EU Multinationals
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Gesamtbetriebsrat der Kühne & Nagel AG & Co. KG
(Council Directive 94/45, Arts 4(1) and (2), 5 and 11(1)) Articles 4(1) and 11(1) of Directive 94/45 on the establishment of a European Works Council or a procedure in Community scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees must be interpreted as meaning that: — where the central management of a Community-scale group of undertakings is not located in a Member State, central management’s responsibility for providing the employees’ representatives with the information essential to the opening of negotiations for the establishment of a European Works Council lies with the deemed central management under the second subparagraph of Article 4(2) of the directive;
— where central management does not, for the purpose of establishing a European Works Council, make certain information available to the deemed central management, the latter, in order to be able to fulfil its obligation to provide information to the employees’ epresentatives, must request the information essential to the opening of negotiations for the establishment of such a council from the other undertakings belonging to the group which are located in the Member States, and has a right to receive that information from them;
— the management of each of the other undertakings belonging to the group which are located in the Member States is under an obligation to supply the deemed central management with the information concerned where it is in possession of the information or is in a position to obtain it;
— the Member States concerned are to ensure that the management of those other undertakings supplies the information to the deemed central management.
The obligation to provide information deriving from Articles 4(1) and 11(1) of Directive 94/45 encompasses information on the average total number of employees and their distribution across the Member States, the establishments of the undertaking and the group undertakings, and on the structure of the undertaking and of the undertakings in the group, as well as the names and addresses of the employee representation which might participate in the setting up of a special negotiating body in accordance with Article 5 of the directive or in the establishment of a European Works Council, where that information is essential to the opening of negotiations for the establishment of such a council.
Josef H. Boquoi Deutschland West
[2001] EUECJ C-62/99 (29 March 2001)
Cite as: [2001] IRLR 403, ECLI:EU:C:2001:188, [2001] EUECJ C-62/99, EU:C:2001:188, [2004] 2 CMLR 53, [2001] ECR I-2579, Case C-62/99
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JUDGMENT OF THE COURT (Sixth Chamber)
The first question
By its first question, the national court is, in essence, seeking to ascertain whether, on a proper construction of Article 11(1) and (2) of the Directive, an undertaking which is part of a group of undertakings is required to supply information to the internal workers’ representative bodies, even where it has not yet been established that there is a controlling undertaking within a group of undertakings.
The employer contends that it is clear from the wording of Article 11(2) of the Directive that an undertaking is obliged to supply information only if it has alreadybeen established that it is a controlling undertaking within a group of undertakings. According to the employer, any other interpretation would make it impossible to know which undertakings are obliged to supply information or how and in what way the undertaking responsible for supplying the information is to obtain the information required concerning other undertakings with which it has no links as part of a group of undertakings within the meaning of the Directive.
The Works Council, the Austrian and German Governments and the Commission all submit that, in order to attain the chief objective of the Directive – namely informing and consulting employees – the workers concerned must of necessity be assured access to information enabling them to judge whether they are entitled to require negotiations to be opened relating to the setting-up of a European Works Council or of a transnational information and consultation procedure and, if appropriate, to formulate their request properly. That right also includes information as to whether or not there exists a controlling relationship between the various undertakings concerned for the purposes of Article 3 of the Directive.
It must first of all be noted, in this connection, that, as stated in the 11th recital in the preamble to the Directive, it is the purpose of that directive to ensure that the employees of Community-scale undertakings are properly informed and consulted when decisions which affect them are taken in a Member State other than that in which they are employed.
As is clear from its general scheme, transnational informing and consulting of employees are essentially to be ensured by means of a system of negotiations between the central management, within the meaning of Article 2(1)(e) of the Directive, and the workers’ representatives.
Next, Article 11(1) of the Directive provides that the management of establishments of a Community-scale undertaking and the management of undertakings which form part of a Community-scale group of undertakings are to abide by the obligations laid down by the Directive.
The wording of that same provision makes it clear that the scope of those obligations is not to be confined, on the employers’ side, exclusively to central management within the meaning of Article 2(1)(e) of the Directive.
Finally, as the Works Council, the Austrian and German Governments and the Commission have correctly pointed out, if the Directive is to serve a useful purpose, it is essential that the workers concerned be guaranteed access to information enabling them to determine whether they have the right to demand the opening of negotiations with central management, once its existence is established, and the workers’ representatives.
Such a right to information constitutes a necessary prerequisite for determining whether a Community-scale undertaking or group of undertakings exists, which is itself acondition precedent for the setting-up of a European works council or of a transnational procedure for informing and consulting workers.
