In a departure from the traditional approach to business transfers, the European Court of Justice ('CJ') has held that employees can be transferred to multiple employers where a transfer of an undertaking results in the employment being divided between multiple employers. In practical terms, this could mean that employees are potentially able to be split on a part-time basis between different employers.
In ISS Facility Services NV v Sonia Govaerts & Atalian NV, the CJ held that this can happen so that the contractual rights and obligations of the individuals concerned may transfer to each new employer in the proportion to the tasks performed. The CJ held that this would only be possible where the division of the contract would not adversely affect the worker's rights or working environment. If the division of the contract adversely affected the individual, the new employers would be liable for any subsequent termination of employment. The CJ provided no commentary on how the division of an employment contract between multiple employers would work in practice.
This case highlights a rare situation in which one business is split up and transferred to different employers. Usually in this situation, an employee would transfer to only one of the new employers, depending on their role. Following this decision, it may be possible for employees to be split between the new employers. Careful consideration will need to be given to any employee potentially in this situation, and employers should obtain legal advice if they are in this situation.
Originally published 21 August, 2020
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