OPINION OF ADVOCATE GENERAL
SHARPSTON
delivered on 21 June 2018(1)
Joined Cases C‑61/17, C‑62/17 and C‑72/17
Miriam Bichat (C‑61/17)
Daniela Chlubna (C‑62/17)
Isabelle Walkner (C‑72/17)
v
Aviation Passage Service Berlin GmbH & Co. KG
(Request for a preliminary ruling from the Landesarbeitsgericht Berlin (Higher Labour Court, Berlin, Germany))
(Reference for a preliminary ruling — Social policy — Collective redundancies — Directive 98/59/EC — Article 2(4) — Concept of an undertaking controlling the employer — Procedures for consultation of workers — Burden of proof)
1.        By this request for a preliminary ruling, the Court is asked to provide guidance on the interpretation of Directive 98/59/EC on the approximation of the laws of the Member States relating to collective redundancies (2) and, in particular, on whether the concept of an ‘undertaking controlling the employer’ for the purposes of Article 2(4) thereof requires to be construed on the basis of a de jure relationship alone or whether a de factorelationship will also suffice.
Legal framework
EU law
The Charter
2.        Article 16 of the Charter of Fundamental Rights of the European Union (3) states:
‘The freedom to conduct a business in accordance with Union law and national laws and practices is recognised.’
Directive 98/59
3.        According to recitals 2 and 11 of Directive 98/59:
‘(2)      Whereas it is important that greater protection should be afforded to workers in the event of collective redundancies while taking into account the need for balanced economic and social development within the [European Union];
…
(11)      Whereas it is necessary to ensure that employers’ obligations as regards information, consultation and notification apply independently of whether the decision on collective redundancies emanates from the employer or from an undertaking which controls that employer’.
4.        Article 2 of the directive is the sole article comprised in Section II, entitled ‘Information and consultation’. So far as relevant to the present case, it provides:
‘1.      Where an employer is contemplating collective redundancies, he shall begin consultations with the workers’ representatives in good time with a view to reaching an agreement.
2.      These consultations shall, at least, cover ways and means of avoiding collective redundancies or reducing the number of workers affected, and of mitigating the consequences by recourse to accompanying social measures aimed, inter alia, at aid for redeploying or retraining workers made redundant.
…
3.      To enable workers’ representatives to make constructive proposals, the employers shall in good time during the course of the consultations:
(a)      supply them with all relevant information and
(b)      in any event notify them in writing of:
(i)      the reasons for the projected redundancies;
(ii)      the number and categories of workers to be made redundant;
(iii)      the number and categories of workers normally employed;
(iv)      the period over which the projected redundancies are to be effected;
(v)      the criteria proposed for the selection of the workers to be made redundant in so far as national legislation and/or practice confers the power therefor upon the employer;
(vi)      the method for calculating any redundancy payments other than those arising out of national legislation and/or practice.
…
4.      The obligations laid down in paragraphs 1, 2 and 3 shall apply irrespective of whether the decision regarding collective redundancies is being taken by the employer or by an undertaking controlling the employer.
In considering alleged breaches of the information, consultation and notification requirements laid down by this Directive, account shall not be taken of any defence on the part of the employer on the ground that the necessary information has not been provided to the employer by the undertaking which took the decision leading to collective redundancies.’
5.        Under Article 6 of the directive:
‘Member States shall ensure that judicial and/or administrative procedures for the enforcement of obligations under this Directive are available to the workers' representatives and/or workers.’
National law
6.        Paragraph 17 of the Kündigungsschutzgesetz (Law on protection against unfair dismissal; ‘the KSchG’) was enacted in order to transpose Directive 98/59 into national law. So far as relevant to these proceedings, it provides:
‘…
(2)      Where an employer is contemplating collective redundancies which he is required to notify [to the Federal Employment Agency] …, he shall in good time supply the workers’ representatives with the relevant information and shall, in particular, notify them in writing of:
1.      the reasons for the projected redundancies;
2.      the number and categories of workers to be made redundant;
3.      the number and categories of workers normally employed;
4.      the period over which the projected redundancies are to be effected;
5.      the criteria proposed for the selection of the workers to be made redundant;
6.      the method for calculating any redundancy payments.
The consultations between employer and representatives of the workers shall, at least, cover ways and means of avoiding collective redundancies or of reducing the number of workers affected, and of mitigating the consequences.
…
(3a)      The obligations as to information, consultation and notification laid down in paragraphs 1 to 3 shall apply irrespective of whether the decision regarding collective redundancies is being taken by the employer or by an undertaking controlling the employer. The employer may not rely on the ground that the necessary information has not been provided to the employer by the undertaking which took the decision leading to collective redundancies.
…’
Facts, procedure and the questions referred
Case C‑61/17
7.        Ms Miriam Bichat, the appellant in Case C‑61/17, worked for Aviation Passage Service Berlin GmbH & Co. KG (‘APSB’), the respondent in the proceedings before the referring court, and its predecessor companies at Tegel Airport in Berlin. (4)
8.        The status of the precise ownership, as a matter of fact and law, of APSB is less than wholly clear. The referring court records that that body is an undertaking which is controlled, as a matter of law, by an undertaking named GlobalGround Berlin GmbH & Co. KG (‘GGB’). That relationship does not, however, mean that as a matter of national law GGB and APSB form part of the same group of undertakings. The referring court also states that it is satisfied as a matter of fact that, at the time of the relevant events in the main proceedings, GGB was not in a position whereby it could itself control the decision-making processes of APSB.
