OPINION OF ADVOCATE GENERAL
SZPUNAR
delivered on 7 February 2019 (1)
Case C‑664/17
Ellinika Nafpigeia AE
v
Panagiotis Anagnostopoulos and Others
interveners: Syllogos Ergazomenon Nafpigeion Skaramagka I Triaina, Panellinia Omospondia Ergatoypallilon Metallou (POEM) and Geniki Synomospondia Ergaton Ellados (GSEE)
(Request for a preliminary ruling from the Areios Pagos (Court of Cassation, Greece))
(Reference for a preliminary ruling — Social policy — Transfer of part of an undertaking — Safeguarding of employees’ rights — Definition of ‘transfer’ — Definition of ‘economic entity’ — Transfer of part of the economic activity of a parent company to a newly-created subsidiary — Continuance of an economic activity — Decision to liquidate the transferee’s business)
1. This request for a preliminary ruling from the Areios Pagos (Court of Cassation, Greece) concerns Article 1 of Council Directive 98/50/EC of 29 June 1998 amending Directive 77/187/EEC 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, (2) which amended Article 1 of Council Directive 77/187/EEC of 14 February 1977. (3) The latter article corresponds to Article 1 of Council Directive 2001/23/EEC of 12 March 2001 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businesses or parts of undertakings or businesses, (4) in accordance with Article 12 of that directive, which repealed, for codification purposes, Directive 77/187 as amended by Directive 98/50. More specifically, owing to its subject matter, the request for a preliminary ruling relates to the interpretation of Article 1(1)(a) and (b) of Directive 2001/23.
2. The reference has been made in proceedings between Mr Panagiotis Anagnostopoulos and 89 other employees and the public limited company Ellinika Nafpigeia AE (5) (‘ENAE’) (6) concerning the performance of contracts of employment initially concluded between those parties.
3. The unique feature of this case should be noted, since it is the employer, and not the employees, which is seeking application of the rights deriving from Directive 2001/23, conceived in the interest of employees in the event of a change of employer.
4. The questions asked by the referring court concern, first, the interpretation of the concept of ‘economic entity’, and, second, the transfer of such an entity if the aim is not to continue the economic activity transferred but to bring it to an end.
5. At the end of my analysis, I shall contend that Directive 2001/23 is not intended to apply if it is established that the objective pursued when the economic entity was transferred was not to maintain the economic activity in question but to circumvent the employee protection obligations under national law. If that is not the case, Article 1(1)(a) and (b) of that directive must be interpreted as meaning that the directive may apply in a situation where the part of the undertaking or business transferred does not retain its organisational autonomy, provided that the operational link between the various factors of production transferred is maintained and allows the transferee to use them for the purpose of carrying out in a stable manner an identical or similar economic activity, a matter which it is for the referring court to verify.
I. Legal framework
A. EU law
6. Recitals 3 and 8 of Directive 2001/23 state:
‘(3) It is necessary to provide for the protection of employees in the event of a change of employer, in particular, to ensure that their rights are safeguarded.
…
(8) Considerations of legal security and transparency required that the legal concept of transfer be clarified in the light of the case-law of the Court of Justice. Such clarification has not altered the scope of Directive [77/187] as interpreted by the Court of Justice.’
7. Article 1(1)(a) and (b) of Directive 2001/23 provides:
‘(a) This Directive shall apply to any transfer of an undertaking, business, or part of an undertaking or business to another employer as a result of a legal transfer or merger.
(b) Subject to subparagraph (a) and the following provisions of this Article, there is a transfer within the meaning of this Directive where there is a transfer of an economic entity which retains its identity, meaning an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.’
8. Article 2(1)(a) and (b) of Directive 2001/23 is worded as follows:
‘For the purposes of this Directive:
(a) “transferor” means any natural or legal person who, by reason of a transfer within the meaning of Article 1(1), ceases to be the employer in respect of the undertaking, business or part of the business;
(b) “transferee” means any natural or legal person who, by reason of a transfer within the meaning of Article 1(1), becomes the employer in respect of the undertaking, business or part of the business.’
9. The first subparagraph of Article 3(1) of Directive 2001/23 provides:
‘The transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee.’
