Abstract

A day care provider, Estro Groep B.V., (‘Estro’) went into pre-arranged (‘pre-pack’) receivership. Immediately afterwards, a large part of its business was taken over by another day care provider, Smallsteps B.V. (‘Smallsteps’). The latter did not offer employment to all of Estro’s employees, taking the position that the takeover did not constitute the transfer of an undertaking. This position was based on the fact that Estro was in receivership at the time of the takeover. According to the Dutch law transposing the Acquired Rights Directive, such takeovers are exempted from the rules on transfers of undertakings. A union and five of the employees whom Smallsteps had not offered jobs, relying on the wording of Article 5(1) of the Directive (“insolvency proceedings which have been instituted with a view to the liquidation of the assets”), claimed that they had become Smallsteps employees. The court referred questions to the ECJ for a preliminary ruling.