Opinion of Mr Advocate General Saggio delivered on 26 September 2000. - Betriebsrat der bofrost* Josef H. Boquoi Deutschland West GmbH & Co. KG v Bofrost* Josef H. Boquoi Deutschland West GmbH & Co. KG. - Reference for a preliminary ruling: Landesarbeitsgericht Düsseldorf - Germany. - Reference for a preliminary ruling - Article 11(1) and (2) of Directive 94/45/EC - Information to be made available by undertakings on request - Information intended to establish the existence of a controlling undertaking within a Community-scale group of undertakings. - Case C-62/99.



European Court reports 2001 Page I-02579



Opinion of the Advocate-General

1 In this reference for a preliminary ruling, the Landesarbeitsgericht (Higher Labour Court) Düsseldorf has applied to the Court for an interpretation of a provision on which the Court has not made any ruling before: 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 (hereinafter `the directive'). (1) This reference for a preliminary ruling is made to establish whether, even before formally initiating the procedure to establish the works council provided in the directive, the central management of the undertaking is required to give the internal representatives of the employees the information and documents requested by the body representing the employees, where the purpose of the request is in fact to establish that procedure for the group to which the undertaking belongs.

Before examining the questions, I should draw attention to the relevant provisions of Community law and of national law.

The relevant Community and national law

2 Article 1 of the directive states that its purpose is to improve the right to information and to consultation of employees in Community undertakings. For this purpose, it provides the means of establishing an employees' council in Community-scale undertakings or groups of undertakings.

Article 2(1) identifies the scope ratione personae of the directive, listing the types of undertakings in which a European works council must be established and those who take part in the procedure. It states that for the purposes of the directive:

`(a) "Community-scale undertaking" means any undertaking with at least 1 000 employees within the Member States and at least 150 employees in each of at least two Member States;

(b) "group of undertakings" means a controlling undertaking and its controlled undertakings;

(c) "Community-scale group of undertakings" means a group of undertakings with the following characteristics:

- at least 1 000 employees within the Member States,

- at least two group undertakings in different Member States, and

- at least one group undertaking with at least 150 employees in one Member State and at least one other group undertaking with at least 150 employees in another Member State;

(d) "employees' representatives" means the employees' representatives provided for by national law and/or practice;

(e) "central management" means the central management of the Community-scale undertaking or, in the case of a Community-scale group of undertakings, of the controlling undertaking.'

Regarding the term `controlling undertaking', referred to in Article 2(1)(b), Article 3 provides that it means `an undertaking which can exercise a dominant influence over another undertaking ("the controlled undertaking") by virtue, for example, of ownership, financial participation or the rules which govern it' (paragraph 1) and that `the ability to exercise a dominant influence shall be presumed, without prejudice to proof to the contrary, when, in relation to another undertaking, directly or indirectly [an undertaking]:

(a) holds a majority of that undertaking's subscribed capital; or

(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'.

Under Article 4(1), the central management of a Community-scale undertaking or of the controlling undertaking of a Community-scale group has responsibility for creating the `conditions and means necessary for the setting up of a European Works Council'.

The party negotiating with the central management is the `special negotiating body', which has a minimum of three and a maximum of 17 employees, who must come from the various Member States in which the Community-scale undertaking has its establishments or the group has its undertakings (Article 5(1) and (2)).

Lastly, Article 11 requires the Member States to ensure `that the management of establishments of a Community-scale undertaking and the management of undertakings which form part of a Community-scale group of undertakings which are situated within its territory and their employees' representatives or, as the case may be, employees abide by the obligations laid down by [the directive], regardless of whether or not the central management is situated within its territory' (paragraph 1). In particular, the Member States must ensure `that the information on the number of employees referred to in Article 2(1)(a) and (c) is made available by undertakings at the request of the parties concerned by the application of [the directive]'.

3 Directive 94/45 was transposed into German law by the Law on European Works Councils of 28 October 1996 (hereinafter: the `German law').

