Proposal for a COUNCIL DIRECTIVE amending Directive 75/129/EEC on the approximation of the laws of the Member States relating to collective redundancies
Date: 1991-11-13
Institutions: European Commission
Subjects: approximation of laws, cessation of trading, collective dismissal, job cuts, worker consultation, worker information

COMMISSION OF THE EUROPEAN 

C0MCS1) 292 final 

Brussels, 13 November  1991 

Proposal  for a 

COUNCIL  DIRECTIVE 

amending  Directive  75/129/EEC on the approximation of the laws of the 

Member  States  relating  to collective  redundancies 

(presented  by the Commission) 

- 2 -

E X P L A N A T O RY 

M E M O R A N D UM 

1.  In the context  of  the establishment of  the Single  European Market, 
the European Councils of Hanover, Rhodes and Madrid considered that the 
same  importance should be attached to social as to economic aspects and 
that  they should therefore both be developed  in a balanced manner. The 
European  Parliament  (in  numerous  own-initiative  resolutions)  and  the 
Economic and Social Committee (in its opinion of 22 February 1989) have 
taken a similar view. 

2.  In developing this approach, point 7 of the Community Charter of the 
Fundamental Social Rights of Workers stated, in paragraph 7, that : 

'The completion of  the  internal market must  lead to an  improvement 
in  the  living  and  working  conditions  of  workers  in  the  European 
Community... 

The  improvement  must  cover, where  necessary,  the  development  of 
certain  aspects  of  employment  regulations  such  as  procedures  for 
collective redundancies...' 

3. Points  17 and  18 of  the Charter  are also  relevant  to the  issue of 
collective redundancies. These state that : 

'Information,  consultation  and  participation  for  workers  must  be 
developed  along appropriate  lines, taking account of  the practices 
in force  in the various Member States. 

This  shall  apply  especially  in companies  or  groups  of  companies 
having establishments  in two or more Member  States of  the European 
Community. 

Such 
information,  consultation  and  participation  must  be 
implemented  in  due  time, particularly...  in  cases  of  collective 
redundancy procedures...' 

4,  On  this  basis,  the  Commission's  Action  Programme  relating  to  the 
implementation  of  the  Charter  proposed  the  revision  of  Council 
Directive  75/129/EEC of  17 February  1975 on  the approximation of  the 
laws  of  the  Member  States  relating  to  collective  redundancies.  The 
Action Programme stated that : 

'Several  years'  application  of  this  directive,  socio-economic 
changes  and  the  establishment  of  a  single  European  market 
necessitate a revision of this directive.' 

-  3 

In  particular,  the  Action  Programme  identified  the  need  to  give  the 
existing  directive  a transnational  dimension  : 

'The directive on  collective  redundancies  should  be completed  so as 
to  cover  cases  where  the  redundancy  decision  is  taken  by  a 
decision-making  centre  or  an  undertaking  located  in another  Member 
State. 

There  will  most  certainly  be  cases  of  transfrontier 
restructuring  which,  Justified  though  they  may  be, will  have  to be 
accompanied  by appropriate  information  and  consultation. A  response 
at  Community  level  appears  the most  appropriate approach  especially 
since  the  directive  should  apply  in  cases  where  the  decision 
concerning  collective  redundancies  is  taken  by  a  decision-making 
centre or  an undertaking  located  in another  Member  State. 

This  legal  loophole should  be eliminated.' 

The  impact  of  the  internal  market 

5.  The  internal  market  is, according  to  Article  8a  of  the  EEC  Treaty, 
'an  area  without  internal  frontiers  in  which  the  free  movement  of 
goods,  persons, services  and  capital  is ensured  in accordance  with  the 
provisions  of  the  Treaty'.  The  dismantling  of  internal  frontiers  is 
already  resulting  in  major  corporate  reorganisations  within  the 
Community,  involving  a  significant  increase  in  mergers,  takeovers, 
transfers  and  Joint  ventures,  and  leading  to  the  growing  concentration 
of  company  ownership.  The  total  number  of  acquisitions  (majority 
holdings  or  mergers)  effected  by  the  top  1000  European  industrial 
enterprises  is  constantly  growing.  A  recent  Commission  report^1) 
shows  that,  over  the  1980s,  the  number  of  such  operations  has  doubled 
every  three years, rising  from  208  in 1984-85  to 492  in 1988-89. 

6.  Moreover,  merger  operations  within  the  Community  are  increasingly 
transnational  in character.  The same Commission  report  notes  that  : 

"National-type operations  (between  two enterprises belonging  to the 
same Member  State)  largely  dominated  between  1983 and  1987.  Almost 
two  thirds  of  the  number  of  acquisitions  recorded  involved  this 
type of  operation.  Since  1987, more  rapid  growth  has been  noted  in 
the  number  of  acquisitions 
involving  Community  enterprises 
belonging  to  two  different  Member  States.  In  1988-1989,  such 
operations  represented  4 0%  of  the  tota  number  of  acquisitions 
effected.  International-level  operations  involving  two  enterprises 
-  the  one  Community,  the  other  non-Coffwnunity  -  accounted  for 
approximately  15  %  of  the  total  number  of  operations  recorded. 
This  figure  is more or  less stable  for  the period  under  review." 

