CELEX: 62020CJ0237
Reference for a preliminary ruling
Directive 2001/23/EC
Articles 3 to 5
Transfers of undertakings
Safeguarding of employees’ rights
Exceptions
Insolvency proceedings
‘Pre-pack’
Survival of an undertaking
Transfer of (part of) an undertaking following a declaration of insolvency preceded by a pre-pack

This request for a preliminary ruling concerns the interpretation of Articles 3 to 5 of Council Directive 2001/23/EC of 12 March 2001 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 undertakings or businesses (
OJ 2001 L 82, p. 16
).
The request has been made in proceedings between the Federatie Nederlandse Vakbeweging (Netherlands Federation of Trade Unions; ‘the FNV’), a Netherlands trade union organisation, and the Netherlands companies Heiploeg Seafood International BV and Heitrans International BV (collectively, ‘Heiploeg-new’), concerning the safeguarding of the rights of the employees of those companies following a transfer of an undertaking where the transferor is the subject of insolvency proceedings.
Legal context
European Union law
Directive 2001/23 codified Council Directive 77/187/EEC of 14 February 1977 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 undertakings or businesses (
OJ 1977 L 61, p. 26
), as amended by Council Directive 98/50/EC of 29 June 1998 (
OJ 1998 L 201, p. 88
).
Recital 3 of Directive 2001/23 is worded as follows:
‘It is necessary to provide for the protection of employees in the event of a change of employer, in particular, to ensure that their rights are safeguarded.’
Article 1(1)(a) and (b) of that directive provides:
‘(a)
This Directive shall apply to any transfer of an undertaking, business, or part of an undertaking or business to another employer as a result of a legal transfer or merger.
(b)
Subject to subparagraph (a) and the following provisions of this Article, there is a transfer within the meaning of this Directive where there is a transfer of an economic entity which retains its identity, meaning an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.’
The first subparagraph of Article 3(1) of that directive states:
‘The transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.’
The first subparagraph of Article 4(1) of Directive 2001/23 provides:
‘The transfer of the undertaking, business or part of the undertaking or business shall not in itself constitute grounds for dismissal by the transferor or the transferee. This provision shall not stand in the way of dismissals that may take place for economic, technical or organisational reasons entailing changes in the workforce.’
Under Article 5 of that directive:
‘1.   Unless Member States provide otherwise, Articles 3 and 4 shall not apply to any transfer of an undertaking, business or part of an undertaking or business where the transferor is the subject of bankruptcy proceedings or any analogous insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor and are under the supervision of a competent public authority (which may be an insolvency practitioner authorised by a competent public authority).
2.   Where Articles 3 and 4 apply to a transfer during insolvency proceedings which have been opened in relation to a transferor (whether or not those proceedings have been instituted with a view to the liquidation of the assets of the transferor) and provided that such proceedings are under the supervision of a competent public authority (which may be an insolvency practitioner determined by national law) a Member State may provide that:
(a)
notwithstanding Article 3(1), the transferor’s debts arising from any contracts of employment or employment relationships and payable before the transfer or before the opening of the insolvency proceedings shall not be transferred to the transferee, provided that such proceedings give rise, under the law of that Member State, to protection at least equivalent to that provided for in situations covered by Council Directive 80/987/EEC of 20 October 1980 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 [(
OJ 1980 L 283, p. 23
)],
and, or alternatively, that
(b)
the transferee, transferor or person or persons exercising the transferor’s functions, on the one hand, and the representatives of the employees on the other hand may agree alterations, in so far as current law or practice permits, to the employees’ terms and conditions of employment designed to safeguard employment opportunities by ensuring the survival of the undertaking, business or part of the undertaking or business.
…
4.   Member States shall take appropriate measures with a view to preventing misuse of insolvency proceedings in such a way as to deprive employees of the rights provided for in this Directive.’
Netherlands law
The BW
Under Article 7:663 of the Burgerlijk Wetboek (Civil Code, ‘the BW’), as a result of the transfer of an undertaking, the employer’s rights and obligations arising, at the time of the transfer, from a contract of employment concluded between the employer and the worker employed in that undertaking are automatically transferred to the transferee.
Article 7:666, introductory sentence and subparagraph (a), of the BW provides that Article 7:663 is not to apply to the transfer of an undertaking where the employer has been declared insolvent and the undertaking forms part of the insolvent estate.
Article 7:663 and Article 7:666, introductory sentence and subparagraph (a), of the BW are intended to transpose Article 3(1) and Article 5(1) of Directive 2001/23 respectively.
The FW
Article 1(1) of the Faillissementswet (Law on Insolvency, ‘the FW’) provides that the debtor is to be declared insolvent by the court, on its own declaration or at the request of its creditors or one of them, where it is unable to pay its debts as they become due and it has more than one creditor.
Article 10 of the FW provides that third parties are entitled to oppose the declaration of insolvency for a period of eight days as from the date of delivery of the order declaring the debtor insolvent.
The insolvency order also includes the name of the insolvency administrator and the supervisory judge.
Article 68 of the FW provides that the insolvency administrator is responsible for the management and winding up of the insolvent estate. In accordance with national case-law, it must take into account the interests of all the creditors, but also collective interests, including those relating to the safeguarding of employment.
Under Article 40 of the FW, the insolvency administrator may terminate the employment contracts of employees employed by the insolvent debtor, with due observance of a notice period of not more than six weeks.
Under Article 64 of the FW, the supervisory judge supervises the insolvency administrator and verifies that he or she does not exceed his or her powers, that he or she acts in the interests of all the creditors and that he or she fulfils his or her task properly.
The pre-pack procedure
The referring court describes the
pre-pack
as a national practice derived from case-law which makes it possible, in the context of the liquidation of a debtor’s assets, to prepare the sale of all or part of an undertaking forming part of its assets in order to increase the chances of creditors being repaid in full.
The preparations for sale consist, inter alia, in negotiating an agreement with one or more candidates on the basis of which all or part of the undertaking in question will be transferred to them after the debtor has been declared insolvent. The
pre-pack
differs from other sales transactions prior to a declaration of insolvency in the sense that the sales transactions organised in connection with it are prepared by an insolvency administrator, known as a ‘prospective insolvency administrator’, under the supervision of a supervisory judge, known as the ‘prospective supervisory judge’. They are appointed by the competent court and their status and functions are determined by the case-law of the Hoge Raad der Nederlanden (Supreme Court of the Netherlands).
It is apparent from the order for reference that, according to that case-law, the role of the ‘prospective insolvency administrator’ is determined by the court which appoints him or her and the information provided by that court or by the ‘prospective supervisory judge’ appointed for that purpose. A ‘prospective insolvency administrator’ must, like the insolvency administrator in the insolvency proceedings, take into account, in the phase prior to the declaration of insolvency, the interests of all the creditors, but also collective interests, including those relating to the preservation of employment. The ‘prospective insolvency administrator’ may, in the same way as the insolvency administrator, be held liable for a wrongful act committed in the performance of his or her duties.
The referring court states that the involvement of the ‘prospective insolvency administrator’ and the ‘prospective supervisory judge’ in a
pre-pack
is essential because, when the insolvency is subsequently declared, they are generally appointed as the insolvency administrator and the supervisory judge of the insolvency proceedings. Accordingly, when performing their duties during the
pre-pack
, they take account of the legal tasks that they will perform after the declaration of insolvency.
It is thus for the ‘prospective insolvency administrator’ and the ‘prospective supervisory judge’ to prepare the transfer of all or part of the undertaking before the declaration of insolvency of the legal person to which that undertaking belongs, taking into account the interests of all the creditors and collective interests. After the declaration of insolvency, regardless of the extent of their involvement before that declaration, they are required, as the insolvency administrator and supervisory judge of the insolvency proceedings, to assess whether that transfer meets those interests and, if it does not, not to proceed with that transfer.
An agreement for the transfer of the undertaking prepared in the context of a
pre-pack
procedure is not to be concluded and performed until after the declaration of insolvency, when the insolvency administrator and the supervisory judge appointed by the court have their legal powers. They are generally able to act quickly because it is common practice to appoint the former ‘prospective insolvency administrator’ and ‘prospective supervisory judge’ to those posts.
Those proceedings thus make it possible to avoid a situation, after the insolvency has been declared, in which all or part of the undertaking concerned is shut down, even briefly, and to obtain, through the transfer of all or part of an undertaking which is still a going concern, a better sale price for that undertaking in order to satisfy to the greatest extent possible the creditors’ claims.
The dispute in the main proceedings and the questions referred for a preliminary ruling
The Heiploeg group (‘Heiploeg-former’) consisted of several companies which were engaged in the wholesale trade in fish and seafood and related activities. During the years 2011 and 2012, Heiploeg-former suffered significant financial losses. In addition, in November 2013, the European Commission imposed a fine of EUR 27 million on four companies in that group for having participated in a cartel.
In view of the serious financial difficulties faced by Heiploeg-former, no bank agreed to finance the payment of that fine. Thus, as soon as the fine was imposed, the possibility of using a
pre-pack
was examined. To that end, several independent companies in relation to the Heiploeg group were invited to submit an offer for the assets of Heiploeg-former. Since the bid submitted by Parlevliet en Van der Plas Beheer BV was considered to be the most promising, negotiations continued with that company.