9.        On 9 and 22 September 2014, GGB informed APSB that the latter was to reduce its operations at Tegel Airport and that that part of its business was being transferred to an undertaking outwith the group. As a result, APSB’s contracts to perform those operations would come to an end. That undertaking would not be taking on any of the members of APSB’s staff.
10.      Also on 22 September 2014, a general meeting of APSB took place at which GGB, as the sole member having voting rights, resolved that APSB’s activities at, inter alia, Tegel Airport should cease entirely from 31 March 2015.
11.      On 2 January 2015, APSB informed the works council of its intention to make collective redundancies as a result of GGB having given notice to terminate its contracts in September 2014. It added that it had not been informed by GGB of the reasons leading to that notice being given but had to assume that this was because of continuing high losses, which it had proved impossible to reduce. These losses were attributed to high wage and salary costs and to restrictive rostering agreements.
12.      On 14 January 2015, representatives of the workforce replied, expressing dissatisfaction on the ground that the information provided was unduly vague and seeking clarification.
13.      On 20 January 2015, APSB took the operational decision to cease its activities and on 28 January 2015 it notified the collective redundancies resulting from that decision to the Agentur für Artbeit (Employment Agency). Those redundancies were scheduled to take place no later than 31 March 2015.
14.      Also on 20 January 2015, APSB held a meeting with the workforce representatives at which it gave essentially the same reasons for the redundancies as it had on 2 January in that year. In particular, it noted that it had not been provided with the precise reasons underlying GGB’s decision to terminate the contracts.
15.      On 27 January 2015, the workforce representatives announced their opposition to the dismissals on the ground that the alleged losses were fictitious and that GGB’s and APSB’s accounts had been manipulated.
16.      A number of challenges were brought against the collective redundancies before the Arbeitsgericht, Berlin (Labour Court, Berlin), each of which was successful. As a result, it appears that fresh redundancy notices were served and the dismissals ultimately took place on 31 January 2016.
17.      The appellant brought proceedings before the same court, alleging, inter alia, that her dismissal was in breach of Paragraph 17 of the KSchG since no proper reasons for the dismissals had been advanced. By judgment of 12 January 2016, that court dismissed Ms Bichat’s action and declared that the dismissals were valid. The appellant has brought an appeal before the Landesarbeitsgericht Berlin (Higher Labour Court, Berlin, Germany).
18.      Since it considers that an interpretation of the provisions of Directive 98/59 relating to collective redundancies and, in particular, the concept of an ‘undertaking controlling the employer’ is required for it to give a ruling in the main proceedings, the referring court has decided to refer the following questions to the Court for a preliminary ruling:
‘(1)      Must the notion of a controlling undertaking specified in the first subparagraph of Article 2(4) of [Directive 98/59] be understood to mean only an undertaking whose influence is ensured through shareholdings and voting rights or does a contractual or de factoinfluence (for example, as a result of the power of natural persons to give instructions) suffice?
(2)      If the answer to Question 1 is to the effect that an influence ensured through shareholdings and voting rights is not required:
Does it constitute a “decision regarding collective redundancies” within the meaning of the first paragraph of Article 2(4) of [Directive 98/59] if the controlling undertaking imposes requirements on the employer such that it is economically necessary for the employer to effect collective redundancies?
(3)      If Question 2 is answered in the affirmative:
Does the second subparagraph of Article 2(4) in conjunction with Article 2(3)(a), Article 2(3)(b)(i) and Article 2(1) of [Directive 98/59] require the workers’ representatives also to be informed of the economic or other grounds on which the controlling undertaking has taken its decisions that have led the employer to contemplate collective redundancies?
(4)      Is it compatible with Article 2(4) in conjunction with Article 2(3)(a), Article 2(3)(b)(i) and Article 2(1) of [Directive 98/59] to place on workers pursuing a judicial process to assert the invalidity of their dismissal effected in the context of collective dismissals, on the basis that the employer effecting the dismissal did not properly consult the workers’ representatives, a burden of presenting the facts and adducing evidence that goes beyond presenting the indicia for a controlling influence?
(5)      If Question 4 is answered in the affirmative:
What further obligations to present facts and adduce evidence may be placed on the workers in the present case pursuant to the abovementioned provisions?’
Cases C‑62/17 and C‑72/17
19.      The facts and legal issues arising, together with the questions referred, are essentially identical to those arising in Case C‑61/17.
Joined Cases C‑61/17, C‑62/17 and C‑72/17
20.      By decision of the President of the Court of 9 March 2017, Cases C‑61/17, C‑62/17 and C‑72/17 were joined for the purposes of the written and oral procedure and the judgment.
21.      Written observations have been submitted by Ms Chlubna (the appellant in Case C‑62/17) and Ms Walkner (the appellant in Case C‑72/17), APSB, the German Government and the European Commission. At the hearing on 12 April 2018, those parties presented oral argument and responded to the questions put by the Court.
Assessment
Preliminary remarks
Background to the cases
22.      Details of the precise factual background to these cases are less than wholly clear. In an attempt to see whether some of that background could be given greater definition, this Court sent to the referring court a request for clarification of certain matters set out in the order for reference, to which that court duly responded. In point 8 above, I set out such of the information as the Court has been given regarding APSB’s ownership and control that seems to be beyond doubt.
