CEDH · CASELAW;DECISIONS;DECCOMMISSION;ENG — 15 mai 1996

.sDD6737AE { font-size:11pt } .s211D6B00 { margin-top:0pt; margin-bottom:0pt; line-height:normal; widows:0; orphans:0; font-size:8.5pt } .sBB9EE52A { font-family:Arial }                              SUR LA RECEVABILITÉ                         Application No. 22351/93                       by Erich FENZEL and Ernst KÖLLNER                       against Austria          The European Commission of Human Rights (First Chamber) sitting in private on 15 May 1996, the following members being present:              Mr.    C.L. ROZAKIS, President            Mrs.   J. LIDDY            MM.    E. BUSUTTIL                  A.S. GÖZÜBÜYÜK                  A. WEITZEL                  M.P. PELLONPÄÄ                  B. MARXER                  N. BRATZA                  I. BÉKÉS                  A. PERENIC                  C. BÎRSAN              Mrs.   M.F. BUQUICCHIO, Secretary to the Chamber        Having regard to Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms;        Having regard to the application introduced on 8 April 1993 by Erich FENZEL and Ernst KÖLLNER against Austria and registered on 27 July 1993 under file No. 22351/93;        Having regard to the reports provided for in Rule 47 of the Rules of Procedure of the Commission;        Having regard to the observations submitted by the respondent Government on 29 May 1995 and the observations in reply submitted by the applicants on 13 July 1995;        Having deliberated;        Decides as follows:   THE FACTS        The first applicant, born in 1944, and the second applicant, born in 1937, are Austrian nationals residing in Vienna. In the proceedings before the Commission they are represented by Mr. G. Grießer, a lawyer practising in Vienna.   A.    Particular circumstances of the case        The facts of the case, as submitted by the parties, may be summarised as follows.        On 1 December 1989 composition with creditors proceedings (Ausgleichsverfahren) were instituted with regard to the company in which the applicants had been employed since 1958 and 1952, respectively. These proceedings were set aside on 21 June 1990.        Meanwhile, the employer company requested the Vienna Commercial Court (Handelsgericht) for permission to terminate the contracts of employment of a number of its employees, including the applicants, under SS. 20 b and 20 c of the Composition with Creditors Act (Ausgleichsordnung).        On 25 January 1990 the Vienna Commercial Court granted this permission. It found that according to the company's submissions, which had been confirmed by the administrator in the composition proceedings (Ausgleichsverwalter), the further employment of the persons concerned would endanger the composition with the employer's creditors while the employees would not suffer disproportionate damages, as they were due to receive compensation under the Insolvency Continued Payment Act (Insolvenz-Entgeltsicherungsgesetz). It appears that the employees concerned were not heard prior to this decision.        On 31 January 1990 the employer company, referring to the Commercial Court's decision, gave the applicants notice of the termination of their contracts of employment with effect from 30 June 1990. The applicants did not lodge an action under S. 105 of the Industrial Relations Act (see below, Relevant domestic law and practice).        Subsequently, on 9 February 1990, the applicants requested the Labour Office (Arbeitsamt) for payment under the Insolvency Continued Payments Act. On 10 October 1990 the Labour Office granted part of the applicants' request, including payment of their salary until 31 March 1990.        On 11 October 1990 the Labour Office dismissed the applicants' request as regards the payment of their salary from 1 April to 30 June 1990. It referred to S. 3 para. 3 of the Insolvency Continued Payment Act, which, in case an employee is dismissed in accordance with SS. 20 b and 20 c of the Composition with Creditors Act, guarantees payment until the end of employment, but not beyond the period of notice (Kündigungsfrist) provided for by law or by collective agreement. However, the Labour Office found that the applicants' dismissal had not been based on SS. 20 b and 20 c of the Composition with Creditors Act, as the employer company, although referring to these provisions, had not made use of the possibility to make their dismissal effective on 30 April 1990, in case of the first applicant, or on 31 March 1990, in case of the second applicant. Thus, the conditions for payment under S. 3 para. 3 of the Insolvency Continued Payment Act were not met.        Payment could neither be granted under S. 3 para. 1 of this Act, as this provision only guaranteed payment for the first three months after the introduction of insolvency proceedings.        