EU: Commission reviews implementation of information and consultation Directive
In March 2008, the European Commission published a report examining the implementation across the EU of the 2002 Directive on national information and consultation rights.
On this
page:
The Directive
Transposition process
Key transposition issues
Scope
Practical arrangements
Information and consultation agreements
Confidential information
Protection of employee representatives
Protection of rights
Link with other provisions
Member states’ views
Social partners’ positions
Commission’s assessment
Next steps.
Key points
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THE DIRECTIVE
Directive 2002/14/EC establishing a general framework for informing and consulting employees in the European Community (on the EUR-Lex website) was adopted in March 2002. The 27 EU member states had until March 2005 to implement the Directive, although countries (such as the UK) with no “general, permanent and statutory” system of information and consultation or workplace employee representation were allowed to phase in the Directive’s requirements for smaller companies until March 2008.
The Directive aims to establish a general framework of minimum requirements for employees’ rights to information and consultation (defined as taking place between the employer and employee representatives). The Directive requires:
- information on the recent and probable development of the undertaking’s or establishment’s activities and economic situation;
- information and consultation on the situation, structure and probable development of employment, and on any anticipatory measures envisaged, in particular where there is a threat to employment; and
- information and consultation, with a view to reaching an agreement, on decisions likely to lead to substantial changes in work organisation or in contractual relations.
Information and consultation arrangements defined by agreements between management and labour, including at undertaking or establishment level, may differ from those set out in the Directive. Employers may require employee representatives to treat information as confidential, and need not inform or consult where to do so would seriously harm or prejudice the undertaking or establishment.
Member states could choose whether to apply the Directive to undertakings with at least 50 employees or establishments with at least 20 employees. Member states also have considerable flexibility in implementing other aspects of the Directive. For example, it is left to national provisions to: determine the employee representatives who are to be informed and consulted; specify whether the Directive’s rights apply obligatorily to all relevant undertakings/establishments or must be triggered by the employees of a particular undertaking/establishment; and choose whether information and consultation arrangements defined by agreements between management and labour may differ from those set out in the Directive.
The Directive (in art.12) requires the European Commission, in consultation with the member states and the EU-level social partners, to review the Directive’s application “with a view to proposing any necessary amendments” by 23 March 2008. This review is contained in a communication (COM 2008 146 final) “on the review of the application of Directive 2002/14/EC” (PDF format, 133K) (on the Europa website), addressed to the other EU institutions, adopted on 17 March 2008. In order to feed into the review, the commission sent a questionnaire to the member states and the main EU-level trade union and employers' organisations, commissioned a study by independent experts, and gathered information through its normal monitoring activity. It has published a “staff working document” containing more details of the findings of this review process.
TRANSPOSITION PROCESS
Only Finland, France, Hungary, the Netherlands, Portugal, the Slovak Republic and the UK adopted measures to transpose the Directive by the March 2005 deadline, while Austria and Germany notified the commission that their existing legislation already met the Directive's requirements. Bulgaria and Romania transposed the Directive, as required, before they joined the EU in 2007.
Most member states therefore failed to transpose the Directive on time. Indeed, some were so late in complying that, following infringement proceedings launched by the commission, the European Court of Justice issued judgments for non-compliance with their obligations against Belgium, Greece, Italy, Luxembourg and Spain. Greece, Italy and Spain have since adopted implementing legislation while, according to the commission, Belgium and Luxembourg have so far only partially transposed the Directive.
The commission believes that the delay in transposing the Directive in many countries “may be related to difficulties in generating the necessary consensus on key issues for the reform of national industrial relations”.
Almost all countries transposed the Directive by way of legislation. Belgium and Denmark, in line with their normal practice, transposed it by way of both legislation and collective agreements. In countries such as Cyprus, Denmark, Estonia, Greece, Italy and Poland, transposition involved the adoption of a comprehensive law. However, in the Czech Republic, Finland, Hungary, Latvia, Lithuania, the Netherlands, the Slovak Republic, Slovenia and Sweden, existing legislation was amended in more or less minor ways. In almost all countries, transposition of the Directive was preceded by some form of consultation of the social partners.
