OPINION OF ADVOCATE GENERAL
BOT
delivered on 19 January 2017 (1)
Joined Cases C‑680/15 and C‑681/15
Asklepios Kliniken Langen-Seligenstadt GmbH (C‑680/15),
Asklepios Dienstleistungsgesellschaft mbH (C‑681/15)
v
Ivan Felja,
Vittoria Graf
(Requests for a preliminary ruling from the
Bundesarbeitsgericht (Federal Labour Court, Germany))
(Requests for a preliminary ruling — Directive 2001/23/EC — Article 3(1) and (3) — Safeguarding of employees’ rights in the event of transfers of undertakings — Clause in a contract of employment which refers to the terms and conditions provided for in a collective agreement and to amendments made to those terms and conditions after the undertaking has been transferred)
1. The present requests for a preliminary ruling relate to the interpretation of Article 3 of Council Directive 2001/23/EC 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 (2) and to Article 16 of the Charter of Fundamental Rights of the European Union (‘the Charter’).
2. Those requests were made in the context of a dispute between Mr Ivan Felja and Ms Vittoria Graf (‘the applicants’), on the one hand, and Asklepios Kliniken Langen-Seligenstadt GmbH and Asklepios Dienstleistungsgesellschaft mbH (‘Asklepios’), on the other hand, concerning the application of a collective agreement.
3. Following the judgments of 9 March 2006, Werhof (C‑499/04, EU:C:2006:168, ‘the judgment in Werhof’), and 18 July 2013, Alemo-Herron and Others (C‑426/11, EU:C:2013:521, ‘the judgment in Alemo-Herron and Others’), the general issue raised by the present case is whether, once a business has been transferred, a transferee employer may be compelled to apply the terms and conditions arising from collective agreements adopted after that transfer.
4. The particular feature of the abovementioned judgments and of the present case is that the collective agreements apply to the employment relationship between the employer and his employees by virtue of a reference made to those agreements in the contracts of employment.
5. Contracts of employment may thus contain two types of reference clause, either static or dynamic.
6. Such clauses operate statically or dynamically depending on whether they refer only to a particular collective agreement in force or also to any future changes that will be made to that agreement.
7. Static clauses thus refer to a specific collective agreement, and only to the version of that agreement which is in force at the time of the transfer.
8. Where, on the other hand, the parties to a contract of employment include a dynamic clause in that contract, they agree that certain material provisions of the employment relationship that exists between them must be dynamically determined by an external legal framework and continue to evolve. The terms and conditions applicable are therefore those provided for in the collective agreements periodically negotiated by the competent organisations.
9. In the context of German law, the inclusion of clauses of this type in contracts of employment is explained by the concern to secure rights for employees, whether or not they belong to a trade union.
10. Such reference clauses thus enable employers that belong to an employers’ association which has negotiated and adopted a sectoral collective agreement to apply that agreement to non-unionised employees, too.
11. Such reference clauses also enable employers that do not belong to an employers’ association which has negotiated and adopted a collective agreement to apply that agreement voluntarily to (unionised and non-unionised) employees.
12. It is that latter scenario which is at issue in the present case: a transferor that does not belong to an employers’ association which has negotiated and adopted a collective agreement chose to include a clause referring to that collective agreement in its employees’ contracts of employment. That reference clause is dynamic in so far as it covers future changes to that collective agreement.
13. Following the transfer of the transferor’s business, the transferee considers that it is not obliged to apply the terms and conditions arising from the amendments made to the collective agreement after the transfer.
14. The Court is asked to rule on whether Directive 2001/23 precludes a reference clause from being dynamic in such circumstances. In other words, does that directive preclude a transferee from being obliged to apply the terms and conditions arising from future changes to the collective agreement to which the contracts of employment refer?
15. In the present Opinion, I shall answer that question in the affirmative.
I – Legal framework
A – EU law
16. Article 1(1)(a) of Directive 2001/23, which replaces and codifies Directive 77/187/EEC, (3) provides:
‘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’.
17. Article 3 of that directive provides:
‘1. 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.
…
3. Following the transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement, until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.
Member States may limit the period for observing such terms and conditions with the proviso that it shall not be less than one year.
…’
18. Article 8 of that directive provides as follows:
‘This Directive shall not affect the right of Member States to apply or introduce laws, regulations or administrative provisions which are more favourable to employees or to promote or permit collective agreements or agreements between social partners more favourable to employees’.
B – German law
19. In Germany, the rights and obligations applicable in the event of a transfer of a business are governed by Paragraph 613a of the Bürgerliches Gesetzbuch (Civil Code, ‘BGB’), subparagraph 1 of which reads as follows:
‘Where a business or part of a business is transferred by legal transaction to another owner, that owner shall assume the rights and obligations arising from the employment relationship in existence on the date of the transfer. Where those rights and obligations are governed by the provisions of a collective agreement or by a works agreement, they shall become part of the employment relationship between the new owner and the employee and may not be amended to the disadvantage of the employee for a period of one year as from the date of the transfer. The second sentence hereof shall not apply where the rights and obligations applicable under the new owner are governed by the provisions of a different collective agreement or by a different works agreement. The rights and obligations may be amended before the expiry of the time limit laid down in the second sentence hereof if the collective agreement or the works agreement ceases to apply or if another collective agreement which the new owner and the employee have agreed will apply between them is not binding on both parties’.
