Olsten (UK) Holdings Limited v Adecco Group European Works Council

Collective redundancies which significantly affect employees in each of at least two EEA countries constitute a transnational matter under a European Works Council agreement. They need not arise from a common rationale, a centrally made decision, or a single co-ordinated management project.

The question should not depend on fine distinctions between local and central management roles. A contrary approach would undermine effective, transparent and legally certain information and consultation rights. The obligation to convene an extraordinary meeting arises within five working days of the relevant announcement, although the meeting need not take place within that period.

Where failures to comply are established, penalties under the Transnational Information and Consultation of Employees Regulations 1999 are assessed by reference to gravity, duration, reason and the employees affected.

Olsten, the United Kingdom representative of the Adecco Group, appealed against decisions of the Central Arbitration Committee dated 5 March and 12 April 2021. The Committee upheld complaints by the Adecco Group European Works Council that the Group had failed to convene an extraordinary meeting concerning collective redundancies in Sweden and Germany, and had failed to provide country-by-country sales-performance data for the November 2020 annual plenary meeting.

The Committee held that complaints concerning redundancies in the Netherlands and Hungary were brought out of time. The EWC cross-appealed on that issue and applied to the Appeal Tribunal for penalties under regulation 21(6) of the Transnational Information and Consultation of Employees Regulations 1999.

The central issue was whether separate redundancy decisions in more than one EEA state, made for country-specific reasons, were a transnational matter requiring an extraordinary meeting.

1. Appeal and cross-appeal dismissed. The Central Arbitration Committee correctly construed the EWC agreement, read with Directive 2009/38/EC and the Transnational Information and Consultation of Employees Regulations 1999. The collective redundancies in Sweden and Germany were a transnational matter and required an extraordinary meeting with the Steering Group.

2. The relevant provisions did not require a common rationale, a centrally taken decision, or a single project co-ordinated at transnational level. Clause V.1.4(b) expressly treated collective redundancies significantly affecting employees in each of at least two EEA countries as transnational. The exclusion of local staffing levels could not include collective redundancies, since that would make the agreement internally inconsistent.

3. The court rejected a construction turning on the precise relationship between local and central management. Central management may influence local decisions in many ways, including through budgets, policies and oversight. Making transnationality depend on such nuances would impair effective enjoyment of information and consultation rights. Separate redundancy events in two countries may therefore be transnational even without a direct factual link.

4. The complaints concerning the Netherlands and Hungary were time-barred. The obligation was to convene the extraordinary meeting within five working days of the last relevant redundancy event, not merely within a reasonable time. The Netherlands and Hungary redundancies together formed a two-state transnational matter, and the six-month limitation period had expired before the complaint was made.

5. The EAT, exercising original jurisdiction, issued penalty notices. The failure to convene an extraordinary meeting was of medium gravity and justified a penalty of £20,000. The failure to provide country-by-country sales data was less serious and justified £5,000. The total penalty of £25,000 was payable by 1 February 2023.

• Employment Appeal Tribunal: appeal and cross-appeal dismissed; penalties imposed under regulation 21(6) of the Transnational Information and Consultation of Employees Regulations 1999.
• Central Arbitration Committee: decisions dated 5 March and 12 April 2021 upheld the complaints concerning Sweden and Germany redundancies and country-level sales data, but held the Netherlands and Hungary aspects of the redundancies complaint out of time.