23.      Certain aspects of the main proceedings, however, are the subject of allegations made on the appellants’ behalf concerning the ownership and control of APSB. Those concerns appear to be taken sufficiently seriously by the referring court for it to make the references on which this Court is asked to rule. That applies in particular to the issues as to de factoownership set out in the first question. I set out a summary of those allegations in points 24 to 28 below. I should stress nonetheless that the matters recorded there do not represent established facts. (5)
24.      The appellants argue that GGB, which has or had at the time of the relevant facts in the main proceedings legal control over APSB, was acquired by a group of companies trading under the umbrella name of ‘WISAG’ in 2008. (6) The activities of that group extend to the provision of airport services, including ground handling services of the kind undertaken by APSB.
25.      APSB carried out trading activities only, principally in relation to passenger handling; it did not operate at an administrative level or on the market, in other words. The latter aspect was entrusted to GGB.
26.      In 2013, either the whole of GGB’s activities or approximately a third of them were transferred to WISAG Contracting GMBH & Co. KG; the parties are in dispute as to the true extent of the transfer. In any event, at the latest by the end of that year GGB had ceased to employ any staff. At the same time, that undertaking was in significant financial difficulties, culminating with a deficit of EUR 7.9 million at the end of 2014. In normal circumstances, the effective insolvency of GGB would have led to its ceasing its activities; instead, however, it was funded out of cash-flow resources provided centrally by the WISAG group.
27.      At the time of the appellants’ dismissals by APSB, that undertaking belonged, as a matter of fact although not of law, to the WISAG group.
28.      The appellants further argue that certain of the contracts performed by APSB until the cessation of its trading activities were transferred to other companies within the WISAG group.
29.      The above represents a summary only of the appellants’ allegations as to the additional facts underlying the cases in the main proceedings. I have limited myself to narrating the salient points. Implicit in those allegations is the suggestion that the decision(s) as to the termination of APSB’s contracts, and with that the redundancies of its employees such as the appellants, were taken by an undertaking at a senior level within the WISAG group of companies. It would follow that only that undertaking would have the knowledge as to the reasons underlying the decision(s) in question that were, in accordance with the appellants’ interpretation of Article 2(4) of Directive 98/59, to be provided to APSB and further communicated by that entity to its workforce in order to implement the consultation obligations which that directive lays down.
Admissibility
30.      The German Government argues that the referring court’s first question is inadmissible. It does so on two grounds. The first is that it is clear from the facts of the case that control for the purposes of Directive 98/59 is vested in GGB, since it is that undertaking that is the sole member of APSB that has the necessary influence and voting rights in it. The question is therefore unnecessary and hypothetical. The second ground is that the facts of the case are insufficiently clearly presented to allow the Court to give a ruling. There is in particular no element to indicate that WISAG has taken any decision which might directly or indirectly have affected APSB’s affairs.
31.      It is the Court’s settled case-law that ‘questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it’. (7)
32.      In the light of that case-law, the German Government’s observations seem to me to miss the point. It is true that the narrative of the facts set out in the order for reference, even as supplemented by the referring court’s response to this Court’s request for clarification, is less than clear. But that has not prevented either the German Government or the Commission from submitting detailed observations to the Court and it cannot be said that that narrative is so wanting in information as to prevent a useful answer being given. As regards the question whether GGB’s ownership interest and voting rights in APSB were sufficient to amount to ‘control’ for the purposes of Article 2(4) of the directive, that issue is at the heart of the referring court’s question and there is no basis on which it could be said to be hypothetical. The position might be otherwise had GGB provided the appropriate information to APSB in good time to enable consultations to take place but it appears that that was manifestly not the case. (8) Indeed, had it done so, it is likely that there would have been no case based on Directive 98/59 to bring. The German Government’s submissions should accordingly be rejected.
33.      The German Government also argues that the fourth question is hypothetical and need not be answered. German law does not operate in the manner contemplated by the referring court so that issues relating to the burden of proof do not arise in this case.
34.      As I observed in my Opinion in Online Games and Others, (9) this Court cannot adopt an interpretation of national law provided by a Member State Government in preference to that of the referring court in order then to declare a question referred inadmissible. Yet that seems to be precisely what the Court is being asked to do in this case. Should a court of a Member State have doubts as to the application of EU law to a situation otherwise governed by national rules, those doubts must be presumed, for all the reasons set out in the case-law referred to above, (10) to be relevant. The German Government’s submissions must accordingly be rejected.
Directive 98/59: an overview
35.      It is well-established case-law that ‘in interpreting a provision of EU law, it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part’. (11) That observation is particularly appropriate in this case.
36.      Before addressing the referring court’s questions in detail I shall therefore start by approaching Directive 98/59 from that perspective.
37.      The essence of the directive is set out in Article 2(1). That provision obliges an employer who is contemplating collective redundancies to begin consultations with the workers’ representatives in good time, with a view to reaching an agreement. Article 2(2) provides that the purpose of those consultations is to cover ways and means of (i) avoiding those redundancies where possible or, where or to the extent that it is not possible, reducing the number of workers affected and of (ii) mitigating the consequences of the measures to be taken. Practical definition is provided by Article 2(3), according to which ‘to enable workers’ representatives to make constructive proposals’, employers are to supply the representatives in good time during the course of the consultations with all relevant information, including providing them in writing with the reasons for the projected redundancies.
38.      Those provisions were first adopted in EU law by Directive 75/129/EEC. (12) In order to fill what has been described as ‘a gap in [the] earlier legislation and to add clarification concerning the obligations of employers who are part of a group of undertakings’, (13) Directive 92/56/EEC (14) added what is now Article 2(4) of Directive 98/59. That provision states that the obligations laid down in the first paragraph of Article 2 are to apply irrespective of whether the decision regarding collective redundancies is being taken by the employer itself or ‘by an undertaking controlling the employer’. It is with that provision in particular that this request for a preliminary ruling is concerned.
