Judgment;Abstract — ECLI:EU:C:2020:682
Date: 2020-09-09
Language of the case: German
Court formation: Fifth Chamber
Subject matter: Social Policy
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
30 October 2018 
Referring court: 
Bundesarbeitsgericht (Federal Labour Court, Germany) 
Date of the decision to refer: 
16 October 2018 
Applicants: 
EM 
Defendant: 
TMD Friction GmbH 
  
Subject matter of the main proceedings 
Action for a ruling declaring the extent to which the defendant must provide the 
applicant with an occupational old-age pension in the future after a transfer of a 
business in insolvency proceedings. 
Subject matter and legal basis of the reference 
Interpretation of EU law, Article 267 TFEU 
Questions referred 
1. Does Article 3(4) 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 allow — in the event of a transfer of a 
business after the opening of insolvency proceedings regarding the assets of 
the transferor of the business under national law, which, in principle, also 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-674/18 
 
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requires the application of Article 3(1) and (3) of Directive 2001/23/EC to 
employees’ rights to old-age, invalidity or survivors’ benefits under 
supplementary company or intercompany pension schemes — a restriction 
to the effect that the transferee is not liable for pension entitlements based on 
periods of service completed prior to the opening of the insolvency 
proceedings? 
2. If the first question referred is answered in the affirmative: 
In the event of a transfer of business after insolvency proceedings regarding 
the assets of the transferor of the business have been opened, are the 
measures necessary pursuant to Article 3(4)(b) of Directive 2001/23/EC to 
protect the interests of employees in respect of rights conferring on them 
immediate or prospective entitlement to old-age benefits under 
supplementary company or intercompany pension schemes based on the 
level of protection required by Article 8 of Directive 2008/94/EC of the 
European Parliament and of the Council of 22 October 2008 on the 
protection of employees in the event of the insolvency of their employer? 
3. If the second question referred is answered in the negative: 
Is Article 3(4)(b) of Directive 2001/23/EC to be interpreted to mean that the 
measures necessary to protect the interests of employees in respect of rights 
conferring on them immediate or prospective entitlement to old-age benefits 
under supplementary company or intercompany pension schemes have been 
taken if the national law provides that 
– the obligation to provide the employee covered by the transfer of a 
business in insolvency proceedings with old-age benefits under 
supplementary company or intercompany pension schemes in the 
future is transferred to the transferee of the business, 
– the transferee of the business is liable for future pension entitlements 
to the extent that they are based on periods of service completed after 
insolvency proceedings are opened, 
– in that case, the insolvency insurance institution designated under 
national law does not have to assume responsibility for the part of the 
future pension entitlements that was acquired before the insolvency 
proceedings had been opened, and 
– the employee may assert, in the insolvency proceedings of the 
transferor, the value of the part of the future pension entitlements that 
was acquired before the insolvency proceedings had been opened? 
4. If, in the event of a transfer of a business, the national law also requires the 
application of Article 3 and Article 4 of Directive 2001/23/EC during 
insolvency proceedings, is Article 5(2)(a) of Directive 2001/23/EC 
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applicable to employees’ pension entitlements under supplementary 
company or intercompany pension schemes that did arise before the 
insolvency proceedings had been opened, but do not lead to benefit 
entitlements on the part of the employee until the occurrence of the covered 
event and therefore not until a later point in time? 
5. If the second or the fourth question referred is answered in the affirmative: 
Does the minimum level of protection to be provided by the Member States 
pursuant to Article 8 of Directive 2008/94/EC of the European Parliament 
and of the Council of 22 October 2008 on the protection of employees in the 
event of the insolvency of their employer also cover the obligation to 
guarantee pension entitlements that were not yet statutorily vested under 
national law when the insolvency proceedings were opened and that are only 
statutorily vested in the first place because the employment relationship is 
not terminated in connection with the insolvency? 
6. If the fifth question referred is answered in the affirmative: 
Under what circumstances can a former employee’s losses suffered in 
respect of occupational old-age pension benefits as a result of the insolvency 
of the employee be regarded as manifestly disproportionate and therefore 
oblige the Member States to ensure a minimum degree of protection against 
such losses pursuant to Article 8 of Directive 2008/94/EC, even though the 
employee will receive at least half of the benefits that will arise from his 
acquired pension rights? 
