Decision

Preliminary Decision

Updated 1 June 2021

Applies to England, Scotland and Wales

Case Number EWC/36/2021

1 June 2021

CENTRAL ARBITRATION COMMITTEE

TRANSNATIONAL INFORMATION AND CONSULTATION OF EMPLOYEES REGULATIONS 1999 AS AMENDED

DECISION ON PRELIMINARY ISSUE RELATING TO COMPLAINTS UNDER REGULATIONS 21 AND 21A

The Parties:

easyJet European Works Council

and

easyJet PLC

1. Introduction

1) On 15 March 2021, Mr. Philip Sack of EWC Legal Advisers submitted a complaint to the CAC on behalf of the easyJet European Works Council (“EWC”), (the Complainant) under Regulations 21 and 21A of the Transnational Information and Consultation of Employees Regulations 1999, as amended by The Employment Rights (Amendment) (EU Exit) Regulations 2019, (amended TICER) ^{[footnote 1]} in relation to the actions of easyJet PLC (the Employer). The CAC gave both parties notice of receipt of the complaint on 16 March 2021. The Employer submitted a response to the CAC dated 22 March 2021 which was copied to the Complainant.

2) In accordance with section 263 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act), the CAC Chair established a Panel to consider the case. The Panel consisted of Professor Gillian Morris as Panel Chair and Mrs Anna Berry and Mrs Maureen Chambers as Members. The Case Manager appointed to support the Panel was Kate Norgate.

2. Background

3) EasyJet (UK) is the ultimate controlling undertaking of a corporate group operating in the aviation sector across Europe. The coronavirus pandemic which began in early 2020 had a significant impact on the Employer, along with other businesses in the aviation sector. On 28 May 2020 the Employer made a regulatory news announcement to the market on “capacity, fleet and cost structure plans” in which it stated that it would shortly launch an employee consultation process on proposals to reduce staff numbers by up to 30%, reflecting the reduced fleet, the optimisation of our network and bases, improved productivity as well as the promotion of more efficient ways of working. We will launch the consultation process in the coming days.

It is common ground between the parties that prior to 11pm (UK time) on 31 December 2020 easyJet (UK) was required to comply with the subsidiary requirements contained in the Schedule to TICER. It is also common ground between the parties that “exceptional circumstances” existed from 28 May 2020 creating an obligation to comply with paragraph 8 of the Schedule to TICER. Paragraph 8(1) reads as follows:

Where there are exceptional circumstances affecting the employees’ interests to a considerable extent, particularly in the event of relocations, the closure of establishments or undertakings or collective redundancies, the select committee or, where no such committee exists, the European Works Council shall have the right to be informed. It shall have the right to meet in an exceptional information and consultation meeting, at its request, the central management, or any other more appropriate level of management within the Community-scale undertaking or group of undertakings having its own powers of decision, so as to be informed and consulted.

The parties also agree that when complying with paragraph 8 there is an obligation to comply with regulation 18A of TICER. Regulation 18A(3) states that

The content of the information, the time when, and the manner in which it is given, must be such as to enable the recipients to-

(a) acquaint themselves with and examine its subject matter;

(b) undertake a detailed assessment of its possible impact; and

(c) where appropriate, prepare for consultation.

3. The Complaint

4) The complaint dated 15 March 2021 submitted to the CAC reads as follows:

On 28 May 2020 easyJet announced proposals to reduce staff numbers by up to 30% and said it would launch an employee consultation process on the proposals “in the coming days”. It subsequently confirmed that these staff reductions were proposed in at least two member states of the European Economic Area (the UK, Germany, France, Italy and Spain). Management began consultations on collective redundancies in the UK with trade unions on 30 June. Between June and August 2020 central management and the EWC communicated over the process to be followed for consultation with the EWC about the proposals, and a timescale for that process. Between September and December, the EWC emailed central management on several occasions seeking further details about the planned consultation with the EWC and making clear that insufficient information had thus far been provided to allow the consultation to take place. On 30 November central management emailed the EWC saying further information was “about to be provided”. As of the date of this complaint, no such further information has been provided, and no information and consultation meeting has taken place between central management and the EWC regarding the proposals.

The last annual meeting of the EWC pursuant to paragraph 7 of the subsidiary requirements was held on 14 January 2020. As of the date of this complaint, no further annual meeting has been held despite requests by the EWC to management to organise the meeting. The EWC understands that management believes the TICE Regulations no longer apply to easyJet and that the EWC established under the subsidiary requirements of the TICE Regulations no longer exists. During the course of 2020 the company has made significant changes to its planned orders of aircraft, entered into Sale and Leaseback Agreements, taken out large loans and issued notes to the value of 1.2 billion Euros. These actions have materially affected the financial situation of the company and impacted employees across the whole company. There has been no information passed to the EWC and no consultation on any of these items.

