Judgment — ECLI:EU:C:2004:16
Date: 2004-01-13
Language of the case: German
Court formation: Full Court
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Social Policy
Concepts: Information and consultation of employees
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of observations submitted to the Court 21. Kühne & Nagel first of all denies that the relationship between the central management and the other companies of the group can be defined on the basis of the directive. In this particular case, in any event, there is simply a constructive management, identified by law in place of the actual management. But the legal fiction affords the constructive central management no power in respect of its sister companies, which are independent, and hence no power to obtain information from them, particularly since that information might be confidential. Nor could such a power stem from the national legislation implementing the directive. Furthermore, according to Kühne & Nagel, in order to secure the practical effect of the directive, there is no need to risk the independence of the individual undertakings in the group, for it is sufficient to accord the workers' representatives a right to information in respect of each of those undertakings. The question ought therefore to be answered in the negative. 22. The Gesamtbetriebsrat and the German and Swedish Governments gave contrary responses. The former, in particular, considers that the right to information held by the workers' representatives can be guaranteed only if the constructive central management itself has a right to information in respect of the other group companies established in the Member States: it would otherwise not be possible to achieve the object of the directive. The Gesamtbetriebsrat also points out that Article 11 shows that the directive attaches considerable importance to the true and effective implementation of the rights which it confers. Failure to comply with the directive, as a result of a refusal by the other companies in the group to cooperate, must therefore be penalised by means of the appropriate judicial procedures. 23. According to the German and Swedish Governments, the existence of the right concerned is to be inferred not only from the principle of the practical effect of the directive but also from Articles 4(1) and 6(1), which presume an obligation of cooperation within the group as between the central management and the other undertakings established in the Member States. The central management's right to information is also to be inferred from the obligation to provide information which Article 11(2) of the directive imposes on all undertakings in the group, since it is the central management which coordinates those undertakings when a European Works Council is established. And the wording of the directive further shows that the mechanisms for information and consultation which it provides for relate to all undertakings of the group and that the undertakings are therefore all required to cooperate in achieving the ends of the directive. The Swedish Government adds that it is therefore for the Member States to identify the means needed for that purpose. 24. The Commission accepts that it can be inferred from Articles 4 and 11 of the directive that the constructive central management has a right to obtain information from the other undertakings in the group but questions whether, in most cases, that is an appropriate means of achieving the practical effect of the directive. It lays stress on the difficulties which the constructive central management would encounter in asserting such a right, starting from the point that it might not have knowledge of the structure of the entire group and, therefore, might not be able to identify all the undertakings or establishments to which the directive applies. And, furthermore, if the constructive central management is in practice to assert such a right to information in respect of the other group undertakings, particularly if they are situated in different Member States, there would be a need at national level for specific provisions to be laid down to that effect in the measures to transpose the directive. 25. The Commission therefore suggests that the problem should be viewed in a different light, one which it considers more in keeping with the wording and the broad logic of the directive. The Commission starts from the assumption that, even when the central management is situated in a non-Member State, it may not evade compliance with the directive in respect of those group undertakings and establishments which are within the territory of the Member States, within which it must therefore guarantee the workers' right to information laid down in the directive. It is thus the central management which must give the constructive central management - which takes on its responsibility for the purposes of the directive - the information requested by the workers. According to the Commission, far from relieving the constructive central management from that responsibility, the central management's withholding of cooperation lays it open to application of the measures laid down in Article 11(3) of the directive. This would - albeit indirectly - be a way of penalising the failure by the central management and, ultimately, by the group as a whole, to meet the obligations imposed by the directive. Therefore, the Commission concludes, there is nothing in this case to preclude Kühne & Nagel from being ordered to supply the information requested and, if appropriate, being subjected to the measures of enforcement provided in German legislation for failure to meet that obligation. 