7. If the fifth question referred is answered in the affirmative: 
Is the protection for employees’ pension entitlements that is necessary 
pursuant to Article 3(4)(b) of Directive 2001/23/EC or Article 5(2)(a) of 
Directive 2008/94/EC — and is equivalent to that of Article 8 of Directive 
2008/94/EC — also accorded if it does not arise from national law, but 
rather only from direct application of Article 8 of Directive 2008/94/EC? 
8. If the seventh question referred is answered in the affirmative: 
Does Article 8 of Directive 2008/94/EC also have direct effect, such that it 
can be asserted before the national court by an individual employer if, 
although he receives at least half of the benefits arising out of his accrued 
pension rights, his losses suffered as a result of the insolvency of the 
employer are nevertheless to be regarded as disproportionate? 
9. If the eighth question referred is answered in the affirmative: 
Is an institution organised under private law that the Member State has 
designated — in a manner that is binding on employers — as an insolvency 
insurance institution for occupational pensions that is subject to State 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-674/18 
 
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supervision of financial services and levies the contributions required for 
insolvency insurance from employers under public law, and, like an 
authority, can establish the conditions for enforcement by way of an 
administrative act, a public body of the Member State?  
Provisions of EU law cited 
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, in particular Articles 3, 4 and 5 
Directive 2008/94/EC of the European Parliament and of the Council of 
22 October 2008 on the protection of employees in the event of the insolvency of 
their employer, in particular Article 8. 
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 
Provisions of national law cited: 
Bürgerliches Gesetzbuch (German Civil Code, ‘the BGB’), in particular 
Paragraph 613a 
Insolvenzordnung (German Insolvency Code) 
Gesetz zur Verbesserung der betrieblichen Altersvorsorge (German Law on the 
improvement of occupational old-age pensions, ‘the Betriebsrentengesetz’, or Law 
on occupational pensions), in particular Article 7 
Brief summary of the facts and procedure 
1 The applicant had been employed at Textar GmbH since 1996. A company-wide 
works council agreement in which the employees were guaranteed, inter alia, an 
occupational old-age pension applied at that company (hereinafter: pension 
scheme). Pursuant to the pension scheme, the amount of the old-age pension for 
each year of service is between 0.2% and 0.55% of the gross monthly 
remuneration earned by the employee as at a specific date prior to his departure 
from the employment relationship. 
2 The applicant’s employment relationship was subsequently transferred to TMD 
Friction GmbH. Insolvency proceedings regarding the assets of the latter were 
opened on 1 March 2009. In April 2009, the business of TMD Friction GmbH, 
which was continued even after the insolvency proceedings had been opened, was 
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transferred to the defendant due to a sale by the court-appointed insolvency 
administrator. 
3 The Pensions-Sicherungs-Verein (mutual insurance association, hereinafter: 
‘PSV’) — the legally designated insolvency insurance institution for occupational 
old-age pensions — informed the applicant that, on account of his age (29 years 
old) he had not yet accrued any vested pension entitlements by the date on which 
the insolvency proceedings were opened and would therefore not receive any 
benefits from the PSV upon the occurrence of the covered event. 
Principal arguments of the parties in the main proceedings 
4 The applicant asserts that, on the basis of the pension scheme, the defendant had 
to provide him with an occupational old-age pension in the future upon the 
occurrence of the covered event, ‘age’, the amount of which also covered the 
periods of service completed before the insolvency proceedings had been opened. 
5 The defendant takes the view that, in the event of a transfer of a business after the 
insolvency proceedings regarding the assets of the transferor of the business had 
been opened, the transferee was liable only for the part of the occupational old-age 
pension that was based on service completed after the insolvency proceedings had 
been opened. 
Brief summary of the basis for the reference 
6 In Paragraph 613a(1) BGB, German law provides, in principle, that the rights of 
the employee transferred to the transferee in the event of a transfer of a business to 
occupational old-age pension benefits are preserved. It is only in the event of 
transfer of a business after insolvency proceedings regarding the assets of the 
transferor of the business have been opened that, owing to the — pursuant to the 
case-law of the Bundesarbeitsgericht (Federal Labour Court) — overriding 
provisions of the Insolvency Code, that provision is not applicable in so far as the 
transferee of the business is not liable for the part of the future occupational 
pension that is based on the periods of service completed by the employee before 
the insolvency proceedings had been opened. What is decisive for this restriction 
is the fact that, according to the principle of equal satisfaction of creditors, all 
proprietary rights existing when insolvency proceedings are opened must be 
satisfied solely pursuant to the provisions of the Insolvency Code. 
