Advocate-General delivers opinion on first EWC case to reach European Court of Justice

In September 2000, the European Court of Justice published an Advocate-General's opinion on the first case concerning the European Works Councils (EWCs) Directive to have reached the Court. The opinion, which is not binding on the Court, seeks to clarify management's responsibility to provide employee representatives with information about the number and distribution of employees and the structure of the undertaking/group, including the disclosure of relevant documents, prior to any employee request for negotiations about a possible EWC.

On 26 September 2000, Advocate-General Antonio Saggio at the European Court of Justice (ECJ) delivered his opinion of the issues raised in the first case concerning the interpretation of the European Works Councils (s) Directive (94/45/EC) to reach the ECJ. The case, number C-62/99, was referred to the ECJ by the higher labour court in Düsseldorf and concerns a claim for information about the number and distribution of employees and the structure of the company/group by the works council at a German firm bofrost* Josef H Boquoi Deutschland West GmbH & Co KG, located in Straelen in Germany.

Background

Article 11(1) of the EWCs Directive states that: "Each Member State shall ensure that the management of a Community-scale undertaking and the management of undertakings which form part of a Community-scale group of undertakings which are situated within its territory and their employees' representatives or, as the case may be, employees abide by the obligations laid down by this Directive, regardless of whether or not the central management is situated within its territory." Article 11(2) requires Member States to "ensure that the information on the number of employees referred to in Article 2(1)(a) and (c) [ie the employment thresholds for Community-scale undertakings and groups respectively] is made available by undertakings at the request of the parties concerned by the application of the Directive".

In this case, the works council at bofrost* sought information on employee numbers and company structure from management on a number of occasions but management did not meet their request and in a letter dated 9 January 1997 categorically refused to provide the information in question. The works council therefore sought a labour court ruling requiring the company to provide information and documents on the relationship between the company and other bofrost* companies in Europe, the numbers of workers employed in these companies, their legal form and law applicable, and their governing bodies, including which people had the power to nominate them. The works council asserted that the German bofrost* company was the controlling undertaking in the bofrost* group, but the company argued that this had not been demonstrated and that no single company had a dominant influence within the group.

In August 1998, the labour court recognised the right of the works council to the information sought on the basis of the influence it considered the German company exercised over the bofrost* companies in other countries. In November 1998, however, the company appealed to the higher labour court in Düsseldorf which decided to suspend proceedings and refer the case to the ECJ for a ruling.

The Advocate-General's opinion

The Advocate-General's opinion is available on the ECJ's website in French, German and Italian, but it is expected to be some time before the ECJ publishes an English version of the opinion.

The ECJ has been asked to rule on the following three questions:

• does the right to information about employee numbers under Article 11(1) and (2) of the Directive exist even where it is not (yet) established whether, among a group of undertakings such as defined by Article 2(1)(b) of the Directive, there is a controlling undertaking within the meaning of Article 3 of the Directive;

• if so, does the right to information under Article 11(1) and (2) include the right of a works council to request information which relates to whether an undertaking constitutes a controlling undertaking under Article 3(2); and

• does the right to information under Article 11(1) and (2) imply a duty to disclose relevant documentation specifying and explaining such information.

Advocate-General Saggio concludes that the ECJ should respond to the questions raised in the following way:

• Article 11 (1) and (2) of the Directive must be interpreted as placing an obligation to provide employee representatives with the information necessary for the establishment of an EWC not only on those undertakings demonstrated to be the controlling undertaking within a Community-scale group but also on all undertakings situated on Community territory;

• the right to receive information about the undertaking, which the Directive grants to employee representatives, includes general information relating to whether an undertaking can be considered to be the controlling undertaking within the meaning of Article 3(2) of the Directive. However, this right does not include more detailed information recognised as confidential according to the law of the Member State in which the undertaking is headquartered; and

• the management of the undertaking must also provide the employee representatives with the documents necessary for initiating the procedure for establishing an EWC unless these documents are considered confidential in accordance to the national law applicable.

Commentary

An Advocate-General's opinion is not binding on the European Court of Justice itself but is usually regarded as a good indicator of the likely outcome of a case. Were the eventual decision by the ECJ in this case to correspond with Advocate-General Saggio's opinion, the implications would be that: all undertakings within the territorial scope of the Directive, not only a controlling undertaking within a Community-scale group, must respond to requests for such information from employee representatives; general information on whether an undertaking is the controlling undertaking of a group must be made available subject to legal provisions on confidentiality; and relevant documents must be provided, again subject to confidentiality rules. The effect would be to clarify the rules governing transparency in the initial dealings between employee representatives and company management prior to any employee request for negotiations about a possible EWC.

The provisions of existing national EWC measures in this area vary in their details. For example, Germany's 1996 EWCs Act (Article 5) requires central management, upon request, to provide works councils with information on the number of employees and their and distribution between countries, undertakings and establishments, and on the structure of the undertaking or group. Where a works council approaches the management of the local establishment or undertaking, the latter is obliged to obtain "the information and documentation required for this purpose" from central management. The UK's Transnational Information and Consultation of Employees Regulations 1999 (UK0001146N) entitle an employee or employees' representative to request information from the management of an establishment or undertaking in the UK for the purpose of determining whether it is part of a Community-scale undertaking or group (Regulation 7), but do not specify the disclosure of relevant documents. An ECJ ruling along the lines of the Advocate-General's opinion could therefore have important consequences for national EWC legislation. (Mark Hall, IRRU)