Press release

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European Works Councils flex their muscles

Two recent court cases involving British Airways and Gaz de France suggest trade unions are looking to use European Works Councils (EWCs) to flex their muscles – and causing embarrassment to European HR directors in the process.

They also give an indication of how European courts can be expected to interpret the consultation obligations in the EWC Directive – in a way that may disconcert many employers.

In December British Airways’ EWC secured an injunction in the Belgian courts preventing the company outsourcing its Customer Service Department at Vienna airport until it had informed and consulted the EWC. BA was ordered to open a consultation procedure with the EWC within 24 hours of the Court decision, and fined 2,500 Euros for every day it delayed doing so. This is believed to be the first successful EWC case brought against a UK company.

The BA judgment follows hot on the heels of a similar, high profile case involving Gaz de France. In November last year the EWC at the French utility complained to a Paris court that it had not been properly consulted about the company’s planned merger with Suez. The complaint was upheld, and the decision confirmed on appeal. Gaz de France was forced to postpone the Board meeting that was due to approve the merger until the EWC had had enough time to study the implications of the deal for employees. The EWC was given time to appoint an independent expert to assess the social consequences of the deal, and a further period after the expert had reported in which to give its opinion. Two months later, the process is still on-going.

Commenting on the two cases, Richard Hume-Rothery, Founding Director at employee consultation specialists European Study Group said:

"After several years of relative peace and harmony with EWCs, there is now ample evidence of trade unions looking to use them to actively challenge multinationals’ behaviour and decisions. We believe this is part of a strategy change on their part - having so far failed to persuade the EU Commission to bolster the EWC Directive, trade unions are looking to make better use of the rights they already have in the existing Directive.

"EWC muscle-flexing has the potential to be highly embarrassing for European HR Directors. One can only imagine the rumpus within BA, Gaz de France and Suez when they were forced to delay their plans by the EWC. M&A deals are high profile and move swiftly. The last thing the Board wants is an unforeseen spanner in the works courtesy of HR.

“We are advising companies with an EWC to carry out a risk assessment to cut their chances of being the next victim.”