Summary European Labour and Social Security Law - Literature Summaries week 3
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European Labour and Social Security Law (PUB4007)
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Maastricht University (UM)
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European Labour Law
Summaries of the readings for European Labour and Social Security Law week 3:
- T. Jaspers, European Labour Law, 2019, Chapter 6 (pp.309-372);
- Case C-242/09 Albron;
- Case C-149/16 Socha
Summary week 5-7 European Labour and Social Security Law, ISBN: 9781780687049 (PUB4007)
Summary week 1-4 European Labour and Social Security Law, ISBN: 9781780687049 (PUB4007)
European Labour and Social Security Law - Literature Summaries week 1
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European Labour and Social Security Law – Literature Notes Week 3: Fundamental Rights
and Restructuring of Enterprises
T. Jaspers, European Labour Law, 2019, Chapter 6 (pp.309-372).
6.1 Introduction
The three ‘restructuring’ directives can be traced back to the Social Action Programme adopted in 1974, after
the Paris Summit of 1972, where the Heads of State declared that the Member States attached as much
importance to action in the social field as the achievement of economic union. They provide a degree of
employment protection in the restructuring of companies. Since the 1970’s, the three directives have been
amended and codified mainly to clarify and harmonise some of the definitions.
6.2 The Collective Redundancies Directive
The aim of this directive is to improve protection for workers in the event of a collective redundancy through
the involvement of workers’ representatives, though it does not provide individual rights to workers.
6.2.1 The Definition of Collective Redundancies
With the exceptions of public administrative bodies or establishments governed by public law, the
crews of seagoing vessels and redundancies effected under fixed-term contracts (Article 1(2)), all
employers employing at least 20 workers in an establishment are concerned by the directive. As
regards the criteria for when dismissals qualify as collective redundancies, the directive gives Member
States the choice between two reference periods within which dismissals count for reaching the
threshold for collective dismissals, namely a 30-day period and a 90-day period (Article 1(1)(a)). In
applying this definition of collective redundancy, three main issues arise:
6.2.1.1 The European Definition of ‘Worker’ in the Collective Redundancies Directive
Whereas the concept of worker is defined by the CJEU in the areas of freedom of movement
of workers and equal treatment in employment, the situation is different for the directives
dealing with working conditions, as most provide that it is for national laws to define the
concept of worker. However, in the Balkaya case, in relation to the CRD, it was decided that
this concept has to be defined at European level. The case concerned the question of who
could be qualified as workers for the purpose of the directive, and more specifically Article
1(1)(a), and the Court found that the concept of worker referred to in that article had to be
given an autonomous and independent meaning. Otherwise, the methods of calculation of
the thresholds laid down in that provision, and therefore the threshold themselves, would be
within the discretion of the Member States, which would allow the latter to alter the scope of
that directive and thus deprive it of its full effect (para 33). For the Court, the essential feature
of employment relationship is that, for a certain period of time, a person performs services
for and under the direction of another person, in return for remuneration. It furthermore
found that that conclusion cannot be invalidated by the fact that the productivity of the
person concerned is low, that the person does not carry out full duties and that, accordingly,
the person works only a small number of hours and thus receives limited pay (e.g. trainees,
apprentices).
6.2.1.2 Redundancies and Other Forms of Termination of Employment Contracts
In order to calculate the number of redundancies relevant to the directive, terminations of
employment contracts other than dismissals on the initiative of the employer should be
equated to redundancies, provided that there are at least five redundancies. In Pujante
Rivera, the Court stated that this had to be interpreted as relating not to terminations of
employment contracts that may be assimilated to redundancies, but only to redundancies
sensu stricto. However, it defined the concept of redundancy broadly, characterising it by the
lack of consent by the employee. Still, since, in that case, the termination of the contract
arose from the change made unilaterally by the employer to an essential element of the
, employment contract for reasons not related to the employee, the termination could still be
defined as a redundancy (para 50).
6.2.1.3 The European Definition of ‘Establishment’
The concept of establishment is not defined in the CRD and the way it has been interpreted
by the Court has resulted in a weakening of the level of protection of workers. In Rockfon, a
Danish company decided to dismiss 24 workers without any consultation, but the Danish
legislator had chosen the first option for determining the relevant number of redundancies
(Article 1(1)(a)), as a result of which ‘establishments’ had to inform and consult workers’
representatives when 16 workers were dismissed. However, Rockfon claimed that the
company was part of a larger undertaking and that it in itself did not constitute an
‘establishment’. The Court then found that the term ‘establishment’ had to be understood as
“the unit in question to be endowed with a management which can independently effect
collective redundancies” (para 32). In Athinaiki Chartopiia A.E., the Court gave a further
clarification, stating that an establishment may consist of a distinct entity, having a certain
degree of permanence and stability, which is assigned to preform one or more given tasks and
which has a workforce, technical means and a certain organisational structure. However, the
decisions in SDAW and Lyttle show that these interpretations could limit workers’ rights. Here,
UK law required no information and consultation to take place because the big majority of the
employees that were to be dismissed worked in stores with fewer than 20 employees, even
though these stores were part of a larger company. The Court then stated that where an
‘undertaking’ comprises several entities, it is the entity to which the workers made redundant
are assigned to carry out their duties that constitutes the ‘establishment’ for the purpose of
Article 1(1)(a), regardless of the choice for (a)(i) or (a)(ii). However, this decision clearly fails to
meet the main objective of the directive. Still, in the case of Cañas, the Court returned to a
more traditional way of interpreting the CRD, stating that “Article 1(1)(a) […] must be
interpreted as precluding national legislation that introduces the undertaking and not the
establishment as the sole reference unit”.
6.2.2 The Information and Consultation Procedure
The sole purpose of the CRD is to require the employer to inform and consult workers’ representatives
with a “view to reaching an agreement”. In this regard, first, the directive recognises a very general
right of workers’ representatives to information on the redundancy. This is further strengthened by
the possibility for Member States to allow workers’ representatives to call upon expert assistance in
accordance with the measures in force at the national level (Article 2(2)). It is not clear, however,
when the duty to begin consultation arises, despite being essential for employee representatives to
have early access to the decision-making process. Consultations between representatives and
employers must cover ways and means of minimising the impact, in particular by recourse to
accompanying social measures aimed at redeploying or retaining workers who are made redundant
(Article 2(2)). On the basis of these indications, the Court has clarified the meaning and the timing of
the information and consultation procedure, and specified that ‘consultation’ and ‘consultation with a
view to reaching an agreement’ are two different procedures and that Article 2 imposes an obligation
to negotiate (C-383/92 - Commission v UK, C-188/03 – Junk). It also provided guidance on when this
negotiation shall take place (see Junk, paras 36-38). The new Article 2(4) provides that the
requirements of the directive apply irrespective of whether the decision regarding the redundancies is
taken by the employer or by a controlling undertaking and that in considering alleged breaches of
these requirements, it will be no defence for an employer to show that the necessary information was
not supplied by the undertaking which took the decision leading to the redundancies. Finally, the
definition of workers’ representatives was considered by the ECJ in two landmark cases against the UK
in the 1990’s. The Court found that Article 1(1)(b) of the CRD leaves to Member States only the task of
determining the arrangements for designating workers’ representatives, but the UK interpretation,
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