"Advocacy is qualified legalassistanceprovidedon a professional basis by persons who received the status of advocate… to physical and legal persons for thepurpose of advocating their rights, freedomsand interests, and ensuring their access to justice."

Chapter 1, art.1 of Federal Law ¹ 63-FZ "On Advocacy and the Bar in the Russian Federation"

Ñontacts


Tel.: 763-4369
Mobile: (919) 962-3755

E-mail:
To contact the attorney at law:
lee@jurexpert.ru
For general information:
info@jurexpert.ru

News

Employment & Labour - Germany

 

In May 2008 the Federal Labour Court found that a transfer of business had taken place where a service company dealing with the provision of staff took over all of a hospital's cleaning staff and subsequently leased them back to the hospital as temporary workers doing the same job as before.

 

Background

 

Section 613a(1) of the Civil Code provides that where a business, or part of a business, is transferred to another owner in a legal transaction, the new owner assumes the employment-related rights and obligations of the business unit as it existed at the time of the transfer.

 

According to established case law, the decisive criterion of a transfer of business is the retention of the economic unit's identity. A 'unit' is defined (following European Court of Justice case law) as an organized group of persons and assets with the purpose of carrying out an economic activity with its own objectives. The determining factor is whether the acquirer has taken over the organization of the work underlying the business. In service-based businesses and businesses with little or no equipment, the total number of employees constitutes the economic unit, as defined by case law.

 

Decision

 

An employee working as a housekeeper for a municipally owned hospital claimed that her settlement agreement with the hospital and new employment contract with the limited liability company (service company) were invalid because of a circumvention of Section 613a of the Civil Code. The court found in favour of the employee. It considered the cleaning of the hospital a separate business unit that was capable of being transferred, as the cleaning was mainly based around the cleaning staff, whereas the cleaning supplies were less important. Consequently, as the service company had taken over the whole cleaning staff and leased them back to the hospital, where they did the same job as before, the court decided that there was a transfer of business according to Section 613a of the Civil Code. The fact that the service company was a temporary employment agency was irrelevant as it leased out employees to that hospital only and did not act on the free market. Consequently, the original employment contract with the hospital (which had better conditions than the new employment contract) had transferred to the service company.

 

The special feature of this case that the service company never offered cleaning services, but only leased  its employees. By contrast, only the hospital organized the cleaning services and gave orders to the leased employees. However, as the service company's activity was limited to leasing employees to the hospital, and as it conducted no other business on the free market, the court found that the situation was as though the service company had offered and carried out the cleaning services for the hospital.

 

Comment

 

The decision is further illustration of the complexity of Section 613a of the Civil Code. Service providers that lease out employees now risk employment relationships being transferred to them from the original employer. Each case should therefore be analyzed in detail.

 

 



Èñòî÷íèê: ILO