April 01
2020
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26th March 2020
Employment & Immigration

CJEU: ‘Transfer of Undertaking’ includes division of employment contract to more than one transferee, with certain provisos

The concept of ‘transfer of an undertaking’ under Directive 2001/23 has been considered by the Court of Justice in a ruling handed down today, ISS Facility Services (C-344/18), concerning the dismissal of an employee, and whether there had been more than one transfer of an undertaking to different companies.

The employee in question had a full-time employment contract with ISS Facility Services, which, when it lost a tender, dismissed her and informed her that Atalian, a company that had won part of the tender in which ISS itself had been unsuccessful, would be her new employer (in what it described as a proportion of 85% of her employment contract) as there had been a transfer of an undertaking (it attributed the other 15% to another company). Atalian disputed this, and the employee commenced proceedings against both companies.

The Court of Justice finds that Article 3(1) of the Directive does not envisage a situation where a transfer involves a number of transferees, and that the directive cannot be invoked to improve remuneration or other working conditions when there is a transfer of undertakings, rather seeking to ensure a fair balance between the interests of the employees and the transferee.

In examining where the balance falls, the Court of Justice finds that Article 3(1) of the Directive must be interpreted as meaning that the rights and obligations arising from a contract of employment can be transferred to more than one transferee, in proportion to the tasks performed by the worker concerned. However, this is conditional – the division of the employment contract must not worsen working conditions or adversely affect the safeguarding of worker’s rights (which it is left for the referring court to determine).

In the alternative, or where such a division is impossible, the Court of Justice rules that the transferee(s) would be regarded as being responsible for any consequent termination of the employment relationship, under Article 4 of that directive, even if that termination were to be initiated by the worker.

Read the ruling in full here.

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