CELEX: 51991PC0292
Language: en
Date: 1991-11-13
Title: Proposal for a COUNCIL DIRECTIVE amending Directive 75/129/EEC on the approximation of the laws of the Member States relating to collective redundancies

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)
 ---pagebreak---                                     - 2 -
               E X P L A N A T O R Y      M E M O R A N D U M
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.'
 ---pagebreak---                                   - 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.
 ---pagebreak---                                   - 4 -
7. The detailed figures are given in the following table :
     Mergers and acquisitions by nationality of the firms involved
         Year       National        EC          International
         1983-84     101            29            25
                    (65.2)        (18.7)        (16.1)
         1984-85     146            44            18
                    (70.2)         (21.2)        (8.7)
         1985-86     145            52            30
                    (63.7)         (23.0)       (13.3)
         1986-87     211            75            17
                    (69.6)         (24.8)        (5.6)
         1987-88     214           111            58
                    (55.9)         (29.0)       (17.8)
         1988-89     233           197            62
                    (47.4)         (40.0)       (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.
 ---pagebreak---                                   - 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    administration of    a multi-
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.
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.
 ---pagebreak---                                      - 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-
es tab M shment    undertaking. In order     to reinforce    this    central
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.
15.      Furthermore, collective redundancies effected without           the
fulfilment      of   the    information,  consultation   and   notification
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.
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     "collective    redundancies  effected   under  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
or    the completion of such contracts". The argument             that   the
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
 ---pagebreak---                                      - 7 -
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     sector. It     should   be   noted    that    Council    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.
(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)     Designation    of    workers'    representatives      for   redundancy
 consultation purposes
 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      initiated    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
  (2) OJ No L 283, 28.10.1980, p. 23.
 ---pagebreak---                                   - 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.
 ---pagebreak---                                   - 9 -
Relationship with other Community   instruments
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   representatives   of   their    respective  employees  about   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  transfers   directive    differs  from  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.
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).
 ---pagebreak---                                  - 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.
 ---pagebreak---                                  - 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                COLLECTIVE
                                        AGREEMENT
BELGIUM      YES                         -
NETHERLANDS  YES
SPAIN        YES
FRANCE       YES
GREECE       YES
IRELAND       *
DENMARK       -                         YES
 ITALY       YES
LUXEMBOURG   YES
PORTUGAL     YES
GERMANY      YES
UK           *
     Workers' representatives within the meaning of Irish and UK law are
     members of independent trade unions voluntarily recognised by their
     employer.
 ---pagebreak---                                      - 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)
 ---pagebreak---                                       - 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
public    authorities,     reflecting,      inter    alia.     the    corresponding
                                                     5
provisions of Council Directive 77/187/EEC* * and              ILO Convention 158
and Recommendation 166;
(4) OJ No L 48, 22.2.1975, p. 29.
(5) OJ No L 61, 5.3.1977, p. 26.
 ---pagebreak---                                     - 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".
 ---pagebreak---                                   - 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.
 ---pagebreak---                                     - 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."
 ---pagebreak---                                  - 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
 ---pagebreak---                                   - 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.
 ---pagebreak---                                    - 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.
 ---pagebreak---                                   - 20 -
Consultations
A.  With employers and trade unions
19.03.91     UNICE / CEEP _ ETUC
05.06.91     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.
 ---pagebreak---                                                                       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
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