In the first appeals decided under Ireland's legislation on European Works Councils, the Labour Court has provided welcome guidance for multinational businesses that moved their European Works Councils to Irelanh3d in light of Brexit.
European Works Councils in Ireland
A European Works Council (EWC) is a standing body that facilitates the information and consultation of employees in multinational businesses on transnational issues. EWCs are composed of employees' representatives from each country that is a member of either or both of the European Union and the European Economic Area, in which a business has employees. They operate separately from national information and consultation bodies.
The concept of a EWC dates from 1994, when the first EU legislation on EWCs was enacted. The EWC Directive was transposed into Irish law under the Transnational Information and Consultation of Employees Act, 1996 (TICEA).
There are two types of businesses operating EWCs in Ireland:
- Irish-based, Irish companies; and
- companies from outside of Europe but which need a legal base in Europe. Until Brexit, relatively few such businesses operated their EWC in Ireland. However, this has changed dramatically since Brexit, with numerous businesses from Switzerland, the United Kingdom and the United States choosing to base their EWCs in Ireland with effect from the end of the Brexit transition period.
There is limited caselaw relating to TICEA. In part, this reflects that TICEA's dispute resolution provisions are defective, a matter which has led the European Commission to commence infringement proceedings against the Irish state.
The Verizon dispute
Until shortly before the end of the Brexit transition period, Verizon's EWC had operated under UK law under the terms of an EWC agreement. That agreement expired in October 2020 after the EWC rejected the draft agreement put to it during negotiations to replace it. In anticipation of the imminent end of the Brexit transition period, Verizon began to operate its EWC under Irish law's default 'subsidiary requirements' set out in the Second Schedule to TICEA.
Training
After its move to Ireland, Verizon promptly began the process of constituting its new EWC. Having regard to section 17(6) of TICEA providing that "the members of the... European Works Council... shall be provided with appropriate training by their employers without loss of wages", it arranged for the EWC members to be provided with training on a virtual basis by independent legal experts on the operation of an EWC under TICEA, including Kevin Duffy, former Chair of the Irish Labour Court.
Nonetheless, four members of the EWC decided that the training had not been 'training' but the mere 'provision of information'. Therefore, and despite Verizon having indicated that it would not cover the cost of them attending an additional in person training course provided by the EWC Academy in Hamburg, they attended that conference after complaining to the Workplace Relations Commission (WRC) that Verizon would not pre-authorise the costs.
Costs for expert assistance
Throughout early 2021, the EWC retained Dr Altmeyer of the EWC Academy to assist it with a range of tasks. However, it did not seek pre-approval for the costs of this work. Whilst Verizon agreed the hourly rates to be charged, and ultimately offered to pay some of the costs, it refused to pay them all based on the tasks performed (such as for Dr Altmeyer checking minutes of a meeting). In response, one of the members filed a further complaint on the basis that section 17(1A) of TICEA entitles members of a EWC to "the means required... to represent the collective interests of employees".
WRC decisions
In April 2023, the WRC issued decisions in respect of each the members of the EWC. Our in-depth article on these decisions is available here but, in summary, the WRC concluded that:
- On the issue of training:
- Verizon had provided the four members of the EWC with training within the ambit of TICEA in 2021, as the training that it had organised had addressed the EWC Directive and TICEA;
- that training met Verizon's training obligations for 2021, with it being "entirely appropriate" that the training that year covered the Irish legal landscape because of the migration of the EWC to Ireland and "entirely reasonable" to provide the training virtually in the context of the pandemic; and
- the four members' decision to attend the Hamburg training and claim the cost retrospectively, despite Verizon having made it clear that it would not pay for it, was not in accordance with the spirit of cooperation required of the parties. So, Verizon was not required to bear the costs of the training except in respect of one member, to whom local Verizon management had mistakenly given commitments that certain costs would be borne.