(1)  'The  impact  of  the  internal  market  by  industrial  sector  :  the 
challenge  for  the  Member  States',  Special  edition  of  European 
Economy  / Social  Europe, 1990. 

- 4 -

7. The detailed figures are given  in the following table : 

Mergers and acquisitions by nationality of the firms involved 

Year 

National 

1983-84 

1984-85 

1985-86 

1986-87 

1987-88 

1988-89 

101 
(65.2) 

146 
(70.2) 

145 
(63.7) 

211 
(69.6) 

214 
(55.9) 

233 
(47.4) 

EC 

29 

(18.7) 

44 

(21.2) 

52 

(23.0) 

75 

(24.8) 

111 
(29.0) 

197 
(40.0) 

International 

25 
(16.1) 

18 
(8.7) 

30 
(13.3) 

17 
(5.6) 

58 
(17.8) 

62 
(12.6) 

NB : Figures in brackets show the percentage of the total 

number of operations surveyed. 

Source  : European Commission 

8.  In  the  context  of  this  accelerating  corporate  restructuring,  an 
increasing  number  of  employees  will  be  affected  by  key  corporate 
decisions taken at a level higher than their  immediate employer, ie. by 
the undertaking's head office  if  located  in a different country, or at 
group  level  by  controlling  undertakings  situated  either  within  or, 
increasingly,  outside  the  country  where  their  own  establishment  or 
undertaking  is  located.  Despite  the  growing  complexity  in  company 
organisation,  ownership  and  control,  the  existing  procedures  for 
informing  and  consulting  employees  and  employee  representatives  are 
still  confined  to  enterprise  level  (though  there  is  legislation 
concerning  national  group-level  works councils or equivalent  bodies in 
a  few Member  States). This means that, although  employees may  be part 
of an undertaking whose headquarters are  located  in a different country 
or  which  belongs  to  a  group  of  undertakings  whose  controlling 
undertaking  is  located  abroad,  the  scope  and  effectiveness  of  their 
information  and  consultation  rights  could  be  endangered  if  the 
decision-making  centre  chooses  not  to  provide  the  employer  with  the 
required  information. 

-  5 -

9.  The  1975  directive  requires  employers  who  are  contemplâting 
redundancies  to  inform  and  consult  workers' representatives ¥*»th a view 
to  reaching  an  agreement  and  to notify  the  competent  public  authority. 
However,  it  does  not  make  specific  provision  for  situations  in  whsch 
redundancies  among  an employing  undertaking's employees  are  proposed  by 
its  controlling  undertaking  whether  the  controlling  undertaking  is 
situated  in  the  same  Member  State  as  the  controlled  undertaking  (the 
employer)  or  in  a  different  State.  However,  it  cannot  be  assumed  that 
'all  relevant  information'  (Article  2(3))  held  by  a  controlling 
undertaking  concerning  the  proposed  redundancies  will  always  be 
provided  to  the  employing  undertaking  for  the  purposes  of  consulting 
worker  representatives. 

10.  Similarly,  where  the  central 
establishment  undertaking  proposes  to make  workers  redundant  in one  of 
its  establishments,  the  existing  directive  does  not  make  specific 
provision  for  the  disclosure  to  local  management  of  all  relevant 
information  held  by  the  central  administration  where  it  is  situated 
outside  the  Member  State  in  which  the  establishment  concerned  is 
situated. 

administration  of  a  multi-

The  application  of  the existing  directive 

11.  In  reviewing  the  implementation  of  the  existing  directive  by 
Member  States  it will  be  noted  that  certain  Member  States'  provisions 
concerning  collective  redundancies  may  not  be  fully  consistent  with 
particular  aspects  of  the  directive,  and  related 
infringement 
proceedings  have  been  initiated  or  are  under  consideration  within  the 
Comm18S i on. 

Proposed  changes  to the directive 

12.  Having  examined  the  scope,  application  and  effectiveness  of  the 
1975  directive  in current  circumstances,  the  Commission  is proposing  a 
series of  amendments. 

( i )  Ensuring  the  enforcement  of  the  Directive  where  the  decision 
leading  to  collective  redundancies  Is  being  taken  by  an  undertaking 
other  than  the employer 

13.  The  directive  applies  to  all  proposed  collective  redundancies 
affecting  workers  within  the  territorial  scope  of  the  Treaty,  even 
where  the  employer  concerned  is a controlled  undertaking  or  is part  of 
a  multi-establishment  undertaking,  the  central  administration  of  which 
is  situated  in  another  State,  and  the  redundancies  to  be  implemented 
are  proposed  by  the  controlling  undertaking  or,  as  the  case  may  be, by 
the central  administration of  the multi-establishment  undertaking. 

