Case C‑149/16

Halina Socha and Others

v

Szpital Specjalistyczny im. A. Falkiewicza we Wrocławiu

(Request for a preliminary ruling

from the Sąd Rejonowy dla Wrocławia-Śródmieścia we Wrocławiu)

(Reference for a preliminary ruling — Social policy — Collective redundancies — Directive 98/59/EC — Article 1(1) — Concept of ‘redundancies’ — Assimilation to redundancies of ‘terminations of an employment contract which occur on the employer’s initiative’ — Unilateral amendment by the employer of pay and working conditions)

Summary — Judgment of the Court (Tenth Chamber), 21 September 2017

1. Social policy—Approximation of laws—Collective redundancies—Directive 98/59—Scope—Definition of redundancies—Significant changes to essential elements of an employment contract for reasons not related to the individual employee concerned—Included—Notice of amendment to the period for acquiring the right to the length of service award—Not included—Termination of an employment contract following the employee’s refusal to accept a change proposed in the notice of amendment—Termination of an employment contract occurring on the employer’s initiative

   (Council Directive 98/59, Art. 1(1)(a))

2. Social policy—Approximation of laws—Collective redundancies—Directive 98/59—Employee information and consultation procedures—Point at which the obligation to hold consultations arises—Employer intending, to the detriment of the employees, to make a unilateral amendment to the terms of remuneration, resulting in termination of the employment relationship if refused by those employees—Obligation of that employer to engage in consultations—Conditions—Verification by the national court

   (Council Directive 98/59, Art. 1(1) and (2))

1.  Regarding the concept of ‘redundancy’ for the purposes of Article 1(1)(a) of Directive 98/59, the Court has held that that directive must be interpreted as meaning that the fact that an employer — unilaterally and to the detriment of the employee — makes significant changes to essential elements of his employment contract for reasons not related to the individual employee concerned falls within that concept (judgment of 11 November 2015, Pujante Rivera, C‑422/14, EU:C:2015:743, paragraph 55).

   It follows that the fact that an employer — unilaterally and to the detriment of the employee — makes a change that is not significant to an essential element of the employment contract for reasons not related to the individual employee concerned, or a significant change to a non-essential element of that contract for reasons not related to the individual employee concerned, cannot be classified as a ‘redundancy’ within the meaning of that directive.

   The notice of amendment at issue in the main proceedings merely provides that henceforth only the periods of work completed with the employer will be taken into account when determining the due date for the length of service award, with the result that the notice of amendment concerns only when the right to the length of service award is acquired. In those circumstances and without the Court needing to examine whether the length of service award at issue in the main proceedings constitutes an essential element of the employment contracts of the employees concerned, it is sufficient to note that the notice of amendment at issue in the main proceedings cannot be considered to result in a significant change to those contracts and that that notice does not fall within the concept of ‘redundancy’ within the meaning of Article 1(1)(a) of Directive 98/59.

   By contrast, the termination of an employment contract following the employee’s refusal to accept a change such as that proposed in the notice of amendment must be considered to be a termination of an employment contract occurring on the employer’s initiative for one or more reasons not related to the individual workers concerned, within the meaning of the second subparagraph of Article 1(1) of that directive, with the result that it must be taken into account when calculating the total number of redundancies.

   (see paras 25-28)

2.  Article 1(1) and Article 2 of Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies must be interpreted as meaning that an employer is required to engage in the consultations provided for in Article 2 when it intends, to the detriment of the employees, to make a unilateral amendment to the terms of remuneration which, if refused by the employees, will result in termination of the employment relationship, to the extent that the conditions laid down in Article 1(1) of that directive are fulfilled, which is for the referring court to determine.

   Regarding at what point an employer is obliged to engage in the consultations provided for in Article 2 of Directive 98/59, it must be noted that the Court has held that the obligations of consultation and notification arise prior to any decision by the employer to terminate contracts of employment (judgments of 27 January 2005, Junk, C‑188/03, EU:C:2005:59, paragraph 37, and of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 38). It has also held that achievement of the objective, as set out in Article 2(2) of the directive, of avoiding terminations of contracts of employment or reducing the number of such terminations would be jeopardised if the consultation of workers’ representatives were to be subsequent to the employer’s decision (judgments of 27 January 2005, Junk, C‑188/03, EU:C:2005:59, paragraph 38, and of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 46).

   That conclusion is all the more compelling since the purpose of the obligation to hold consultations, set out in Article 2 of that directive — namely, to avoid terminations of contracts of employment or to reduce their number and to mitigate the consequences (judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 46) — and the purpose of the notices of amendment, according to the order for reference — namely, to save the hospital from liquidation — overlap to a considerable extent. Where a decision involving the amendment of conditions of employment could help to avoid collective redundancies, the consultation procedure provided for in Article 2 of that directive must begin once the employer intends to make such amendments (see, to that effect, judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 47).

   (see paras 29, 34, 35, operative part)