This complaint is made pursuant to regulations 21 (Disputes about operation of European Works Council) and 21A (Disputes about failures of management) of the amended TICE Regulations 1999. Specifically, the EWC considers that central management has:

A. Failed to inform and consult the EWC in accordance with paragraph 8 of the subsidiary requirements by failing to hold an exceptional information and consultation meeting about proposed transnational collective redundancies “as soon as possible on the basis of a report drawn up by the central management”;

B. Failed to provide adequate information that allows a “detailed assessment” of the proposed redundancies and to consult in accordance with TICE regulation 18A;

C. Failed to ensure that the procedures for informing and consulting the EWC and the national employee representation bodies about the redundancies are linked so as to begin within a reasonable time of each other, in accordance with TICE regulation 19E; and

D. Failed to hold an annual information and consultation meeting with the EWC and therefore failed to provide to the EWC information about the economic and financial situation and the probable development of the business, and failed to inform and consult the EWC about the situation and probable trend of employment, investments, and substantial changes concerning organisation, at an annual meeting in accordance with paragraph 7 of the subsidiary requirements of the TICE Regulations. ^{[footnote 2]}

4. Overview of subsequent submissions by the parties and the scope of this decision

5) In its response to the Complaint dated 22 March 2021 the Employer submitted that the CAC had no jurisdiction to hear these complaints. The Employer said that, by enacting paragraph 6 of part 1 of schedule 2 to the Employment Rights (Amendment) (EU Exit) Regulations 2019 (the “EU Exit Regulations”), Parliament had exercised its sovereignty to provide that the particular provisions of the legislation upon which the Complainant relied no longer had any application to an undertaking such as the Employer since 11pm (UK time) on 31 December 2020. The Employer submitted, in the alternative, that the CAC only had jurisdiction in respect of certain of the complaints due to limitation periods and that the complaints over which the CAC did have jurisdiction were not well-founded.

6) The Panel invited the Complainant to comment on the Employer’s response. The Complainant submitted its comments on 9 April 2021. The Case Manager cross-copied the Complainant’s comments to the Employer on 12 April 2021. The covering letter asked the Employer to comment in as much detail as possible on the substantive merits of the complaints relating to a failure to hold an exceptional information and consultation meeting and a failure to provide adequate information and to supply any documentation which it considered relevant. The letter stated that the Panel did not wish to receive any further submissions relating to any issues raised by either party relating to jurisdiction or to the complaint of a failure to hold an annual information and consultation meeting with the EWC. The Employer supplied its comments to the CAC on 21 April 2021. The Employer stated that it had refrained from making submissions relating to jurisdiction or the complaint of a failure to hold an annual information and consultation meeting but that it would also have provided detailed comments on those issues if the Panel had afforded it an opportunity to reply to the detailed case against it.

7) The Panel considered carefully the documentation submitted by the parties and decided that the question whether the CAC had jurisdiction to hear the Complaint under amended TICER should be dealt with as a preliminary issue. The Panel is satisfied that it was able to reach a decision on whether the CAC had jurisdiction (“the preliminary issue”) fairly without a hearing and on the basis of the documentation before it without further submissions from either party. The parties’ submissions relating to the preliminary issue are summarised below. The Panel was not satisfied that it could reach a decision on the substantive merits of the complaints relating to a failure to hold an exceptional information and consultation meeting and a failure to provide adequate information on the basis of the documentation before it. This decision does not contain the parties’ submissions relating to these matters or the failure to hold an annual information and consultation meeting with the Complainant and the Panel has not reached any conclusions in relation to them at the time of this decision. The Panel notes that the complaint of a failure to begin consultation of the EWC and of national employee representative bodies within a reasonable time of each other was withdrawn by the EWC in its comments dated 9 April 2021.

5. Summary of the Employer’s submissions on the preliminary issue

8) The Employer said that easyJet (UK) was the ultimate controlling undertaking of a corporate group operating in the aviation sector and that between 2011 and 11pm (UK time) on 31 December 2020 easyJet (UK) was required to comply with the subsidiary requirements detailed in the Schedule to TICER as in force prior to 11pm (UK time) on 31 December 2020. The Employer said that the board of easyJet (UK) had approved the following resolution on 11 November 2020:

After due consideration, IT WAS RESOLVED that:

The German branch of easyJet UK Limited be appointed as the representative agent of the central management of the Company pursuant to Article 4 of the EWC Directive (Directive 94/45/EC, as amended) for the exclusive purposes of negotiating, establishing and managing the Company’s European Works Council. This appointment shall take effect immediately before the United Kingdom ceases to be subject to the transition or implementation arrangements provided for by Part 4 of the withdrawal agreement between the UK and the European Union negotiated under Article 50(2) of the Treaty of the European Union which sets out the arrangements for the UK’s withdrawal from the European Union (“Transition Time”), currently scheduled to take place no later than 11pm (UK) on 31 December 2020 but this is subject to change, unless:

a) the United Kingdom’s exit from the European Union is cancelled; or

b) a further transitional period is in effect; or

c) it is agreed that the UK remains directly subject to the EWC Directive (Directive 94/45/EC, as amended).

If any of these events takes place, where applicable, the appointment shall not take effect at the Transition Time and instead shall take effect only on such subsequent date as shall be determined by the Board, if appropriate.

