Albron Catering BV v FNV Bondgenoten and another
Employees of Heineken International Group were employed by Heineken Nederlands Beheer, a service company that permanently assigned staff to various operating companies within the group. Mr Roest was employed by Heineken Nederlands Beheer in a catering role and assigned to Heineken Nederland BV, which supplied catering for Heineken employees.
On 1 March 2005, Heineken Nederland BV's catering activities were transferred by contract to Albron Catering BV, which provides catering in staff restaurants. Mr Roest was employed by Albron Catering BV from 1 March 2005. Mr Roest subsequently brought a claim in the Netherlands alleging that the transfer of the catering business from Heineken Nederland BV to Albron Catering BV constituted the transfer of an undertaking under the Acquired Rights Directive (2001/23/EC), so that Heineken Nederlands Beheer employees assigned to Heineken Nederland BV transferred automatically to Albron Catering BV. Albron Catering BV should therefore have honoured the employment conditions that applied between Mr Roest and Heineken Nederlands Beheer before the transfer.
A reference was made to the ECJ, which was asked to determine whether or not it is possible to regard group company A (the group company to which the employees were permanently assigned) as a "transferor" under the Acquired Rights Directive, given that the employees actually had employment contracts with group company B.
The ECJ considered that the Acquired Rights Directive's requirement that there be either an employment contract or an employment relationship at the transfer date suggests that a contractual link with the transferor is not always required for employees to benefit from the Directive's protection.
Heineken Nederland BV could be regarded as Mr Roest's "non-contractual employer" and Heineken Nederlands Beheer as his "contractual employer". In such a situation, according to the ECJ, the Acquired Rights Directive does not prevent the non-contractual employer from being capable of being regarded as a "transferor". Here, there had been a transfer under the Directive when the catering activities of Heineken Nederland BV were outsourced to Albron Catering BV.
The relevant wording of the UK's Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE) is different to that of the Acquired Rights Directive. TUPE may appear to preclude a transfer of the employees in the situation in Albron Catering BV, as the transferring employees must be "employed" by the transferor.
However, things are far from clear as TUPE defines an employee (and by extension "employed") as someone "who works ... whether under a contract of service or apprenticeship or otherwise". Arguably, the words "or otherwise" could be read as referring to this sort of non-contractual relationship. Given the obligation on the UK employment tribunals to interpret TUPE so far as possible in accordance with the aims of the Directive, this might well result in "employed" being given this interpretation.
In view of the evolution of case law, many UK employers faced recently with the transfer of a business out of a group company with arrangements of the type seen in this case will have proceeded on the basis that TUPE applies.
The ECJ's decision now confirms this as the correct approach. Employers purchasing assets or taking on outsourced services from a group business whose staff are employed by another group company will have to be clear about which staff are assigned to the transferring undertaking to avoid the risk of acquiring unexpected liabilities under TUPE.
Also, as the ECJ's decision has retrospective effect, it will apply to outsourcing agreements currently in force. As such, where employees with Albron-type employment arrangements have been taken on by a third-party service provider, but there have been changes to their terms and conditions, there is a risk of these changes being found to be void.
Jonathan Exten-Wright, partner, DLA Piper