-  6 

14 
The  main  changes  proposed  are  to  fulfil  the  aim  of  ensuring  tha 
enforcement  of  the  existing  directive  in  cases  of  transnational 
undertakings  and  associated  undertakings.  Thus,  it  is  provided  the 
the  Information  and  consultation  requirements  laid  down  by  the 
directive  apply  irrespective  of  whether  the  decisions  entailing 
collective  redundancies  are  taken  by  the  employer  himself,  by 
controlling  undertaking  or  by  the  central  administration  of  a  multi 
this  central 
es tab M shment  undertaking.  In  order 
obligation  it  is also  established  that  an  employer's  failure  to  comply 
with  the  directive's  requirements  can  not  be  condoned  on  the  ground 
that  the  undertaking  taking  the  decision  leading  to  collective 
redundancies  failed  to  inform  the employer  in due  time. 

to  reinforce 

of 

the 

information, 

Furthermore,  collective  redundancies  effected  without 

the 
15. 
notification 
fulfilment 
requirements  laid  down  by  the  Directive  may  be  rendered  null  and  vo<cf 
by  the  competent  courts  at  the  request  of  the  workers'  representatives 
or  workers  concerned.  This  particular  provision  will  ensure  that  tha 
information,  consultation  and  notification  requirements  are  met 
whatever  the  identity  of  the  undertaking  which  takes  the  relevant 
decisions  leading  to  the collective  redundancies. 

consultation 

and 

16.  It  should  be  emphasized  that  the  revised  text  does  not  directly 
impose  any  obligation  on  controlling  undertakings  as  such.  Problems  of 
extraterritoriality  are  therefore  avoided.  It  should  also  be  noted 
that  the  Commission  is  not  proposing  a  mechanism  (as  envisaged  under 
the  original  draft  of  the  'Vredeling'  directive)  whereby  employees 
would  have  the  right  to  seek  consultation  with  the  undertaking's 
central  administration  or  with  the  management  of  a  controlling 
undertaking  (the  so-called  'by-pass'  system). 

(ii) Crews of  sea-floing  vessels 

17.  The  information,  consultation  and  notification  requirements  Said 
down  by  this  Directive  are  in  no  way  incompatible  with  the  special 
nature of  the  contract  of  employment  or  employment  relationships of  the 
crews  of  sea-going  vessels.  Their  exclusion  from  the  protection 
provided  by  the  Directive  is  not  Justifiable,  unless  they  are  covered 
by other  forms of  guarantee  offering  them  protection  equivalent  to  that 
resulting  from  the  Directive.  It  cannot  be  argued  that  the  temporary 
nature  of  the  employment  of  some  seafarers  is  incompatible  with  the 
Directive's  provisions  because  Article  1(2)(a)  excludes  from  this 
Directive 
contracts  of 
employment  concluded  for  limited  periods of  time or  for  specific  tasks, 
except  where  such  redundancies  take  place  prior  to  the  date  of  expiry 
that  the 
or  the  completion  of  such  contracts".  The  argument 
notification  to  the  public  authorities  and  the  compliance  with  the 
period  of  30 days  before  the  planned  collective  redundancies  can  take 
effect  is  incompatible  with  the  necessary  flexibility  and  the  sector's 
need  to  implement  urgent  decisions  should  be  rejected.  Article  4(1) 
second  subparagraph  establishes  that  "Member  States  may  grant  the 

"collective  redundancies  effected  under 

-  7  -

sector.  It 

competent  public  authority  the  power  to  reduce  the  period  provided  for 
in  the  preceding  subparagraph".  The  fact  that  the  directive  does  not 
apply  to  establishments  normally  employing  less  that  20 workers  and 
that  the  consultation  procedure  is  not  imposed  upon  establishments 
employing  less  than  50 workers  provides  the  appropriate  flexibility  as 
regards  the  great  number  of  undertakings  which  operate  mainly  in  the 
fishing 
Directive 
80/987/EEC (2>  relating  to  the  protection  of  employees  in  the  event 
of  the  insolvency  of  their  employer  applies  to  the  crews  of  sea-going 
vessels  unless  they  benefit  from  "the  existence  of  other  forms  of 
guarantee  offering  the  employee  protection  equivalent 
to  that 
resulting  from  this  Directive"  (Article  1(2)).  Only  members  of  crews 
of  a  fishing  vessel,  if and  to  the extent  that  they  are  remunerated  by 
a  share  in the  profits  have  been  expressly  excluded  by  Greece,  Ireland 
and  the  United  Kingdom  on  the  ground  of  the  special  nature  of  the 
employment  relationship  referred  to  in Article  1(2) of  that  Directive. 

Council 

should 

noted 

that 

be 

(iii)  Judicial  decisions 

18.  The  general  exclusion  of  the  current  directive  in  cases  where  an 
establishment's  activities  are  terminated  as  a  result  of  a  Judicial 
decision  no  longer  appears  to  be  appropriate.  There  seems  no  reason 
why  employees'  information  and  consultation  rights  (as  opposed  to  the 
delays  imposed  on  the  implementation  of  redundancies  under  Article  4 
of  the  existing  directive)  should  not  apply 
in  such  cases. 
Legislation  implementing  the  directive  is already  generally  applicable 
to  redundancies  brought  about  by  Judicial  decision  in  six  Member 
States  (France,  Federal  Republic  of  Germany,  United  Kingdom,  Spain, 
Netherlands,  Portugal). 

