Oy Liikenne Ab v Pekka Liskojärvi and Pentti Juntunen.
Date: 2001-01-25
19 It must be recalled that the aim of Directive 77/187 is to ensure continuity of employment relationships within an economic entity, irrespective of any change of ownership. The fact that the activity carried on by such an entity is awarded successively to different operators by a public body cannot exclude the application of Directive 77/187, if passenger transport by bus does not involve the exercise of public authority (see, to that effect, Joined Cases C-173/96 and C-247/96 Sánchez Hidalgo and Others [1998] ECR I-8237, paragraphs 21 and 24).
27 The test for establishing the existence of a transfer within the meaning of Directive 77/187 is whether the entity in question retains its identity, as indicated inter alia by the fact that its operation is actually continued or resumed (Case 24/85 Spijkers [1986] ECR 1119, paragraphs 11 and 12, and Case C-234/98 Allen and Others [1999] ECR I-8643, paragraph 23).
28 While the absence of any contractual link between the transferor and the transferee or, as in this case, between the two undertakings successively entrusted with the operation of bus routes may point to the absence of a transfer within the meaning of Directive 77/187, it is certainly not conclusive (Case C-13/95 Süzen [1997] ECR I-1259, paragraph 11).
29 Directive 77/187 is applicable wherever, in the context of contractual relations, there is a change in the natural or legal person responsible for carrying on the business and entering into the obligations of an employer towards employees of the undertaking. Thus there is no need, in order for that directive to be applicable, for there to be any direct contractual relationship between the transferor and the transferee: the transfer may take place in two stages, through the intermediary of a third party such as the owner or the person putting up the capital (see, inter alia, Joined Cases C-171/94 and C-172/94 Merckx and Neuhuys [1996] ECR I-1253, paragraphs 28 to 30, and Süzen, paragraph 12).
31 For Directive 77/187 to be applicable, however, the transfer must relate to a stable economic entity whose activity is not limited to performing one specific works contract (Case C-48/94 Rygaard [1995] ECR I-2745, paragraph 20). The term entity thus refers to an organised grouping of persons and assets facilitating the exercise of an economic activity which pursues a specific objective (Süzen, paragraph 13).
33 However, to determine whether the conditions for the transfer of an economic entity are satisfied, it is also necessary to consider all the factual circumstances characterising the transaction in question, including in particular the type of undertaking or business involved, whether or not its tangible assets such as buildings and movable property are transferred, the value of its intangible assets at the time of the transfer, whether or not the core of its employees are taken over by the new employer, whether or not its customers are transferred, the degree of similarity between the activities carried on before and after the transfer, and the period, if any, for which those activities were suspended. These are, however, merely single factors in the overall assessment which must be made, and cannot therefore be considered in isolation (see, in particular, Spijkers, paragraphs 13, and Süzen, paragraph 14).
34 So the mere fact that the service provided by the old and the new contractors is similar does not justify the conclusion that there has been a transfer of an economic entity between the two undertakings. Such an entity cannot be reduced to the activity entrusted to it. Its identity also emerges 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 operational resources available to it (Süzen, paragraph 15, Sánchez Hidalgo, paragraph 30, and Allen, paragraph 27; see also Joined Cases C-127/96, C-229/96 and C-74/97 Hernández Vidal and Others [1998] ECR I-8179, paragraph 30).
35 As pointed out in paragraph 32 above, the national court, in assessing the facts characterising the transaction in question, must take into account among other things the type of undertaking or business concerned. It follows that the degree of importance to be attached to the various criteria 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, and indeed the production or operating methods employed in the relevant undertaking, business or part of a business (Süzen, paragraph 18, Hernández Vidal, paragraph 31, and Sánchez Hidalgo, paragraph 31).
37 The Court has indeed held that an economic entity may, in certain sectors, be able to function without any significant tangible or intangible assets, so that the maintenance of the identity of such an entity following the transaction affecting it cannot, logically, depend on the transfer of such assets (Süzen, paragraph 18, Hernández Vidal, paragraph 31, and Sánchez Hidalgo, paragraph 31).
38 The Court thus held that, since in certain sectors in which activities are based essentially on manpower a group of workers engaged in a joint activity on a permanent basis may constitute an economic entity, it must be recognised that such an entity is capable of maintaining its identity after it has been transferred where the new employer does not merely pursue the activity in question but also takes over a major part, in terms of their numbers and skills, of the employees specially assigned by his predecessor to that task. In those circumstances, the new employer takes over an organised body of assets enabling him to carry on the activities or certain activities of the transferor undertaking on a regular basis (Süzen, paragraph 21, Hernández Vidal, paragraph 32, and Sánchez Hidalgo, paragraph 32).
39 However, bus transport cannot be regarded as an activity based essentially on manpower, as it requires substantial plant and equipment (see, reaching the same conclusion with respect to driveage work in mines, Allen, paragraph 30). The fact that the tangible assets used for operating the bus routes were not transferred from the old to the new contractor therefore constitutes a circumstance to be taken into account.
42 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.
43 Consequently, in a situation such as that in the main proceedings, Directive 77/187 does not apply in the absence of a transfer of significant tangible assets from the old to the new contractor.