10. Article 5(1) and (4) of Directive 2001/23 provides:
‘1. Unless Member States provide otherwise, Articles 3 and 4 shall not apply to any transfer of an undertaking, business or part of an undertaking or business where the transferor is the subject of bankruptcy proceedings or any analogous insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor and are under the supervision of a competent public authority (which may be an insolvency pract[it]ioner authorised by a competent public authority).
…
4. Member States shall take appropriate measures with a view to preventing misuse of insolvency proceedings in such a way as to deprive employees of the rights provided for in this Directive.’
B. Greek law
11. According to the referring court, the provisions of Proedriko Diatagma 178/2002: Metra schetika me tin prostasia ton dikaiomaton ton ergazomenon se periptosi metavivasis epicheiriseon, enkatastaseon i tmimaton enkatastaseon i epicheiriseon, se symmorfosi pros tin Odigia 98/50/EK tou Symvouliou (Presidential Decree 178/2002: Measures relating to the protection of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses, in compliance with [Directive 98/50]) (7) are applicable.
12. Under Article 2(1)(a) and (c) of that decree, its provisions apply to all contractual or statutory transfers or mergers of undertakings, businesses or parts of businesses, which involve a change of employer and may concern public or private bodies carrying out economic activities, whether with a view to profit or not.
13. Article 2(1)(b) of the decree defines ‘transfer’ as the transfer of an economic entity which retains its identity, meaning an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.
14. Article 3(1)(a) and (b) of Presidential Decree 178/2002 defines the terms ‘transferor’ and ‘transferee’ as meaning, in the former case, any natural or legal person who, by reason of a transfer within the meaning given above, ceases to be the employer in respect of the undertaking, business or part of the undertaking or business, and, in the latter case, any natural or legal person who, by reason of a transfer within the meaning of Article 1(1) of that decree, becomes the employer in respect of the undertaking, business or part of the undertaking or business.
15. Pursuant to the first subparagraph of Article 4(1) of that decree, all the existing rights and obligations of the transferor under a contract of employment or employment relationship are transferred to the transferee as from the date of transfer.
16. Where, under Article 6(1) of Nomos 2112/1920 — Peri ypochreotikis katangelias tis symvaseos ergasias idiotikon ypallilon (Law 2112/1920 on compulsory termination of contracts of employment of employees in the private sector) (8) and Article 9(1) of the Vasiliko Diatagma ‘peri epektaseos tou N. 2112 … kai epi ton ergaton …’ (Royal Decree ‘extending Law 2012 to workers ...’, of 16/18 July 1920, a change of employer takes place, the change occurs automatically, irrespective of the legal cause and of the form of the transfer of the undertaking, without the need for the employees’ consent.
17. The second subparagraph of Article 4(1) of Presidential Decree 178/2002 provides that the transferor is to continue, after the transfer, to be jointly, severally and fully liable with the transferee in respect of obligations arising under a contract of employment or employment relationship up to the date on which the transferee takes over.
18. It follows from Article 4(2) of that decree that the transferee is to continue, after the transfer, to maintain the working conditions already established by a collective agreement, an arbitral award, regulations or an individual contract of employment.
19. The first subparagraph of Article 5(1) of Presidential Decree 178/2002 provides that the transfer of an undertaking, business or part of an undertaking is not, in itself, to constitute grounds for dismissing employees. However, in accordance with the second subparagraph of Article 5(1), provided that the provisions relating to redundancy are complied with, any dismissals that prove necessary for economic, technical or organisational reasons entailing changes in the workforce are permitted. Nevertheless, Article 5(2) of the decree provides that, if the contract of employment or employment relationship is terminated because the transfer involves a substantial change in working conditions to the detriment of the employees, the employer is to be regarded as having been responsible for the termination of the contract of employment or employment relationship.
20. Under Article 6(1) of Presidential Decree 178/2002, the consequences of a transfer, provided for in Articles 4 and 5 of that decree, are not applicable where the transferor is the subject of bankruptcy proceedings or any similar proceedings.
II. The facts of the dispute in the main proceedings and the questions referred for a preliminary ruling
21. The applicants were employed under contracts of indefinite duration by the company ENAE to work in its facilities in Skaramangas in the Municipality of Chaïdari, Attica (Greece), (9) for more than 30 years.