(iv)  Information  and  consultation  requirements 

19.  A  number  of  clarifications  and  refinements  are  proposed  in  respect 
of  the  timing  and  objectives  of  consultations  about  projected 
redundancies  and  the  nature  of  the  information  to  be  supplied  to 
workers'  representatives  (and  therefore  to  the  public  authorities), 
reflecting  among  other  things  the  corresponding  provisions  of  the 
transfers  of  undertakings  directive,  ILO  Convention  158  and  Article  2 
of  the  Additional  Protocol  to  the  European  Social  Charter  of  the 
CounciI  of  Europe. 

( v ) 
consultation  purposes 

Designation 

of 

workers' 

representatives 

for 

redundancy 

20.  Council  Directive  75/129/EEC  imposes  on  Member  States  an 
obligation  to provide  for  workers'  representatives  for  the  purposes  of 
the  information  and  consultation  obligations  referred  to  therein,  but 
leaves  the  definition  of  workers'  representatives  to  "national  law  and 
practice".  That  was  why  the  Commission 
infringement 
proceedings  against  a  Member  State  under  that  Directive.  In  order  to 
alleviate  the  legal  constraints  imposed  upon  small  undertakings  and  to 
provide  for  adequate  flexibility,  in  accordance  with  the  revised  text 

initiated 

(2) OJ  No L  283,  28.10.1980, p. 23. 

-  8 -

Member  States  may  not  provide  for  workers'  representatives  in 
establishments  normally  employing  less  than  50  workers.  Moreover, 
where  collective  redundancies  are  envisaged  in  such  establishments  the 
employer  shall  supply  in  good  time  to  the  workers  concerned  the 
information  referred  to  in  Article  2(3)  of  the  Directive  but  no 
obligation  to  consult  is  imposed  in  such  cases.  This  rule  mirrors  a 
similar  provision  contained  in  Article  6(4)  and  (5)  of  Council 
Directive  of  14  February  1977 on  the  safeguarding  of  employee's  rights 
in  the  event  of  transfers  of  undertakings,  businesses  or  parts  of 
businesses*3^.  Table  I  provides  overview  of  the  systems  of  worker 
representation  in the  12 Member  States. 

(vi) Failure  to  comply 

21.  Although  the  directive  is  subject  to  the  general  principles  of 
Community  law  including  those  of  effectiveness  and  non-discrimination, 
the  Commission  is  proposing  a  new  article  introducing  an  explicit 
provision  aimed  at  ensuring  the enforceability  of  the  Directive. 

The  proposed  new  article  has  a  twofold  objective:  to  provide  for  the 
availability  of  Judicial  procedures  at  the  request  of  the  workers' 
representatives and  workers  concerned  in the event  of  failure  to  comply 
with  the  directive's  requirements  (notwithstanding  the  eventual 
recourse  to  other  procedures  such  as  mediation,  arbitration  or 
conciliation)  and  to  require  that  specific  Judicial  procedures  should 
be  available  to  render  null  and  void  those  collective  redundancies 
effected  in contradiction with  the  Directive. 

Collective  redundancies 
implemented  without  compliance  with  the 
obligations  on  information,  consultation  and  notification  may  be 
rendered  null  and  void  under  the  existing  laws  of  eight  Member  States 
(Portugal,  Federal  Republic  of  Germany,  Italy,  Greece,  Luxembourg,  the 
Netherlands, France  and  Spain). 

(vii)  Implementation  by  collective  agreement 

22.  Finally,  it  is proposed  to  introduce  an explicit  provision  allowing 
for  the  implementation  of  the  directive  by  collective  agreements,  in 
line  with  other  recent  proposals  for  directives  in  the  labour  law 
sphere. 

(3) 0J  No L 61, 5.3.1977,  p. 26. 

-  9  -

Relationship  with  other  Community  instruments 

their 

representatives  of 

respective  employees 

23.  The  Commission  is  aware  that  in  a  number  of  important  respects, 
the  reasons  for  revising  the  collective  redundancies  directive  apply 
equally  to  the  existing  transfers  of  undertakings  directive.  This 
requires  the  transferor  and  transferee  employers  to  inform  and  consult 
the 
the 
implications  of  the  transfer,  and  provides  for  the  safeguarding  of 
employees'  acquired  rights  by  means  of  the  automatic  transfer  of  the 
employment  relationship  from  the old  employer  to  the new employer.  The 
two  directives  thus  reflect  similar  objectives  (i.e.  the  need  to 
guarantee  employees  an  appropriate  degree  of  Job  security  and 
information  and  consultation  where  their  employing  undertaking  is 
involved  in  restructuring)  and  have  broadly  parallel  provisions, 
although 
the  collective 
redundancies  directive  in  that  it  obliges  Member  States  to  confer 
substantive  rights  on  workers.  To  ensure  a  consistent  approach, 
therefore,  the  Commission  is also  considering  whether  changes  proposed 
to  the collective  redundancies  directive  should  also  be proposed,  where 
appropriate,  in respect  of  the  transfers of  undertakings  directive. 

