Akavan Erityisalojen Keskusliitto AEK Ry and others v Fujitsu Siemens Computers Oy Case C-44/08 ECJ

Collective Redundancies Directive | duty to consult employees | trigger for obligation to arise

The European Court of Justice (ECJ) has held that an employer triggers the duty to consult employees about collective redundancies under the Collective Redundancies Directive (98/59/EC) when it adopts strategic decisions or changes in activities that compel it to contemplate or plan for collective redundancies.

Fujitsu Siemens Computers Oy is a subsidiary of parent company Fujitsu Siemens Computers (Holding) BV. On 7 December 1999, the parent company's executive council proposed the sale of one of the subsidiary company's factories in Finland. On 14 December 1999, the parent company's board of directors decided to support the proposal. On the same day, the subsidiary company proposed that consultations take place from 20 December 1999 to 31 January 2000. The subsidiary company began making employees redundant on 8 February 2000, with around 450 of the company's 490 employees being made redundant. Some of these employees claimed that the decision to make them redundant had been made, at the latest, by 14 December 1999, before they had been consulted. They brought claims through their trade unions in the Finnish court of first instance. The employees lost their original claim and an appeal against this decision but, on a further appeal, the court asked the ECJ at what stage the obligation to consult arises, particularly when decisions likely to give rise to collective redundancies are taken within a group of companies.

The ECJ said that the adoption, within a group of companies, of strategic decisions or of changes in activities that compel the employer to contemplate or plan for collective redundancies gives rise to an obligation on that employer to hold consultations with employees’ representatives. The trigger for employers to start consultations on the collective redundancies contemplated does not depend on whether or not the employer is already able to supply the employees’ representatives with all the information required under the Collective Redundancies Directive.

In the case of a group of companies consisting of a parent company and one or more subsidiaries, the obligation to hold consultations with the employees’ representatives falls on the subsidiary that has the status of employer only once that subsidiary, within which collective redundancies may be made, has been identified. The consultation procedure must be concluded by the subsidiary affected by the collective redundancies before that subsidiary terminates the contracts of employees who are to be affected by those redundancies.

Case transcript of Akavan Erityisalojen Keskusliitto AEK Ry and others v Fujitsu Siemens Computers Oy (on the ECJ website)

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