39.      The notion of an ‘undertaking controlling the employer’ may at first sight bring to mind notions of company law and the concept of a ‘group of companies’ within that context. A number of points should however be noted. First, the directive does not actually use the term ‘company’ but instead talks of an ‘undertaking’. That word is capable of being considerably broader in scope. Second, there is no common EU definition of what is meant by the expression ‘group of companies’: that is a question for national law alone. (15) Third, the circumstances in which Article 2(4) of Directive 98/59 may apply are many and varied. This needs to be seen in the context of what the Court has described as ‘an economic background marked by the increasing presence of groups of undertakings’. (16) The simplest case will comprise an undertaking carrying on business in a single Member State and there will be only one possible undertaking that could on any basis be seen as ‘controlling’ it, also incorporated or carrying on business in the same Member State. Equally, however, that controlling undertaking may be located in another Member State or, indeed, outside the European Union entirely and it may not always be possible to determine with ease which undertaking has ‘control’.
40.      It is also worth bearing in mind that the nature of relationships within a ‘group’ may vary considerably. In some cases, control will be exercised exclusively from the top, with very little, if any, discretion being given to undertakings lower down the scale. In others, the reverse may apply, with the top body playing the role of a ‘pure’ holding company and delegating management decisions further down the company chain. It may be an intermediary undertaking that takes those decisions; it need not be the same undertaking as the one that employs the workforce. The relationship between the controlling undertaking and the employer may in some instances be a discursive and constructive one, with major decisions being taken only following full discussion and explanation as to the underlying reasons. In other cases, the employer may be expected to act upon instructions given by the controlling undertaking and be given neither reasons nor explanations as to why those instructions might be issued. Even within a corporate group structure, the company that takes the decision to declare collective redundancies need not be the holding company but may be the employer alone. ‘Control’, interpreted technically in such a context then becomes irrelevant. In summary, therefore, there cannot be said to be a single type of legal (or even financial) controlling interest that can be said to cover all possible circumstances in which Article 2(4) will apply. ‘Control’ can thus take many forms and it is implicit in the referring court’s questions that to rely purely on the de jure aspects of that notion may lead to manipulation and even to abuse.
41.      Separately, I should add that the directive does not define what is meant by the notion of an ‘undertaking controlling the employer’. The uniform application of EU law and the principle of equality alike require that the terms of a provision of EU law that has not been defined and that makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an autonomous and uniform interpretation throughout the European Union, having regard to the context of the provision and the objective pursued by the legislation in question. (17) Whilst Article 5 of Directive 98/59 allows the Member States, inter alia, to introduce national provisions which are more favourable to workers, those Member States are, as the Commission rightly observes, nevertheless bound by the autonomous and uniform interpretation given to the EU law terms used in the directive. (18)
The first question: the nature of the controlling interest required for the purposes of Article 2(4) of Directive 98/59
42.      By its first question, the referring court essentially asks whether the relationship between an employer and the undertaking which controls it must, for the purposes of Article 2(4) of the directive, be a de jure one or whether a de factointerest will also suffice.
43.      The procedure laid down by the directive concerns consultation. It does not seek in any way to govern the manner in which a group of undertakings is organised nor does it restrict the freedom of such a group to organise its activities in the way which it thinks best suits its needs. (19) The aim of the consultation is, where possible, to avoid the need for the projected collective redundancies altogether. Where that cannot be achieved — and it has to be assumed that in many cases it will not be — their number should be reduced or the consequences should be mitigated, all to the degree possible in the circumstances. The obligation to participate is at all times on the employer; it is not on the undertaking having control, even though it is clear that the duty to hold consultations can arise in situations where the prospect of those redundancies is not directly the employer’s choice. To that end, the employer must begin the consultations ‘in good time with a view to reaching agreement’ and the workers’ representatives should be placed in a position to make ‘constructive proposals’. (20)
44.      The consultation process should, in every sense, be meaningful. It is not intended to be a purely symbolic exercise. Indeed, the essence of the notion of ‘consultation’ is that both sides may achieve a constructive result through discussion and negotiation that might otherwise not have been achieved. The employer must therefore ensure that the consultations in question pursue a worthwhile purpose. It is the employer which must undertake them; it cannot rely on a failure by the decision-making undertaking to provide the necessary information and must itself bear the consequences of such a failure. (21) It is therefore essential that that information be provided to the employer by the correct source.
45.      Directive 98/59 is silent as regards the question of ‘control’ for the purposes of Article 2(4). The first question that arises in that context is whether ‘control’ is intended to refer to an undertaking which falls within the definition of a ‘holding company’ under national law. All the parties at the hearing accepted that it may do. In that regard, an analogy may be drawn with the definition of ‘controlling undertaking’ as set out in Article 3 of Directive 2009/38. Paragraph 1 of that provision defines the notion on the basis of the exercise of a dominant influence by virtue, for example, of ownership, financial participation or the rules which govern that influence. Paragraph 2 goes on to set out certain presumptions which, while not expressly formulated in that way, essentially reflect a company law relationship between a subsidiary and its parent. (22)
46.      However, I agree with the Commission that that definition is too narrowly drawn to fit all the circumstances which Directive 98/59 contemplates. It reflects the context in which Directive 2009/38 was adopted, namely the setting up of works councils in larger undertakings (there defined as ‘Community-scale undertakings’ and ‘Community-scale group[s] of undertakings’), to be informed and consulted in respect of a wide range of matters affecting the workforce generally. (23) The company law-based test set out in Article 3(2) of Directive 98/59 reflects the fact that the controlling undertaking in that context will in most cases be the ultimate holding company.
47.      But that is not the case, or need not be the case, here. The question of control for the purposes of Article 2(4) of Directive 98/59 is not ‘which undertaking is the ultimate holding company of the employer?’ but ‘which undertaking can provide the necessary information to enable consultations to take place in the meaningful way which the directive contemplates?’. In that context, the company law-based test may have the merit of legal certainty. In all other respects, it seems to me that it is too narrow and fails to reflect the overall scheme of Directive 98/59. Moreover, such an approach could not, by definition, take account of the divergences in company law that exist at Member State level and the need for the expression ‘undertaking controlling the employer’ to be given an autonomous interpretation throughout the European Union. (24)
48.      It follows in my view that the de jure relationship is not necessarily determinative; the de factorelationship may also be relevant.
49.      What, then, is the nature of that relationship? I suggest that it is necessary for the controlling undertaking to have an influence on the employer as regards the manner in which the collective redundancies that are contemplated are to be carried out. Such an influence need not be a ‘dominant’ one in the sense that the controlling undertaking has to enjoy a higher position in the structural hierarchy than the employer, since there is nothing that requires that the decisions that may lead to the collective redundancies be taken at an organisationally superior level. ‘Control’, in other words, need not mean hierarchical control. It also assumes that the undertaking which has control will provide the information which enables the employer to consult, since if that is not done the latter will be in breach of its obligations under the directive.
50.      In summary, I suggest that the undertaking having ‘control’ for the purposes of Article 2(4) will, to adopt the Court’s case-law in Akavan, prima facie be the undertaking which, in the circumstances of the case in question, adopts a strategic or commercial decision compelling the employer to contemplate or to plan for collective redundancies. (25)
51.      However, as all parties at the hearing appeared to agree, it is necessary to exclude relationships where the parties are at arm’s length. Thus, the notion of an ‘undertaking controlling the employer’ cannot include an undertaking which is at arm’s length from the employer, such as a supplier or customer whose conduct may have an economic impact on the employer’s business and may, in more extreme cases, require it to contemplate and, if necessary, implement collective redundancies. Such an entity would have no interest in or reason for communicating the necessary information to the employer.
52.      There must, in other words, be a relationship between the undertaking having control and the employer that gives the former a reason to provide the necessary information for consultation purposes.
53.      In that regard, I believe it is necessary to reject the German Government’s submissions to the effect that the essential basis of such a relationship can be found in what it termed ‘legally anchored control’. I can understand that control of that kind may exist where, for example, there is a contractual commitment in place permitting the employer to require the undertaking having control to provide the necessary information. Such an arrangement seems relatively unlikely in practice, however. Rather, as I understood Germany’s submissions, such control may be implicit as a matter of law in the relations between the two entities. The employer would, in that context, have the power to compel the undertaking having control to provide that information. In that regard, I would observe that even in the context of a company law-based controlling structure such a relationship will not exist. ‘Control’ will exist in a hierarchically downwards direction, giving the holding company the power to give its subsidiaries directions as to how they run their affairs. However, the converse is not true: the subsidiary may ask but it cannot compel. In those circumstances, I can draw no useful guidance from the German Government’s line of argument.
54.      There must, however, be some form of tie in the form of an incentive placed on the undertaking having control to provide the information which allows proper consultation to take place. The obvious form such an incentive may take lies in the financial impact any failure to do so may have on its interest in the employer. Such an impact may arise, for example, because the rules at national level provide that any collective redundancies imposed without proper consultation are void, or because the employer will be subject to a financial penalty for that failure. In such circumstances, the resulting monetary loss will filter through to the undertaking having control by reason of the interest it has in the employer.
55.      In my view, this means that the two entities must share the same commercial interests in the form either of acorporate structure (de jure) or of acontractual or factual connection (de facto), represented by a common patrimonial interest. That interest need not take the form of legal ownership. It may be direct or indirect and there is no need for the interest to be exclusive. Partial ownership of that interest will suffice. Whether or not that interest is sufficient to amount to control for the purposes of Article 2(4) of Directive 98/59 in a given case will be a matter to be determined by the national court having jurisdiction to examine and make findings on the evidence.
56.      Before concluding my analysis of the referring court’s first question, I should briefly mention one argument put forward by ASPB. It alleges that any relationship other than one based on the notion of a controlling interest under the company law of the Member State concerned would infringe Article 16 of the Charter. That argument seems to me to be entirely without merit. Article 16 reflects the Court’s case-law concerning the freedom to exercise an economic or commercial activity and Article 119(1) and (3) TFEU, which recognises free competition. (26) It is in any event subject to Article 52(1) of the Charter, which permits limitations on the exercise of rights and freedoms recognised subject to the conditions it lays down, in particular that those limitations be provided for by law. There is nothing in the present case to suggest that the interpretation of Directive 98/59 which I propose would infringe the rights and freedoms provided for in Article 16 and I do not consider the matter further.
57.      In the light of all the foregoing, I consider that the answer to the first question should be that Article 2(4) of Directive 98/59 is to be interpreted as meaning that the notion of a controlling undertaking within the meaning of that provision must be construed by reference to the undertaking (if any) which takes a strategic or commercial decision which compels the employer to contemplate or to plan for collective redundancies. Such an undertaking need not only be an undertaking which controls the employer de jure but may also be one which controls the employer de facto. An undertaking of that type will not, however, include an undertaking which is at arm’s length from the employer, such as a supplier or customer whose conduct may have an impact on the employer’s business. Rather, the employer and the undertaking having de factocontrol of it must share the same commercial interests in the form of acontractual or factual connection, represented by a common patrimonial interest. That interest need not take the form of legal ownership. It may be direct or indirect and there is no need for the interest to be exclusive. Partial ownership of that interest will suffice. Whether or not that interest is sufficient to amount to control for the purposes of Article 2(4) in a given case will be a matter to be determined by the national court having jurisdiction to examine and make findings on the evidence.
The second question: the notion of a ‘decision regarding collective redundancies’
58.      By its second question, the referring court asks for guidance concerning the meaning of the expression ‘decision regarding collective redundancies’ in Article 2(4) of Directive 98/59. As I understand the position, the point is essentially relevant in the present case because it concerns the time when the controlling undertaking must communicate information to the employer for the purposes of that provision.
59.      In referring in Article 2(4) to a decision regarding collective redundancies, the directive could on first reading give the impression that the requirements of that provision apply only once the decision has actually been taken. On closer inspection, however, it is clear that that cannot be the correct construction. As the Commission rightly points out, Article 2(4) refers to the obligations laid down in paragraphs 1, 2 and 3 of that article. The first of these applies to a situation where an employer ‘is contemplating collective redundancies’, which is the point at which he is under a duty to begin consultations with the workers’ representatives. Under paragraph 3, the employer must ‘in good time during the course of the consultations’ provide information that will enable those representatives to make constructive proposals. Such an approach is confirmed by the Court’s case-law, according to which the consultation procedure must be completed before any decision on the termination of employees’ contracts is taken. (27)
60.      As regards the point at which the consultations must begin, the same case-law makes it clear that that does not depend on whether the employer is already able to supply to the workers’ representatives all the information required by Article 2(3)(b) of the directive, since that information can be provided during the consultations and not necessarily at the moment when they start. Equally, however, to impose a duty on an employer to start negotiations when there is merely a theoretical possibility that collective redundancies may occur would risk imposing an intolerable and quite possibly unrealistic burden on the employer. The Court has therefore held that time does not start to run until the adoption of a strategic decision or change in activities which compel the employer to contemplate or to plan for collective redundancies. (28)
61.      The decision as to when to begin consultations for the purposes of Article 2(1) of Directive 98/59 will be a matter for the employer. It must take that decision in accordance with the principles set out above. Where it is subject to the control of another undertaking for the purposes of Article 2(4), it must accordingly have regard to any information and instructions provided to it by its controlling undertaking that may have an impact on whether or not collective redundancies are contemplated. Equally, and whilst it is not subject to the legal obligation to consult, the undertaking having control must provide the necessary information to the employer no later than the time when the latter is obliged to meet its duties in that regard. In the absence of such communication, the directive becomes devoid of purpose. Should the undertaking having control impose on the employer what amount to requirements that make it economically necessary for the latter to effect collective redundancies, that will in my view in every case require the employer to start the consultation process.
62.      I therefore consider that the answer to the second question should be that the employer is under a duty to start the consultation process under Directive 98/59 when it becomes aware of the adoption of a strategic decision or change in activities which compels it to contemplate or to plan for collective redundancies. Where there is an ‘undertaking controlling the employer’ for the purposes of Article 2(4) of that directive, the imposition by that undertaking on the employer of what amount to requirements that make it economically necessary for the latter to effect collective redundancies will require the employer to start the consultation process if it has not already done so.
The third question: the extent of the obligation to communicate
63.      By its third question, the referring court essentially seeks guidance on the extent of the obligation to make disclosure under Article 2(3) of Directive 98/59.
64.      Once again, it is important to recall the context in which those obligations arise. First (by virtue of Article 2(1)), an employer who is contemplating collective redundancies must begin consultations ‘with a view to reaching an agreement’. Second (as specified by Article 2(2)), the consultations in question must, at least, cover ways and means of avoiding the redundancies, reducing the number of workers affected and of mitigating the consequences (if and to the extent that redundancies have to be made). Third, Article 2(3) requires that the information it specifies be supplied ‘to enable workers’ representatives to make constructive proposals’. Where, pursuant to Article 2(4), the decision regarding collective redundancies is being taken by an undertaking controlling the employer, the information must be communicated to the employer in good time to enable the latter to meet its obligations under the directive.
65.      The scope of the duties imposed is therefore wide. It is plain that a high degree of good faith on the employer’s part is necessary to ensure their successful implementation. Do they require the employer, as the referring court asks, to disclose the economic or other grounds on which the controlling undertaking has taken its decisions that have led the employer to contemplate collective redundancies?
66.      It is likely that in many, if not most, cases the answer will be ‘yes’. Without knowing the reasons underlying the strategic decision or change in activities referred to in point 60 above the workers’ representatives may find it materially impossible to make constructive proposals in the consultations.
67.      I would however restrict that general statement in one regard. The duty to supply information exists in order to enable workers’ representatives to make constructive proposals. There will be no duty to communicate material that does not serve that purpose. Since the impact of that qualification will vary from one case to another, I do not think it is possible to lay down any general guidance in that regard. It will be a matter for the national court having jurisdiction to examine and make findings on the evidence in every case to decide upon the application of the relevant principles to the proceedings before it.
