Country Report from Norway: The Sas/Braathens Verdict
European Company Law, Vol. 3, 2006
9 Pages Posted: 14 Apr 2006
The tougher competition amongst airlines globally also reflects the situation in Norway, and airlines have found tough restructuring processes a necessity. The Norwegian airlines Braathens ASA was in trouble financially at least from early in 2001 and SAS AB (the parent company in the Scandinavian SAS group) bought 100% of the shares in Braathens that year, turning it into one of the subsidiaries in the SAS Group. The verdict that this report deals with is the end result of a dispute over the organisation of the ground handling and de-icing which was done by one business entity in Braathens and after the restructuring ended up being done by separate parts of the SAS group called Scandinavian Ground Services (SGS) and SAS Technical Services (STS). As opposed to other areas of activity which were transferred from Braathens in accordance with the rules on transfer of undertakings, SAS maintained that the new organisation of ground handling and later de-icing did not constitute a transfer of undertaking. The key point of interest for European company lawyers is whether a transfer of undertaking, in accordance with directives protecting employee rights, had taken place, which would entail that the former Braathens employees should keep their rights and be set on equal footing with SAS employees, both in the previous and any forthcoming restructuring rounds within the SAS group.
The Norwegian Supreme Court emphasises the issue to be evaluated, namely whether the identity of the activity is maintained, as a general, reality-based assessment with no absolute levels with regard to number of involved employees or quantity of assets. However, although the Court specifies the factors that it bases its decision on, it does so without further explanation of the weight it attaches to each factor. The factor of legal uncertainty may still seem rather considerable in an area where the stakes are very high.
As the Norwegian Supreme Court does very little to clarify the issue as to the actual application of the identity requirement in future cases, there seem to be only two sure conclusions we can draw from this verdict: One is that we can now ascertain that the Norwegian Supreme Court applies the same factors that the ECJ does in transfer of undertaking cases. Two; that it probably takes less to be caught by the transfer of undertaking rules than previously assumed in Norway (but most likely well in line with ECJ case law).
Keywords: transfer of undertaking, protection of employee rights, restructuring, Norwegian law, EC law
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