TRANSFERS OF UNDERTAKINGS : ECJ: EU LAW PRECLUDES SUBSTANTIAL REDUCTION IN SALARY.

Workers affected by the transfer of an undertaking, even those employed by a public authority that is taken over by another public authority, cannot be placed in a less favourable salary position solely as a result of the transfer. This is the gist of a judgement handed down, on 6 September, by the EU Court of Justice in response to an application for a preliminary ruling by an Italian court (Case C-108/10).

The applicant, Ivana Scattolon, was employed by the municipality of Scorze in Italy from 1980 to 1999 as a cleaner in state schools. She was a member of the administrative, technical and auxiliary (ATA) staff of the local authority. In 2000, she was transferred onto the list of state ATA employees and placed on a salary scale corresponding, on that list, to nine years of service, in application of the ministerial order of 5 April 2001.

Scattolon failed to obtain from the Ministry for Education, Universities and Research recognition of her service of about 20 years and consequently brought a legal action seeking recognition of her full length of service.

The court first confirmed that Scattolon's transfer does indeed come within the scope of Directive 77/187, repealed by Directive 2001/23/EC, on the approximation of member states' legislations on the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts thereof. For the court, the transfer of staff charged with auxiliary services, such as cleaning, maintenance and administrative assistance of state school buildings, from local authorities (municipalities and provinces) to the state must be understood as a "transfer" within the meaning of the directive.

The court went on to clarify the scope of protection of the rights of employees transferred to a new employer. In a previous judgement (Collino and Chiappero - September 2000), it had ruled that length of service is used to determine certain pecuniary rights of transferred workers and that these rights must in principle be maintained by the transferee in the same way as by the transferor. In the case pitting Scattolon against the ministry, the situation is slightly different since the rights and obligations of the staff transferred and of...