Migration of UK-based European Works Councils to Ireland highlights the inadequacies of the dispute resolution process under the Irish legislation

Author: Anthony Kerr, UCD Sutherland School of Law

One of the many consequences of the withdrawal of the United Kingdom (UK) from the European Union (EU) is that, as and from 1 January 2021, Directive 2009/38/EC (the Transnational Works Council Directive)  no longer applies to that jurisdiction and the role of “representative agent” for UK-based European Works Councils (EWCs) automatically transferred on that date to the establishment or group undertaking employing the greatest number of employees in a Member State, which then became the “deemed” central management pursuant to Article 4(3) of the Directive: see the European Commission’s Notice to Stakeholders of 21 April 2020.

Consequently, in advance of that date, it is estimated that at least 100 multi-national companies – including Verizon, Adecco, Hewlett Packard, Oracle, Emerson and GE – appointed their Irish subsidiary as their new “representative agent” and established a new EWC under the Irish subsidiary requirements provided for in the Transnational Information and Consultation of Employees Act 1996 (the 1996 Act): see, for example, Verizon EWC v Verizon UK Ltd EWC/33/2020 (18 January 2021) and Adecco Group EWC v Adecco Group EWC/34/2020 (15 February 2021).

The current legislative arrangements governing disputes involving Irish-based EWCs are clearly inadequate when compared to the powers of the Central Arbitration Committee (CAC) and the Employment Appeal Tribunal (EAT) when it comes to resolving disputes involving those EWCs when they were based in the UK: see, for example, Verizon European Works Council v Central Management of the Verizon Group UKEAT/0053/20/DA where, in a decision issued on 1 October 2020, the EAT imposed a penalties of £35,000, in respect of the company’s failure to comply with the information and consultation process, and £5,000, for refusing to pay for expert assistance for the EWC. In addition, the CAC had ordered the company to pay £10,000 plus VAT in respect of that assistance.

No comparable provisions are to be found in the 1996 Act. Section 18 of the 1996 Act (as amended) does create a number of criminal offences, including failure to comply with the subsidiary requirements, which can be summarily prosecuted by the Workplace Relations Commission (WRC) in the District Court, which court is empowered by section 19 to impose a fine not exceeding €4,000 and/or imprisonment for a term not exceeding six months. There is also the possibility of a prosecution on indictment, at the suit of the Director of Public Prosecutions, before a judge and jury in the Circuit Court, where the maximum penalty is a fine of €22,219.75 and/or three years imprisonment.

The use of the criminal law to enforce and vindicate the rights of Irish-based EWCs is entirely inconsistent with the general approach of the legislature in seeking to resolve industrial relations and employment rights disputes which normally involves utilising the services of the WRC and the Labour Court. In the latter area, the criminal law is almost exclusively employed in imposing fines on employers who have been found to be in breach of the National Minimum Wage Acts 2000 and 2015 and/or the Employment Permits Acts 2003 to 2020. There is also a much higher standard of proof in criminal proceedings – beyond a reasonable doubt – than in civil proceedings – balance of probabilities.

Section 20 of the 1996 Act provides for the referral of disputes concerning the withholding by central management of “commercially sensitive information” to an independent arbitrator appointed by the Minister for Enterprise, Trade and Employment under Regulations made for the purposes of this section. No such Regulations, however, have ever been made by the Minister, or his predecessors, and, consequently, the section is effectively inoperable. It must again be questioned as to why this role, and indeed the role of determining compliance with the 1996 Act’s other requirements, was not entrusted to the WRC and the Labour Court.

It has been reported that the SIPTU trade union has complained to Commissioner Joost Korte that, unless changes are made to the 1996 Act, all these Irish-based EWCs may find themselves in “a very precarious position” in the event of a dispute arising between an EWC and central management. The union points out that Ireland is an “attractive option” for these companies because Irish legislation provides no rights for collective bargaining and very limited, if any, legal remedies in matters pertaining to EWCs.