EU consults on changing collective information and consultation rights

The EU Commission is consulting both sides of industry (the EU’s ‘social partners’) on strengthening the effectiveness of existing EU legislation on national-level worker information and consultation, including a possible consolidation of three Directives (the Acquired Rights/TUPE, collective redundancies and information and consultation of workers Directives).

The employers’ body, Business Europe, is against such change, seeing it as unnecessary, while European trade unions have concerns that any consolidation might erode existing worker protections. At the same time, the trade unions have already used this initiative by the Commission to lobby for stricter employer duties: such as a requirement for employers to share more detailed information with workers representatives at the earliest opportunity and to receive their opinion in response, before any decision is finalised. Read our briefing for further information.

Significant EU collective redundancy court decision

The EU Collective Redundancies Directive provides two options for Member States to frame how the employee consultation duty is triggered. The second option (adopted by the UK), gives rise to a duty to consult representatives when the number of contemplated redundancies is ‘over a period of 90 days, at least 20, whatever the number of workers normally employed in the establishments in question’. The exact meaning of these words became critical in the context of the facts below.

Two insolvent retailers, Woolworths and Ethel Austin, collapsed and the employees lost their jobs. Many employees claimed compensation because there had been little or no collective consultation prior to dismissal. Those working in shops where 20 or more were dismissed succeeded, whereas those working in shops where there were fewer than 20 failed. This was challenged in the UK Court of Appeal. It asked the European Court of Justice to clarify whether the trigger for collective redundancy consultation is 20 or more redundancies in a particular establishment or 20 or more redundancies across an employer, irrespective of where they work.

The European Court decided that the Directive does not require aggregating the number of dismissals in all the employer’s establishments for the purpose of triggering the duty to consult. It also confirms that the term ‘establishment’ is an EU term, meaning that its interpretation must comply with EU case law to ensure uniformity. It reiterates that an ‘establishment’ is the entity to which the workers made redundant are assigned to carry out their duties and, as was previously the case, this will depend on the circumstances.