II – The dispute in the main proceedings and the questions referred for a preliminary ruling
20. The applicants have been employed at the hospital in Dreieich-Langen (Germany) as a caretaker/gardener, since 1978, and a care assistant, since 1986, respectively. After Kreis Offenbach (Germany), a district-level local authority, had, in 1995, transferred the hospital business to a GmbH (a limited liability company) established under private law, the part of that business in which the applicants are employed was transferred, in 1997, to KLS Facility Management GmbH (‘KLS FM’).
21. KLS FM, which did not belong to an employers’ association, agreed with the applicants under individual contracts that their employment relationship would be governed, as it had been before the transfer, by the Bundesmanteltarifvertrag für Arbeiter gemeindlicher Verwaltungen und Betriebe (federal framework collective agreement for employees of municipal authorities and businesses, ‘BMT-G II’) and by the collective agreements supplementing, amending and replacing it.
22. Subsequently, KLS FM became affiliated to the Asklepios group, which owns numerous undertakings in the hospital sector.
23. On 1 July 2008, the part of the business in which the applicants are employed was transferred from KLS FM to another company in the group, Asklepios. That company was also not — and is still not — bound, through membership of an employers’ association, by the BMT-G II, by the Tarifvertrag für den öffentlichen Dienst (collective agreement for the public service, ‘TVöD’) which replaced it on 1 October 2005, or by the Tarifvertrag zur Überleitung der Beschäftigten der kommunalen Arbeitgeber in den TVöD und zur Regelung des Übergangsrechts (collective agreement on the transition of staff employed by municipal employers to the TVöD, ‘TVÜ-VKA’).
24. The applicants sought a court order to the effect that the provisions of the TVöD, the collective agreements supplementing it and the TVÜ-VKA apply to their employment relationship in the versions in which they are each in force, that is to say, dynamically.
25. Asklepios contended that Directive 2001/23 and Article 16 of the Charter preclude the legal consequence, provided for in national law, whereby the rules of the public service collective agreements to which the contract of employment refers apply dynamically. In its submission, this means that, once the business has been transferred, the terms and conditions agreed in the contract of employment, which are based on the collective agreements referred to in that contract, apply only statically to the employment relationship.
26. The lower courts upheld the actions brought by the applicants.
27. The Bundesarbeitsgericht (Federal Labour Court), before which the appeal on a point of law was brought, asks the Court to give a preliminary ruling on the following questions:
‘I.
1. Does Article 3 of … Directive 2001/23 … preclude a provision of national law which provides that, in the event of a transfer of an undertaking or business, all conditions of employment agreed between the transferor and the employee, individually and in the exercise of their freedom of contract, in the contract of employment transfer to the transferee unaltered, as if he had himself agreed them in an individual contract with the employee, where national law provides for both consensual and unilateral adjustments by the transferee?
2. If Question 1 is answered in the affirmative, either generally or for a defined group of individually agreed conditions of employment in the employment contract between the transferor and employee:
Does the application of Article 3 of Directive 2001/23 … have the effect that certain terms of the contract of employment between the transferor and the employee which have been agreed in the exercise of freedom of contract are to be excluded from being transferred unaltered to the transferee, and are to be adjusted simply by reason of the transfer of the undertaking or business?
3. If, according to the Court of Justice’s answers to Questions 1 and 2, an individual provision which has been agreed in an individual contract, under which certain provisions in a collective agreement are, dynamically and in the exercise of freedom of contract, incorporated into the employment contract, is not transferred unaltered to the transferee:
(a) Does this apply also where neither the transferor nor the transferee is party to a collective agreement or is affiliated to such a party, that is, where, even prior to the transfer of the undertaking or business, the provisions in the collective agreement would not have been applicable to the employment relationship with the transferor in the absence of the term referring to them in the agreement made, in the exercise of freedom of contract, in the contract of employment?
(b) If the answer to that question is in the affirmative:
Does this apply also if the transferor and the transferee are undertakings within the same group?
II.
Does Article 16 of the Charter … preclude a national provision enacted to implement Directive 77/187 … or … 2001/23 … which provides that, in the event of a transfer of an undertaking or a business, the transferee is bound by the conditions of employment agreed individually and in the exercise of their freedom of contract by the transferor with the employee as if he had agreed them himself, even if these conditions incorporate certain provisions of a collective agreement, which would not otherwise apply to the employment contract, into the employment contract dynamically, in so far as national law provides for both consensual and unilateral adjustments by the transferee?’
III – My analysis
28. By its questions, which must be examined together, the referring court seeks from the Court, in essence, a ruling on whether Article 3 of Directive 2001/23, read in the light of Article 16 of the Charter, must be interpreted as meaning that it precludes a national rule providing that, in the event of a transfer of a business, the continued observance of the transferor’s rights and obligations arising from a contract of employment extends to a clause in such a contract that makes dynamic reference to the terms and conditions provided for in a collective agreement, where the national law makes it possible for the transferee to make both consensual and unilateral adjustments. The referring court point up the fact, on the one hand, that neither the transferor nor the transferee are direct or indirect parties to the collective agreement at issue and, on the other hand, that the transferor and the transferee are undertakings in the same group.
