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10 December 2003
In Abler v Sodexho Catering Gesellschaft mbH (C-340/01) the ECJ gave further guidance on these principles. It found that the Acquired Rights Directive applied where an incoming contractor took over a contract for the provision of catering services in a hospital. The incoming contractor refused to take over the outgoing contractor's materials, stock and employees, and received no accounting data, menu plans or general records. However, the premises, water, energy and equipment were provided by the hospital. The ECJ commented that catering cannot be regarded as an activity based essentially on manpower, since it requires a significant amount of equipment. A defining feature of the case was the fundamental obligation to prepare meals in the hospital kitchen, which required the tangible assets. Moreover, given their 'captive' status, the incoming contractor necessarily took over most of its predecessor's customers. The ECJ therefore concluded that there was a transfer and that the failure of the incoming contractor to take on the outgoing contractor's workforce did not, "in a sector such as catering where the activity is essentially based on equipment", prevent the entity from retaining its identity after the transfer.
This ruling signifies a fairly broad application of the Acquired Rights Directive to contracting-out, as it is arguable whether services such as catering are any more reliant on equipment than labour. It remains to be seen how it will be applied by domestic courts.
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