On 31 January 1991 the Vienna Labour and Social Court (Arbeits- und Sozialgericht) found that the first applicant was entitled to payment until 30 April 1990, but dismissed the remainder of his claim. As regards the second applicant, the Court dismissed his claim entirely. The Court noted that the first applicant had been employed in the company at issue as an apprentice (Lehrling) from 1958 to 1962, as a worker (Arbeiter) from 1962 to 1 February 1983 and as an employee (Angestellter) from 1 February 1983 to 30 June 1990. The second applicant had been employed as an apprentice from 1952 to 1955, as a worker from 1955 to 1 July 1987, and as an employee from 1 July 1987 until 30 June 1990. By letter of 4 February 1993 in the first applicant's case, and by letter of 1 July 1987 in the second applicant's case, the employer company had stated that the period of the applicants' employment as workers would be taken into account as regards any rights or claims, which were dependent on the length of employment. The Court further noted the parties' submissions. The applicants had claimed in particular that, by taking the years of their employment as workers into account, the period of notice provided for by law was five months. It followed that they had a right to payment under S. 3 para. 3 of the Insolvency Continued Payment Act until 30 June 1990. The Labour Office had maintained that the applicants' dismissal had not been based on SS. 20 b and 20 c of the Composition with Creditors Act.        The Court, referring to S. 20 of the Employees' Act, found that the period of notice depended on the length of the applicants' employment as employees, and was three months in respect of the first applicant and two months in respect of the second applicant. Taking the applicants' employment as workers into account, the period of notice was five months. However, this period of notice was one agreed upon by specific contract, which the employer was allowed to disregard in case of a termination of the contract of employment under SS. 20 b and 20 c of the Composition with Creditors Act. The company, although dismissing the applicants with effect from 30 June 1990, could have dismissed the first applicant with effect from 30 April 1990 and the second applicant with effect from 31 March 1990. S. 3 para. 3 of the Insolvency Continued Payment Act only provided payment until the end of the period of notice provided for by law.        On 19 February 1992 the Vienna Court of Appeal (Oberlandes- gericht) dismissed the applicants' appeal (Berufung) and confirmed the Labour Court's legal view. In these and the subsequent proceedings the applicants were represented by counsel.        On 16 September 1992 the Supreme Court (Oberster Gerichtshof) dismissed the applicants' appeal on points of law (Revision). It found that the lower instances had correctly applied the law. As regards the applicants' complaint that the relevant provisions, including SS. 20 b and 20 c of the Composition with Creditors Act, were unconstitutional, the Court found inter alia that a dismissal was a unilateral act, which did not depend on the approval of the person to be dismissed. Thus, there was no violation of the right to a fair hearing, if the court, in the composition with creditors proceedings, gave permission to terminate contracts of employment without hearing the employees concerned.        The Supreme Court's decision was served on the applicants' lawyer on 13 October 1992.   B.    Relevant domestic law and practice   1.    Composition with Creditors Act (Ausgleichsordung)        The Composition with Creditors Act governs the proceedings to be followed in case of insolvency, if the debtor proposes a composition with creditors. The relevant provisions, in the version of the 1982 amendment, Federal Law Gazette (Bundesgesetzblatt) 1982/370, which were in force at the time of the facts, are summarised below. They have partly been changed by an amendment of 1994, Federal Law Gazette 1994/153.        S. 20 b para. 2 states that the debtor, provided permission is given by the court, may give notice of termination of contracts which have not been entirely performed at the time of the institution of the composition proceedings. If appropriate, the court has to hear the other contracting party and the administrator in the composition proceedings before taking a decision. Permission to give notice of termination of a contract may only be given if its fulfilment would endanger the composition with creditors or the further existence of the enterprise, and if the other contracting party will not suffer disproportionate damage. The decision of the court has to be served upon the debtor, the administrator in the composition with creditors proceedings and the other contracting party. There is no appeal against the court's decision.        S. 20 c para. 2 states that Section 20 b is also applicable to contracts of employment, where the debtor is the employer. In such cases, the court may allow the debtor to give notice of termination of contracts of employment. The debtor has to respect the period of notice (Kündigungsfrist) provided for by law or by collective agreement, but is not bound to respect a longer period of notice which might have been agreed upon in a specific contract, nor the duration of employment agreed upon in a fixed-term contract. Apart from that the employer has to respect restrictions on the termination of contracts of employment provided for by law (gesetzliche Kündigungsbeschränkungen).        