As regards employees of an undertaking forming part of a group of undertakings, as defined in Article 2(1)(b) of the Directive, their right to be informed therefore exists even before it is ascertained whether or not there exists within the group a controlling undertaking within the meaning of Article 3 of the Directive.
That interpretation is corroborated by the wording of Article 11(2) of the Directive, which refers generally to ‘parties concerned by the application of this Directive, without confining itself to central management, within the meaning of Article 2(1)(e) of the Directive, or workers’ representatives.
In light of the foregoing, the answer to be given to the first question must be that, on a proper construction of Article 11(1) and (2) of the Directive, an undertaking which is part of a group of undertakings is required to supply information to the internal workers’ representative bodies, even where it has not yet been established that the management to which the workers’ request is addressed is the management of a controlling undertaking within a group of undertakings.
The second and third questions
With regard to the second and third questions, which deal with the scope of the obligation to supply information imposed by Article 11(1) and (2) of the Directive, information concerning the number of employees in a group of undertakings, within the meaning of Article 2(1)(b) of the Directive, in each Member State, information requested pursuant to Article 11(2) of the Directive, cannot be dissociated from information concerning the existence of a controlling relationship between the various undertakings concerned within the meaning of Article 3 of the Directive.
As pointed out in paragraph 32 above, it is implicit in the Directive’s purpose that the obligations which it lays down are to be fulfilled in such a way as to enable the workers concerned, or their representatives, to have access to the information which is necessary if they are to be able to determine whether or not they are entitled to request the opening of negotiations and, where relevant, to make that request in due form.
It follows that, where information relating to the structure or organisation of a group of undertakings forms part of the information which is essential to the opening of negotiations for the setting-up of a European Works Council or for the transnational information and consultation of employees, an undertaking within the group is required to supply the information which it possesses or is able to obtain to the internal workers’ representative bodies requesting it.
It also follows that, to the extent that it is necessary in order to make it possible for the employees concerned or their representatives to gain access to the information which is essential if they are to be able to determine whether or not they are entitled to request the opening of negotiations, communication of documents clarifying and explaining the information which is indispensable for that purpose may also be required, in so far as that communication is necessary.
The answer to be given to the second and third questions must therefore be that where information relating to the structure or organisation of a group of undertakings forms part of the information which is essential to the opening of negotiations for the setting-up of a European Works Council or for the transnational information and consultation of employees, an undertaking within the group is required to supply the information which it possesses or is able to obtain to the internal workers’ representative bodies requesting it. Communication of documents clarifying and explaining the information which is indispensable for that purpose may also be required, in so far as that communication is necessary in order that the employees concerned or their representatives may gain access to information enabling them to determine whether or not they are entitled to request the opening of negotiations.
Costs
42. The costs incurred by the German and Austrian Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds,
THE COURT (Sixth Chamber),
in answer to the questions referred to it by the Landesarbeitsgericht Düsseldorf by of 21 January 1999, hereby rules:
1. On a proper construction of Article 11(1) and (2) of Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees, an undertaking which is part of a group of undertakings is required to supply information to the internal workers’ representative bodies, even where it has not yet been established that the management to which the workers’ request is addressed is the management of a controlling undertaking within a group of undertakings.
2. Where information relating to the structure or organisation of a group of undertakings forms part of the information which is essential to the opening of negotiations for the setting-up of a European Works Council or for the transnational information and consultation of employees, an undertaking within the group is required to supply the information which it possesses or is able to obtain to the internal workers’ representative bodies requesting it. Communication of documents clarifying and explaining the information which is indispensable for that purpose may also be required, in so far as that communication is necessary in order that the employees concerned or their representatives may gain access to information enabling them to determine whether or not they are entitled to request the opening of negotiations.”
ADS Anker
[2004] 3 CMLR 14
“Turning, first, to the question of whether there is an obligation under the Directive for central management, or the deemed central management, to provide another undertaking in the group with certain information with a view to establishing a European Works Council, the works council, the German Government and the Commission observe that, under Article 4 of the Directive, the central management is responsible for creating the conditions and means necessary for the setting up of a European Works Council in Community-scale undertakings and Community-scale groups of undertakings. In their view, if the Directive is to serve a useful purpose, it is imperative that the central management of an undertaking or a group of undertakings be obliged to provide employees- representatives with the information which will enable them to determine whether a European Works Council must be set up within the undertaking or the group of undertakings in question and, if so, whether the special negotiating body may be set up.