9) The Employer said that at 11pm (UK time) on 31 December 2020:

a. the Brexit transition period provided for by article 126 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (2019/C 384 I/01) (the “Withdrawal Agreement”) had expired;

b. as a matter of EU law, Directive 2009/38/EC (“the Directive”) ceased to be required to be construed in accordance with article 127(6) of the Withdrawal Agreement as if the UK were a member state of the European Union;

c. in accordance with:

i. the definition of “exit day” meaning 11pm (UK) time on 31 December 2020 in the light of section 20(1) of the European Union (Withdrawal) Act 2018 (as amended by regulation 2 of the European Union (Withdrawal) Act 2018 (Exit Day) (Amendment) (No. 3) Regulations 2019); and

ii. regulation 1(1) of the “EU Exit Regulations”,

part 1 of schedule 2 to the EU Exit Regulations came into force and TICER became amended TICER;

d. easyJet (UK) ceased to be obliged to operate a European Works Council as a matter of UK law; and

e. the management of the German branch of easyJet UK Limited (“easyJet (DE)”) began to be under an obligation to comply with the German legislation transposing the Directive.

The Employer said that since 11pm (UK time) on 31 December 2020, easyJet (DE) had taken steps towards the establishment of a European Works Council operating under German law. The Employer said that easyJet (UK) and easyJet (DE) were both committed to the representation of not only UK but also Swiss employees on its future European Works Council operating under any new European Works Council agreement concluded under and governed by German law. The Employer said that the legal changes that took place as a result of the UK’s sovereign decision to withdraw from both the European Union and its legal framework could not properly be characterised as a definitive end to UK employees’ transnational information and consultation rights and that easyJet (UK) had continued voluntarily to engage with the Complainant, including its former UK members, pending the establishment of a new European Works Council operated by easyJet (DE).

10) The Employer said that regulations 4 and 5 of amended TICER governed the application of amended TICER to easyJet (UK) insofar as was material to this complaint; in effect they acted as the gateway to the application of regulations 18A, 19E, 21 and 21A and paragraphs 7 and 8 of the Schedule to amended TICER. The Employer set out the following provisions of amended TICER ^{[footnote 3]}:

Regulation 2(1):

“central management” means–

(a) the central management of a Community-scale undertaking, or

(b) in the case of a Community-scale group of undertakings, the central management of the controlling undertaking, or, where appropriate, the central management of an undertaking or group of undertakings that could be or is claimed to be a Community-scale undertaking or Community-scale group of undertakings.

Regulation 4(1):

Subject to paragraph (2) the provisions of regulations 17 to 41 and of regulation 46 shall apply in relation to a Community-scale undertaking or Community-scale group of undertakings only where, in accordance with regulation 5, the central management is situated in the United Kingdom.

Regulation 4(2):

The following regulations shall apply in relation to a Community-scale undertaking or Community-scale group of undertakings whether or not the central management is situated in the United Kingdom–

(c) regulation 18 to the extent it applies paragraphs 3 to 5 of the Schedule (UK members of the European Works Council);

(d) regulations 23(1) to (5) (breach of statutory duty);

(e) regulations 25 to 33 (protections for members of a European Works Council, etc.);

(f) regulations 34 to 39 (enforcement bodies) to the extent they relate to applications made or complaints presented under any of the other regulations referred to in this paragraph;

(g) regulations 40 and 41 (restrictions on contracting out).

Regulation 5:

(1) This regulation applies where –

(b) the central management is not situated in a Relevant State and the representative agent of the central management (to be designated if necessary) is situated in the United Kingdom; or

(c) neither the central management nor the representative agent (whether or not as a result of being designated) is situated in a Relevant State and–

(i) in the case of a Community-scale undertaking, there are employed in an establishment, which is situated in the United Kingdom, more employees than are employed in any other establishment which is situated in a Relevant State, or

(ii) in the case of a Community-scale group of undertakings, there are employed in a group undertaking, which is situated in the United Kingdom, more employees than are employed in any other group undertaking which is situated in a Relevant State.

(2) Where this regulation applies, the central management shall be treated, for the purposes of these Regulations, as being situated in the United Kingdom and–

(a) the representative agent referred to in paragraph (1)(b); or

(b) the management of the establishment referred to in paragraph (1)(c)(i) or of the group undertaking, referred to in paragraph (1)(c)(ii), shall be treated, respectively, as being the central management.

11) The Employer said that easyJet (UK) accepted that paragraphs 3 to 5 of the Schedule to amended TICER applied to it in the light of regulation 4(2) of amended TICER. The Employer said that if easyJet (DE) were to conclude a European Works Council agreement that provided for the representation of UK employees, as it hoped to do, those paragraphs would govern the manner in which the UK member(s) would be elected if the agreement were, as is common, to provide that members are to be elected or appointed in accordance with the national legislation of the state that they represent, a conclusion which followed from the CAC’s decision in SAFRAN. ^{[footnote 4]} The Employer said that the other provisions detailed in regulation 4(2) of amended TICER were ancillary to paragraphs 3 to 5 and concerned the rights and obligations of such UK members of a European Works Council. The Employer said that easyJet (UK) accepted only that the regulations and paragraphs specified in regulation 4(2) of amended TICER could apply to it and that these included neither regulations 18A, 19E, 21 and 21A nor paragraphs 7 and 8 of the Schedule to amended TICER. The Employer said that regulation 4(1) of amended TICER provided that those regulations and paragraphs, which were those that were material to these complaints, apply “only where, in accordance with regulation 5, the central management is situated in the United Kingdom”. The Employer said that easyJet (UK) did not satisfy the criteria detailed in either regulation 5(1)(b) or 5(1)(c) of amended TICER because it had a representative agent situated in Germany and Germany was a “Relevant State” as defined in regulation 2(1) of amended TICER.