Some of the countries that lacked a general, permanent and statutory system of information and consultation, or of employee representation, made use of the option to phase in the Directive’s requirements. While undertakings with at least 150 employees, or establishments with at least 100 employees, had to be covered by the Directive by March 2005, such member states could delay application until: March 2007 for undertakings with at least 100 employees, or establishments with at least 50 employees; and March 2008 for undertakings with at least 50 employees, or establishments with at least 20 employees. The countries that phased in application were Bulgaria, Cyprus, Ireland, Italy, Malta, Poland and the UK.
KEY TRANSPOSITION ISSUES
The communication questions the “correct and full transposition” of a number of the Directive’s requirements by some member states, calling for “further clarification or verification”.
Scope
According to art. 3, the Directive applies to undertakings with at least 50 employees or establishments with at least 20 employees. In calculating the size of the undertaking or establishment’s workforce for this purpose, some member states (such as Italy and Lithuania) exclude young workers or workers with short-term contracts. The commission believes that such exclusions “pose problems and deserve further examination”.
Member states are allowed not to apply the Directive in full to certain types of undertaking/establishment or employee, but should lay down “particular provisions” for information and consultation in these cases. This may relate to: “undertakings or establishments which pursue directly and essentially political, professional organisational, religious, charitable, educational, scientific or artistic aims, as well as aims involving information and the expression of opinions” (if national information and consultation legislation already treated such companies differently, as in Germany, for example); and the crews of “vessels plying the high seas”. The commission expresses concern that some member states have excluded these businesses or workers, but without putting in place particular provisions for them (examples are Cyprus, Greece, Malta and Romania).
The communication also identifies a need to clarify whether the national implementing legislation in some countries covers not-for-profit undertakings (as required by the Directive).
Practical arrangements
Article 4 of the Directive provides that member states must determine the practical arrangements for exercising the right to information and consultation at the appropriate level. It also defines the issues for information and consultation. The commission states that the national provisions aimed at transposing this article “vary greatly as to the level of detail and comprehensiveness”.
In several countries, in particular those with long-standing systems of information and consultation, the wording of the national legislation “does not always coincide with that of the Directive”; and certain issues are “worthy of further examination, not least for reasons of legal certainty and security”. Notably, in some member states the transposing legislation provides only for information and not for consultation on issues regarding the undertaking's or establishment’s employment situation, its probable development and related anticipatory measures. Further, some national laws make no explicit mention of the employer’s obligation to give reasoned replies to the opinions of employee representatives or to consult with a view to reaching agreement.
The commission sees a need to “further verify” the situation in those countries whose legislation allows the employer to inform and consult through means other than defined employee representatives. The Directive states that it is “without prejudice” to systems that provide for the direct involvement of employees (ie without the use of employee representatives), as long as employees are “always free to exercise the right to be informed and consulted through their representatives”. Ireland and the UK have included in their national implementing legislation the possibility that information and consultation may be through direct channels.
Information and consultation agreements
Article 5 of the Directive allows member states to “entrust management and labour at the appropriate level, including at undertaking or establishment level, with defining freely and at any time through negotiated agreement the practical arrangements for informing and consulting employees”. These agreements may include provisions that differ from those laid down in the Directive, as long as they respect the Directive’s basic principles and any conditions and limitations laid down by the member states.
Most member states have provided for the possibility of social partner agreements on the practical arrangements for information and consultation. Some countries (such as Ireland, Malta, Poland and the UK) make a distinction between “pre-existing” agreements (ie those already in place at the time the Directive came into force) and agreements adopted subsequent to the Directive. However, according to the commission, the requirements established by pre-existing agreements do not always fit in with the provisions laid down in the Directive. For example, some of these agreements may not: provide for any timeframe for informing and consulting employees; provide for consultation (but merely for seeking the views of employees); or be subject to enforcement provisions.
