Transfer of Camping Concession: Do Employees Follow the Activity?

Imagine: you are an employee of a municipal campsite in Schiltigheim. The concession contract changes hands, the new manager arrives, but you are left out in the cold. No transfer, no compensation, just a door closing. This situation was experienced by employees in 1986 at the Bois de Boulogne campsite in Paris. But justice ruled: the new concessionaire must answer for the rights of the former concessionaire's employees, even if there is no contractual link between them. A landmark decision that changes the game for campsite workers and other delegated public services.

The question every owner or operator asks: when I take over an activity, am I automatically liable for my predecessor's social debts? And from the employee's side: how can I assert my rights if my employer changes overnight?

The French Supreme Court's decision of 16 March 1990 (No. 89-45.730) answers in the affirmative, relying on Articles 1 and 3 of the European Directive of 14 February 1977 and Article L. 122-12, paragraph 2, of the Labour Code (now L. 1224-1). It establishes the following principle: as soon as an economic entity retains its identity and its activity is continued or taken over, the employment contracts survive with the new employer, even in the absence of a legal link between successive employers.

The Facts: A Story Like Many Others

The City of Paris had granted the operation of the Bois de Boulogne campsite to the Société d'exploitation du touring-club de Paris-Ouest. The contract ended on 31 December 1986. On that date, a new concessionaire took over the operation. But in the meantime, the employees of the former concessionaire found themselves without an employer, without compensation, without anything.

Several of them then sued the new concessionaire before the Paris Employment Tribunal, claiming payment of various compensation (redundancy, notice, paid leave). The new concessionaire defended itself by arguing that it had no legal link with the former one and was therefore not bound by the latter's obligations.

The Paris Court of Appeal ruled in their favour, and the Supreme Court confirmed. The case gave rise to two separate decisions (No. 1 and No. 2 in the summary) but the solution is identical: the transfer of an autonomous economic entity (land, installations, clientele) entails the transfer of employment contracts.

The Court's Reasoning — Analysed

The lower courts first noted that the subject of the concession was the operation of a campsite. They then characterised the existence of an autonomous economic entity comprising land, installations (sanitary facilities, reception, etc.) and a clientele. Finally, they verified that the new concessionaire was continuing the same activity, on the same site, with the same means.

The Supreme Court validates this reasoning by recalling the legal basis: the 1977 European directive (which aims to protect employees in the event of a transfer of undertaking) and Article L. 122-12, paragraph 2, of the Labour Code. This provision states that "if a change occurs in the legal situation of the employer, particularly by succession, sale, merger, transformation of the business, incorporation, all employment contracts in force on the day of the change survive between the new employer and the company's staff".

What is remarkable here is that the Court dismisses the requirement of a legal link between successive employers. It does not matter that the first concessionaire and the second have no contract between them. What matters is the economic reality: an identical activity, means taken over, continuity of operation. The solution is now settled: the transfer of an autonomous economic entity (an "organised set of means") entails the transfer of employment contracts.

The new concessionaire's arguments (absence of legal link, contractual freedom) were rejected. The Court affirms that the protection of employees prevails over contractual considerations between professionals.

What This Means for You — Practically

For employees of a campsite, car park, school canteen or any concessioned service: if the operation changes hands, your employment contracts automatically follow. The new concessionaire cannot dismiss you without a genuine and serious reason, nor deprive you of your seniority and compensation. Example: in Saverne, a municipal campsite passes from one operator to another. The three permanent employees keep their jobs, their seniority, and the new operator must take over the former's salary debts (paid leave, bonuses).

For owners or grantors (towns, local authorities): you must inform the new concessionaire of the existence of employees and their rights. A clause in the concession contract may provide for the transfer of staff, but even without a clause, the law applies. Caution: if you do not pass on the information, you could incur liability.

For new concessionaires: before signing, demand a precise statement of staff (contracts, seniority, salaries, any debts). You will have to take on the employees, but also answer for any unpaid salary claims from the former operator. In the Bois de Boulogne case, the employees obtained compensation directly from the new concessionaire, while the former one was insolvent.

If you are in this situation, you must act quickly: the limitation period for wages is 3 years (Article L. 3245-1 of the Labour Code), but for redundancy compensation, it is 5 years. Refer the matter to the employment tribunal as soon as possible.

Four Tips to Avoid This Type of Dispute

• For the grantor (town, owner): insert in the concession specifications a clause requiring the new concessionaire to take over the staff, and provide for mandatory transmission of individual files.
• For the employee: as soon as you learn of the change of operator, send a registered letter to the new concessionaire reminding them of your rights and requesting the continuation of your contract. Keep all your payslips and contracts.
• For the new concessionaire: before signing, have a social audit carried out by a lawyer or accountant. Assess the cost of taking over the staff (seniority, leave, bonuses) and negotiate the concession price accordingly.
• For the former concessionaire: you cannot get rid of your employees by changing concessionaire. If you dismiss them before the end of the contract, you must follow the procedure and pay compensation. Otherwise, the new concessionaire could take action against you.

Further Reading: Related Case Law and Developments

This 1990 decision follows in the wake of the Supreme Court's "Société générale" decision (1985) which had already applied the 1977 directive to a sale of a business. Since then, case law has extended the principle to many situations: takeover of a cleaning contract, a catering contract, a security activity, etc. The Court of Justice of the European Union (CJEU) also clarified that the notion of "economic entity" should be interpreted broadly (Spijkers decision, 1986).

The trend is therefore towards maximum protection of employees. Courts verify in concreto whether the material and human resources are transferred, whether the activity is identical, and whether the clientele is retained. Caution: if the new concessionaire only takes over part of the means (for example, it changes the equipment or the location), it might escape the obligation to take over staff. But in the case of a campsite, where the land and installations are fixed, continuity is almost automatic.

Key Points to Remember

• What is an autonomous economic entity? An organised set of means (staff, equipment, clientele) enabling an activity to be carried out. Example: a campsite with its land, sanitary facilities, reception and employees.
• Must the new concessionaire take over all employees? Yes, if the entity retains its identity and the activity is continued. They cannot choose to take over only some.
• What to do if the new concessionaire refuses to take over the employees? Refer the matter to the employment tribunal to request the continuation of contracts and damages. The time limit is 3 to 5 years depending on the claim.
• Can the grantor (town) be sued? Yes, if they did not inform the new concessionaire or if they organised an abusive termination of contracts. Their liability may be engaged under Article 1240 of the Civil Code (formerly 1382).
• Is a private campsite owner concerned? Yes, if they change the manager (for example, they entrust the operation to a new company). The rule applies regardless of the owner's status.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →