Employment: Changes to European Works Council regulations

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The Transnational Information and Consultation of Employees (Amendment) Regulations 2010 (“TICE”)  amending the Transnational Information and Consultation of Employees Regulations 1999 (the “1999 Regulations”) in order to bring them into line with the recast 2009 European Works Council Directive (the “Directive”) in the UK, were put before Parliament on 6 April 2010.  The majority of the amendments are expected to come into force on 5 June 2011

The changes will be of relevance to UK based multinational companies which have either at least 1,000 employees in the European Economic Area (EEA) and at least 150 employees in a minimum of two other member states or are part of a group of companies which have at least 1,000 employees in the EEA and a minimum of two “group undertakings” with 150 employees each in any of the other member states.  (When the Agency Worker Regulations 2010 come into force on 1 October 2011 agency workers will be included in calculating the threshold numbers of employees for the agency that they are contracted to work for).

Transnational consultation agreements that were in place before the current regulations were implemented in 1999 will continue to be allowed to operate outside the scope of TICE, while agreements created or amended between 5 June 2009 and 4 June 2011 will (with limited exceptions) be allowed to continue to operate under the regime established by the 1999 regulations.

The main changes are as follows:

• new definitions of “information” and “consultation” reflecting those in the Directive where “information” means the transmission of data from an employer to employees’ representatives and “consultation” means “establishment of dialogue and exchange of views between employees’ representatives and central management”.  In an attempt to clarify how (if at all) national and transnational information and consultation obligations interact with one another, the Regulations require that “where there is no agreement on how national and EWC dialogue are linked, the two processes must start within a reasonable time of each other”.  Furthermore, the Regulations will amend TICE 1999 to make it “explicit that the linkage between EWCs and national employee representation bodies only needs to occur to the extent that those national bodies are already entitled by law or agreement to be informed and consulted”;
• the requirement in earlier drafts of TICE for the employer to provide training to employee representatives has been removed and instead the language of the Directive has been transposed.  The Regulations therefore “require central management to provide the means required for the representatives to receive the necessary training”;
• the maximum penalty for breach of the Regulations has been increased from £75,000 to £100,000, despite opposition from employers;
• the Regulations will transfer jurisdiction from the Employment Appeal Tribunal and will establish the Central Arbitration Committee as the primary body to hear complaints of breach of the Regulations;
• a new six month time limit in which to submit a claim for alleged failures in the operation of a European Works Council or information and consultation procedure or management failures in relation to the same under regulations 21 (where the applicant considers that there has been a failure to comply with an EWC agreement or information has been provided by central management which the applicant believes is false or materially incomplete) and the new 21A (where the applicant believes that members of the special negotiating body have been unable to meet, members of the EWC have not been provided with the means to fulfil their duty to represent the interests of the employees or either body has not been provided with the means to undertake the required training).  However, there will still be no time limit on claims for failure to establish a European Works Council or information and consultation procedure.

Commentary

Affected employers should note the revisions to the Regulations and if necessary seek to take advantage of the “grandfathering” provisions to make amendments to existing arrangements prior to 5 June 2011.

Resources

Transnational Information and Consultation of Employees (Amendment) Regulations 2010 (SI 2010/1088)

Government response to consultation April 2010

Department for Business Innovation and Skills guidance April 2010

For further information or to discuss the issues raised, please contact Guy Abbiss on +44 (0) 203 051 5711.