What happens if employees refuse to comply with the employer’s unilateral decision to permanently work hundreds of kilometres away from their contractual workplace and the employer dismisses them for unauthorized absence? Is this considered simply as a disciplinary dismissal, or can it qualify as redundancy under the EU Collective Redundancy Directive? The Court of Justice of the European Union had to answer this question in a recent judgement which we analyse below.
ILF’s Hungarian member, Smartlegal Schmidt&Partners summarizes this issue in the article.
- Facts
Egenergy a company specialised in the manufacturing of power generators decided to cease operations at is production site in Campania and transfer its activities to another site in Sardinia which is located more than 600 kilometres away from the original site.
Egenergy notified the employees of the transfer 3 weeks before it was to take effect in relation to them. Since the employees did not report to the new workplace, Egenergy first initiated disciplinary proceedings against hem and subsequently terminated their employment for unauthorized absence for more than 30 days.
- Procedure in Italy
The employees requested the Naples North District Court to declare the transfer decision unlawful. They argued that the transfer was equivalent, in practical terms, to a decision to terminate their employment relationships and that, given the number of workers affected, Egenergy should therefore have carried out the trade union consultation procedure required by the law. Egenergy requested the rejection of the application since in its view the transfer was justified by organisational need and that reason of the dismissal was the unauthorised absence of the employees.
The Naples North District Court declared the transfer decision as unlawful pointing out that the unilateral change in working conditions clearly was difficult to reconcile with the continuation of the employment relationship.
Following that decision, the employees brought an action on the merits, seeking a declaration that the dismissals were null and void, reinstatement and payment of the remuneration accrued since the dismissals. The Naples North District Court declared that both the transfer decision and the dismissals were unlawful and ordered the employees’ reinstatement in their respective jobs. According to that court the unilateral change resulting from the transfer falls under the EU concept of collective redundancy within the meaning of the EU Collective Redundancy Directive.[i]
Egenergy brought an appeal against the first instance judgement before the Naples Court of Appeal. This court had doubts as to whether the transfer and the subsequent dismissal may be covered by the concept of ‘indirect’ redundancy in accordance with the EU Collective Redundancy Directive and whether they are to be taken into account when calculating the number of redundancies in relation to a collective redundancy. Thus, the Court of Appeal decided to stay the proceedings and refer the questions to the Court of Justice of the European Union.
- The CJEU’s decision
The main question before the CJEU was whether the termination of the employment contract for a reason not related to the individual worker concerned and effected by the employer following the worker’s refusal to comply with the employer’s unilateral decision to transfer the place of work to a site away from the original site comes under the concept of redundancy or termination of employment contract in accordance with the EU Collective Redundancy Directive.
- When can an employer-imposed change be treated as redundancy?
First, the CJEU recalled its former case-law and pointed out that the concept of redundancy under the EU Collective Redundancy Directive cannot be interpreted narrowly and shall cover any termination of an employment contract not sought by the worker, and therefore without his or her consent.[ii]
Considering the broad definition of redundancy required by the objective of the EU Collective Redundancy Directive which is to afford greater protection to workers in the event of collective redundancies, the Court had already held that redundancy may also exist where the employer, unilaterally and to the detriment of the employee, makes significant changes to essential elements of the employment contract for reasons not related to the individual employee.[iii]
- Was the workplace transfer in Egenergy significant enough?
As a preliminary issue, it must be examined by the referring court whether the employees were contractually or legally required to comply with the transfer decision and if their absence from the new workplace could be regarded as non-performance of their employment contracts.
If the employees were not required to accept the transfer decision, the referring court shall determine if the workplace is an essential element of the employment contract and whether its transfer by Egenergy can be considered as a significant change.
According to the CJEU the place of work shall be considered as an essential element of the employment contract because any change of workplace may have significant economic and organisational consequences for the worker.[iv]
As to significance, the Court referred to the temporary or permanent nature of the change, the distance between the old and new workplaces, and any accompanying measures intended to compensate for the transfer. Since the transfer in Egenergy appeared to be permanent, followed the definitive closure of the Campania site, and concerned a move of more than 600 kilometres across the sea, the Court considered that it could constitute a significant change to an essential element of the employment contract which shall be verified by the referring court.
- Summary
The Egenergy judgment is a reminder that employers must look beyond the formal ground of dismissal. A dismissal described as disciplinary may still qualify as redundancy in the sense of the collective redundancy rules if the route cause is an employer-driven restructuring measure, such as a site closure or relocation.
For employers, the main lesson is that a major workplace transfer should be assessed before implementation from a collective redundancy perspective. If several employees are affected and refusal is foreseeable, the information and consultation procedure may have to be considered at an early stage.
This is especially relevant where the transfer is permanent, requires relocation of the employee’s private life, or is connected to the closure of the original workplace. In such cases, the transfer may be regarded as a significant change to an essential element of the employment contract, triggering collective redundancy procedure.
In this article we analysed the judgement C-907/24 of the CJEU.
Written by Anita Vereb
SMARTLEGAL is a team of agile business & litigation lawyers in Budapest, Hungary, helping international corporate clients and individual entrepreneurs doing business in Hungary. For more information please visit our website at this link.
[i] Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies
[ii] judgment of 4 September 2025, Ineo Infracom, C-249/24, EU:C:2025:661
[iii] judgment of 4 September 2025, Ineo Infracom, C-249/24, EU:C:2025:661
[iv] judgment of 4 September 2025, Ineo Infracom, C-249/24, EU:C:2025:661