S. 23 deals with claims which are privileged in the composition with creditors proceedings (bevorrechtete Forderungen). According to para. 1 subpara. 3, claims of employees, for the period following the institution of such proceedings, are privileged, if their contract of employment has not been terminated either before the institution of the proceedings or after their institution in accordance with SS. 20 b or 20 c.   Section 46 para. 2 provides that debtors whose claims are privileged have to be fully paid.   2.    Employees' Act (Angestelltengesetz)        S. 20 deals with the termination of contracts of employment which have not been concluded for a fixed term. The employer may terminate the contract at the end of each quarter of the year (Kündigungstermin) after giving prior notice. The period for giving notice (Kündigungsfrist) is six weeks, after two years of employment it is two months, after five   years of employment it is three months, after fifteen years of employment it is four months and after 25 years of employment it is five months (para. 2). The employee can terminate the contract at the end of each month with one month's notice (para. 4).   3.    Industrial Relations Act (Arbeitsverfassungsgesetz)        S. 105 deals with the dismissal of employees.        Before dismissing an employee the employer shall notify the works council, which may comment within five days (para. 1).        Provided the works council has not expressly authorised the dismissal within this period, application may be made to the Court inter alia if the dismissal is not justified from a social point of view and the dismissed employee has already been in the employ of the undertaking for six months. Dismissal is unjustified from a social point of view, when it damages the employee's important interests, unless the employer can prove that inter alia it is due to business requirements which militate against continued employment (para. 3).        The employer is required to give the works council notice of the dismissal. If it has expressly objected to the proposed dismissal, the works council may, within one week of being notified, contest it before the court at the dismissed employee's request. If the works council does not act on the employee's request, he may himself do so within one week following expiry of the time-limit laid down for the works council (para. 4).        According to the Labour and Social Courts Act the Labour Courts are competent to deal with these proceedings.   4.    Insolvency (Continued Payments) Act (Insolvenz-Entgelt-      sicherungsgesetz)        S. 3 para. 1 states that, if not provided otherwise, an employee can claim payment under this Act for claims under S. 1 para. 2 (including claims for payment originating from the contract of employment or its termination), which have originated until the end of the third month following the institution of bankruptcy or other insolvency proceedings.        S. 3 para. 3 provides that an employee is entitled to payment under this Act, if his contract has been terminated by the employer either before the opening of bankruptcy or composition with creditors proceedings or after the opening of such proceedings according to Section 25 of the Bankruptcy Act or according to Sections 20 b and 20 c of the Composition with Creditors Act. For claims under Section 1 para. 2 the payment is due until the end of employment. It may not be granted beyond the period of notice (Kündigungsfrist) which is provided for by law or by collective agreement having regard to the date of termination (Kündigungstermin) and any restrictions for the termination of contracts provided for by law (gesetzliche Kündigungsbeschränkungen).   COMPLAINTS   1.    Under Article 6 para. 1 the applicants complain that they were not heard by the Vienna Commercial Court prior to its decision of 29 January 1990, which gave their employer permission to terminate their contracts of employment under SS. 20 b and c of the Composition with Creditors Act. They submit that the above decision affected their civil rights in that it reduced their claim to payment to the quota in the composition with creditors proceedings, and in that they did not get fully compensated under the Insolvency Continued Payment Act for the damage suffered. They also submit that they could not foresee this effect at the time the contested decision was taken.   2.    The applicants complain under Article 4 of the Convention that the termination of their contracts of employment under SS. 20 b and 20 c of the Composition Act compelled them to work without full pay, as they could not terminate their contracts themselves without loosing other claims, e.g. a lump sum payment which is only due if the employer terminates the contract.   3.    Finally, the applicants submit that the reduction of their claims for payment, which followed from the application of SS. 20 b and 20 c of the Composition with Creditors Act and was effective as of the date of the institution of the composition with creditors proceedings, amounted to an expropriation, for which they were not fully compensated. Moreover, the said provisions have a discriminatory effect as they leave it entirely in the employer's discretion for which employees he seeks the court's permission to terminate their contracts. The applicants invoke Article 1 of Protocol No. 1 alone and in combination with Article 14.   PROCEEDINGS BEFORE THE COMMISSION        The application was introduced on 8 April 1993 and registered on 27 July 1993.        On 28 February 1995 the Commission decided to communicate the application to the respondent Government, pursuant to Rule 48 para. 2 (b) of the Rules of Procedure.        The Government's written observations were submitted on 29 May 1995.   The applicants replied on 13 July 1995.   THE LAW   1.    The applicants complain under Article 6 para. 1 (Art. 6-1) of the Convention that they were not heard by the Vienna Commercial Court before it gave their employer company permission to terminate their contracts of employment under SS. 20 b and 20 c of the Composition with Creditors Act.        Article 6 para. 1 (Art. 6-1), so far as relevant, reads as follows:        "In the determination of his civil rights and obligations ...,      everyone is entitled to a fair ... hearing ... by an independent      and impartial tribunal ...".   a.    The Government submit that the applicants failed to exhaust domestic remedies as required by Article 26 (Art. 26) of the Convention. Firstly, the applicants should have appealed against the decison of the Vienna Commercial Court of 25 January 1990. Although this appeal would have been rejected as inadmissible under S. 20 b of the Composition with Creditors Act, they could then have lodged a further appeal with the Vienna Court of Appeal, which could have requested the Constitutional Court to review the constitutionality of the provisions at issue. Secondly, the Government submit that the applicants failed to challenge the termination of their employment under S. 105 of the Industrial Relations Act. They argue that under this provision the labour courts can declare the termination of employment invalid if the interests of the employee prevail over those of the employer. Finally, the Government submit that the applicants failed to claim payments which were not covered by the Insolvency (Continued Payments) Act from their employer. They claim that there is case-law according to which such payments are not reduced to the quota.        The applicants contest the Government's view. They submit that S. 20 b of the Composition with Creditors Act clearly states that there is no appeal against a decision taken under this provision. The Vienna Court of Appeal, as a court of second instance, has a right to challenge a law before the Constitutional Court. However, the party concerned is not entitled to have such proceedings instituted. As regards possible proceedings under S. 105 of the Industrial Relations Act, the applicants submit that they would not offer any prospects of success. They argue that other courts would be bound by the decision of the Vienna Commercial Court. Thus, they would not be able to come to a different assessment when examining whether the interests of the applicants prevailed over the employer's interest in terminating their contracts under S. 20 b of the Composition with Creditors Act. Moreover, the proceedings under S. 105 of the Industrial Relations Act are aimed at restoring the employment, whereas they wished to complain about the effects of the permission to terminate their employment under S. 20 b of the Composition with Creditors Act.        The Commission recalls that Article 26 (Art. 26) of the Convention only requires the exhaustion of such remedies which relate to the breaches of the Convention alleged and at the same time can provide effective and sufficient redress. An applicant does not need to exercise remedies which, although theoretically of a nature to constitute remedies, do not offer any chance of redressing an alleged breach (cf. No. 20357/92, Dec. 7.3.1994, D.R. 76-A, p. 80, 87).        In the present case, the Vienna Commercial Court, on 25 January 1990, gave the applicants' employer permission to terminate their contracts of employment under SS. 20 b and 20 c of the Composition with Creditors Act. According to S. 20 b of the said Act, no remedy was available against this decision. Thus, an appeal would have been rejected as inadmissible. As regards a further appeal to the Vienna Court of Appeal, the Commission notes that this court may challenge a law before the Constitutional Court, but is not obliged to do so.        As regards the possibility to challenge the termination of their employment, the Commission finds that the proceedings under S. 105 of the Industrial Relations Act are aimed at the continuation of employment. They do not, however, offer the applicants a possibility to claim that the general rules of labour law, instead of SS. 20 b and c of the Composition with Creditors Act, should be applied to the termination of their contracts of employment.        