Judgment — ECLI:EU:C:2003:629
Date: 2003-11-20
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Social Policy
Concepts: Employment protection and protection of employees in the event of the insolvency of their employer
Procedure: Reference for a preliminary ruling
Origin: Austria

Summary 88. At point 63 above, I concluded that there is no transfer of an undertaking in this case unless it is clear from other facts and circumstances that the undertaking in question retains its identity. 89. The case-law concerning transfer within the meaning of Article 1(1) of the directive shows that the Court places a broad interpretation on the retention of the identity of the economic entity but the identity must display a certain degree of organisation and stability and cannot stem solely from a contract with only one customer. Identity must also emerge from other factors, such as its workforce, its management staff, the way in which its work is organised, its operating methods or indeed, where appropriate, the tangible and intangible assets available to it. (19) Therefore, the mere loss of a service contract to a competitor cannot by itself indicate the existence of a transfer within the meaning of the directive. (20) 90. Account must be taken of among other things the type of undertaking or business concerned. It follows that the degree of importance to be attached to each criterion for determining whether or not there has been a transfer within the meaning of the directive will necessarily vary according to the activity carried on, or indeed the production or operating methods employed in the relevant undertaking, business or part of a business. Where in particular an economic entity is able, in certain sectors, to function without any significant tangible or intangible assets, the maintenance of its identity following the transaction affecting it cannot, logically, depend on the transfer of such assets. (21) 91. In the present case the facts do not lead to the conclusion that there is the transfer of an undertaking. It is clear from the facts of the main proceedings that intangible assets such as menus, accounting material and specific know-how were not transferred. Nor were the tangible assets transferred. The contracting authority made these assets available to the new caterer but they constitute only one factor relevant to the conclusion of the contract. Finally, the staff were not transferred either. I have already stated that in the present case the criterion of whether or not the staff were taken over by the new contractor cannot be taken into account as a decisive factor. This case does not concern a sector which is shaped solely by the use of the staff but a sector in which, as the national court found, inter alia tangible and intangible assets are essential to the activity to be performed. Furthermore, this criterion cannot be used in a situation such as the present because the question of whether the staff should have been taken over is precisely what is at issue in the proceedings before the national court. 92. Nor do the other facts and circumstances lead to another conclusion. Only the contract to provide certain services has been transferred and that is in no way comparable to the transfer of a going concern. The identity of the operator of the dining room and cafeteria has changed considerably. Following the termination of the contract with Sanrest, Sodexho took over operations as the new contractor of the hospital. 93. Termination of a contract in respect of one undertaking and the subsequent award thereof to another undertaking, such as in the present case, do not constitute a transfer. The mere continuation of an activity previously performed by another undertaking, without the transfer of goods or rights, provides insufficient bases on which to distinguish one case from another. The loss of a contract cannot therefore by itself indicate the existence of a transfer within the meaning of the directive. 94. This opinion based on existing case-law is, in my view, also satisfactory. I have already set out in greater detail my view that the Court should, both for legal and economic reasons, exercise restraint in applying Directive 77/187 to sectors in which contractual relations are generally of a temporary nature and can change, as has happened in the present case. (22) VI - Conclusion 95. On the basis of the foregoing, I propose that the Court should answer the question submitted by the national court as follows: Article 1 of 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 businesses is to be interpreted as meaning that there is no transfer of an undertaking where a hospital authority, which has previously employed a catering undertaking to supply meals and beverages to patients and hospital staff at a price based on a day of catering per person, and to that end has made available to that undertaking water and energy as well as its service premises (hospital kitchen) together with the necessary equipment, transfers, after giving notice of termination of that contract, those operations and the assets previously made available to that first catering undertaking to a second catering undertaking which does not take over the assets (staff, stock, accounting material and menu, diet, recipe or general records) brought in by the first catering undertaking itself. 1: - Original language: Dutch. 2: - OJ 1977 L 61, p. 26. 3: - Case C-13/95 [1997] ECR I-1259. 4: - Case C-51/00 [2002] ECR I-969. 5: - Council Directive of 29 June 1998 amending Directive 77/187/EEC 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 (OJ 1998 L 201, p. 88). The period for implementation of Directive 98/50 was extended to 17 July 2001. 6: - OJ 2001 L 82, p. 16. Unless stated otherwise, reference is made below to the wording of the original directive. 7: - See the fourth recital in the preamble. 8: - In the view of the United Kingdom Government the conflicting case-law arises from Case C-234/98 Allen and Others [1999] ECR I-8643, paragraph 30, and Case C-172/99 Liikenne [2001] ECR I-745, paragraph 42. In the former case the Court held that: ... The fact that ownership of the assets required to run the undertaking did not pass to the new owner does not preclude a transfer ... . In the circumstances, the fact that there was no transfer of assets between ACC and AMS is not of decisive importance. In the latter the Court held that: However, in a sector such as scheduled public transport by bus, where the tangible assets contribute significantly to the performance of the activity, the absence of a transfer to a significant extent from the old to the new contractor of such assets, which are necessary for the proper functioning of the entity, must lead to the conclusion that the entity does not retain its identity. 9: - Temco, cited in footnote 4 above, paragraph 21. 10: - See Süzen, cited in footnote 3 above, paragraph 10; Case 24/85 Spijkers [1986] ECR 1119, paragraphs 11 and 12; and, most recently Joined Cases C-171/94 and C-172/94 Merckx and Neuhuys [1996] ECR I-1253, paragraph 16. 11: - See, as regards case-law, Temco, cited in footnote 4 above, paragraph 23. 12: - Spijkers, cited in footnote 10 above, paragraph 13; Süzen, cited in footnote 3 above, paragraph 14; and Temco, cited in footnote 4 above, paragraph 24. 13: - Case C-29/91 [1992] ECR I-3189. 14: - Cited in footnote 10 above. 15: - Case C-343/98 [2000] ECR I-6659. 16: - See Süzen, cited in footnote 3 above, paragraphs 15 and 16. 17: - Spijkers, cited in footnote 10 above, paragraph 13; Süzen, cited in footnote 3 above, paragraph 14; and Temco, cited in footnote 4 above, paragraph 24. 18: - See Süzen, cited in footnote 3 above, paragraph 21; Joined Cases C-127/96, C-229/96 and C-74/97 Hernández Vidal and Others [1998] ECR I-8179, paragraph 27; and Temco, cited in footnote 4 above, paragraph 26. 19: - See Süzen, cited in footnote 3 above, paragraph 15; Case C-175/99 Mayeur [2000] ECR I-7755, paragraph 49; and my Opinion in Temco, cited in footnote 4 above, point 55. 20: - Süzen, cited in footnote 3 above, paragraphs 15 and 16, and Liikenne, cited in footnote 8 above, paragraph 34. 21: - Süzen, cited in footnote 3 above, paragraph 18; Temco, cited in footnote 4 above, paragraph 25; and Hernández Vidal and Others, cited in footnote 18 above, paragraph 26. 22: - Opinion in Temco, cited in footnote 4 above. See, in particular, paragraphs 33 to 40.