Directive (2001/23) on the safeguarding of employees' rights applies to the transfer of a production unit where the transferor, the transferee or both persons are acting jointly with a view to the transferee continuing the economic activity carried on by the transferor, the Court of Justice of the European Union ruled on Thursday 13 June (Case C-664/17).
EU rules also apply where the transferred production unit is not fully autonomous, provided that the transferor and the transferee do not fraudulently and abusively seek to benefit from the advantages provided for by EU law and that this unit has guaranteed access to the factors of production of a third party so as not to depend on the latter's unilateral economic choices.
The case concerns the execution of employment contracts between 90 employees of the Greek company Ellinika Nafpigeia. After the privatisation of the latter, one of the four divisions was transferred to a subsidiary, Etaireia Troxaiou Ylikou Ellados, created for this purpose. The parent company and its subsidiary signed several contracts for the former management to operate as an autonomous company in the construction and repair of railway vehicles.
Referred to it by the Greek Court of Cassation, the Court analyses the notion of autonomy of a transferred entity based on elements such as personnel, management, work organisation, operating resources and the necessary functional autonomy. In particular, it notes that the functional autonomy of a transferred entity does not necessarily have to be total, as the directive also applies to the transfer of part of an undertaking.
See the judgment: http://bit.ly/31s9R6B (Original version in French by Mathieu Bion)