13 november 2010

Employer and worker in EU law: nothing is what it seems

by K. Nevens

In two recent judgments the ECJ (re)affirmed that the concepts of ‘employer’ and ‘worker’ have an autonomous meaning in EU law.

1. In the Albron case (C-242/09, 21 october 2010) the Court ruled that in the event of a transfer of an undertaking belonging to a group, to an undertaking outside that group, it is possible to regard as a ‘transferor’, within the meaning of Directive 2001/23, the group company to which the employees were assigned on a permanent basis without however being linked that company by a contract of employment, and even though there exists within that group an undertaking with which the employees concerned were linked by such a contract of employment.

The Court reached this conclusion after being questioned by the “Gerechtshof” (Court of Appeal) of Amsterdam whether the employees of the catering service of the Heineken group were entitled to see their labour conditions maintained after that that service was transfered to a company outside the group. This question especially arose because of the fact that those employees were employed by a group company, but were at the disposal of another group company.

The Court followed advocate-general Bot’s reasoning that the Directive does not preclude the existence and recognition of an employment relationship which is not based on an employment contract, so that the “non-contractual” employer can be regarded as the transferor, id est as the natural or legal person who ceases to be the employer in respect of the transfered undertaking.

This judgment slightly comes as a surprise. in Allen the ECJ had ruled that there can be a transfer of undertaking within a group of companies, because of the simple fact that each company within the group is a distinct legal person. Henceforth, the group is not be considered as one undertaking or as one employer. In Jouini (C-458/05, 13 september 2005) again maintained a classic view of employment relationships by considering that agency workers are part of the ‘assets’ of a temporary employment business.

However, advocate-general Bot distinguished the facts in the Albron case from both those in Allen and Jouini. With regard to the first case the AG stated:

“I fail to see how the fact that the directive would also apply in [intragroup] circumstances should preclude its application in the event of the transfer of a company which does not belong to that group. The possibility of applying that directive in those two cases is, on the contrary, consistent with its aim of safeguarding employees’ rights in all cases of transfer of their undertaking.”

With regard to the second case the AG stressed that temporary employees do not have a permanent relationship with the user company, as opposed to employees who are employed within a group of companies:

“an employee who, within the context of a relationship between companies belonging to the same group, is in the formal employ of a company within that group and works on a permanent basis for another company in that group has, of course, a stable relationship with the latter company which can be compared to a considerable extent to the relationship that would exist if he had been employed directly by that company.”

2. In the Danosa case (C-232/09, 11 november 2010) considered that a (female) director of a corporation can be regarded as having the status of ‘worker’ for the purposes of Directive 92/85 (19 October 1992). This directive requires that the member states to take the necessary measures to prohibit the dismissal of female workers during the period from the beginning of their pregnancy to the end of the maternity leave, save in exceptional cases not connected with their condition.

The Court reaffirmed that the notion of ‘worker’in this Directive is to be given an autonomous meaning and refers to the existence of an employment relationship, to be defined as a relationship in which, for a certain period of time, a person performs services for and under the direction of another person, in return for which he receives remuneration (see earlier: C-116/06, Kiiski). The Court explicitly stated that the fact that a person is regarded as a self-employed person under national law, does not preclude a finding that that same person is a worker under EU law.

While in many european countries directors of corporations, in their mere function of director, are not considered to be employees of the corporation, the Court arrives at the path breaking conclusion that directors may very well be workers of the corporation, depending on the circumstances in which the director was recruited; the nature of the duties entrusted to him or her; the context in which those duties were performed; the scope of the person’s powers and the extent to which he or she was supervised within the company; and the circumstances under which the person could be removed. In this case also, the ECJ followed the opinion of advocate-general Bot.

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