22. That company became a public sector undertaking in 1985. (10) It was privatised in 2002 and prohibited from reducing its workforce, within a certain limit, until 30 September 2008. (11)
23. When it was privatised, ENAE had four lines of business, namely ship repairs, military and commercial shipbuilding, submarine shipbuilding and repairs, and railway vehicle production and repairs, organised as directorates, respectively the repairs directorate, the surface vessels directorate, the submarine directorate and the rolling stock directorate. The structural organisation of ENAE also included four production ‘divisions’ necessary for the activity of the directorates, namely a rolling mill workshop, a pipe workshop, a carpentry workshop and a machining workshop.
24. Shortly after it was privatised, ENAE set up a subsidiary, the company Etaireia Trochaiou Ylikou Ellados ΑΕ (12) (‘ΕΤΥΕ’), in order to transfer to it the programme agreements underway between, on the one hand, consortia in which ΕΝAE participated and, on the other, Organismos Sidirodromon Ellados (13) (‘OSE’) and the company Ilektrikoi Sidirodromoi Athinon Pireos (14) (‘ISAP’). The agreements related to the construction and supply by the consortia of various types of rolling stock.
25. In 2005, ENAE was acquired by the shipbuilding company ThyssenKrupp Marine Systems.
26. In order to enable the rolling stock directorate of ENAE to operate, from 1 October 2006, as an autonomous company under ETYE’s name, on 28 September 2006 ENAE concluded with ETYE several contracts relating inter alia to the leasing for business purposes of a plot of land situated inside the shipyard precinct, together with its buildings and infrastructure on the plot of land, to the sale and delivery of movable property to be used for the activities of ETYE as an undertaking, to the provision of administrative services for the operation of the undertaking, and to the assignment to ETYE of outstanding works under three programme agreements numbered, respectively, 33 (with OSE and ISAP), 37 and 41a. (15)
27. After ETYE had commenced operating, it concluded other contracts with ENAE during 2007, concerning inter alia secondment of ETYE staff to ENAE, (16) the assignment by ENAE to ETYE of outstanding works under programme agreement 33a with OSE and ISAP, (17) the provision of services by ETYE to ENAE (18) and the provision by ENAE to ETYE of administrative support services. (19)
28. The referring court pointed out that, ‘from the very beginning, ΕΤΥΕ’s future course as a company had been decided in advance, leading to its winding up’. It stated, that ‘more particularly, Article 5 of the framework agreement of 28 September 2007, concluded between ENAE and ETYE, addressed the liquidation [of ETYE on] 30 September 2008, that is to say, on a date which coincided with the expiry of the six-year period during which it was prohibited to reduce the number of employees to fewer than 1 400 workers, on the basis of the transfer contract of 1 October 2002 which transferred ENAE from the Greek State to the foreign bidders’. It stated that, under that article, ENAE would bear the liquidation costs equal to the budgeted cost of making the 160 EYTE employees redundant and that that contribution would be reduced by 4% per month of delay. The date envisaged for that liquidation was, however, put back, on the initiative of ENAE, by an amendment of 10 September 2008 to the framework agreement.
29. On 1 October 2007, the group of German limited liability companies ΙΝΤΕΙ Industriebeteiligungsgesellschaft mbH (ΙΝΤΕΙ) and Industriegesellschaft Waggonbau Ammendorf mbH (ΙGWA) acquired all the shares in ETYE.
30. By announcement of 8 October 2007, all the workers were informed of the purchase of ETYE by the INTEI/IGWA group of companies. A company-level collective agreement was concluded on 13 May 2008 on the pay and working conditions of all ETYE employees. (20)
31. In 2010, the Polymeles Protodikeio Athinon (Court of First Instance, Athens, Greece) declared ETYE insolvent, it being stated that, since the transfer in question, the economic activities carried out by the latter were minimal. (21)
32. On 1 June 2009, the applicants brought an action before the Monomeles Protodikeio Athinon (Court of First Instance (single judge), Athens, Greece) for a declaration that they continued to be bound to ENAE by contracts of employment of indefinite duration, that ENAE was required to pay them the lawful wages in particular throughout the period that their contracts of employment continued and that, in the event of termination of the contracts of employment, ENAE would be required to make the statutory redundancy payments to each employee.