In response to a request from Heiploeg-former, on 16 January 2014 the Rechtbank Noord-Nederland (District Court, Noord-Nederland, Netherlands) appointed two ‘prospective insolvency administrators’ and a ‘prospective supervisory judge’. It is apparent from the letter of appointment that the objective of the measure was to achieve as high a return as possible on behalf of all the creditors and to provide an opportunity to prepare a sale or a reorganisation from a situation of insolvency. The court noted that the ‘prospective insolvency administrators’ and the ‘prospective supervisory judge’ had no legal powers or duties in the context of the
pre-pack
procedure, but were tasked with monitoring, obtaining information and being informed, giving their opinion and, where appropriate, giving advice. It stated that they had to be guided by the interests of all the creditors, as if the insolvency had already been declared and, in the event of subsequent insolvency proceedings, to report on the
pre-pack
procedure in public reports. Heiploeg-former was required to cooperate fully with the ‘prospective insolvency administrators’ and the ‘prospective supervisory judge’.
On 27 January 2014, Heiploeg-former applied to the Rechtbank Noord-Nederland (District Court, Noord-Nederland) for a declaration of insolvency. On the following day, that court granted that application and appointed, as insolvency administrator and supervisory judge, the persons who had previously performed the duties of ‘prospective insolvency administrator’ and ‘prospective supervisory judge’.
The two companies comprising Heiploeg-new, which were entered in the commercial register on 21 January 2014, took over most of Heiploeg-former’s business. The transfer agreement, under which Heiploeg-former’s business was transferred to Heiploeg-new, was concluded on 29 January 2014.
Under that agreement, Heiploeg-new took over the contracts of employment of approximately two-thirds of Heiploeg-former’s employees for the purpose of carrying out, at the same workplace, the activities which they carried out previously, while imposing less favourable conditions of employment on those employees. Heiploeg-new purchased the premises of Heiploeg-former, which it uses, and has retained almost all of Heiploeg-former’s customers.
FNV appealed against the judgment at first instance declaring Heiploeg-former insolvent. By its judgment, the Court of Appeal dismissed the action, holding that Heiploeg-new had claimed without being contradicted that the financial losses suffered by Heiploeg-former and the fact that the banks were not prepared to finance the payment of the fine imposed on four companies in that group had had the effect of making its insolvency inevitable. That court inferred from this that the three conditions for the application of Article 5(1) of Directive 2001/23 were satisfied and that, accordingly, Heiploeg-new was not bound by the working and employment conditions applicable to its employees before the transfer. That court held that, when Heiploeg-former was taken over by Heiploeg-new, first, Heiploeg-former was the subject of insolvency proceedings, secondly, those proceedings concerned the liquidation of the assets of the transferor and, thirdly, those proceedings had been placed under the supervision of a public authority.
FNV brought an appeal on a point of law against that judgment before the Hoge Raad der Nederlanden (Supreme Court of the Netherlands), submitting that the last two conditions laid down in that provision were not satisfied in the case of a
pre-pack
procedure and that, as a result, the transfer of Heiploeg-former to Heiploeg-new was subject to the provisions of Directive 2001/23, with the result that the employees of Heiploeg-former had to be regarded as having entered the service of Heiploeg-new while retaining their conditions of employment.
The referring court notes that, under Article 7:663 of the BW, when an undertaking is transferred, the employer’s rights and obligations, at the time of the transfer, under an employment contract concluded between that employer and the employee working in that undertaking, are transferred to the transferee. It states that that provision does not, however, apply to the transfer of an undertaking, in accordance with Article 7:666, introductory sentence and subparagraph (a), of the BW, where the employer has been declared insolvent and the undertaking forms part of the insolvent estate. That court adds that those provisions of national law, which transpose Directive 2001/23 into national law, must be interpreted in a manner consistent with that directive.
The referring court also notes that the primary objective of a
pre-pack
procedure is to secure the greatest possible reimbursement of all creditors when the debtor’s assets are liquidated, and that, in addition, a
pre-pack
process contributes to maintaining some employment. It also states that public supervision in insolvency proceedings is not compromised by the existence of a
pre-pack
procedure prior to the insolvency proceedings.
As regards the case in the main proceedings, the referring court notes that it is common ground that Heiploeg-former was the subject of insolvency proceedings, within the meaning of Article 5(1) of Directive 2001/23. However, in the light of the Court’s case-law, the referring court has doubts as to whether the
pre-pack
procedure at issue in the main proceedings complies with the two conditions laid down in Article 5(1) of Directive 2001/23, namely whether that procedure, first, can be regarded as being instituted with a view to the liquidation of the assets of Heiploeg-former and, secondly, is under the supervision of a competent public authority.
