The Supreme Court recently upheld the Eastern High Court’s ruling establishing that a shop steward’s function ended at the time of a business transfer because the transferee had renounced the collective agreement.

Skrevet af

Employee representatives retain their previous function and rights after a business transfer, unless the basis for employee representation ceases to exist as a result of the business transfer. But what applies if the transferee, in connection with the business transfer, renounces the transferor’s collective agreement? Does the renunciation in itself mean that the basis of the shop steward’s function ceases? In this case, the Supreme Court considered this question and, at the same time, assessed when the shop steward’s protection subsequently ceased.

In connection with a business transfer in the healthcare sector, a shop steward was informed that her function as shop steward would cease at the time of the business transfer. At the same time, she was informed that her protection against dismissal would cease after a time period corresponding to the notice for shop stewards under the collective agreement.

At the end of the protected period, the transferee gave notice of changes to the employment terms for the now former shop steward. The shop steward chose not to accept the changed employment terms and therefore considered herself as dismissed.

The shop steward’s trade union believed that it would be in conflict with the underlying EU directive if the transferee’s renunciation of the collective agreement could lead to termination of the shop steward’s protection, and the trade union also believed that a shop steward’s protection could at the earliest be terminated at the expiry of the collective agreement. On this basis, the trade union brought an action before the ordinary courts.

Protection ceased
With reference to the wording of the Transfer of Undertakings Act, the High Court found that the basis for employee representation ceased at the time of the business transfer. Thus, the shop steward’s function ended at the same time.

The High Court also agreed with the transferee that the shop steward’s protection ended 9 months after the function ceased, corresponding to the shop steward’s individual extended notice.

The Supreme Court upheld judgment
The case ended up in the Supreme Court, which upheld the judgment by the High Court. The Supreme Court essentially based its decision on the same grounds as the High Court and emphasised in particular that the rules in the Transfer of Undertakings Act must be understood to mean that a transferee’s renunciation of a collective agreement according to which a shop steward has been elected in connection with a business transfer means that the basis for the shop steward’s function under the collective agreement must be deemed to have ceased.

As regards the issue of the duration of the shop steward’s protection, the Supreme Court, like the High Court, held that the shop steward’s protection ended 9 months after the cessation of the function, corresponding to the shop steward’s individual extended notice.

Accordingly, the Supreme Court found for the transferee.

Norrbom Vinding notes

• that, with the judgment, the Supreme Court has established that a transferee’s renunciation of a collective agreement is a factor that may result in the basis for employee representation ceasing to exist with the consequence that a shop steward’s function ends at the time of the business transfer.

The content of the above is not, and should not be a substitute for legal advice.