With attention focused on the outcome of the UK’s election, it is easy to forget that the European Union is also instrumental in the development of our employment law. Of particular interest this month is the EU Commission consultation (closing 30 June) on strengthening existing EU legislation on worker information and consultation, including a possible consolidation of three Directives (the 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.
In order to ensure that EU legislation remains ‘fit for purpose’, the EU Commission undertook a review of the information and consultation provisions in the above Directives during 2012/13. The review was broadly positive in its conclusions. However, it highlighted some shortcomings and gaps in the definitions of 'information' and 'consultation' across the Directives. As a result, the Commission decided to consult with the EU social partners (representatives of employers and trade unions) on whether to revise the Directives and, if so, how.
Does this matter to employers?
The outcome of the consultation does matter because stricter obligations to inform and consult could result in delays to business restructuring, mergers, sales and other business change, as well as the potential for more litigation alleging breaches of the new and more extensive consultation rights and an increased risk of leaks of market sensitive confidential information.
In particular, the Commission’s consultation raises the prospect of adopting the definitions of information and consultation from the 2009 European Works Council (EWC) Directive. According to the Commission, harmonising standards ‘upwards’ in this way would contribute to “a more effective exercise of the rights and obligations of all” concerned.
However, adopting EWC definitions would, for example, result in trade union or employee representatives in a TUPE or collective redundancy situation having a new legal right to produce a formal ‘opinion’ about managements’ proposals; the idea being that management provide a reasoned response to the opinion before moving ahead with any change.
Depending on the nature and complexity of the proposed change, an opinion may take time to produce and the representatives may need assistance. For example, in France external accountants are sometimes hired to help representatives produce an opinion.
There is also a risk that the Directives would be ‘recast’, meaning that they would be swept into one new Directive, providing the opportunity for further change in other areas, besides information and consultation.
While the consultation does raise the spectre of some major changes to information and consultation, it must be borne in mind that the social partners frequently fail to reach agreement on the way forward.
If that is the case, the Commission must then decide how to act. It is anticipated that it would propose changes to the Directives but whether they would finally be adopted depends on support from national governments, in the form of the Council, as well as the EU Parliament - neither of which is certain and may result in a stalemate.