No cases have been brought before the Court of Justice on the Directive so far. At national level, court cases concerning EWC are not frequent and are concentrated to jurisdictions with higher number of multinationals with EWCs. ETUI identified altogether 160 EWC-related national court cases since 1997 and until the beginning of 2023. Some of these national cases point to existence of legal uncertainties, which may compromise the correct implementation of the Directive.

Problem driver: ‘Not sufficiently efficient & effective setting-up of EWCs and gender imbalance’

In 2016, the Arbeitsgericht Berlin (First instance) ruled that an EWC was established after the management has not convened a constituent meeting within 6 months of the request. According to the national court: “[a] refusal can also exist if, due to delays on the part of the central management, the constituent meeting of the special negotiating body has not taken place within six months of the application being made or if the information required for the formation of a special negotiating body is persistently refused in accordance with § 5 EBRG.”^[1]

Problem driver ‘Obstacles to the effective operation of EWCs’ 

Legal uncertainty regarding the concept of transnational matters

In a decision of 27 November 2018 in interim proceedings^[2], the District Court of Rotterdam (‘Rechtbank Rotterdam’) considered whether an EWC established in the Netherlands had to be informed and consulted on the possible closure of two establishments in Spain. Based on an interpretation of the concept of transnational matters in conformity with Directive 2009/38/EC, the Dutch court found that it was sufficiently plausible, for the purposes of the decision in the interim proceedings, that the issue was to be considered transnational. The Court took into account that the closures would make around 20% of the relevant undertaking’s European workforce redundant, and might have knock-on effects on the activities of its establishments in other Member States.

In a French case^[3], an EWC established in France queried the central management’s failure to inform and consult on its decision to claim repayment of a loan that had been granted to keep a loss-making French subsidiary afloat. Although the EWC argued that the decision had to be considered in the wider context of the undertaking’s strategy involving the closure of various subsidiaries, the national court held that all the facts of the matter were confined to the French territory and thus did not trigger information and consultation requirements at transnational level.

The definition of ‘transnational matters’ in Article 1(4) of the Directive was also interpreted, in light of recitals 15 and 16, in a recent judgment of the Court of Appeal of England and Wales^[4]. The court was faced with the question whether redundancies proposed in two separate Member States could be considered as a transnational matter despite the fact that they had been separately formulated in light of unrelated national circumstances. It held that in order for a matter to be considered transnational, it was not sufficient that two matters / decisions occur within the company in two countries at about the same time, but there must be some objective factual nexus between them. Requiring an (extraordinary) EWC meeting absent such a nexus would render meaningless the requirement for a matter to be transnational, because no (potential) effects of any one matter on undertakings in each of two different countries would be required. The Appeal Court recalled the limitation of the the scope of the procedures guaranteeing information and consultation with EWCs, in accordance with Article 1(3) and (4) and recitals 15 and 16 of the Directive, which together ensure that information and consultation occur at the correct level of management and representation, according to the subject under discussion. To achieve this necessary demarcation, the competence and scope of action of an EWC is different and distinct from that of national representative bodies.

Insufficient resources of EWCs

In a judgment concerning an EWC operating under subsidiary requirements in Austria, the Oberlandesgericht Wien (Higher Regional Court) confirmed that such an EWC can choose an independent expert of its choice and it is not obliged to minimise the costs to be borne by central management by having recourse as a priority to experts provided by trade unions or by a statutory representative body, as long as the expert’s services and costs are legitimately linked to the functions of the EWC.^[5] Moreover, the Higher Regional Court found that fees for expert legal advice to be covered by central management are not limited to the statutory scales of legal fees.

In 2019, the UK Central Arbitration Committee (CAC) considered that the employer should pay the legal fees incurred in relation to the proceedings.^[6]  The decision was upheld by the Employment Appeals Tribunal, which stated that the central management’s approach “inevitably had the effect of leaving either the individual members of the EWC who were taking the reasonable step of bringing CAC proceedings or their chosen experts at an unfair financial risk: that was not a reasonable approach, particularly coming from a very substantial organisation which no doubt had access to and would itself make use of legal assistance in connection with the CAC proceedings.”^[7]

Confidentiality imposed disproportionately may create obstacles to effective information and consultation

In a decision of 12 February 2018^[8], the UK’s Central Arbitration Committee found that ”the default position of the employer was (a) not to disclose and (b) to classify as confidential anything it feels it has to disclose in order to comply with the minimum legal obligations. This stands in contrast to the thrust and intent of the Directive and the (UK Transnational Information and Consultation of Employees Regulations 1999) which is that relevant information should be given to EWC, with protections available where it is objectively reasonable for management to argue that it its disclosure would prejudice or seriously harm the undertaking.”

Problem driver ‘Shortcomings in enforcing of the Directive’

Ineffective penalties / sanctions for non-compliance in some Member State

In a 2020 judgment^[9], the French Cour de Cassation upheld the suspension of operations of undertakings on the grounds of a violation of EWCs’ information and consultation rights. Véolia Environnement and SA Engie motioned for the Court of Appeal of Paris to squash interim measures in the form of suspension of operations that had been imposed in previous proceedings until the comité social et économique of multiple SUEZ establishments had been informed and consulted about the acquisition of SUEZ company shares held by Engie. The EWC of a SUEZ establishment intervened voluntarily. The court rejected the appeal and declared the EWC’s voluntary intervention to be admissible in order to establish the existence of a manifestly unlawful disturbance and to prevent imminent damage.

