Keywords
Summary

Keywords

Social policy — Approximation of laws — Protection of employees in the event of insolvency of their employer — Directive 80/987 — Option for the Member States to take the measures necessary to avoid abuses — Definition of abuses — Claim for a compensation payment in respect of salary owed submitted by a shareholder-employee out of time, time having begun to run once the individual concerned became aware of the parlous financial situation of the undertaking — Not included — Claim for a compensation payment in respect of salary owed submitted by a shareholder-employee in respect of periods after the date by which an employee who was not a shareholder would presumably have terminated the employment relationship — Included — Limits — (Council Directive 80/987, Articles 3(1), 4(2), first and second indents, and 10(a))

Summary

Pursuant to Article 10(a) of Directive 80/987 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer, the Member States are, in principle, authorised to take the measures necessary to avoid abuses, defined as practices that adversely affect the guarantee institutions, which ensure the payment of employees ' outstanding pay claims resulting from contracts of employment or employment relationships, by artificially giving rise to a claim for salary, thereby illegally triggering a payment obligation on the part of those institutions.

First, the conduct of an employee having a significant shareholding in the private limited company that employs him, but who does not exercise a dominant influence over that company, in seeking a compensation payment in respect of existing claims relating to his pay, although he made no genuine demand for payment of salary owed to him in the 60 days from the time he could first have become aware that the company was no longer creditworthy, cannot be regarded as an abusive practice adversely affecting the guarantee institution. That employee has not artificially established the necessary conditions for obtaining the compensation payment.

Second, the very fact that a shareholder-employee remains in the employment relationship beyond the date on which an employee who is not a shareholder would, in the same circumstances, have resigned on the ground of non-payment of his salary is circumstantial evidence of abusive intentions. Therefore, a measure taken by a Member State to prevent abuse, which denies the shareholder-employee an entitlement to a guarantee in respect of claims for outstanding pay arising after that date, does indeed constitute a measure adopted to avoid abuses within the meaning of Article 10(a) of Directive 80/987. However, that fact does not automatically mean that there was an abuse. It is clear from the first and second indents of Article 4(2) of Directive 80/987 that the Community legislature considered that it is not unusual for an employee to continue to perform his duties where the unpaid salary relates to a period of less than three months. Consequently, as regards the guarantee to pay claims covered by that Article 4(2), the Member State is not entitled to assume that, as a general rule, an employee who is not a shareholder would have resigned on the ground of non-payment of his salary before his salary had been in arrears for a period of three months.

see paras 31, 36, 39-40, 43-44, 47-50, 52, operative parts 1-2