Employment Update, Germany - February 2007

20 February 2007

Dr Martin Nebeling, Catharina Klump

Case Update

Acquired Rights Directive - Werhof v Freeway Traffic Systems GmbH & Co. KG, judgment of European Court of Justice (ECJ) of March, 9.2006

The claimant’s employment contract was governed by a collective bargaining agreement (“Tarifvertrag”). The agreement in question was renegotiated to provide for an increase in wages in addition to other payments. The claimant’s employment was transferred to the defendant’s business prior to the renegotiation. The transferee was not a member of any employer’s association and was not party to any collective agreements. The claimant brought a claim for the additional payments to which he would have been entitled under the renegotiated scheme had he still been employed by the transferor.

The regional labour court addressed the issue of whether or not Article 3(1) of the Directive binds a transferee to any collective agreements in force at the time of the transfer (to which the transferor was a party) and which is referred to in the employees’ contracts of employment.

The court held that the transferee will be bound by any collective bargaining agreement existing at the time of the transfer. This is because the intention of the Directive is to safeguard the rights of employees. However, the transferee will not be bound by any changes to such a collective agreement which take place after the transfer if they are not themselves members of the employers’ association.