The Federal Labour Court has clarified that sec. 613a of the German Civil Code, which implements the Acquired Rights Directive into German law, does not apply in case of a change of shareholders (judgment of the Federal Labour Court dated 23 March 2017, docket number 8 AZR 89/15).

The parties had been in dispute about the correct amount of salary due to the employee. The employee’s contract included a provision according to which the provisions of a collective bargaining agreement were to apply “in their relevant form applicable from time to time.” The employing company had been sold to a different shareholder in 2002 and subsequently argued that following the decision of the European Court of Justice in Alemo-Herron (C-426/11), it would only be bound by the provisions of the collective bargaining agreement which were in place at the time it was acquired. While the impact of a transfer of business on clauses such as the one above is still unclear and cases regarding this issues are pending with the European Court of Justice, the Federal Labour Court highlighted that a share acquisition does not fall within the scope of the Acquired Rights Directive and, therefore, a transfer of business had not taken place. The employee was therefore entitled to remuneration as provided in the current form of the collective bargaining agreement.