More generally, some member states make no explicit mention of the Directive’s requirement that the social partners should respect the Directive’s principles, where they agree on practical arrangements that differ from those set out in the Directive. The commission argues that it is necessary to clarify the conditions under which employees may express reservations or challenge pre-existing agreements in order to assess whether their right to information and consultation is impaired.
Confidential information
Article 6 of the Directive requires member states to provide that employee representatives and any experts who assist them must not reveal to employees or to a third party any information which, in the legitimate interest of the undertaking or establishment, has expressly been provided to them in confidence. This obligation continues to apply, wherever the said representatives or experts are, even after their terms of office expire. However, member states may authorise employee representatives and anyone assisting them to pass on confidential information to employees and to third parties if they are bound by an obligation of confidentiality. Further, member states must provide, “in specific cases and within the conditions and limits laid down by national legislation”, that employers are not obliged to communicate information or undertake consultation when the nature of that information or consultation is such that, “according to objective criteria, it would seriously harm the functioning of the undertaking or establishment or would be prejudicial to it".
The commission reports that most member states transposed these provisions by using “general terms”, broadly similar to those laid down in the Directive, without specifying them further, leaving this to case law or to agreements between management and labour. Some member states transposed these provisions in a “minimalist” way, omitting certain terms and therefore “raising questions as regards the compatibility of the implementing acts with the Directive”.
The communication states that, while effective protection of employers’ legitimate interests in respect of confidentiality must be ensured, the effective exercise of employees’ rights to information and consultation should not “be impaired by employers' unwarranted recourse to the confidentiality clause”. It therefore identifies a number of issues that warrant “closer attention”:
- the lack of any explicit provisions in some countries’ transposing legislation regarding continuation of the confidentiality obligation after the expiry of employee representatives’ term of office (as in Estonia, Finland, France and Slovenia), or the limitation of this obligation to a defined period after expiry of the term of office (as in the Czech Republic, Italy, Poland and the Slovak Republic);
- the fact that some countries do not specify the criteria for characterising information as confidential, in particular objective criteria for assessing whether an employer has a legitimate interest in requiring confidentiality or faces a risk of prejudice by disclosing certain information;
- some national legislation provides that a piece of information is confidential by the mere fact that the employer divulges it in confidence and ceases to be confidential only after the employer so decides; and
- some member states (eg Austria, the Czech Republic, Denmark, Finland, France, Hungary, Latvia, the Slovak Republic and Slovenia) have not taken specific measures to transpose the Directive’s requirement to provide for administrative or judicial review procedures for cases where employers require confidentiality or withhold information.
Protection of employee representatives
Article 7 requires member states to ensure that employee representatives, when carrying out their functions, enjoy adequate protection and guarantees to enable them to perform their duties properly. The commission finds that all countries seem to have provided such adequate protection and guarantees. This generally involves a right to paid time off, along with protection against employers’ actions disadvantaging or discriminating against representatives while carrying out their tasks or, in certain cases, after their term of office.
Protection of rights
Article 8 obliges member states to provide for “appropriate measures” in the event of non-compliance with the Directive by employers or employee representatives. In particular, they must ensure that adequate administrative or judicial procedures are available to enable the obligations deriving from the Directive to be enforced. Further, member states must provide for “effective, proportionate and dissuasive” sanctions in the event of infringement of the Directive by employers or employee representatives.
According to the communication, all countries provide for adequate administrative or judicial procedures in order to ensure respect of the Directive’s obligations. In most countries, monitoring and control is assigned to the labour inspectorate, while disputes may be brought before specific bodies and/or courts. The national transposition measures also provide for administrative or, in certain cases (such as Belgium and Germany), penal sanctions and determine, in several cases, the minimum and/or maximum amounts of such sanctions (which vary considerably). The sanctions may depend on factors such as the legal form of the employer, the size of the undertaking and the relative gravity of the infringement. A number of member states provide for “particularly effective” sanctions in cases where the employer takes decisions without respecting its information and consultation obligations - such decisions may be suspended or even declared null and void (eg in France, the Netherlands and Spain). In a few countries (eg Austria), non-compliance with the Directive may also be taken into account when determining the measures to be taken by the employer in order to compensate for disadvantages suffered by employees in cases of restructuring.