In those circumstances the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)
Must Article 5(1) of Directive [2001/23] be interpreted as meaning that the condition that “bankruptcy proceedings or any analogous insolvency proceedings … have been instituted with a view to the liquidation of the assets of the transferor” has been met, where:
(i)
the insolvency of the transferor is inevitable and the transferor is therefore effectively insolvent,
(ii)
under Dutch law, the objective of the insolvency proceedings is to secure the highest possible return for the joint creditors by liquidating the debtor’s assets, and
(iii)
in a so-called
pre-pack
prior to the declaration of insolvency, preparations are made for the transfer of (part of) the undertaking but it is only carried out after the declaration of insolvency, given that
(iv)
prior to the declaration of insolvency, the “prospective insolvency administrator” appointed by the Rechtbank (District Court) must be guided by the interests of the joint creditors as well as by social interests such as the importance of job preservation, and the “prospective supervisory judge”, also appointed by the Rechtbank [(District Court)], must exercise a supervisory function in that regard,
(v)
the objective of the
pre-pack
is to enable, in the subsequent insolvency proceedings, a method of liquidation whereby (part of) the undertaking belonging to the assets of the transferor is sold as a going concern so as to obtain the highest possible return for the joint creditors and jobs are preserved as far as possible, and
(vi)
the structure of the procedure ensures that that objective is in fact the guiding principle?
(2)
Must Article 5(1) of the Directive be interpreted as meaning that the condition that “the bankruptcy proceedings or any analogous insolvency proceedings are under the supervision of a competent public authority” is fulfilled if the transfer of (part of) the undertaking is prepared in a
pre-pack
prior to the declaration of insolvency and is carried out after the declaration of insolvency, and
(i)
is monitored, prior to the declaration of insolvency, by a “prospective insolvency administrator” and a “prospective supervisory judge” who have been appointed by the Rechtbank [(District Court)] but who do not have legal powers,
(ii)
under Dutch law, prior to the declaration of insolvency, the “prospective insolvency administrator” is obliged to be guided by the interests of the joint creditors and by other social interests, such as the preservation of jobs, and the “prospective supervisory judge” is obliged to exercise a supervisory function in that regard,
(iii)
the duties of the “prospective insolvency administrator” and the “prospective supervisory judge” do not differ from those of the insolvency administrator and the supervisory judge in the insolvency proceedings,
(iv)
the agreement on the basis of which the company is transferred and which has been prepared during a
pre-pack
is only concluded and executed after the insolvency has been declared,
(v)
the Rechtbank [(District Court)], when declaring the insolvency, may proceed to appoint an insolvency administrator or a supervisory judge other than the “prospective insolvency administrator” or the “prospective supervisory judge”, and
(vi)
the same requirements of objectivity and independence apply to the insolvency administrator and the supervisory judge as apply to an insolvency administrator and a supervisory judge in insolvency proceedings that were not preceded by a
pre-pack
and, irrespective of the degree of their involvement prior to the declaration of insolvency, they are obliged by virtue of their statutory duty to assess whether the transfer of (part of) the undertaking prepared prior to the declaration of insolvency is in the interests of the joint creditors, and if they answer that question in the negative, to decide that such a transfer will not take place, while they are also always entitled to decide on other grounds, for example, because other social interests, such as the interest of employment, are opposed to it, that the transfer of (part of) the undertaking prepared prior to the declaration of insolvency will not take place?’
Consideration of the questions referred
The first question
By its first question, the referring court asks, in essence, whether Article 5(1) of Directive 2001/23 must be interpreted as meaning that the condition which it lays down, according to which Articles 3 and 4 of that directive are not to apply to the transfer of an undertaking where the transferor is the subject of bankruptcy proceedings or any analogous insolvency proceedings ‘instituted with a view to the liquidation of the assets of the transferor’, is satisfied where the transfer of all or part of an undertaking is prepared, prior to the institution of insolvency proceedings with a view to the liquidation of the assets of the transferor and in the course of which that transfer is carried out, in the context of a
pre-pack
procedure intended to enable, during the insolvency proceedings, a liquidation of the undertaking as a going concern which satisfies to the greatest extent possible the claims of all the creditors and preserves employment as far as possible.
As a preliminary point, it should be recalled, in the first place, that, as the Advocate General observed in points 44 and 45 of his Opinion, the introduction of the derogation provided for in Article 5(1) of Directive 2001/23 is a codification of the Court’s case-law. Even though Directive 77/187 did not contain any specific provision in that respect, the Court, inter alia in its judgments of 7 February 1985, Abels (
135/83
,
EU:C:1985:55
), and of 25 July 1991, d’Urso and Others (
C‑362/89
,
EU:C:1991:326
), recognised – given the specific nature, as regards social security law, of insolvency law, which is characterised by special procedures intended to balance various interests, in particular those of the different categories of creditors – the possibility of derogating from the system of individual protection of workers where an undertaking or a part of a transferred undertaking is the subject of proceedings instituted with a view to liquidating the assets of the transferor.
Accordingly, the Court held, in paragraph 25 of the judgment of 7 December 1995, Spano and Others (
C‑472/93
,
EU:C:1995:421
), that Directive 77/187 did not apply to transfers taking place in proceedings for the liquidation of the transferor’s assets, such as the insolvency proceedings at issue in the judgment of 7 February 1985, Abels (
135/83
,
EU:C:1985:55
), or the compulsory administrative liquidation procedure under Italian law, at issue in the judgment of 25 July 1991, d’Urso and Others (
C‑362/89
,
EU:C:1991:326
), but that it did apply to the transfer of an undertaking subject to a procedure aimed at ensuring the continuation of its business.