According to the works council, the obligation under Paragraph 5(2) of the EBRG for the central management to communicate that information even when it is not situated within the territorial scope of application of the EBRG but rather in another Member State follows not only from the Directive but also from the objective behind the creation of a European Works Council, that is, transnational information and consultation of employees. If the application of Paragraph 5(2) of the EBRG were to be limited to German territory, it would be more difficult for employees- representatives to obtain information with a view to setting up European Works Councils, and would make attainment of the objectives of the Directive that much more difficult and involve unnecessary loss of time, procedures and costs.
The Commission submits, with respect to the obligations imposed on the central management by Article 4 of the Directive, that regardless of which Member State is involved, it does not matter if the group-s employees exercise their legitimate right to obtain information as against that central management directly or through an undertaking in the group, as is the case in Germany.
ADS Anker maintains that even though the objective of the Directive is to make it possible to create a European Works Council, it cannot result in an undertaking-s being forced to bring legal proceedings against its controlling undertaking.
If the works council of the controlled undertaking does not manage to obtain the information necessary for a request under Article 5(1) of the Directive from that undertaking because that information is not available there, it will be necessary for that works council to exercise its right to information against the undertaking which controls the group, pursuant to the provisions in place for transposing the Directive in national law.
Turning, second, to the nature of the information which the central management or the deemed central management is obliged to provide pursuant to the obligation to give information laid down by the Directive, both the works council and the German Government submit that the Directive must be interpreted broadly, having regard to its meaning and purpose.
According to the works council, the right to information covers the information essential for determining whether, in the undertaking or group of undertakings, it is appropriate to set up a European Works Council. The employees- representatives should also be able to obtain the information they require to submit a request pursuant to Article 5 of the Directive, with a view to setting up a European Works Council, and to set up the special negotiating body required for that purpose. The fact that the request to set up a European Works Council must be presented by the employees or their representatives in at least two different Member States for a special negotiating body to be established implies knowledge of other employee representation bodies and their members.
By contrast, ADS Anker maintains that the names of the employee representation bodies and their representatives are not prerequisites for instituting the negotiation process with a view to establishing a special negotiating body pursuant to Article 5(1) of the Directive.
Relying on Case C-62/99 Bofrost* [2001] ECR I-2579, the Commission maintains that when, in the view of the court dealing with a request for information, the names of the employees- representation bodies and their representatives required to participate, on behalf of the employees of the undertakings or of undertakings controlled by that undertaking, in the establishment of a European Works Council are part of the information essential for the opening of negotiations for the establishment of such a council or a procedure for the purposes of transnational information and consultation of employees, an undertaking in that group must provide the information in its possession or which it is able to obtain to the internal employee representation bodies which so request.
Findings of the Court
According to the 11th recital in the preamble and Article 1(2) of the Directive, its purpose is to ensure that the employees of Community-scale undertakings or groups of Community-scale undertakings are properly informed and consulted when decisions which affect them are taken in a Member State other than that in which they work.
As is clear from its general scheme, transnational informing and consulting of employees under the Directive are essentially to be ensured by means of a system of negotiations between the central management and the workers- representatives (Bofrost*, paragraph 29, and Case C-440/00 Kühne & Nagel [2004] ECR I-0000, paragraph 40).
In that connection, a European Works Council or a procedure for the purposes of informing and consulting employees is established in each Community-scale undertaking and each Community-scale group of undertakings when a request to that effect is made in accordance with the procedure set out in Article 5(1) of the Directive.
Under that provision of the Directive, in the case of a Community-scale group of undertakings, the central management, on its own initiative or at the written request of at least 100 employees or their representatives in at least two undertakings or establishments in at least two different Member States, must initiate negotiations for the establishment of such a European Works Council.
Under Article 6(1) of the Directive, the special negotiating body, which is an employee representation body established pursuant to Article 5(2) of the Directive, and the central management must negotiate in a spirit of cooperation with a view to reaching an agreement on the detailed arrangements for setting up a European Works Council.
The Court has already stated that, if the Directive is to serve a useful purpose, it is essential that the employees concerned be guaranteed access to information enabling them to determine whether they have the right to demand the opening of negotiations between central management and the employees- representatives, such a right to information constituting an essential prerequisite for determining whether a Community-scale undertaking or group of undertakings exists, which is itself a condition precedent for the setting up of a European Works Council or of a transnational procedure for informing and consulting employees (Bofrost*, paragraphs 32 and 33, and Kühne & Nagel, paragraph 46).
As regards, first, the setting up of such a council, the central management must, in accordance with Article 4(1) of the Directive, create the conditions and means necessary for the setting up of such a council. That responsibility includes an obligation to supply the employees- representatives with the information essential to the opening of negotiations for establishing a European Works Council (see Kühne & Nagel, paragraphs 49 and 51).
