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2021-06-09
EELC Law Review 2020: Dismissal and related topics
Attila Kun[1]
EELC 2020 featured some really noteworthy and topical cases concerning dismissal law. These are mostly – and not surprisingly – national judgments, as dismissal law is a field regulated by EU law only to a very limited extent and where there are remarkable differences between European countries’ laws. However, there are still many general, commonly applicable – mostly procedural – principles,[2] which might be distilled from specific national judgments. Despite the various governmental financial support schemes for employers during the Covid-19 ‘crisis’, it is obvious that dismissals and collective redundancy have become central issues in practice probably more than ever.
One Covid-related case from the UK (EELC 2020/46, Morales – v – Premier Fruits (Covent Garden) Ltd) underlined the general principle of how important it is for employers to ensure that all stages of – pre-dismissal – investigations and disciplinary proceedings are carried out fairly and that trade union members and officials are not treated differently on account of their status. This is crucial as the pandemic has seen rising union activity in response to employers’ measures, increased anxiety over workplace health and safety and the risk of redundancies. The case in hand was about an automatically unfair dismissal on grounds of trade union activity. The employee was dismissed for using a trade union to bring a grievance over measures his employer had taken on account of the Covid-19 pandemic. The disputed measure was a proposed, but refused, pay cut after which the management had clearly acted extremely adversely towards the ‘non-cooperative’ employee. The Employment Tribunal awarded the powerful remedy of ‘interim relief’, ordering the employer to immediately reinstate the employee until the case was finally decided. According to EELC commentators, the Employment Tribunal’s decision might signal a potential rise in claims for interim relief in future cases (including Covid-related cases).
Another unfair dismissal case from the UK (EELC 2020/11, Royal Mail Group Ltd – v – Jhuti) further strengthened the dismissal protection applicable in whistleblowing situations. In the UK, a dismissal related to a ‘protected disclosure’ qualifies automatically as unfair dismissal. The employee in the Jhuti case was dismissed for unsatisfactory performance, but the dismissing manager did not know about the former whistleblowing disclosures made by the employee, because this manager was manipulated by another manager. The Supreme Court ruled that the dismissal was still automatically unfair because the real reason for the dismissal was the protected disclosure (even though the dismissing manager had acted in good faith, being manipulated by another manager who wanted to get rid of the employee because of the whistleblowing). Correspondingly, whistleblowing enjoys a very strong, full, ‘absolute’ protection in this regard. It is a timely and important message also for EU Member States that need to clarify the concept (and scope) of whistleblowers’ protection as the EU’s ‘Whistleblowing Directive’ – Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law – needs to be implemented by 17 December 2021.
Following and broadening the logic of the previous case (Jhuti), the courts extended the same reasoning to other ‘ordinary’ unfair dismissal cases (EELC 2020/20, Uddin – v – London Borough of Ealing). It is not new at all that the ‘real’ reason for dismissal always needs to be taken into account. However, even in those – rather rare, specific – cases, when the decision-maker might have been manipulated by another manager (for example, by transmitting false information) in order to drive an employee’s dismissal, the dismissal can still qualify as unfair. In the UK, the same logic has also been applied in anti-union cases. For example, in Cadent Gas Ltd – v – Singh ((2019) UKEAT 0024/19) the Employment Appeal Tribunal upheld a finding that an employee was unfairly dismissed because the disciplinary process was manipulated by a manager who was motivated by dislike of the employee’s union activities. This maxim underlines again the above-mentioned general precaution, according to which employers must always conduct a thorough investigation – based on full and transparent information – into performance, misconduct or disciplinary accusations before pursuing the actual dismissal. Even if this principle is now specifically underscored by courts in the UK, it could easily be regarded as a general, universal principle for dismissal law all over Europe (where the fundamental protection against unjustified dismissal prevails in line with the Charter of Fundamental Rights of the European Union, Article 30).
Although the collective redundancy-related cases in EELC 2020 are not yet necessarily directly related to the pandemic, they can all help in clarifying the related legal requirements, also stemming from EU labour law (Directive 98/59/EC).
The Bundesarbeitsgericht (German Federal Labour Court) clarified in a case (EELC 2020/19) the relationship between time of notification of collective redundancies and time of notice of termination (following the logic of the ‘classic’ ECJ decision in the case of Junk, C-188/03). Accordingly, the notice of collective redundancies required to be given to an employment agency can only be effectively submitted if the employer has already decided to terminate the employment contract at the time of its receipt by the employment agency. Notices of termination in collective redundancy proceedings are therefore effective – subject to the fulfilment of any other notice requirements – if the proper notice is received by the competent employment agency before the employee has received the letter of termination. The timeliness of the notification of collective redundancies does not depend on when the employer submitted the notice of termination or signed it, but on when it reached the employee. This also follows from the general principles of (German and other) contract law. The main general message of the case is that in the course of a collective redundancy procedure, specific attention must be paid to compliance with all the formalities, as breaches of the procedural requirements can lead to the invalidity of a large number of terminations. This is especially difficult, but still necessary in the turbulent times of the Covid-19 pandemic.
