The Gazette 1982

GAZETTE

JULY/AUGUST 1982

agement of each subsidiary or establishment is required to

communicate the information without delay to the em-

ployees' representatives in each subsidiary or establish-

ment, The information must be forwarded at least every six

months and must relate in particular to: (a) structure and

manning; (b) the economic and financial situation; (c) the

situation and probable development of the business and of

production and sales; (d) the employment situation and

probable trends; (e) production and investment pro-

grammes; (f) rationalisation plans; (g) manufacturing and

working methods, in particular the introduction of new

working methods; (h) all procedures and plans liable to

have a substantial effect on employees' interests

. In the

event of the management of the subsidiaries or establish-

ments being unable to communicate the said information to

employees' representatives, the management ofthe domin-

ant undertaking itself (or where the undertaking has one or

more establishments in a member state as distinct from one

or more subsidiaries, the management of the undertaking)

must communicate the information to any employees' rep-

resentatives who have requested it to do so.

Criticisms

Various criticisms have been levelled against the infor-

mation requirements prescribed by the Proposed Direc-

tive. Leaving aside the question of the confidentiality of

information, which will be discussed later, it has been

suggested that the Directive does not make it clear in

relation to the six monthly reports, as to the time limitwithin

which information is to be prepared and forwarded and the

extent of the detail of the contents required. From the

employees' point of view, information forwarded by man-

agement is bound to have a 'management' slant so that it is

imperative for the employees to have persons trained from

their ranks who will be able to analyse documents and

monitor statements issued by management. Just as share-

holders do not have to rely totally on management's inter-

pretation of the company's performance, by virtue of the

appointment of an auditor who can examine any original

company document and make an independent assessment

ofthe company's financial state ofaffairs, so also ithas been

suggested that employees should have some kind of inde-

pendent assessor appointed on their behalf, whose job it

would be to ensure that whatever information is released by

the management is clear and complete. Furthermore it has

been argued that the increased disclosure requirements

may lead to friction between and within unions— what will

be the reactions of workers in one plant on hearing their unit

is to be closed so that a plant in another town may survive?

The employers, on the other hand, oppose the proposed

information procedures not only on practical grounds (that

the information required to be forwarded is not available,

that it would in any event be too costly to compile given its

value, and that many of the items required to be disclosed

exceed the needs of employees in relation to collective

bargaining), but also on the grounds that it will increase

trade union bargaining power

vis a vis

management and

that it will in effect entitle employees to receive more

information than the shareholders of the company

Information and Consultation

The Directive specifies proposals to make decisions

concerning the whole or major part of an undertaking or of

one of its subsidiaries or establishments which are liable to

have a substantial effect on the interests of its employees.

152

These decisions are stated to relate to: (a) the closure or

transfer of an establishment or major parts thereof; (b)

restrictions, extensions or substantial modifications to the

activities of the undertaking; (c) major modifications with

regard to organisation; (d) introduction of long-term co-

operation with other undertakings or the cessation of such

co-operation.

The Directive proposes that in these circumstances pre-

cise information would be forwarded to the management of

each subsidiary or establishment not later than 40 days

before adopting the decision, giving details of (a) the

grounds for the proposed decision; (b) the legal, economic

and social consequences of such decision for the em-

ployees' concerned; (c) the measures planned in respect of

these employees. The management of each subsidiary or

establishment would be obliged in turn to transmit this

informationwithoutdelay to itsemployees'representatives

and to request the latter to state theiropinion within 30 days.

Furthermore, if, in the opinion of the employees' represen-

tatives the proposed decision would be likely to have a

direct effect on employees' terms of employment or work-

ing conditions, the management of the subsidiary or estab-

lishment would be obliged to hold consultations with them

with a view to reaching agreement on the measures planned

in respect of such employees

. Where the management

ofthe subsidiary or establishment fails to convey the details

of information mentioned above or to hold the requisite

consultations the employees' representatives will be

authorised to open consultations, through authorised dele-

gates, with the central management or management (as the

case may be) of the undertaking with a view to obtaining

such information, and, where appropriate, to reaching

agreement on the measures planned with regard to the

employees concerned. The obligation to negotiate lies

primarily on local management in the transnational con-

text. The above provisions, allowing employees' repre-

sentatives recourse to central management, will not lead to

the undermining of the authority of local management in

view of the fact that recourse is only permitted in excep-

tional circumstances.

Further Criticisms

The information and consultation procedures outlined

above have been the subject ofmuch criticism. It has first of

all been argued that the text ofthe proposed Directive is am-

biguous . When the management ofthe dominant undertak-

ing (or undertaking where establishments are concerned)

contemplates taking a decision which may have a substan-

tial effect on the interests of its employees, the Directive

does not make it clear whether the information and consul-

tation procedures must be pursued with the employees'

representatives ofall the subsidiaries (orestablishments) in

the group or only with the employees' representatives of

those subsidiaries (or establishments) which have in their

employworkers whose interests will be substantially affect-

ed. The Economic and Social Committee has recently

issued an opinion in favour of the latter interpretation

Secondly it has been argued that the 40 day notice period

will slow down the decision making process of the under-

taking andwill prevent the undertakingfromreactingquick-

ly and effectively to changes in market conditions. It has

been suggested that there should be some provision which

allows an undertaking to by-pass this requirement when

urgent and prompt measures are required to be taken.