68.      I therefore consider that the answer to the third question should be that Article 2(3) of Directive 98/59 should be interpreted as requiring the employer, in a case where, pursuant to Article 2(4), the decision regarding collective redundancies is being taken by an undertaking controlling the employer, to disclose the economic or other grounds on which the controlling undertaking has taken its decisions that have led to collective redundancies being contemplated. However, the duty of disclosure will not apply where the material in question will not serve the purpose of enabling workers’ representatives to make constructive proposals in relation to the projected redundancies. It will be for the national court having jurisdiction to find the facts to decide on the application of the relevant principles to any given proceedings.
The fourth and fifth questions: the burden of proof
69.      By its fourth and fifth questions, which are best taken together, the referring court essentially seeks guidance concerning the burden of proof in claims based on Article 2 of Directive 98/59.
70.      Article 6 of the directive is expressed in straightforward terms. It requires the Member States to ensure that judicial and/or administrative procedures to enforce obligations arising under the directive are available to the workers’ representatives and/or to the workers themselves. Unlike certain other pieces of EU legislation, Directive 98/59 contains no provisions relating to the burden of proof. (29) It is the Court’s well-settled case-law that, in the absence of EU rules governing the matter, it is for the domestic legal system of each Member State to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from EU law. That extends to the rules of evidence, including (where applicable) the rules governing the allocation of the burden of proof. (30) The Member States are, however, responsible for ensuring that those rights are effectively protected in each case. That rule lies at the heart of the principles of equivalence and effectiveness and the requirement under EU law that there be effective judicial protection of those rights.(31) Those principles are embodied in Article 6 of Directive 98/59. Workers and their representatives must be in a position to enforce their rights under the directive in the same way as they would be able to enforce equivalent rights under national law and the relevant procedural rules must not be framed in such a way as to render impossible in practice or excessively difficult the exercise of rights conferred by EU law. (32)
71.      All of that being so, it is not possible for this Court to provide anything other than the most general of guidance. It is for the national court having jurisdiction to examine and make findings on the evidence to ensure that the principles referred to in point 70 above are satisfied. Should the applicable rules laid down by domestic law fail to reflect those principles, they must be set aside. (33) That will be the case where, inter alia, those rules require workers’ representatives seeking to challenge collective redundancies to prove matters in respect of which they cannot, in practice, be expected to have access to the necessary information in order to do so.
72.      I have nothing to add as regards the fifth question.
73.      I am therefore of the view that the answer to the fourth and fifth questions should be that Article 6 of Directive 98/59 should be interpreted as meaning that workers and their representatives must be in a position to enforce their rights under the directive in the same way as they would be able to enforce equivalent rights under national law. The relevant procedural rules must not be framed in such a way as to render impossible in practice or excessively difficult the exercise of those rights. It is for the national court having jurisdiction to examine and make findings on the evidence to ensure that the principles of equivalence and effectiveness and the requirement under EU law that there be effective judicial protection of those rights are satisfied. Should the applicable rules laid down by domestic law fail to reflect those principles, they must be set aside. That will be the case where, inter alia, those rules require workers’ representatives seeking to challenge collective redundancies to prove matters in respect of which they cannot, in practice, be expected to have access to the necessary information in order to do so.
Conclusion
74.      For all of the foregoing reasons, I consider that the answer to the questions referred by the Landesarbeitsgericht, Berlin (Higher Labour Court, Berlin, Germany) should be that:
(1)      Article 2(4) of Directive 98/59/EC on the approximation of the laws of the Member States relating to collective redundancies is to be interpreted as meaning that the notion of a controlling undertaking within the meaning of that provision must be construed by reference to the undertaking (if any) which takes a strategic or commercial decision which compels the employer to contemplate or to plan for collective redundancies. Such an undertaking need not only be an undertaking which controls the employer de jure but may also be one which controls the employer de facto. An undertaking of that type will not, however, include an undertaking which is at arm’s length from the employer, such as a supplier or customer whose conduct may have an impact on the employer’s business. Rather, the employer and the undertaking having de factocontrol of it must share the same commercial interests in the form of acontractual or factual connection, represented by a common patrimonial interest. That interest need not take the form of legal ownership. It may be direct or indirect and there is no need for the interest to be exclusive. Partial ownership of that interest will suffice. Whether or not that interest is sufficient to amount to control for the purposes of Article 2(4) in a given case will be a matter to be determined by the national court having jurisdiction to examine and make findings on the evidence.
(2)      The employer is under a duty to start the consultation process under Directive 98/59 when it becomes aware of the adoption of a strategic decision or change in activities which compels it to contemplate or to plan for collective redundancies. Where there is an ‘undertaking controlling the employer’ for the purposes of Article 2(4) of that directive, the imposition by that undertaking on the employer of what amount to requirements that make it economically necessary for the latter to effect collective redundancies will require the employer to start the consultation process if it has not already done so.
(3)      Article 2(3) of Directive 98/59 should be interpreted as requiring the employer, in a case where, pursuant to Article 2(4), the decision regarding collective redundancies is being taken by an undertaking controlling the employer, to disclose the economic or other grounds on which the controlling undertaking has taken its decisions that have led to collective redundancies being contemplated. However, the duty of disclosure will not apply where the material in question will not serve the purpose of enabling workers’ representatives to make constructive proposals in relation to the projected redundancies. It will be for the national court having jurisdiction to find the facts to decide on the application of the relevant principles to any given proceedings.
