A transfer of undertaking carried out after the transferor’s bankruptcy may exempt the transferee from the obligation to maintain the employees’ rights provided for in Directive 2001/23, even where that transfer corresponds to the performance of an agreement concluded before the bankruptcy, ruled the Court of Justice of the European Union (CJEU) in a judgment delivered on Thursday 3 April (Case C-431/23).
In 2020, Wibra België, which was in serious difficulty, initiated judicial restructuring proceedings. Its Dutch parent company, Wibra Nederland, offered to take over part of its premises and 183 of its 439 employees. However, this offer was rejected by the Belgian courts on the grounds that it did not respect employees’ rights, particularly with regard to the payment of bonuses and holidays.
The latter declared Wibra België bankrupt and, the following day, SRL Wibra België, which had previously been set up to take over and continue part of the business operated by Wibra België, took over certain premises and re-employed 183 employees. However, 60 workers are contesting this decision, claiming that they were not properly informed or consulted before being made redundant.
In its judgment, the CJEU considers that the derogation from the employee protection regime provided for under EU law applies in a situation where bankruptcy proceedings follow judicial restructuring proceedings during which an agreement to partially transfer the business concerned was drawn up, but was not approved by the competent court before then being carried out once bankruptcy was declared.
The Court points out that this derogation (Article 5 of the directive) lays down three cumulative conditions: the transferor must be the subject of bankruptcy proceedings or similar insolvency proceedings; those proceedings must be initiated with a view to liquidating its assets; and those proceedings are supervised by a competent public authority. It is for the court which referred the case to determine whether these conditions are met.
In any event, the Court of Justice has reiterated that Member States must take the necessary measures to prevent abusive recourse to insolvency proceedings aimed at depriving employees of the rights established by Directive 2001/23.
See the Court’s judgment: https://aeur.eu/f/g9b (Original version in French by Mathieu Bion)