Pursuant to EU and Luxembourg case law, the simple change of service provider by a company can entail the application of the TUPE regulations in place (and thus an automatic transfer of the employment contracts). National case law so far distinguished between an activity predominantly based on manpower and an activity predominantly based on (indispensable) materials/assets.
A recent decision (Court of Appeal, 30 May 2016, number 41615) does however no longer highlight the aforementioned distinction and employers active in Luxembourg should be aware of the risk that, even if an activity is mainly asset based (rather than manpower related), Luxembourg courts tend to consider that the TUPE regulations should also apply if the new service provider takes over employees. In such a case, all in-scope employees’ employment contracts would then automatically be transferred to the new service provider and would either have to be (i) terminated or (ii) the employees granted the rights they had before during the relationship with the former service provider.