12) The Employer noted that Mr Sack, the Complainant’s expert for the purposes of this complaint, had previously been engaged by easyJet (UK) and had written on 5 December 2018 in respect of the draft of the EU Exit Regulations that was later enacted by Parliament as follows:

On the face of it, it appears the Regulations would continue to apply to easyJet after 29 March 2019 in the event of a no-deal Brexit. The amended Regulation 18 states “ The provisions of the Schedule [ie the subsidiary requirements to which easyJet is currently subject] continue to apply on and after exit day in any case where they applied before exit day.” This is consistent with what the Government has told Parliament about the changes – “The current rights are being retained”. They have said the changes relate to new requests to establish an EWC. The upshot would be that easyJet would be subject to the subsidiary requirements in both the UK and another EEA member state at the same time, possibly requiring two EWCs.

However, on a careful reading of the amended Regulations, they are actually disapplied to all UK companies, and almost all other companies as well (with some limited exceptions concerning rights of UK EWC members – see point 4 below). It works as follows:

The amended Regulation 4 states “ the provisions of regulations 17 to 41 [ie including Reg 18] .. shall apply in relation to a Community-scale undertaking or Community-scale group of undertakings only where, in accordance with regulation 5, the central management is situated in the United Kingdom.” Again, on first sight you would think this means any group/company whose central management is situated in the UK, but the reference to Reg 5 is crucial because ….

The amended Regulation 5 says that it only applies to companies/groups whose central management is situated outside the UK or the EEA.

Therefore according to amended Regs 4 and 5, Regulations 17 to 41 would not apply to a company/group like easyJet whose central management is situated in the UK.

The revised Regulation 4(2) provides that certain rights and protections for UK EWC members (paid time off, protection from unfair dismissal or detriment) will continue to apply, enforceable at an employment tribunal.

The Employer said that this analysis was faultless in respect of amended TICER’s application to easyJet (UK) although it noted that, despite the earlier indications to Parliament of the Government’s intentions in respect of maintaining UK employment laws notwithstanding Brexit, by the time that the Government moved its draft EU Exit Regulations in Parliament its position had changed and by March 2019 it had finally recognised that Brexit would have profound effects on UK law governing European Works Councils.

13) The Employer said that easyJet (UK) had chosen to appoint easyJet (DE) as its representative agent with effect from 11pm (UK time) on 31 December 2020 in the light of the imminent end of the Brexit transition period. The Employer said that its ability to do so was supported by:

a. recital 24 of the Directive which provides that:

The information and consultation provisions laid down in this Directive must be implemented in the case of an undertaking or a group’s controlling undertaking which has its central management outside the territory of the Member States by its representative agent, to be designated if necessary, in one of the Member States or, in the absence of such an agent, by the establishment or controlled undertaking employing the greatest number of employees in the Member States;

b. article 4(2) of the Directive, which provides that:

Where the central management is not situated in a Member State, the central management’s representative agent in a Member State, to be designated if necessary, shall take on the responsibility referred to in paragraph 1.

In the absence of such a representative, the management of the establishment or group undertaking employing the greatest number of employees in any one Member State shall take on the responsibility referred to in paragraph 1;

and

c. paragraph 3 of the European Commission’s Notice to Stakeholders on the Withdrawal of the United Kingdom and EU Rules on European Works Councils dated 21 April 2020 (the “Notice”), which provides as follows:

According to Article 4(1) and (2) of Directive 2009/38/EC, the central management or the central management’s representative agent have to be situated in the EU. Therefore, after the end of the transition period, for those European Works Councils for which the thresholds in Article 2 of Directive 2009/38/EC continue to be met within the Union, but which have their central management or their representative agent in the United Kingdom, either the role of central management will have to be transferred to a Member State or the central management will have to designate a new representative agent in a Member State. If the central management fails to take one of these steps before the end of the transition period, as of that date, the role of representative agent will be automatically transferred to the establishment or group undertaking employing the greatest number of employees in a Member State, which will become the ‘deemed central management’ pursuant to Article 4(3) of Directive 2009/38/EC.

14) The Employer said that easyJet (UK)’s appointment of easyJet (DE) as its representative agent had not only EU law but also UK law consequences. This reflected that regulation 2(5) of amended TICER provides as follows and is relevant in the absence of a definition of the term “representative agent” in amended TICER:

In the absence of a definition in these Regulations, words and expressions used in particular regulations and particular paragraphs of the Schedule to these Regulations which are also used in the provisions of the Transnational Information and Consultation Directive or the Extension Directive to which they were designed to give effect have the same meaning as they have in those provisions.

