The ECJ handed down a judgment on the 9 July 2015 in which the concept of a "worker" within the meaning of Directive 98/59/EC on Collective Redundancies was interpreted. 

According to the directive on collective redundancies - which has been implemented into Danish law - a number of conditions must be met for the Directive/Law to apply. In the judgment, the ECJ is to decide whether a director and an unpaid intern should be included in calculation for the number of workers under Article 1(1)(a).

Background

The German company Kiesal Abbruch und Recycling Technik GmbH dismissed with effect from 15 February 2013 all its employees, including Mr. Ender Balkayas. 

Mr. Balkayas argued that since the number of workers normally employed at Kiesel Abbruch was above the threshold of 20 people, notice should have been given to the Bundesanstalt fur Arbeit (Federal Institute for Work) before the dismissal. 

Kiesel Abbruch submitted however that the number was 18 employees, and therefore under the threshold. There was particular controversy over whether a director and a trainee should be counted in the calculation.

The director did not own any shares, and could only represent Kiesel Abbruch jointly with another director.  

The national court asked the ECJ how Directive Article 1(1)(a) should be interpreted concerning the director and the trainee.

The judgment

The ECJ ruled at first that the concept of a worker is an EU law concept which must be interpreted uniformly, and that the essential characteristic of an employment relationship is the fact that a person within a certain period provides services for payment by another person and under their direction.

As a consequence, the Court held further that where a member of the management performs services for remuneration for the company which has appointed him and to which he is an integral party, and which carries out its activities as directed by or under the supervision of another body of the company, and which at any moment may be dismissed from his function without limitations, meets the conditions to be considered as an "worker". This is regardless of whether that person has a certain discretion in the exercise of his duties.  The director in this particular case was therefor considered to be covered by the concept of a "worker".

The trainee in this case carried out practical work and was retraining as an office assistant with the financial support of a job Centre; hence the trainee was not under the company's payroll.

The Court stated here that it has consistently held that the concept of a "worker" in EU law covers persons undergoing an intern training or an apprenticeship in a subject which may be considered as practical preparation for the actual practice of the profession where such periods are completed under the same conditions that apply to salaried employment with consideration by an employer and under its direction. This is regardless of what national legislation sets in relation to this type of employee.

On these grounds, the trainee is also considered to be included as a "worker".

In summary, both the director and the trainee should be counted when calculating the number of workers under Directive 98/59/EC on collective redundancies.

Bird & Birds comments

The ruling extends the application of Directive 98/59/EC to both directors and unpaid trainees, both must be counted in the determination of whether there is a collective redundancy under the Directive.

In Denmark, the legal position so far has been that the managing director of public companies, limited liability companies and limited partnerships, and managers in other types of companies that occupy a similar independent position, should not be included in the count. This ECJ ruling no doubt changes this starting-point.

The judgment should be compared with another EU ruling from May 2015 under which fixed-term employment contracts should not be included in the calculation if the contracts are automatically terminated in accordance with the contract's termination provisions. You can read about this earlier judgment here.