Consequences of a ‘hard Brexit’ for EWCs
In her speech, the UK Prime Minister, Theresa May, seemed to clearly indicate that the UK was heading for a “hard Brexit. This would mean that EU law no longer applied in the UK, including labour law, after Brexit.
What would a “hard Brexit” means for European Works Councils? (it is always possible that a “hard Brexit” will be avoided. But, for the purposes of this article we assume it will happen). Having talked with a number of EWC experts, Plant Labour has concluded that the position appears to be this.
With “hard Brexit”:
- EWCs could no longer be legally “housed” in the UK. It will be necessary to switch EWCs to another jurisdiction.
- UK employees would no longer be legally entitled to be represented on EWCs.
- The continued existence of “Subsidiary Requirement” EWCs could be called into question.
- Question marks would be raised over UK union officials acting as experts to EWCs.
EWCs could no longer be legally “housed” in the UK. If the UK is outside the scope of EU labour law then, clearly, EWCs can no longer be legally housed in the UK. There a are probably 200/250 EWCs subject to UK law. Many of them will look at Ireland as an alternative. Ireland is an English speaking country with a common law tradition, similar to the UK in this regard. HPE has already set a precedent in announcing that it is moving the jurisdiction of its SNB from the UK to Ireland. The 2009 Directive leaves the choice of jurisdiction to management, where “central management” of the “controlling undertaking “ is not located in the EEA. It is not a matter for negotiations. It is likely that managements will be informing their EWCs within the next year as to where they intend to legally move, when the necessity arises.
UK employees would no longer be legally entitled to be represented on EWCs. Hard-Brexit, UK employees will no longer be legally entitled to be represented on EWCs. Whether or not their membership lasts after Brexit may depend on the precise wording of the EWC agreement. It could well be that they sit on the EWC until their mandate comes to an end, or the agreement is renegotiated. Thereafter, their continued membership will be a matter for management agreement. It has been suggested that management will agree to the continued involvement of UK representatives because that it what they did in the period 1996-1999 when the UK was outside the Maastricht social chapter. But then the UK was still a member of the EU, not a country which had just voted to leave. If managements agree to include representatives from a country which left the EU on what basis do they exclude representatives from other non-EEA countries, such as, for example, Turkey or Morocco? Coming to a decision on the continued involvement, or not, of UK representatives on EWCs will be difficult, because it is never easy to say goodbye to people who you may have been working with for many years.
The continued existence of “Subsidiary Requirement” EWCs could be called into question. EWCs set up under the Subsidiary Requirements are governed directly by the law, TICER, in the case of the UK. While Prime Minister May has said she will introduce a “Great Repeal Act” to incorporate all EU law into domestic UK law, this will mean nothing in the case of TICER. UK domestic law cannot have any transnational effect. If TICER becomes transnationally ineffective, post-BREXIT, could this mean that EWCs based on the Subsidiary Requirements are no longer legally valid and come to an end? Might it be necessary for employees elsewhere in the EEA to request the establishment of a new SNB to negotiate a replacement EWC? This is not a question that can be answered with any certainty, one way or the other, but it is one that needs to be considered carefully by all parties. The EWC Directive has nothing to say about what is to happen when a country, in which an EWC is legally located, leaves the European Union.
Question marks would be raised over UK union officials acting as experts to EWCs. As noted above, there are probably somewhere between 200 and 250 EWC working under UK law. Many of these have UK union officials acting as their “experts” for the understandable reason that they are familiar UK EWC law and UK labour relations procedures, such as the referral of disputes to the Central Arbitration Committee (CAC). But if the UK is outside of the EU and outside of EU labour law, what value can UK “experts” bring to EWCs? Why would EWC members want a UK “expert” if the EWC is subject to the laws of another jurisdiction? Language alone, the ability to read the relevant legislation, becomes an issue. Unless the EWC is based in Ireland, where language is not an issue. But English voices in Ireland, post-Brexit, with all the damage Brexit will do to North/South relations in Ireland, may not be a wise choice. The Irish Labour Court may not take kindly to UK union officials turning up to tell them what the EWC Directive, as transposed into Irish law, means.
There has never been a “Brexit” before. It is an unprecedented situation. But if Brexit means a hard-Brexit then things will change radically. UK involvement with EWCs will be part of the collateral damage.