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

The competence of a European Works Council is confined to transnational matters. Under an agreement adopting the statutory scheme, the definition of a transnational matter is a gateway to all EWC procedures, including an extraordinary meeting. Collective redundancy proposals in two countries are transnational only where an objective factual link exists between them, or one concerns or may affect the undertaking in the other. Central management need not have made or coordinated the decisions. Coincidence of timing, or the fact that redundancies occur within one corporate group, is insufficient. The issue is assessed objectively and substantively, including potential effects. Unresolved factual questions about the link require remittal to the fact-finding body.

The respondent complained to the Central Arbitration Committee that the appellant had failed to inform and consult the European Works Council about collective redundancies in several EEA countries and had failed to convene an extraordinary meeting. The CAC upheld the redundancy complaint in relation to Sweden and Germany. The Employment Appeal Tribunal dismissed the appeal and issued a £20,000 penalty notice, in a judgment reported at [2022] EAT 183.

The appeal concerned whether clause V.1.4(b) independently treated collective redundancies significantly affecting employees in at least two EEA countries as transnational, or whether the definition in clause II controlled. The Court also had to decide whether the factual issue could be resolved on the existing findings or required remittal.

Appeal allowed unanimously. The Employment Appeal Tribunal and the CAC had materially erred in law by treating collective redundancies in two countries as transnational merely because they occurred at about the same time.

1. The Agreement had to be construed purposively in the context of Directive 2009/38/EC and the Transnational Information and Consultation of Employees Regulations 1999. Its scope, like that of the statutory scheme, was confined to transnational matters. Clause II therefore operated as a gateway for all EWC procedures, including clause V.1.4.
2. A matter could be a decision, proposal or policy at a formative or sufficiently early stage for information and consultation to have utility. The term concerns was broad, meaning relates to or affects. Whether a matter concerned or had potential effects on undertakings in two countries was an objective and substantive question, unaffected by the parties’ subjective views.
3. Clause V.1.4 did not create a freestanding definition of transnational matters. It identified exceptional transnational matters requiring an additional meeting. The relevant category had to be present only after the clause II gateway had been satisfied.
4. For collective redundancy proposals in two countries, there had to be an objective factual link or nexus between the proposals or their actual or potential effects. A central management decision, approval or coordination was unnecessary. Conversely, coincidence of timing alone was insufficient. Independent and unrelated national events did not constitute a transnational matter.
5. The existence of a common link between the Swedish and German redundancies was an evaluative factual question which the CAC had not decided. The Court therefore declined to substitute a conclusion that the complaint was unfounded and remitted the matter to the CAC.

The decisions on the issue, the £20,000 penalty notice and the costs orders were set aside.

1. Court of Appeal (Civil Division) Allowed the appeal, set aside the relevant decisions, penalty notice and costs orders, and remitted the factual issue to the CAC.
2. Employment Appeal Tribunal Dismissed the appellant’s appeal from the CAC and issued a £20,000 penalty notice. The judgment is reported at [2022] EAT 183.
3. Central Arbitration Committee Upheld the complaint in part, in relation to collective redundancies in Sweden and Germany, and found that an extraordinary meeting should have been convened.