Central management is the central management of the controlling undertaking, namely the undertaking which can exercise a dominant influence over all the other controlled undertakings of the group within the meaning of Article 3(1) and (2) of the Directive. It is that undertaking which, by virtue of its dominant influence, can request − and oblige − the other undertakings in the group to provide it with the information essential for opening negotiations in order to enable it to communicate that information to the representatives (see also, to that effect, Kühne & Nagel, paragraphs 52 and 54).
Moreover, in order to guarantee attainment of its objective pertaining to employees- rights to have access to that information, the Directive even provides that, where the central management is situated outside the territory of the Member States, the responsibility conferred on it by Article 4(1) of the Directive is to be assumed, pursuant to the first and second subparagraphs, respectively, of Article 4(2), by either the representative agent of the central management in one of the Member States or, in the absence of such a representative, by the central management of the establishment or group undertaking employing the greatest number of employees in a Member State, that is, by the deemed central management.
In order to ensure that the Directive serves a useful purpose, the other undertakings belonging to the group and located in the Member States are under an obligation to assist the deemed central management in fulfilling the main obligation referred to in Article 4(1) of the Directive. The corollary of the deemed central management-s right to receive essential information is an obligation on the part of the management of each of the other undertakings belonging to the group to supply the deemed central management with the information concerned where it is in possession of the information or is in a position to obtain it (Kühne & Nagel, paragraph 59).
In the present case, the essential question which arises is whether the central management or the deemed central management is also obliged under the Directive to supply information which is essential in order to open negotiations to set up a European Works Council to a controlled undertaking within the group, the request for information in question having been presented by the employees- representatives to that controlled undertaking, and whether such an undertaking is entitled under the Directive to require that that information be supplied to it.
It is clear from both the purpose and the general scheme of the Directive that the obligations by which the central management or the deemed central management is bound under Article 4(1) of the Directive must be interpreted as encompassing both the obligation to supply directly to the employees- representatives information which is essential for the opening of negotiations to set up a European Works Council and the obligation to supply that information to employees- representatives through their undertaking in the group to which those representatives submitted a request for information in the first place.
Any other interpretation of the obligations by which the central management or the deemed central management is bound under Article 4(1) of the Directive would be liable to undermine the useful purpose of the Directive referred to by the Court in Bofrost* and Kühne & Nagel, cited above.
The Directive seeks to impose obligations on all undertakings in the group intended to facilitate the setting up of European Works Councils (see, to that effect, Bofrost*, paragraphs 31 and 35). As the Court has already held, it is implicit in the Directive-s purpose that the obligations which it lays down are to be fulfilled in such a way as to enable the workers concerned, or their representatives, to have access to the information which is necessary if they are to be able to determine whether or not they are entitled to request the opening of negotiations (Bofrost*, paragraph 38).
A restrictive interpretation of the obligation laid down in Article 4(1) of the Directive, to the effect that that provision would apply only to situations where employees- representatives submit requests for information directly to the central management or the deemed central management, would place an unjustified limitation on the application and scope of that provision, and indeed of the Directive, and might even discourage employees from exercising the rights conferred on them by the Directive.
Accordingly, Article 4(1) of the Directive lays down both the obligation to supply directly to employees- representatives certain information with a view to setting up a European Works Council and the obligation to supply them with that information through the undertaking in the group which received a request to that effect from its employees- representatives.
In addition, under Article 14(1) of the Directive, the Member States must take all the necessary steps in order to be able at all times to guarantee the results imposed by the Directive. Under Article 11(3) of the Directive, they must provide for appropriate measures in the event of failure to comply with the Directive and, in particular, they must ensure that adequate administrative or judicial procedures are available to enable the obligations deriving from the Directive to be enforced. It follows from the purpose of the Directive that the Member States must take all the measures necessary to ensure that the obligations deriving from Articles 4(1) and 11 of the Directive are fully performed (see, to that effect, Kühne & Nagel, paragraph 61).
With regard to the nature of the information which the central management or the deemed central management is bound to supply by virtue of that obligation to supply information, it should first be borne in mind that Article 11(2) of the Directive imposes an express obligation on Member States to ensure that the information on the number of employees referred to in Article 2(1)(a) and (c) is made available by undertakings at the request of the parties concerned by the application of the Directive.
Next, where the management of the other undertakings belonging to the group is located in the Member States, there is an obligation to supply the deemed central management with the information essential to the opening of negotiations for the establishment of a European Works Council where it is in possession of the information or is in a position to obtain it (Kühne & Nagel, paragraphs 64 and 69).