The Employer said that references to a “representative agent” in regulation 5 of amended TICER must accordingly be construed having regard to the term’s meaning under the Directive and, accordingly, as meaning easyJet (DE) since 11pm (UK time) on 31 December 2020. The Employer said that finally and in respect of the validity of its conditional appointment of easyJet (DE), easyJet (UK) relied on:

1) paragraph 52 of HPE, ^{[footnote 5]} in which the CAC first upheld that responsibility for performing a group’s European Works Council obligations can transfer between its members; and

2) paragraph 33 of Adecco (2) ^{[footnote 6]} in which the CAC upheld a conditional appointment of a new representative agent with effect from 11pm (UK time) on 31 December 2020 in anticipation of the end of the Brexit transition period and in order to avoid a transferral of responsibilities to a deemed central management pursuant to article 4(3) of the Directive.

15) The Employer said that in the light of easyJet (UK)’s appointment of easyJet (DE) as its representative agent, the central management of the group was not situated in the United Kingdom “in accordance with regulation 5”. The Employer said that as regulation 4(1) of amended TICER was unambiguous that regulations 18A, 19E, 21 and 21A and paragraphs 7 and 8 of the Schedule to amended TICER would apply to easyJet (UK) “only” if that criterion was satisfied, the CAC had no jurisdiction to hear this complaint. The Employer said that although the CAC was not bound by its own decisions, it noted in IWGB and CIS Security Ltd [TUR1/1091/2019] as follows:

While CAC decisions are not binding on other panels they do set out the thinking of panels chosen for their industrial knowledge and experience. While many CAC decisions turn on their own facts some involve determinations of general principle. Where CAC panels have consistently determined a point of principle in one way that is of significance, particularly because it involves the consideration of the issue by a number of panels all selected for their industrial knowledge including panel members who have many years of experience in the workplace.

The Employer said that in the light of IWGB the Employer suggested that the CAC may draw support for concluding that it had no jurisdiction to hear this complaint from SAFRAN ^{[footnote 7]} and HPE. ^{[footnote 8]}

16) The Employer said that amended TICER and the decisions of the CAC in SAFRAN and HPE were clear that the CAC did not have jurisdiction over easyJet (UK) under regulations 21 and 21A of amended TICER and that as such, extrinsic aids to interpretation were unnecessary. The Employer said that easyJet (UK) nevertheless considered that, as the complaints had been filed, notwithstanding it being recognised that easyJet (UK)’s position was that the material provisions of amended TICER did not apply to it, it would assist the CAC for the Employer to anticipate comments that might be made in response to its letter.

17) The Employer said that Part 1 of Schedule 2 to the EU Exit Regulations came into force at 11pm (UK time) on 31 December 2020 and paragraph 6 of it repealed regulation 5(1)(a) of TICER. That regulation had read “the central management is situated in the United Kingdom” and provided the basis for easyJet (UK) to fall within the scope of regulation 5(1) of TICER and as such, it had been the basis for regulation 4(1) of TICER to have required easyJet (UK) to comply with the Schedule to TICER. The Employer said that Parliament’s sovereign decision to enact paragraph 6 was the reason why easyJet (UK) was no longer obliged to operate a European Works Council and that the CAC had no jurisdiction in respect of these complaints and was a decision that the CAC was constitutionally bound to respect. The Employer said that, insofar as the Complainant might suggest that, despite enacting paragraph 6, Parliament had not intended for easyJet (UK) not to have to continue to comply with regulation 18 of amended TICER, the following statement made by the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy to the House of Commons when moving the EU Exit Regulations on 13 February 2019 was one which the CAC may properly consider having regard to Pepper v Hart [1993] 1 All ER 42 HL and in circumstances following the UK and EU failing to conclude an agreement providing for UK employees’ continuing representation on employee representation bodies governed by the laws of EU member states after 11pm (UK time) on 31 December 2020:

withdrawing from the EU without a deal will mean that the UK is no longer covered by EU rules on European works councils. In that scenario, it would be for the EU to give UK workers the right to be represented on the councils. It is an unavoidable and unfortunate truth that there is no way for the UK unilaterally to ensure that workers in this country retain that right without a deal. There is also no way to replicate the European works council system only in the UK, as their purpose is to enable cross-border engagement. That requires the same rules in all countries, which requires a withdrawal agreement.

The Employer also said, in relation to the continuing importance of amended TICER having regard to regulation 4(2) of amended TICER and the provisions that continued to apply to easyJet (UK), the Parliamentary Under-Secretary noted that retaining a form of TICER in the form of amended TICER ensured the following:

we will encourage businesses to continue to allow UK workers to be represented on a voluntary basis in European works councils. We are retaining as many of the existing rules as we can to enable that. All existing protections for workers and for their representatives on European works councils—even those there voluntarily—will be maintained. Approving the draft regulations is the only way to ensure that workers involved in European works councils are protected if there is no deal. They deliver on our commitments.

18) The Employer said that, as the Complainant’s expert had noted would be the case on 5 December 2018, regulation 18 of amended TICER provides as follows:

The provisions of the Schedule continue to apply on and after exit day in any case where they applied before exit day.

The Employer said that easyJet (UK) agreed that this wording might at first appear to suggest that it was still required to operate a European Works Council but that:

1) such a conclusion could not be reconciled with Parliament’s enactment of paragraph 6 of part 1 of schedule 2 to the EU Exit Regulations; and

2) such a conclusion would have to overlook how regulations 4 and 5 of amended TICER acted as a gateway to regulation 18 of amended TICER. The Employer said that the Complainant’s expert had noted on 5 December 2018 that we would be left with a situation where one Regulation (18) says the SRs would apply to a UK company like easyJet, and another (4 and 5) says they do not.