Paragraph 2(1) of that Law defines its scope, stating that it relates to Community-scale undertakings situated in Germany and Community-scale groups of which the central undertaking is situated in Germany. Paragraph 6(2) reproduces the requirements in Article 3(2) of the directive for the undertaking to be regarded as the controlling undertaking within a Community-scale group.

Paragraph 5 of the Law, implementing Article 11 of the directive, expressly imposes an obligation to provide information as follows:

`(1) The central management must give to the employees' representatives, upon request, information on the average number of employees and the distribution of these within the Member States, on the undertakings and establishments and on the structure of the company or group of companies.

(2) A works council or a central works council may exercise the right granted in subparagraph 1 against the local management of the establishment or undertaking; the latter shall be required to obtain from the central management the information and documents necessary to provide the particulars requested.'

The national proceedings and the questions referred

4 The respondent in the appeal proceedings under which the preliminary reference was made is the works council of the establishment of the undertaking bofrost* Josef H. Boquoi Deutschland West GmbH & Co. KG, situated at Straelen (Germany). The works council had several times requested the undertaking's management committee to provide information on the number of employees and the structure of the group undertakings, under Paragraph 5 of the German Law. The committee had not acted upon that request and, in a letter of 9 January 1997, had given a categorical refusal to provide the information.

5 The works council therefore applied to the Arbeitsgericht, by application filed on 3 March 1998, requesting that the defendant undertaking be ordered to supply to the plaintiff, by `production and transmission of written documents', information on (a) the relationship of the German company bofrost* - by means of shares held by the company itself or its members - with other European undertakings, specifically with bofrost* J.H. Boquoi Deutschland Ost GmbH & Co. KG, bofrost* Dienstleistungs GmbH & Co. KG, spedbo Speditions GmbH & Co. KG, bofrost* Italy, bofrost* Spain, bofrost* Austria, bofrost* France, bofrost* Netherlands, bofrost* Greece and bofrost* England; (b) the average number of employees in those undertakings; (c) the legal form of the undertaking, showing the registered office of the firm and where it is registered; (d) the law applying to those undertakings, and (e) their supervisory bodies and the persons with power of appointment.

The works council maintained that in this case the requirements of Paragraph 5(1) of the German Law were met because the German bofrost* company was the controlling undertaking within the meaning and for the purposes of Paragraph 2(1) of the Law. In particular, the works council claimed that Mr Josef Boquoi, as chairman of the Shareholders' Advisory Council, which comprises the undertakings belonging to the bofrost* group, had exercised a dominant influence on the bofrost* Europe Steering Committee, (2) comprising the members of the national management bodies of the undertakings in that group. It also observed that he held majority shareholdings in the German undertakings.

The undertaking claimed that no evidence had been produced of its dominant relationship with the bofrost* undertakings situated in the other Member States and that, in particular, it was not possible to presume any such dominance within the meaning of Paragraph 6(2) of the German Law, since the bofrost* group is structured as a `horizontal group' and therefore no undertaking has dominant functions. It also maintained that in any case Mr Josef Boquoi was not a shareholder of any of the limited-liability bofrost* companies but was to be found only as a limited partner.

6 By an order of 5 August 1998, the Arbeitsgericht acknowledged the Works Council's right to information under Paragraph 5 of the German Law, holding that in this case it had been shown that there was influence and, hence, control by the German undertaking over the group undertakings situated abroad.

7 Bofrost* appealed against the order, by a document of 23 November 1998, in the Landesarbeitsgericht at Düsseldorf. In the appeal, the parties repeated the same arguments. The court expressed doubt as to whether the internal body representing the employees had the right to request information unless it were shown that the group was of Community scale and that the undertaking was dominant within the group. The court also queried what were the appropriate means of securing the information to appraise the link between the German undertaking and the other undertakings of the bofrost* group.

8 The Landesarbeitsgericht therefore suspended the national proceedings and requested the Court of Justice to give a preliminary ruling on the following questions:

`Is Article 11(1) and (2) of Council Directive 94/45/EC of 22 September 1994 to be interpreted as meaning that the right to information laid down therein exists even where it is not (yet) established whether or not there is a controlling undertaking within the meaning of Article 3 of Directive 94/45/EC in a group of undertakings as defined in Article 2(1)(b) of Directive 94/45/EC?

