179/83 · GlobalLawDB

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Judgment of the Court7 February 1985^noteIn Case 179/83REFERENCE to the Court under Article 177 of the EEC Treaty by the President of the Arrondissementsrechtbank [District Court], The Hague, for a preliminary ruling in the proceedings pending before that court between(1) Industriebond FNV, an incorporated association,(2) Federatie Nederlandse Vakbeweging (FNV), an incorporated association,andThe Netherlands State,THE COURTcomposed of: Lord Mackenzie Stuart, President, G. Bosco, O. Due and C. Kakouris (Presidents of Chambers), T. Koopmans, U. Everling, K. Bahlmann, Y. Galmot and R. Joliét, Judges,Advocate General: Sir Gordon SlynnRegistrar: H. A. Rühi, Principal Administrator^notegives the following

Judgment

(The account of the facts and issues which is contained in the complete text of the judgment is not reproduced)

Decision

1By order dated 16 August 1983, which was received at the Court on 19 August 1983, the President of the Arrondissementsrechtbank, The Hague, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question as to the interpretation of Article 1 (1) of Council Directive No 77/187/EEC of 14 February 1977 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses (Official Journal 1977 L 61, p. 26).

2That question was raised in connection with an application for the adoption of interim measures made by Industriebond FNV and Federatie Nederlandse Vakbeweging against the Netherlands State, the purpose of which was to obtain an order ‘annulling, rendering ineffective or declaring inapplicable the part of the circular from the Minister for Social Affairs and Employment of 17 May 1983 requesting Chief Inspectors and Directors for Employment to instruct the Directors of the Regional Employment Offices to disregard Article 1639 (aa) et seq. of the Netherlands Civil Code when considering applications for permission to dismiss employees in the event of insolvency or “surséance van betaling” (judicial leave to suspend the payment of debts)’.

3Articles 1639 (aa) and 1639 (bb) of the Netherlands Civil Code provide that upon the transfer of an undertaking, as defined in those provisions, ‘the employer's rights and obligations resulting from a contract of employment between the employer and any of his employees on the date of the transfer shall pass by operation by law to the transferee of the undertaking. However, in addition to the transferee, the employer shall continue to be liable for a further year following the transfer in respect of any obligation which arose from the contract of employment before the date of the transfer.’ Those provisions were introduced by the Law of 15 May 1981 in order to implement Council Directive No 77/187 of 14 February 1977.

4Directive No 77/187, which was adopted by the Council on the basis of, in particular, Article 100 of the Treaty, is intended, in the terms of its preamble, ‘to provide for the protection of employees in the event of a change of employer, in particular, to ensure that their rights are safeguarded’. For that purpose, Article 3 (1) thereof provides that: ‘The transferor's rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer... shall, by reason of such transfer, be transferred to the transferee’. Article 4 (1) provides for the protection of the workers concerned against dismissal by the transferor or the transferee, but does not stand in the way of ‘dismissals that may take place for economic, technical or organizational reasons entailing changes in the workforce’. In addition, Article 6 of the directive requires the transferor and transferee to inform and consult the representatives of the workers affected by the transfer. Finally, Article 7 provides that the directive is not to ‘affect the right of Member States to apply or introduce laws, regulations or administrative provisions which are more favourable to employees’.

5Considering that the decision to be given depended on the interpretation of Directive No 77/187, the President of the Arrondissementsrechtbank, The Hague, stayed the proceedings and submitted the following question to the Court for a preliminary ruling:‘Does the scope of Article 1 (1) of Directive No 77/187/EEC extend to a situation in which the transferor of an undertaking is adjudged insolvent or is granted a “surséance van betaling”?’

6That question is identical to a question submitted in Case 135/83 {Abels), in which judgment has today been delivered.

7In that judgment, the Court ruled that:‘Article 1 (1) of Council Directive No 77/187/EEC of 14 February 1977 does not apply to the transfer of an undertaking, business or part of a business where the transferor has been adjudged insolvent and the undertaking or business in question forms part of the assets of the insolvent transferor, although the Member States are at liberty to apply the principles of the directive to such a transfer on their own initiative. The directive does, however, apply where an undertaking, business or part of a business is transferred to another employer in the course of a procedure such as a “surséance van betaling” (judicial leave to suspend payment of debts).’

8For the grounds of the ruling, reference should be made to the judgment in that case, the text of which is annexed to this judgment.

Costs

9The costs incurred by the Netherlands and Danish Governments and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,THE COURT,in answer to the question submitted to it by the President of the Arrondissementsrechtbank, The Hague, by order of 16 August 1983, hereby rules: Article 1 (1) of Council Directive No 77/187/EEC of 14 February 1977 does not apply to the transfer of an undertaking, business or part of a business where the transferor has been adjudged insolvent and the undertaking or business in question forms part of the assets of the insolvent transferor, although the Member States are at liberty to apply the principles of the directive to such a transfer on their own initiative. The directive does, however, apply where an undertaking, business or part of a business is transferred to another employer in the course of a procedure such as a ‘surséance van betaling’ (judicial leave to suspend payment of debts).

Delivered in open court in Luxembourg on 7 February 1985.