The Employer said that this conclusion was flawed, and that the regulations did not conflict with each other. Instead:

a. regulations 4 and 5 of amended TICER act as a gateway; and

b. for those undertakings that pass through that gateway by satisfying criteria detailed in regulation 5(1) of amended TICER, regulation 18 of amended TICER prescribes their obligation;

3) The Employer said that Parliament could not properly be said to have ‘overlooked’ that regulations 4 and 5 of amended TICER act as a gateway to most of amended TICER. In particular, paragraph 5 of part 1 of schedule 2 to the EU Exit Regulations expressly amended the wording of regulation 4 of amended TICER and refined the particular regulations of amended TICER in respect of which it acts as the gateway; and

4) regulation 18 of amended TICER was not rendered devoid of meaning merely because it no longer applied to easyJet (UK). Any undertaking that continued to satisfy the condition in regulation 4(1) of amended TICER by virtue of meeting criteria detailed in regulation 5(1) of amended TICER must continue to operate a European Works Council under the Schedule to Amended TICER. This was notwithstanding the real practical issues that they would face in doing this, as identified by the Parliamentary Under-Secretary of State in Parliament.

19) The Employer said that the Complainant might suggest that the CAC should still have jurisdiction to hear the complaint concerning events that predated 11pm (UK time) on 31 December 2020. The Employer said that Parliament had had regard to the need for saving and transitional provisions when enacting the EU Exit Regulations and had accordingly enacted part 2 of Schedule 2 to the EU Exit Regulations, paragraph 41 of which provides that the CAC continues to have jurisdiction over complaints that predated 11pm (UK time) on 31 December 2020. The Employer said that if Parliament had wished for the CAC also to continue to have jurisdiction over events that predated that time then it could have legislated, but did not legislate, to that effect.

20) The Employer referred to paragraph 23 of the decision of the Employment Appeal Tribunal in Manpower ^{[footnote 9]}:

As to interpretation of the Regulations in the light of the Directive, it is uncontroversial that when a national court interprets a provision of national law, it is required to do so as far as possible in the light of the wording and purpose of community law in order to achieve the result sought by Community law: Marleasing SA v La Comercial Internacional de Alimentacion SA C-106/89 [1990] ECR I-4135. The only constraints on the broad and far-reaching nature of that interpretative obligation are that (a) the meaning should go with the grain of the legislation and be compatible with the underlying thrust of the legislation being construed, and (b) that the exercise of the interpretative obligation cannot require the courts to make decisions for which they are not equipped or give rise to important practical repercussions which the court is not equipped to evaluate: see Vodafone 2 v Revenue and Customs Commissioners [2010] Ch 77 at [38] and cases cited therein.

The Employer said that in the light of section 6(3)(a) of the European Union (Withdrawal) Act 2018, Parliament’s decision not materially to amend regulation 2(5) of TICER when enacting the EU Exit Regulations meant that Manpower remains “good law” and that the CAC’s interpretation of amended TICER must therefore “go with the grain of the legislation and be compatible with the underlying thrust of the legislation being construed”. The Employer submitted that the CAC may not purposively read regulations 4 and 5 of Amended TICER so as fundamentally to depart from the EU law principle that the controlling undertaking of a group that is situated outside of the European Union may appoint a representative agent in a member state of the European Union, such as Germany, and that it is that undertaking that is responsible for operating the group’s European Works Council. The Employer further submitted that any construction of regulation 4 of amended TICER in a way that there was no interaction between regulations 4(1) and 5(1) of amended TICER would amount to an improper judicial rewriting of the legislation and would, in effect, require regulation 4(1) of amended TICER to be read as follows with the additional emphasised wording:

Subject to paragraph (2) the provisions of regulations 17 to 41 and of regulation 46 shall apply in relation to a Community-scale undertaking or Community-scale group of undertakings only where, in accordance with regulation 5 or otherwise, the central management is situated in the United Kingdom.

The Employer said that the High Court had held that such an approach to statutory interpretation by the CAC would be impermissible in Re Deliveroo. ^{[footnote 10]}

21) The Employer said that the statements and guidance concerning the former Government’s political commitment not to remove EU-derived employment rights following Brexit were of no legal significance. ^{[footnote 11]} The Employer said that the Explanatory Memorandum to the EU Exit Regulations should be given only limited if any weight. The Employer cited Westminster City Council v National Asylum Support Service where Lord Steyn noted that explanatory notes “do not form part of” legislation and “are not endorsed by Parliament” [at 4] and [w]hat is impermissible is to treat the wishes and desires of the Government about the scope of the statutory language as reflecting the will of Parliament. The aims of the Government in respect of the meaning of clauses as revealed in Explanatory Notes cannot be attributed to Parliament. The object is to see what is the intention expressed by the words enacted [at 6].

The Employer said that it was immaterial whether the European Commission took into account that amended TICER would apply in the United Kingdom after 11pm (UK time) on 31 December 2020. As its recent correspondence electronically signed on 25 January 2021 confirmed, “the United Kingdom is a third country as regards the application of EU law”. The Employer said that United Kingdom laws were accordingly irrelevant to the meaning of the term “representative agent” in the Directive. The Employer said that that term must therefore continue to be given the meaning that it had under EU law as Parliament had chosen materially to retain regulation 2(5) of TICER by amending it into regulation 2(5) of amended TICER by enacting paragraph 3 of part 1 of Schedule 2 to the EU Exit Regulations.