It should be noted that, in the case that gave rise to the judgment of 25 July 1991, d’Urso and Others (
C‑362/89
,
EU:C:1991:326
), which concerned the question whether employees retained, upon the transfer of an undertaking, the rights flowing from seniority acquired before the transfer, the Court was required to rule on national legislation which provided for a special administration procedure entailing two types of effects for the undertakings subject to it. That case was characterised by the fact that, on the one hand, the transferred undertaking could be placed under a system of compulsory administrative liquidation the effects of which were comparable to those of insolvency proceedings and, on the other hand, that undertaking could, although placed under that scheme, continue trading, under the supervision of an auditor, for a period determined according to legislative provisions. In the latter case, that auditor was to draw up a programme whose implementation had to be authorised by the supervisory authority and which had to comprise, as far as is possible and taking account of creditors’ interests, a restructuring plan compatible with the trends of industrial policy, and specify the plants to be brought back into operation and those to be expanded as well as the plants or business units to be transferred. That legislation therefore had different characteristics, depending on whether or not the decree ordering compulsory administrative liquidation authorised the undertaking to continue trading (judgment of 25 July 1991, d’Urso and Others,
C‑362/89
,
EU:C:1991:326
, paragraphs
to
).
The Court held that the first of those effects was comparable to insolvency proceedings, since it was designed to liquidate the debtor’s assets in order to satisfy the body of creditors, and transfers effected under this legal framework were consequently excluded from the scope of Directive 77/187 (judgment of 25 July 1991, d’Urso and Others,
C‑362/89
,
EU:C:1991:326
, paragraph
). However, it took the view that, where the second effect applied, the primary purpose of the special administration procedure was to give the undertaking some stability allowing its future activity to be safeguarded. The social and economic objectives thus pursued could not explain nor justify the circumstance that, when all or part of the undertaking concerned is transferred, its employees lose the rights which that directive confers on them under the conditions which it lays down (judgment of 25 July 1991, d’Urso and Others,
C‑362/89
,
EU:C:1991:326
, paragraph
).
In the second place, it must be noted that the first question involves factual and procedural matters which, according to the referring court, were either not raised in the order for reference that gave rise to the judgment of 22 June 2017, Federatie Nederlandse Vakvereniging and Others (
C‑126/16
,
EU:C:2017:489
), or were not at issue in the case that gave rise to that judgment and, consequently, preclude the transposition of the response given by the Court in that judgment to the case in the main proceedings.
The Court held, inter alia, in paragraph 47 of that judgment, that Article 5(1) of Directive 2001/23 requires the bankruptcy proceedings or any analogous insolvency proceedings to be instituted with a view to liquidation of the assets of the transferor and noted that, in accordance with the Court’s case-law, a procedure aimed at ensuring the continuation of the undertaking in question does not satisfy that requirement.
The Court added, in relation to the differences between those two types of procedure, that a procedure is aimed at ensuring the continuation of the undertaking where that procedure is designed to preserve the operational character of the undertaking or of its viable units. By contrast, a procedure focusing on the liquidation of assets is aimed at maximising satisfaction of creditors’ collective claims. Although there may be some overlap of those two objectives within the aims of any given procedure, the primary objective of a procedure aimed at ensuring the continuation of the undertaking is, in any event, the safeguarding of the undertaking concerned (judgment of 22 June 2017, Federatie Nederlandse Vakvereniging and Others,
C‑126/16
,
EU:C:2017:489
, paragraph
).
In view of the characteristics of the
pre-pack
procedure set out by the referring court in the case that gave rise to the judgment of 22 June 2017, Federatie Nederlandse Vakvereniging and Others (
C‑126/16
,
EU:C:2017:489
), in particular the fact that that procedure was intended to avoid an abrupt cessation of the undertaking’s activities on the day of the declaration of insolvency, so as to safeguard the economic value of the undertaking and the employment posts, the Court held, in paragraph 50 of that judgment that, subject to determination by the referring court, that procedure was not ultimately aimed at liquidating the undertaking, with the result that the economic and social objectives it pursued were no explanation of, or justification for, the employees of the undertaking concerned losing the rights conferred on them by Directive 2001/23 when all or part of that undertaking was transferred.
Contrary to the facts of that case, in the present proceedings the referring court states that, when the
pre-pack
procedure at issue was initiated, the insolvency of the transferor was inevitable and both the insolvency proceedings and the
pre-pack
procedure which preceded them were aimed at liquidating the assets of the transferor, which was, moreover, declared insolvent. The referring court emphasises that the primary objective of all of those proceedings which led to that liquidation was to obtain the highest possible return for all the creditors.
