New European Measures

This article is based on a paper presented to an Employment Lawyers Association workshop on 3 October 2002. The paper together with others presented to the workshop and other occasional employment papers are available on the Blackstone Chambers website at www.blackstonechambers.com

There are a number of new and proposed European employment measures recently adopted or currently under consideration by the institutions of the European Union and the British government. This article considers the more important of these developments.

The Information and Consultation Directive1

This Council Directive originated with a European Commission proposal in November 1998 aimed at "establishing a general framework for informing and consulting employees in the European Community".2 A "common position" on the proposal was agreed by the Council in June 2001, and approved by the European Parliament in February 20023.

The Directive was adopted on 11 March 2002 and published in the Official Journal of the European Communities on 23 March 2002.4 Implementation by the member states is due by 23 March 2005.5

The UK Department of Trade and Industry issued a consultation paper in July 2002 on issues raised for the UK by the Directive, inviting comments by 11 December 2002.6 This is the initial stage of a two-stage consultation procedure on framing UK legislation to implement the Directive. The government has said it will consult at a later stage on specific legislative proposals.

The purpose of the Directive is "to establish a general framework setting out minimum requirements for the right to information and consultation of employees in undertakings or establishments within the Community" (Article 1). Its requirements will apply, according to the choice made by member states, to undertakings employing at least 50 employees in any one member state, or establishments employing at least 20 employees in any one member state. "Undertaking" is a public or private undertaking carrying out an economic activity, whether or not operating for gain. "Establishment" means a unit of business defined in accordance with national law and practice.

The right to information and consultation covers:

Information on the recent and probable development of the undertaking's or the establishment's activities and economic situation;

Information and consultation on the situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged, in particular where there is a threat to employment; and

Information and consultation on decisions likely to lead to substantial changes in work organisation or in contractual relations.

Consultation, defined as "the exchange of views and establishment of dialogue between the employees' representatives and the employer", shall take place:

While ensuring that the timing, method and content are appropriate;

At the relevant level of management and representation;

On the basis of information supplied by the employer and the opinion which the employees' representatives are entitled to formulate;

In such a way as to enable employees' representatives to meet with the employer and obtain a response, and the reasons for that response, to any opinion they might formulate; and

With a view to reaching an agreement on decisions within the scope of the employer's powers likely to lead to substantial changes in work organisation or in contractual relations.

The European Company Statute7

The first draft Council Regulation on a European Company Statute (ECS) was issued by the European Commission in 1970.8 Despite its amendment in 1975, the proposal met with significant opposition within the Council of Ministers, and negotiations finally ground to a halt in 1982. Following its inclusion in the Commission's 1985 White Paper9, the Commission issued a revised...