If the first question is answered in the affirmative: does the right to information in Article 11(1) and (2) of Directive 94/45/EC also include the right of a works council to request from the undertaking concerned information which gives rise to the presumption referred to in Article 3(2) of Directive 94/45/EC?

Does Article 11(1) and (2) of Directive 94/45/EC also include the right of a works council to request documents from an undertaking to clarify and explain such information?'

Substance

9 By means of these three questions referred for a preliminary ruling, the German court is asking, firstly, whether Article 11(1) and (2) is to be interpreted as meaning that an undertaking is required to supply information on the structure and internal organisation of the company and of the group to the internal bodies representing the employees, even where it has not been established that the management approached by the employees is that of the undertaking which exercises `control' within a Community-scale group, within the meaning of Article 2(1)(b) and of Article 3 of the Directive (first question). If this question is answered in the affirmative, it then asks whether the management is also required to provide information specifically regarding the position of the undertaking within the group (second question) and documents regarding the information requested (third question).

10 In the instance submitted to the court making the reference, the appeal - as mentioned earlier - is against the right of the works council for the bofrost* establishment situated at Straelen to request, and receive, from the management of that establishment information and documents essentially relating to: (a) the links between the German bofrost* company and the group companies situated in other Member States, (b) the number of employees within those undertakings and the type of employment contract made with them, (c) the national law applying to those companies' internal relations, (d) the organs having external representation of those companies and (e) the organs of internal supervision.

Two points are raised in this reference: does the directive apply to a case such as this and, if so, what rights must be conceded to the employees' representatives, within the meaning of and for the purposes of the directive?

11 It is well known that the directive was adopted after lengthy and laborious negotiations, because a number of Member States resisted the adoption of Community legislation which might conflict with domestic legislation on trade union rights and, in general, on employees' rights to representation. (3) And it is precisely because of that resistance that the directive is fairly limited in its content: as the title states, the directive relates only to establishment of a procedure for the purposes of informing employees and to establishment of European Works Councils which reproduce a type of employees' representation already found in the legislation of some Member States; it also relates only to multi-national undertakings, meaning those with establishments, on a substantial scale, situated in more than one Member State, and groups of undertakings which are situated in several national territories. (4) Furthermore, the directive makes provision only for the establishment of the works councils and not for their operation, although the nineteenth recital and points 2 and 3 of the subsidiary requirements, annexed to the directive, give a generalised statement of the rights of the works council, consisting of a right to information and a degree of participation in decisions on internal organisation and the strategies of the undertaking.

Now, if we turn to the text of the directive, we realise immediately that the legal relationships which it governs are those between the `central management' which, under Article 2(1)(e), comprises the administrative organs of the Community-scale undertaking or group of undertakings and the `special delegations' of employees at the various establishments of that undertaking or group. As I stated earlier, the directive is therefore in no way concerned with relations between the management and employees' representatives of any single establishment.

12 In this case, the problem is to establish whether, although the directive does not regulate relations between management and employees' representatives, it does nonetheless give the employees the right to information and documents where the employees' representatives are taking action for the purpose of establishing a European Works Council.

In the main proceedings, and in its observations submitted during the present case, the works council maintains that, without the information requested, the employees are unable to activate the procedure to set up the European Works Council.

I feel that this claim can be accepted only in part, for the reasons that follow.