A – Preliminary observations
29. As a preliminary point, it seems necessary to revisit the two precedents in the form of the judgments in Werhof and Alemo-Herron and Others.
1. The judgment in Werhof
30. The dispute giving rise to that case concerned a contract of employment which, so far as concerns wage progression, referred to a collective agreement in force which had been negotiated and signed by an employers’ association to which the transferring undertaking belonged but the transferee did not. The contractual clause at issue in that case was static, meaning that it referred to a specific collective agreement in force and not to any collective agreements that would succeed it in the future.
31. Following the transfer of the part of the business in which Mr Werhof worked, a new collective agreement had been concluded. Since that collective agreement provided for a wage increase, Mr Werhof had claimed that his employer should be regarded as having an obligation to apply that wage increase to him.
32. He submitted that, where an individual contract of employment includes a clause referring to collective agreements concluded in a particular sector, that clause is necessarily ‘dynamic’ and, in accordance with Article 3(1) of Directive 77/187, which corresponds to Article 3(1) of Directive 2001/23, refers to collective agreements concluded after the date of transfer of the undertaking.
33. The Court did not agree with that view. On the contrary, it held that that provision must be interpreted as not precluding, in a situation where the contract of employment refers to a collective agreement binding the transferor, that the transferee, who is not party to such an agreement, is not bound by collective agreements subsequent to the one which was in force at the time of the transfer of the business.
34. In order to reach that solution, the Court reasoned as follows.
35. First, the Court noted that a contractual reference clause such as the one at issue in that case is covered by Article 3(1) of Directive 77/187. It follows that, by virtue of that directive, ‘the rights and obligations arising from a collective agreement to which the contract of employment refers are automatically transferred to the new owner, even if … the latter is not a party to any collective agreement. Accordingly, the rights and obligations arising out of a collective agreement continue to bind the new owner after the transfer of the business’. (4)
36. It is therefore clear, according to the Court, that the rights and obligations arising from a collective agreement to which a clause contained in a contract of employment refers are indeed transferred to the transferee on the basis of Article 3(1) of Directive 77/187.
37. That clarification having been made, it then remained for the Court to determine whether, in the light of the rules contained in Directive 77/187, that type of clause was to be interpreted as referring to the collective agreement applicable to the transferor at the time of the transfer or, more broadly, to any future changes to that agreement.
38. The Court proceeded to set out several rules which, as we shall see, are fully relevant to the answer to be given to the questions raised by the Bundesarbeitsgericht (Federal Labour Court) in the present case.
39. The Court made it clear that, ‘in respect of the interpretation of Article 3(1) of … Directive [77/187], a clause referring to a collective agreement cannot have a wider scope than the agreement to which it refers. Consequently, account must be taken of Article 3(2) of the Directive, which contains limitations to the principle that [that] collective agreement to which the contract of employment refers is applicable’. (5)
40. The Court thus lays down a rule to the effect that, where a contractual clause referring to the terms and conditions provided for in a collective agreement is at issue, while Article 3(1) of Directive 77/187 does indeed form the basis of the transfer of rights and obligations to the transferee, the fact remains that that provision must be read in the light of Article 3(2) of that directive, which corresponds to Article 3(3) of Directive 2001/23. I would recall in this regard that the latter provision states that the terms and conditions arising from collective agreements must temporarily continue to be observed in the event of a transfer of a business.
41. According to the Court, it follows from the foregoing, on the basis of the wording of Article 3(2) of Directive 77/187, first, that the terms and conditions governed by a collective agreement ‘are to continue to be observed only until the date of its termination or expiry, or the entry into force or application of another collective agreement. Thus the wording of [that] [d]irective does not in any way indicate that the EU legislature intended that the transferee be bound by collective agreements other than the one in force at the time of the transfer and, consequently, that the terms and conditions be subsequently amended through the application of a new collective agreement concluded after the transfer’. (6)
42. The Court states that ‘such an assessment is, moreover, consistent with the objective of the Directive, which is merely to safeguard the rights and obligations of employees in force on the day of the transfer. On the other hand, … Directive [77/187] was not intended to protect mere expectations to rights and, therefore, hypothetical advantages flowing from future changes to collective agreements’. (7)
43. Secondly, the Court noted that, as the wording of Article 3(2) of Directive 77/187 itself states, ‘the Member States may limit the period for observing the terms and conditions arising from a collective agreement, provided that that period is not less than one year’. (8)
44. The Court further held that, ‘although in accordance with the objective of [that] [d]irective the interests of the employees concerned by the transfer must be protected, those of the transferee, who must be in a position to make the adjustments and changes necessary to carry on his operations, cannot be disregarded’. (9)
45. The Court then set against the claimant’s claim that the contractual clause should be interpreted dynamically, the freedom of association enjoyed by the transferee.
46. In that regard, the Court held that ‘the “static” interpretation … makes it possible to avoid a situation in which the transferee of a business who is not party to a collective agreement is bound by future changes to that agreement. His right not to join an association is thus fully safeguarded’. (10) In those circumstances, ‘the claimant cannot maintain that a clause contained in an individual contract of employment and referring to collective agreements concluded in a particular sector must necessarily be “dynamic” and refers, by application of Article 3(1) of … Directive [77/187], to collective agreements concluded after the date of transfer of the undertaking’. (11)
47. It was on the basis of that reasoning that the Court arrived at the ruling referred to in point 33 of the present Opinion.