Finally, as regards the Government's submission that the applicants failed to claim payments which were not covered by the Insolvency (Continued Payments) Act from their employer, the Commission notes that, according to S. 23 of the Composition with Creditors Act, claims of employees whose contracts were terminated under SS. 20 b and c of the said Act, loose their status as privileged claims, i.e. they are reduced to the quota. The Government have failed to show that, at the relevant time, there was case-law to the contrary. Thus, it appears that such a claim would not have provided full redress to the applicants.        In conclusion, the Commission finds that the applicants have exhausted domestic remedies as required by Article 26 (Art. 26) of the Convention.   b.    As regards the merits of the complaint, the Government argue that the Commercial Court's decision of 25 January 1990 did not determine the applicants' civil rights and obligations within the meaning of Article 6 (Art. 6) of the Convention. This decision only gave the applicants' employer permission to terminate their contracts of employment prematurely, in accordance with SS. 20 b and c of the Composition with Creditors Act. Further, the Government point out that the applicants' employer company did not make use of this permission, as it terminated their contracts only at the specific dates and periods of notice set out in their contracts.        Moreover, the Government argue that the applicants did not suffer any other disadvantages as a result of the impugned decision. They submit that the Supreme Court, in its decision of 6 May 1994, has found that claims for payment remain privileged claims under S. 23 para. 1 of the Composition with Creditors Act, insofar as they are not covered by the Insolvency (Continued Payments) Act.        Further, the Government point out that S. 20 b of the Composition with Creditors Act, in the version applicable at the relevant time, stated that the competent court has to hear the employees concerned, if appropriate. Given the need to observe close deadlines in the composition with creditors proceedings and the interest of the debtor and the general public in obtaining a decision, they argue that the Commercial Court's refraining from hearing the applicants was justified. Finally, the Government again refer to S. 105 of the Industrial Relations Act, and submit that the applicants had the possibility to challenge the termination of their employment as being unjustified from a social point of view before the labour courts and to be heard in these proceedings.        The applicants submit that the Commercial Court's decision directly affected their civil rights within the meaning of Article 6 (Art. 6). They submit in particular that it allowed their employer to terminate their contracts with the effect that a shorter period of notice applied and that their claims, which would otherwise have to be fully paid, were reduced to the quota in the composition with creditors proceedings.        Further, the applicants submit that the need to conduct the composition with creditors proceedings speedily cannot justify the fact that they were not heard at all. As regards   the possibility to challenge the termination of their employment under S. 105 of the Industrial Relations Act, the applicants refer to their above submissions, namely that the labour courts would not come to a different assessment of the interests involved; and that the proceedings were not suited to assert their claim that they suffered damages from the termination of their employment under SS. 20 b and c of the Composition with Creditors Act.        Finally, the applicants argue that they are not entitled to full compensation under the Insolvency (Continued Payments) Act. In particular they argue that the Supreme Court's decision of 6 May 1994, referred to by the Government, constituted a change of the case-law, which occurred after their cases had been before the courts.        The issues to be decided are whether, in regard to the Vienna Commercial Court's decision to permit the applicants' employer to terminate their contracts of employment under SS. 20 b and c of the Composition with Creditors Act, the applicants were entitled to a procedure in accordance with Article 6 para. 1 (Art. 6-1) of the Convention and, if so, whether such a procedure was available to them.        After an examination of these issues in the light of the parties' submissions, the Commission considers that they raise questions of fact and law which can only be determined by an examination of the merits. It follows that this complaint cannot, therefore, be declared inadmissible as being manifestly ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention. No other grounds for inadmissibility have been established.   2.    Under Article 4 (Art. 4), the applicants submit that, following notice of their dismissal, they were compelled to perform work without full pay as they could not terminate their contracts themselves without loosing claims, which were only due if the employer terminated the contract.        Article 4 para. 2 (Art. 4-2) reads as follows:        "No one shall be required to perform forced or compulsory      labour."        