EU: employers have to consult employee representatives as soon as they intend to unilaterally amend working conditions that could lead to a termination in the employment contract (CJEU)
On 21 September in a ruling handed down in Polish case the CJEU affirmed the principle whereby an employer is obliged, in line with the EU directive on collective redundancies, to consult with employee representatives when the employer intends, to the detriment of the employees, to unilaterally undertake amendments to working conditions based on economic grounds, and if refused by the employees will lead to the termination of the employment relationship.
The Polish national case was brought because an employer had notified its staff of a change in the calculations of a career length based award scheme without having consulted the employee representatives. The Polish courts turned to the CJEU, which recalled for this landmark case that it had previously included in the scope of EU Directive 98/59 on collective redundancies (which requires employee representative information and consultation) situations where employers proceed unilaterally and to the detriment of workers with substantial changes to essential elements of the employment contract on grounds unrelated to the worker. In this ruling the CJEU also adds that all amendments even insubstantial amendments, in so far as employee refusal to accept such changes can result in the employment relationship being terminated, also enter the scope of the Directive.
However the court also clarifies the time from which the employer should proceed with consultations. Relying on existing jurisprudence which considers that the consultation procedure intended by Directive 98/59 must be triggered by the employer as soon as a strategic or commercial decision has been adopted that forces the employer to envisage collective redundancies, it affirms that the employer is obliged ‘to engage in the consultations when it intends, to the detriment of the employees, to make a unilateral amendment to the terms of remuneration which, if refused by the employees, will result in termination of the employment relationship,’ as soon as the grounds for such modifications are economic in nature and the number of employees affected by the changes matches the collective redundancy procedure thresholds. The ruling underlines ‘that the employer considered that, in the light of the economic difficulties it faced, it had to make the proposed amendments in order to avoid having to take decisions directly concerned with terminating specific employment relationships, it should reasonably have expected that some employees would not accept the change to their conditions of employment and that, as a result, their employment contract would be terminated.’
CJEU 21 September 2017, Case C‑149/16 Socha e.a