2. Assessment 26. In the present proceedings, the Court has to rule for a second time on the right of workers to obtain information for the purpose of establishing a European Works Council under Directive 94/45. This occurred for the first time in the Bofrost* case, (5) which sought to establish whether workers may rely on Article 11(2) of the directive to obtain information from an undertaking belonging to a group when the group central management has not yet been identified. This time, however, the question referred to the Court relates to a case where the group central management is known but is outside the territory of the Member States and the obligations imposed upon it for the purposes of the second subparagraph of Article 4(2), and of Article 4(3), of the directive are taken on by a constructive central management. The national court is seeking to find out whether and how, in this case also, the directive guarantees effective exercise of the workers' right to information in respect of the central management. 27. As we have seen, Kühne & Nagel does not dispute the workers' right to obtain information for the purposes of the directive, but it does object that, as the constructive central management of the group, it is not able to guarantee respect of that right without cooperation from the true central management and the other undertakings of the group. The court making the reference therefore asks whether, in order to overcome that obstacle, it is possible to assume that the German company has a corresponding right to information in respect of the group undertakings situated in the Member States, on the basis of Articles 4 and 11 of the directive. 28. In answering this question, it must be noted first of all that, as is shown by Article 1, the purpose of this directive is to improve the transnational information and consultation of the employees of undertakings and groups of undertakings operating in two or more Member States, making provision for the establishment, within those undertakings and groups where it is requested, of a European Works Council or of other procedures equally suited to achieve that purpose. That, as Article 1 of the directive also states, covers the entire Community-scale undertaking or, in a group of undertakings, all the undertakings which are part of the group and are situated in the Member States and so concerned in implementation of the directive. (6) 29. It is also to be noted that the system described in the directive hinges upon the role of the central management of the Community-scale undertaking or group of undertakings, upon which Article 4(1) of the directive places primary responsibility for achieving the purpose laid down in the directive, since it is the effective decision-making centre of the undertaking or the group [Article 2(1)(e) and Article 3(1)]. The principle that the central management is responsible must in fact, according to a number of commentators, be regarded as one of the guiding principles of the directive. (7) In any event, as Article 4(1) makes clear the responsibility of the central management is very wide and covers all the conditions and means necessary for setting up the mechanisms for informing and consulting employees specified in the directive. That responsibility includes the obligation, using all available resources, to meet any need that may arise in the setting up of a European Works Council or a procedure for the purpose of informing and consulting employees under the directive, limited only in that the activity requested of the central management should be truly necessary for the purpose. 30. From that it follows that, for the present purposes, the central management is required to create all the physical and logistical conditions and means for negotiations with the workers' representatives to be able to proceed duly (8) and, prior to that, to make it possible to set up a special negotiating body within the meaning of Article 5(2) of the directive. But primarily it follows that there is an obligation imposed on the central management to afford the workers all information necessary for the initiation and the successful outcome of the negotiations and, if appropriate, for the European Works Council to be established by force of law under Article 7 of the directive, where the conditions for that obtain. (9) 31. That having been said, I must point out here that, as we see from the 14th recital in the preamble (10) and from Article 11(1) of the directive, the mechanisms for informing and consulting employees must be correctly established in the Community-scale undertaking or group of undertakings whether or not the central management is situated inside the territory of the Member States. In fact, to prevent the establishment of the central management in a non-Member State from hindering achievement of the purposes of the directive, Article 4 lays down a system whereby such a situation may be dealt with. As we have seen, subparagraph 2 proposes that a representative agent of the central management in a Member State should be designated and, in the absence of such representative, provides that ... the management of the ... group undertaking employing the greatest number of employees in any one Member State shall take on the responsibility referred to in paragraph 1. In any event, subparagraph 3 lays down that the designated representative or, if none, the constructive management [f]or the purposes of this Directive ... shall be regarded as the central management. (11) In both cases, the result is that the responsibility which the directive places on the central management is entirely transferred to the constructive management, which will therefore be subject to the same obligations as the former and, like it, will be responsible for fulfilling them. 32. I have to note that an approach not very dissimilar to that described above is to be found in other directives adopted within the context of Community legislation on social policy. I am referring in particular to the Community directive on collective redundancies (12) and also to that on safeguarding employees' rights in the event of transfers of undertakings - this latter also referred to by the Swedish Government in its observations to the Court. (13) These directives expressly provide that the obligations which they impose upon employers, of advance information to and consultation of workers in a collective redundancy or transfer of an undertaking, must be met whether the decisions concerned are taken by the employer or by another