A council meeting of Ministers of Agriculture (including fisheries) on 18 February 2002 finally adopted the directive establishing a general framework for improving information and consultation rights of employees in the European Community.
UK can run but cannot hide...
As recounted in Thompsons LELR of September 2001, the United Kingdom government had been actively blocking adoption of the directive in the Council. One result was the joint declaration of the European Parliament, the Council and the Commission attached to the Minutes of the Council which adopted the directive on 18 February. The declaration recalled the judgements of the European Court of Justice of 8 June 1994 (Cases C-382/92 and C-383/92) which condemned the then UK Conservative government for its failure to provide for information and consultation of employee representatives under directives of 1975 and 1977. The declaration is a sharp reminder that the new directive's obligation to inform and consult employee representatives applies to Labour governments as well. At the end of the day, the UK government cannot escape the EU model of mandatory employee representation, and information and consultation of employee representatives.
Timing of information and consultation
Early drafts of the directive indicated clearly that employee representatives were to be informed and consulted prior to decisions being made. The final text remains ambivalent. Article 4(4)(e) defines 'consultation' as taking place 'with a view to reaching an agreement on decisions', but without any clearer indication of timing. However, the Preamble to the directive does contain a number of indications that the directive is to be interpreted to preclude 'serious decisions affecting employees from being taken and made public without adequate procedures having been implemented beforehand to inform and consult them' (Recital 6). There is every reason to expect that the European Court would uphold an interpretation of the directive consistent with this clear indication in the Preamble.
Sanctions for breach
Article 7(3) originally provided a sanction for serious breach. Under pressure from the UK, this was deleted. A report by the European Parliament's Employment and Social Affairs Committee on second reading on 10 October 2001 proposed an Amendment 12 imposing stringent sanctions and suspension of employer decisions in cases of serious breach. However, at a plenary session on 23 October 2001, while this amendment achieved a majority of those voting, it failed to obtain the required absolute majority of 313 of the 625 MEPs. A compromise was reached in the form of Recital 28 in the Preamble: 'Administrative or judicial procedures, as well as sanctions that are effective, dissuasive and proportionate in relation to the seriousness of the offence, should be applicable in cases of infringement of the obligations based on this Directive'. It is open to the European Court to condemn a Member State, as it did the UK in Cases C-382/92 and C-383/92 of 8 June 1994, for failing to provide adequate penalties in cases of violation of the information and consultation requirements. But, not least in the aftermath of the Enron scandal in the USA, this is a bitter disappointment.
A minefield of ambiguities
The final tortured text of the directive, reflecting the UK's government's unrelenting campaign, is a minefield of ambiguities. Four will be highlighted briefly here, and, with others, will attract much litigation.
- different negotiated arrangements - Article 5 allows management and labour to negotiate 'provisions which are different' from the directive. Unlike the Article 13 agreements in the European Works Councils (EWC) Directive, such agreements may be made 'at any time'. But Article 13 agreements could only be negotiated by the special negotiating body, subject to specific representation and voting requirements. The European Parliament attempted in Amendment 3 on second reading of this directive to specify that the 'social partners' eligible to negotiate different agreements on behalf of employees were 'the competent representative organisation of the trade unions, the employee representatives of the undertaking, as provided by law'. Though supported by the Commission, this proposal failed. Again, in the event of failure to reach agreement, the EWC directive prescribed a set of minimum standards (the 'subsidiary requirements') laid down in an Annex. No such standards are provided for in the present Directive. Instead, the agreements are subject only to the principles set out in Article 1, and exposed to challenge.
- effects on other directives - Earlier drafts of the directive provided clearly that it 'also applies' to the Collective Dismissals and Acquired Rights Directives. Instead, the final text states: 'This Directive should not affect the provisions, where these are more specific' of those directives. This presumably means it does affect those directives where they are 'less specific'. The outcome is considerable uncertainty as to whether, and if so how, those other directives are affected
- practical arrangements and national law and practices - Article 1(2) provides: 'The practical arrangements for information and consultation shall be defined and implemented in accordance with national law and industrial relations practices in individual Member States in such a way as to ensure their effectiveness'. Article 2(b-e) allows for national law and practice to define 'establishment', 'employer', 'employee' and 'employees' representatives'. But not 'information' and 'consultation'. The substantive elements of the general framework of the right to information and consultation may not be defined by national law and practices; only the practical arrangements to assure their effectiveness.
Some Member States may be tempted to trespass on the requirements of the 'general framework'. It will be up to litigants to bring them before the courts. Only if the practical arrangements ensure effectiveness of the right to information and consultation should they be upheld, an open invitation to litigation.
- thresholds and transposition The directive applies to all undertakings employing at least 50 employees or establishments employing at least 20 employees (Article 3), estimated at under 3% of all companies in the EU, though about 50% of all employees in the EU. Member States are allowed 3 years for transposition of the directive into national law. Not content, the UK government extracted concessions both increasing the threshold of application and extending the period of transposition. Too modest to allow itself to be named, the UK government is identified in Article 10 as: 'a Member State in which there is no general, permanent and statutory system of information and consultation of employees, nor a general, permanent and statutory system of employee representation at the workplace allowing employees to be represented for that purpose'. This dubious distinction is likely to be claimed only by the UK and Ireland, though arguably even the UK includes a permanent statutory system of health and safety representatives. This raises the question of whether 'general' refers to all workplaces, not to all issues.
If the UK succeeds in exploiting this provision, it will increase the threshold to undertakings with 150 employees or establishments with 100 employees for a period of a further two years, and for a further year this threshold will only decrease to 100 in undertakings and 50 in establishments. Many British workers will have to wait until 2008 for the rights guaranteed to other EU citizens three years earlier.
Conclusion
Given the long delay in transposition which it extracted, it is entirely possible that a Labour government will not be in power in 2008 when the deadline expires. For that reason alone, the government should be encouraged to introduce the necessary implementing legislation earlier.
Whenever this happens, litigation is probable. The Intergovernmental Conference scheduled for 2004 is likely to incorporate into the EC Treaty the EU Charter of Fundamental Rights which includes among other fundamental rights Article 27: Workers' right to information and consultation within the undertaking. Looking to this Charter, the European Court of Justice is likely to be more sympathetic to the objectives of the EU directive than to the domestic policies of the UK Government.