Judgment of the Court of Justice of the European Union of 09 -09-2015 (Case C- 160/14) - Concept of “transfer of undertaking” - Unlawful collective dismissal

This judgment concerns the winding-up of the company Air Atlantis (“AIA”) in February 1993, which was followed by the collective dismissal of 97 people. From May 1993, Transportes Aéreos Portugueses, S.A. (“TAP”), which was the main shareholder of AIA, began to provide part of the flights already chartered by AIA, having used, for this purpose, four aircrafts and part of the office equipment of AIA, having also hired some of the employees of the closed AIA.

The employees in question challenged their dismissal and requested their reinstatement in TAP. The Court of First Instance concluded that this was a case of transfer of undertaking and consequently ordered the reinstatement of the employees in their corresponding categories and the payment of their severances.

The Lisbon Court of Appeal annulled the decision of the First Instance and the Supreme Court of Justice upheld the decision of the Court of Appeal, declaring that the collective dismissal was not unlawful. The Supreme Court observed that (i) for a transfer of undertaking to occur, the “simple pursuit” of the activity is not sufficient , the identity of the business must also be maintained, and (ii) despite the request of the employees of a preliminary ruling from the Court of Justice of the European Union (“CJEU”), there were no significant doubts as to the interpretation of the EU law that might imply the aforementioned preliminary ruling.

The employees then brought an action alleging non-contractual liability against the Portuguese State in the Civil Courts of Lisbon. In this context, the Civil Courts asked the CJEU whether, in this situation, (i) the Supreme Court of Justice was required to submit a request for a preliminary ruling, and whether (ii) the concept of “transfer of undertaking” in the applicable European directive covered the situation of AIA employees.

The CJEU answered affirmatively to both questions, emphasising that, in the air transport sector, the transfer of equipment is an essential feature to consider the existence of a “transfer of undertaking” in the meaning of the directive and that maintaining a functional link of interdependence between the various factors transferred led to the possibility that TAP was pursuing the activity previously carried out by AIA, in an identical or similar fashion, albeit within a new organisational structure.

Judgment of the Court of Justice of the European Union of 10 -09-2015 (Case C- 266/14) - Travel times for employees without a fixed or habitual place of work - Concept of “working time

The Court of Justice of the European Union (“CJEU”) was called on to decide whether the time spent in travel by employees of a Spanish company is included in the concept of “working time” or of “rest period”, in the meaning of the applicable European directive.

Under the terms of this directive, “working time” is defined as any period during which the employee is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice. Any period which is not w orking time is considered a “rest period”.

In this case, the employees did not have a fixed or habitual place of work, their work including travel to various customers, located in different geographical areas, sometimes at a distance of more than 100 kilometres from the employees’ homes.

The Court decided that, in this case, the time spent travelling between the employees homes and the customers was “working time”, since it included the three elements of that concept:

  1. During time spent travelling, the employees were carrying out their activities/duties, since, without a fixed or habitual place of work, the aforementioned travelling was a “necessary mean of providing those customers’ technical services”.
  2. During that time, the employees were also at the employer’s disposal, since it is the employer who determines the order of customers to be visited, in which case the employer can  change that order, and cancel or add appointments with customers. In this context, the employees are required to be physically present at the place determined by the employer and cannot manage their time without major constraints, nor pursue their own interests.
  3. During the time spent travelling, employees are working, because travelling is an integral part of being an employee. Under these terms, the place of work of such employees cannot be reduced to the physical areas of their work on the premises of their employer’s customers and must include the travel times to these customers.

It was also emphasised that the objective of that directive is to protect the safety and health of employees, i.e. to guarantee a minimum rest period for employees, and it would be contrary to that objective if travelling to customers was interpreted as meaning a rest period.