The EU Directive on EWCs, as transposed into Irish law by the Transnational Information and Consultation of Employees Act 1996 (“TICEA”) and the European Communities (Transnational Information and Consultation of Employees Act 1996) (Amendment) Regulations 2011, requires multinational employers to set up information and consultation processes, most often in the form of a EWC or European Employees’ Forum (EEF), for the purpose of informing and consulting with employees on a range of issues relating to transnational developments within the organisation. EWCs are comprised of employees’ representatives from each country that is a member of the EU and/or the European Economic Area (EEA), in which an organisation has employees.

The obligation to establish a EWC is triggered when a company, or group of companies, meets the following criteria:

• at least 1,000 employees within the EU or EEA member states; and
• at least 150 employees in each of at least two different member states.

Background

Verizon had operated its EWC under UK law until shortly before Brexit, at which point the EWC agreement expired and negotiations to replace it broke down before agreement was reached. Verizon then decided to operate its EWC under Irish law, specifically the ‘subsidiary requirements’ contained in the Second Schedule to the Transnational Information and Consultation of Employees Act, 1996 (“TICEA”).

On foot of its obligations under section 17(6) of the TICEA, which provides that “the members of the… European Works Council… shall be provided with appropriate training by their employers without loss of wages”, Verizon organised training on the operation of EWCs in Ireland by independent legal experts for the EWC members. Four members of the EWC were not satisfied that the training provided met the requirements under the TICEA and attended a further training course provided by the EWC Academy in Hamburg, despite Verizon indicating that it would not cover the cost of this training.

In addition to the training, the members retained an expert from the EWC Academy to provide expert assistance to the EWC on a number of issues on the basis of section 17(1A) of TICEA which entitles members of a EWC to “the means required… to represent the collective interests of employees”. The issues covered included: reviewing the minutes of an EWC meeting; confirmation that UK delegates were no longer entitled to participate in the EWC; advice on an ultimately aborted possible transaction that Verizon was considering; and to assist with the preparation of its own internal rules. Despite the fact that the members had not sought pre-approval from Verizon for the cost of this expert assistance, Verizon did offer to pay some, but not all, of the costs.

On the basis of these two issues, members of the EWC filed complaints with the Workplace Relations Commission.

WRC decision

Training

The WRC found that, as the training organised by Verizon satisfied its training obligations under section 17(6) of the TICEA, the decision of the EWC members to attend the additional training course provided by the EWC Academy, in circumstances where Verizon had made it clear that it would not cover the costs involved, was not in accordance with the spirit of cooperation required of the parties. Accordingly, the WRC found that Verizon was not required to repay the costs incurred by the EWC members for this additional training.

Expert Assistance

Further, on the question of the expert assistance obtained, the WRC found that while the EWC did require expert assistance as a result of the EWC migrating from the UK to Ireland, the fact that Verizon was not notified in advance that this expert assistance was being obtained, along with the extent of the expert assistance sought, meant that it was outside the ‘means required’ to which an EWC is entitled in order to carry out its functions. This ruling was made on the basis that the EWC had again failed to comply with the spirit of cooperation required of all parties. In relation to the expert assistance obtained, only the assistance obtained by the EWC to prepare its own internal rules was in fact necessary. Accordingly, the WRC ruled that Verizon was required to pay 50% of the total cost incurred.

Labour Court decision

The Labour Court has now dismissed one of the member’s appeals. On the issue of training, the Labour Court agreed with the WRC and found that Verizon was not liable for costs where it had clearly informed the member in advance that it would not bear those costs. Importantly, the Court found that section 17(6) of TICEA is incompatible with the EWC Directive because it only provides that the training is to be “provided by the employer”. Rather, the Court was of the view that any determination of what training should be provided should be a “collaborative activity with input from both the EWC members themselves and representatives of management”.

On the issue of expert assistance, the Court stated that the member’s submission made it clear that he was acting in a representative capacity in bringing the complaint, which “is effectively a concession that the issues in dispute are collective in nature and are not particular to him as an individual”. The Court was of the view that section 17 of TICEA “is framed so as to afford statutory protection to individual members of EWCs qua individuals. It is not – and was not intended by the legislature – to be a means of progressing disputes that are collective in nature”. Therefore, the Labour Court determined that this element of the appeal was bound to fail and held that Verizon was not required to pay any of the costs involved in obtaining the expert assistance, thus varying the decision of the WRC in this regard.

While this decision will undoubtedly be welcomed by multinationals with EWCs in Ireland, it also highlights some of the concerns which have been expressed about the validity of Ireland’s transposition of the EWC Directive into Irish law, with the European Commission having initiated infringement proceedings against Ireland on this point. While acknowledging that “there may be scope for some improvements” to the implementing legislation, the Irish Government has indicated that it will await agreement at European level on a revised EWC Directive before making changes to the TICEA.

For more information on an organisation’s obligations under the EWC Directive or the TICEA, please contact a member of the Employment Group. 

The content of this article is provided for information purposes only and is not legal or other advice.