Nortel uses Ireland as legal base for EWC

In one of the first Irish-led agreements since the European Works Council Directive came into force in September 1996, the Canadian company, Nortel, concluded an agreement on a European Employee Forum in September 1998.

Nortel, the Canadian telecommunications giant, has reached an agreement with employee representatives on a "European Employee Forum", aimed at meeting its requirements under the EU Directive on European Works Councils (94/45/EC), which has been in force since 22 September 1996. Multinationals based outside the European Economic Area (EEA) countries covered by the Directive must choose a subsidiary within those countries as their "representative agent": Nortel chose Ireland and its agreement is governed by Irish law. Such "Article 6" agreements have so far been scarce in Ireland. Nortel, which employs 900 workers in the western Irish city of Galway and a total of over 13,000 in Europe, is part of Northern Telecom of Canada which employs almost 85,000 worldwide.

The Irish representative on the employees' special negotiating body (SNB) which signed the agreement is a non-union employee. On a Europe-wide basis, it is reported that only three SNB representatives were trade union members (two from France and one from Italy). For some commentators, this highlights the weakness of unions across much of the private sector in Europe generally, a weakness which is now being reflected in Ireland, particularly over the past five years as more non-union companies become established there.

The agreement establishing the European Employee Forum was signed on 4 September 1998 by Nortel (Ireland) Limited - a legal entity incorporated in accordance with the laws of Ireland - and the appointed or elected members of the SNB representing Nortel employees in the EU and EEA.

The parties agree that Nortel's business and employee interests are "best served by there being a joint understanding of the objectives, strategy, competitiveness and performance of Nortel, and of its operating environment, human resource strategy and market position". Business change is seen as "a necessary feature of Nortel ensuring its continued profitability and the operation of the Forum will must continually reflect the operating culture, competitive position and evolving organisation of Nortel".

Nortel will provide information to the Forum "such as to facilitate a constructive and free exchange of views and opinions on Nortel's financial performance and position, strategic development and human resource development where those issues directly affect employee interests and involve company facilities in at least two different countries covered by the Forum".

The Forum "will not consider or be responsible for: negotiations; compensation, salaries and other non-wage benefits; health and safety; local or national topics subject to national legislation or to local or national collective agreements; political issues or matters that relate to particular individuals, which will continue to be handled locally in accordance with the information and consultation procedures of the country or facility concerned."