Claes –v- Landsbanki Luxembourg SA Case C-235/10 Judgment of the European Court of Justice 3rd March 2011.
The European Court has handed down a very interesting ruling on the scope of the Collective Redundancies Directive 98/59/EEC which is implemented in Ireland by the Protection of Employment Act, 1977, as amended.
The Court gave judgment in Claes v Landsbanki Luxembourg SA Case C-235/10 on the 3rd March, 2011. The matter was referred by a national court in Luxembourg to the European Court to clarify the effect of the Directive where there is an immediate termination of the employment contracts of a workforce following a judicial decision ordering the dissolution and winding-up of the employer. By its first question, the referring court asked whether Articles 1 to 3 of Directive 98/59 must be interpreted as applying to a termination of activities of an institution that is an employer as a result of a judicial decision ordering its dissolution and winding up on grounds of insolvency, even though, in the event of such a termination, national legislation provides for the termination of employment contracts with immediate effect. The Court stated that under the original Collective Redundancies Directive 75/129, Article 1(2)(d) provided that that directive did not apply to workers affected by the termination of an establishment’s activities where that is the result of a judicial decision. That provision allowed a derogation from the rule in Article 1(1) (a) of that directive, in which it was stated, in terms identical to those of the same provision in Directive 98/59, that, for the purposes of applying Directive 75/129, ‘collective redundancies’ means dismissals effected by an employer for one or more reasons not related to the individual workers concerned. Article 1(1)(b) of Directive 92/56 (the precursor to Directive 98/59) deleted Article 1(2)(d) of Directive 75/129. The Court also noted that that amendment was emphasised by the European Union legislator in the third recital in the preamble to Directive 92/56, which states that Directive 75/129 also applies in principle to collective redundancies arising where the establishment’s activities are terminated as a result of a judicial decision.