Finally, as evidenced by paragraph 58 of this judgment, it is implicit in the Directive-s purpose that the obligations which it lays down are to be fulfilled in such a way as to enable the workers concerned, or their representatives, to have access to the information which is necessary for them to be able to determine whether or not they are entitled to request the opening of negotiations and, where relevant, to make that request in due form (Bofrost*, paragraph 38).
It follows that the provision of information on the group-s companies and establishments, their legal form and representational structure, the average total number of employees and their distribution across the Member States, may be requested in so far as that information is essential for the opening of the negotiations referred to in Article 5(1) of the Directive for the establishment of a European Works Council (see, to that effect, Kühne & Nagel, paragraph 70). The same holds true for information on the names of the employees- representation bodies and their representatives required to participate, on behalf of the employees of the undertakings or of undertakings controlled by them, in the establishment of a European Works Council.
It is for the national courts to ascertain, on the basis of all the evidence before them, whether the information requested is essential for opening the negotiations referred to in Article 5(1) of the Directive.
In the light of the foregoing, the questions referred should be answered as follows: Article 4(1) and Article 11 of the Directive must be interpreted as meaning that Member States are required to impose on undertakings established within their territory and constituting the central management of a Community-scale group of undertakings for the purposes of Article 2(1)(e) and Article 3(1) of the Directive, or the deemed central management under the second subparagraph of Article 4(2), the obligation to supply to another undertaking in the same group established in another Member State the information requested from it by its employees- representatives, where that information is not in the possession of that other undertaking and it is essential for opening negotiations for the setting up of a European Works Council.”
Baxter Healthcare SA v SIPTU
LCR15824
“SUBJECT:
1. Selection process for representation on European Forum.
BACKGROUND:
2. Baxter Healthcare develops, manufactures, distributes, markets and sells a wide range of medical products and services in the cardiovascular, renal, biotech and intravenous medication areas.
The Company has operations in seventeen European countries, comprising research and development, manufacturing, sales and marketing and distribution. It employs approximately 10,000 people in these countries.
Baxter established its Irish operations in 1972 and employs in excess of 1,000 people at its four locations in Ireland. It operates two manufacturing facilities at Castlebar and Swinford and exports its products from these facilities to Europe, the U.S. and Japan. The Union represents approximately 700 employees while 200 employees are non-unionised.
In 1994, the European Community passed Council Directive 94/45EC on the establishment of a European Works Council. Baxter International established a “Baxter European Forum” consisting of representatives of management and employees in each of its European locations to facilitate transnational dialogue and consultation. The Forum meets the requirements of the European Works Council Directive.
Employees of Baxter’s Irish operations are entitled to two representatives on the Forum. However, the Union is in dispute with the Company in relation to the method by which the two employee representatives are to be chosen.
The Company wants to have one nominee representing the Union’s members and one nominee to represent the non-union members.
The Union rejected the Company’s proposal and claims that the representatives should be elected by a ballot of the total workforce.
As no agreement was possible between the parties, the dispute was referred to the Conciliation Service of the Labour Relations Commission. A conciliation conference was held on the 27th of August, 1997 but no agreement was reached. The dispute was referred to the Labour Court on the 17th of September, 1997 under Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute on the 4th March,1998.
RECOMMENDATION:
Having considered the submissions from both parties and taking into account the further information given at the oral hearing the Court has concluded as follows:-
(a) The agreement, the operation of which is now in dispute was made within the period allowed by the Act for the conclusion of in-company arrangements (up to 22nd September, 1996).
(b) Section 21 of the Act does not therefore apply to the dispute.
(c) The agreement provides that employee representatives to the European Forum are to be selected “according to arrangements to be agreed between the local representatives of management and employees”.
(d) The essence of the dispute to be addressed by the Court is the method of selecting the employees’ representatives (2 in number).
The Court notes that had the Act applied the method of election to the Forum would be governed by the First Schedule to the Act. This provides for a single election conducted by proportional representation with all employees employed on the day of the election being entitled to vote.
The Court considers it reasonable to recommend the adoption of this procedure despite the reservation expressed by the Company as to the outcome of such an election. To assist the parties the Court further recommends that an independent outsider be appointed to supervise the ballot and that the names of the candidates and their location be the only information given in the ballot papers. In the event of the two places being filled by representatives of either groups involved in this dispute the substitute delegate place should be filled by the employee from the other groups who polled the highest number of votes.
Finally the Court further recommends that 6 months prior to the second election the parties meet to review the situation and make any further local arrangements that are considered desirable.