Employers with a presence in more than one European country may be under an obligation to set up a European Works Council or some other information and consultation procedure to discuss issues that relate to the business and affect employees in more than one country. This obligation is contained in the Transnational Information and Consultation of Employees Regulations 1999 (the TICE Regulations). It applies to companies that employ at least 1,000 people in the European Economic Area (EEA) and at least 150 in two or more countries in that area. It also applies to groups of companies that meet these thresholds. The EEA is the 27 Member States of the European Community and Norway, Liechtenstein and Iceland.
The TICE Regulations apply only to:
- companies or groups of companies whose central management is in the UK; or
- whose central management is outside the EEA but whose representative agent is in the UK; or
- who have neither central management nor a representative agent in the EEA but employ more people in the UK than in any other EEA country.
However, the TICE Regulations were adopted to implement the requirements of a European Community Directive and other countries in the EEA will also have legislation reflecting the Directive's requirements. Therefore trans-European companies or groups of companies are likely to have similar obligations to consult their workforces, wherever their central management is located.
The TICE Regulations may not apply to companies or groups that had already established transnational information and consultation arrangements on a voluntary basis, or were already covered by transnational information and consultation arrangements established under the law of another EEA country, when the TICE Regulations came into force in January 2000. Companies that consider that they may be excluded from the Regulations for this reason should contact their Association for advice.
The TICE Regulations are very detailed, and this section only summarises their content. Companies that are approached to set up a consultation mechanism under the Regulations should contact their Association for advice.
A company can meet its obligations under the TICE Regulations by establishing a European Works Council or by adopting an information and consultation procedure. Whichever mechanism is adopted, it must be agreed with a special negotiating body representing the employees, it must be capable of delivering information and consultation on transnational questions that significantly affect employees' interests, and it must cover at least those of the company's businesses that are located in EEA countries.
The company may decide on its own initiative to begin negotiations with the special negotiating body on the appropriate consultation mechanism. Otherwise, it need negotiate only if it is asked to do so by at least 100 employees, or the representatives of at least 100 employees, who work in at least two Member States. Employees or their representatives have the right to ask a company for information that will help them establish whether the company or its group is covered by the TICE Regulations.
The special negotiating body must have at least one member from each EEA country in which the company or group is represented, and additional members from countries in which the largest numbers are employed. The UK members may be elected by a secret ballot in which all the UK employees are entitled to stand as candidates and to vote. Alternatively, if the company already has an independent committee of elected employee representatives that it consults on issues that may significantly affect employees, that committee can nominate the UK members.
The aim of the negotiations between the company and the special negotiating body is to agree the scope, composition, functions and term of office of a European Works Council, or arrangements for the information and consultation procedure.
An agreement to establish a European Works Council must set out:
- the businesses that are covered by the agreement;
- how the Council is to be composed, the number of members, the allocation of seats and the term of office of members;
- the functions of the Council and the procedure for information and consultation;
- the venue, frequency and duration of the Council's meetings;
- the financial and material resources that the Council will have; and
- the duration of the agreement and the procedure for its renegotiation.
If the company and the special negotiating body decide to establish an information and consultation procedure instead of a European Works Council, the agreement they reach must specify a method by which the information and consultation representatives are to meet to discuss the information provided to them. The information they receive must cover in particular transnational questions that significantly affect the interests of the employees.
The TICE Regulations set out fallback provisions that will apply if the company and special negotiating body agree that they should, or if the company refuses to negotiate, or if negotiations do not lead to an agreement. The fallback provisions provide for the establishment of a European Works Council with between three and 30 members, with at least one member from each EEA country and additional members from the countries where the largest numbers are employed.
Under the fallback provisions, the Council meets with central management at least once a year to be informed and consulted on the progress of the business and its prospects. The meeting covers, in particular:
- the structure, economic and financial situation;
- the probable development of the business and of production and sales;
- the situation and probable trend of employment;
- investments;
- substantial changes relating to the organisation;
- introduction of new working methods or production processes;
- transfers of production;
- mergers;
- cut-backs or closures; and
- collective redundancies.
Where exceptional circumstances arise, such as with relocations, closures or redundancies, the Council can ask for a special information and consultation meeting with management.
The TICE Regulations contain specific provisions to protect sensitive and confidential information. The company need not disclose information that may prejudice or seriously harm the business to the special negotiating body, the European Works Council or employee representatives under any information and consultation procedure. If the company does decide to give them confidential information, they are under a legal duty not to disclose it, unless it qualifies as a 'protected disclosure' ( Protection for 'whistleblowers' ).