Judges M Berger, F Biltgen
Advocate General E Tanchev
The former employees of the former employer, ICTS Portugal—Consultadoria de Aviação Comercial SA, performed security guard duties in a Portuguese port under a contract with the port authority. They were, inter alia, responsible for monitoring the entry and exit of persons and goods, by means of video surveillance devices in accordance with rules laid down for them by the former employer, which provided them with uniforms and radio equipment. The port authority subsequently awarded the contract for the provision of security guard and preventive security services to the defendant company, Securitas—Serviços e Tecnologia de Segurança SA. The former employer informed the former employees in writing that, following the award of that contract, their employment contracts would be transferred to the defendant. Subsequently, the radio equipment used by the former employees was surrendered to the defendant, which passed it on to the port authority. The defendant began performing its security guard services, providing its security guards with that radio equipment and identical uniforms featuring the logo of the undertaking, but informed the former employees that they were not part of its staff. Consequently, the former employees brought actions requesting that the defendant or, in the alternative, the former employer, acknowledge that they were part of its staff and pay their salaries or compensation for wrongful dismissal. The actions were allowed by the court which held that there had been a transfer of a business between the two companies and that the employment contracts of the former employees had been transferred to the defendant. As a result, it classified their dismissal as wrongful and ordered the defendant to reinstate the majority of the persons concerned and pay them various salary claims and compensation. On the defendant’s subsequent appeal, the Supreme Court, Portugal stayed the proceedings and referred to the Court of Justice of the European Union for a preliminary ruling a question, inter alia, as to whether the replacement of the former employer by the defendant for the provision of security guard services fell within the notion of a “transfer of an undertaking” as a result of a legal transfer or merger within the meaning of article 1(1)(a) of Council Directive 2001/23/EC.
On the reference—
Held, the lack of a contractual link between the two undertakings successively entrusted with managing the surveillance and security of the port facilities had no bearing on the question as to whether or not Council Directive 2001/23/EC applied to the present situation. Further, the applicability of that Directive was subject to the condition that the transfer concerned “an economic entity which retains its identity, meaning an organised grouping of resources which has the objective of pursuing an economic activity, whether that activity is central or ancillary”. In order to determine whether that condition was met, it was necessary to consider all the facts characterising the transaction in question. In particular, where the economic activity was based essentially on equipment, the fact that the former employees of an undertaking were not taken over by the new contractor to perform that activity, as in the present case, was insufficient to preclude the existence of a transfer of an economic entity which retained its identity, within the meaning of Directive 2001/23. However, only the equipment that was actually used in order to provide the security guard services, excluding the facilities that were the subject of those services, had to be taken into consideration for the purpose of establishing the existence of such a transfer of an entity. Accordingly, where a contracting entity had terminated the contract concluded with one undertaking for the provision of security guard services at its facilities, then concluded a new contract for the supply of those services with another undertaking, which refused to take on the employees of the first undertaking, that situation fell within the concept of a “transfer of an undertaking” within the meaning of article 1(1)(a) of Directive 2001/23, when the equipment essential to the performance of those services had been taken over by the second undertaking. To that end, it was for the referring court to verify whether the former employer transferred to the defendant, directly or indirectly, equipment or tangible or intangible assets for the purpose of carrying out security guard activities in the facilities in question (judgment, paras 24, 25, 26, 30–33, 34, operative part, para 1).
Federación de Servicios Públicos de la UGT (UGT-FSP) v Ayuntamiento de La Línea de la Concepción (Case C-151/09) EU:C:2010:452; [2010] ICR 1248, ECJ and Administrador de Infraestructuras Ferroviarias (ADIF) v Aira Pascual (Case C-509/14) EU:C:2015:781; [2016] IRLR 156, ECJ applied.
AL Santos for the former employer.
L Inez Fernandes, M Figueiredo and LC Oliveira, agents, for the Portuguese Government.
H Leppo, agent, for the Finnish Government.
M França and M Kellerbauer, agents, for the European Commission.