Council of Ministers reaches political agreement on employee consultation Directive
In June 2001, the EU Employment and Social Policy Council approved a compromise text of the proposed Directive on national information and consultation rules. The measure now returns to the European Parliament for a second reading and final adoption is possible before the end of the year.
On 11 June 2001, the EU Employment and Social Policy Council of Ministers, meeting in Luxembourg (EU0106220F) reached political agreement on a common position on the proposed Directive establishing a general framework for informing and consulting employees in the European Community (EU9812135F). Formal adoption of the common position will take place following legal and linguistic finalisation of the text. Thereafter, the draft Directive will be submitted to the European Parliament (EP) for a second reading in accordance with the co-decision procedure.
Apart from one significant amendment concerning transitional periods, agreed to accommodate the concerns of the UK and Irish governments, ministers approved a compromise text prepared by the Swedish EU Presidency in discussion with Member States. This incorporates a number of relatively minor changes to the French Presidency text considered by the Council in November 2000 (EU0012285F). According to a Council press statement, following the meeting, Italy and the UK indicated that they would report to their newly established governments before giving their final consent to the agreement. However, the Council President, the Swedish employment minister, Mona Sahlin, concluded that she was confident that the common position would be agreed by unanimity on the occasion of its formal adoption.
Key provisions of the common position
The purpose of the draft Directive is "to establish a general framework setting out minimum requirements for the right to information and consultation of employees in undertakings or establishments within the European Community". Its requirements will apply, according to the choice made by Member States, to:
- undertakings employing at least 50 employees in any one Member State; or
- establishments employing at least 20 employees in any one Member State.
The right to information and consultation covers:
- information on the recent and probable development of the undertaking's or the establishment's activities and economic situation;
- information and consultation on the situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged, in particular where there is a threat to employment; and
- information and consultation on decisions likely to lead to substantial changes in work organisation or in contractual relations.
The information should be given at such time, in such fashion and with such content as are appropriate to enable employees' representatives (as provided for by national laws and/or practices) to conduct an adequate study and, where necessary, prepare for consultation.
Consultation shall take place:
- while ensuring that the timing, method and content are appropriate;
- at the relevant level of management and representation;
- on the basis of relevant information to be supplied by the employer and the opinion which the employees' representatives are entitled to formulate; and
- in such a way as to enable employees' representatives to meet with the employer and obtain a response, and the reasons for that response, to any opinion they might formulate; and
- with a view to reaching an agreement on decisions within the scope of the employer's powers likely to lead to substantial changes in work organisation or in contractual relations.
The practical arrangements for information and consultation are to be defined and implemented by Member States in accordance with national law and industrial relations practice.
Member States can also entrust management and labour with defining such arrangements freely and at any time through negotiated agreements, including at undertaking or establishment level. These may differ from those set out by the Directive.
As regards confidentiality, Member States must ensure that employee representatives and any experts who assist them should not disclose any expressly confidential information provided to them, though Member States may authorise its disclosure to employees and third parties bound by an obligation of confidentiality. Member States must also ensure, in specific cases and within the limits laid down by national legislation, that employers are not obliged to communicate any information or undertake any consultation which would seriously harm the functioning of the undertaking or would be prejudicial to it. Member States must provide for administrative or judicial review procedures where employers require confidentiality or withhold prejudicial information.
Member States will have to provide for appropriate measures in the event of non-compliance by employers or employees' representatives with the provisions of the Directive, and ensure that adequate administrative or judicial procedures are available to enable the obligations deriving from the Directive to be enforced. Member States must also provide for adequate penalties to be applicable in the event of infringement of the Directive. These must be "effective, proportionate and dissuasive".
