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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Agorastoudis and Others (Social policy) [2006] EUECJ C-187/05 (07 September 2006) URL: http://www.bailii.org/eu/cases/EUECJ/2006/C18705.html Cite as: [2006] ECR I-7775, [2006] EUECJ C-187/05, [2006] EUECJ C-187/5

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JUDGMENT OF THE COURT (First Chamber)

7 September 2006 (*)

(Collective redundancies - Directive 75/129/EEC - Article 1(2)(d) - Termination of an establishment's activities as a result of a judicial decision - Termination of an establishment's activities of the employer's own volition)

In Joined Cases C-187/05 to C-190/05,

REFERENCES for a preliminary ruling under Article 234 EC from the Arios Pagos (Greece), made by decisions of 17 March 2005, received at the Court on 27 April 2005, in the proceedings

Georgios Agorastoudis and Others (C-187/05),

Ioannis Panou and Others (C-188/05),

Kostantinos Kotsampougioukis and Others (C-189/05),

Georgios Akritopoulos and Others (C-190/05)

v

Goodyear Hellas AVEE,

intervening parties:

Geniki Sinomospondia Ergaton Elladas (GSEE),

Ergatoipalliliko Kentro Thessalonikis (C-187/05 and C-189/05),

THE COURT (First Chamber),

composed of P. Jann, President of the Chamber, K. Schiemann, N. Colneric, E. Juhász (Rapporteur) and E. Levits, Judges,

Advocate General: D. Ruiz-Jarabo Colomer,

Registrar: L. Hewlett, Principal Administrator,

having regard to the written procedure and further to the hearing on 27 April 2006,

after considering the observations submitted on behalf of:

- Mr Agorastoudis and Others, by A. Kazakos, dikigoros,

- Mr Panou and Others, by A. Kazakos, dikigoros,

- Mr Kotsampougioukis and Others, by A. Kazakos, dikigoros,

- Mr Akritopoulos and Others., by A. Kazakos, dikigoros,

- Goodyear Hellas AVEE, by K. Kremalis and I.-D. Filiotis, dikigori,

- Geniki Sinomospondia Ergaton Elladas (GSEE), by A. Kazakos, dikigoros,

- the Commission of the European Communities, by M. Kontou-Durande and G. Rozet, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 The references for a preliminary ruling relate to the interpretation of Article 1(2)(d) of Council Directive 75/129/EEC of 17 February 1975 on the approximation of the laws of the Member States relating to collective redundancies (OJ 1975 L 48, p. 29).

2 The references were made in proceedings between dismissed workers and their former employer concerning the legality of their collective redundancies, prompted by the termination of the establishment's activities which was decided upon by the employer of its own volition.

Legal context

Community legislation

3 Directive 75/129, founded on Article 100 of the EEC Treaty (which became Article 100 of the EC Treaty, now Article 94 EC), has the aim, as the first recital in its preamble states, that "greater protection should be afforded to workers in the event of collective redundancies while taking into account the need for balanced economic and social development within the Community". The second recital records that, "despite increasing convergence, differences still remain between the provisions in force in the Member States of the Community concerning the practical arrangements and procedures for such redundancies and the measures designed to alleviate the consequences of redundancy for workers". For that reason, it is stated in the fifth recital that the approximation of the provisions in force in the Member States must be promoted while the improvement is being maintained within the meaning of Article 117 of the EEC Treaty (which became Article 117 of the EC Treaty; Articles 117 to 120 of the EC Treaty have been replaced by Articles 136 EC to 143 EC).

4 Article 1 of Directive 75/129 determines the directive's scope as follows:

"1. For the purposes of this Directive:

(a) "collective redundancies" means dismissals effected by an employer for one or more reasons not related to the individual workers concerned where, according to the choice of the Member States, the number of redundancies is:

- either, over a period of 30 days:

(1) at least 10 in establishments normally employing more than 20 and less than 100 workers;

(2) at least 10% of the number of workers in establishments normally employing at least 100 but less than 300 workers;

(3) at least 30 in establishments normally employing 300 workers or more;

- or, over a period of 90 days, at least 20, whatever the number of workers normally employed in the establishments in question;

...

2. This Directive shall not apply to:

(a) collective redundancies [effected] under contracts of employment concluded for limited periods of time or for specific tasks except where such redundancies take place prior to the date of expiry or the completion of such contracts;

(b) workers employed by public administrative bodies or by establishments governed by public law (or, in Member States where this concept is unknown, by equivalent bodies);

(c) the crews of sea-going vessels;

(d) workers affected by the termination of an establishment's activities where that is the result of a judicial decision."

