The Court of Justice of the European Union (CJEU) has held that, contrary to the opinion of Advocate General Tanchev in December 2017, a gap of five months in an undertaking’s activities does not necessarily preclude a transfer for the purposes of the Acquired Rights Directive (2001/23/EC) (ARD).

The Claimant, Mr. Sigüenza, worked as a teacher at a music school in Spain. The school was run by the local authority until 1997 when it was outsourced to a contractor. Following poor financial performance, the contractor dismissed all its staff in April 2013 and subsequently ceased to operate. At the start of the next academic year in September 2013 the management of the school was given to a new contractor, who employed a different staff team.

The CJEU considered that in this case there could be a transfer of an economic entity within the meaning of the ARD. The court took into account the fact that the premises and other assets of the business were owned by the local authority at all times, and that three months of the closure had been school holidays. However, the CJEU also held that the Claimant’s dismissal appeared to be for an economic, technical or organisational (ETO) reason. The final decisions on both points were referred back to the Spanish courts.

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