It is also common ground that, in the present case, the transfer of the undertaking concerned took place in the course of insolvency proceedings intended to liquidate all the assets of Heiploeg-former, that is to say the transferor’s undertaking.
In that regard, it should be noted that, since Article 5(1) of Directive 2001/23 distinguishes between the ‘transferor’ and an ‘undertaking’, a ‘business’ or ‘part of an undertaking or business’ belonging to that transferor, a distinction must be drawn between the overall economic activity of the transferor and the individual activities of the various entities included among the assets to be liquidated.
It is clear from the wording of Article 5(1) of Directive 2001/23 that the scope of that provision, and consequently that of the derogation it lays down, is not limited to undertakings, businesses or parts of an undertaking or business whose activity definitively ceases before or after that transfer.
Article 5(1) of Directive 2001/23, since it provides that the transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer are not to be transferred to the transferee where the conditions laid down in that provision are fulfilled, implies that an undertaking or part of an undertaking which is still operating must be able to be transferred while benefiting from the derogation provided for in that provision. In doing so, Directive 2001/23 prevents the risk that the undertaking, the business or the part of an undertaking or business concerned will depreciate before the transferee takes over, in the context of insolvency proceedings instituted with a view to the liquidation of the transferor’s assets, a part of the transferee’s assets or business considered viable. That derogation is thus intended to eliminate the serious risk of a general deterioration of the value of the transferred undertaking or in the living and working conditions of workers, contrary to the objectives of the Treaty (see, to that effect, judgment of 25 July 1991, d’Urso and Others,
C‑362/89
,
EU:C:1991:326
, paragraph
and the case-law cited).
That interpretation of Article 5(1) of Directive 2001/23 is not undermined by the fact that the transfer of an undertaking, business or part of an undertaking or business, carried out during bankruptcy proceedings or any analogous insolvency proceedings instituted with a view to the liquidation of the transferor’s assets, was prepared before those proceedings were opened, since that provision does not concern the period preceding the institution of the bankruptcy or insolvency proceedings concerned. That finding is borne out by Article 5(2), from which it is clear that the exceptions which it lays down cover cases in which Articles 3 and 4 of that directive apply to a transfer carried out ‘during’ insolvency proceedings which have been instituted in relation to a transferor.
Accordingly, where the main purpose of a
pre-pack
procedure followed by insolvency proceedings is to obtain, following the declaration of insolvency of the transferor and its liquidation, the highest possible reimbursement of all its creditors, those procedures, taken together, satisfy, in principle, the second condition laid down in Article 5(1) of Directive 2001/23.
It is necessary in that respect to verify, in each situation, whether the
pre-pack
procedure and the insolvency proceedings at issue were carried out with a view to the liquidation of the undertaking as a result of the established insolvency of the transferor and not with a view to the mere reorganisation of that undertaking. In addition, it is necessary to establish not only that those proceedings have as their primary objective to satisfy to the greatest extent possible the claims of all the creditors, but also that the implementation of the liquidation through the transfer of the undertaking or a part thereof as a going concern, as prepared in the
pre-pack
procedure and carried out following the insolvency proceedings, enables the achievement of that primary objective. Accordingly, the aim of the use of the
pre-pack
procedure, for the purposes of liquidating a company, is to enable the insolvency administrator and the supervisory judge appointed by the court after the declaration of that company’s insolvency to increase the chances of satisfying the creditors’ claims.
It is clear however from the file before the Court that the
pre-pack
procedure at issue is governed solely by rules derived from case-law and that its application by different national courts is not uniform, with the result that, as the Advocate General pointed out in point 83 of his Opinion, it is the source of legal uncertainty. In those circumstances, the
pre-pack
procedure set out in the case-law of the referring court cannot be regarded as providing a framework for the implementation of the exception contained in Article 5(1) of Directive 2001/23 and does not meet the requirement of legal certainty.
It follows that, notwithstanding the considerations set out in paragraphs 47 to 53 above, the answer to the first question is that Article 5(1) of Directive 2001/23 must be interpreted as meaning that the condition which it lays down, according to which Articles 3 and 4 of that directive are not to apply to the transfer of an undertaking where the transferor is the subject of bankruptcy proceedings or any analogous insolvency proceedings ‘instituted with a view to the liquidation of the assets of the transferor’, is satisfied where the transfer of all or part of an undertaking is prepared, prior to the institution of insolvency proceedings with a view to the liquidation of the assets of the transferor and in the course of which that transfer is carried out, in the context of a
pre-pack
procedure which has as its primary aim to enable, in the insolvency proceedings, a liquidation of the undertaking as a going concern which satisfies to the greatest extent possible the claims of all the creditors and preserves employment as far as possible, provided that that
pre-pack
procedure is governed by statutory or regulatory provisions.
