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Chambers & Partners
08/09/1999

Everson v. Secretary of State for Trade and Industry

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European Court of Justice

The Irish High Court ordered the winding up of a company, BL, incorporated in Ireland, with branches throughout the UK in one of which E was employed. E applied for arrears of pay, holiday pay and compensation to the Secretary of State as the relevant guarantee institution as required by Council Directive 80/987 Art. 3(1) and the Employment Rights Act 1996 Pt.XII . The Secretary of State refused the application on the basis that he had no responsibility, citing Danmarks Aktive Handelsrejsende v Lonmodtagernes Garantifond (C117/96) [1998] 1 All. E.R. (E.C.) 112 . E contended that the instant case could be distinguished from Danmarks because BL had UK branches and E was paid through these branches, and the collection of taxes and social security contributions were made under English law. The employment tribunal referred to the ECJ the question of which guarantee institution was responsible for settling the claims, the state where the insolvency proceedings had been commenced or the state in which E had been employed.
HELD: giving a preliminary ruling, that the protection given by the Directive to employees in the event of their employer being declared insolvent was available in the country in which the employees worked. That was the most appropriate interpretation of the Directive in the light of its social objectives. BL had a significant presence in the UK, employing over two hundred people, and collected tax and national insurance contributions in accordance with English law, Danmarks distinguished.

C-198/98,[2000] IRLR 202,[2000] 1 I.C.R. 525.

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