Question 1 
7 The referring court takes the view that, despite the provision made in Article 5(2) 
of Directive 2001/23, the permissibility of a restriction — which exists under 
national law and arises under insolvency law — of the liability of the transferee of 
a business for the occupational old-age pension benefits arising before insolvency 
proceedings had been opened should also be based, at the least, on Article 3(4) of 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-674/18 
 
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Directive 2001/23. In view of the power conferred on the Member States in 
Article 3(4)(a) of Directive 2001/23 to provide ‘otherwise’, the Chamber also 
assumes that national law may partially exclude from the application of 
Article 3(1) and (3) of Directive 2001/23 the employees’ rights to occupational 
old-age pension benefits in the event of a transfer of a business after insolvency 
proceedings are opened if, in this respect, the protective measures necessary 
pursuant to Article 3(4)(b) of Directive 2001/23 have been taken. 
Question 2 
8 The Court of Justice has not yet addressed the question of which requirements are 
to be imposed on the measures to be taken by the Member States pursuant to 
Article 3(4)(b) of Directive 2001/23 to protect the interests of employees in 
respect of rights conferring on them immediate or prospective entitlement to old-
age benefits under supplementary company or intercompany pension schemes. 
The answer to this question is not evident either. The referring court takes the 
view that — despite the fact that the wording differs from that in Article 5(2)(a) of 
Directive 2001/23 — it appears to be possible that the necessary measures in the 
event of a transfer of a business in insolvency proceedings must satisfy the 
requirements of Article 8 of Directive 2008/94. 
Question 3 
9 When assessing the appropriateness of national measures for protecting 
employees, account must be taken of the fact the likelihood that employees’ 
pension entitlements will become statutorily vested in the period after insolvency 
proceedings are opened and that they will be entitled to pension entitlements in 
the future even in the event of a premature departure from the employment 
relationship will increase with the limitation of the liability of the transferee of a 
business. As not only the principle of equal satisfaction of creditors but also the 
principle of best possible satisfaction of creditors applies in insolvency 
proceedings, the insolvency administrator is obliged to achieve the highest 
possible return for the insolvency estate. If the transferee’s liability is unlimited, 
the purchase price to be achieved for the transferred business is reduced. The 
insolvency administrator may therefore be obliged not to sell the business, but 
rather exploit the debtor’s assets in a different way. The limitation of liability 
therefore increases the likelihood of businesses not being broken up after the 
insolvency proceedings have been opened and of instead being continued by a 
transferee, thus increasing the likelihood of at least some of the jobs being 
preserved and of being able to continue the employment relationships. 
10 Owing to the lack of case-law of the Court of Justice on the interpretation of 
Article 3(4)(b) of Directive 2001/23/EC, however, the Chamber is unable to 
assess, with the degree of certainty required for a court of last instance, whether 
the legal position existing under German law meets the requirements under EU 
law. 
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Question 4 
11 The Chamber has doubts as to whether, in the event of a transfer of a business in 
insolvency proceedings, Article 5(2)(a) of Directive 2001/23 is also applicable to 
pension entitlements and future claims of employees to occupational old-age 
pension benefits — as is the case in the main proceedings. Article 3(4)(b) of 
Directive 2001/23 could militate against this. It is conceivable that this provision 
exhaustively sets out the rules for the employee rights referred to therein for all 
transfers of a business — including those that take place after insolvency 
proceedings have been opened. 