48. Although the Court, given the context in which the questions were put to it, did not go so far as to rule that Article 3 of Directive 77/187 precluded collective agreements subsequent to the transfer of a business from being capable of being made enforceable against the transferee, the reasoning which it puts forward contains the germs of a ruling to that effect, a ruling, moreover, which would be adopted several years later in the judgment in Alemo-Herron and Others. As we shall see, however, the Court employs a different line of reasoning in order to arrive at that ruling.
2. The judgment in Alemo-Herron and Others
49. The dispute giving rise to that case concerned a London borough council which had contracted out its ‘leisure’ services to a private-sector undertaking, the employees working in that leisure department having become part of that undertaking’s staff. That undertaking had then itself sold that business to another private-sector undertaking.
50. At the time when the ‘leisure’ department was the responsibility of the public authority, the employees working in that department benefited from the terms and conditions periodically negotiated by the NJC, the local government collective bargaining body. The agreements negotiated by the NJC were not binding as a matter of law but as a result of a contractual term contained in the relevant contracts of employment.
51. Following the transfer of the business, a new agreement was concluded within the NJC. The transferee undertaking took the view that the new agreement was not binding on it because that agreement was subsequent to the transfer, and therefore refused to apply to the employees the pay increase provided for in that agreement, on the ground that the latter had been concluded after the transfer.
52. Having been asked to give a preliminary ruling in the course of the dispute between the employees and the transferee undertaking, the Court ruled that Article 3 of Directive 2001/23 must be interpreted as precluding a Member State from providing, in the event of a transfer of an undertaking, that dynamic clauses referring to collective agreements negotiated and adopted after the date of transfer are enforceable against the transferee, where that transferee does not have the possibility of participating in the negotiation process of such collective agreements concluded after the date of the transfer.
53. In order to arrive at that ruling, the Court began by recalling that it followed from its judgment in Werhof that Article 3(1) of Directive 77/187 must be interpreted as not precluding, in a situation where the contract of employment refers to a collective agreement binding the transferor, that the transferee, who is not party to such an agreement, is not bound by collective agreements subsequent to the one which was in force at the time of the transfer of the business.
54. Since that provision does not preclude national law from stipulating that a reference clause is only static, the Court went on to determine whether Article 8 of Directive 2001/23 could permit Member States to adopt national provisions more favourable to employees. I would recall here that the latter provision states that that directive ‘does not affect the right of Member States to apply or introduce laws, regulations or administrative provisions which are more favourable to employees or to promote or permit collective agreements or agreements between social partners more favourable to employees’. According to the Court, that determination was justified by the fact that dynamic reference clauses are more favourable to employees than static clauses.
55. In assessing the discretion left to the Member States by Article 8 of Directive 2001/23 in the circumstances specific to that case, the Court drew attention to the following points.
56. First, according to the Court, Directive 2001/23 ‘does not aim solely to safeguard the interests of employees in the event of transfer of an undertaking, but seeks to ensure a fair balance between the interests of those employees, on the one hand, and those of the transferee, on the other. More particularly, it makes clear that the transferee must be in a position to make the adjustments and changes necessary to carry on its operations’. (12)
57. This is particularly necessary where the undertaking in question is being transferred from the public sector to the private sector. (13) However, the Court states, ‘a dynamic clause referring to collective agreements negotiated and agreed after the date of transfer of the undertaking concerned that are intended to regulate changes in working conditions in the public sector is liable to limit considerably the room for manoeuvre necessary for a private transferee to make such adjustments and changes’. (14) In such a situation, the Court considered that ‘such a clause is liable to undermine the fair balance between the interests of the transferee in its capacity as employer, on the one hand, and those of the employees, on the other’. (15)
58. Secondly, the Court considered that the interpretation of Article 3 of Directive 2001/23 must comply with Article 16 of the Charter, laying down the freedom to conduct a business, one component of which is the freedom of contract. (16)
59. The Court states that, ‘in the light of Article 3 of Directive 2001/23, it is apparent that, by reason of the freedom to conduct a business, the transferee must be able to assert its interests effectively in a contractual process to which it is party and to negotiate the aspects determining changes in the working conditions of its employees with a view to its future economic activity’. (17)
60. In that regard, the Court found that the transferee at issue in that case was unable to participate in the collective bargaining body and could not therefore assert its interests effectively. (18) In those circumstances, the Court considered that the transferee’s contractual freedom was seriously reduced to the point that such a limitation was liable to adversely affect the very essence of its freedom to conduct a business. (19)
61. Given that ‘Article 3 of Directive 2001/23, read in conjunction with Article 8 of that directive, cannot be interpreted as entitling the Member States to take measures which, while being more favourable to employees, are liable to adversely affect the very essence of the transferee’s freedom to conduct a business’, (20) the Court arrived at the ruling referred to in point 52 of the present Opinion.