the  transfers  directive  differs 

about 

from 

24.  As  regards  the  relationship  between  the  proposed  changes  to  the 
collective  redundancies  directive  and  the  provisions  of  the  proposed 
directive  on  European  Works  Councils,  the  following  points  are 
relevant.  While  the  collective  redundancies  directive  applies  to  all 
undertakings  employing  more  than  20  workers,  the  proposed  European 
Works  Council  directive  is  confined  to  'Community-scale'  undertakings 
or  groups,  i.e.  those with  at  least  1000 employees  within  the  Community 
and  with  at  least  100 employees  in each  of  at  least  two Member  States. 
Moreover,  under  minimum  requirements  set  out  in  the  directive,  the 
competence  of  European  Works  Councils  is  restricted  to  transnational 
issues,  i.e.  those  affecting  the Community-scale  undertakings  or  groups 
as  a  whole  or  those  affecting  two  or  more  establishments  or  group 
undertakings  situated  in different  Member  States. 

25. Only  where  proposed  redundancy  programmes  affected  an  undertaking's 
or  group's  operations  in  more  than  one  Member  State  Therefore,  would 
they  be subject  to  the consultation  procedure  envisaged  by  the  European 
Works  Councils directive.  Moreover, where  this  is the  case,  the  scope, 
content  and objectives of  the  information  and  consultation  requirements 
envisaged  by  the  two  measures  differ  considerably.  At  European  Works 
Council  level,  consultation  would  take  place  on  the  transnational 
aspects  of  such  a  redundancy  programme,  in  addition,  the  proposed 
European  Works  Council  Directive  includes  in  Article  11  the  provision 
that  'Nothing  in  this  directive  shall  affect  the  operation  of  the  laws 
or  practice  of  the  Member  States  in  respect  of  the  provision  of 
information  to  and  the  consultation  of  employees  at  group  level, 
undertaking  level  and  establishment  level'.  In  particular,  it  is 
specifically  stated  that  'This  directive  shall  be  without  prejudice  to 
measures  taken  pursuant  to directive 75/129/EEC...'  (ie. the  collective 
redundancies  directive). 

-  10 -

26.  Under  the  collective  redundancies  directive,  the  information  and 
consultation  requirements  are  imposed  upon  the  employer,  relate  to 
nationally-defined  employee  representatives, are much more  detailed  and 
specific,  and  should  be  undertaken  'with  a  view  to  reaching  an 
agreement'.  The  collective  redundancies  directive,  moreover,  contains 
provisions  relating  to  the  notification  of  competent  national  public 
authorities  and  the  timing  of  notified  redundancies  which  do  not  of 
course  feature  in  the  European  Works  Council  directive.  The  two 
measures  therefore  fulfil  different  functions  and  are  substantially 
different 
in  terms  of  their  scope,  thresholds,  representative 
institutions,  level  of  applicability  and procedures. 

legal  basis 

27.  Article  100  of  the  EEC  Treaty  provided  the  legal  basis  for  the 
existing  collective  redundancies  directive,  and  the  same  legal  basis 
will  also  apply  to  the  proposed  revision. Article  100A which  derogates 
from  Article  100,  in  so  far  as  it  concerns  the  harmonization  of 
legislation  with  the  view of  the  attainment  of  the objectives  referred 
to  in Article  8(a), does  not  apply  here,  for  it  can  not  be  sustained 
that  the proposal  is  intended  to remove  the obstacles  to the  completion 
of  the  Internal  Market. 

- 11 -

TABLE I 

SITUATION  IN THE  MEMBER  STATES  CONCERNING  WORKERS'  REPRESENTATION  IN 
UNDERTAKINGS EMPLOYING MORE THAN 50 WORKERS WHICH MUST BE RECOGNISED BY 
THE EMPLOYER  FOR  INFORMATION AND CONSULTATION PURPOSES. 

LEGISLATION 

BELGIUM 
YES 
NETHERLANDS YES 
YES 
SPAIN 
YES 
FRANCE 
YES 
GREECE 
* 
IRELAND 
- 
DENMARK 
ITALY 
YES 
LUXEMBOURG  YES 
YES 
PORTUGAL 
YES 
GERMANY 
* 
UK 

COLLECTIVE 
AGREEMENT 

-

YES 

Workers' representatives within the meaning of  Irish and UK  law are 
members of  independent trade unions voluntarily recognised by their 
employer. 

-  12 -

Proposal  for a 

COUNCIL  DIRECTIVE 

amending  Directive 75/129/EEC  on  the approximation of  the  laws of  the 

Member  States  relating  to collective  redundancies 

THE COUNCIL  OF THE  EUROPEAN  COMMUNITIES, 

Having  regard  to  the  Treaty  establishing  the  European  Economic 

Community,  and  in particular  Article  100  thereof, 

Having  regard  to the proposal  from  the  Commission*1), 

Having  regard  to  the opinion  of  the European  Parliament*2), 

Having  regard  to the opinion  of  the  Economic  and  Social  Committee*3), 

Whereas  the  Community  Charter  of  the  Fundamental  Social  Rights  of 

Workers  states  in  paragraph  7  that  "the  completion  of  the  internal 

market  must  lead  to an  improvement  in the  living  and working  conditions 

of  workers  in  the  European  Community  ...  The  improvement  must  cover, 

where  necessary,  the  development  of  certain  aspects  of  employment 

regulations  such  as procedures  for  collective  redundancies  ..." 

