MA
Maritime
Maritime Law
ONTIER SPAIN

Transfer of Undertakings by Purchase of Ships



Problem

A great number of employees filed a complaint to voluntarily terminate their contracts with the right to obtain the same severance pay as if they were unfairly dismissed due to the continuous lack of payment of their salaries by the company; they also claimed the unpaid salaries. The employees brought their legal action against other companies as well, which were all represented by our law firm, claiming their joint and several liability for the unpaid salaries. The plaintiff employees worked for different merchant ships, which were sold “bare” to a third party who leased them to another corporation – but without including the work force in the transfer. The employees alleged that a transfer of undertakings had taken place because the ownership of the ships was transferred to another corporation and the latter leased them to another.



Solution

The Firm successfully defended the lack of transfer of undertakings (TUPE) alleging that (i) the requirements of the TUPE were not met – though this was contrary to the majority case law in the sale of ships and (ii) that the employees were claiming the joint and several liability of our clients after the sale and lease of the ships took place and (iii) their argument was not consistent because they did not complain when their former employee ceased its activity. These arguments were uphold in their entirety by the Appellate Court of Madrid, which dismissed the complaint of the employees against our clients.

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