62. It therefore follows from that judgment that, while Member States can in principle, on the basis of Article 8 of Directive 2001/23, opt to make contractual clauses referring to collective agreements dynamic, the exercise of that option is nonetheless subject to the condition of respect for fundamental rights, in particular the transferee’s freedom to conduct a business. However, the transferee’s freedom to conduct a business is not respected where it is unable to participate in the process of negotiating collective agreements concluded after the date of the transfer.
B – My assessment
63. I am of the opinion that, in order to answer the questions referred by the Bundesarbeitsgericht (Federal Labour Court), the Court should base its reasoning on that which it put forward in its judgment in Werhof. There is all the more reason for taking this approach given that both cases call for an assessment of the German legislation against the rules on the safeguarding of employees’ rights in the event of the transfer of an undertaking set out in Directive 2001/23. More fundamentally, the Court should, in my view, take the opportunity presented by this case to clarify the way in which Article 3(1) and (3) and Article 8 of that directive are meant to interact with each other.
1. Starting point: a contractual clause referring to a collective agreement falls within the scope of Article 3(1) of Directive 2001/23
64. According to the wording of Article 3(1) of Directive 2001/23, ‘the transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer are, by reason of such transfer, to be transferred to the transferee’. As the Court has already held, that provision ‘refers in general terms and unreservedly to the [abovementioned] rights and obligations’. (21) Consequently, it follows from that provision that all rights and obligations are transferred to the transferee, since they arise from a contract of employment concluded between the transferor and the employees concerned by the transfer of an undertaking.
65. It is settled case-law that Directive 2001/23 is intended to safeguard the rights of employees in the event of a change of employer by enabling them to continue to work for the new employer on the same terms and conditions as those with the transferor. (22)
66. By virtue of Article 3(1) of Directive 2001/23, the transferee is subrogated to the transferor’s rights and obligations under the employment relationship. (23)
67. The Court has also held that the rules of Directive 2001/23 must be considered to be mandatory, so that it is not possible to derogate from them in a manner unfavourable to employees. It follows that the contracts of employment and employment relationships existing, on the date of the transfer of an undertaking, between the transferor and the workers employed in the undertaking transferred are automatically transferred to the transferee by the mere fact of the transfer of the undertaking. (24)
68. According to the Norwegian Government, a literal and teleological interpretation of Article 3(1) of Directive 2001/23 would necessarily lead to the view that the rights and obligations flowing from a contract of employment under which the employee and the transferor have agreed to abide by the terms and conditions provided for in a collective agreement in the dynamic version applicable, as in the present case, are transferred to the transferee.
69. The proposition that employees continue to benefit from the terms and conditions provided for in collective agreements negotiated and adopted after the date of transfer is based on the idea that, by including a clause referring to a collective agreement in their contracts of employment, the transferor and the employees have voluntarily accepted that their employment relationship will be governed by the provisions of that collective agreement. The employee would thus have a recognised contractual right to benefit from the terms and conditions forming the subject of periodic collective agreement. The source of the obligation would be the individual contract of employment rather than the collective agreement. That conclusion would be contingent on a straightforward application of Article 3(1) of Directive 2001/23 as supporting the continued existence of the rights and obligations contained in a contract of employment. Since the employee’s right to benefit from the terms and conditions forming the subject of periodic collective agreement would be enforceable against the transferor, it would, after the transfer, necessarily be enforceable against the transferee because the contract is deemed to have been concluded from the outset with the transferee.
70. However, I consider that, in circumstances such as those at issue in the main proceedings, Article 3(1) of Directive 2001/23 cannot be read in isolation but must be interpreted in conjunction with Article 3(3) of that directive.
2. Limit: where there is a contractual clause referring to a collective agreement, Article 3(1) of Directive 2001/23 must be read in conjunction with Article 3(3) of that directive
71. I would recall that, under Article 3(3) of Directive 2001/23:
‘Following the transfer, the transferee shall continue to observe the terms and conditions agreed in any collective agreement on the same terms applicable to the transferor under that agreement, until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement.
Member States may limit the period for observing such terms and conditions, with the proviso that it shall not be less than one year.’
72. Article 3(1) and (3) of Directive 2001/23 represents the interaction of two rules. First, the general rule that the rights and obligations arising from a contract of employment in existence on the date of transfer within the meaning of that directive must be transferred to the transferee. Next, the degree to which the transferee remains bound by terms and conditions agreed under a collective agreement applicable to the transferor on the date of the transfer.
73. Where a clause in a contract of employment concluded between the transferring employer and his employees makes reference to the terms and conditions periodically determined by way of collective bargaining, the situation is, in my view, governed by Article 3(1) of Directive 2001/23 in combination with Article 3(3) of that directive.
74. Under Article 3(1) of Directive 2001/23, a clause in a contract of employment which makes reference to the terms and conditions provided for in a collective agreement is transferred to the transferee by virtue of the transfer of the business.
75. However, so far as terms and conditions provided for in a collective agreement are concerned, Article 3(3) of that directive operates to limit the scope of the obligations incumbent on the transferee under that clause. It follows from that provision that it is only the terms and conditions provided for in the collective agreement in force on the date of transfer that must continue to be observed by the transferee. After all, it follows from that provision that the obligation to respect those terms and conditions endures for as long as the collective agreement in force at the time of transfer remains in force itself, that is to say ‘until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement’.