Whereas  paragraphs  17 and  18 also  state  that  "information,  consultation 

and  participation  for  workers  must  be  developed  along  appropriate 

lines,  taking  account  of  the  practices  in  force  in  the  various  Member 

States  ...  Such  information,  consultation  and  participation  must  be 

implemented  in  due  time,  particularly  ...  in  cases  of  collective 

redundancy  procedures  ..." 

(1) 

(2) 

(3) 

-  13 -

Whereas  Council  Directive  75/129/EEC*4)  promoted  the  harmonization  of 

the  relevant  national  laws by  requiring  employers  who  are  contemplating 

collective  redundancies  to  inform  and  consult  workers'  representatives 

with  a view  to reaching  an agreement  and  to notify  the competent  public 

authorities; 

Whereas,  as  the  establishment  of  the  Internal  Market  is resulting  in a 

growing  concentration  of  undertakings  across  national  frontiers,  the 

decisions  leading  to  collective  redundancies  may  be  taken  by  an 

undertaking  other  than  the  employer; 

Whereas  Directive  75/129/EEC  should  therefore  be  revised  so  as  to 

ensure  that  the  existing  information,  consultation  and  notification 

requirements  are  complied  with  irrespective  of  whether  the  decision 

leading  to  collective  redundancies  is  taken  by  the  employer,  by  the 

controlling  undertaking  or  by  the  central  administration  of  an 

undertaking  of which  the employer  is part; 

Whereas,  with  a  view  to  ensuring  that  this  Directive  has  the  desired 

effect,  account  should  not  be  taken  of  any  defence  on  the  ground  that 

the employer  was  not  provided  in time with  the  relevant  information  by 

the  controlling  undertaking  which  takes  the  decision  leading  to 

collective  redundancies; 

Whereas  the  information  and  consultation  rights of  workers  laid down  by 

Directive  75/129/EEC  should  also  apply  to  crews  of  sea-going  vessels 

unless  they  benefit  from  equivalent  protection,  and  to  collective 

redundancies  effected  where  an  establishment's  activities  are 

terminated  as a result  of  a  Judicial  decision; 

Whereas  a  number  of  clarifications  and  amendments  are  required  in 

respect  of  the  timing and objectives of  consultations and  the nature of 

the  information  to  be  supplied  to  workers'  representatives  and  to  the 

authorities,  reflecting, 

public 
corresponding 
provisions  of  Council  Directive  77/187/EEC*5*  and  ILO  Convention  158 

alia.  the 

inter 

and  Recommendation  166; 

(4) OJ  No L 48, 22.2.1975, p. 29. 

(5) OJ  No L 61, 5.3.1977, p. 26. 

- 14 -

Whereas  in order  to allow  for more  flexibility with  respect  to small 

undertakings,  Member  States  need  not  provide  for  workers' 

representatives in establishments employing  less than 50 workers; 

Whereas  it  is necessary  to provide  for  appropriate measures  to ensure 

the  enforcement  of  obligations  laid  down  by  this  Directive  and  in 

particular  for  Judicial  procedures  to render  null  and  void  collective 

redundancies  effected  without  compliance  with  the  abovementioned 

obligat Ions; 

Whereas Directive 75/129/EEC should be amended accordingly, 

HAS ADOPTED THIS DIRECTIVE: 

Article,  } 

Directive 75/129/EEC  is hereby amended as follows: 

1.  The fol lowing point  is added to Article 1(1): 

"(c) 

'employer'  means  any  natural  or  legal  person  who  has  an 

employment relationship with the worker." 

2.  The following  is inserted at the end of Article 1(2)(c): 

"inasmuch  as  the special  regime  covering  them  provides protection 

equivalent  to that resulting from this Directive". 

3.  Article  1(2)(d) is deleted and the following paragraph  is added to 

Article 1: 

"3. 

Member  States  need  not  apply  Article  4  to  collective 

redundancies  resulting  from  the  termination  of  an 

establishment's  activities  where  that  is the  result  of  a 

Judicial decision". 

-  15 -

4.  Section  II  is replaced  by  the  following: 

"SECTION  I S 

Information and  consultation 

Article  2 

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  minimizing  the  number  of 

workers  affected,  and mitigating  the consequences. 

3.  To  enable  the  workers'  representatives  to  make  constructive 

proposals  the employer  shall  supply  them  in good  time  with  all 

relevant  information and shall  in any event  give  in writing  the 

reasons  for  the  projected  redundancies,  the  number  of  workers 

normally  employed,  the  employer's  proposals  with  regard  to  the 

number  and  categories  of  workers  to  be  made  redundant,  the 

criteria  proposed  for  the  selection  of  the workers  to be  made 

redundant,  the  proposed  basis  of  any  redundancy  payments,  and 

the  period  over  which  the  projected  redundancies  are  to  be 

effected. 