33. After the Monomeles Protodikeio Athinon (Court of First Instance, single judge, Athens) upheld that action, ENAE lodged an appeal with the Efeteio Athinon (Court of Appeal, Athens, Greece). That court confirmed the judgment given at first instance, holding that ETYE had never been an autonomous organisational entity. It found, in the first place, that ETYE was not an autonomous production unit, on the grounds that the contribution of ENAE’s four production divisions was necessary for the manufacture and repair of rolling stock and that, if ENAE ceased all activities, it would be impossible for ETYE to manufacture and repair rolling stock. In the second place, ETYE leased from ENAE its administrative support, including secretarial services, and, in the third place, it did not have financial and management autonomy, such matters being carried out by ENAE. That court inferred that there was no transfer of an undertaking or business or parts of a business, and that, therefore, ENAE continued to be the applicants’ employer.
34. ENAE appealed against that decision on 29 August 2013 to the Areios Pagos (Court of Cassation). That court considers that, in view of a divergence of interpretation, within the chamber hearing the case, of the concept of ‘economic entity’, in Article 1 of Directive 98/50, it is necessary to ask the Court about its meaning.
35. According to three members of the chamber, ETYE was unable to pursue the activity entrusted to it, since the rolling stock directorate which appears to have been transferred to it could not operate without the support of ENAE’s production divisions and of its administrative and financial services. That view is corroborated by the fact that the volume of work undertaken by ETYE was low and led to its insolvency, which also justifies the position of the employees concerned, according to whom the purpose of the transfer in question was to put an end to the rolling stock manufacture and repair activity of ENAE and to lose the related posts without ENAE having to take on adverse financial consequences.
36. On the other hand, two members of the chamber hearing the case are of the opinion that the unit transferred had sufficient autonomy, both before and after the transfer in question, so that it was able to engage in its economic activity autonomously. It is maintained that, in the case of transfer of a less important unit, the constituent elements of the concept of ‘economic entity’ may be interpreted less strictly than in the case of a transfer of the whole of an undertaking or a main activity. The fact that the transferee may have been supported by the transferor in carrying out the activity acquired, within the framework of a subsidiary, does not preclude the existence of a transfer, since, in order to interpret the concept of ‘transfer’, it is necessary to take into account modern forms of ‘entrepreneurship’. Finally, the intention of the transferor and the transferee to liquidate the undertaking is not a factor that precludes a transfer, but it may provide the basis of a claim against the employer making the transfer for compensation payable if the employees’ interests are adversely affected when a unilateral change is made to the working conditions.
37. Consequently, the Areios Pagos (Court of Cassation) decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:
‘(1) On the true meaning of Article 1 of Directive 98/50 and in order to establish whether or not there is a transfer of an undertaking, business or part of an undertaking or business, is “economic entity” to be understood as a completely self-sufficient production unit which is capable of operating to attain its economic object without in any way seeking (purchasing, borrowing, leasing and so forth) factors of production (raw materials, manpower, machinery, components of the finished product, support services, financial resources and so forth) from third parties? Or, on the contrary, does it suffice, in order to qualify as an “economic entity”, that the subject matter of the activity is distinct, that that subject matter is in fact able to constitute the object of an economic endeavour and that it is feasible to effectively organise the factors of production (raw materials, machinery and other equipment, manpower and support services) to attain the object in question, irrespective of whether or not the new operator of the activity also seeks outside factors of production, or fails to attain the object in a particular instance?
(2) On the true meaning of Article 1 of Directive 98/50 is the existence of a transfer precluded where the transferor or transferee or both of them have in view not only the successful continuance of the activity under the new operator, but also its future cessation for the purpose of winding up the undertaking in question?’
III. Analysis
38. By its two questions, which should be examined together, the referring court asks the Court of Justice, in essence, whether Article 1(1) of Directive 2001/23 is to be interpreted as meaning that the concept of ‘transfer of an undertaking’ covers a situation in which a parent company, in charge of three economic activities in the shipbuilding sector and a fourth in the railway rolling stock manufacture sector, has transferred the operation of that last activity to a subsidiary and concluded with it for that purpose various contracts, first, in order that the subsidiary may use the infrastructure and equipment, owned by the parent company, needed to carry out work outstanding under programme agreements concluded by that company, and secondly, for the purpose of liquidating the subsidiary in the short term.
