July 26
The appellant company, based in London, represented the interests of a multinational group of companies with headquarters in Switzerland. The respondent European Works Council was created by a European Works Council agreement, pursuant to article 1 of Council Directive 2009/38/EC, implemented in the United Kingdom by the amended Transnational Information and Consultation of Employees Regulations 1999, whereby, inter alia, representatives of the group’s employees were to be informed and consulted on “transnational” matters affecting the group’s employees across the European Economic Area. Under the agreement, the group was obliged to convene an extraordinary meeting within five working days following collective redundancies affecting group employees in at least two EEA countries. In 2019 and 2020, pursuant to decisions taken by local management, redundancies of the group’s employees took place in, inter alia, Sweden and Germany, which were unrelated to each other. A request by the works council to convene an extraordinary meeting to discuss the redundancies was refused by the group on the ground that, as there was no common cause to the redundancies in each individual country and no centrally-taken decision, the matter was not “transnational” and no extraordinary meeting was called for. A complaint was subsequently presented on behalf of the works council under regulation 21 of the 1999 Regulations, alleging a breach of regulation 18A by the employer in failing to inform and consult the works council about collective redundancies concerning employees in at least two member states. The Central Arbitration Committee upheld the complaint in regard to the redundancies in Sweden and Germany, holding that those redundancies, though unrelated, gave rise to a “transnational” matter creating an obligation on the group under the works council agreement to call an extraordinary meeting to provide information and engage with employee representatives, and that it was irrelevant that the redundancies were separately formulated in different countries in the light of unrelated national circumstances. The EAT dismissed the company’s appeal, substantially agreeing with the Committee’s reasoning and holding that the language of the provisions in article 1(4) of Directive 2009/38, regulation 2(4A) of the amended 1999 Regulations and the works council agreement did not require that, to be a “transnational” matter, a decision to make collective redundancies, taken in one EEA state, had to have consequences that also affected employees in at least another EEA state. It was sufficient if there were collective redundancies significantly affecting employees in each of at least two EEA countries and accordingly, there was an obligation to convene an extraordinary meeting of the works council.
On the company’s further appeal—
Held, appeal allowed. The language of the provisions in article 1(4) of Directive 2009/38, regulation 2(4A) of the amended Transnational Information and Consultation of Employees Regulations 1999 and the works council agreement required that, to be a “transnational matter”, collective redundancy proposals affecting undertakings in two or more countries had to have a common link or nexus of some kind, or there had to be some way in which each proposal affected or had potential effects on undertakings in each of two different countries. Although a central management decision was not required, if the objective factual link or nexus was not present, the matter was not transnational for those purposes. A mere coincidence of timing of proposals for collective redundancies or business restructuring happening in undertakings in two countries was not enough to trigger an extraordinary meeting, and it was not irrelevant that such “exceptional circumstances” were unrelated or had no common rationale or nexus at all. Collective redundancies of this kind would not be transnational in character since they would lack the necessary link or nexus affecting (or potentially affecting) two undertakings in each of two or more countries. If, as a matter of substance and fact, collective redundancies in one member state would have “indirect or knock-on effects” on employees in another member state, that would make the proposal a “transnational matter”, but if they did not, and only had national effects (domestic effects on employees in one member state), they were not a “transnational matter”. Independent, unrelated employment events in two or more countries, would not constitute a transnational matter. Accordingly, both the EAT and the Committee had made a material error of law and their decisions on this issue would be set aside. The factual issue of whether there was a common link or nexus between the redundancies in Sweden and Germany, or their potential effects, was an evaluative question which would be remitted to the Committee for redetermination (paras 56, 61, 66–71, 75, 76, 82).
Andrew Burns KC and Sam Way (instructed by Lewis Silkin LLP) for the company.
Richard O’Dair (instructed by EWC Legal Advisers) for the works council.