In this essay I will argue that the jurisprudence emerging from the CJEU in relation to key concepts of the Directive has largely been deficient. Deficient in the sense that the CJEU has not been consistent in its decisions in course of time, shifting its thinking, providing a lack of clarity and therefore leaving national courts with suboptimal legal certainty in the interpretation of the law.
Since its adoption in 1977 the Acquired Rights Directive (hereinafter the “Directive”) has generated a generous amount of case law, both in the national courts of the Member States of the European Union as well as at European level before the CJEU. This was owed to the vague drafting of its original provisions and the lack of clarity or definition even of key concepts such as the “transfer of undertakings”. Furthermore, the way of doing business in a globalised economy has changed over the years leading to corporate restructuring and the creation of atypical contracts (e.g. leasing, contracting-out, franchising) which the European legislator may not have thought of at that time. Consequently, national courts involved in transfer of undertakings litigations have been forced to request the CJEU for preliminary rulings and interpretation in rather fact-specific matters since a settlement based solely on the law text of the Directive or the corresponding national implementation was not possible. At the end, some of the Court’s case law itself has generated new uncertainty among the interpretation of the provisions of the Directive which has resulted in more case law. This prompted the European Council to amend the Directive in 1998 in order to reflect inter alia the case law of the CJEU and ultimately to repeal it in 2001 ‘in the interests of clarity and rationality’. The corresponding law and the evolvement of the jurisprudence of the CJEU will be analysed in more detail below.
Table of Contents
1. Introduction
2. Scope of application – The concept of the transfer of an undertaking
2.1 Economic activity in contrast to the exercise of public authority: An unclear demarcation
2.2 Legal transfer: Resurrection of a contractual link?
2.3 Economic entity retaining its identity: An open door to avoid the application of the Directive
3. Safeguarding of employees’ rights
3.1 Contractual variation
3.2 Opting-out of a transfer: A sting in the tail
3.3 Collective agreements
4. Dismissal: Clever transferors dismiss before the transfer, or not?
5. Conclusion
Research Objectives and Core Themes
This essay critically evaluates the jurisprudence of the Court of Justice of the European Union (CJEU) concerning the Acquired Rights Directive. The central objective is to determine whether the court's interpretations are deficient, specifically analyzing how inconsistencies in its rulings impact legal certainty for national courts and the protection of employees during business transfers.
- The conceptual scope and definition of "transfer of an undertaking" within EU law.
- The criteria for defining an "economic activity" versus the exercise of public authority.
- The requirements for a "legal transfer" and the necessity of a contractual link.
- The protection of employee rights, including contractual variations and the impact of collective agreements.
- The legal challenges and loopholes surrounding dismissals in the context of business transfers.
Excerpt from the Book
Economic entity retaining its identity: An open door to avoid the application of the Directive
The CJEU firstly clarified in Spijkers39 that there is a transfer of an undertaking where it retains its identity to the extent that it is transferred as a going concern and the transferee continues the business with the ‘same or similar activities’. Furthermore, all facts that characterize the transaction must be considered and no single factor is decisive.
Based on the two elements of the Spijkers formula, “activity” and “economic entity”, subsequent cases have developed two different conceptions of the undertaking: the “entreprise-activité” and the “entreprise-organisation” approach.40
Summary of Chapters
1. Introduction: Provides an overview of the Acquired Rights Directive, highlighting the historical challenges of vague legislative drafting and the resulting surge in CJEU case law.
2. Scope of application – The concept of the transfer of an undertaking: Examines the definition of economic activities, the evolving requirements for a legal transfer, and the complexities of determining when an economic entity retains its identity.
3. Safeguarding of employees’ rights: Analyzes the protection of workers, focusing on the limitations of contractual variations, the implications of employees opting out of a transfer, and the enforceability of collective agreements.
4. Dismissal: Clever transferors dismiss before the transfer, or not?: Discusses the prohibition of dismissals linked to transfers and the legal strategies used to circumvent these protections.
5. Conclusion: Summarizes the deficiencies in the CJEU's jurisprudence, noting that inconsistent rulings and fact-based decisions create legal uncertainty and gaps in employee protection.
Keywords
Acquired Rights Directive, CJEU, Transfer of Undertakings, Employee Protection, Economic Entity, Legal Transfer, Public Authority, Contractual Variation, Collective Agreements, Dismissal, European Labour Law, Jurisprudence, Employment Contract, Reorganisation, Legal Uncertainty
Frequently Asked Questions
What is the primary focus of this essay?
The essay critically evaluates the jurisprudence of the CJEU regarding the interpretation of the Acquired Rights Directive, specifically assessing whether the emerging case law is deficient in providing clarity and protection for employees.
What are the core thematic areas covered in the work?
The work focuses on the scope of the Directive, the definition of economic entities, the protection of existing employment contracts, the role of collective agreements, and the legality of dismissals during business transfers.
What is the central research question?
The primary question is whether the case law generated by the CJEU in interpreting the Acquired Rights Directive is deficient, and if so, what the underlying reasons for this perceived deficiency are.
Which scientific methodology is applied?
The author employs a legal-analytical method, examining key CJEU rulings and academic literature to demonstrate inconsistencies in the Court's application of the Directive.
What topics are discussed in the main body?
The main body addresses the three pillars of the Directive: the transfer of rights and obligations, the protection against unfair dismissal, and the requirement to inform and consult employees.
How would you characterize the keywords for this paper?
The keywords reflect the intersection of European labour law, corporate restructuring, and the judicial interpretation of statutory rights, highlighting terms like "Acquired Rights Directive," "Transfer of Undertakings," and "CJEU."
How does the CJEU distinguish between an "economic activity" and "public authority"?
The CJEU has struggled to provide a clear demarcation, though it initially held that activities falling under the exercise of public powers are excluded, later case law has blurred this line when public bodies contract out services to private entities.
Why does the author consider the "static approach" to collective agreements problematic?
The author argues that the "static approach" freezes the terms of collective agreements at the date of transfer, which may leave employees with inferior protection compared to other workers and fails to account for evolving economic conditions.
- Citation du texte
- Ass. Jur. Thomas Böhm (Auteur), 2018, A critical evaluation of the jurisprudence of the Court of Justice of the European Union (“CJEU”) that has interpreted the provisions of the Acquired Rights Directive. Is the case law emerging from the CJEU deficient, and why?, Munich, GRIN Verlag, https://www.grin.com/document/480685