76. Furthermore, Member States have the option to limit the period during which the terms and conditions continue to be observed, provided that this is not less than one year. It should be noted that German law expressly provides for such a time limitation.
77. Article 3(3) of Directive 2001/23 provides a compromise intended to reconcile the interests of the transferee and those of the employees affected by the transfer of the undertaking.
78. It should be emphasised that, in the proposal for a directive which it submitted on 29 May 1974, the Commission had already envisaged the scenario of a transfer of an undertaking in which the transferee is not party to the collective agreement binding the transferor and that agreement has not been made binding. (25) According to the Commission, ‘in this case, it would be a breach of the right of free association to impose on the transferee against his will a collective agreement to which he is not already party. However, in order to prevent the workers losing their terms of employment reached through collective agreements, paragraph 3 attempts to provide a compromise: although the status of a party to any collective agreement is not imposed on the transferee, he shall respect existing terms of employment reached through collective agreements and shall, in the case of collective bargaining agreements of limited duration, respect the terms of employment laid down in the collective agreement up to the end of its period of validity and, in the case of collective bargaining agreements of unlimited duration, for a period of one year’. (26)
79. Article 3(3) of Directive 2001/23 thus strikes a balance between competing interests: on the one hand, the employee has a right to benefit from the specific terms and conditions previously agreed with the transferor, while, on the other hand, the transferee has a legitimate right to know the extent of its future obligations and, therefore, not to be bound by new terms and conditions defined at the end of a collective bargaining process in which it will not or cannot participate.
80. Article 3(3) of Directive 2001/23 even offers Member States the option, in the interests of the transferee, of limiting the length of the period during which the latter will be bound by the terms and conditions laid down in the collective agreement in force at the time of the transfer, provided that that period is not less than one year. That provision also reflects the balance which the EU legislature sought to strike between the interests of employees and the transferee respectively in the event of a transfer of an undertaking.
81. It is my view that the dynamic reference clause ceases to have effect in the situations provided for in Article 3(3) of Directive 2001/23, that is to say where [the collective agreement] expires, terminates or is replaced and, if the Member State has so provided, where at least one year has passed since the undertaking was transferred. Those clauses do not therefore apply to collective agreements concluded after the date of transfer, unless the new employer expresses a different wish.
82. To my mind, the issue raised by the dispute in the main proceedings cannot be addressed by reading Article 3(1) of that directive in isolation. The effect of doing so would, pursuant to that provision, be that the transferee is bound by all of the contractual clauses that bound the transferor, whatever their nature. While it is true that Article 3(1) of Directive 2001/23 does not draw a distinction based on the content of the contractual clauses, the situation in which a contractual clause refers to terms and conditions provided for in a collective agreement is a case apart. After all, such a reference to the terms and conditions provided for in a collective agreement is a situation in which the clause in question not only maintains the rights and obligations arising from a contract of employment but also maintains the terms and conditions arising from a collective agreement.
83. That combination of circumstances leads me to the view that Article 3(1) of Directive 2001/23 cannot be interpreted without taking account of Article 3(3) of that directive, which states that the continued observance of terms and conditions provided for in a collective agreement is temporary.
84. It makes little difference in this regard whether the application to employees of the terms and conditions provided for in a collective agreement stems directly from the collective agreement, because the latter is binding on the undertaking or sector in question, or indirectly from that agreement, because of a reference made by a clause in the contract of employment.
85. In that regard, mention should be made of the contribution made by the judgment of 11 September 2014, Österreichischer Gewerkschaftsbund (C‑328/13, EU:C:2014:2197, ‘the judgment in Österreichischer Gewerkschaftsbund’). In that judgment, the Court held that ‘Article 3(3) of Directive 2001/23 is intended to maintain not the application of a collective agreement as such but the “terms and conditions” put into place by such an agreement’. (27) Thus, ‘Article 3(3) of the directive requires the terms and conditions put in place by a collective agreement to continue to be observed, without the specific origin of their application being decisive’. (28) According to the Court, it follows that ‘the terms and conditions put in place by a collective agreement fall within, in principle, the scope of Article 3(3) of Directive 2001/23, irrespective of the method used to make those terms and conditions applicable to the persons concerned. In that regard, it is sufficient that such terms and conditions have been put in place by a collective agreement and effectively bind the transferor and the employees transferred’. (29) Applying that reasoning to the case at issue, the Court ruled that ‘terms and conditions laid down in a collective agreement cannot be regarded as being excluded from the scope of that provision on the sole ground that they apply to the persons concerned by virtue of a rule maintaining the effects of a collective agreement, such as that at issue in the main proceedings’. (30)
86. While it is true that that case did not relate to a reference clause contained in a contract of employment, it is, to my mind, applicable by analogy in the present case.
87. The reason for using a reference clause is to secure the same result as if the collective agreement applied directly to the undertaking or the sector at issue, for example, because that undertaking is a member of the employers’ association which negotiated that collective agreement or because that agreement has been declared to be generally binding, that is to say that the State has extended it to all employers, and therefore to all employees, in the sector concerned. The reference clause thus operates to fill the gap resulting from the fact that the employer is not bound by the normative effect of a collective agreement.
