Boarding Passes Ready - When Employees May Unexpectedly Move Around Within A Corporate Group

The European Court of Justice (the "ECJ") has ruled that, in certain circumstances, when a subsidiary company is wound up, its employees will transfer automatically to its holding company.

What happened?

Air Atlantic SA ("AIA") was a Portuguese company operating in the aviation sector. It had been providing charter (or non-schedule) flight services since 1985.

On 19 February 1993, AIA was wound up. During the winding-up, several of AIA's employees were dismissed as part of a collective redundancy.

TAP – the Portuguese flag carrier – was the main shareholder in AIA. From 1 May 1993, TAP began operating some of the charter flights that AIA had agreed to provide up to 31 October 1993. In addition, TAP, which had not previously been active in the charter flights sector, began operating its own charter flights on the same routes used by AIA.