Final approval given to consultation Directive

The controversial EU employee consultation Directive was formally adopted by the European Parliament and Council during February 2002. Following publication of the Directive in the EU Official Journal, Member States have until March 2005 to comply with its requirements.

In February 2002, the European Parliament and Council of Ministers formally adopted the EU Directive on national information and consultation rules. After the remaining formalities, the final, official text of Directive (2002/14/EC) establishing a general framework for informing and consulting employees in the European Community was published in the Official Journal of the European Communities (L80) on 23 March 2002. EU Member States now have until 23 March 2005 to comply with its requirements. Under the Directive, all undertakings with at least 50 employees (or establishments with at least 20 employees) must inform and consult employee representatives about business developments, employment trends and changes in work organisation.

The latter stages of the legislative process

In June 2001, the Employment and Social Policy Council of Ministers reached political agreement on a common position on the Directive (EU0106219F). In October 2001 the European Parliament put forward a series of amendments (EU0110206F) to the Council's common position. As not all of these were acceptable to the Council, the draft Directive entered the conciliation stage of the EU's co-decision procedure.

Following discussions within and between the Council, Parliament and European Commission, on 30 November the Commission put forward compromise proposals as a basis for agreement between the Parliament and the Council. These were approved at a 'trialogue' meeting between representatives of the three EU institutions on 5 December. This 'political agreement' between the Council and the Parliament was welcomed in the Presidency conclusions of the Laeken European Council summit of EU heads of state and government on 14-15 December (EU0201231N), and subsequently adopted unanimously and without further debate by the full 30-member Parliament-Council conciliation committee on 17 December.

The compromise involved four amendments to the Council's common position. The key amendment was to Article 10(b), reducing by one year to a total of six years the transitional period within which countries without 'general, permanent and statutory' systems of information and consultation and employee representation may phase in the Directive's requirements, applying them in three stages to progressively smaller undertakings or establishments.

The other three changes were relatively minor, involving:

  • the inclusion of a new 'recital' in the preamble to the Directive noting that the restriction of the Directive to undertakings with at least 50 employees (or establishments with at least 20 employees) 'takes into account and is without prejudice to other national measures and practices aimed at fostering social dialogue within companies not covered by this Directive and within public administrations';
  • the addition of a further recital stating that penalties for the infringement of the Directive's obligations should be 'proportionate in relation to the seriousness of the offence'; and
  • a drafting change clarifying the term 'information' in Article 4(4)(c).

In addition, a joint declaration by the Parliament, Council and Commission on employee representation was appended to the Directive, drawing attention to the June 1994 judgments of the European Court of Justice in two cases brought against the UK for inadequate implementation of the EU Directives on collective redundancies and transfers of undertakings (Commission of the European Communities v United Kingdom, cases C-382/92 and C-383/92). These judgments established that Member States must provide mechanisms for designating the employee representatives who are to be informed and consulted (UK9708152F).

During February, both the Parliament and the Council ratified the joint text agreed by the conciliation committee. MEPs voted to adopt the Directive on 5 February during the Parliament's plenary session in Strasbourg. Formal adoption by the Council took place at the 18 February meeting of the Agriculture Council in Brussels.

The Directive formally entered into force on 23 March 2002 - the date of its publication in the Official Journal.

Transposition

As already noted, the Directive's 'regular' transposition deadline will be 23 March 2005. However, the transitional arrangements available to Member States without established statutory systems of employee consultation and representation - effectively the UK and Ireland - mean that these countries may phase in the coverage of the Directive according to the following timetable:

  • for two years following the Directive's 'regular' implementation date (ie until 23 March 2007), application of the Directive may be restricted to undertakings with at least 150 employees (or establishments with at least 100 employees);
  • for a further one-year period (ie until 23 March 2008), application of the Directive may be restricted to undertakings at least 100 employees (or establishments with at least 50 employees); and
  • as from 23 March 2008, full application of the Directive - to all undertakings with at least 50 employees (or establishments with at least 20 employees) - will be required.

It is understood that the European Commission will not be convening a working group of national civil servants to coordinate transposition of the Directive. Although the Commission took such a step following the adoption of the European Works Councils Directive and the Directive on worker involvement in European Companies, this is not considered necessary in the case of the new Directive as it is not transnational in nature.

Commentary

The adoption of the new Directive is a major landmark in the development of EU social policy. It brings to an end a protracted and difficult debate over the desirability of an EU-wide framework for national-level information and consultation rules. The Directive has finally reached the EU statute book almost seven years after the idea of such a measure was first put forward in the European Commission's April 1995 medium-term social action programme - and nearly three and a half years after the Commission initiated the legislative process in November 1998 by formally proposing a draft Directive (EU9812135F). Throughout this period, the proposal for the Directive provoked sharp differences of view between employers' organisations and trade unions, and between EU Member States.

Attention will now focus on the implementation of the Directive at national level. The Directive will have its biggest impact on the 'voluntarist' industrial relations systems of the UK and Ireland. These two countries are, broadly speaking, the only EU Member States without a generally applicable system of information and consultation through works councils or similar bodies established by law or by central collective agreement.

Although the adoption of the Directive completes one of the Commission's most important social policy 'dossiers', a range of related Commission initiatives are underway or in prospect. These include: the Commission's consultations with the social partners about EU-level action to encourage 'socially intelligent restructuring' (EU0201235F and EU0204202N); the prospective revision of the European Works Councils Directive (EU0005248F); proposals for establishing EU-level dispute resolution mechanisms (EU0112245F); and renewed discussion of a takeovers Directive (EU0107224N). These moves will ensure that employee consultation and related issues remain high on the EU agenda. (Mark Hall, IRRU)

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