Employment Briefing - December 2010

Acquired Rights Directive and Service Company Transfers

The ECJ has ruled in Albron Catering BV v FNV Bondgenoten and another that where employees of a service company (A) are permanently assigned to another group company (B) the Acquired Rights Directive will treat the 'non contractual' employer, B, as the transferor. Article 3(1) of the ARD provides that 'the transferor's rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer shall, by reason of such transfer, be transferred to the transferee'. The ECJ held that this wording (and in particular the concept of 'an employment relationship') suggests that there need not be a contractual nexus between the transferor and the employees in order for the provisions of the ARD to bite.