(4)      Article 6 of Directive 98/59 should be interpreted as meaning that workers and their representatives must be in a position to enforce their rights under the directive in the same way as they would be able to enforce equivalent rights under national law. The relevant procedural rules must not be framed in such a way as to render impossible in practice or excessively difficult the exercise of those rights. It is for the national court having jurisdiction to examine and make findings on the evidence to ensure that the principles of equivalence and effectiveness and the requirement under EU law that there be effective judicial protection of those rights are satisfied. Should the applicable rules laid down by domestic law fail to reflect those principles, they must be set aside. That will be the case where, inter alia, those rules require workers’ representatives seeking to challenge collective redundancies to prove matters in respect of which they cannot, in practice, be expected to have access to the necessary information in order to do so.
1      Original language: English.
2      Council Directive of 20 July 1998 (OJ 1998 L 225, p. 16).
3      OJ 2010 C 83, p. 389 (‘the Charter’).
4      The narrative as set out in this section of the Opinion is taken from the order for reference, as supplemented by the referring court’s response to this Court’s request for clarification. See further point 22 et seq. below.
5      On more than one occasion, it has proved difficult to distinguish between information provided by the referring court as a matter of fact and matters which only represent arguments put forward by the appellants. I have sought to err on the side of caution in that regard. Where it is unclear in which category a point should fall, I have recorded it as being an allegation.
6      The referring court notes that the group comprises numerous undertakings linked to one another in law or in fact but that it has proved impossible to clarify their status fully in the main proceedings.
7      See, among many, judgment of 7 December 2017, López Pastuzano, C‑636/16, EU:C:2017:949, paragraph 19 and the case-law cited.
8      See point 11 above.
9      Opinion in Online Games and Others, C‑685/15, EU:C:2017:201, point 25.
10      See footnote 7 above.
11      See, inter alia, judgment of 6 July 2017, Air Berlin, C‑290/16, EU:C:2017:523, paragraph 25 and the case-law cited.
12      Council Directive of 17 February 1975 on the approximation of the laws of the Member States relating to collective redundancies (OJ 1975 L 48, p. 29).
13      Judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 61.
14      Council Directive of 24 June 1992 amending Directive 75/129 (OJ 1992 L 245, p. 3).
15      In a report drawn up in October 2016 by The Informal Company Law Expert Group, established by the Commission in May 2014 to assist it with expert advice on issues of company law, the group noted that ‘Member States have different and even conflicting approaches regarding the recognition of the interests of the group’ (section 1, p. 5). See http://orbilu.uni.lu/bitstream/10993/34455/1/2016-10%20icleg_recommendations_interest_group_final_en.pdf.
16      Judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 44.
17      See, inter alia, judgment of 17 July 2008, Kozlowski, C‑66/08, EU:C:2008:437, paragraph 42 and the case-law cited.
18      See, to that effect, judgment of 27 January 2005, Junk, C‑188/03, EU:C:2005:59, paragraph 29.
19      See, to that effect, judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraphs 59 and 42.
20      Article 2(1) and (3), respectively, of Directive 98/59.
21      See, to that effect, judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 69. It is also worth noting that the undertaking controlling the employer for the purposes of Article 2(4) of Directive 98/59 need not be incorporated or established within the European Union and accordingly may not be subject to the jurisdiction of the courts of the Member States. Contrast, in that regard, the rules laid down in Article 4 of Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 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 (OJ 2009 L 122, p. 28), which lay down specific provisions to cover that eventuality; and see also, in the context of the legislation which preceded that directive, judgment of 15 July 2004, ADS Anker, C‑349/01, EU:C:2004:440, paragraph 55 et seq.
22      Article 3(2) of Directive 2009/38 states: ‘The ability to exercise a dominant influence shall be presumed, without prejudice to proof to the contrary, when an undertaking, in relation to another undertaking directly or indirectly: (a) holds a majority of that undertaking’s subscribed capital; (b) controls a majority of the votes attached to that undertaking’s issued share capital; or (c) can appoint more than half of the members of that undertaking’s administrative, management or supervisory body.’
23      See, in that regard, Article 1(1) and (2) of Directive 2009/38. See also recital 17 of that directive, which states ‘it is necessary to have a definition of “controlling undertaking” relating solely to this Directive, without prejudice to the definitions of “group” or “control” in other acts’.
24      See points 39 and 41 above.
25      See, in that regard, judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 48.
26      See the Explanations relating to the Charter of Fundamental Rights (OJ 2007 C 303, p. 17).
27      Judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraph 70.
28      Judgment of 10 September 2009, Akavan Erityisalojen Keskusliitto AEK and Others, C‑44/08, EU:C:2009:533, paragraphs 55, 52 and 49, respectively.
29      See, for example, Article 10(1) of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (OJ 2000 L 303, p. 16).
30      See, to that effect, judgment of 24 April 2008, Arcor, C‑55/06, EU:C:2008:244, paragraph 189.
31      See, inter alia, judgment of 16 July 2009, Mono Car Styling, C‑12/08, EU:C:2009:466, paragraphs 48 and 49 and the case-law cited.
32      See, to that effect, judgment of 12 December 2013, Test Claimants in the Franked Investment Income Group Litigation, C‑362/12, EU:C:2013:834, paragraph 32 and the case-law cited.
33      See, to that effect, judgment of 15 October 2015, Nike European Operations Netherlands, C‑310/14, EU:C:2015:690, paragraph 28.