In Dodic v. Banka Koper and Alta Invest (Case c-194/18) EU:C:2019:385, the ECJ was asked to consider whether the transfer of intangible client investments from one undertaking (which had ceased investment services activity) to another could constitute a transfer of an undertaking for the purposes of the Acquired Rights Directive. It determined that it could in principle, but the question of whether there actually had been such a transfer in this case was remitted to the national court to decide.
Banka Koper (Banka) ceased operating as a stock exchange intermediary. Banka transferred these activities (as it was obliged under Slovenian law) to another intermediary, Alta Invest. It was agreed that Banka would work for Alta Invest as a dependent stock exchange intermediary. Banka therefore informed its clients that, as Banka would be ceasing investment services operations, they could transfer their accounts to Alta Invest for free. A large majority of Banka’s clients therefore transferred over to Alta Invest.
As a result of ceasing these activities, Banka dismissed all its employees in its investment services office. Mr Dodic, who was one of the dismissed employees, claimed that there was a transfer of undertakings and that his employment should have transferred to Alta Invest.
The case went all the way to the Slovenian Supreme Court which asked the ECJ to consider whether there had been a transfer of an undertaking even though:
• Banka’s clients could have transferred their investments to an intermediary other than Alta Invest; and • Banka continued to operate as a dependent stock exchange intermediary and co-operated with Banka.
The ECJ found that the transfer of financial instruments from one undertaking to another following the ceasing of the former’s business could constitute a transfer of an undertaking for the purposes of the Acquired Rights Directive. This was subject to the usual requirement that it had retained its identity post transfer (i.e. that there was a transfer of clients). This was, however, a matter for the referring national court to decide. The fact that the clients could choose to move their investments elsewhere and that Banka continued to operate as a dependent stock exchange intermediary was irrelevant.