Keywords
Summary

Keywords

1 Social policy - Approximation of laws - Transfers of undertakings - Safeguarding of employees' rights - Directive 77/187 - Applicability to a transfer between companies in the same group

(Council Directive 77/187)

2 Social policy - Approximation of laws - Transfers of undertakings - Safeguarding of employees' rights - Directive 77/187 - Scope - Company belonging to a group which subcontracts works contracts to another company in the same group - Included - Conditions

(Council Directive 77/187)

Summary

1 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 can apply to a transfer between two companies in the same group.

In contrast to competition law, nothing justifies a parent company's and its subsidiaries' uniform conduct on the market having greater importance in the application of the Directive than the formal separation between those companies which have distinct legal personalities. That outcome, which would exclude transfers between companies in the same group from the scope of the Directive, would be precisely contrary to the Directive's aim, which is to ensure, so far as possible, that the rights of employees are safeguarded in the event of a change of employer by allowing them to remain in employment with the new employer on the terms and conditions agreed with the transferor.

2 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 applies to a situation in which a company belonging to a group decides to subcontract works contracts to another company in the same group in so far as the transaction involves the transfer of an economic entity between the two companies. The term `economic entity' refers to an organised grouping of persons and assets facilitating the exercise of an economic activity which pursues a specific objective.