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Summary of the Judgment
Summary of the Judgment
Judgment of the Court (Sixth Chamber) of 7 March 1996.
Albert Merckx and Patrick Neuhuys v Ford Motors Company Belgium SA.
References for a preliminary ruling: Cour du travail de Bruxelles - Belgium.
Safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses - Concept of a transfer - Transfer of a dealership.
Joined cases C-171/94 and C-172/94.
1. Social Policy — Approximation of laws — Transfers of undertakings — Safeguarding of employees ' rights — Directive 77/187 — Scope — Transfer — Concept — Transfer of a motor vehicle dealership without transferring assets and without a direct contractual relationship between the new and the old dealer, together with an assignment of the latter ' s business — Included — (Council Directive 77/187, Art. 1(1))
2. Social policy — Approximation of laws — Transfers of undertakings — Safeguarding of employees ' rights — Directive 77/187 — Employee opposed to the transfer of his contract to the transferee — Whether permissible — Fate of the contract with the transferor — Determined by the Member States — Termination of the contract following a change in the level of remuneration — Employer responsible for the termination — (Council Directive 77/187, Art. 3(1) and 4(2))
1. The decisive criterion for establishing whether there is a transfer for the purposes of Directive 77/187 on the approximation of the laws of the Member States relating to the safeguarding of employees ' rights in the event of the transfers of undertakings, businesses or parts or businesses is whether the entity in question retains its economic identity, as indicated inter alia by the fact that its operation is actually continued or resumed.
Consequently, Article 1(1) of the directive must be interpreted as applying where an undertaking holding a motor vehicle dealership for a particular territory discontinues its activities and the dealership is then transferred to another undertaking which takes on part of the staff and is recommended to customers, without any transfer of assets or direct contractual relations between the two undertakings concerned.
2. Article 3(1) of Directive 77/187 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 businesses does not preclude an employee employed by the transferor at the date of a transfer of an undertaking from objecting to the transfer to the transferee of the contract of employment or the employment relationship. In such a case, it is for the Member States to determine what the fate of the contract of employment or employment relationship with the transferor should be. They may provide, in particular, that in such a case the contract of employment or employment relationship must be regarded as terminated either by the employee or by the employer. However, where the contract of employment or the employment relationship is terminated on account of a change in the level of remuneration awarded to the employee, Article 4(2) of the directive requires the Member States to provide that the employer is to be regarded as having been responsible for the termination, because the change in the level of remuneration awarded to the employee is a substantial change in working conditions within the meaning of that provision.