88. The reference clause thus enables employers that belong to an employers’ association which has negotiated and adopted a sectoral collective agreement to apply that agreement to non-unionised employees, too.
89. That reference clause also enables employers that do not belong to an employers’ association which has negotiated and adopted a collective agreement, as in the present case, to apply that agreement voluntarily to (unionised and non-unionised) employees.
90. In my view, Article 3(1) of Directive 2001/23, read in conjunction with Article 3(3) of that directive, is intended to govern those two scenarios. As I see it, therefore, it makes no difference that the transferor does not belong to the employers’ association which negotiated and adopted the collective agreement at issue.
91. It is true that Article 3(3) of Directive 2001/23 provides that the terms and conditions must continue to be observed ‘on the same terms applicable to the transferor under [the collective agreement]’. That provision thus guarantees that, notwithstanding the transfer of the undertaking, the terms and conditions governed by the agreements remain in place ‘in accordance with the intention of the contracting parties to the collective agreement’. (31) Contrary to the assertions of the referring court and the Norwegian Government, however, I do not consider that, in order to be applicable, Article 3(3) of Directive 2001/23, as interpreted by the Court, requires that the transferor belong to the employers’ association which negotiated and adopted the collective agreement at issue. What matters is that the transferor should be effectively bound by that collective agreement, as the Court stated in paragraph 25 of the judgment in Österreichischer Gewerkschaftsbund. The collective agreement at issue may therefore be directly or indirectly enforceable against the transferor. In both cases, the transferor has, in one way or another, expressed its intention to be bound by that collective agreement.
92. Furthermore, I consider that making the application of Article 3(3) of Directive 2001/23 dependent on the transferor’s position in relation to the collective agreement at issue would lead to differences in the treatment of employees in the context of an undertaking’s transfer depending on whether or not the transferor is a member of the employers’ association which negotiated and adopted that collective agreement.
93. I would add that the Court’s findings in its judgment in Werhof on the subject of the combined reading of Article 3(1) and (2) of Directive 77/187 are formulated generally and do not seem to be confined to the situation in which the transferor is a member of an employers’ association which negotiated and adopted the collective agreement at issue.
94. In the light of the foregoing, I therefore take the view that, in a situation such as that at issue in the main proceedings, and on a combined reading of Article 3(1) and (3) of Directive 2001/23, the collective agreements which were not in force at the time when the transfer occurred, but which were negotiated and adopted after the transfer, cannot bind the transferee indefinitely.
95. As the Court made clear in paragraph 29 of the judgment in Werhof, the objective of the directive ‘is merely to safeguard the rights and obligations of employees in force on the day of the transfer’, (32) nothing more. Thus, Directive 2001/23 does not guarantee that the employee will benefit from the same terms and conditions with the transferee as those from which he could have benefited, by virtue of the dynamic reference clause, if he had remained in the employ of the transferor.
96. Moreover, by stating in that judgment that the directive ‘was not intended to protect mere expectations to rights and, therefore, hypothetical advantages flowing from future changes to collective agreements’, (33) the Court was certainly alert to the uncertainty and unforeseeability of terms and conditions flowing from future changes to collective agreements, and to the negative effects that this may have on the transferee.
97. As Advocate General Ruiz-Jarabo Colomer pointed up in his Opinion in Werhof, (34) ‘if future collective agreements were to have a permanent effect on an employer who had not participated in their negotiation, … more obligations might be imposed on an employer who had not been a party to an agreement than on the person who had been, leaving the former in uncertainty and exposed to the risk that conditions might be introduced behind his back’.
98. The Court seems to have recognised that, at some stage, the interests of the transferee require that certain limits be placed on the protection granted to employees in the event of the transfer of an undertaking. In that regard, the Court expressly refers to the limits set out in Article 3(2) of Directive 77/187, which, let us recall, corresponds to Article 3(3) of Directive 2001/23.
99. In paragraph 28 of the judgment in Werhof, that provision is presented as attaching ‘limitations to the principle that the collective agreement to which the contract of employment refers is applicable’. One of those limitations is that ‘the terms and conditions under that collective agreement are to continue to be observed only until the date of its termination or expiry, or the entry into force or application of another collective agreement’, as paragraph 29 of that judgment explained.
100. It would be incompatible with Article 3(3) of Directive 2001/23 for Article 3(1) of that directive to have the effect of making collective agreements adopted after the transfer which are referred to in a clause contained in the contract of employment binding on the transferee, because this would exceed the express limit laid down in Article 3(3) of that directive.
101. Consequently, in a situation such as that in the main proceedings, where neither the transferor nor the transferee are parties to a collective agreement, a clause referring to that agreement is enforceable against the transferee only within the limits laid down in Article 3(3) of Directive 2001/23.
102. In my view, there is no reason why the outcome should be different where a transfer of a business takes place within the same group. After all, the Court has already ruled that Directive 77/187 is intended to cover a transfer between two subsidiary companies in the same group. (35) In the present case, KLS FM had not yet become affiliated to the Asklepios group when it included the reference clause in the contracts of employment. In the light of the abovementioned case-law, the fact that the challenge to the dynamic nature of that clause came after KLS FM had become affiliated to that group, that is to say, more specifically, when the part of the business in which the applicants are employed was transferred to Asklepios, is not such as to exclude the application of the rules laid down in Directive 2001/23.
