) Regulations 1981.
'Such confusion is undesirable: in an uncertain legal environment none of the parties involved can be sure that they have acted efficiently and rationally and legitimate expectations are always at risk of being upset'. The report argues the Directive should be amended to make it clear that as a general rule it applies to contracting out.