22) The Employer said that the Complainant’s expert had suggested when acting in Verizon (4) ^{[footnote 12]} and Adecco (2) ^{[footnote 13]} that a group might be required to operate two European Works Councils with one operating under amended TICER and a second under the national law of a European Union member state. The Employer said that this reflected the fact that the Complainant’s expert had twice conceded that, as a matter of EU law, it was necessary for a group to operate a European Works Council under the national law of a European Union member state irrespective of whether it might also have to operate such a body under amended TICER. The Employer said that, as noted by the Parliamentary Under-Secretary of State, if an undertaking met either of the criteria in regulation 5(1) of amended TICER then it would face significant practical problems in complying with regulation 18 of amended TICER although it would nevertheless appear, of course, to be bound to comply with its obligation in the light of Parliament having legislated to that effect. The Employer said that easyJet (UK)’s position was different and that the unambiguous wording of regulations 4(1) and 5(1) of amended TICER did not require it to operate two European Works Councils. The Employer said that such a construction of amended TICER would also not only run contrary to applicable rules of statutory interpretation as laid down by the EAT and the High Court but also lead to absurdity (as such term is understood in the context of statutory interpretation):

1) it would be contrary to the approach detailed in recital 24 of the Directive and reflected in the UK’s transposition of it that the legal framework applicable to groups should “keep to a minimum the burden on undertakings or establishments while ensuring the effective exercise of the rights granted”;

2) it would render meaningless Parliament’s careful efforts when enacting regulations 4 and 5 of both TICER and amended TICER to ensure that a European Works Council only operates under UK law if no European Works Council will be operating in respect of the same group under the legislation of a member state of the European Union; and

3) it would raise significant practical issues such as how, other than UK members, members of the European Works Council operating under amended TICER would be elected or appointed. In particular, EU law and national law in member states of the European Union ceased to recognise any concept of a “UK law European Works Council” at 11pm (UK time) on 31 December 2020. As such, in a member state such as Ireland, there is no legislation under which to elect Irish members of a “UK law European Works Council”. The Employer said that the Irish Labour Court had confirmed in Fujitsu Microelectronics Ireland Limited v SIPTU ^{[footnote 14]} that even existing employees’ representatives had no stand-alone entitlement to attend meetings on topics concerning transnational information and consultation other than in the legal framework now provided for by the Directive, from which the UK had removed itself.

23) The Employer said that regulation 21(3)(a) of amended TICER provides that only a “European Works Council” is a “relevant applicant” for the purposes of regulation 21 of amended TICER and regulation 21A(10)(c)(iv) of amended TICER provides that only a “member of the European Works Council” is a “relevant applicant” for the purposes of regulation 21A of Amended TICER in respect of a complaint concerning a breach of regulation 19E of Amended TICER. The Employer said that for the reasons given above there was not currently a European Works Council because the former European Works Council ceased to exist at 11pm (UK time) on 31 December 2020. The Employer said that the EWC did not continue to exist after 11pm (UK time) on 31 December 2020 but that it was only a matter of time before a new European Works Council would exist under German law and be operated by easyJet (DE). The Employer said that the absence of a European Works Council currently operating under amended TICER was fatal to this complaint because it meant that the complainant was not a “relevant applicant”. The Employer referred to SAFRAN ^{[footnote 15]} and Manpower. ^{[footnote 16]}

6. Summary of the Complainant’s submissions on the preliminary issue

24) The Complainant submitted that the amendments to TICER made by the EU Exit Regulations did not have the effect for which the Employer contended and certainly were not intended by the Government or Parliament to have that effect. The Complainant set out the following provisions of regulations 4 and 5 of amended TICER:

4.—(1) Subject to paragraph (2) the provisions of regulations 17 to 41 and of regulation 46 shall apply in relation to a Community-scale undertaking or Community-scale group of undertakings only where, in accordance with regulation 5, the central management is situated in the United Kingdom.

(2) The following regulations shall apply in relation to a Community-scale undertaking or Community-scale group of undertakings whether or not the central management is situated in the United Kingdom–

(c) regulation 18 to the extent it applies paragraphs 3 to 5 of the Schedule (UK members of the European Works Council);

(d) regulations 23(1) to (5) (breach of statutory duty);

(e) regulations 25 to 33 (protections for members of a European Works Council, etc.);

(f) regulations 34 to 39 (enforcement bodies) to the extent they relate to applications made or complaints presented under any of the other regulations referred to in this paragraph;

(g) regulations 40 and 41 (restrictions on contracting out).

7. The central management

5.—(1) This regulation applies where–

(b) the central management is not situated in a Relevant State and the representative agent of the central management (to be designated if necessary) is situated in the United Kingdom; or

(c) neither the central management nor the representative agent (whether or not as a result of being designated) is situated in a Relevant State and–

(i) in the case of a Community-scale undertaking, there are employed in an establishment, which is situated in the United Kingdom, more employees than are employed in any other establishment which is situated in a Relevant State, or

(ii) in the case of a Community-scale group of undertakings, there are employed in a group undertaking, which is situated in the United Kingdom, more employees than are employed in any other group undertaking which is situated in a Relevant State.

