Great Britain: Central Arbritation Committee delivers a significant ruling on EWCs

Great Britain: Central Arbritation Committee delivers a significant ruling on EWCs

On 19 January, the Central Arbitration Committee (CAC), a labour tribunal with responsibility for EWC issues, delivered its decision in a dispute between the employers’ representatives of the newly formed Emerson European Works Council (EEWC) (first meeting in December 2014) and Emerson management. The CAC said that the company should launch transnational consultations, as long as the conditions are appropriate, regardless of whether the company has all the information on the consequences of a project. It did however not make any order to that effect. The CAC decision also clarifies interesting aspects of the right to expert advice, information prior to the annual meeting and whether or not EWCs can hire lawyers, paid for by management, to submit cases to the CAC. It shows to what extent the “judicial environment” around a European Works Council (EWC) agreement under British law is more supportive of management than other jurisdictions. 

The facts. In June 2015, Emerson management informed all employees and subsequently made a press statement concerning its intention to restructure the group by repositioning its numerous businesses. The group’s strategy initially involved spinning off its Network Power business and choosing between potential operating partnerships, joint ventures, sales or purchases for some of its other businesses. The Network Power spinoff was set for September 2016. In July 2015 the EWC secretary requested that management convene a general meeting in line with what the EWC agreement recognises as extraordinary circumstances. At this stage Emerson management denied that the circumstances were in fact extraordinary, indicating that the future restructuring decisions were wholly within management prerogative and that the EWC was only competent for treating the consequences on workers of such decisions, once the consequences had been evaluated. Management committed to providing available information during the annual November 2015 meeting as well as calling a meeting of the EEWC beforehand, should information on the ‘spin-off’ become available. Management underlined the fact that even if the ‘spin-off’ was likely to affect more than 300 staff in two countries (the threshold requirement for launching EWC information and consultation procedures), it couldn’t provide any additional information at that stage on what would be a 15-month process. The EEWC thus voted to take legal action via the CAC.

Providing information when it is available. On 19 January the CAC decided on the following, taking into account both British law as it affects EWCs, but mainly the content of the EWC agreement itself.

1/ Regardless of whether the project is a worldwide project or not, once it affects workers located in the European Union or in the European Free Trade Agreement Area, and in the proportions laid out in the EWC agreement, the EWC must be explicitly involved. This point is in reply to the argument by Emerson management that in fact the restructuring project did not have just a European dimension but was global.

2/ Above all, the CAC decision explicitly stated that the fact management had very little concrete information was immaterial. “It is not necessary for all the information pertinent to a proposed course of action to be available before the information and consultation process can begin. Additional information can be added at a later stage.” In reply to management’s argument that the costs of a full EWC meeting were too high given the paucity of information available, the CAC stressed that the EWC agreement allowed for an exceptional meeting with just the select committee and it concluded that management had breached the terms of the agreement by not calling the EWC meeting prior to the June announcement.

3/ Nonetheless, because the company had already begun arrangements for an exceptional meeting with the full EWC, the CAC decided not to deliver a ruling either enjoining respect for, or penalising the breach of, the agreement,nor did it make any order as to how such matters should be dealt with in the future

Debate over information prior to an annual meeting and over the right to an expert. The complainants also criticised management for not having provided the information, which was presented during the annual meeting, beforehand, which would have given the EWC time to thoroughly evaluate its content. The complainants argue that the quick-fire pace and density of the information presented during the annual meeting was such that they could not fully comprehend its scope and content and even if the agreement did not intend for information to be made available beforehand such behaviour runs counter to the spirit of the EU directive on EWCs. The CAC’s response took up management’s defense arguments saying that the fact that the EWC agreement allows the delegates to meet for three full days (including the preparatory and debriefing meetings but excluding travel) during which time they can discuss between themselves, formulate a reply to management, with the assistance of two experts if needed, in effect gave them ample means to exercise their function without it being necessary to provide them with the information beforehand.

The final point on recourse to expert opinion, although not officially ruled on, was in the end resolved via a financial settlement. The dispute lay in the fact that management had questioned an invoice issued by the British trade union Unite in respect of one of its representatives for acting as an expert to the EWC. Due to the fact that this expert had been representing the IndustriALL Europe union federation during the EWC negotiations, management did not see why this union expert should be paid. The CAC did not have to rule on this issue because both parties agreed an agreement on the matter during the course of the hearing. Nonetheless the CAC is shutting the door to the right to expert legal opinion in cases of legal recourse invoked by the EWC. For the CAC, in so far as no legal representation had been required during the procedures, management’s refusal to pay for legal assistance did not run against the agreement nor did it run against British law concerning EWCs. In saying that UK did not require the payment of lawyers, the CAC has blocked this for all EWCs working under UK law.

Source: Planet Labor, 21 January 2016