Case C‑429/16

Małgorzata Ciupa and Others

v

II Szpital Miejski im. L. Rydygiera w Łodzi, now Szpital Ginekologiczno-Położniczy im. dr L. Rydygiera sp. z o.o. w Łodzi

(Request for a preliminary ruling from the Sąd Okręgowy w Łodzi, VII Wydział Pracy i Ubezpieczeń Społecznych)

(Reference for a preliminary ruling — Social policy — Collective redundancies — Directive 98/59/EC — Article 1(1) and Article 2 — Concept of ‘redundancies’ — Assimilation to redundancies of ‘terminations of an employment contract which occur on the employer’s initiative’ — Unilateral amendment by the employer of working and pay conditions — Determination of the employer’s ‘intention’ to effect redundancies)

Summary — Judgment of the Court (Tenth Chamber), 21 September 2017

Social policy — Approximation of laws — Collective redundancies — Directive 98/59 — Scope — Concept of redundancy — Significant changes to essential elements of a contract of employment for reasons not related to the individual employee — Included — Unilateral amendment by the employer, to the detriment of the employees, of conditions of pay entailing the termination of the contract of employment in the event of the employee’s refusal — Included — Employer contemplating such an amendment — Obligation of the employer to carry out consultations — Conditions — Verification by the national court

(Council Directive 98/59, Art. 1(1) and (2))

Article 1(1) of Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies must be interpreted as meaning that a unilateral amendment of conditions of pay by the employer, to the detriment of the employees, which, in the event of an employee’s refusal, entails the termination of the contract of employment is capable of being regarded as a ‘redundancy’ within the meaning of that provision, and Article 2 of that directive must be interpreted as meaning that an employer is required to carry out the consultations provided for in Article 2 where he contemplates effecting such a unilateral amendment of the conditions of pay, in so far as the conditions laid down in Article 1 of the directive are satisfied, which is for the referring court to ascertain.

As regards the concept of ‘redundancy’ in point (a) of the first subparagraph of Article 1(1) of Directive 98/59, the Court has held that that directive must be interpreted as meaning that the fact that an employer, unilaterally and to the detriment of the employee, makes significant changes to essential elements of his employment contract for reasons not related to the individual employee concerned falls within that concept (judgment of 11 November 2015, Pujante Rivera, C‑422/14, EU:C:2015:743, paragraph 55).

It follows that, if an employer, unilaterally and to the detriment of the employee, makes a non-significant change to an essential element of the contract of employment for reasons not related to the individual employee concerned, or makes a significant change to a non-essential element of that contract for reasons not related to the individual employee, that may not be regarded as a ‘redundancy’ within the meaning of that directive.

The notice of amendment at issue in the main proceedings provides for a temporary reduction of remuneration by 15%, followed some months later by a restoration of the remuneration to its original level. While it cannot be disputed that remuneration is an essential element of the employment contract and a 15% reduction of remuneration could in principle be regarded as a ‘significant change’, the temporary nature of the reduction nevertheless markedly reduces the extent of the proposed amendment of the contract of employment.

However, it is ultimately for the referring court, which has sole jurisdiction to assess the facts, to determine in the light of all the circumstances of the case whether the temporary reduction of remuneration at issue is to be regarded as a significant change.

In any event, even if the referring court were to consider that the notice of amendment at issue in the main proceedings is not covered by the concept of ‘dismissal’, a termination of the contract of employment following the employee’s refusal to accept a change such as that proposed in the notice of amendment must be regarded as constituting a termination of an employment contract which occurs on the employer’s initiative for one or more reasons not related to the individual workers concerned, within the meaning of the second subparagraph of Article 1(1) of Directive 98/59, so that it must be taken into account for calculating the total number of redundancies.

As regards the question of the point in time from which an employer is required to carry out the consultations provided for in Article 2 of that directive, the Court has taken the view that the obligations of consultation and notification come into being prior to the employer’s decision to terminate employment contracts (judgments of 27 January 2005, Junk, C‑188/03, EU:C:2005:59, paragraph 37, and of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 38) and that the achievement of the objective expressed in Article 2(2) of Directive 98/59 of avoiding terminations of employment contracts or reducing their number would be jeopardised if the consultation of representatives were subsequent to the employer’s decision (judgments of 27 January 2005, Junk, C‑188/03, EU:C:2005:59, paragraph 38, and of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 46).

That conclusion is all the more compelling in that the purpose of the obligation of consultation laid down in Article 2 of the directive, namely to avoid terminations of employment contracts, or to reduce their number, and to mitigate the consequences (judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 46), and the objective pursued by the notices of amendment, according to the referring court, namely to avoid individual redundancies, coincide to a large extent. Where a decision entailing an amendment of working conditions may enable collective redundancies to be avoided, the consultation procedure provided for in Article 2 of the directive must start when the employer contemplates making such amendments (see, to that effect, judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 47).

(see paras 27-32, 37, 38, operative part)