Judgment — ECLI:EU:C:2004:706
Date: 2004-11-11
Language of the case: French
Court formation: Second Chamber
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: Luxembourg

Summary of the Judgment Social policy – Approximation of laws – Transfers of undertakings – Safeguarding of workers’ rights – Directive 77/187 – Taking over by the State of activities previously carried on by a legal person governed by private law – Possibility for the State to comply with national rules for public employees – Substantial reduction in remuneration – Substantial change in working conditions – Termination regarded as resulting from the action of the employer (Council Directive 77/187, Arts 1(1) and 4(2)) Directive 77/187 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 must be interpreted as not precluding in principle, in the event of a transfer of an undertaking from a legal person governed by private law to the State, the latter, as new employer, from reducing the amount of the remuneration of the employees concerned for the purpose of complying with the national rules in force for public employees. However, the competent authorities responsible for applying and interpreting those rules are obliged to do so as far as possible in the light of the purpose of that directive, taking into account in particular the employee’s length of service, in so far as the national rules governing the position of State employees take a State employee’s length of service into consideration for calculating his remuneration. If such a calculation leads to a substantial reduction in the employee’s remuneration, such a reduction constitutes a substantial change in working conditions to the detriment of the employees concerned by the transfer, so that the termination of their contracts of employment for that reason must be regarded as resulting from the action of the employer, in accordance with Article 4(2) of Directive 77/187. (see para. 35, operative part)