In the first and second instance 2018 legal proceedings^[10], the German labour courts rejected an EWCs’ request for injunction on grounds of a failure of the management to comply with the consultation obligations. The courts reasoned that neither the national law nor the Directive provides for an injunction. […] According to the predominant interpretation of the law, the rights of the European Works Council are instead guaranteed by the provisions on administrative sanctions of Paragraph 45 of the EBRG […] and the possibility of enforcing the rights to information and consultation by means of judicial remedies before the Labour Court, including by way of an interim order. […]. Moreover, according to the court the legislative history of the EBRG militates against the granting of an injunction, since a corresponding application for a prohibitory injunction was expressly rejected in the legislative procedure in the case of non-participatory [i.e., non-codetermination] measures. There is therefore no legal loophole, according to the court, which also noted that the parties to the proceedings have also refrained from agreeing such an injunction, having been aware of the legal situation at issue in national law and despite apparently several revisions of the EWC agreement. That possibility would have been readily available. “The court shares the prevailing view in rejecting a claim for an injunction in the event of a breach by the undertaking concerned of the rights of the European Works Council. Recognition of such a right would have the effect of conferring on the EWC, in the absence of any express provision, a right which would be much stronger than the rights expressly regulated. Moreover, he would be recognised as having a right whose existence is contested even with regard to the [national] works council under the BetrVG, which, by virtue of its participation rights, has a significantly stronger legal position than the European Works Council.”

In 2015 legal proceedings in Germany^[11], a EWC asked for an injunctive relief to prevent redundancies until the EWC had been properly informed. The court of first instance dismissed the motion noting that such a right does not result from an interpretation of § 30 EBRG. Since the Directive does not provide for any specific sanctions in the event of a breach of the duty to inform, it is not objectionable that the national legislature decided to introduce an administrative offence subject to a fine as a sanction. The Court does not consider the European Works Council and the national Works Councils to be comparable as the rights of the former are weaker than the rights of the latter. The national Works Councils “can enforce its right to information and consultation in a formalised conciliation procedure and appeal to the conciliation board. In contrast, Directive 2009/38/EC, through the right to information and consultation, only pursues the exchange of views and the establishment of a dialogue between the central management and the European Works Council.”

The right to instruction can be enforced by way of interim legal protection, a violation can be punished with a fine. The small amount of the fine is acknowledged by the court but is not considered relevant for the assumption of injunctive relief. If the fine were to be regarded as inadequate and was not meeting the requirement of the Directive, the will of the legislature could nevertheless not be circumvented. The court substantiates the intention of the legislator with several legislative documents.

In a 2011 case^[12], the German court confirmed that interim judicial proceedings before the labour courts are available to EWCs. However, this does not mean that EWCs have a substantive right to injunctive relief. The court considered that violation of EWC’s rights to information and consultation does not justify a claim for injunctive relief with regard to the implementation of the intended plant closure. The court makes it clear that even if the case law on injunctive relief for national works councils could in principle be applied to the European Works Council, the latter would not be entitled to any such relief in respect of its obligations to give notice and information and consultation rights, because also in respect of national works councils, the right to injunctive relief relates only to participation (=co-determination) rights.

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^[1] Germany, 15.07.2016, Groupon, Arbeitsgericht Berlin – 26 BV 4223/16 (First instance).

^[2] Netherlands, Rechtbank Rotterdam, judgment in interim proceedings of 27 November 2018, Case no C/10/561635/KG ZA 18-1170.

^[3] France, Tribunal de Grande Instance de Nanterre, judgment of 26 November 2014, N° 14/02861; confirmed on appeal by Cour d’appel de Versailles, judgment of 21 May 2015, N° 14/08628.

^[4] UK, Court of Appeal (civil division), judgment of 26 July 2023, Adecco, [2023] EWCA Civ 883.

^[5] Austria, Higher Regional Court (Oberlandesgericht) Wien, judgment of 23 February 2022, No. 8 Ra 49/22t, subject to appeal.

^[6] United Kingdom, 9 October 2019, Verizon, Central Arbitration Committee, EWC/22/2019. The CAC has also considered the question of payment of legal representation in cases EWC/21/2019, EWC/13/2015.

^[7] Employment Appeals Tribunal, judgement of 1 October 2020, Appeal No. UKEAT/0053/20/DA.

^[8] United Kingdom, Central Arbitration Committee (UK), Oracle, No EWC/17/2017, para 87.

^[9] France, 19.11.2020, Veolia-Engie v. Suez, Cour de Cassation Paris, 20/06549 (Appeal)

^[10] Germany, 01.08.2018, DT Group, Arbeitsgericht Köln – 1BVGa 7/18 (first instance). Germany, 13.12.2018, DT Group, Landesarbeitsgericht Köln – 6 TaBVGa 3/18 (Appeal).

^[11] Germany, 12.10.2015, Landesarbeitsgericht Baden-Wuerttemberg of 12 October 2015.

^[12] Germany, 08.09.2011, Visteon, Landesarbeitsgericht Köln – 13 Ta 267/11 (Appeal).