The  employer  shall  forward  to  the  competent  public  authority  a 

copy of  all  the written  communications  referred  to  in the  first 

subparagraph. 

4.  The  obligations  laid  down  in  paragraphs  1,  2,  3  and  5  shall 

apply  irrespective of whether  the decision  regarding  collective 

redundancies  is  being  taken  by  the  employer  or  by  an 

undertaking  controlling  the  employer. 

-  16 -

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 

ground  that  the  necessary  information  has  not  been  provided  by 

the  undertaking  which  took  the  decision  leading  to  collective 

dIsm i ssaI s. 

5.  For  the  purposes  of  implementation  of  this  Directive  Member 

States need  not  provide  for workers' representatives  in respect 

of  establishments  normally  employing  less  than  50 workers.  In 

that  case,  Member  States  shall  ensure  that  employers  are 

obliged  to supply  in good  time  to  the workers  concerned  by  the 

projected  collective  redundancies  the  same  information  as  is 

required  to  be  given  to  workers'  representatives  under 

paragraph  3." 

5.  The  following phrase  is  inserted  at  the end of  Article  5: 

"or  to promote or  to allow  the application  of  col Iective agreements 

more  favourable  to workers." 

6.  The  fol lowing Article  is  inserted: 

"Article  Sa 

Member  States  shall  ensure  that  Judicial  procedures  exist  for  the 

enforcement  of  obligations  under  this  Directive  at  the  suit  of  the 

workers'  representatives  and  workers  and  in  particular  procedures 

rendering  null  and  void  the  collective  redundancies  concerned, 

notwithstanding  the availability  of  recourse  to other  procedures." 

- 17 -

Article 2 

1.  Member  States  shall  bring  into  force  the  laws,  regulations  and 

administrative provisions  necessary  to comply  with  this  Directive 

by  31  December  1992, or  shall  ensure  that  the  social  partners 

establish  the  necessary  provisions  through  agreement,  subject  to 

the obligation on Member States to take all  the necessary measures 

to guarantee compliance at all  times with  the requirements of this 

Directive. 

2.  When Member  States adopt the provisions referred to in paragraph 1, 

these  shall  contain  a  reference  to  this  Directive, or  shall  be 

accompanied  by  such  reference  at  the  time  of  their  official 

publication. The procedure  for such  reference shall  be adopted by 

Member States. 

3.  Member  States  shall  immediately  inform  the  Commission  of  the 

measures adopted to comply with this Directive. 

Article 3 

This Directive  is addressed to the Member States. 

Done at Brussels, 

For the Council 

The President 

- 18 -

IMPACT ASSESSMENT FORM 

IMPACT OF THE PROPOSAL ON UNDERTAKINGS 
WITH PARTICULAR REFERENCE TO SMALL AND MEDIUM SIZED ENTERPRISES (SMEs) 

Proposal  for  a Council Directive amending Directive 75/129/EEC on the 
approximation of  the  laws of  the Member  States relating  to collective 
redu,nclanç|ss 

The Proposal 

1• Taking  account  of  the  principle of  subsidiarity. Why  is Community 
legislation necessary  in this field and what are the main aims? 

The  proposal  takes  account  of  the  undertaking  process  of  corporate 
restructuring associated with the completion of the  internal market, in 
particular  the  transnationalisation of  company  organisation  ownership 
and  control.  In  this  context,  the  requirements  of  the  existing 
collective  redundancies  directive  require updating  in order  to ensure 
that  it  applies  to  cases  where  a  redundancy  decision  is  taken  by  a 
decision-making centre which  is not the direct employer of  the workers 
concerned,  in particular  where  the  decision-making  centre  is  located 
outside  the  Member  State  where  the  employer  is  located.  Given  the 
transnational  nature  of  this  matter,  and  the  fact  that  collective 
redundancy  procedures  are  already  regulated  by  EC  legislation,  a 
response  at Community  level  is the most appropriate approach. 

The central aim of the proposed revisions to the directive  is to ensure 
that  where  redundancy  decisions  are  taken  by  such  decision-making 
centres, all relevant  information is provided to the employer  to enable 
him  to  inform  and  consult  workers'  representatives  and  notify  the 
competent  public  authorities. Other  changes  (e.g  the  requirement  of 
the  information  and  consultation  requirements  and  provisions  on  the 
designation  of  workers  representatives  for  redundancy  consultation 
purposes)  are  proposed  in  the  light  of  the  experience  of  the 
application and operation of the existing 1975 directive over the years 
since  it came  into force. 

The  impact on undertakings 

2. Who will be affected by the proposal? 

The  revised  directive  -  like  the  existing  directive  -  applies  to 
employers  with  establishments  employing  more  than  20  employees  who 
propose  to make redundant a certain proportion of  the workers employed 
in such an establishment. The proposed revisions to the directive would 
ensure that the controlling undertakings and the central administration 
of  a  multi-establishment  undertaking  of  which  the  employer  is  part 
where  the central  administration  is situated outside  the Member  State 
where the employer  is located, provide the employer with the necessary 
information to enable him to  inform and consult the representatives of 
the workers. 

