EU: the CJEC defines the notion of activity in several Member States as part of the protection of employees in the event of the insolvency of the employer

In a ruling rendered on October 16, 2008, the Court of Justice of the European Communities defined the notion of "activity in a number of Member States" which enables to determine the institution responsible for wage debts in the event of a cross-border bankruptcy. Based on the development of new communication means, it judged that this notion doesn't necessarily imply to have a "physical infrastructure" but "a stable economic presence featuring human resources". Since this case concerned the transport sector, Luxembourg's judges ruled that the fact that a worker delivers goods between two Member States is not enough for the undertaking to be regarded as carrying out transnational activities. (Ref. 080796)
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Facts. Mr. Holmqvist was responsible, for the company which employed him and which only had a facility in Sweden, of delivering goods to Italy and vice versa, crossing Germany and Austria. When his employer went bankrupt, the Swedish authority in charge of guaranteeing wages excluded the truck driver from this guarantee on the grounds that he didn’t mainly perform his activity in Sweden. Indeed, during the revision – in 2002 – of Directive 80/987 which creates wage guarantee in the event of insolvency of the employer, a new provision was introduced (article 8) which provides that “when an undertaking with activities in the territories of at least two Member States is in a state of insolvency (…), the institution responsible for meeting employees’ outstanding claims shall be that in the Member State in whose territory they work or habitually work”.

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