1) By order of 14 July 2008, the Tribunal Superior de Justicia de Madrid (High Court of Justice, Madrid) (Spain) referred to the Court for a preliminary ruling under Article 234 EC three questions: two on the interpretation of Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies (2) (‘the directive’ or ‘Directive 98/59’) and one on the interpretation of Article 30 of the Charter of Fundamental Rights of the European Union and of the 1989 Community Charter of the Fundamental Social Rights of Workers.

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3) In essence, the Court is called on to clarify, first, whether termination of an employment contract following the death of an employer falls within the concept of collective redundancy as used in the directive; and, second, whether the provisions of the directive, of the Charter of Fundamental Rights of the European Union and of the Community Charter of the Fundamental Social Rights of Workers preclude legislation of a Member State under which the rules laid down for collective redundancies – in particular with regard to determination of the compensation payable to workers who have been made redundant – do not apply where the employment contract has been brought to an end following the death of an employer, whilst those rules are applicable to cases where the contract has come to an end as a result of the winding-up of a corporate employer.

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4) Adopted on the basis of Article 100 of the EC Treaty (now Article 94 EC), Directive 98/59, which codified Council Directive 75/129/EEC of 17 February 1975 on the approximation of the laws of the Member States relating to collective redundancies, (3) seeks to enhance the protection of workers by promoting convergence of national provisions ‘concerning the practical arrangements and procedures for such redundancies and the measures designed to alleviate the consequences of redundancy for workers’. (4) The aim pursued by Directive 98/59 – made clearly apparent in its preamble, in particular in recitals 1, 4, 6 and 7 – is to reduce the impact of the differences between the laws of the Member States on the functioning of the internal market and to promote balanced economic and social development in the Community in accordance with the principles laid down by the Community Charter of the Fundamental Social Rights of Workers and by Article 117 of the EC Treaty (now Article 136 EC), according to which:

‘The Community and the Member States, having in mind fundamental social rights such as those set out in the European Social Charter signed at Turin on 18 October 1961 and in the 1989 Community Charter of the Fundamental Social Rights of Workers, shall have as their objectives the promotion of employment, improved living and working conditions, so as to make possible their harmonisation while the improvement is being maintained, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment and the combating of exclusion.

To this end, the Community and the Member States shall implement measures which take account of the diverse forms of national practices, in particular in the field of contractual relations, and the need to maintain the competitiveness of the Community economy.

They believe that such a development will ensue not only from the functioning of the common market, which will favour the harmonisation of social systems, but also from the procedures provided for in this Treaty and from the approximation of provisions laid down by law, regulation or administrative action.’

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12) Article 30 of the Charter of Fundamental Rights of the European Union provides that ‘[e]very worker has the right to protection against unjustified dismissal, in accordance with Community law and national laws and practices’. 

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33) Second, the Tribunal Superior de Justicia considered that a provision whereby, in cases of termination of employment contracts as a result of the employer’s death, compensation was limited to one month’s wages regardless of the employee’s length of service, did not, under domestic law, afford workers protection consistent with that provided for by Article 30 of the Charter of Fundamental Rights of the European Union and the provisions of the Community Charter of the Fundamental Social Rights of Workers.

34) Faced with those issues of Community law, the national court considered it necessary to stay its proceedings and seek a preliminary ruling from the Court of Justice under Article 234 EC on the following questions:

‘(1) By restricting the definition of collective redundancies to dismissals on economic, technical, organisational or production grounds and by failing to extend the definition to dismissals for any reason not related to the individual workers concerned, does Article 51 of the Spanish Estatuto de los Trabajadores fail to fulfil the obligations imposed in Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies?

(2) Is the legal rule in Article 49(1)(g) of the Estatuto de los Trabajadores, which establishes for workers who lose their jobs as a result of the death, retirement or incapacity of the employer compensation limited to one month’s remuneration, excluding them from the scope of Article 51 of the Statute and failing to comply with Articles 1, 2, 3, 4 and 6 of the directive, also contrary to Council Directive 98/59/EC?

(3) Does the Spanish legislation on collective redundancies, and specifically Articles 49(1)(g) and 51 of the Estatuto de los Trabajadores, infringe Article 30 of the Charter of Fundamental Rights of the European Union and the Community Charter of the Fundamental Social Rights of Workers adopted at the European Council meeting held in Strasbourg on 9 December 1989?’

