Verizon European Works Council & Anor v The Central Management of The Verizon Group (CENTRAL ARBITRATION COMMITTEE (CAC))

Where the CAC has found a failure to comply with the Transnational Information and Consultation of Employees Regulations 1999, the EAT must issue a penalty notice unless the central management establishes that the failure was beyond its control or that it had another reasonable excuse. The amount must reflect the statutory factors, including gravity, duration, reasons and the employees affected.

A substantial employer's failure to give the appropriate European Works Council representatives timely information and a meaningful opportunity to influence a proposed transnational redundancy decision is a significant breach. A possible legal doubt does not excuse a refusal to fund necessary expert assistance unless it was the actual basis for the refusal and the approach was reasonable.

The Verizon European Works Council and its chairman applied to the Employment Appeal Tribunal for penalty notices following a CAC decision of 9 October 2019.

The CAC had found that Verizon failed to comply with the information and consultation requirements in relation to a proposed reorganisation affecting 216 employees in eight European countries. It also found that Verizon breached regulation 19A and the parties' Charter by refusing to pay the expenses of Mr Buckle, appointed as an expert to assist the Council in pursuing its CAC complaint.

The central issues were the appropriate penalties and whether Verizon had a reasonable excuse for the refusal to meet the expert's expenses.

1. Penalty notices issued. Verizon was ordered to pay £35,000 for the information and consultation failures and £5,000 for the refusal to meet the expert's expenses.

2. Under regulations 21 and 21A of the Transnational Information and Consultation of Employees Regulations 1999, the EAT must issue a penalty notice after a relevant CAC finding unless satisfied, from the central management's representations, that the failure was beyond its control or that it had another reasonable excuse. Evidence from the individual decision-makers was not indispensable, although the weight of the representations depended on the available evidence.

3. The first failure was significant. The proposed reorganisation involved 216 redundancies across eight countries. Verizon convened only the Select Committee, withheld substantive information until the meeting, excluded representatives of affected countries, and proceeded without a meaningful opportunity for the EWC's views to influence the decision. The process was inconsistent with the spirit of regulation 18A and the Charter. Applying regulation 22, the EAT treated Verizon's admission and apology as mitigation, but gave weight to its earlier attempts to avoid engagement with the specific complaints.

4. The earlier CAC decision concerning Emerson could have created genuine legal doubt about whether legal costs were payable. Properly read, however, it concerned legal representation and legal costs as such, on its own facts and agreement. Verizon's June refusal was instead based on asserted lack of necessity and unwillingness to commit to the quoted fixed fee. Those reasons were not reasonable. They exposed the EWC or its chosen expert to unfair financial risk. Later legal advice could not retrospectively excuse that refusal, though the limited period, absence of prejudice, lower eventual fee and prompt payment of the CAC award mitigated the penalty.

• Employment Appeal Tribunal: on an application for penalty notices, issued penalties of £35,000 and £5,000 following the CAC's findings.
• Central Arbitration Committee: decision dated 9 October 2019. It found failures concerning consultation under regulations 18A(3) and 18A(5), and expert expenses under regulation 19A, and ordered payment of the expert's fees.