The second question
By its second question, the referring court asks, in essence, whether Article 5(1) of Directive 2001/23 must be interpreted as meaning that the condition which it lays down, according to which Articles 3 and 4 of that directive do not apply to the transfer of an undertaking, business or part of an undertaking or business where the bankruptcy proceedings or any analogous insolvency proceedings instituted in respect of the transferor ‘are under the supervision of a competent public authority’, is satisfied where the transfer of all or part of an undertaking is prepared in the context of a
pre-pack
procedure prior to the declaration of insolvency by a ‘prospective insolvency administrator’, under the supervision of a ‘prospective supervisory judge’ and the agreement concerning that transfer is concluded and performed after the declaration of insolvency with a view to the liquidation of the transferor’s assets.
In order to answer that question, it must be borne in mind that, as the Court noted in its judgment of 22 June 2017, Federatie Nederlandse Vakvereniging and Others (
C‑126/16
,
EU:C:2017:489
, paragraph
), and as confirmed by the referring court, the
pre-pack
procedure which precedes the declaration of insolvency with a view to the liquidation of the transferor’s assets is derived from case-law and has no basis in national legislation or regulations.
As regards more specifically the
pre-pack
procedure at issue in the case that gave rise to the judgment of 22 June 2017, Federatie Nederlandse Vakvereniging and Others (
C‑126/16
,
EU:C:2017:489
), the Court, on the basis of the file submitted to it, held, in paragraph 54 of that judgment, that that procedure was not carried out under the supervision of the competent court, but rather was supervised by the undertaking’s management which conducted the negotiations and adopted the decisions concerning the sale of the insolvent undertaking. In paragraph 55 of that judgment, it observed that the ‘prospective insolvency administrator’ and the ‘prospective supervisory judge’ had no formal powers and that they were not supervised by any public authority. It also considered that, since, very soon after the opening of the insolvency proceedings, the supervisory judge granted authorisation for the transfer prepared during the
pre-pack
procedure, that judge must, before the opening of those insolvency proceedings, have been informed of that transfer and consented to it. The Court concluded, in paragraph 57 of that judgment, that, in the light of those characteristics, the
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procedure at issue in that case was liable to defeat almost entirely the purpose of the supervision of the insolvency procedure by a competent public authority and could not, therefore, satisfy the condition for supervision by such an authority required under Article 5(1) of Directive 2001/23.
In the present case, it must be noted that the referring court – which points out that the ‘prospective insolvency administrator’ and the ‘prospective supervisory judge’, although appointed by a court, do not have any legal powers when they carry out their tasks in a
pre-pack
procedure – sets out, in the order for reference, various elements capable of calling into question the assessment carried out by the Court in paragraph 57 of the judgment of 22 June 2017, Federatie Nederlandse Vakvereniging and Others (
C‑126/16
,
EU:C:2017:489
), with the result that that assessment could not be applied to the case in the main proceedings.
More specifically, it should be noted that, according to that court, the status and duties of the ‘prospective insolvency administrator’, defined by the court which appoints that administrator or by the instructions of the ‘prospective supervisory judge’ appointed for that purpose, do not differ substantially from the status and duties of the insolvency administrator in the insolvency proceedings. The ‘prospective insolvency administrator’ may, in the same way as the insolvency administrator, be held liable for a fault in the performance of his or her duties and personal liability is assessed on the basis of the same criteria as those applicable to the insolvency administrator. The ‘prospective supervisory judge’ – like the supervisory judge in insolvency proceedings – supervises the ‘prospective insolvency administrator’, during the
pre-pack
procedure preceding the declaration of insolvency, so that he or she does not exceed his or her powers and acts in the interests of all the creditors. The court which appointed the ‘prospective insolvency administrator’ and the ‘prospective supervisory judge’ reviews, in the event of subsequent insolvency proceedings, whether those persons have followed all the instructions given to them and, if not, will appoint other persons as insolvency administrators and supervisory judge at the time of the declaration of insolvency.
The referring court states that, in the case in the main proceedings, although the agreement on the basis of which the undertaking was transferred was prepared during the
pre-pack
procedure, that agreement had not yet been concluded at the time when Heiploeg-former was declared insolvent. Once insolvency proceedings were opened, the insolvency administrators and the supervisory judge who were responsible for monitoring the insolvency proceedings and had been appointed by the court for that purpose had legal powers to that effect and were subject to the same requirements of objectivity and independence as those applicable to an insolvency administrator and a supervisory judge appointed in insolvency proceedings not preceded by a
pre-pack
procedure. They were therefore required to assess whether the transfer of the viable units of Heiploeg-former prepared before the declaration of insolvency was carried out in the interests of all the creditors. Consequently, the implementation of a
pre-pack
procedure, such as that at issue in the main proceedings, has no effect on the supervision which will be carried out subsequently in insolvency proceedings by a competent public authority, namely by the insolvency administrator and the supervisory judge, as provided for by the FW.
