Lex localis - Journal of Local Self-Government_11(1)_January

L EX LOCALIS - J OURNAL OF L OCAL S ELF -G OVERNMENT D. Senčur Peček, S. Laleta & S. Kraljić: Labour Law Implications of Outsourcing in Public Sector 711 economic activity (part of the economic activity) because the economic activity is just one element of a plant, respectively the object of the business of the holder of enterprise (Laleta, 2011: 269). Even though the LA does not mention the term “establishment”, the transfer of an undertaking and part of an undertaking that retain their economic integrity “would actually mean the transfer of establishment, whereby it is always necessary to keep in mind that for the transfer of an employment contract there must be a continuity of that part that will be transferred” (Gović, 2014: 547). The term “establishment” is used in Croatian jurisdiction as well, meaning “an establishment with jobs of those who were working in the plant)”. 26 Therefore, despite the misleading phrasing, the definition of a transfer of an undertaking in Croatian law follows the Directive and safeguards employee's rights only in the case where the undertaking or part of the undertaking (as well as the business or part of the business) retains its economic integrity (economic identity). Despite the fact that the notion of the transfer of an undertaking has been established in Croatian legislation for many years, not many cases can be found in Croatian case law in which the court recognised the protection of employment relationship to employees on these grounds. In several cases the Croatian Supreme Court found that there was no transfer of undertakings and, consequentially, that the provisions of LA on the transfer of employment contract do not apply. 27 Even in the case where a company A terminated the accounting department and contractually assigned the provision of accounting services to the outside contractor, who (under the agreement with the company A) entered into employment relationship with all employees employed in the accounting department, the Supreme Court failed to recognise employees' rights to the employees on the grounds of a change of employer. 28 The Court was of the opinion that the Article of LA on the transfer of employment contract to a new employer could not apply because that was not a case of the transfer of an undertaking or part of an undertaking to a new employer. According to the court's opinion, as a result of reorganisation (the transfer of accounting services to an outside contractor), the need of the company A for the work performed by those employees ceased, which is why the termination of employment contract with the employee who did not accept a less favourable employment with the outside contractor is considered lawful. Therefore, a question might arise in this case, as well as in some others, whether the Supreme Court of the RC interprets the notion of the transfer of an undertaking in accordance with the Directive. Article 75 of Slovenian ERA-1 stipulates that "if due to the legal transfer of an undertaking or part of an undertaking carried out on the basis of an Act, another regulation, a legal transaction and/or a final court decision, or due to a merger or division, the employer is changed, the contractual and other rights and obligations