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Will EWCs become the victims of a hard Brexit?

Will EWCs become the victims of a hard Brexit?

What would a “hard Brexit” mean for European Works Councils, assuming that it is in fact what we are headed for? We asked a number of EWC experts for their view on this and they came up with 4 important conclusions:

  • EWCs could no longer be legally “housed” in the UK.
  • UK employees would no longer be legally entitled to be represented on EWCs.
  • The continued existence of “Subsidiary Requirement” EWCs could be called into question.
  • Question marks would be raised over UK union officials acting as experts to EWCs.

EWCs could no longer be legally “housed” in the UK

If the UK is outside the scope of EU labour law, EWCs can no longer be legally housed in the UK. There a are probably 200-250 EWCs subject to UK law. Many of them will look at Ireland as an alternative, as it is an English-speaking country with a common law tradition, similar to the UK. HPE has already set a precedent in announcing that it is moving the jurisdiction of its SNB from the UK to Ireland. The 2009 Directive leaves the choice of jurisdiction to management, where “central management” of the “controlling undertaking “ is not located in the EEA. It is not a matter for negotiations. It is likely that management teams will inform their EWCs within the next year as to where they intend to legally move, when the necessity arises.

UK employees would no longer be legally entitled to be represented on EWCs

Whether or not UK representatives’ membership lasts after Brexit may depend on the precise wording of the EWC agreement. It could well be that they sit on the EWC until their mandate comes to an end, or the agreement is renegotiated. Thereafter, their continued membership will be a matter subject to management agreement. It has been suggested that management will agree to the continued involvement of UK representatives because that is what they did in the period of 1996-1999 when the UK was outside the Maastricht social chapter. At that time, however, the UK was still a member of the EU, not a country that had just voted to leave. Moreover, if management agrees to including representatives from a country that has left the EU, what basis would they have to exclude representatives from other non-EEA countries, such as, for example, Turkey or Morocco? Coming to a decision on the continued involvement of UK representatives will be difficult, because it is never easy to say goodbye to people whom you may have been working with for many years.

The continued existence of “Subsidiary Requirement” EWCs could be called into question

EWCs set up under the Subsidiary Requirements are governed directly by the law, TICER, in the case of the UK. While prime minister May has said that she will introduce a “Great Repeal Act” to incorporate all EU law into domestic UK law, this will mean nothing in the case of TICER. UK domestic law cannot have any transnational effect. If TICER becomes transnationally ineffective, this could mean that EWCs based on the Subsidiary Requirements are no longer legally valid and should come to an end. It might be necessary for employees elsewhere in the EEA to request the establishment of a new SNB to negotiate a replacement EWC. These matters cannot be predicted with any certainty at this point, but they need to be considered carefully by all parties. The EWC Directive says nothing about what is to happen when a country, in which an EWC is legally housed, leaves the European Union.

Question marks would be raised over UK union officials acting as experts to EWCs

As noted above, there are probably somewhere between 200 and 250 EWCs working under UK law. Many of these have UK union officials acting as their “experts” for the understandable reason that they are familiar with UK EWC law and UK labour relations procedures, such as the referral of disputes to the Central Arbitration Committee (CAC). But if the UK is outside of the EU and outside of EU labour law, what value can UK experts bring to EWCs? Why would EWC members want a UK expert if the EWC is subject to the laws of another jurisdiction? In any other case than when the agreement is subject to Irish law, language and the ability to read the relevant legislation would become an issue. This of course leads to the question on the damage that a Brexit will do to North/South relations in Ireland. The Irish Labour Court may not take kindly to UK union officials turning up to tell them what the EWC Directive, as transposed into Irish law, means. In this case, it may not be wise for EWCs to work with a UK expert.

The Brexit is an unprecedented situation. If it takes the shape of a hard Brexit, many things will change radically. UK involvement with EWCs will then no doubt become part of the collateral damage.