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41) With regard to the third question submitted, the Spanish Government considers that the national rules on collective redundancy are not inconsistent with the Charter of Fundamental Rights of the European Union or with the Community Charter of the Fundamental Social Rights of Workers: the principles enunciated in those instruments are in fact protected within the Spanish legal order, including at constitutional level.

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43) So far as concerns the second and third questions submitted, the Hungarian Government considers that it is incumbent on the Member States to regulate severance allowances in the event of termination of an employment contract and that national legislation which, with justification, provides for different treatment for workers depending on whether they are employed by a natural person or by a legal person cannot be regarded as contrary to the Charter of Fundamental Rights of the European Union or the Community Charter of the Fundamental Social Rights of Workers.

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46) As regards the second question submitted, the Commission emphasises that the directive does not effect complete harmonisation of the conditions for collective redundancies, but merely imposes on employers the obligation to consult workers and inform the competent public authority before effecting a collective redundancy, and does not impose any obligation to compensate workers, still less determine the amount of compensation. The Commission recognises that, to the extent to which a difference of treatment between workers regarding severance allowances is not objectively justified and is therefore to be regarded as discriminatory, a provision of national law may conflict with fundamental rights which the Court of Justice upholds as principles of Community law, which include the principles of equal treatment and non-discrimination. Since, however, determination of severance allowances is a matter reserved exclusively to the Member States, the Court of Justice has no jurisdiction to rule as to any breach of those principles resulting from a difference of treatment noted by the national court. Consequently, it is not necessary to give a ruling on the third question : not only are the statements recorded in the Charter of Fundamental Rights of the European Union and the Community Charter of the Fundamental Social Rights of Workers not legally binding, serving rather to confirm the existence and clarify the scope of gene ral principles of Community law, but in addition those principles cannot in any case be considered applicable to the present case since the question of compensation payable to workers under Spanish legislation in cases of collective redundancy does not fall within the scope of Community law.

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90) By its third question, read in the light of the order for reference as a whole, the referring court seeks a ruling from the Court of Justice as to the compatibility of the Spanish rules on collective redundancies with Article 30 of the Charter of Fundamental Rights of the European Union (20) and with the Community Charter of the Fundamental Social Rights of Workers, adopted by the European Council in Strasbourg on 9 December 1989, in so far as those rules give rise to a difference of treatment between workers regarding severance allowances.

91) In line with what I have said regarding the first and second questions referred to the Court, this third question, as framed, cannot be examined since its subject-matter, as indicated in points 49 and 50 above, is not governed by the directives relevant to this case and, moreover, as observed by the Commission, since determination of severance allowances accruing to dismissed workers remains within the exclusive competence of the Member States, the principles of equal treatment and non-discrimination cannot be applied here. The request for a ruling can only be considered if it is treated as a request for clarification of the importance to be attached to Article 30 of the Charter of Fundamental Rights of the European Union and to the Community Charter of the Fundamental Social Rights of Workers in order to clarify what kind of favourable treatment of workers is imposed by Community law on employers in relation to the procedures to be followed in cases of collective redundancies.

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93) In the light of the foregoing considerations, I suggest that the Court give the following answers to the questions on which the Tribunal Superior de Justicia seeks a preliminary ruling:

(1) The concept of ‘redundancy’ used in Article 1 of Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies does not cover cases of termination of employment contracts brought about by the death of the owner of the undertaking, whose lawful heirs decline to accept his estate, where such death gives rise to complete cessation of business activity and no provision of the legal order of a Member State appoints a public authority to replace the employer and fulfil his obligations under the directive.

(2) Directive 98/59 merely provides for approximation of the laws of the Member States regarding collective redundancies in relation to the procedure to be followed in that regard, leaving rules on the compensation to be paid to workers as a matter exclusively for the Member States. The directive does not therefore preclude a provision of national law which, in the event of termination of an employment contract following the employer’s death, prescribes payment of a severance allowance which is lower than that which the worker would receive in the case of collective redundancy.

(3) Article 30 of the Charter of Fundamental Rights of the European Union and the Community Charter of the Fundamental Social Rights of Workers, given the general nature of the principles which they expound, cannot contribute to clarification of the scope of the redundancy procedures provided for by Directive 98/59, since those instruments contain no provisions relating to such procedures.