Jouini v Princess Personal Service GmbH (Case C-458/05)

ECJ: K Lenaerts, President of Chamber; E Juhász, G Arestis, Malenovský and T von Danwitz, Judges; Y Bot, Advocate General: 13 September 2007

After M GmbH, a temporary employment undertaking in Austria, had run into difficulties the defendant company was formed in order in particular to continue to provide services for its principal client. Part of the management staff moved to the defendant when M GmbH ceased business, as did some two-thirds of employees that had been seconded to the principal client, who continued to be assigned to that client after the move, and some other clients and the employees that had been assigned to them. The claimants, certain transferred employees whose outstanding salaries had not been paid by M GmbH, brought proceedings against the defendant for, inter alia, payment of arrears of salary, contending that there had been a transfer of part of M GmbH's business to the defendant.

The Oberster Gerichtshof, inter alia, uncertain as to whether there could be a transfer of an economic entity in the case of a business such as a temporary employment agency which did not have an identifiable organisational structure, referred to the Court of Justice of the European Communities for a preliminary ruling a question as to whether a set of circumstances such as that in the case before it came within Council Directive 2001/23/EC on the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses.

The Court of Justice held:
Where part of the administrative personnel and part of the workforce of a temporary employment business were transferred to another temporary employment agency in order to carry out the same activities for the same clients, Directive 2001/23 was applicable if the assets affected by the transfer were sufficient in themselves to allow the services characterising the economic activity of the business to be provided without recourse to other significant assets or to other parts of the business.