However, the commission believes that it is necessary to check whether the measures in place ensure that infringements of the Directive, including where employee representatives violate their confidentiality obligation, are liable to sanctions that are effective, proportionate and dissuasive.
Link with other provisions
Article 9 states that the Directive is without prejudice to: the specific information and consultation procedures set out in the Directives on collective redundancies (98/59/EC) and transfers of undertakings (2001/23/EC); the provisions implementing the Directive on European Works Councils (94/45/EC, as amended); and other rights to information, consultation and participation under national law. Further, implementation of the Directive cannot be grounds for any regression in relation to the (employee information and consultation) situation that already prevails in each member state and in relation to the general level of protection of workers in the areas to which it applies.
According to the commission, most national laws implementing the Directive stipulate that they do not affect, or are without prejudice to, the national provisions transposing other information and consultation Directives. The interaction of the various Directives “does not seem to be a problem” in countries (such as a number of the new member states in central and eastern Europe) that transposed all the Directives in a single act, in particular by amending their Labour Code. However, this interaction “may become an issue in cases where such transposition was carried out through different acts in ways that could appear to be not wholly coherent, in terms either of the beneficiaries of the information and consultation rights (possible duplication of the actors) or of the procedural modalities of such information and consultation”.
MEMBER STATES’ VIEWS
As mentioned above, the commission consulted national governments on its review of the application of the Directive. It reports that, when asked for their views on the Directive’s practical application, including attainment of its objectives, several member states (such as Austria, Belgium, France and Germany) highlighted the fact that their legislation has long provided for information and consultation of employees in undertakings/establishments. Several other countries (such as Bulgaria, Estonia and Ireland) responded that it is too early to provide a definite answer, given the early stage of implementation of the Directive.
All member states said that they found the Directive sufficiently “flexible and suitable”. With regard to the impact of the national transposition measures on their industrial relations systems, several (such as Germany, the Netherlands and Spain) stated that this is expected to be minimal, given that they already had long-standing legislation in this area. Other member states (eg Cyprus, Greece, Hungary and Latvia) considered the Directive’s impact to be positive, while some (eg Estonia, Italy and the UK) said that it is too early to make an assessment.
When asked if they saw a need to revise the Directive, a majority of member states responded negatively. Several (such as Germany, Greece, Ireland and Italy) said that it is too early for such a revision. However, two member states replied in the affirmative, with Poland seeking changes in the Directive’s scope and the Slovak Republic arguing that, where no employee representatives exist in an undertaking, direct information and consultation of employees should be provided.
When asked if they perceived a need to clarify any of the Directive’s provisions, most countries said no, or that it was too early to assess such a need. Ireland raised concerns about the current definition of “undertaking” and Poland called for clarification of the provisions relating to the scope of the information to be provided and of consultations.
Regarding the links between the various EU Directives on information and consultation, most member states did not identify any difficulties in this area or see any need to improve coherence between them. However, Finland, France, Hungary and the Slovak Republic raised the issue of considering a consolidation of the various Directives in a single instrument.
SOCIAL PARTNERS’ POSITIONS
The commission also sought the views of EU-level trade union and employers’ organisations. They were all of the opinion that, in general, the Directive's impact on each member state depends on the extent to which a developed national system of information and consultation is already in place. However, the social partners have different views on the practical significance and impact of the Directive.
For BusinessEurope (representing private sector employers), the Directive’s impact is still uncertain, and its application might lead in some countries to an accumulation of legislation and the imposition of a “one-size-fits-all” approach. Further, the objective of empowering the social partners through allowing them to adopt information and consultation agreements has not been achieved in several countries. Ueapme (small and medium-sized companies) also sees a risk that the Directive may impose a uniform model on some member states, and generate red tape and “social unrest”. Ceep (public sector employers) states that the national implementing measures in general meet the Directive's objective, adding that in some countries the Directive’s implementation has favoured certain employee representatives to the detriment of others.
