CRISTIAN PUJANTE RIVERA V GESTORA CLUBS DIR. SL AND FONDO DE GARANTIA SALARIAL
According to the Council Directive 98/59/EC dated July 20th1998 on the approximation of the laws of the Member States relating to collective redundancies (hereinafter the “Directive”), the termination of an employment contract following the employee’s refusal to accept a significant unilateral change to essential elements of the employment contract, operating to his/her detriment, constitutes a redundancy.
Two legal issues are at stake :
1. Whether a “collective redundancy”, within the Directive’s meaning, must be interpreted as relating solely to redundancies or as covering terminations of employment contracts that may be assimilated to redundancies, and
2. Whether the fact that an employer makes significant, unilateral changes to essential elements of an employee’s employment contract, operating to his/her detriment, but not related to the individual employee (such as a significant decrease of salary), falls within the Directive’s definition of “redundancy” or rather constitutes the termination of an employment contract that may be assimilated to such a redundancy.
"The European Court of Justice (hereinafter the “ECJ”) stated that only redundancies in the strict sense of the term fall within the scope of the Directive’s definition of “collective redundancy”.
According to the ECJ, the wording of the Directive is absolutely clear and any other reading which has the effect of extending or restricting the scope of the Directive would directly deprive the Directive of its effectiveness.
According to the ECJ, redundancies are characterised by the lack of the employee’s consent, which means that a significant and unilateral change to an essential element of the employment contract, operating to the employee’s detriment, falls within the Directive’s definition of a “redundancy”. Therefore, the ECJ decided that in the present case, the termination of the employment contract by common consent with an employee where her salary had been decreased in a significant manner constitutes a redundancy under the Directive’s meaning.