13 Article 5(1) of the directive provides that the central management of the Community-scale undertaking or group is the party to initiate negotiations `for the establishment of a European Works Council' either `on its own initiative or at the written request of at least 100 employees or their representatives in at least two undertakings or establishments in at least two different Member States'. The action whereby the procedure commences is therefore not the same as that which gave rise to the main proceedings, which is a part of internal relations at the bofrost* establishment at Straelen. Furthermore, once the conditions for setting up a European Works Council exist, only two parties act to establish it: on the one hand, the central management of the Community-scale undertaking or group which, under Article 4(1) of the directive, is `responsible for creating the conditions and means necessary for the setting up' of the council, and, on the other, the `special negotiating body' with a minimum of three and a maximum of 17 members who are employees of the establishments situated in the various Member States in which the undertaking has its establishments or the group has its undertakings (Article 5(2)(b) and (c)). (5)

14 In spite of the restricted scope of the directive, and in spite of the limited number of persons concerned in the relevant procedure, I consider that any interpretation of the directive which failed to grant the representatives of the employees, in all undertakings situated within Community territory, the right to gather information for the purpose of activating the procedure to establish a European Works Council would prejudice the effectiveness of the directive and also be contrary to its very purpose. Where no spontaneous action has been taken by the management, and prior to the formal request by a group of employees from the individual establishments or all the undertakings situated in a number of Member States, no action for that purpose by the employees of one establishment can be regarded as not required for the implementation of the directive, for that would lead to a general ban on gathering information and would nullify the right which the directive gives to employees to establish a European Works Council. In other words, to withhold such a right from employees would be equivalent to prohibiting access to any information, although such a prohibition is clearly contrary to the intention of the directive which we are discussing, for that would negate the assumptions which underlie this new instrument of European social policy - these assumptions being the right of employees to have access to information for the purpose of establishing the means whereby they are able to participate in the life of the undertaking.

15 This interpretation is confirmed in Article 11 of the directive, that is, in the very provision for which the national court seeks an interpretation. Article 11(2) requires Member States to ensure `that the information on the number of employees referred to in Article 2(1)(a) and (c) is made available by undertakings at the request of the parties concerned by the application of [the Directive]'. In the light of the wording of the provision, which gives a general indication of those to whom the requirement applies, and the purpose of the directive, to which I have already referred, there is no doubt that `parties concerned by the application' must be taken to include, on the one hand, the management organs of all undertakings and, hence, not only central managements as referred to in Article 2(e) of the directive and, on the other hand, the employees' representative organs and, hence, not only the special delegations as referred to in Article 2(h). Consequently, the undertaking also has a general obligation to inform during the preparatory phase preceding the procedure specified in Article 4 et seq. of the directive.

This conclusion is further confirmed by Article 11(1) which, in general terms, sets out the duty to observe `the obligations laid down by [the directive]' incumbent upon all managements of Community-scale undertakings and all managements of undertakings belonging to Community-scale groups, and also upon all employees' representatives and employees of such establishments or undertakings. The range of persons covered by the directive cannot be restricted therefore only to the principal parties in the procedure to establish the council.

16 I therefore consider, as regards the first question referred, that the directive, and Article 11(2) in particular, recognises that employees' representatives have the right to information and places an obligation of cooperation on all undertakings. This obligation cannot be restricted only to Community-scale undertakings or groups, within the meaning of Article 2(1)(a), (b) and (c). It follows that, in a case such as this, where the undertaking to whom the request for information is made meets the requirements because one is able to presume that it is dominant within the group, that undertaking in particular is required to communicate to the internal representative organs of the employees the information needed to enable the European Works Council to be established. (6)

17 But what is the information that can be accessed by employees' representatives who, although recognised at the national level, are not included in the parties acting in the procedure to establish the European Works Council? In other words, where information or documents are confidential, is the undertaking still required to make them accessible to the employees even at this stage, prior to the formal initiation of the establishment procedure? Essentially, that is the point raised by the court in the second and third questions.

18 Clearly, if the information requested is public or in any way accessible to the union representatives, there can be no doubt about the undertaking's obligations to provide it to the employees' representatives. The point therefore concerns information which to some extent is recognised as confidential.