39. At the outset, there are grounds for questioning the doubt expressed by the referring court, since it found that there was a framework agreement concluded on 28 September 2007 (22) between the transferor and the transferee for the purpose of organising the cessation of the economic activity at issue one year later, in order to circumvent the ban on the transferor dismissing employees before 30 September 2008.
40. Since the concept of ‘transfer’ is inextricably linked to the expectation that the activity will be continued, as is apparent from the wording of Article 1(1)(b) of Directive 2001/23 and the objectives pursued by that directive, namely the safeguarding of employees’ rights in the event of a change of employer, (23) it seems clear to me that, if it is found that the transfer was organised in implementation of a plan to end the activity transferred in circumstances which allow the transferor to free itself of employee protection obligations, that directive is not intended to apply.
41. However, it may be inferred from the differing opinions expressed by the referring court that the particular difficulty presented by the dispute arises from the finding that the activity was continued for at least one year from October 2006 before the declaration of insolvency in 2010. Provided that that finding relating to the actual continuance of the operation may be clarified by the referring court, (24) it is therefore a matter of determining the conclusions to be drawn therefrom.
42. Accordingly, I shall set out the general principles established by the case-law of the Court concerning the concept of ‘transfer of an undertaking’ before examining their application to the circumstances of this case.
A. Principles
43. In the first place, it should be pointed out that, according to the settled case-law of the Court, Directive 2001/23, in accordance with the definition in Article 1(1)(a), is applicable wherever, in the context of contractual relations, there is a change in the natural or legal person who is responsible for carrying on the undertaking and who, by virtue of that fact, incurs the obligations of an employer vis-à-vis the employees of the undertaking, regardless of whether or not ownership of the tangible assets is transferred. (25)
44. The Court has pointed out on several occasions that the concept of ‘undertaking’ covers any stable economic entity comprising any organised grouping of persons and of assets enabling the exercise of an economic activity which pursues a specific objective and which is sufficiently structured and autonomous. (26)
45. In the second place, as the Court has consistently noted, the aim of Directive 2001/23 is to ensure continuity of employment relationships within an economic entity, irrespective of any change of ownership. (27)
46. The decisive criterion for establishing the existence of a transfer within the meaning of Article 1(1)(b) of that directive is, therefore, the fact that the entity in question retains its identity after being taken over by the new employer, as indicated by the fact, inter alia, that its operation is actually continued or resumed. (28)
1. The identity and durability of the entity at the time of transfer
47. The Court has specified the method of analysing the condition relating to these two aspects, namely the identity and durability of the entity at the time of the transfer. Thus, it is necessary to consider all the facts characterising the transaction at issue, including in particular the type of undertaking or business in question, 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 majority 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. It should be understood that all those circumstances are merely individual factors in the overall assessment which must be made and cannot therefore be considered in isolation. (29)
48. The Court has pointed out that it follows that the degree of importance to be attached to one or other of those criteria will necessarily vary according to the activity carried on, or indeed the production or operating methods employed in the relevant undertaking, business or part of a business. (30)
49. The Court has also pointed out that the mere fact that one economic entity takes over the economic activity of another entity is not a ground for concluding that the latter has retained its identity. The identity of such an entity cannot be reduced to the activity entrusted to it, since its identity emerges from several indissociable factors, such as its workforce, its management staff, the way in which this work is organised, its operating methods or indeed, where appropriate, the operational resources available to it. (31)
2. Transfer within a group of companies
50. Having regard to the circumstances of the main proceedings, it should also be pointed out that, in the case of transfer within a group of companies, the Court has held that that, in itself, cannot preclude the existence of a transfer. (32)
51. Specifically, in such a case, the Court has held that ‘for the purpose of the application of [Directive 2001/23], … the economic entity concerned must have a sufficient degree of functional autonomy, the concept of autonomy referring to the powers granted to those in charge of the group of workers concerned, to organise, relatively freely and independently, the work within that group and, more particularly, to give instructions and allocate tasks to subordinates within the group, without direct intervention from other organisational structures of the employer’, (33) and that ‘that finding is supported by the first and fourth subparagraphs of Article 6(1) of Directive 2001/23, relating to the representation of workers, according to which that directive is intended to apply to any transfer satisfying the conditions laid down in Article 1(1) thereof, whether or not the economic entity transferred retains its autonomy in the transferee’s organisational structure’. (34)
52. It is in the light of that guidance in the case-law that criteria should be proposed for assessing the questions raised, taking into account the main facts pointed out by the Areios Pagos (Court of Cassation) in the order for reference.
