Federal Labour Court, 17 November 2010 - 4 AZR 391/09 (and others)
In today's business world, it is normal for companies or parts of companies to be sold and transferred to another company.
If certain conditions are met, the sale or purchase of a business then constitutes what is known as a transfer of business from a labour law perspective. The legal consequences of such a transfer of business are governed by Section 613a BGB. If a transfer of business takes place, the new owner assumes the rights and obligations of the employment relationships that existed at the time of the transfer of business in accordance with Section 613a (1) sentence 1 BGB. This transfer of employment relationships is therefore a mandatory legal consequence of the transfer of the business from which it is only possible to deviate in favour of the employees. This means, among other things, that the employee does not have to agree to the conclusion of a new employment contract or that claims from company pension schemes or claims from company exercises are also transferred.
However, the legal consequences of a transfer of business under an employment contract can be more problematic if a decision has to be made on the continued validity of collective agreements.
In principle, the parties to an employment contract can agree that the terms and conditions of employment should be based on a collective agreement. This provision in the employment contract then constitutes a so-called "collective bargaining reference clause".
In the case of a reference, reference can then be made either to a specific collective agreement (static reference) or to a collective agreement in its currently valid version (dynamic reference). The dynamic reference is then usually organised in the following forms:
* Small dynamic reference clause: Reference is made to the respective valid version of the specific collective agreement.
* Large dynamic reference clause: Reference is made in each case to the collective agreement applicable to the company in its currently valid version.
In six parallel decisions, the Federal Labour Court has now once again had to decide in principle whether, in the event of a transfer of business, such a small dynamic reference in an employment contract can be interpreted beyond its wording as a large dynamic reference if this results from special circumstances. This was decisive for the question of whether a transfer of business with a change of industry led to a change in the collective bargaining law applicable to the transferred employment relationship.
FactsThe plaintiff was an employee of the city of R., which was a member of the municipal employers' association. The plaintiff's employment contract therefore contained the following provision:
"The employment relationship shall be governed by the provisions of the Federal Collective Agreement for Workers in Public Administrations and Enterprises (BMT-G II) ... as amended from time to time. The same applies to the collective agreements replacing it. In addition, the other collective agreements in force for the area of the employer shall apply. ..."
The plaintiff's employment relationship was then transferred to a GmbH, which also belonged to the Municipal Employers' Association, as part of a transfer of the "cleaning" division. The plaintiff, who was employed as a cleaner, did not object to the transfer of her employment relationship to the defendant. After the transfer, the defendant then paid the plaintiff in accordance with the collective agreements for commercial employees in the building cleaning trade that had been declared generally binding. This collective agreement was less favourable for the plaintiff.
The plaintiff then sued and demanded payment of her remuneration in accordance with the BMT-G II (or the collective agreement for the public sector (TVöD) that came into force on 1 October 2005), as in her opinion the validity of the old collective agreement was secured by Section 613a BGB. The defendant, on the other hand, was of the opinion that the BMT-G II could not be assumed to continue to apply dynamically after the transfer of the business. The Labour Court upheld the claim, while the Regional Labour Court dismissed the claim on the defendant's appeal.
Federal Labour CourtThe plaintiff's appeal before the BAG was successful, contrary to the LAG's objections, as in the BAG's view the employees' wages did not in principle result from their collective agreement, but directly from the employment contract. After the transfer of the business, the collective agreement for building cleaners declared to be generally binding also applied to the employees in addition to the BMT-G II. According to the principle of favourability, however, the decision as to which of the two collective agreements should now apply was to be made in favour of the BMT-G II.
Source: Federal Labor Court
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