Mr. Philip Sack:

I thank the Chairman for this opportunity to address the committee. I have sent the committee a briefing paper setting out what I am about to say in more detail. I am director of EWC Legal Advisers. I specialise in providing advice, support and training to European works councils, EWCs. I have been working in this area for a little over 20 years. From 2001 to 2005 I was assistant director in the Department of Trade and Industry - as it was then called - in London with responsibility for EU and UK legislation on employee involvement, including European works councils. I devised the enforcement scheme in the UK information and consultation regulations, which was subsequently adopted by the EWC legislation – the transnational information and consultation of employees regulations. I believe the title was stolen from the Irish law. This enforcement regime involves bringing almost all disputes relating to EWCs to a body known as the Central Arbitration Committee, through a civil procedure. Since 2005 I have been in the private sector advising in the area of EWCs, initially on the employer side, but now exclusively on the employee side, including bringing several legal complaints on behalf of EWCs to the Central Arbitration Committee. I have a fairly good knowledge of EWCs and of the enforcement regime in the UK.

In the run up to the EU referendum in the UK in 2016, I started looking much more closely at the Irish legislation on EWCs, the Transnational Information and Consultation of Employees Act 1996, because I could see that if the UK voted to leave the EU it was very likely that a lot of companies with EWCs based in the UK would seek to move them to Irish jurisdiction, and that is exactly what has happened, as we have heard. I do not know the precise number but I believe there are dozens of companies that have appointed a representative agent in Ireland in order to make their EWC subject to the Transnational Information and Consultation of Employees Act 1996.

I confess that what I read in the Act about enforcement surprised me, and I became more surprised when I contacted the Workplace Relations Commission, the Department of Business, Enterprise and Innovation, and its successor the Department of Enterprise, Trade and Employment, to ask how the enforcement regime would work in practice. I cannot see how the enforcement regime in the Transnational Information and Consultation of Employees Act 1996 complies with the EWC directive. Specifically, Article 11 of the directive requires member states to ensure that the management of establishments or undertakings situated within their territory “abide by the obligations laid down by [the] Directive”. It also requires member states to provide for “appropriate measures in the event of failure to comply” with the directive, ensuring that “adequate administrative or judicial procedures are available to enable the obligations deriving from [the] Directive to be enforced”. As a general principle of EU law, reflected in Recital 36 to the directive, “administrative or judicial procedures, as well as sanctions that are effective, dissuasive and proportionate in relation to the seriousness of the offence, should be applicable in cases of infringement of the obligations arising from [the] Directive”.

The Transnational Information and Consultation of Employees Act 1996 provides for enforcement of the subsidiary requirements, namely the rules that apply in the absence of an EWC agreement, and certain other obligations, through criminal enforcement by the Workplace Relations Commission, WRC. Criminal prosecution requires a high standard of proof, which must be beyond reasonable doubt. This is not suitable for the type of breach that would typically be in dispute under the subsidiary requirements. I refer, For example, to: whether adequate information had been provided by management to enable the EWC to undertake an in-depth assessment of the possible impact; whether that information had been provided early to allow that assessment ahead of a meeting with management; whether management should have consulted the EWC at an earlier stage in the decision-making process; whether an issue involved a substantial change concerning organisation, or whether employees interests were affected to a considerable extent. Many of these are questions involving fine judgments and are not at all clear-cut. To have to prove them beyond reasonable doubt in a criminal prosecution seems like using a sledgehammer to crack a nut. The same could be said of the other offences subject to prosecution under section 18 of the Act.

I was told by the WRC that it had absolute discretion regarding whether to bring a prosecution under the Act, and that it would weigh various factors when deciding whether to do so, one of which was the efficient use of resources. I can understand that the WRC would not want to use its resources inefficiently, but I do not see how that ensures that obligations deriving from the directive can be enforced. I was also told that the District Court in which a prosecution may be brought could not order any remedy where a company had breached the subsidiary requirements. All it can do is issue a penalty. That penalty is rather low, a few thousand euro at most. I do not see how that can be said to be effective, proportionate or dissuasive.

On the enforcement of EWC agreements, this is exclusively through private or court-appointed arbitration under section 21 of the Act. However, I understand that regulations have still not been made under section 7 of the Act regarding the powers and procedures of arbitrators, the conduct of arbitration proceedings or the expenses to be borne by central management. Also, as has been mentioned, the Act states that the parties must bear their own costs in arbitration. Therefore, as matters stand, it is unclear whether it is even possible to seek arbitration under the Act, it is unclear what procedure should be followed, and it is unclear what powers an arbitrator would have, for example, to order remedies or impose a penalty for breach of an EWC agreement.

The threat of having to cover their costs will also act as a severe deterrent to any EWCs wishing to bring disputes. Similar comments could be made about disputes regarding the confidentiality rules in section 15 of the Act, but the situation here is even worse because a dispute can only be brought where it involves Irish employees or their representatives. This seems to discriminate against other EU employees. I note that the obligations on central management regarding special negotiating body, SNB, negotiations in section 11 of the Act are not enforceable at all. This is the subject of related infringement proceedings by the European Commission, as is the issue of confidential information disputes.

In terms of recommendations, it seems that the best enforcement regime would involve civil proceedings, brought by the complainants themselves, for example, the SNB or the EWC, to a specialised body with expertise in industrial relations. The Labour Court or the WRC are the obvious candidates. There should be the possibility of an effective remedy, such as an order by the court or the WRC against central management, requiring it to make good its breach of the legislation or of the EWC agreement. There should also be a financial penalty that is proportionate to the nature of the offence but also dissuasive. It seems to me that the enforcement regime in the Employees (Provision of Information and Consultation) Act 2006, involving the Labour Court and the WRC, provides a good and ready-made model. Alternatively, the initial enforcement role for all obligations could be given to the WRC, with a combination of mediation and adjudication of disputes, and possible appeal to the Labour Court on points of law.