Select Committee on European Communities Twenty-Second Report

Appendix 4


(presented by the Commission)


  The European Parliament, the Economic and Social Committee and the Committee of the Regions have adopted their respective opinions on the proposal for a Council Directive amending Directive 77/187/EEC on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings.

  The present amended proposal for a Directive, submitted in accordance with Article 189A(2) of the EC Treaty, takes into account the amendments of the European Parliament approved on 16 January 1997, the opinion of the Economic and Social Committee adopted on 30 March 1995 and the opinion of the Committee of the Regions adopted on 21 April 1995. Several technical improvements have been made in the interests of legal certainty and consistency.


  In connection with the discussion of Article 1(1), second subparagraph, of the reference proposal for a Directive[5], which we shall examine below, the European Parliament had already requested, in its Resolution of 18 January 1996, that the proposal for a Directive replacing Directive 77/187/EEC be transformed into a proposal for a Directive amending Directive 77/187/EEC. The title of the present proposal takes account of the opinion of the European Parliament on this point. As soon as the amended proposal has been adopted by the Council, the Commission will initiate the codification procedure laid down in the Interinstitutional agreement of 20 December 1994[6] designed to ensure that Community legislation is clear and is understood correctly. In the light of the above, the first recital has therefore been deleted, as requested by Parliament.


  Article 1, paragraph 1, of the Commission proposal was analysed several times in the Council's Working Party on Social Questions under both the German Presidency (second half of 1994) and the French Presidency (first half of 1995). These Meetings revealed certain problems of Comprehension relating to the definition of the transfer of undertakings as set out in this Article (clarification of the transfer of only an activity of the undertaking).

  The Economic and Social Committee delivered an opinion on this proposal on 30 March 1995[7], as did the Committee of the Regions on 21 April 1995[8]. The scope of the Directive (the transfer of only an activity of an undertaking) has always been the most controversial point. In particular, the Economic and Social Committee questioned the ability of a new Article 1, Paragraph 1, to clarify this issue and proposed a new text. The employees' group tabled an amendment designed to exclude subcontracting from the scope of the Directive. This amendment was rejected.

  The European Parliament was highly critical of the concept of the transfer of undertakings, as defined in Article 1, Paragraph 1, of the proposal. The various political groups in the Parliament took the view that the proposed amendments to Article 1, Paragraph 1, did not improve legal certainty and, on the contrary, introduced new sources of uncertainty which might prove detrimental to the rights of workers and the interests of firms. A resolution was therefore adopted at the plenary sitting of 18 January 1996 with the unanimous agreement of all the political groups, calling on the Commission to propose an amended version of Directive 77/187/EEC, without replacing it by a new text, and to leave Article 1(1), second subparagraph, unchanged.

  In the light of the opinions adopted by the Economic and Social Committee and the Committee of the Regions, the progress of discussions in the Council's Working Party on Social Questions, and Resolution B4-00033/96 of 18 January 1996 adopted unanimously by the European Parliament, the Commission decided on 7 February 1996[9] to inform Parliament that it would be willing to accept amendments designed to transform its proposal for the revision of Council Directive 77/187/EEC into a Directive amending Directive 77/187/EEC and to delete the proposed amendment to Article 1(1), second subparagraph, contained in the initial proposal.

  Given that Parliament proposes in its opinion that Article 1(1), second subparagraph, be deleted, and in the light of the above analysis, the Commission has amended its proposal accordingly and has deleted the seventh recital, as requested by Parliament.


Paragraph 1, second subparagraph

  Parliament calls for joint and several liability of the transferor and the transferee in respect of obligations which arise from a contract of employment. The Commission's proposal had already taken this aspect into account. Nevertheless, in order to make the wording clearer and more precise, and to avoid false interpretations, the Commission now proposes that this liability be limited to the obligations that fall due prior to the date of the transfer.

Paragraph 5 (new)

  The main objective of Directive 77/187/EEC, according to its recitals, is to protect workers in the event of a change of employer, in particular to ensure that their rights are safeguarded. Consequently, any amendment which reduces the protection afforded to certain benefits connected to the transfer rule (as provided for in Articles 3(4) and 4(3) and (4) of the proposal for undertakings, businesses or parts of businesses transferred in the context of certain insolvency proceedings) must be examined with particular care. Accordingly, it is necessary to bolster the adoption of measures to prevent the fraudulent use of insolvency proceedings, as requested by Parliament.


