Key facts of the case:
- By this request for a preliminary ruling, the Supreme Court of the United Kingdom is raising three questions concerning the interpretation of Article 3(3) of Directive 2001/23/EC 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 undertakings or businesses. (2) The referring court asks whether Directive 2001/23 prohibits, permits or requires the acceptance by Member States of the transfer of ‘dynamic clauses referring to collective agreements’. These are clauses that have been agreed between the employees and the transferor employer prior to the transfer of an undertaking and that have the effect of requiring the transferee employer to abide by the conditions agreed in future collective agreements, even where that employer cannot be a party to the negotiations leading to that agreement.
- UK law has traditionally given the social actors significant freedom of action and has permitted the transfer of dynamic clauses referring to collective agreements as part of the transfer of an undertaking. The transferee employer thus remains bound, seemingly indefinitely, not only by agreements in whose negotiation it took no part, but also by those in whose negotiation it could not take part. In the Werhof (3) judgment, delivered in the specific context of German employment law, the Court of Justice ruled that Directive 2001/23 did not require Member States to ensure that dynamic clauses referring to collective agreements were transferred in cases of transfers of undertakings. This decision has given rise to conflicting decisions in the UK courts, some taking the view that the judgment prevents any dynamic clause referring to collective agreements from being transferred, while others consider that it relates to the very specific case of the German legislation, which limited the scope of such clauses. The Supreme Court of the United Kingdom has referred these questions for a preliminary ruling so that the Court of Justice can define the scope of Article 3(3) of Directive 2001/23, in the light of its interpretation in Werhof.
Results (sanctions) and key consequences of the case:
In the light of the foregoing, I propose that the Court reply as follows to the questions referred by the Supreme Court:
- Article 3(3) of Council Directive 2001/23/EC of 12 March 2001 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 undertakings or businesses, must be interpreted as not, in principle, precluding Member States from allowing dynamic clauses referring to existing and future collective agreements that are freely agreed between the parties to a contract of employment to be transferred as a result of the transfer of an undertaking.
- European Union law, and in particular Article 16 of the Charter of Fundamental Rights of the European Union, does not preclude national legislation that requires the transferee of an undertaking to accept the existing and future terms and conditions agreed by a collective bargaining body, provided that the requirement is not unconditional and irreversible. It is for the national court to assess whether, in the specific circumstances of the present case and pursuant to national law, the requirement is in fact unconditional and irreversible in nature.