Also, the Court of Justice has delivered an important decision in 2020 related to collective redundancies (11 November 2020, C-300/19, Marclean Technologies SLU). One of the conditions that trigger the Directive’s (98/59/EC) applicability pertains to the number of dismissals that take place over a given period (30 or 90 days, depending on the choice made by each Member State). The Court decided that in determining if the threshold for a collective redundancy is actually triggered, employers must look at ‘both directions’, i.e. at any period of dismissals and not merely ex post or ex ante the concerned employee’s dismissal date. In other words, the actual ‘aggregation period’ is a rolling period: it will be those 30 or 90 consecutive days which include the dismissal in question and the highest number of other redundancy dismissals. The Court of Justice rejected the alternative proposition whereby the relevant period would be the period specifically either before or after the dismissal in question. The main idea behind this decision derives from the very objective of the Directive, according to which greater protection is to be awarded to workers dismissed collectively. Only time will tell what implications the decision will have in practice, but it is for sure that significant practical issues can arise (for example, how to plan collective dismissals prudently).
When it comes to employment disputes, including – and especially – unfair dismissal cases, simplified, quick, streamlined processes are desirable and are often in the interests of all parties. It is not unprecedented in national systems that – besides courts – various, often quasi-judicial bodies have a role either in the process of dismissal (for example works councils in Germany), or in related dispute settlement (for example Employment Tribunals in the UK and tripartite Labour Courts in Finland). In Ireland, the Workplace Relations Act 2015 has introduced provisions meaning that all employment rights disputes would be dealt with by adjudication officers of the newly established Workplace Relations Commission (WRC) with a right of appeal to the Labour Court. A recent challenge to the overall constitutionality of the WRC has failed and the procedures introduced by the Workplace Relations Act 2015 have now been declared sufficient from a fair procedures perspective by the High Court. One of the main conclusions of the Court was that the WRC does not exercise judicial functions per se (EELC 2020/34).
Last but not least, a unique case (with cross-cutting legal dilemmas) is to be mentioned. A recent Dutch case – ‘Non-Seafarers Work Clause: contributing to better employment conditions or not?’ (EELC 2020/45, decided by the Court of Rotterdam (Summary Proceedings) on 27 August 2020) – gives rise to at least three general considerations. First, even if transnational company/collective bargaining agreements, TCAs (or global framework agreements) are not ‘hard laws’, and they don’t have crystal clear legal status or have (yet) significant case law, they can still be a basis for traditional-like legal disputes and serve as ‘de facto’ sources of labour law. Second, the potential clash between labour law and competition law has probably never been as timely as nowadays (see also the seminal Court of Justice decision in FNV KIEM[3] and related legal scholarship[4]). Third, the Covid-19 pandemic has created (or exacerbated) very specific labour law (and health and safety) hurdles in various sectors of the economy, this case being a particular example of the maritime sector. More concretely, in a summary proceeding, the Court of Rotterdam has had to evaluate the validity of the so-called Non-Seafarers’ Work Clause (also known as the Dockers’ Clause), introduced by the sector’s ‘IBF Framework Agreement’ (which is considered an international collective labour agreement) as of 1 January 2020. The clause aims to protect the labour market position of dock workers, who are members of ITF[5] affiliated unions. This clause also protects seafarers from being obliged to perform dangerous cargo handling services. The Court has held that it is not clear whether the clause, prohibiting lashing work (‘cargo handling services’) on board of container ships being carried out by the crew, does indeed contribute to better employment and/or working conditions of seafarers. As a result, that clause – at this stage – cannot be held to be outside the scope of competition law (in line with the so-called Albany formula[6]
) and the claim for compliance with the provision must be rejected. The Court of Rotterdam refrained from immediately ordering a shipowner and manning agents to comply with the clause. Since then, in the media, unions have stated that they will continue to seek compliance with the debated clause. It remains to be seen whether a court in main proceedings will reach a similar verdict. More extensive judicial review would be necessary to examine the several factual and legal questions. This complex and unique case can have implications in terms of transnational collective bargaining (whether TCAs can qualify as collective agreements), European competition law, European freedom to provide services, negative trade union freedom, freedom of choice of employment, health and safety issues during the pandemic and the (Dutch) standards of reasonableness and fairness. In sum, it is not unlikely that the clause (agreed in the process of transnational social dialogue) prevents or restricts competition within the internal market. It will be interesting to see how the complaint against the ITF and affiliated unions regarding this clause will evolve, which the Charterers (companies active in the European short sea and feeder transport routes) have submitted to the European Commission (to the Directorate-General for Competition). It is also possible that the trade unions will initiate main proceedings (bodemprocedure) in order to have another attempt to force shipping (crew) companies to comply with the Dockers’ Clause.
[1] Attila Kun is a Professor of Labour Law, Budapest, Hungary, KRE ÁJK & NKE ÁNTK. Supported by the János Bolyai Research Scholarship of the Hungarian Academy of Sciences and the ÚNKP-20-5-KRE-2 New National Excellence Program of the Ministry for Innovation and Technology from the source of the National Research, Development and Innovation Fund.
[2] See for more details: G.H. van Voss & B. ter Haar, ‘Common Ground in European Dismissal Law’, European Labour Law Journal, 3(3), 2012, pp. 215-229.
[3] Court of Justice, 4 December 2014, Case C-413/13 FNV Kunsten Informatie en Media (KIEM) – v – Staat der Nederlanden [ECLI:EU:C:2014:2411].
[4] Cf. among others: I. Lianos, N. Countouris & V. De Stefano, ‘Re-thinking the competition law/labour law interaction: Promoting a fairer labour market’, European Labour Law Journal, 10(3), 2019, pp. 291-333.
[5] International Transport Workers’ Federation (ITF).
[6] ECJ, 21 September 1999, Case C-67/96 Albany International BV – v – Stichting Bedrijfspensioenfonds Textielindustrie [ECLI:EU:C:1999:430].