C-171/94

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OPINION OF MR LENZ — JOINED CASES C-I7I/94 AND C-I72/94

4. By letters of 27 October 1987 Mr Merckx was dismissed by judgment of 20 July and Mr Neuhuys informed Anfo Motors 1990 and the plaintiffs appealed against that that they did not consent to being employed judgment to the Cour du Travail de Brux- by Novarobel. They stated that Anfo Motors elles (Higher Labour Court, Brussels). could not require them 'to work for another company, in another place and under differ- ent working conditions, without the slightest guarantee as to whether the client base is to be retained or a sales figure achieved'. They maintained that Anfo Motors' conduct was a unilateral breach of their employment con- tracts and claimed compensation for breach of contract and other sums due. 7. The Cour du Travail de Bruxelles took the view that in order to decide the dispute it was necessary to refer a question to the Court of Justice for a preliminary ruling. In its order for reference the Cour du Travail refers to the fact that the right to sell Ford Motor vehicles in the area in question was 5. In its letters of 30 October and 2 Novem- transferred to Novarobel with effect from ber 1987 Anfo Motors confirmed its view 15 October 1987. According to that court, that Mr Merckx and Mr Neuhuys were Anfo Motors dismissed more than three- obliged to work for Novarobel with effect quarters of its staff and at the end of October from 1 November 1987 'with full retention 1987 there were only three mechanics, a chief of all rights and benefits acquired with Anfo sales manager, five salesmen, a store manager, Motors'. It stated that Novarobel guaranteed two storemen, one employee in 'planning' the observance of those obligations for a and one delivery man left in its employment. period of two years. Furthermore, it pointed Those remaining employees (which included out that the trade unions had signed a collec- Mr Merckx and Mr Neuhuys) had been tive agreement on 30 October 1987 in which called on to work for Novarobel with effect they had recognized the applicability of from the beginning of November 1987. Convention Collective No 32 bis and thus the validity of the transfers.

to assume certain obligations of Anfo Β — Analysis Motors in the context of Convention Collec­ tive No 32 bis in return for guarantees from Ford ...'. However, according to the findings of the national court, the decision to cease trading was taken by Anfo Motors itself. 11. The national court is seeking an answer to the question whether, in view of the cir­ cumstances referred to in the above question, there is a transfer of an undertaking or busi­ ness within the meaning of Directive 77/187. Article 1(1) of Directive 77/187 provides that 9. The national court cannot see what assets it is to apply 'to the transfer of an undertak­ Anfo Motors could have transferred to ing, business or part of a business to another Novarobel. It states that it is not even clear employer as a result of a legal transfer or whether Anfo Motors transferred its client merger'. Article 3(1) of the directive provides list. that in such a case the transferor's rights and obligations arising from a contract of employment or from an employment rela­ tionship existing on the date of the transfer are to be transferred to the transferee. It is apparent from the order making the refer­ ence that the national court doubts the appli­ 10. In both of the present cases the Cour du cability of the directive for two reasons in Travail, Brussels, has therefore referred the particular. First, it wonders whether it is a following question to the Court of Justice case of a transfer of an undertaking at all. for a preliminary ruling: Secondly, the parties disagree whether such a transfer was the result of a legal transfer within the meaning of the directive.

trading and dismissed the majority of its as possible, that the rights of employees are employees, with the remainder of the under- safeguarded in the event of a change of taking being wound up. It was a case of a employer by enabling them to remain in liquidation and not of the transfer of an employment with the new employer on the undertaking. That liquidation was carried terms and conditions agreed with the transf- out independently of the dealership agree- eror'. 4 ment concluded between Ford and Novaro- bel. The fact that Novarobel is performing the same activities as Anfo Motors previ- ously did is irrelevant in that respect, because it is obvious that all Ford dealers perform similar activities. Moreover, not even the 15. In order to protect workers the notion firm's business name was transferred to the of 'transfer of an undertaking, business or new dealer. part of a business' should therefore be inter- preted widely. That applies in the present case too. Admittedly, the circumstances being considered here are special in so far as the employees concerned are not in fact rais- ing any claims — which would have required 13. All the other parties that have taken part there to have been a transfer within the in the proceedings before the Court of Jus- meaning of the directive — but they dispute tice — Ford, the United Kingdom and the that such a transfer has taken place. How- Commission — take a different view. They ever, the interpretation of the rules cannot claim that notwithstanding the circumstances depend upon the particular intention of the set out by the national court there is, or at employee actually concerned, but must fol- least could be, a transfer within the meaning low principles of general validity. of the directive. I share that view.

