In this case the Advocate General of the ECJ has handed down an opinion on the issue of whether a transferee is required to take into account service with the transferor when calculating notice periods. This was a referral from the Swedish Labour Court.
Four employees with long service transferred from two transferors to ISS. After some years of service with ISS they were all made redundant. At the date of redundancy all had total service with the transferor and ISS in excess of 10 years. (In two cases over 40 years.) However they had all only been employed for periods between 2 and 6 years with ISS (the transferee) since they transferred.
Both the transferor and transferee were parties to collective agreements which gave different periods of notice depending on the length of service of the particular employee. Of significance, the transferor and transferee had separate collective agreement with the same trade union but each collective agreement had the same provision relating to length of service and notice. This provided for extended notice in cases where length of service exceeded 10 years and the employee was aged over 55 years as was the case here if length of service with the transferor was taken into account..
In accordance with the discretion afforded by Art 3(3) of the Acquired Rights Directive, Swedish law only required compliance with collective agreements entered into by the transferee for one-year after the transfer. The employees had all been employed for well in excess of one year after the transfer.
The central question was whether when applying the notice provisions in the transferee’s collective agreement, service with the transferor, before the date of transfer, counted.
The AG’s opinion
The AG was of the opinion that service with the transferor should be counted in the application of the calculation in the notice provisions. In reaching this opinion the AG made the following observations:
- Although length of service does not as such constitute a right that transfers it is used to determine other financial rights which do transfer such as termination payments. Here the length of service had a direct impact on the notice payment payable to the employee.
- Here the reason for the change in entitlement was necessarily the transfer (and therefore void) where there had been no independent negotiation of the notice provisions after the transfer. Moreover, had the employees not transferred they would have been entitled to have the notice periods calculated on the basis of their full service.
- The purpose of the Directive is to prevent employees being placed in a less favourable position solely because of the transfer and to ensure their rights are safeguarded.
- As for Art 3(3), this cannot have the aim or effect of imposing on the employees conditions which are, overall, less favourable than those applicable before the transfer. (see Scattolon, C‑108/10, paragraph 76). The same must necessarily be the case with respect to the one year option when the relevant terms of the pertinent collective agreements are identically worded.