12 If the Court of Justice takes the view that, in the event of a transfer of business in 
insolvency proceedings, it is conceivable that Article 5(2)(a) of Directive 2001/23 
also applies in relation to the pension entitlements and future claims of employees 
to occupational old-age pension benefits, it would be questionable whether the 
provision — despite its wording — can be interpreted to mean that it allows the 
exclusion of not only obligations that had already ‘fallen due’ before the 
insolvency proceedings had been opened from a transfer to the transferee of a 
business, but also the pension entitlements that have not yet become statutorily 
vested when the insolvency proceedings are opened and that cannot lead to a 
benefit entitlement that has fallen due on the part of the eligible employee until the 
occurrence of the covered event and therefore not until a later point in time. The 
purpose of the provision — not to impose liability on the transferee for obligations 
financially attributable to the period before the point at which the insolvency 
proceedings are opened — and the reference to Directive 80/987 and therefore 
also Article 8 of the subsequent Directive 2008/94, which also covers entitlement 
rights, could militate in favour of this. 
Question 5 
13 If the Court of Justice answers the second or the third question referred in the 
affirmative, it would be unclear — both in the context of Article 3(4)(b) and in the 
context of Article 5(2)(a) of Directive 2001/23 — to what the minimum level of 
protection to be provided by the Member States pursuant to Article 8 of Directive 
2008/94 refers. The provision requires protection with regard to the ‘accrued’ 
rights conferring immediate or prospective entitlement of employees. The Court 
of Justice has not yet ruled on the conditions under which such accrual can be 
assumed. 
14 The Chamber takes the view that the question as to whether an entitlement has 
already been ‘accrued’ at the date of the onset of the employer’s insolvency 
should be governed by national law. Accordingly, it would be conceivable for an 
entitlement that has not yet become statutorily vested when the insolvency 
proceedings are opened — as in the case of the applicant — not to be regarded as 
‘accrued’ within the meaning of Article 8 of Directive 2008/94. 
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Question 6 
15 If the Court of Justice answers the fifth question referred in the affirmative, the 
question that also arises for the referring court in the main proceedings is the 
question already submitted to the Court of Justice by order of the Chamber of 
20 February 2018 (Case C-168/18, paragraph 23 f.), of whether the minimum 
level of protection provided for pursuant to Article 8 of Directive 2008/94 is 
accorded. For the reasoning for this question referred, express reference is made to 
the statements made in the order for reference of 20 February 2018 (C-168/18, 
paragraph 23), in order to avoid repetitions. 
16 In the event of a period of service until the occurrence of the covered event ‘age’, 
it must be assumed that the applicant will not suffer any losses that exceed half of 
his occupational pension entitlement arising pursuant to the pension scheme. 
Based on the applicant’s estimations, his loss was approximately EUR 430 per 
month in the case of entitlement to a proportional occupational pension of 
EUR 1 300. 
17 The Chamber is unable to conclusively determine whether and under which 
conditions the losses suffered by the applicant can be regarded as manifestly 
disproportionate and therefore the minimum degree of protection provided for 
pursuant to Article 8 of Directive 2008/94 is no longer guaranteed. 
Question 7 
18 If Article 8 of Directive 2008/94 were also to require insolvency protection in 
respect of pension entitlements that — as in the case of the applicant — were not 
yet statutorily vested when the insolvency proceedings were opened, the referring 
court would be prevented from achieving this outcome by an interpretation or 
development of the Law on occupational pensions in conformity with EU law, as 
such an interpretation or development would not be consistent with the statutory 
concept and would therefore be ‘contra legem’. Claims of the applicant against the 
PSV could be based, at best, on the direct applicability of Article 8 of Directive 
2008/94. However, it is unclear whether such direct applicability of that provision 
is sufficient to accord the level of protection pursuant to Article 3(4)(b) of 
Directive 2001/23 or Article 5(2)(a) of Directive 2001/23. Both provisions seek to 
ensure that either the Member States take the necessary protective measures or the 
law of the Member State concerned provides the protection. 
Questions 8 and 9 
19 The Court of Justice has previously only answered the question about the direct 
applicability of Article 8 of Directive 2008/94 clearly in the affirmative in the 
event that the employee does not receive at least half of the benefits arising out of 
his accrued pension rights (judgment of 6 September 2018, Hampshire, C-17/17 
[EU:C:2018:674] paragraph 58 ff.). 
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20 For the details of the reasoning for this question referred, the Chamber 
additionally makes express reference — in order to avoid repetitions — to the 
statements made in its order for reference of 20 February 2018 (C-168/18, 
paragraph 29 ff.)