5 Article 2 of Directive 75/129 imposes certain obligations on employers who are contemplating collective redundancies. First, the employer is to begin consultations with the workers" representatives which, at least, cover ways and means of avoiding redundancies or reducing the number of workers affected, and mitigating the consequences. In addition, to enable those representatives to make constructive proposals, the employer is to give them all relevant information and in any event, in writing, the reasons for the redundancies, the number of workers to be made redundant, the number of workers normally employed and the period over which the employer is to effect the redundancies.

6 Article 3(1) of the directive states:

"Employers shall notify the competent public authority in writing of any projected collective redundancies.

This notification shall contain all relevant information concerning the projected collective redundancies and the consultations with workers" representatives provided for in Article 2, and particularly the reasons for the redundancies, the number of workers to be made redundant, the number of workers normally employed and the period over which the redundancies are to be effected."

7 Article 4(1) of the directive provides:

"Projected collective redundancies notified to the competent public authority shall take effect not earlier than 30 days after the notification referred to in Article 3(1) ...

..."

8 Finally, Article 5 provides that the directive "shall not affect the right of Member States to apply or to introduce laws, regulations or administrative provisions which are more favourable to workers".

9 Directive 75/129 was amended by Council Directive 92/56/EEC of 24 June 1992 (OJ 1992 L 245, p. 3), following the adoption of the Community Charter of the Fundamental Social Rights of Workers at the European Council meeting held in Strasbourg on 9 December 1989. The amendments involve, in essence, the strengthening of the employer's obligations, laid down in Article 2 of Directive 75/129, regarding the informing and consulting of workers" representatives and, by the insertion of Article 5a in that directive, the imposition of an obligation on the Member States to ensure that judicial and/or administrative procedures for ensuring fulfilment of the obligations under Directive 75/129 are available to the workers" representatives and/or workers.

10 As part of those amendments, Article 1(2)(d) of Directive 75/129 was deleted.

11 The amendments also involved the addition of the following subparagraph after the first subparagraph of Article 3(1) of Directive 75/129:

"However, Member States may provide that in the case of planned collective redundancies arising from termination of the establishment's activities as a result of a judicial decision, the employer shall be obliged to notify the competent public authority in writing only if the latter so requests."

12 Directive 92/56 also provided for a fourth paragraph, worded as follows, to be added to Article 4 of Directive 75/129:

"4. Member States need not apply this Article to collective redundancies arising from termination of the establishment's activities where this is the result of a judicial decision."

National legislation

13 Directive 75/129 was transposed into Greek law by Law 1387/1983.

14 Article 3 of this Law provides for the employer to supply the workers with full information in writing on the collective redundancies contemplated and on the reasons for them, and obliges him to begin consultations with the workers" representatives and to disclose to them any information which may enable them to make constructive proposals. The Law also obliges the employer to communicate that information to the competent public authority. In addition the Law contains, in Article 5(3), a provision favourable to workers according to which, if the parties do not reach an agreement, the prefect or the Minister for Labour may, depending on the situation on the market and the situation of the undertaking in question, either extend the consultation for a further 20 days or not approve all or some of the planned redundancies.

15 Article 1(2)(d) of Directive 75/129 was transposed into domestic law by Article 2(2)(c) of Law 1387/1983, which states:

"The provisions of this Law shall not apply to workers who are dismissed by reason of the termination of the undertaking's or establishment's activities following a first-instance judicial decision."

16 The amendments made by Directive 92/56 were transposed into national law by Laws 2736/1999 and 2874/2000, that is to say after the material events in the main proceedings, which occurred in July 1996. The period for transposition of the amendments into domestic law, laid down in Article 2 of Directive 92/56, had expired on 24 June 1994, namely before those events.

The main proceedings and the question referred for a preliminary ruling

17 According to the orders for reference, the claimants in the main proceedings used to work, under employment contracts of indefinite duration, in Goodyear Hellas's industrial branch, located in the industrial zone of Thessaloniki. That factory essentially produced tyres and inner tubes for motor vehicles and materials for the repair and retreading of tyres. The factory, which formed an organised body of human and technical resources, constituted the industrial branch of the undertaking in question, was separate from its commercial branch established in Athens and was economically independent of the latter.

18 On 19 July 1996 it was resolved at a general meeting of the shareholders of Goodyear, the parent company established in the United States of America, to cease the industrial activity and to close down the Thessaloniki factory definitively from 22 July 1996. The employment contracts of the staff employed in the undertaking's industrial branch, that is to say of some 340 individuals, were terminated from the same date, without the conditions and procedure regulating collective redundancies, laid down by Law 1387/1993 as then in force, being observed. Dismantling of the industrial branch's facilities began in October 1996.