B. Application of the principles to the circumstances of this case
1. The autonomy of the transferred entity prior to the transfer
53. It is necessary, first, to recall the context in which the transfer at issue took place, namely a transfer to a subsidiary, set up for that purpose. (35) Therefore, it must be ascertained whether the autonomy of the transferred entity existed prior to the transfer. (36) It may be inferred from the subject matter of the questions referred, and especially the second question, that they do not concern the assessment of whether the transferred entity had sufficient operational autonomy before the transfer.
54. Consequently, I am continuing my analysis on the basis of the view that, before the transfer, the entity, constituting an ENAE directorate allocated to an activity different from the other three using the same means of production, was composed of an organised group of workers permanently assigned to that stable activity, in order to examine the conditions relating to the actual continuance of the activity.
2. The durability of the activity transferred
55. In the second place, with regard to the durability of the activity transferred, I note the lack of precision in the order for reference as to the circumstances relating to the conclusion of the contracts, especially in 2006 for the operation of the sector of activity in question, and as to their specific content. I therefore consider, like the applicants, the Greek Government and the Commission, that uncertainty about the fact that, at the time of transfer, the activity was not limited to performance of a specific job must be removed.
56. Indeed, the referring court stated several times that ENAE entrusted the completion of contracts to ETYE. It stated that, ‘in order that the rolling stock directorate could operate as from 1 October 2006 as an autonomous company under ΕΤΥΕ’s name, [several] contracts were concluded between them [including] a works contract of 28 September 2006 concluded by ΕΝΑΕ, as the client, and ΕΤΥΕ, as the contractor, by which the former assigned to the latter outstanding works under programme agreement 33 (with OSE and ISAP), and all other works needed during the programme warranty period, … a similar contract of 28 September 2006 for outstanding main or warranty works under programme agreement 37 and … a similar contract of 28 September 2006 for outstanding main or warranty works under programme agreement 41a’.
57. The referring court added that, ‘once ETYE had commenced operating, it concluded with ΕΝAE … a works contract dated 30 August 2007 between ΕΝAE, as the client, and ΕΤΥΕ, as the contractor, by which the former assigned to the latter outstanding works under programme agreement 33a (with OSE and ISAP), and all other works needed during the programme warranty period’.
58. It pointed out, moreover, that ‘the argument in support of ETYE’s financial autonomy, according to which it had received an order from the Swiss company Carwaggon AG for 200 wagons was not proven; in reality that company ordered from ETYE, on 29 April 2009, only three 27-metre car-carrying wagons, for a fee of only EUR 510 000’.
59. I think that those circumstances should be compared with those examined by the Court in the judgment of 2 December 1999, Allen and Others, (37) relating to the driveage activity of Amalgamated Construction Co. Ltd (38) at the Prince of Wales Collieries, which was organised in the form of an economic entity before that undertaking subcontracted that activity to AMS.
