C-144/87

Mr President, Raad, which, pursuant to the third Members of the Court, paragraph of Article 177 of the EEC Treaty, referred to the Court the following questions: 1. By two judgments delivered on 1 May 1987 the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) seeks (a) Must Article 3 (1) of Directive an interpretation by the Court of various 77/187/EEC be interpreted as meaning provisions of Council Directive that, in so far as it is not otherwise 77/187/EEC of 14 February 1977 on the provided in the directive or by the approximation of the laws of the Member Member States, after the date of States relating to the safeguarding of transfer the transferor is no longer liable employees' rights in the event of transfers of for the obligations arising from the undertakings, (Official Journal 1977, L 61, employment contract? If so, is the p. 26). consent of the employee required for the transferor to be released from his liability? If not, can that effect be The facts are as follows. In February and prevented by objections by the March 1982 Mr Berg and Mr Busschers employee, with the result that the latter were engaged by Mr Besselsen to work in must be regarded as being in the his discothèque Besi Mill in Ermelo, one as employment of the transferor? manager and the other as a part-time employee. On 15 February 1983, under a lease-purchase agreement (in other words a (b) Does a lease-purchase agreement sale by deferred payment without immediate constitute a transfer of an undertaking transfer of ownership) Besselsen sold the for the purposes of Article 1 (1) of the business to Summerland BV, a commercial directive and does the termination of partnership owned by Mr Manshanden and that agreement by judicial decision in its Mr Tweehuijzen. Some months later, the turn result in a transfer, with the conse- two employees brought an action before the quence that the obligations of the Kantonrechter de Harderwijk, for an order purchaser by lease-purchase which arise requiring the transferor and the transferees from the contract of employment to pay in full the monthly salary owed to existing at the time of the termination them for the period 15 February to 25 are transferred by that transfer to the November 1983. On the same day, on an vendor? application by Besselsen, the Kantonrechter declared the contract terminated on the ground of the purchasers' non-performance. Written observations were submitted by the parties to the main proceedings, the Commission of the European Communities, On appeal the decision ordering payment of the Netherlands and Portuguese Govern- the salaries was varied. Berg and Busschers ments and the United Kingdom. Only the appealed against this decision to the Hoge Commission presented oral argument.

2. Under Article 1 (1), Directive produces its effects when the agreement is 771 187/EEC 'shall apply to the transfer of concluded — but is in addition to the an undertaking . . . to another employer as a liability which attaches to the transferee by result of a legal transfer or merger'. In such reason of the transfer under the first cases, 'the transferor's rights and obligations subparagraph of this provision. arising from a contract of employment … existing on the date of a transfer … shall, by reason of such transfer, be trans- As the Court has held, these provisions ferred to the transferee.

thereto. On the other hand, the view taken 2639, paragraph 15). by the other participants in the proceedings is that such release from liability does not depend on the will of the employees and, even if they object, this does not have the The position could not have been stated effect of keeping them in the employment of more clearly. In this case it can therefore be the transferor. said (a) that under Community law the transferor of an undertaking is released from his obligations vis-à-vis the employees of the transferred undertaking, subject to I prefer the second view.

account. Thus the Member states retain the undertakings while protecting the rights of right to provide that, after the transfer of their staff — would be frustrated by the the undertaking, the transferor is to necessity of obtaining the consent of all the continue to be liable, jointly with the employees concerned. transferee, for the obligations arising from the employment contracts transferred (Article 3 (1), second subparagraph). Moreover, the safeguard thus imposed on 3. The first part of the second question that contracting party is not a condition for does not give rise to any difficulties.

BERG v BESSELSEN

view. Certain laws — such as French, The second part of this question is more Belgian and, in principle, Netherlands interesting. It seeks to ascertain whether this law — only provide for termination by is also the case where the same contract is judicial decision, whereas others — such as terminated by judicial decision because of the German legal system — make provision the purchaser's non-performance. In this for unilateral rescission ('Rücktritt'). Still respect, I would refer the court to its others — such as Italian law — allow the judgment of 17 December 1987 in Case contracting party in question to choose 287/86 (Ny Mølle Kro [1987] ECR 5465). between instituting proceedings in court and The Court held that 'where the owner of a calling upon the other party to perform his leased undertaking takes over its operation obligations within a specified period, on the following a breach of the lease by the lessee' expiry of which the contract will be deemed that transfer must be regarded as a 'legal to have been terminated. Such solutions are transfer' within the meaning of Article 1(1) based on practical grounds (rescission and of the directive because 'such a takeover notice to perform being quicker and also occurs on the basis of the lease' cheaper, while the intervention of the courts (paragraph 14). makes it possible for the party who has failed to perform to defend himself and provides greater certainty for the plaintiff). That observation is decisive for the reply to It is nevertheless clear that these solutions be given to the Netherlands court. The are based on a common view of the inference to be drawn from it is that, in principle of termination and indeed confirm, accordance with a view which is widely held for our purposes in these proceedings, the by academic writers in the field of the civil fact that the means used by the contracting law, the Court considers non-performance party who has performed his obligations is a as an anomaly which has occurred within matter of indifference in substantive terms. the context of a bilateral contract and thereby identifies the remedy (termination) offered by the legal system to the party which has complied with the terms of the Having said this, I would repeat what I contract as a derivative of the contract. It stated in my Opinion in Ny Mølle Kro.

OPINION OF MR MANCINI — JOINED CASES 144 AND 145/87

legislature, refers to any legally relevant act economic entity transferred to retain its own (contract, will, administrative provision, identity, that is to remain in operation and judicial decision) whereby the ownership of viable. Ultimately, the only cases to which the undertaking is modified. The only Article 1 is always and indisputedly inap- condition to which the protection provided plicable are those involving an undertaking by the directive to employees is subject which is bankrupt or a company which is in consists then in the capacity of the liquidation.

4. For all the foregoing reasons, I propose that in reply to the questions referred to the Court by the Hoge Raad by its judgments of 1 May 1987 in the actions brought by Mr Berg and Mr Busschers against Mr Besselsen, the Court should rule as follows:

(a) Article 3 (1) of Directive 7 7 / 1 8 7 / E E C is to be interpreted as meaning that, after the transfer of the undertaking, the transferor is released from his obli- gations vis-à-vis the employees of the transferred undertaking, subject to the derogations provided for in the applicable national legislation. In this connection, the consent or objection of the employee in question is immaterial.

(b) Article 1 (1) of the directive is to be interpreted as meaning that it applies to the transfer of an undertaking effected by means of a lease-purchase agreement or resulting from the judicial termination of such an agreement, provided that the economic entity thus transferred retains its own identity.