The European Trade Union Confederation (ETUC) considers that the Directive has had a positive impact, particularly in terms of making industrial relations more participatory, notwithstanding what it sees as the vagueness of some provisions, the weakness of procedures and sanctions, and the absence of a reference to trade unions. It also draws attention to perceived attempts to “deviate from existing procedures and representative bodies”.
All the social partners reportedly agree that the Directive is, in general, sufficiently “flexible and suitable”. When asked whether there is a need to review and clarify the Directive, BusinessEurope, Ueapme and Ceep replied in the negative, but the ETUC argued that the Directive could be improved and made clearer in a number of areas (such as in providing a specific role for unions, better defining the issues for information and consultation, and giving employee representatives a right to training).
BusinessEurope and Ueapme do not see any need to improve coherence between the various information and consultation Directives, and have instead asked the commission to evaluate these existing provisions in terms of their added value, as part of the EU’s “better regulation” initiative.
The ETUC argues that it is necessary to harmonise the Directives in order to avoid “twin tracks” through which different actors are required to deal with the same issue. It also urges an update of the European Works Councils Directive, in order to make it consistent with the standards set in the national information and consultation Directive, which is “more advanced” in certain respects.
COMMISSION'S ASSESSMENT
According to the communication, the Directive’s implementation represents an important step forward in the consolidation of the right to information and consultation enshrined in the EU Charter of Fundamental Rights. A particularly significant impact is expected in those member states (such as Cyprus, Ireland, Malta, Poland and the UK) that did not previously have a general, permanent and statutory system of information and consultation of employee representatives. The commission notes that implementation has given rise in some countries to “lively and sometimes lengthy” debates on how to organise the system of workers’ representation - for example, via a single or dual channel (ie works councils and trade unions), or through “mixed solutions”.
The commission believes that “a majority of opinions suggest broadly positive prospects as to the overall impact of the Directive”, but acknowledges that more time is needed to make a definite assessment, as the Directive has not yet generated its full impact (it is only three years since the transposition deadline). Further, there was considerable delay in transposing the Directive in several member states, and it has still not been transposed fully in a few countries. The communication adds that it is too early to conduct comprehensive evidence-based research into the application of the Directive in all member states.
In this context, the commission does not currently envisage proposing amendments to the Directive. While the Directive’s provisions “could be improved and rendered more precise regarding certain specific points”, the commission considers that the national implementing measures should be “given some time to bed down in the industrial relations systems of the member states”.
However, one aspect of the Directive may require action, the commission argues. As mentioned above, art. 3(3) gives member states the option of excluding the crews of vessels plying the high seas from the scope of the Directive’s application. However, this exclusion is conditional on such member states laying down “particular provisions” covering this category of workers, which some of them have failed to do. This issue is being addressed as part of a commission initiative, launched in October 2007, to ensure better protection of the employment rights of seagoing workers (who are often not fully covered by EU employment law Directives).
NEXT STEPS
According to the communication, the “main challenge now is to ensure the full and effective transposition and enforcement of the Directive”. This requires the active involvement of the European Commission, the member states and, where relevant, the social partners. As seen above, the commission has identified a number of outstanding issues that raise either questions of interpretation of the Directive or doubts as regards the compliance of national implementing measures with the Directive. The commission intends to examine these issues more closely in cooperation with the national authorities of the member states concerned. If necessary, it will, on a case-by-case basis, launch infringement proceedings against these countries.
The commission notes that some member states (notably Greece, Lithuania and Poland) have already published draft legislation in order to remedy shortcomings identified in the transposition of the Directive. In addition, the commission intends to take “further action aimed at facilitating correct enforcement of the Directive”. This involves: awareness-raising initiatives aimed at employers and employees; promoting exchanges of best practice; and “capacity-building”, by way of seminars, training courses, studies and financial support for projects submitted by representatives of employers and employees.
This article was written by Mark Carley, editor, European Employment Review.
European Employment Review 412 (EER 412) contents