60. By that judgment, the Court held, first, that, ‘nor can the fact that ACC was always RJB’s sole contractor and subcontracted the work to AMS preclude in itself the existence of a transfer within the meaning of [Directive 77/187]. First, the transfer of customers between transferor and transferee is only one factor amongst others in the overall assessment to be made to ascertain whether a transfer has taken place (judgment [of 18 March 1986,] Spijkers, [(39)] paragraph 13)’. (40)
61. Secondly, the Court found that, ‘in [the judgment of 19 September 1995,] Rygaard, [(41)] the Court held that the situation in which an undertaking transfers to another undertaking one of its building works with a view to the completion of that work, confining itself to providing the latter undertaking with certain workers and equipment to carry out the work in progress, is outside the scope of [Directive 77/187]. However, that situation differs from the present case in that complete works projects were subcontracted to AMS. Furthermore, at paragraph 21 of the judgment [of 19 September 1995] in Rygaard, [(42)] the Court added that a transfer of building works with a view to the completion of that work could come within the terms of [Directive 77/187] if it included the transfer of a body of assets enabling the activities or certain activities of the transferor undertaking to be carried on in a stable way. So, the fact that ACC only subcontracted to AMS the performance of certain driveage work would not be sufficient to preclude application of [Directive 77/187] if it were established that in that transaction AMS had acquired from ACC a body of assets which would enable it to carry out driveage work on a permanent basis at the Prince of Wales Collieries’. (43)
62. It is apparent from those considerations and from the finding of a lack of sufficient factual detail in the order for reference that it is for the referring court to assess, first, in the light of that case-law, whether, in the circumstances of the main proceedings, and especially those relating to the allocation of work, the identity of the transferred entity has been preserved owing to the transfer of an organised body of elements enabling the activities of the undertaking making the transfer to continue in a stable manner.
63. Assuming, at this stage, that those conditions are met, it is now necessary to reply to questions of the referring court concerning the lack of operational autonomy of the transferred entity.
3. The autonomy of the transferred entity after the transfer
64. According to the case-law of the Court, it must be assumed, first of all, that the activity carried out has been defined, since the weighting given to the various criteria laid down by the Court will vary depending on that. (44)
65. In the present case, it may be inferred from the referring court’s questions relating to the use of equipment needed for production (45) that the transfer at issue was carried out in a sector in which the activity is not based essentially on manpower.
66. In a situation such as that in the main proceedings, the economic activity at issue, namely the rolling stock directorate, requires the support of four production divisions, namely a rolling mill workshop, a pipe workshop, a carpentry workshop and a machining workshop, like the three other ENAE directorates.
67. Next, as regards the referring court’s main question concerning the fact that the tangible assets needed to carry out the activity at issue in the main proceedings have always belonged to ENAE, it can be answered that that finding cannot preclude a transfer of an undertaking within the meaning of Directive 2001/23, since, in similar circumstances, the Court has held that ‘whether ownership of tangible assets is transferred is not relevant for the purposes of the application of Directive 2001/23’. (46)
68. In that regard, the Court has held that ‘the fact that the tangible assets taken over by the new contractor did not belong to its predecessor but were merely provided by the contracting authority cannot preclude the existence of the transfer of an undertaking within the meaning of Directive 2001/23 (see, to that effect, judgment [of 20 November 2003,] Abler and Others, C‑340/01, EU:C:2003:629, paragraph 42). It follows that … an interpretation of Article 1(1)(b) of Directive 2001/23 which excluded from the scope of that directive a situation in which the tangible assets essential to the performance of the activity in question were owned at all times by the transferee would deprive that directive of part of its effectiveness’. (47)
69. Finally, as regards the method of financing (48) and the lack of organisational autonomy after the transfer, (49) mentioned in the order for reference, it should be pointed out that the Court has already held that those factors are not in themselves such as to preclude the application of Directive 2001/23.
70. Indeed, in a situation which may be compared with that of the main proceedings, (50) the Court has held that ‘it follows from paragraphs 46 and 47 of the judgment [of 12 February 2009,] Klarenberg [(51)] that what is relevant for the purpose of finding that the identity of the transferred entity has been preserved is not the retention of the specific organisation imposed by the employer on the various factors of production which are transferred, but rather the retention of the functional link of interdependence and complementarity between those factors. Thus, the retention of a functional link of that kind between the various elements transferred allows the transferee to use them — even if they are integrated, after the transfer, in a new and different organisational structure — to pursue an identical or analogous economic activity (see judgment [of 12 February 2009,] Klarenberg, [(52)] paragraph 48)’. (53)
71. Consequently, it seems to me necessary for the referring court to investigate whether a functional link of interdependence and complementarity between the various factors of production transferred has been retained in order to pursue an identical or analogous economic activity. (54)
72. In other words, it is sufficient to determine whether, at the time of the transfer, the previous activity, carried on under the responsibility of ENAE, was intended to be maintained with adequate resources under new management and it is irrelevant, as has already been pointed out, that the assets provided by the transferor are not used exclusively for the activity transferred. Consequently, the success of the economic activity after the transfer, which the referring court is asking about, cannot be taken as a relevant criterion for the application of Directive 2001/23.
