This article first appeared on the Legal Island Employment Law Hub, January 2020.
In preparation for the ever-looming Brexit, which is currently due to happen on the 31 January this year, many European Employee Fora and European Works Councils (“EWCs”) situated in the UK are reconsidering their location and looking to Ireland as their new hub.
Due to the ambiguity and insecurity caused by Brexit, many EWCs have chosen to relocate from the UK before the default rules under the EWC Directive automatically apply, which will happen in the event of a no-deal Brexit. Once the default rules kick in post-Brexit, a representative agent will be deemed to exist in the Member State that employs the highest number of employees in the organisation. In order to avoid this, EWCs headquartered in the UK at present, are looking to locate their new representative agent in Ireland in advance of Brexit. Ireland has proven to be the most attractive destination for EWCs given the following considerations:
- It will be the only predominately English-speaking member of the European Union post-Brexit
- It operates a common law legal system and has a strong employment law framework
- It has a thriving business-friendly environment
- It is culturally diverse
- It provides easy access to the European, Middle Eastern and African regions (EMEA)
Hewlett Packard Enterprise relocates European Works Council to Ireland
A number of non-EU-based companies have been pro-active in relocating their representative agent from the UK since Brexit, most notably Hewlett Packard Enterprise Company (HPE). Following the UK’s decision to leave the European Union, HPE unilaterally terminated its UK representative agent and appointed an Irish subsidiary in its place.
HPE’s special negotiating body of employee representatives challenged this change and complained to The Central Arbitration Committee (CAC). The CAC subsequently ruled that multinational companies, that are headquartered outside of the European Union, are permitted to terminate their UK representative agent in order to relocate to a new member state in anticipation of Brexit. This ruling provides clarity and comfort to other multinational companies, that have their EWC arrangements currently located in the UK, who are considering appointing a new representative agent.
All non-EU multi-national companies, that meet the requirements under the EWC Directive and have their central management and/or their representative agent located in the UK, may wish to consider appointing a new representative agent in Ireland in order to avoid the consequences of a possible no-deal Brexit following the transition period, ending on 31 December 2020.