The Commission recalls that the concept of forced or compulsory labour within the meaning of Article 4 para. 2 (Art. 4-2) comprises two elements. These elements are first that the labour or service must be performed by the person concerned against his will and secondly that the obligation to perform this labour or service must be either unjust or oppressive, or must itself constitute an avoidable hardship (No. 9322/81, Dec. 3.5.83, D.R. 32 p. 180, 182).        In the present case, the applicants entered freely into their contracts of employment. Moreover, it appears that, according to S. 20 para. 4 of the Employees' Act, they were free to terminate them with one month's notice. Moreover, the applicants failed to show that the financial losses they would allegedly suffer from terminating their contracts of employment, would be such as to amount to a restriction of their contractual freedom. Therefore, it cannot be said that they had to perform their work against their will. In any event, there is no indication that the performance of their work can be considered as unjust or oppressive or as constituting avoidable hardship.        It follows that this part of the application is manifestly ill- founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.   3.    Finally, the applicants complain that the application of SS. 20 b and 20 c of the Composition with Creditors Act amounted to an expropriation, for which they were not compensated. Moreover, they claim that the said provisions have a discriminatory effect as they leave it entirely in the employer's discretion for which employees he seeks the court's permission to terminate their contracts. They invoke Article 1 of Protocol No. 1 (P1-1) alone and in combination with Article 14 (P1-1+14).        The Commission will first examine this complaint under Article 1 of Protocol No. 1 (P1-1), which reads as follows:        "Every natural or legal person is entitled to the peaceful      enjoyment of his possessions.   No one shall be deprived of his      possessions except in the public interest and subject to the      conditions provided for by law and by the general principles of      international law.        The preceding provisions shall not, however, in any way impair      the right of a State to enforce such laws as it deems necessary      to control the use of property in accordance with the general      interest or to secure the payment of taxes or other contributions      or penalties."        The Commission recalls that legal provisions governing private law relations between individuals and which, as such, provide for one person to surrender a possession to another, do not infringe the right to peaceful enjoyment of possessions, unless these provisions result in one person being arbitrarily and unjustly deprived of property in favour of another (No. 12462/86, Dec. 13.7.1987, D.R. 53 p. 234).        The Commission notes that the relations between the applicants and their employer company were governed by private law contracts, i.e. by their contracts of employment. The applicants' rights flowing from these contracts, including the right to payment, may be regarded as a "possession" within the meaning of Article 1 of Protocol No. 1 (P1-1). The Commercial Court's decision permitted the applicants' employer to terminate their contracts with the effect that the applicants' claims for payment were reduced to the quota in the composition with creditors proceedings. Thus, the contested decision related to the adjudication of property between private parties. However, it was in accordance with SS. 20 b and 20 c of the Composition with Creditors Act, which do not appear arbitrary as they allow termination of contracts of employment only if otherwise the composition with creditors or the existence of the enterprise would be endangered and if the employees concerned do not suffer disproportionate damage. The applicants were actually compensated, though not fully, under the Insolvency (Continued Payment) Act.        In these circumstances, the Commission finds no appearance of a violation of the applicants' right to peaceful enjoyment of their possessions within the meaning of Article 1 of Protocol No. 1 (P1-1).        As regards Article 14 in combination with Article 1 of Protocol No. 1 (Art. 14+P1-1), the Commission finds that the applicants have not substantiated their complaint. In particular, they have not submitted that they were singled out for dismissal on the basis of any particular personal status which distinguished them from other employees.        It follows that this part of the application is manifestly ill- founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.        For these reasons, the Commission, unanimously,        DECLARES ADMISSIBLE, without prejudging the merits, the      applicants' complaint that they were not heard as regards      permission to terminate their contracts of employment under      SS. 20 b and c of the Composition with Creditors Act, which was      given to their employer by the Vienna Commercial Court;        DECLARES INADMISSIBLE the remainder of the application.   Secretary to the First Chamber        President of the First Chamber        (M.F. BUQUICCHIO)                         (C.L. ROZAKIS)