choose his employer and cannot be obliged 17. According to the case-law of the Court to work for an employer whom he has not of Justice the essential criterion for answer freely chosen.' 5 ing the question whether there is a transfer within the meaning of the directive is 'whether the business in question retains its identity' which 'may be indicated in particu lar by the fact that its operation is actually continued or resumed by the new employer, with the same or similar activities'. 8 The The United Kingdom has correctly pointed Court of Justice has consistently held that in out that in the present case Mr Merckx and order to determine whether those conditions Mr Neuhuys may actually have made use of are met:

The Mem ing the type of undertaking or business, ber States may provide that in such cases the whether or not the business's tangible assets, contract of employment or the employment such as buildings and moveable property, are relationship with the transferor is to con transferred, the value of its intangible assets tinue. However, they may also provide that at the time of the transfer, whether or not the in such a case the contract of employment or majority of its employees are taken over by employment relationship must be regarded the new employer, whether or not its cus as having been terminated either by the tomers are transferred and the degree of sim employee or by the employer. 7 ilarity between the activities carried on before and after the transfer and the period, if any, for which those activities were sus

At the hearing the Commission explained which approach Belgian law adopted in such cases. I'"or lhe sake of completeness, it is pointed out that the Court of Jus 8 — J u d g m e n t in Case 24/85 Spijkers ν Benedik [1986] ECR tice made statements in its judgment in Joined Cases 1119, paragraphs II and 13. Also ludgments in Case 144/87 and 145/87 Berg ν Besselen [19881 ECR 2559 that 287/86 Ny Malte Kro, cited above (footnote 4), paragraph 18; seemed to indicate that Directive 77/187 did not give Case 101/87 Bork Internattonal ν Foreningen af Arbejdsled- employees the righi to object to the transfer of their contract ere i Danmark [1988] ECR 3057, paragraph 14; Case of employment or employment relationship (at paragraph C-29/91 Redmond Stichting v Hendrikus Bartol [Wil] ECR

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O P I N I O N O F MR LENZ — J O I N E D CASES C-171/94 A N D C-172/94

made and cannot therefore be considered in 19. For that reason the Court of Justice isolation.' 9 should restrict itself in the present case to answering the more general question of whether there may be a transfer at all in the circumstances outlined by the national court. In my opinion that question should be answered in the affirmative. None of the cir- cumstances mentioned by the national court seems to be of such a nature as to exclude the applicability of the directive.

9 — Judgment in Case 24/85 Spijkers, cited above (footnote 8), paragraph 13. Also judgments in Case C-29/91 Redmond, paragraph 24, and in Case C-209/91 Watson Rask, para- graph 20. Cf. also the judgments in Case 287/86 Ny Mølle Kro, cited above, paragraph 19, and in Case 101/87 Bork, cited above, paragraph 15. 10 — Judgment in Case 24/85 Spijkers, cited above (footnote 8), paragraph 14. Also judgments in Case 287/86 Ny Molle Kro, paragraph 21, Case 101/87 Bork, paragraph 19 and in 21. On the other hand, the fact that Anfo Case C-29/91 Redmond, paragraph 25. 11 — As Advocate General Van Gerven correctly stated in his Motors dismissed the majority of its staff Opinion in Case C-209/91 Watson Rask [1992] ECR I-5766, at p. I-5769. 12 — Case C-329/92 Schmidt, cited above (footnote 8), para- graph 20. 13 — Advocate General Van Gerven expressed himself to that 14 — See points 2 and 5 above. effect in his Opinion in the Schmidt case [19941 ECR 15 — Judgment in Case 186/83 Botzen ν Rotterdamsebe Droog­ I-1313, at p. I-1319. dok Mattschappij [1985] ECR 519.

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MERCKX A N D NEUHUYS

It should be recalled that in the Bork case the Court of Justice had to consider a situation which was similar in some respects to the sit- uation in the present case. In Bork the previ- ous operator of an undertaking had dis- 'The fact that in its case-law the Court missed all his employees. The business was includes the transfer of such assets among ultimately continued by a third party who the various factors to be taken into account re-engaged more than half of the staff previ- by a national court to enable it, when assess- ously employed. 16 The Court of Justice held ing a complex transaction as a whole, to that there was a transfer within the meaning decide whether an undertaking has in fact of the directive, provided that the undertak- been transferred does not support the con- ing in question had retained its identity. 17 clusion that the absence of these factors pre- cludes the existence of a transfer.' 18

16 — Case 101/87 Bork, cited above (footnote 8). paragraphs 3 and 4. 18 — Case C-392/92 Schmidt, cited above (footnote 8). paragraph 17 — Case 101/87 Bork, cited above (footnote 8). paragraph 20. 16.

