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Introduction
For nearly two decades, commencing on 14 February 1977 when the Council of the European Communities adopted Council Directive 77/187/EEC on the approximation of the laws of the member states relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses (the Acquired Rights Directive), there has been much mystification in member states as to what exactly the Directive does or does not mean.
Attempts to resolve this mystery have taken two main forms. First, the courts in member states have sought clarification from the European Court of Justice (ECJ) under the terms of Article 177. This takes the form of an opinion by the Advocate General which is subsequently and frequently confirmed by the ECJ. Secondly, the European Commission has itself taken member states before the ECJ under the terms of Article 169 on the grounds that they have failed to implement certain aspects of the Directive.
The case law has been accumulating since 1985, and the mystery is slowly but surely being unravelled, as outlined in the discussion below by reference to recent key rulings. It is fair to say that the UK is the most seriously affected among the member states because the Acquired Rights Directive has become intimately bound up with the process of compulsory competitive tendering (CCT) whereby local authorities, hospitals and government agencies are obliged to put out to tender specified elements of their blue-collar and, more recently, white-collar activities. The Directive does not bear directly upon CCT because all Directives must be transposed into national law in each member state. In the case of the UK this has taken the form of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), as amended in the Trade Union Reform and Employment Rights Act 1993.
The theme of this paper is an exploration of the link between the Directive and TUPE, and between TUPE and CCT. It seeks to demonstrate that the UK government's attempt to 'opt-out' of parts of the Directive with a view to facilitating CCT has proved to be almost completely unsuccessful.
The Acquired Rights Directive
According to Article 1(1) of the Directive, it applies in the event of the transfer of an undertaking, business or...