In that regard, it should be noted that, since the ‘prospective insolvency administrator’ and the ‘prospective supervisory judge’ are appointed by the competent court for the
pre-pack
procedure and that court not only defines their duties but also reviews the exercise of those duties when the insolvency proceedings are subsequently opened, in deciding whether or not to appoint the same persons as insolvency administrator and supervisory judge, there is already, as a result, supervision of the ‘prospective insolvency administrator’ and the ‘prospective supervisory judge’ by a competent public authority.
That assessment is supported by the fact, first, that the transfer prepared during the
pre-pack
procedure is carried out only after the insolvency proceedings have been instituted, since the insolvency administrator and the supervisory judge may refuse to carry out that transfer if they consider that it is contrary to the interests of the creditors of the transferor whose assets are to be liquidated. Secondly, as is apparent from the documents before the Court, not only must the ‘prospective insolvency administrator’ account for his or her management of the preparatory phase in the insolvency report, he or she may also be held liable under the same conditions as the insolvency administrator. Moreover, it is common ground that the intervention of the ‘prospective insolvency administrator’ during the
pre-pack
procedure is carried out under the supervision of the ‘prospective supervisory judge’ and, therefore, of the competent court, which may, if it considers that the ‘prospective insolvency administrator’ did not comply with the tasks assigned to him or her by the court, replace that administrator with another person or oppose the closure of the
pre-pack
procedure.
It should also be pointed out that, in order to carry out the duties entrusted to them in the context of the
pre-pack
procedure and in the context of the insolvency proceedings, the ‘prospective insolvency administrator’ and the ‘prospective supervisory judge’ are required, as from the preparatory phase of the insolvency proceedings represented by the
pre-pack
procedure, to consult each other, to carry out an assessment of the various transfer possibilities and to examine the transfer agreement which they may be required to validate and to carry out once the insolvency proceedings are opened. Consequently, the time elapsed between the opening of the insolvency proceedings and the signing of the agreement prepared in the context of the
pre-pack
procedure cannot, as such, serve as a criterion for assessing whether or not the competent public authority was able to exercise the supervision provided for in that regard.
Accordingly, it must be held that the fact that the transfer of all or part of an undertaking is prepared as part of a
pre-pack
procedure preceding the declaration of insolvency by a ‘prospective insolvency administrator’, placed under the supervision of a ‘prospective supervisory judge’, does not preclude the third condition laid down in Article 5(1) of Directive 2001/23 from being satisfied.
In the light of the foregoing considerations, the answer to the second question is that Article 5(1) of Directive 2001/23 must be interpreted as meaning that the condition which it lays down, according to which Articles 3 and 4 of that directive do not apply to the transfer of an undertaking, business or part of an undertaking or business where the bankruptcy proceedings or any analogous insolvency proceedings instituted in respect of the transferor ‘are under the supervision of a competent public authority’, is satisfied where the transfer of all or part of an undertaking is prepared in the context of a
pre-pack
procedure prior to the declaration of insolvency by a ‘prospective insolvency administrator’, under the supervision of a ‘prospective supervisory judge’, and the agreement concerning that transfer is concluded and performed after the declaration of insolvency with a view to the liquidation of the transferor’s assets, provided that that
pre-pack
procedure is governed by statutory or regulatory provisions.
Costs
Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Third Chamber) hereby rules:

1.
Article 5(1) of Council Directive 2001/23/EC of 12 March 2001 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 undertakings or businesses must be interpreted as meaning that the condition which it lays down, according to which Articles 3 and 4 of that directive are not to apply to the transfer of an undertaking where the transferor is the subject of bankruptcy proceedings or any analogous insolvency proceedings ‘instituted with a view to the liquidation of the assets of the transferor’, is satisfied where the transfer of all or part of an undertaking is prepared, prior to the institution of insolvency proceedings with a view to the liquidation of the assets of the transferor and in the course of which that transfer is carried out, in the context of a
pre-pack
procedure which has as its primary aim to enable, in the insolvency proceedings, a liquidation of the undertaking as a going concern which satisfies to the greatest extent possible the claims of all the creditors and preserves employment as far as possible, provided that that
pre-pack
procedure is governed by statutory or regulatory provisions
.

2.
Article 5(1) of Directive 2001/23 must be interpreted as meaning that the condition which it lays down, according to which Articles 3 and 4 of that directive do not apply to the transfer of an undertaking, business or part of an undertaking or business where the bankruptcy proceedings or any analogous insolvency proceedings instituted in respect of the transferor ‘are under the supervision of a competent public authority’, is satisfied where the transfer of all or part of an undertaking is prepared in the context of a
pre-pack
procedure prior to the declaration of insolvency by a ‘prospective insolvency administrator’, under the supervision of a ‘prospective supervisory judge’, and the agreement concerning that transfer is concluded and performed after the declaration of insolvency with a view to the liquidation of the transferor’s assets, provided that that
pre-pack
procedure is governed by statutory or regulatory provisions.

[Signatures]
(
*1
)	Language of the case: Dutch.