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

The Employment Appeal Tribunal dismissed the employer's appeal against the Central Arbitration Committee's decision that proposed redundancies in more than one EEA state constituted a "transnational" matter under the EWC agreement, the Directive 2009/38/EC and the Transnational Information and Consultation of Employees Regulations 1999. The CAC was correct to conclude that collective redundancies in two or more EEA states at the same or about the same time can give rise to a transnational matter requiring an Extraordinary Meeting under clause V.1.4 of the EWC agreement, even where the redundancies do not share a common rationale or central decision.

The CAC was also correct to hold that parts of the complaint relating to redundancies announced in the Netherlands and Hungary were out of time under regulation 21(1B) of the 1999 Regulations. The EAT, exercising original jurisdiction, imposed penalty notices under regulation 21(6) for two breaches found by the CAC: failure to convene an Extraordinary Meeting about redundancies in Sweden and Germany, and refusal to provide sales performance data broken down by country for the November 2020 Annual Plenary Meeting (breach of clause IV.1 of the EWC agreement and regulation 18A). The total penalty was £25,000 (£20,000 and £5,000 respectively).

Background and parties: The Adecco Group is a multinational group whose UK representative for EWC purposes was Olsten. The Adecco Group had an amended and restated European Works Council agreement dated 24 May 2018. The Adecco Group made or proposed redundancies across several EEA countries in 2019–2020 (Sweden, Netherlands, Hungary, Germany). The Steering Group of the EWC sought an Extraordinary Meeting under clause V.1.4 of the agreement. Management refused, contending redundancies were local decisions and not a transnational matter. The EWC (by its employee representatives) complained to the Central Arbitration Committee under the Transnational Information and Consultation of Employees Regulations 1999. The CAC found in favour of the EWC in respect of Sweden and Germany, held that the parts of the complaint about the Netherlands and Hungary were out of time, and found that Adecco had failed to provide country-by-country sales data for the November 2020 Annual Plenary Meeting.

The Adecco Group (through Olsten) appealed the CAC decision to the Employment Appeal Tribunal on a single ground: alleged misdirection on the meaning of "transnational". The EWC cross‑appealed the CAC finding that some complaints were out of time. Separately, the EWC applied to the EAT under regulation 21(6) for penalty notices to be issued in respect of the two well-founded complaints.

Issues before the EAT):

• whether the CAC misdirected itself on the meaning of a "transnational" matter such that independent, locally motivated redundancies in two or more EEA states cannot, without more, be transnational;
• whether the CAC was wrong to find parts of the complaint about Netherlands and Hungary redundancies out of time;
• appropriate penalties if the CAC's findings were upheld;
• whether the EAT should remit the matter to the CAC or substitute a decision if the CAC had erred.

Court's reasoning and conclusions): The EAT held that the plain language of the directive, the 1999 Regulations and the EWC agreement did not require a common rationale or a single central decision to render separate redundancies transnational. The definition of transnational matters (article 1(4) of the directive and regulation 2(4A) of the 1999 Regulations) and clause V.1.4 of the EWC agreement expressly included collective redundancies affecting employees in at least two EEA countries. Requiring proof of a single management project or centralised decision would be inconsistent with the instrument language, impractical, and risk frustrating the information and consultation rights. The CAC was therefore correct on the meaning of "transnational" and the appeal was dismissed.

The EAT also affirmed the CAC's limitation decision: time started to run once redundancies in the Netherlands and Hungary combined had occurred and the five working‑day convening period had expired, so the complaint as to those countries was out of time. On penalties, the EAT concluded the employer's failings were of medium and lesser gravity respectively, found limited mitigation, and imposed penalties of £20,000 (redundancies failure) and £5,000 (sales data failure), payable by 1 February 2023.

Appeal dismissed. The CAC was correct that collective redundancies proposed by group undertakings in more than one EEA state at the same or about the same time can amount to a transnational matter under the directive, the 1999 Regulations and the EWC agreement even if they do not share a common rationale or central decision. The CAC was also correct that the complaint in respect of redundancies in the Netherlands and Hungary was out of time. The EAT imposed penalty notices under regulation 21(6) totaling £25,000 (£20,000 for failure to convene an Extraordinary Meeting about redundancies in Sweden and Germany; £5,000 for refusing to supply country-by-country sales data at the November 2020 Annual Plenary Meeting). Reasons: textual interpretation of the directive, Regulations and EWC agreement; practical and policy considerations favoring legal certainty and effective enjoyment of information and consultation rights; and assessment of gravity and mitigation when fixing penalties.

Appeal from the Central Arbitration Committee (CAC) decisions (initial decision dated 5 March 2021 and further decision dated 12 April 2021) to the Employment Appeal Tribunal; appeal and cross-appeal dismissed by the EAT on 13 December 2022. Application under regulation 21(6) for penalty notices determined by the EAT in original jurisdiction.