new directive<\/a>, these exemptions for businesses
\nwith “Article 13” status and “Article 3” status
\nwill be abolished on 1 January 2028.<\/p>\nIt follows that, from 1 January 2028:<\/p>\n
\na business with “Article 13” status can be required
\nto establish an EWC, irrespective of its existing arrangements.
\nFurther, it will only have two years to negotiate an EWC agreement
\nor else face the application of default rules for establishing its
\nEWC, instead of the usual three years allowed for such negotiations
\nwhen businesses are first establishing an EWC; and
<\/p>\n
\na business with “Article 3” status can also be
\nrequired to establish an EWC, irrespective of its existing
\narrangements. However, in an apparent oversight in the directive,
\nthese businesses may still have the usual three years to negotiate
\nan EWC agreement.
<\/p>\n
Implications for businesses with “Article 13” status
\nor “Article 3” status<\/p>\n
Businesses with “Article 13” status or “Article
\n3” status have now enjoyed that status for 30 years. In that
\ntime, many of them have developed effective relationships with
\ntheir transnational information and consultation bodies.
\nNonetheless, pressure from the European trade union movement has
\nnow resulted in these businesses’ general exemption from the
\nobligations imposed by national laws transposing Directive
\n2009\/38\/EC being abolished.<\/p>\n
As a first option, these businesses could adopt a “wait and
\nsee” approach. This reflects that all that will happen is that
\nthey will lose their exemption from complying with national laws
\ntransposing Directive 2009\/38\/EC. There will not, however, be any
\nautomatic obligation on them to establish an EWC under national
\nlaws transposing Directive 2009\/38\/EC. If everyone is happy with
\nthe current arrangements, it is possible that these businesses will
\nnot be requested by their employees or their representatives to
\nestablish an EWC.<\/p>\n
As a second option, these businesses could look to update their
\nexisting arrangements to at least more closely reflect the minimum
\nstandards set by the draft directive. If an EWC agreement would not
\ndeliver a higher standard of transnational information and
\nconsultation, then there would be little incentive for employees or
\ntheir representatives to request the establishment of an EWC. The
\nbusiness could also note that, if it were to receive a valid
\nrequest to establish an EWC, it would immediately terminate its
\nexisting arrangements and that there might be a consequential
\nperiod during which it would not engage in any transnational
\ninformation and consultation pending the establishment of the
\nEWC.<\/p>\n
As a final option, these businesses could plan to terminate their
\nexisting arrangements with effect from immediately before the
\nprovision of the new directive abolishing “Article 13″
\nand “Article 3” status comes into effect. This option is
\nmost likely to be appropriate for a business where, for example,
\nthe existing transnational information and consultation body is
\nfrustrated that its arrangements currently fall below the minimum
\nstandards set by Directive 2009\/38\/EC. This approach would ensure
\nthat the business:<\/p>\n
\navoids the risk of simultaneously having to engage with two
\nseparate transnational bodies of employees’ representatives.
\n(That said, if such a situation were to arise, the business could
\nminimise for how long it had to do that by terminating its existing
\narrangements immediately upon its receipt of a valid request);
\nand
\n
\nhas three years instead of two years during which to negotiate
\nan EWC agreement.
<\/p>\n
With a view to managing any potential adverse labour relations
\nconsequences of this final option, the business could note that it
\nis acting in response to recent legislative reforms. It could even
\nproactively initiate the establishment of an EWC immediately upon
\nits loss of its “Article 13” status or “Article
\n3” status as a sign of its ongoing commitment to social
\ndialogue.<\/p>\n
If the ultimate parent company of a business is situated in a
\ncountry that is not a Member State, such as Japan, Switzerland or
\nthe United States, then, irrespective of whichever option it
\nchooses, the one step that it should certainly take before January
\n2028 is to appoint a representative agent in a Member State of its
\nchoice for EWC purposes. If it has not appointed a representative
\nagent, then its obligations following any valid request will arise
\nunder the national laws of the Member State in which the member of
\nits group which employs the most employees in any single Member
\nState happens to be situated at the time of the request.<\/p>\n
In our experience, if they have any presence in Ireland,
\nmultinational businesses consider it best to appoint an Irish
\nrepresentative agent. This is because Ireland conducts business and
\nany legal proceedings in English, the European language most
\ncommonly understood by managers at businesses’ global
\nheadquarters. For the avoidance of doubt, the appointment of an
\nIrish representative agent does not need to be notified to
\nemployees, their representatives or any public authorities.
\nHowever, it is important that the necessary formalities are
\nfollowed and that the process is properly documented, such as that
\nthe signatory has legal authority to bind the group’s ultimate
\nparent company.<\/p>\n
We consider the remainder of the provisions in the new directive in
\nour second article.<\/a><\/p>\nThe content of this article is intended to provide a general
\nguide to the subject matter. Specialist advice should be sought
\nabout your specific circumstances.<\/p>\n","protected":false},"excerpt":{"rendered":"Lewis Silkin are most popular:
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