The Gazette 1982

GAZETTE

JULY/AUGUST 1982

Employee Information and

Consultation Procedures —

The Community Proposal

Edwina Dunn M.A. LL.B. DIP. ICEI (Amsterdam)

Solicitor

HE subjection ofsizeable undertakings operating in the

European Community to differentrights and duties in

relation to employee information and consultation pro-

cedures, due to divergences in the national legislation ofthe

Member States concerned, may be deemed to constitute an

obstacle hindering the realisation of a single Community

market. At present, evenwhere employees have arightto be

informed or consulted on certain issues, the extent of these

rights depends on the scope of the individual laws of the

Member States. More often than not the employee is only

informed or consulted on matters which relate to the indi-

vidual establishment or subsidiary where he works, as

distinct from matters relating to the undertaking's overall

operations in that state, or in the various states in which it is

established, where a transnational undertaking is involved.

Thus it was that in February 1975 the European Trade

Union Federation (ETUC) called for the passingoflegisla-

tion to require the creation of an institution for the informa-

tion and consultation of a group's employees at group level,

repeating its call in June 1977. The European Commission

acknowledged this view and stated that what was required

was the "creation of legal systems which "recognise the

reality of group situations and permit groups to operate

according to centrally co-ordinated policy, but subject to

rules which safeguard the legitimate interests of those con-

cerned, in particular minority shareholders, creditors and

employees".

The Commission presented its conclusions to the Coun-

cil in October 1980 in the form of a "Proposal for a Council

directive on procedures for informing and consulting the

employees of undertakings with complex structures in

particular transnational undertakings:

Article 100 ofthe

EEC Treaty was deemed to be the appropriate legal basis

for the proposed directive. The obligation that Member

States have, to ensure that information and consultation

procedures are observed with regard to employees, in the

event of a collective redundancy

and on a transfer of all or

parts ofthe enterprise

will be extended even further if the

Proposal is adopted.

Wide Scope of Obligations

The controversial nature of the Proposal lies in the fact

that it envisages the creation of a legal framework wherein

employees will be entitled to receive specified information

and will be given an opportunity to express opinions on

major decisions proposed by management

. The Propos-

al not only applies to an undertaking which has one or more

establishments and/or one or more subsidiaries within a

given Member State, and whose decision-making centre is

located in that same Member State, but also to an undertak-

ing which controls one or more subsidiaries and/or one or

more establishments in aMember State, and which has its

decision-making centre in another Member State, or in a

State which is not a member of the European Community.

The Proposal therefore aims to subject both nationally

based undertakings and transnational undertakings, to

equivalent treatment, whether or not the decision-making

centres of the latter are situate within or outside the Com-

munity — the main question is whether the undertaking

operates

within the EEC. The Proposal has been criticised

by the Commission on the grounds that it does not cover

enterprises having a single establishment, that it does not

legislate in favour of persons employed where the enter-

prise has its decision-making centre, but more importantly

because it operates to discriminate between multinationals

operating within the EEC and those operating outside of it.

The Commission on the other hand argues thatmanymulti-

national firms based outside the EEC adhere to the OECD

Guidelines for Multinational Enterprises and the ILO Tri-

partite Declaration ofPrinciples concerning Multinational

Enterprises and Social Policy, the objectives ofboth instru-

ments being similar to those pursued by the Commission in

its Proposal. The latter has pledged itself to work closely

with the OECD and the ILO in this regard, in particular

with a view to ensuring that multinationals will be subject to

similar obligations whether they operate within the EEC or

outside of it

. Whereas adherence to these international

Codes is voluntary in nature, non-adherence to the proced-

ures laid down by the Directive will entitle employee

representatives to have recourse to legal action in the

national courts and will result in the imposition of sanc-

tions on the enterprises concerned.

The Directive requires the management of undertakings

falling within the scope of its provisions, to inform and

consult with employees' representatives. The Proposal

does not seek to impose new industrial relations machinery

regarding representative institutions on top ofthose already

existing in the Member States. The employee representa-

tives, for the purposes of the Proposal, will be those recog-

nised as such by the laws or practice ofthe Member States.

Special provisions will be required where employees are

represented at the group or international level.

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