- On the issue of costs for expert assistance:
- the EWC needed expert assistance in early 2021 in light of the particular circumstances of the previous EWC agreement having expired and the EWC having migrated to Ireland;
- it was understandable that Verizon was very concerned about EWC Academy undertaking billable work when it had not been notified of the nature of the work in advance. The WRC went so far as to indicate that the EWC procuring billable expert support without even alerting Verizon the advice was being engaged could, per the spirit of cooperation, result in the support being outside of the 'means required' to which an EWC is entitled in order to carry out its functions;
- in circumstances other than the particular situation faced by the EWC in early 2021, the manner in which Verizon was surprised by the undertaking and extent of billable expert support was outside the 'means required' to be provided by central management, on the basis that the EWC had failed to comply with the spirit of cooperation required of all parties;
- on the individual items of expert assistance, these were not all required or reasonable. In particular, expert assistance was not necessary: (1) to review the minutes of an internal EWC meeting; (2) to understand that UK delegates were no longer entitled to participate in the EWC after Brexit; or (3) in connection with an aborted information and consultation process (relating to a possible transaction that Verizon had given the EWC a 'heads up' about but which was quickly made clear would not be proceeding), on the basis that it would dissuade management from giving an early 'heads-up' if doing so would lead to financial liability. However, expert assistance was necessary for the EWC to prepare its own internal rules of procedure; and
- in light of the above, Verizon should pay 50% of the total invoice.
Labour Court decisions
Following the WRC's decisions, three of the members of the EWC appealed to the Labour Court, with one member appealing the WRC's decisions in respect of both his training entitlements and EWC Academy's invoice.
The Labour Court has now dismissed both of that member's appeals:
- On the issue of training:
- based on the Labour Court's own experience of continuous professional development and training, the materials covered in the training provided by Verizon 'undoubtedly' met the member's own barrister's definition of training, had covered appropriate topics and had been provided by trainers with 'recognised expertise';
- Verizon's refusal of the member's request to attend the Hamburg conference was not unreasonable as there were ongoing discussions between Verizon and the EWC about training needs;
- Verizon was not liable for costs where it had clearly informed the member in advance that it would not bear them. The member chose to incur them with 'full knowledge' that they would not be reimbursed;
- the determination of what training should be provided to members of an EWC should be a collaborative activity with input from both the members of the EWC and representatives of management. In this respect, section 17(6) of TICEA is incompatible with the EWC Directive insofar as it only provides that the training is to be 'provided by the employer'; and
- whilst an employer is required to pay the cost of training that is 'reasonably required and appropriate in all the circumstances', it is not required to furnish its EWC with 'a blank cheque'.
- On the issue of costs for expert assistance:
- the member's claim involved him acting 'in a representative capacity' on behalf of the EWC. However, section 17(1A) of TICEA concerns the protection of individual members of EWCs as opposed to providing a means of progressing disputes that are collective in nature; and
- not only did his appeal for payment of the balance of the invoice therefore fail (as it concerned a claim that the WRC had not in fact had jurisdiction to hear at all) but the WRC's decision was varied so that Verizon is not required to pay any of the invoice.
Implications for employers
Overall, this decision is welcome news for employers with an EWC operating under Irish law. Most importantly, the Labour Court's restatement of the WRC's clear emphasis on the importance of the spirit of cooperation means that employers can take comfort that their EWC cannot surprise them with fees for them to settle after the event, such as for training. Employers will also welcome the fact that proceedings before the WRC cannot be misused to settle complaints that are in fact individual as opposed to collective in nature.
However, the Labour Court's refusal to consider the claim in respect of EWC Academy's invoice does mean that uncertainty continues to exist over the extent to which an expert's assistance to a EWC is 'necessary and appropriate'.
Finally, the rights of EWC members to entitlements such as expert assistance are likely to change significantly in the more distant future if the EWC Directive is revised in the ways that the European Commission has recently proposed. For example, it has been proposed that experts assisting EWCs will be entitled to be present during meetings between EWCs and management, in an advisory capacity. We have written about the proposals in more detail here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.