The European Acquired Rights Directive states that in the event of a transfer, the employee’s contract transfers over to the transferee with all its rights and obligations. In ISS Facility Services NV v Govaerts and Atalian NV, the Court of Justice of the European Union (CJEU) held that the same principle applies even if there is more than one transferee.
Basic facts
Ms Govaerts worked for ISS which was responsible for cleaning and maintaining various buildings in the Belgian city of Ghent. Although the work was divided into three lots depending on the type of building being cleaned or maintained, Ms Govearts was responsible for project managing all three areas of work.
After a call for tenders for the work, the city awarded Lots 1 and 3 to Atalian and Lot 2 to Cleaning Masters NV. Ms Govaerts was told by ISS that, as a result, her contract of employment had transferred to Atalian.
However, Atalian took the view that there had not been a transfer and, as such, it had no binding contract with Ms Govaerts. She lodged claims against both ISS and Atalian before the Ghent Labour Court arguing that she was entitled to compensation in lieu of notice, an end-of‑year bonus and holiday pay.
Decisions of lower courts
The Labour Court held that it was unlawful to dismiss Ms Govaerts and ordered ISS to pay compensation in lieu of notice, her end-of‑year bonus and the leave pay due to her. However, it held that the claim against Atalian was inadmissible.
ISS appealed, arguing that Ms Govaerts’ contract of employment had transferred over to the two companies that had won the tender in two different proportions - 85 per cent to Atalian and 15 per cent to Cleaning Masters NV.
The Higher Labour Court decided to stay proceedings and to ask the CJEU whether, in the event of a simultaneous transfer of various parts of an undertaking to more than one transferee, the rights and obligations arising from Ms Govaerts’ contract should be transferred in proportion to the work she did or whether it should transfer only to the contractor who won the tender for the lots on which she spent most of her time (in other words, Atalian). If neither possibility was permitted, it wanted to know if that meant that no transfer had occurred.
Relevant law
Article 3(1) of the directive states that: “The transferor's rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.”
Decision of CJEU
Acknowledging that article 3(1) did not envisage a situation involving a number of transferees, the CJEU said it was important to remember that the directive was introduced in order to safeguard the rights of employees caught up in a transfer.
That being so, it held that Article 3(1) had to be interpreted as meaning that a single full-time employment contract could be divided into a number of part-time contracts, although it was for national courts to decide how that should happen in practice. For instance, in this case, it could take into consideration the economic value of the lots to which Ms Govaerts was assigned or the actual time that she devoted to each lot.
The important thing for courts to remember was that the employee’s working conditions should not be adversely affected. If it was impossible to divide the job up or if doing so would adversely affect the rights of that worker, the transferee(s) would be responsible if the worker ended up losing their job, even if it was the worker who had initiated the process.
Comment
This case is helpful in establishing that if the facts allow, and there is no detriment to the employee, an employee can continue to be employed by more than one transferee after a TUPE transfer. It is likely however that each case will depend on its own facts.