19 The actions brought by the dismissed employees against the decisions prompted by this termination of operations were dismissed at first instance and, on appeal, by the Efetio Athinon (Court of Appeal, Athens). The Efetio Athinon held, in accordance with the settled case-law of Greek courts, that since Greek law does not provide for a judicial decision where an undertaking's activities are terminated definitively of the employer's own volition, such an employer is not subject to the obligations laid down by Directive 75/129 and by the national implementing legislation.

20 It was in those circumstances that the Arios Pagos (Supreme Court of Cassation), before which appeals on a point of law had been brought, decided to stay proceedings and, in each of the four cases before it, to refer the following question to the Court for a preliminary ruling:

"Given that Greek (national) law does not provide for a prior judicial decision where an undertaking or establishment is closed down definitively of the employer's own volition, under Article 1(2)(d) of Council Directive 75/129/EEC does that directive apply to collective redundancies caused by the definitive termination of the operation of an undertaking or establishment which has been decided on by the employer of his own accord without a prior judicial decision on the matter?"

21 By order of the President of the Court of 9 June 2005, the present cases were joined for the purposes of the written and oral procedure and of the judgment.

Consideration of the question referred

22 By its question, the national court essentially asks whether Directive 75/129 is applicable in the case of collective redundancies caused by the definitive termination of the operation of an undertaking or establishment which has been decided on by the employer of his own accord without a prior judicial decision and, more specifically, whether the exception laid down in Article 1(2)(d) of the directive may justify its application being precluded.

23 The question which the Court is asked arises from the settled case-law of Greek courts concerning the application of Directive 75/129 and of the domestic legislation transposing it.

24 Under that case-law, if the decision to terminate an undertaking's activities definitively is made by the employer of his own volition - in accordance with the constitutionally guaranteed economic and financial freedom which he enjoys - irrespective of a judicial decision, Directive 75/129 is not applicable. The directive's application is dependent on the undertaking's continued operation.

25 No basis can be found for that interpretation in the wording of Directive 75/129, in the objective or purpose pursued by it or in the Court's case-law relating to the directive.

26 First, the wording of Directive 75/129, in particular of Article 1(1)(a) and (2)(d), is clear and allows for no reasonable doubt as to the directive's scope and the conditions governing its application.

27 In accordance with Article 1(1)(a) of Directive 75/129, ""collective redundancies" means dismissals effected by an employer for one or more reasons not related to the individual workers concerned ...". This definition is in itself sufficiently precise and contains no ambiguity.

28 The Court has explained this concept of "redundancy" by stating that it has a Community law meaning and has to be interpreted as including any termination of contract of employment not sought by the worker, and therefore without his consent (Case C-55/02 Commission v Portugal [2004] ECR I-9387, paragraphs 49 and 50).

29 Having regard to the rule set out in Article 1(1)(a) of Directive 75/129, the four cases where the directive does not apply, cited in Article 1(2), have to be regarded as constituting an exhaustive list. Furthermore, as exceptions to that rule, they must be construed narrowly (see, to this effect, Case C-250/97 Lauge and Others [1998] ECR I-8737, paragraph 19).

30 The fourth of those exceptions, namely the exception which is laid down in Article 1(2)(d) of Directive 75/129 and to which the question submitted by the national court refers, concerns the directive's inapplicability to redundancies caused by the termination of an establishment's activities where their termination "is the result of a judicial decision".

31 That provision can be interpreted only as meaning that the directive is allowed not to apply solely where the termination of an establishment's activities is the result of a judicial decision, for example, a decision ordering the compulsory liquidation or the winding-up of an undertaking.

32 In all other cases, including where the definitive termination of the activities of the undertaking concerned is of the employer's own volition and where it is founded on assessments of an economic nature or of another kind, the employer's obligations, flowing from Directive 75/129, remain intact. The fact that the provisions of domestic law, to which the national court refers, do not envisage a prior judicial decision where an undertaking or establishment is closed down definitively of the employer's own volition is irrelevant in this connection.

33 It is to be noted that the exemption in Article 1(2)(d) of Directive 75/129 was deleted with effect from 24 June 1994 by Directive 92/56, which thus reinforced the objective pursued. Therefore, at the material time, employers were obliged to inform and consult workers in all cases of collective redundancy following the termination of an establishment's activities, even where their termination was the result of a judicial decision.

