Opinion of Advocate General

Mr President,

Members of the Court,

1. In this case, the Court has to consider once again a number of questions relating to the scope of Council Directive 77/187/EEC of 14 February 1977 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses (hereinafter the Directive).

Background to the case

2. Mrs Watson Rask and Mrs Christensen were employed in one of the works canteens of the company Philips A/S at the time when Philips handed over the management of its works canteens to ISS. The transfer was effected by an agreement concluded on 2 December 1988 which took effect on 1 January 1989. Under the agreement, Philips undertook to pay ISS a fixed monthly fee to cover wages, insurance, work clothes and management costs. It also made available to ISS the necessary premises, equipment, electricity, heating, telephone and cloakrooms and a refuse removal service. It further agreed to provide various consumables (disposable plates, serviettes, etc.) at wholesale prices. For its part, ISS agreed, among other things, to offer jobs to Philips permanent staff employed in its works canteens at the time when the agreement took effect on the same terms and conditions as regards pay and notice as they had previously enjoyed. In that connection, the agreement provided that the wages paid to the employees concerned would consist of the basic ISS wages plus a transfer supplement so that former Philips employees taken over by ISS would not suffer any loss of income.

3. The two disputes which are the subject of the proceedings in the national court may be summarized as follows. In the first set of proceedings, Mrs Watson Rask seeks compensation for wrongful dismissal and non-pecuniary damage. At the end of January 1989, her wages were paid late. After she had insisted on receiving her wages at the time at which she had been accustomed to getting them, she was paid by cheque. In February 1989, the same thing happened, but this time ISS refused to pay her her wages on Philips' pay day. ISS claimed that it was entitled to alter the pay day so to opt for the last working day in the month rather than the last Thursday. Mrs Watson Rask maintained for her part that, under the Danish Law on transfers of undertakings, she was employed on the same terms and conditions as had been in force when she was employed by Philips. She then declared that she no longer wished to work for ISS if her wages were not paid to her at the usual time, whereupon the manager dismissed her without notice.

4. The national court considered that it was necessary to obtain a preliminary ruling from the Court under Article 177 of the EEC Treaty on the following questions:

Applicability of the Directive

5. The national court's first and second questions essentially seek to establish whether the Directive is applicable in a situation in which an undertaking transfers to another undertaking the operation of its works canteens together with its canteen staff, but there is no transfer of assets. Consequently, once again, the scope of the Directive, as defined in Article 1(1), is at issue:

6. By contrast, the question in this case is whether there can be said to have been a transfer of an undertaking, business or part of a business within the meaning of Article 1(1) of the Directive. Here too there is a consistent line of cases, which have been summarized recently by the Court in the Redmond Stichting case. The decisive criterion employed by the Court is whether the economic entity in question (that is to say, the undertaking, business or part of a business) retains its identity and this would be indicated by the fact that its operation was actually continued or resumed by the new employer with the same or similar economic activities. According to that which the Court has consistently held, in order to determine whether that condition is met, it is necessary to

7. I should now turn to the national court's second question: should works canteens be regarded as being a part of an undertaking or a business within the meaning of the Directive regardless of the fact that they are not part of the actual production activity of the undertaking in question? As the Commission rightly observes, the answer to that question is already contained in essence in the Court's judgment in Botzen: the crucial criterion is not the usual character of the activity of the part of the business concerned, but the link existing between the employees and the part of the undertaking transferred. In other words, the national court may merely find that the employees concerned were assigned, that is to say, that they actually formed part of the organizational framework of the undertaking or business transferred. Moreover, the Court confirmed in the judgment in Redmond Stichting that, even if some activities of an undertaking constituting an independent function — in this case Philips's production activity — are not transferred, the provisions of the Directive may still be applicable; those provisions were

The Directive and the alteration by the employer of the arrangements for the payment of wages

8. The national court's third question seeks to establish whether it is contrary to the Directive for the new employer to alter arrangements for the payment of wages, in particular the pay day and the way in which wages are made up — but not the total amount ultimately paid. Although the question refers solely to paragraph 2 of Article 3 of the Directive, it seems desirable to me to relate it also to paragraph 1 of that provision. It cannot be told from the documents in the case-file whether the advantages mentioned by the plaintiffs in the main proceedings are based on a collective agreement or on a legal or administrative provision. I shall therefore set out the relevant passages of Article 3 of the Directive:

9. Before answering that question, it is worth recalling the purpose of those provisions within the framework of the Directive. As the Court has repeatedly stated, the purpose of the Directive is

10. It follows from the foregoing that, in replying to the third question, the Court can do no more than refer to the national law of the Sø-og Handelsretten i København: it is for that court to consult the system of social protection elaborated by the national rules — set out, not only in legislative and administrative provisions, but also in collective agreements and other provisions of general scope. In so far as national law allows the employer unilaterally to alter the time of payment and/or the composition of wages (while leaving the total amount unaffected) in situations other than the transfer of an undertaking, Community law does not automatically preclude such alterations merely because the undertaking or part of it has been transferred in the meantime. In other words, under the Directive, the employment relationship may be altered unilaterally by the employer with regard to the transferee to the same extent as it could have been with regard to the transferor, provided that the transfer of the undertaking itself may never constitute the reason for that amendment.

Conclusion

11. In view of the foregoing, I propose that the Court should answer the national court's questions in the following terms:

1 Original language: Dutch.

2 OJ 1977 L 61, p. 26.

3 Law No 111 of 21 March 1979 on the legal situation of employees in the event of transfers of undertakings. It was by that law that Denmark implemented the Directive.

4 Judgments in Case 101/87 Bork International v Foreningen af Arbejdsledere i Danmark [1988] ECR 3057, paragraph 13, and in Case C-29/91 Redmond Stichting v Bartol and Others [1992] ECR I-3189, paragraph 11.

5 Judgment in Case 287/86 Ny Mølle Kro [1987] ECR 5465, paragraph 12.

6 Judgments in Case 24/85 Spijkers v Benedik [1986] ECR 1119, paragraph 12, and in Redmond Stichting, paragraph 23.

7 Judgments in Redmond Stichting, paragraph 24, and in Spi/kers v Benedik, paragraph 13; cf. also Bork International v Foreningen af Arhc/dsledere i Danmark, paragraph 15.

8 The Court followed the same reasoning, moreover, in Redmond Stichting, paragraph 29.

9 See my Opinion in that case, in particular at sections 6 to 12.

10 Judgments in Spi/hen v Benedik, paragraph 14, and in Redmond Stichting, paragraph 29.

11 Judgment in Case 186/83 Botzen v Rotterdamsebe Droogdok Maatschappij [1985] ECR 519, paragraph 15.

12 Judgment in Redmond Stichting, paragraph 30.

13 Judgment in Ny Molle Kro, paragraph 25; cf. the judgments in Case 19/83 Wendelboe [1985] ECR 457, paragraph 15, and in Case 105/84 Danmols Inventar [1985] ECR 2639, paragraphs 15 and 26.

14 Cf., as regards Article 3(2), the ludgment in Ny Molle Kro paragraph 26.

15 Judgment in Case 324/86 Foreningen af Arbejdsledere t Danmark v Daddy's Dance Hall [1988] ECR 739, paragraph 16; judgment in Danmols Inventar, paragraph 26.

16 Cf. the judgment in Daddy's Dance Hall, paragraph 17.