ADIF v Pascual, referred to the European Court from Spain, was a case about the business of handling "intermodal" transport units at the Bilbao terminal. In 2008, ADIF, a public body, had outsourced the management of this service to Algeposa. Algeposa provided the service in ADIF’s facilities, using ADIF's cranes. In May 2013, ADIF seconded some of its employees to Algeposa. However, in June, ADIF told Algeposa that it did not wish to extend the agreement beyond the agreed end date of 30 June 2013 because it was going to provide the service itself with its own staff. Several Algeposa workers were dismissed as a result.

The issue referred to the ECJ was whether there had been a business transfer for the purposes of the European business transfers directive (the basis of our TUPE regulations).  In this case, the key question was whether, on the resumption of ADIF's direct management of the provision of the service, that service retained its identity.

In previous cases the European Court has decided that, in a sector where the activity is based essentially on manpower, the identity of an economic entity cannot be retained if the majority of its employees are not taken on by the alleged transferee. However, in this case, the service was not an activity based principally on manpower. On the contrary, significant amounts of equipment were essential, as illustrated by the fact that ADIF put cranes and facilities at Algeposa’s disposal. The fact that ownership of assets was never transferred was irrelevant.

Given that this was a sector where the activity is based essentially on equipment, ADIF’s failure to take over Algeposa’s employees was not sufficient to prevent there being a transfer. As the ECJ said, any other conclusion would of course run counter to the directive's objective.