undertaking controlling the employer. In order to ensure that those obligations are met, these directives provide that the employer is not relieved of responsibility on account of the fact that the controlling undertaking has not supplied the information needed. (14) 33. As we have seen, it has also been objected that full compliance with the obligations stemming from Article 4(1) cannot be required of the constructive central management because - unlike the actual central management - it does not hold the powers to direct and coordinate the group which are necessary for that purpose. This is, very clearly, also the concern of the national court, which asks whether, in order to enable the constructive central management to meet the obligation to provide information which is incumbent upon it by virtue of Article 4(1), it may be inferred from the directive that that management has the right to obtain the information needed for the purpose from the other undertakings in the group, in particular relying upon the provisions of Article 11(2) of the directive which, as we have seen, imposes upon those undertakings an obligation to provide information. 34. However, I feel that the objection does not grasp the sense of the rules laid down in Article 4(2) and (3) of the directive. It is true that under those rules the system is based on the (actual) management of the undertaking or of the group in the light of its powers to direct and coordinate and, therefore, on its leading position within the undertaking or the group; however, it is also true that, although in no way seeking to redefine the internal organisation of the undertaking or group, the directive is concerned to prevent the undertaking or the group, by locating the central management outside the Community, from escaping the obligations imposed upon them. Indeed, that is why, in Article 4, subparagraphs 2 and 3 treat the constructive central management, presumptively, in the same way as the actual central management and transfer to the former all the responsibilities laid down for the latter. The result is that, as the Commission also has pointed out, in accordance with Article 11(1) and Article 14 of the directive the competent authorities of the Member States must penalise any failure on the part of the constructive central management to meet obligations stemming from Article 4(1) exactly as they would failure on the part of the actual central management of the group, in particular by means of the administrative or judicial procedures ... to enable the obligations deriving from this Directive to be enforced provided for in Article 11(3). 35. That is not, of course, to overlook the fact that it is none the less the actual central management which has the means and the resources to take all the measures necessary to comply with the obligations imposed by the directive. But the presumption that the constructive central management is responsible, and the consequent application to it of the system of penalties, are in fact intended to exert pressure on the actual central management so that, in the interests of the group, it will enable the constructive central management to meet those obligations. Therefore, to argue that the constructive central management escapes responsibility if the actual central management should not wish to cooperate would be to encourage the latter not to take the measures needed to meet the obligations imposed by the directive and so, in short, to frustrate the objective pursued by the provisions laid down in Article 4(3); in other words, it would be to offer a convenient pretext for nullifying the practical effect of the directive by establishing the central management outside the Community. 36. I therefore feel that the approach adopted by the national court is open to question where it considers that it is unable to penalise a failure by Kühne & Nagel to meet the obligation to supply information to the workers unless that company is allowed a corresponding right to information in respect of the other undertakings of the group. Such an approach would mean altering the sense and the purpose of the provisions at issue, for it would remove the responsibility for implementing the directive from the central management to the other undertakings of the group, making the obligations incumbent upon the former secondary - if not actually meaningless - whereas the entire system laid down by the directive hinges upon the central management, because it alone is able, directly or indirectly, to ensure its full and effective application. 37. Next, more specifically, I must note that, because of its particular and limited function, I do not feel that the obligation to provide information which Article 11(2) of the directive imposes on individual undertakings is appropriate for the purpose of meeting the requirements referred to by the national court. As we see from the wording of that provision, the obligation which it lays down is intended only to enable the workers to establish whether the directive does apply to the undertaking or the group of undertakings within which they are employed and, as appropriate, to identify the central management of the group. Firstly, that provision is addressed to the undertakings without distinction and on an individual basis, not mentioning the concepts either of a central management or of the Community-scale undertaking or group of undertakings, and it refers to requests for information made, generally, by the parties concerned by the application of this Directive. Secondly, the obligation which it imposes relates only to information on the number of employees [within the undertaking or group] referred to in Article 2(1)(a) and (c) of the directive, meaning that information which makes it possible to determine whether the undertaking or the group is of Community scale. (15) 38. However, once it has been established that the undertaking or the group falls within the field of application of the directive then, by virtue of the general responsibility arising under Article 4(1), it is the central management which is subject to the obligation to send the workers all the information needed to set up the European Works Council, including of course the information which each of the undertakings in the group must supply, on the specific aspects which relate to it, for the purposes of Article 11(2). These undertakings are indeed subject to an individual obligation to supply, upon request, the information laid down in that provision, but that is not relevant to the central management's responsibility, which has been neither replaced nor restricted and is subject to Article 4(1) - not to Article 11(2) - of the directive. The matter and the general extent of that responsibility therefore remain full and intact, and the responsibility of the constructive central management also remains intact, given what has been said above. 39. Apart from that, I must note that the solution whereby the constructive central management is granted a right to information in respect of the other companies in the group, although creating many difficulties of implementation in practice - as has been amply shown during the procedure before the Court, can indeed serve to guarantee the workers access to the information needed for setting up the European Works Council. However, on a more general level, it gives no guarantee of effective implementation of the information and consultation mechanisms provided in the directive. We need only remember that, unless it is desired to intervene in the arrangement of the legal and organisational links among the companies in the group, even if the European Works Council were set up, the cooperation of the actual central management of the group would still be essential to ensure that it operated properly. Clearly, in fact, only the actual central management can effectively inform and consult the council regarding the general position and the prospects of the group, or on the strategic decisions likely to have a significant effect on the workers' interests as provided by the directive, (16) whilst the constructive central management would not be able to gather the information needed for the purpose from the other companies in the group. 40. In conclusion, I consider that the answer to the first question must be that, in groups of undertakings where the central management is situated outside the territory of the Member States, it is the management taking the place of the central management for the purposes of the second subparagraph of Article 4(2) and of Article 4(3) of the directive which must make available to the internal bodies representing the workers so requesting all the information necessary for the purpose of setting up a European Works Council or a procedure for the purpose of transnational information and consultation of employees. It is for the Member States to guarantee compliance with this obligation in accordance with Article 11(1) and (3) and Article 14 of the directive. B - The second question referred 41. In this question, the national court asks whether the obligation to provide information which is laid down in the directive also encompasses the names and addresses of the employee representations participating in the setting up of a special negotiating body in accordance with Article 5 of the directive or in the establishment of a European Works Council. In the light of the answer which I have proposed should be given to the first question, I consider that the second question also must be examined. 42. I would note first of all that, according to Kühne & Nagel, information relating to the names and addresses of the worker representations do not come within the scope of the directive, because that would go beyond what is necessary for the purposes of setting up a European Works Council. The Commission thinks similarly, adding that - precisely for that reason - it is not possible to infer an obligation to provide that information from the duty of cooperation required by the directive as between undertakings and workers or their representatives. However, the Gesamtbetriebsrat and the German Government believe that this information is part of the information necessary for setting up a European Works Council and therefore falls within the scope of the directive. 43. I feel that all that can be said in this regard is that, in order to determine the extent of the obligation to provide information, we must consider whether the information requested is necessary for the purpose of setting up a European Works Council. (17) But I believe that it is not for the Court of Justice but for the court making the reference, using all the evidence available to it, to find whether in this instance the information referred to in the question is necessary in this way. I would only add that, because this obligation to provide information is incumbent upon the central management because of the general responsibility placed upon it by Article 4(1) of the directive then, for the reasons described above, that same obligation is incumbent also upon the management taking the place of the central management under the second subparagraph of Article 4(2), and Article 4(3). 44. I therefore believe that the second question referred is to be answered to the effect that the central management of the group or, as appropriate, the management taking on responsibility under the second subparagraph of Article 4(2), and Article 4(3), of Directive 94/45 is required to provide the workers' representatives at their request with the information relating to the names and addresses of the representations of the employees of undertakings which are part of a group of undertakings if such information is necessary to the setting up, within that group, of a European Works Council. V - Conclusions 45. In the light of the considerations above, I therefore propose that the Court should answer as follows to the questions referred to it by the Bundesarbeitsgericht by its order of 27 June 2000: (1) Articles 4 and 11 of Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees are to be interpreted to mean that, in the case of a group of undertakings the central management of which is situated outside the territory of the Member States, it is the management taking the place of the central management for the purposes of the second subparagraph of Article 4(2) and of Article 4(3) of the directive which must make available to the internal bodies representing the workers so requesting all the information necessary for the purpose of setting up a European Works Council or a procedure for the purpose of transnational information and consultation of employees. It is for the Member States to guarantee compliance with this obligation in accordance with Article 11(1) and (3) and Article 14 of the directive. (2) The central management of the group or, as appropriate, the management taking on responsibility under the second subparagraph of Article 4(2) and Article 4(3) of Directive 94/45 is required to provide the workers' representatives at their request with the information relating to the names and addresses of the representations of the employees of undertakings which are part of a group of undertakings if such information is necessary to the setting up, within that group, of a European Works Council. 1: - Original language: Italian. 2: - OJ 1994 L 254, p. 64. Being based on Article 2(2) of the Agreement on social policy annexed to Protocol 14 to the EC Treaty, the directive did not originally apply to the United Kingdom. It was later extended to the United Kingdom by Directive 97/74/EC (OJ 1998 L 10, p. 22). 3: - BGBl. 1996 I, p. 1548. 4: - Unofficial translation. 5: - Judgment in Case C-62/99 Bofrost* [2001] ECR I-2579. 6: - See also the 11th, 12th and 14th recitals in the preamble to the directive. And I would note that the directive also covers the possibility that a Community-scale group of undertakings includes one or more sub-groups which are themselves of Community scale or one or more Community-scale undertakings. Under Article 1(3) of the directive, a European Works Council is to be established at the level of the entire group unless agreed otherwise between the parties concerned. 7: - In particular, see J. Leite, L. Fernandes, L. Amado, J. Reis, Conselhos de empresa europeus. Comentários à directiva 94/45/EC, Lisbon, 1996 (in particular, p. 32). On the role of the central management, see also B. Teyssié, Le comité d'entreprise européen, Paris, 1997 (in particular, p. 199), and also C. Gulotta, Le relazioni industriali nelle impresi multinazionali. I diritti d'informazione e di consultazione dei lavoratori nell'Unione europea e nel diritto internazionale, Milan, 2002 (in particular, p. 132). 8: - It ought also to be noted that, under Article 5(6) of the directive, [a]ny expenses relating to the negotiations ... shall be borne by the central management so as to enable the special negotiating body to carry out its task in an appropriate manner. 9: - Under Article 7 of the directive, a European Works Council is to be established even where no agreement is reached between the parties, in particular where the central management refuses to commence negotiations within six months of the formal request by the workers or where no agreement has been reached after three years from the date of that request. The competence and the composition of the council so established are to be governed by the applicable national legislation, subject to the subsidiary requirements annexed to the directive. 10: - I would note that, according to the 14th recital in the preamble, the mechanisms for informing and consulting employees in such [Community-scale] undertakings or groups must encompass all of the establishments or, as the case may be, the group's undertakings located within the Member States, regardless of whether the undertaking or the group's controlling undertaking has its central management inside or outside the territory of the Member States. 11: - For convenience, I shall refer from now on only to the constructive management hypothesis, that is, where the central management's responsibility is taken on by the management of the ... group undertaking employing the greatest number of employees in any one Member State. But, clearly, the points made on this will apply also where that responsibility is taken on by a representative agent designated by the central management situated in a non-Member State. 12: - Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies (OJ 1998 L 225, p. 16). 13: - Council Directive 77/187/EC of 14 February 1977, on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses (OJ 1977 L 61, p. 26), amended by Directive 98/50/EC (OJ 1998 L 201, p. 88). This directive was later repealed by Directive 2001/23/EC (OJ 2001 L 82, p. 16). 14: - On collective redundancies, see Article 2(4) of Directive 98/59 but, on transfers of undertakings, see Article 6(4) of Directive 77/187, the provisions of which have been precisely repeated in Article 7(5) of Directive 2001/23. 15: - I feel that the Court's reasoning is the same as in the Bofrost* judgment, defining the extent of the obligation concerned to include the information which is necessary [for the workers concerned or their representatives] if they are to be able to determine whether or not they are entitled to request the opening of negotiations [to set up a European Works Council or a procedure for the transnational information and consultation of the workers] and, where relevant, to make that request in due form (paragraph 38). I would note that this judgment was given in respect of a group of undertakings where it had not yet been established that there was a controlling undertaking and, hence, a central management, within the meaning of the directive. 16: - In particular, see points 2 and 3 of the Supplementary Requirements annexed to the directive (and see also note 9). 17: - On this, I would note further that, under Article 8(2) of the directive, in specific cases and under the conditions and limits laid down by national legislation, the central management may refuse to transmit information when its nature is such that, according to objective criteria, it would seriously harm the functioning of the undertakings concerned or would be prejudicial to them.