Member States will have three years from the date of final adoption of the Directive to comply with its provisions. Under the transitional provisions introduced to accommodate the UK and Ireland, Member States in which there is, at the date of adoption of the Directive, no "general, permanent and statutory system" of information and consultation nor of employee representation at the workplace, will be able to apply the Directive in three phases:
- undertakings with at least 150 employees (or establishments with at least 100 employees) would be covered as from the three-year implementation deadline;
- undertakings with at least 100 employees (or establishments with at least 50 employees) would be covered two years later; and
- full application of the Directive (ie to undertakings with at least 50 employees or establishments with at least 20 employees) would become obligatory four years after the normal implementation deadline.
Reaction from the social partners
The European Trade Union Confederation (ETUC) welcomed the Council's decision. ETUC general secretary Emilio Gabaglio said in a statement that approval of the Directive was "the result of the concerted trade union action and lobbying orchestrated by ETUC in face of the European employers' resistance and some governments' reluctance to have information and consultation recognised by European legislation as a fundamental right of workers. The Swedish Presidency deserves full credit for sticking to its guns and achieving this result. ETUC will keep working to see that the text is tightened up in the next stages of the legislative process."
At the time of writing, no official position paper had been published by theUnion of Industrial and Employers' Confederations of Europe (UNICE). However, Thérèse de Liedekerke, director of UNICE's social affairs committee, commented that UNICE was originally not in favour of the Directive, believing that a high level of protection of workers was already ensured by the collective redundancies, transfer of undertakings and EWCs Directives: "If you add to that legitimate information and consultation requirements in the health and safety framework Directive, you cover all key aspects of information and consultation. What is left has to do with every day communication between employers and employees in purely national companies and we believe that it should not be regulated at EU level." However, she added that UNICE welcomed elements in the final text which ensure the avoidance of negative interference in well-functioning national systems of information and consultation, in particular (and subject to verification of the final text) the exclusion of smaller companies from the scope of the Directive and broad principles on sanctions, as UNICE believes that sanctions should be adapted to each specific case. Further, rendering an employer's decision null (as proposed by the European Commission- see below) is not, in UNICE's view, the best way to compensate workers who suffer due to a lack of information and consultation.
In the UK - which is the one of the countries, along with Ireland (IE0106168F), where the Directive is expected to have the most far-reaching effects - the Trades Union Congress (TUC) expressed satisfaction at the Council's agreement on the Directive but criticised the transitional arrangements under which workers in smaller firms may have to wait up to seven years before being covered by the legislation. The Confederation of British Industry (CBI) said that it was "deeply disappointed" by the Council's decision to approve the Directive. The CBI said it had fought the proposal on the grounds that "companies need the freedom to decide how best to communicate with employees, taking into account culture structure and size ... Good employee relations should be home-grown."
The Council's approval of the draft Directive is undoubtedly a major breakthrough in the long-running debate about the legislative proposals first put forward by the European Commission in November 1998. Over recent months, Denmark, Germany and Ireland - previously part of a four-country "blocking minority" with the UK - have moved towards acceptance of a revised version of the Directive, leaving the UK isolated as the only remaining opponent of the Directive. As the measure is subject to qualified majority voting, the UK on its own was unable to prevent adoption of the measure and has been forced to accept the Directive, albeit with concessions on the timetable for applying its requirements to smaller companies.
The Council's common position will now be considered by the European Parliament, which aims to adopt an opinion on the Directive at the beginning of October 2001. It is expected that the Belgian government, which takes over the EU Presidency in July, will press for the Directive to be finalised and adopted before the end of the year. Under the co-decision procedure, if the Council does not approve all the amendments put forward by the Parliament, the measure will be referred to a Council/Parliament conciliation committee which will have the task of reaching agreement on a joint text. One area where the Parliament may seek amendments to the Directive concerns sanctions - as was the case in the Parliament's opinion on first reading (EU9911211F). The Council has so far rejected the Commission's view - repeated in its amended proposal of 27 May 2001 - that decisions taken by employers in serious breach of their information and consultation obligations should have their legal effect suspended. However, the Commission clearly hopes that the Directive's provisions on sanctions will be strengthened as a result of the co-decision procedure. (Mark Hall, IRRU)