4. The intention of the transferor and the transferee at the time of the transfer of the activity
73. If, after making the checks mentioned in the previous points, (55) the referring court comes to the conclusion that the criteria for the existence of a transfer of part of an undertaking are met in the present case, it would then still be necessary to determine the conclusion to be drawn from that court’s finding that ‘ETYE’s future course as a company had been decided in advance, leading to its winding up’, although, between 2006 and 2007, an activity, albeit meagre, did exist. (56)
74. It is not a question, as ENAE contends, of laying down a new condition which would relate to the economic success of the transfer or which would call into question the conditions thereof in the event of a subsequent cessation of activity decided on by the transferee. Indeed, the transferee’s freedom to end the activity after its transfer should not a priori be called into question.
75. As the Court has held many times and as is apparent, moreover, from Article 4 of Directive 2001/23, ‘the latter does not deprive the Member States of the possibility of allowing employers to modify working relations in an unfavourable direction, notably as regards protection against dismissal and the conditions of remuneration. The directive only prohibits such modifications from taking place on the occasion of and because of the transfer’. (57)
76. More specifically, having regard to the circumstances of the case in the main proceedings, it is the decision of the transferor at the time of transfer to use the transfer as a means of putting an end to the activity transferred for which it was responsible, in order to avoid its employee protection obligations, (58) which prevents the transfer from being brought within the scope of Directive 2001/23.
77. It is irrelevant, therefore, that an activity may have been continued after the transfer of the economic activity if it is established that the activity was not intended to be stable and that it had been organised at the time of the transfer under conditions which were such as to cause it to fail.
78. In other words, it is not as important to determine the duration of the activity as to establish the powers given to the entity transferred to continue to engage in the activity during a period which in principle was indefinite. In that regard, the programmed completion of contracts, without any vigorous sales strategy for customer development or diversification of tasks, may be an indication of the lack of prospects of stability at the time of the transfer. The same would apply if it were planned to reorganise the workers or their working time, or even their number, preventing the continuance of the activity. Therefore, it is the choice, at the time of the transfer, of the means used to achieve that objective which seems conclusive to me.
79. In any event, to hold that the duration of the continuance of the economic activity is a criterion for assessing the existence of a transfer would be contrary to the objective of protecting employees constantly emphasised by the Court (59) and could favour the improper application of provisions of EU law. (60)
80. However, merely to find that there is an agreement to end the activity, when it has not become a reality, since that activity is, in that highly theoretical case, continued in a stable manner, would lead to an outcome also contrary to the objective of that directive.
81. It follows that, if it is established that, at the time of the transfer, the objective pursued by the transferor and the transferee was not to continue the activity transferred, but to circumvent the employee protection obligations under national law, that transfer cannot fall within the scope of Article (1)(a) and (b) of Directive 2001/23.
82. In that case, the protection of employees seems to me also to justify the application of national provisions penalising any harmful consequences of such dishonest conduct.
83. In the light of the above, I am of the opinion that Article 1(1)(a) and (b) of Directive 2001/23 is to be interpreted as meaning that, on condition that the intention, at the time of the transfer of the economic entity, to continue an economic activity is established, that directive may apply in a situation where the part of the undertaking or business transferred does not retain its organisational autonomy, provided that the operational link between the various factors of production transferred is maintained and allows the transferee to use them for the purpose of carrying out in a stable manner an identical or similar economic activity, a matter which it is for the referring court to verify.
IV. Conclusion
84. In the light of the foregoing considerations, I propose that the Court reply to the questions referred for a preliminary ruling by the Areios Pagos (Court of Cassation, Greece) as follows:
Article 1(1)(a) and (b) of Council Directive 2001/23/EC of 12 March 2001 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 undertakings or businesses is to be interpreted as meaning that, on condition that the intention, at the time of the transfer of the economic entity, to continue an economic activity is established, that directive may apply in a situation where the part of the undertaking or business transferred does not retain its organisational autonomy, provided that the operational link between the various factors of production transferred is maintained and allows the transferee to use them for the purpose of carrying out in a stable manner an identical or similar economic activity, a matter which it is for the referring court to verify.