-  19 -

3 • What  will  undertakings  have  to do  to comply  w it h thQ_p.ro.eosa j? 

A  number  of  clarifications  and  refinements  are  proposed 
\:\  respect  of 
the  timing  and  objective  of  consultations  about  projected  redundancies 
ârsd  the  nature  of  the  information  to  be  supplied  to  workers 
representatives and  the public authorities.  In addition,  a new  proposed 
provision  is  that,  where  redundancies  are  proposed  not  by  the  direct 
employer  but  by  a  controlling  undertaking,  or  by  the  centrai 
administration  of  a  multi-establishmeni  undertaking  of  which  the 
employer  is  part,  account  shall  not  be  taken  of  any  defence  on  the 
ground  that  the  relevant  decision-making  centre  did  not  provide  the 
employer  in  time  the  required  information  to enable  him  to  comply  with 
the  directive's  provisions.  It  is  proposed  to  extend  the  information 
and  consultation  procedure  to  collective  redundancies  brought  about  by 
the closure  of  an establishment  resulting  from  Judicial  decision,  which 
were  excluded  from  the scope of  the directive so  far. 

4. What  economic  effects  is the proposai  likely  to  have? 

-  on  employment 

The  objective  of  the  information  and  consultation  procedure  laid  down 
in  the  existing  directive  and  modified  by  the  proposal  for  its 
revision  is  to  identify  ways  and  means  of  avoiding  redundancies  or 
minimising  the number  of workers  affected. 

-  on  investment  and  the creation  of  new  businesses 

None. 

-  on  the competitiveness of  undertakings 

The  proposed  amendments  to  the  collective  redundancies  directive  may 
entail  some  indirect  costs  of  compliance  for  firms,  due  to  the 
strengthening  of  the  information  and  consultation  procedure.  However 
their  effect  on  the  competitiveness  of  EC  undertakings  should  remain 
marginal. On  the other  hand,  2(5)(b)  introduces  a change  entailing  more 
flexibility  by  allowing  small  undertakings  not  to consult  but  to  inform 
the workers  concerned. 

5.  Does  the  proposal  contain  measures  to  take  account  of  the  specific 
situation  of  small  and  medium  -  sj_zed  enterprises  (reduced  px 
different  reguirements. etc.)? 

By  virtue  of  the  definition  of  'collective  redundancies'  the  existing 
and  proposed  directive  does  not  apply  to  establishments  normally 
employing  20  or  fewer  workers.  Moreover,  the  proposal's  requirements 
regarding  information  and  consultation  with  workers' representatives  do 
not  oblige  Member  States  to  provide  for  procedures  for  the  designation 
of  such  representatives,  in establishments normally  employing  less  than 
50  workers.  Where  there  are  no  workers'  representatives  in  such 
establishments,  workers  affected  by  redundancy  proposals  should  be 
directly  informed  by  the  employer. 

- 20 -

Consultations 

A.  With employers and trade unions 

19.03.91 
05.06.91 

UNICE / CEEP _ ETUC 
UNICE / CEEP - ETUC 

22.05.91 

Transport 

23.05.91 

Commerce 

28.05.91 

Fishing 
Construction 
ganjcs  ft  Insurance 

7.06.91 

Agriculture 

B.  With  individual organisations 

C.G.T. (France) (General Confederation of Labour) 

CEC (European Confederation of Professional  Staff) 

Consultation of employers' organisations by DG XXIII: 

Organisations consulted; 

AECM (Association Européenne des Classes Moyennes) 
Eurochambre 
Eurogroup 

-  UEAPME  (Union of Crafts and SMEs) 
-  UNICE (Union of  Industries of the EC) 

CECOP (European Committee of Workers' Production Cooperatives) 
EUR0PMI  (European  Committee  for  Small  and  Medium-Sized 
Independent Enterprises) 
EMSU (Union Européenne des Classes Moyennes) 
CECD (European Retail Trade Confederation) 
FEWITA (Federation  of  European  Wholesale  and  International 
Trade Associations) 
CED I (Centre Européen des  Indépendants) 
CCACC  (Com.  Coord,  des  Associations  des  Coopératives  de  la 
Communauté européenne) 

The trade union organisations are  in favour of the revision of Council 
Directive  75/129  but  consider  that  the  Commission's  Proposal  falls 
short  of  their  expectations,  in particular  with  respect  to the social 
plan  and  the  intervention  of  the  public  authorities.  The  employers' 
organisations  generally  support  the  objective  of  applying  the 
information and consultation procedure  also to collective redundancies 
of a transnational  dimension, but  think  the existing directive already 
covers  this  case;  they  do  not  favour  amendments  introducing  new 
elements  in the proposal, such as additional  information to be provided 
to the workers. 

BSN 0254-1475 

C0M(91) 292 final 

DOCUMENTS 

EN 

06  04 

Catalogue number : CB-CO-91-507-EN-C 

ISBN 92-77-77501-7 

Office for Officiai Publîcatîozis of the European Communities 

L-2985 Luxembourg