The law states that certain organisations have to inform and consult with members of their European Works Council (EWC) in relation to “transnational matters”. In Verizon EWC and anor v Central Management of the Verizon Group, the Employment Appeal Tribunal (EAT) held that as a result of not consulting meaningfully with its EWC, the company had to pay a penalty of £35,000.
At a meeting of the company’s European Works Council (EWC) Select Committee on 10 January 2019, the five committee members were informed of a likely re-organisation which would result in 216 employees across eight European countries, including the UK, losing their jobs. At the meeting the company said that notice of the proposals would not be given to staff before 24 January.
The committee raised concerns that, given the potential impact of the reorganisation, the company needed to consult representatives from all the affected countries, as opposed to members of the select committee. About a week after the meeting, the committee chair wrote again expressing concern about the tight schedule of the reorganisation and the non-involvement of EWC members who were not members of the select committee.
On 23 January, Verizon issued a press release about the reorganisation. The following day it sent an email to staff announcing that redundancy processes would start in various European countries. The chair then complained that, by failing to consult the EWC, the company was in breach not only of the Transnational Information and Consultation of Employees Regulations 1999 (TICER), but also the agreement made between the parties under TICER, referred to as the Charter.
After an unsuccessful attempt at arbitration, the Select Committee members complained to the Central Arbitration Committee (CAC) about the company’s failure to consult; the fact that Verizon had refused to allow the EWC “an expert of their choice”; and that it had also refused to pay their expert’s expenses, as stipulated under the Charter.
The CAC agreed that Verizon had failed to comply with the required information and consultation process before making a decision on the re-organization as required by the TICER regulations and the Charter. In particular it held that they had breached the Charter by failing to inform and consult the "correct elements" of the EWC because representatives of all the affected countries were not involved.
Although the CAC rejected the complaint that Verizon had failed to allow the EWC to appoint an expert of their choice, it agreed that the company’s refusal to pay their fees was in breach of the Charter.
The EWC then asked the EAT to issue penalty notices with regard to each of these decisions. In their defence, Verizon argued that the failure to consult was purely procedural and that "the gravity of the failures was slight, the period of time over which they occurred was short, [and] the reason for them was accidental and well-intentioned...".
The EAT, however, disagreed. It pointed out that instead of ensuring that the required information was supplied to the appropriate members of the EWC in order to give them enough time to have a “meaningful input”, the company went ahead with a final decision to reorganise on an unspecified date between 10 and 23 January. This, said the EAT, was not remotely consistent with the spirit of the regulations. That being so, the EAT issued a penalty notice for £35,000.
With regard to the failure to pay the expenses of the experts acting for the committee, the EAT held that Verizon should pay a penalty of £5,000 bearing in mind that the expert had been prepared to act without payment and that it had already paid the actual fees, as ordered by the CAC.