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OPINION OF MR LENZ — JOINED CASES C-171/94 AND C-172/94

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MERCKX AND NEUHUYS

Moreover, if the nature of the activities of still be fully satisfied in the present case. As I the undertakings concerned are taken into have already mentioned, Novarobel has account, it is apparent that the fact that no taken on certain tasks of Anfo Motors and is assets have been transferred is not likely to now selling Ford vehicles in the area previ- be of particular importance in the present ously served by Anfo Motors. In so doing, it case. The activity of a dealer is not shaped by is malung use of the concession which Anfo and dependent on its capital to the same Motors previously held and is employing extent as, for example, that of an industrial part of the staff of Anfo Motors. The facts in undertaking. As a rule, the experience and this case are not as unusual as those in the skill of its staff constitute a particularly Schmidt case. 21 important factor for the success of such a dealer. The acquisition of an — albeit small — part of those employees by another undertaking, and the criteria according to which those staff members have been selected, are therefore of particular relevance to the question whether there has been a transfer within the meaning of the directive. The fact that Novarobel acquired not only 28. In the hearing before the Court the rep- part of the staff of Anfo Motors, but also its resentative of Mr Merckx and Mr Neuhuys sales concession, is another factor which referred to further factual circumstances seems to me to be particularly important. As which, in his opinion, showed that there had a result of those acquisitions the new dealer not been a transfer within the meaning of the is now pursuing the same activity in the directive. He pointed out, in particular, that same area as Anfo Motors previously did. to a certain extent Novarobel's places of When taken as a whole, those factors militate business were located in different parts of most clearly in favour of there being conti- Brussels from those of Anfo Motors. It will nuity in the sense required by the directive. be for the national court, if necessary, to investigate those factors more closely and to appraise them in the course of the overall examination which it must carry out.

purposes of national law (which is based on Mølle Kro it held that the directive was the directive) does not seem to me to have applicable where the owner of a leased any importance by itself in deciding the undertaking took over its operation again question which is relevant in this case. How- after termination of the lease. 23 The Daddy's ever, it does show that the unions concerned Dance Hall case also concerned an undertak- take a view of the facts which is similar to ing which had been leased by its owner. that expressed here. The fact that Novarobel After the termination of the leasing agree- has not taken over the trading name of Anfo ment the undertaking was transferred to a Motors is of no importance, because that is third party with which the owner had con- not a precondition for a transfer within the cluded a new lease. The Court of Justice held meaning of the directive. that that could be a transfer within the meaning of the directive: 'The fact that in such a case the transfer is effected in two stages, in that the undertaking is first retrans- ferred from the original lessee to the owner Legal transfer and the latter then transfers it to the new les- see, does not prevent the directive from applying, provided that the economic unit in question retains its identity'. 24 In its judg- ment in Bork 25 and in Redmond 26 the Court of Justice confirmed that view. The judgment in Bork is particularly interesting 30. Mr Merckx and Mr Neuhuys argue that in that respect. That case also concerned an there has been no legal transfer within the undertaking that had been leased by its meaning of the directive, because no contract owner. After termination of the lease the has been concluded between Anfo Motors owner sold the undertaking to a third party. and Novarobel. On the other hand, Ford, The question arose whether the obligations the Commission and the United Kingdom on the previous lessee arising under the con- correctly argue that that fact does not pre- tracts of employment with its employees had clude the applicability of the directive. been transferred to the new owner. Of course, that presupposed that there had been a transfer within the meaning of the direc- tive. The new owner claimed that the appli- cability of the directive presupposed the con- clusion of a transfer agreement between the previous employer and the new employer. 27 31. As the Court of Justice stated in the Redmond case, the concept of a legal transfer has been given a 'flexible interpretation' by the Court in keeping with the objective of 23 — Judgment in Case 287/86 Ny Malle Kro, cited above (foot- note 8), paragraph 14. The Court of Justice also held to the the directive and it is therefore sufficient for same effect in Joined Cases 144/87 and 145/87 Berg ν Besselen, cited above, which concerned the termination of a the transfer to take place 'in the context of lease-purchase agreement (at paragraph 19 of the judg­ contractual relations'. 22 For example, in Ny ment). 24 — Case 324/86 Tellerup ν Daddy's Dance Hall [1988] ECR 739, paragraph 10. 25 — Cited above (footnote 8), paragraph 14. 26 — Cited above (footnote 8), paragraph 14. 22 — Judgment in Case C-29/91 Redmond, cited above (footnote 27 — Judgment in Case 101/87 Bork, cited above (footnote 8), 8), paragraph 11. paragraph 11.

29 — Sec point 26 above. 30 — Sec point 2 above. That letter even refers to discussions 28 — Ibid., paragraph 14. with Novarobel.

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OPINION OF MR LENZ — JOINED CASES C-171/94 AND C-172/94

those 14 persons, while retaining their acquired rights, must work in an undertak- ing with which the first undertaking has not concluded an agreement but which holds the dealership previously held by the first undertaking, even if the first undertaking has not transferred any part of its assets to the second undertaking. However, that applies only if the undertaking in question has retained its identity. The national court must establish whether that is the case, applying the criteria laid down by the Court of Justice.

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