Employee inadequately informed on the transfer of the company

Year of publication

2009


Year of publication

168


Reference

Supreme Court, 26 June 2009, www.rechtspraak.nl, ljn: BH4043


Decision

An employee has worked in the logistics department of a tobacco company since 1980. On 25 September 2003, the tobacco company enters into an agreement with a logistic service provider, whereby all logistics of the tobacco company are outsourced to the logistic service provi-der, a company specifically established for that purpose. The employees are then seconded to a subsidiary of the tobacco company and they carry out their duties work based on a secondment agreement between that subsidiary and the logistic service provider. The tobacco com-pany writes a letter about this to its employees on 24 September 2003, in which they are informed that the department that they worked for has been closed, that the work will be continued by the logistic service provider, that this logistic service provider will use the employees of the newly incorporated subsidiary and that the employees will be employed, starting 28 September 2003, by the subsidiary with the existing employment conditions remaining in force unaltered. The employee concerned signs this letter for agreement.

In June 2005 the subsidiary announces that it intends to dismiss all its employees on 1 January 2006, and that the employees can be employed by the logistic service provider on that date. The letter states that the Works Council gave a positive advice on the intended decision to transfer, after its activities, the employees as well. The announcement is made that the em-ployment contract with the tobacco company (apparently including the subsidiary that is the formal employer) will be terminated on 1 January 2006, and that the logistic service provider will be the new employer.

On 1 January 2006 the employee concerned is incapacitated to work. When he resumes work at the beginning of February 2006, therapeutically, there is an altercation with a manager and the employee is suspended. The cause of the altercation was that the employee did not accept that he is now employed by the logistic service provider, and therefore reimbursed his salary of January 2006. This eventually results in the employment contract being dissolved at the request of the subsidiary that formerly employed the employee, on 1 March 2007, granting compensation to the employee.

The employee then is still short of the wages from 1 January 2006 until the date of the dissolution of the employment contract. In interlocutory proceedings, he claims this from the logistic service provider, apparently stating that the company has been transferred to the logistic service provider. The subdistrict court and also the Court of Appeal reject this claim. The Court of Appeal does not address the issue of whether the company was transferred in 2003, because the employee then agreed with a transfer to the subsidiary and was therefore no longer employed by the tobacco company. According to the Court of Appeal, there was no transfer of company in 2006, because no company activities were transferred from the subsidiary to the logistic service provider.

However, in the appeal to the Supreme Court by the employee, the Supreme Court reverses the ruling of the Court of Appeal. The Supreme Court refers to the European Directive on which the protection of employees in the transfer of a company is based, and the jurisprudence based on that Directive of the Court of Justice of the European Communities. This shows that employees cannot waive the protection accorded to them based on the Directive, but that employees can decide on their own initiative, after the company has been transferred, to discontinue the employment contract with the new acquirer, on the date of transfer of the company, provided they can freely sign an agreement to that effect with the seller or acquirer of the company. The Supreme Court also concludes that in 2003, formally there was no transfer of the company, but that the entire course of events actually meant that the company was transferred from the tobacco company to the logistic service provider. According to the Supreme Court, the waiver of the employees of their employment contract with the tobacco company was essential. However, according to the Supreme Court, the Court of Appeals should not have concluded, based on that waiver, that the employees were not legally em-ployed by the logistic service provider, because the demands of being a proper employer mean that the tobacco company should have informed its employees better at the time on their legal position. In particular, the tobacco company should have given its employees the opportunity to choose to remain in the employment of the tobacco company, so they would be legally employed by the logistic service provider when the company activities were transferred, respectively to be employed by the subsidiary, and thus freely and univocally waive the legal protection on transfer of the company.


Comments

The protection of employees on transfer of a company is far-reaching and is broadly interpreted by the European Court, and therefore also by the Dutch courts. In this case the transfer of the company took place in 2003, when the activities were transferred to the logistic service provider. At that time, however, the employees were persuaded by the tobacco company not to be employed by the logistic service provider, but by a subsidiary incorporated for that purpose. The transfer in 2006 of the employees to the logistic service provider was not a transfer of the company, because the activities (and therefore the company) remained unaltered at the logistic service provider. The right to be and remain employed by the company which employed them, was therefore denied the employees by the tobacco company, by persuading them not to be employed by the logistic service provider, but “voluntarily” by the subsidiary incorporated for that purpose. In the view of the employees, that was probably the safest choice at that time, because they would not be employed by an unknown third party, but by a subsidiary of their own employer, whom they knew. Because the tobacco company did not sufficiently inform the employees on the consequences of that choice, which only became clear in 2006, the Supreme Court found that the employees were unjustly deprived of the protection on transfer of the company in 2003.



Leave a comment


Name: *
E-mail address: *
Your comment:
Fill in the code: *


Reactions


No comments.