ECJ rules against Luxembourg for non-transposition of EWCs Directive

The European Court of Justice ruled on 21 October 1999 that Luxembourg has failed to implement the European Works Councils Directive, rejecting Luxembourg's argument that it has prepared draft legislation and that most of the Luxembourg companies falling within the scope of the Directive have voluntary EWC agreements in place.

In case C-430/98, the European Court of Justice ( ECJ) ruled on 21 October 1999 that Luxembourg has not taken the necessary steps to implement the European Works Councils Directive (94/45/EC) and has therefore failed in its obligation to either transpose this Directive into national legislation or ensure its implementation by collective agreement.

The date by which Member States were obliged to implement this Directive was 22 September 1996. On 16 January 1997, having received no communication from Luxembourg, the European Commission- using the procedure laid down in Article 169 (now Article 226) of the EC Treaty- wrote to the government of Luxembourg asking it to submit its observations on this matter. The government replied on 18 February 1997 that draft implementing legislation was being debated by the social partners and would theoretically be adopted at the beginning of the following month. A further letter, sent on 2 May 1997, informed the Commission that the draft would be shortly laid before the Luxembourg parliament.

However, no further communication was sent to the Commission, which on 22 April 1998 sent a reasoned opinion to Luxembourg inviting it to fulfil its obligations regarding this Directive within the space of two months. As Luxembourg did not respond within this time limit, the matter was referred by the Commission to the ECJ.

Giving evidence to the ECJ, the Luxembourg government did not deny that the Directive has not been transposed, but pointed out that a draft law had been adopted on 19 January 1999 and immediately sent to its professional chambers and State Council for approval. It added that the companies in Luxembourg which fall under the scope of the Directive already have voluntary agreements in place (with one or two exceptions) and asked the ECJ to suspend its proceedings.

However, the ECJ ruled that, given that by the Luxembourg government's own admission not all companies falling within the scope of the Directive are covered by agreements, and that the government has not taken all the necessary steps to ensure the implementation of the Directive, Luxembourg has failed in its obligations relating to this Directive.

Under Article 228 of the Treaty, Luxembourg will now be required to comply with the ECJ judgment. If the Commission considers that it subsequently has not done so, it may, after giving Luxembourg the opportunity to submit observations, issue a further reasoned opinion, following which it may take a further case to the ECJ which may result in the imposition of a penalty payment.