Paragraph 3

  The responsibility of the employees' representatives, given that they may permit changes to the terms and conditions of employment with the agreement of the employer or his representatives, means that they must enjoy sufficient independence to be able to carry out the functions assigned to them (see Article 5 A (new) ).

  The Commission proposal now takes account of Parliament's amendment on this point.

Paragraph 4

  The amended proposal takes into account the amendment of the European Parliament, which adds the terms "referred to in the agreement" to paragraph 4. By improving the text's clarity, this will make it easier to understand.

Paragraph 5

  The powers given to the judicial authorities to terminate a contract of employment or an employment relationship may cause considerable difficulties in the national law of some Member States which do not provide for such a possibility. The Commission welcomes Parliament's comment concerning the deletion of this paragraph, and its proposal removes potential legal obstacles at a non-essential point in the text.


  In view of inter alia, the powers granted in Article 4, paragraph 4, to the employees' representatives, who may, in certain cases, amend the terms and conditions of employment, it appears necessary to strengthen their role so that they enjoy sufficient independence to accomplish their tasks.

  This effectively reflects the idea expressed by Parliament on this point.


Paragraph 1

  Technical improvements have been made to the text so that it is clearer and and more legally precise, and hence easier to understand: when the transfer of an undertaking, business or part of a business is planned, the transferor and the transferee are obliged to inform the representatives of their respective employees affected by the transfer.

Paragraph 2

  This small grammatical change ("when") makes the wording of the proposal for a Directive more precise.

Paragraph 4

  The inclusion of the spirit of the European Parliament amendment improves the wording of the proposal. Accordingly, any failure to comply with the Directive's provisions on consultations, which results from the fact that the undertaking or the natural or legal person who/which took the transfer desision failed to inform the employer in due time, cannot be tolerated. Recital No 13 has been drafted in harmony with this paragraph.

Paragraph 5

  Given that the adoptions of minimum rules at European level on information and consultation in national undertakings could be planned under the Communication from the Commission on Worker Information and Consultation[10], and that such rules could stipulate a minimum threshold concerning the obligation to provide for employees' representatives, it would be wise not to make any changes in this area for the time being and to leave the wording of the existing directive in its current form, as requested by Parliament.

Article 7A (new)

  To ensure that Community law is properly implemented, the Member States must provide for effective, proportionate and dissuasive sanctions in the event of failure to comply with the national provisions adopted under the Directive. Parliament's amendment adopted in the light of the case-law of the Court of Justice strengthens the Commission's text. This amendment is in keeping with the Commission's Medium-Term Social Action Programme 1995-1997[11], point 11.1.8 of which states that "Member States' authorities must ensure that Union legislation is fully enforced through inter alia appropriate systems of control or sanctions, which are effective in practice and have a deterrent value". In the same point, the Commission also commits itself to insert in all future legislation a "standard clause" establishing an obligation for Member States to impose sanctions which are effective, proportionate and dissuasive.

Article 7B (new)

  A clause has been inserted banning discrimination on the basis of race, sex, age, handicap, sexual orientation, skin colour, religion or nationality, which is in line with the Communication from the Commission on racism, xenophobia and anti-semitism of 13 December 1995[12]. The Commission therefore welcomes the European Parliament's approach in this area.

Recital No 18 (new) has been drafted in line with this Article.

5   COM(94 300 final, of 8.9.1994, 94/0203(CNS), OJ C 274 of 1.10.1994, p.10. Back

6   Interinstitutional Agreement of 20.12.1994. Accelerated working method with a view to the official codification of legislative texts signed by the Commission of the European Communities, the European Parliament the Council of the European Union. Back

7   CES 317/95. Back

8   CdR 143/95. Back

9   PV (96) 1279, pages 23 and 24. Back

10   COM (95) 0547. Back

11   COM (95) 134. Back

12   COM (95) 653 final. Back

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