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Luxembourg finally transposed the 1994 EU Directive on European Works Councils into national legislation during 2000, some four years behind schedule. All EU Member States have now implemented the Directive. We review the main distinctive points of the Luxembourg law.
EU Council Directive 94/45/EC on the establishment of a European Works Council (EWC) or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees was adopted of 22 September 1994. The Member States had until 22 September 1996 to transpose the Directive into their national provisions. However, Luxembourg failed notably to meet this deadline and the Minister of Employment and Labour did not lodge a bill - drawn up by a tripartite working group - in the Chamber of Deputies until 28 January 1999. This delay in implementation led to the European Court of Justice ruling against Luxembourg for non-transposition of the Directive in October 1999 (EU9911209N).
Finally, Luxembourg became the last EU Member State to implement the Directive when it adopted the necessary legislation on 28 July 2000 (published in the Luxembourg official journal, the Memorial, on 18 August). The law also transposes the December 1997 Directive (97/74/EC) extending the original EWCs Directive to the UK.
As specified in the EWCs Directive, the law applies to undertakings and groups of undertakings that employ at least 1,000 workers in Member States of the European Economic Area (EEA), with at least 150 workers in each of at least two Member States. About 15 multinational companies based in Luxembourg fall within the scope of the legislation.
Much of the content of national legislation to implement the Directive is of course laid down in the Directive itself However, the Directive leaves certain points to be decided by the Member States. Furthermore, the Directive's provisions were given some "reinforcement" in the government bill, which was drawn up in agreement with the social partners, in order to bring it more into line with the Luxembourg model of information and consultation.
In Luxembourg, the various professional chambers (chambres professionnelles) give their opinions on legislative proposals affecting them. They made a number of general and specific remarks on the draft EWCs implementing legislation drawn up by a tripartite body.
For example, the Chamber of Private Sector White-Collar Staff (Chambre des Employés privés) registered its agreement with the bill, but stressed that the notion of "consultation" should be clarified in the text, and should focus both on social data and on the broad directions of company's industrial and employment policy. It also demanded more rights for EWCs.
The Directive requires Member States to provide (in specific cases and under the conditions and limits laid down by national legislation) that central managements situated in their territory are not obliged to transmit information to EWCs when its nature is such that, according to objective criteria, it would seriously harm the functioning of the undertakings concerned or would be prejudicial to them. The Luxembourg legislation provides for any disputes on this point to be referred to an arbitration committee chaired by the director of the Inspectorate of Labour and Mines (Inspection du travail et des mines) and made up of representatives of the central management and employees involved in the information and consultation procedure. The Chamber of Private Sector White-Collar Staff and the blue-collar Chamber of Labour (Chambre de Travail) called unsuccessfully for the facility for appeals against the arbitration committee's decisions. In the legislation, the committee's decision remains final.
Another unsuccessful demand of the Chamber of Labour was for the statutory EWC based on the Directive's subsidiary requirements to be entitled to meet with management at least once year for information on business and employment matters, rather than simply once a year. The Chamber argued that a single information procedure per calendar year was insufficient, particularly if significant changes were taking place within a company
On the employers' side, the Chamber of Commerce (Chambre de Commerce) opposed the election of Luxembourg members of the special negotiating body (SNB), preferred them to be appointed. The final legislation provides for either the election or appointment of SNB members by employee representatives. The Chamber also called unsuccessfully for the SNB and statutory EWC to be joint employee-management bodies, though accepting that the two sides should not have numerical parity. Finally, the Chamber challenged the principle of the introduction of specified amounts of paid time off to perform their duties for EWC representatives of staff employed in Luxembourg, on the grounds that this would discourage potential investors from opening up businesses in the country (the final legislation provides for set amounts of time off where no agreement can be reached on this issue).
The key points where the Luxembourg transposition legislation makes use of the limited latitude for adaptation allowed by the Directive, or adds to the Directive's provisions, are outlined below.
The Directive provides that the SNB negotiating procedure over the establishment of an EWC can be initiated by the central management 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. The Luxembourg legislation adds (in Article 8) that Luxembourg trade unions represented in the company, or having a collective agreement with it, can also trigger the procedure.
The SNB is made up (Article 13) of one representative from each Member State where the company has operations, plus additional members as follows: one extra seat for countries where at least 25% of the total EEA workforce is employed; two extra seats for countries with at least 50% of the workforce; and three extra seats for countries with at least 75% of the workforce. This formula for seat allocation has been used by many Member States. The Luxembourg legislation adds to the Directive by specifically allowing for the SNB to be extended to include representatives from non-EEA countries (Article 14).
The SNB is specifically entitled to hold preparatory meetings on its own prior to negotiating meetings with management up to three before the first joint meeting, and one before subsequent meetings) (Article 19). The expenses relating to the SNB's constitution and activity - including one preparatory meeting - are met by management, to the extent that this is necessary to allow the SNB to carry out its role. It is specified that management will: provide rooms and material resources; pay for SNB members' travel and accommodation; where necessary, provide interpreting facilities and administrative support staff; and meet the costs of one expert's participation at a meeting (Article 21).
The representatives on the SNB of workers employed in Luxembourg are appointed or elected by the members of employee committees/works councils (délégations du personnel) (or higher-level committees/councils where these exist within companies or groups) (Article 16). This solution, based on existing democratically elected structures and not involving excessively bureaucratic mechanisms, was approved by the social partners in the tripartite body which contributed to drawing up the legislation. The SNB representatives may be company employees or representatives of nationally representative trade unions, if these unions had triggered the SNB procedure. Where workers employed in Luxembourg are entitled to more than one SNB representative, one must be an employee, and one must be a representative of a nationally representative trade union that triggered the procedure.
The Luxembourg legislation largely repeats Article 6 of the Directive on the content of agreements reached through the SNB procedure. It adds that the agreement must cover all the company's workers in the EEA, and guarantee an appropriate representation of these workers (Article 25). Furthermore, where the agreement is to set up one or more transnational "information and consultation procedures" rather than an EWC, there are a number of additional provisions in the Luxembourg legislation relating to such procedures, and notably the employee representatives involved (Article 28).
As required by the Directive, a statutory "subsidiary requirements" EWC must be established where management and SNB reach no agreement. The main points on which the Luxembourg legislation differs from the Directive's subsidiary requirements are that:
Being the last country to transpose a Directive is never anything to be proud of, particularly when this comes about only as a result of a judgment delivered by the European Court of Justice against a country that sees itself as more European than the rest. This limited enthusiasm is probably explained by the small number of Luxembourg-owned enterprises involved, and by the content of a Directive essentially restricted to a simple right to information. It might also be suggested that the delay was caused by the fact that employee representation at enterprise level is highly developed in Luxembourg, and that neither the government nor the social partners felt any urgent need for transposition. For example, in companies established in Luxembourg and normally employing more than 1,000 workers over the past three years, employee representatives make up one-third of the administrative board (TN9809201S), while company joint committees (comités mixtes d'entreprise) - consultative and sometimes decision-making bodies (LU9810172F) - are obligatory in firms employing at least 150 workers. (Marc Feyereisen)