Proposed Draft Directive for Informing and Consulting Employee in the European Community [2001] IRLR 263 EAT
The decision by the French car manufacturer Renault in February 1997 to close its factory at Vilvoorde in Belgium, announced without warning to the 3,000 workers employed there, triggered a political storm which revived long-standing demands for EU legislation. Despite the strong encouragement of the European Commission, the European organisation of employers (UNICE) twice explicitly refused to enter in negotiations (social dialogue) with the European Trade Union Confederation with a view to reaching a framework agreement. Consequently, on 11 November 1998, the European Commission published a proposal for a private Council Directive establishing a general framework for informing and consulting employees in the European Community.
Legislative manoeuvres
From November 1998 the United Kingdom government successfully mobilised a blocking minority of Member States. However, the persistence of the Swedish Presidency of the Council, which began in January 2001, finally led to political agreement on a draft directive on 11 June 2001, with the UK abstaining. The EU's legislative procedure then engages the European Parliament, which proposed a series of amendments to the Commission's draft of 1998. The Commission adopted a number of these amendments in a revised draft proposal of 23 May 2001. The next step in the procedure is for an attempt, through a Conciliation Committee, to reach agreement on a compromise text which can be approved by both the Council and the Parliament. If so, it will become the new directive legally binding on all Member States, including the UK.
The battleground issues
Two of the most important and innovative aspects of the original Commission proposal of 1998 concern the need for information and consultation prior to a decision being made, and the need for sanctions when management violates the requirement of information and consultation. These are potentially serious defects in the Council draft agreed on 11 June 2001.
Consultation prior to decision-making?
Article 1(1) states that the purpose of the directive is to establish a general framework for information and consultation of employees. This statement, however, does not make it clear whether the information and consultation process is obligatory before, or only after the employer makes the decision.
However, in "decisions likely to lead to substantial changes in work organisation or in contractual relations", the Commission's proposed draft of 1998 did make it clear that the mandatory infor-mation and consultation must include "an attempt to seek prior agreement on the decisions" (Article 2(1)(e), 5th indent).
Unfortunately, both the revised Commission draft of 23 May 2001 (Article 4(4) 5th indent) and the Council's approved draft of 11 June 2001 (Article 3(3b), 4th indent) delete the word "prior". This would appear to indicate a shift towards the view that information and consultation only concerns decisions already taken.
Nonetheless, the Preambles to all three drafts justify the directive on the grounds that "serious decisions affecting workers" were taken "without adequate procedures having been implemented beforehand to inform and consult them". In Community law, the Preambles provide an interpretative framework for the directive. The ambiguity caused by the absence of the word "prior" may still be interpreted to promote the objectives of the directive: that information and consultation take place before the decision is made.
The negotiations in the Conciliation Committee will determine the outcome of this central question: are employees' representatives to be informed and consulted prior to decisions being made, or only to react to decisions already made? The resolution of this issue in EU law will have fundamental implications for trade union policy in the UK and Europe.
Sanctions for "serious" failure to inform and consult
Experience, such as that of the Renault case, shows that Member States often fail to provide adequate remedies where employers violate their obligations to inform and consult. This led the Commission, in the 1998 draft, to propose special sanctions for the case of "serious breach" by the employer of the obligation to inform and consult over certain decisions. The decision by the employer "shall have no legal effect on the employment contracts or employment relationships of the employees affected... until such time as the employer has fulfilled his obligationsÉ". This provision would also have reinforced the sanctions available for breaches of the Collective Dismissals and Acquired Rights Directives, and would have required the amendment of the national legislation implementing them.
None of this careful attention to special sanctions for serious breaches survived the Council's approved draft of 11 June 2001, which proposes to delete the whole of this provision for a special sanction for serious breach.
The battle ahead...
A major political struggle is imminent over the content of the proposed draft directive. The coming struggle in the Conciliation Committee will focus on compromises based on the revised Commission draft of 23 May 2001 and the Council approved draft of 11 June 2001. The concessions made in the Council draft in order to overcome the UK's opposition in principle to the directive severely weaken the core objective of the directive. It is in the trade unions' interest to persuade the European Parliament to resist the Council's draft. The task is to identify amendments that will muster the qualified majority in the Council needed to approve the Commission's revised directive.
A number of specific differences will be the focus of attempts at compromise. The most important is perhaps the special sanctions for serious breach. But there are other differences relating to the possibility of information and consultation of individual employees, extension of the new requirements to other directives, the extent to which national law and practice can determine the scope and nature of the new obligations, the definitions of "establishment" and "undertaking", the freedom given to the negotiation of agreements providing for different obligations and the extent of the prohibition on disclosure of confidential information.
Trade union strategy should aim to achieve the requisite majority in the Council to support at least some improvements. Trade unions in the UK have perhaps the most at stake in the negotiations over the final content of the draft directive. The UK government's role in the forthcoming Conciliation Committee should be strictly monitored and pressure brought where possible to mitigate any further effort by the UK government to weaken the directive.
The final directive will inevitably include compromise provisions raising questions of interpretation. Not least the two highlighted above: must trade union representatives be informed and consulted prior to decisions being made, and does national implementing legislation include penalties which are adequate, effective, proportionate and dissuasive?
After the directive has been approved, a careful strategy of targeted litigation can identify cases which may produce interpretations from the European Court of Justice, as in earlier cases on the Working Time Directive, which are more sympathetic to the objectives of the EU directive than to the domestic policies of the UK government.