Since the initial contacts between the management and the employees of an undertaking - just like those in the main proceedings - are not part of the procedure governed by the directive, I consider that at this stage the undertaking is only required to communicate information which is not regarded as confidential for the purposes of national law, meaning either public information or information which, under the relevant national law, cannot be claimed as secret.(7) Indeed, Article 11(2) provides that only `the information on the number of employees referred to in Article 2(1)(a) and (c) is made available by undertakings' to any person concerned, meaning particulars of the number of employees - these being regarded as public - for the purpose of judging whether the undertaking or the group is of Community scale. As regards groups, it is not clear how far the reference to the total number of employees in all undertakings of the group necessarily entitles those workers to access information on the links among the various undertakings - and in this case the request for information made by the bofrost* works council is focussed precisely on these details. The general scheme of the directive makes it possible, even in the case of the information which may be regarded as confidential, to identify those particulars of a general nature which the management must communicate to the organisers.

19 As regards the preparatory stage of the establishment procedure, however, this obligation covers only the information strictly necessary for the establishment of the European Works Council, in other words, only information on whether the undertaking or, as in this case, the group to which it belongs meets the requirements for it to be considered to be of Community scale. Under Article 2(1)(a), (b) and (c), these requirements are - for undertakings - a large number of employees and establishments situated in more than one national territory and - for groups - the existence of a link between undertakings, the various undertakings of the group to be situated in more than one territory, a large number of employees and, under Article 3 of the directive, identification of the controlling undertaking.

The number of employees and the location of registered offices are normally details that are published or at least accessible. The only details on which there might be doubt concerning confidentiality relate to the links between undertakings - specifically the details regarding the type of control or relationship between undertakings, and the `position of control' held by any one of them over the others in the group; such information might be regarded in national law as confidential.

Going back to the observations made earlier regarding the purpose of the directive, I consider that it, and particularly Article 11(2), has to be taken to mean that in all cases the management of an undertaking must - even in this preliminary contact between management and employees' representatives - offer its collaboration to ensure full implementation of the directive. For that purpose it must therefore transmit all the appropriate details required in order to activate the procedure to establish the European Works Council. However, to safeguard the confidentiality of the particulars on the company's business, where such treatment is allowed by national law, the management is nonetheless required, as stated earlier, to give the employees general details on the link among the undertakings of the group and on any `controlling' position occupied by one undertaking within that group; this means that the undertaking must provide such information as is sufficient to make it possible to open the procedure to establish the works council, but is not required to provide further and more precise details on the individual links among the entities of the group. In other words, if the management merely indicates that there is a link with a number of undertakings, within the meaning of and for the purposes of Article 2(1) of the directive, and identifies the controlling undertaking, such information is sufficient for the employees of the various undertakings concerned to act in concert for the purpose of establishing a works council.

20 It might however be suspected that the information provided by the management is inaccurate or that it is so general as to constitute unlawful concealment. It might be that, as in the present case, the parties hold different opinions at to whether the conditions for establishing the council have been met. If so, it is for the competent national authorities to ensure that the undertaking complies with its obligations and does not hinder proper application of the directive. Indeed, Article 11(3) requires the Member States to provide for `appropriate measures' of an administrative or judicial nature in the event of failure to comply with the Community legislation.

21 In this case therefore, even where information is confidential, the national court must have the means of finding whether the requirements for establishing a European Works Council have been met, such as in fact the German bofrost* company's controlling position within its group, even when those making the request, that is the employees' representatives, have not gathered sufficient information. The court must then establish whether such information is confidential and, if so, ensure appropriate treatment.

22 I therefore consider, on the second question referred, that the directive, and in particular Article 11(1) and (2), is to be interpreted to mean that a national works council has the right to receive information on the position of the undertaking concerned within the Community-scale group and the management of that undertaking must collaborate fairly with the employees' representatives. Failure to transmit specific details on its position within the group may be justified only where the relevant national law recognises the confidential nature of such details, and that of course within the limits of what has been stated earlier.

23 These considerations apply more particularly to the production of documents, regarding which the referring court puts its third question. Thus, although at the preliminary contact stage, as in the present case, the employees do have the right of access to documents not regarded as confidential, they have no right to request production of secret documents. But non-disclosure of specific details contained in those documents must be offset by fair collaboration afforded by the management of the undertaking, subject to the limits stated above.