103. Finally, the Norwegian Government noted the difference of context as between the case which gave rise to the judgment in Werhof and the present case.
104. The case giving rise to the judgment in Werhof concerned a statically worded reference clause and a claim by the employees that that clause should be interpreted as being dynamic. In order to arrive at the conclusion that Directive 77/187 did not require the clause to be dynamic, the Court articulated a line of reasoning detailing why Article 3(1) of that directive, combined with Article 3(2) of that directive, had to be interpreted as calling for that type of reference clause to be static. In other words, the Court listed the reasons why the transferee could not be compelled to apply the wage increases provided for in collective agreements adopted after the transfer.
105. The situation at issue in the case in the main proceedings is the reverse. Here, the reference clause is worded dynamically. Faced with the employees’ claim that the amendments to the collective agreement referred to by that clause, made after the transfer of the business, are enforceable against the transferee, the referring court asks the Court to rule on whether Directive 2001/23 precludes that clause from being dynamic.
106. That difference of context as between the two cases must not, however, disguise the fact that they both raise the same legal issue, that is to say whether the fact that a reference clause is dynamic is compatible with the rules of EU secondary law relating to transfers of undertakings.
107. Thus, despite the difference of context as between the two cases, the fact remains that the reasons which the Court gave in its judgment in Werhof to explain why, from the point of view of the provisions of Article 3(1) of Directive 77/187, read in the light of Article 3(2) of that directive, a static clause could not be interpreted as being dynamic are the same as the reasons on the basis of which the Court should, in my opinion, find that, in the case of a business transfer, Article 3(1) of Directive 2001/23, read in conjunction with Article 3(3) of that directive, precludes a clause referring to a collective agreement from being recognised as dynamic.
3. The option given to Member States to adopt provisions more favourable to employees: Article 8 of Directive 2001/23
108. I would recall that, under Article 8 of Directive 2001/23, the latter ‘does not affect the right of Member States to apply or introduce laws, regulations or administrative provisions which are more favourable to employees or to promote or permit collective agreements or agreements between social partners more favourable to employees’.
109. As the Court noted in its judgment in Alemo-Herron and Others, the interpretation to the effect that contractual clauses referring to a collective agreement are dynamic may prove to be more favourable to employees if it is assumed that future changes to the collective agreement will contain improvements to employees’ rights.
110. In circumstances such as those of the dispute in the main proceedings, however, it does not seem possible to me to accept the proposition that, on the pretext of giving a ruling that is more favourable to employees, on the basis of Article 8 of Directive 2001/23, the national courts may, by adopting the interpretation to the effect that reference clauses are dynamic, circumvent the rules set out in Article 3(1) and (3) of Directive 2001/23, which were transposed by Article 613a of the BGB.
111. After all, in transposing Directive 2001/23, the Federal Republic of Germany clearly took up the option of temporarily continuing to observe the terms and conditions provided for in collective agreements, in particular by choosing to limit the period of continued observance of those terms and conditions to one year. In those circumstances, Article 8 of that directive does not, in my view, allow the national courts to give a ruling which would be at odds with the choice thus made by the German legislature.
112. Moreover, as the judgment in Alemo-Herron and Others makes clear, the implementation of Article 8 of Directive 2001/23 by Member States must respect the fundamental rights protected by the Charter.
113. However, I do not see any need to address the issue raised by the present case from the point of view of the fundamental rights protected by the Charter, since that issue can be resolved simply by applying Article 3(1) and (3) of Directive 2001/23. I would observe here that, by refraining from imposing on the transferee in an unlimited and uncertain fashion obligations arising from future collective agreements over which it has no influence, the ruling I am advocating will address the concern to guarantee the transferee’s freedom to conduct a business that was expressed by the Court in its judgment in Alemo-Herron and Others.
114. Furthermore, to the extent that, according to my analysis, the rule that, in the event of a transfer, the terms and conditions provided for in a collective agreement need be maintained only temporarily by the transferee, even where a contract of employment refers to that collective agreement, flows from Article 3(1) and (3) of Directive 2001/23, as transposed by Article 613a of the BGB, there is no need, in my view, to consider the existence in reality, which Asklepios contests, of the options that would be available to the transferee under German contract law for unilaterally or consensually amending the reference clause included in the contract of employment.
IV – Conclusion
115. In the light of the foregoing submissions, I propose that the Court’s answer to the Bundesarbeitsgericht (Federal Labour Court) should be as follows:
In a situation such as that at issue in the dispute in the main proceedings, in which the contract of employment concluded between the transferor and the employees contains a clause referring to the terms and conditions defined in a collective agreement, and in which neither the transferor nor the transferee may participate in the process of negotiating that collective agreement, Article 3(1) 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, read in conjunction with Article 3(3) of that directive, must be interpreted as meaning that it precludes such a clause from being dynamic after the business has been transferred, which is to say that it precludes that clause from being interpreted as also referring to future adjustments to that collective agreement. On the contrary, the interaction between paragraphs 1 and 3 of Article 3 of Directive 2001/23 requires that the reference contained in the clause in the contract of employment be subject to the temporal limitations set out in Article 3(3) of that directive, which is applicable to terms and conditions agreed in a collective agreement.