34 With regard, second, to the objective pursued by Directive 75/129, as the first recital in its preamble states, the directive is intended to afford greater protection to workers in the event of collective redundancies. That aim of protecting workers has been noted repeatedly by the Court (see Case C-449/93 Rockfon [1995] ECR I-4291, paragraph 29, and Lauge andOthers, paragraph 19).

35 The Court has pointed out that Directive 75/129 does not affect the employer's freedom to effect or refrain from effecting collective redundancies and that its sole object is to provide for consultation with the trade unions and for notification of the competent public authority prior to such dismissals (Case 284/83 Nielsen & Søn [1985] ECR 553, paragraph 10).

36 That is undoubtedly the case where an employer is minded, for particular reasons of his, to bring operation of his establishment to an end. As the Commission of the European Communities moreover rightly observes, Directive 75/129 harmonises not the manner in which an establishment's activities are definitively terminated, that is to say the circumstances in which a judicial decision is necessary, but the procedure to be followed at the time of collective redundancies.

37 In the light of the objective pursued by Directive 75/129, the Court has defined the term "establishment" appearing therein very broadly, in order to limit as far as possible cases of collective redundancies which are not subject to the directive because of the legal definition of that term at national level (see Rockfon, paragraphs 31 and 32).

38 The Court has also pointed out that Directive 75/129 was adopted on the basis of Articles 100 and 117 of the EEC Treaty, the latter provision concerning the need for the Member States to promote improved working conditions and an improved standard of living for workers, so as to make possible their harmonisation while the improvement is being maintained (Rockfon, paragraph 29).

39 Third, the interpretation set out above and related matters are already apparent from the Court's case-law.

40 In Case 215/83 Commission v Belgium [1985] ECR 1039, paragraphs 13 to 19, the Court held specifically that the Member State concerned had failed to fulfil its obligations because it did not provide workers with the protection envisaged by Directive 75/129 in all cases of collective redundancies which arose from closures of undertakings that were not the result of a judicial decision. From the date of that judgment at the latest, there was no longer any doubt as to the meaning of the exemption laid down in Article 1(2)(d) of Directive 75/129.

41 The derogations set out in the second subparagraph of Article 3(1) and Article 4(4) of Directive 75/129, provisions which were inserted by Directive 92/56, were explained by the Court in its judgment in Lauge and Others (paragraph 18), according to which, in order for those derogations to be applicable, the termination of the activities of the establishment and the collective redundancies must not take place prior to the judicial decision making a winding-up order.

42 Furthermore, in Commission v Portugal (paragraph 66 and the operative part), the Court held that the Member State concerned had failed to fulfil its obligations under Directive 75/129 since it restricted the concept of collective redundancies to redundancies for structural, technological or cyclical reasons and failed to extend that concept to dismissals for any reason not related to the individual workers concerned.

43 Fourth and finally, in accordance with settled case-law, the obligation on Member States to achieve the result prescribed by a directive, in order to comply with the third paragraph of Article 249 EC, is binding on all national authorities, including the courts. When the latter are called upon to interpret and apply national law, they are bound to do so, so far as possible, in the light of the wording and the purpose of the directive in order to achieve the result sought by it (see to this effect, most recently, Joined Cases C-397/01 to C-403/01 Pfeiffer and Others [2004] ECR I-8835, paragraph 113, and the case-law cited).

44 However, the approach followed by the Greek courts removes the protection sought by Directive 75/129 in numerous cases of termination of an undertaking's activities where mass redundancies of workers result and those workers" need for protection is precisely greater, contrary to the objective pursued by that directive. Such an approach, which also prejudices the requirement for uniform application of Directive 75/129, is liable to render the directive largely meaningless.

45 It follows from the foregoing that the answer to the question referred must be that Directive 75/129 must be interpreted as being applicable in the case of collective redundancies that result from the definitive termination of the operation of an undertaking or establishment which has been decided on by the employer of his own accord without a prior judicial decision, and the exception laid down in Article 1(2)(d) of that directive cannot preclude its application.

Costs

46 Since these proceedings are, for the parties to the main proceedings, a step in the actions pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (First Chamber) hereby rules:

Council Directive 75/129/EEC of 17 February 1975 on the approximation of the laws of the Member States relating to collective redundancies must be interpreted as being applicable in the case of collective redundancies that result from the definitive termination of the operation of an undertaking or establishment which has been decided on by the employer of his own accord without a prior judicial decision, and the exception laid down in Article 1(2)(d) of that directive cannot preclude its application.

[Signatures]

* Language of the case: Greek.