In the UK’s first ever appeal case on European Works Councils (‘EWCs’), the Employment Appeal Tribunal (‘EAT’) has ruled that a Special Negotiating Body (‘SNB’, a body of employees’ representatives set up to negotiate the terms of an agreement establishing a EWC) can continue to exist after the third anniversary of a request to establish a EWC.
By: David Hopper and Kerry Salisbury
Firm: Lewis Silkin LLP
The Transnational Information and Consultation of Employees Regulations 1999 (‘TICER’) provide for default rules called ‘subsidiary requirements’ to apply if, ‘after the expiry of a period of three years’, management and the SNB of special employees’ representatives ‘have failed to conclude an agreement’. This is different from the test in the underlying EU directive, which refers to the application of subsidiary requirements if ‘after three years, they are unable to conclude an agreement’.
The Manpower case
Manpower, an American multinational workforce solutions company, received a request to negotiate a EWC in 2013 and concluded an agreement in March 2017. Gordon Lean, a Manpower employee, had complained to the Central Arbitration Committee (‘CAC’) in January 2017 that, as three years had already passed, the subsidiary requirements applied.
The CAC dismissed Mr Lean’s complaint. It upheld the validity of the March 2017 agreement on the basis that the SNB had continued to exist in January 2017, meaning only it could bring a complaint. In any event, the CAC said, there had been no ‘failure’ of management.
The EAT has now upheld the CAC’s decision. Its judgment focuses on whether Mr Lean was an eligible complainant to the CAC, but also provides helpful guidance on how TICER should be interpreted. In particular, the EAT has emphasised the fundamental importance of the ‘principle of autonomy of the parties’ during negotiations to tailor an information and consultation framework for their own circumstances.
The EAT also confirmed that:
- A SNB can become the first EWC notwithstanding that its members were not elected or appointed for that purpose. This is particularly important, as the topic of how quickly an EWC can be established often crops up during negotiations.
- A SNB does not automatically come to an end after three years but can continue if the parties may be able to conclude an agreement.
- SNBs only cease to exist ‘for some reason’. Companies should therefore consider whether an agreement should provide for the winding up of the SNB.
Finally, the EAT rejected the idea that a SNB would draw out negotiations interminably and against the interests of employees. This is consistent with its other findings that TICER must be interpreted in line with ‘industrial reality’.
The EAT’s pragmatic approach to interpreting TICER will be of significant precedent value in future EWC cases before the CAC. It may also be relevant in cases before the Irish courts, given the similarity of the two states’ legal systems and EWC legislation. We are expecting further guidance from a second appeal case on EWCs, which is listed for hearing by the EAT next month.