European Labour Law Lecture 09A

The 1970s brought many changes in the economic situation in Europe: stagnation after the “golden sixties”, unemployment, restructuring of enterprises. Politicians were prepared to a more active European social policy ( Paris summit 1972). In this social-economic and political climate three EEC Directives concerning the restructuring of enterprises could be launched. All three were consolidated in recent years. Directives on - Collective Redundancies 75/129 98/59 - Transfer of the undertaking 77/ /23 - Insolvency 80/ / Restructuring the enterprise 1

All three Directives contain specific material rules which have an impact on the contracts of employment of the individual workers The first two Directives also contain rules concerning the information and consultation of the workers’ representatives in case of collective redundancies or transfer of undertakings Restructuring the enterprise 2

When exactly is there a collective dismissal? MS may choose - either, over a period of 30 days, dismissal of at least 10 workers in establishments workers at least 10% workers in establishments workers at least 30 workers in establishments > 300 workers - or, over a period of 90 days, dismissal of at least 20 workers irrespective of the number of workers in an establishment Collective redundancies 1

Only dismissals which are not motivated by causes in the person of the employee count for this Directive (case Commission/Portugal). On the concept “establishment” see Bouchereau and Athinaiki cases Collective redundancies 2

Collective Redundancies Directive is not applicable - on some short-time contracts - bodies of the public administration - crews of see-going vessels Directive is applicable - on non-profit employers (see case Comm/Italy, 2003) and - in cases of termination of the enterprise by judicial decision, however MS may exclude the 30 days time lapse in that case (art. 4(4) 9.2. Collective redundancies 3

Collective redundancies may take effect not earlier than 30 days after notification to the competent public authority (art. 4 (1)(2). This 30 days time lapse is there to allow the competent public authority to seek solutions (placement of workers, retraining, outplacement, etc). Which is the Italian competent authority? How active are Italian competent authorities? 9.2. Collective Redundancies 4

Information and consultation of workers representatives in case of collective redundancies must be delivered - beforehand - in good time and contain - reasons - indication of the number of workers involved - selection criteria - redundancy payments 9.2. Collective Redundancies 5

Consultation with a view to reaching an agreement (art. 2(1) The agreement should be about - avoiding redundancies or - mitigating the consequences. Workers’ representatives according to the law and practices of MS may be - trade unions, or/and - works’ councils Collective Redundancies 6

Most import problem with the Directive in cases of (multinational) concerns: at what time to initiate the process of information and consultation of the workers’ representatives??? Formal decision making process, triggering the application of the Directive’s obligations by the directors at establishment level, is most of the times preceded by material decision making at the level of the concern-top. It has been established that daughter companies cannot escape responsibility for not complying with the obligations of the Directive by invoke non- cooperation of the mother company (Akavan case) Collective redundancies 7

Employers must first inform and consult the workers’ representatives and then the competent authority as they must report the competent authority over the outcome of the negotiations with the unions. They may only notice the termination of the contract of employment to the workers concerned and start the period of notice after having noticed the competent authorities (Junk case). So there is no simultaneity between the period of notice and the period of contact with the workers’ representatives, but there may be simultaneity of the period of notice and the 30 days waiting period Collective redundancies 8

Last year the Eur. Commission made a so-called fitness-check of this Directive. It was established that there are still problems with respect of the definition, non-application to certain categories of workers, staggering dismissals and the recourse to ‘dissolution agreements’ so that the threshold is not met, the choice of and the content and timing of the consultation of workers’ representatives, selective dismissals, application in the groups of undertakings, sanctions, the recourse to external workers when dismissing permanent staff Collective redundancies 9