Where the management is unlawfully obstructive, interested parties may always apply to the courts to secure compliance with and, hence, proper application of the directive. The national court must be satisfied that those documents are confidential and must ensure they are treated properly.

Conclusion

24 In the light of the foregoing, I propose that the Court should reply as follows to the questions referred for a preliminary ruling by the Landesarbeitsgericht Düsseldorf:

(1) Article 11(1) and (2) 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 is to be interpreted as meaning that the obligation to give the employees' representatives the information needed to activate the procedure to establish a European Works Council applies not only to those undertakings which are found to hold a controlling position within a Community-scale group, under Article 2(1)(b) of the directive, but on all undertakings situated within Community territory.

(2) The right to information on the undertaking given by the directive to employees' representatives applies also to general information concerning satisfaction of the requirements for an undertaking within a group to be regarded as `controlling' within the meaning of Article 3(2) of the Directive. However, it does not apply to more detailed information held to be confidential by the law of the State in which the undertaking has its seat.

(3) The management of the undertaking is also required to transmit to the employees' representatives the documents needed to activate the procedure to establish a European Works Council, unless those documents are held to be confidential under the relevant national law.

(1) - OJ 1994 L 254, p. 64.

(2) - We find in the order of reference that the Shareholders' Advisory Council, established by the majority shareholders of the bofrost* undertakings, attends meetings of the bofrost* Europe Steering Committee in an advisory capacity. In accordance with their advisory and supervisory obligations to the individual bofrost* undertakings, the members of the Shareholders' Advisory Council state, at meetings of the bofrost* Europe Steering Committee, their opinions on the benefit, profitability, expediency and lawfulness of the measures put forward for a decision. In the case of decisions on commercial transactions and measures which go beyond the normal conduct of business, the members of the Shareholders' Advisory Council exercise the shareholders' right to grant or withhold approval by analogy with Paragraph 164 of the Commercial Code (HGB). On the other hand, the function of the bofrost* Europe Steering Committee, is to lay down the fundamental principles for the commercial activity of the bofrost* undertakings with a view to ensuring the most uniform and effective market penetration possible of the Bofrost mark in Europe having regard to the specific characteristics of each country. The bofrost* Europe Steering Committee is composed of the members of the national management bodies to be determined, in each case, by the bofrost* undertakings in accordance with the relevant national rules. Each contracting party (i.e. each country in which bofrost* undertakings operate) is allocated one vote. Where a party is represented by two or more persons, such persons may exercise their voting right only in concert. Decisions are adopted by unanimity; where unanimity cannot be achieved, the decision is postponed until a subsequent meeting.

(3) - The first proposal for a directive on the European company statute was submitted during the 1970s. The Economic and Social Committee's opinion on this only arrived eight years after the proposal was submitted, and it was adverse. The proposals for the Fifth Directive on Harmonisation of Company Law, which also related to the company statute, therefore date from the 1980s. Directive 94/45 was not adopted until after signature of the agreement on social policy annexed to the Treaty of Maastricht. Even here, the proposal dates from 1991 and the legislative processes took a full three years.

(4) - See Article 2(1)(a), (b) and (c).

(5) - But, as regards the method of election or appointment of the individual members of the special delegation, the directive refers to the national provisions.

(6) - To interpret Paragraph 2(1) of the German Law transposing the directive to mean that the Community legislation applies and thus establishes obligations not in respect of all undertakings having their registered offices within national territory but only in respect of undertakings situated within Germany and of a European scale or with control of Community-scale groups would unreasonably limit application of the directive and would raise serious doubts as to its compatibility with the Community legislation.

(7) - The undertaking's duty to communicate confidential information at subsequent stages of the negotiations is not expressly stated by the directive, but it seems possible to deduce it from Article 8, which places a duty of confidentiality on the members of the special delegation (paragraph 1) and provides that this duty may not apply only where the information is of a `nature ... such that ... it would seriously harm the functioning of the undertakings concerned or would be prejudicial to them' (Article 8(2)).