(2) Where this regulation applies, the central management shall be treated, for the purposes of these Regulations, as being situated in the United Kingdom and–

(a) the representative agent referred to in paragraph (1)(b); or

(b) the management of the establishment referred to in paragraph (1)(c)(i) or of the group undertaking, referred to in paragraph (1)(c)(ii), shall be treated, respectively, as being the central management.

The Complainant submitted that Parliament’s intentions regarding the amendments to regulations 4 and 5 could be understood from the explanations of those changes made to Parliament (and others) by the government, and (with caution) the debates in Parliament on the draft EU Exit Regulations.

25) The Complainant said that the Government’s Explanatory Memorandum to the EU Exit Regulations read as follows:

7.4 A no deal exit would mean that after exit the UK is no longer included within EU rules on European Works Councils. As such changes are required to the legislative framework set out in the TICE Regulations 1999 to address this. In a ‘no deal’ scenario, the government will ensure the enforcement framework, rights and protections for employee representatives in the UK European Works Councils continue to be available, as far as possible.

7.5 Provisions relevant to existing European Works Councils, which can continue to operate, are maintained. These include:

• the enforcement framework, for example where there is a dispute about the operation of an existing European Works Council;

• the employee representative rights and protections, such as the rights to training and time off, and the protections from suffering detriment or unfair dismissal; and

• the protection for confidential information shared with the European Works Council or through the information and consultation procedure.

7.6 However, the SI amends the TICE Regulations 1999 so that no new requests to set up a European Works Council or information and consultation procedure can be made. This removes the provisions covering:

• requests for information on employee numbers;

• the right to request that a European Works Council or information and consultation procedure is set up;

• the negotiation process for establishing a European Works Council or information and consultation procedure, including setting up a special negotiating body; and

• the content of new European Works Council or information and consultation procedure agreements.

26) The Complainant said that in a submission from the Trades Union Congress (TUC) to Parliament regarding the draft EU Exit Regulations dated November 2018, the TUC expressed concern, inter alia, about the fact that:

UK workers would no longer be entitled to request the establishment of an EWC, union representatives would lose the right to participate in negotiations on the establishment of an EWC and workers could lose out on the numerous benefits EWCs can bring ….

The TUC went on to welcome the government’s efforts to preserve existing EWCs but believe that UK employment rights protection should also be offered to workers who wish to set up an EWC in the future (recognising that in a no-deal scenario future participation would be contingent upon reciprocal agreement with other EU countries).

The Complainant said that in response to the TUC submission, the Department for Business, Energy and Industrial Strategy (BEIS) had stated:

The current rights are being retained. The changes are in relation to new requests to establish an EWC, which will not be possible as the EWC Directive will no longer apply to the UK in a ‘no deal’ scenario. Any impact on the rights of workers to be represented on or by EWCs is as a result of leaving the EU without a deal covering EWCs, not as a result of the SI.

The Complainant said that the House of Lords Secondary Legislation Scrutiny Committee also appears to have understood the proposed changes to TICER as protecting “arrangements for existing EWCs but no longer allow[ing] for the establishment of new EWCs in a ‘no deal’ situation”. ^{[footnote 17]} The Complainant said that there was no suggestion in either the Explanatory Memorandum or the BEIS response to the TUC that TICER would cease to apply to all companies or groups with actual central management in the UK as argued by the Employer. On the contrary, as noted above, the Explanatory Memorandum stated that “Provisions relevant to existing European Works Councils, which can continue to operate, are maintained. These include .. the enforcement framework, for example where there is a dispute about the operation of an existing European Works Council”. The Complainant said that the Explanatory Memorandum did not limit this to European Works Councils only with deemed central management in the UK and that had the amendments done so, both the TUC and Parliamentarians would surely have picked up on the point.

27) The Complainant said that Parliamentary debates on the draft EU Exit Regulations offered a somewhat opaque insight into exactly what was in the minds of Parliamentarians when passing the legislation. Those who raised the issue of European Works Councils appeared to welcome the fact that the Regulations would continue to apply to existing European Works Councils and bemoaned the fact that it would no longer be possible to set up a new European Works Council under TICER as the TUC had done. The Complainant referred to a statement of Lord Monks in a House of Lords debate on 6 February 2019 ^{[footnote 18]} and the following statement of Justin Madders in the House of Commons:

In the regulations, the Government seek to retain certain aspects of the European works council scheme for councils set up before exit day, whenever that turns out to be. We welcome the fact that the enforcement framework, various employee representative rights and protections, and the confidential information protections are preserved for existing European works councils. There are also provisions to ensure that existing European works councils can continue to operate.

The concern, however, which we have already referred to, is that no new councils will be set up and that the right to request information on employee numbers, the provisions governing the setting up of a negotiating body, and the process and content of works councils and information and consultation procedure agreements will be lost. That clearly constitutes a loss of valuable workers’ rights in contravention of the Prime Minister’s promise to maintain existing workers’ rights at current levels. ^{[footnote 19]}

The Complainant said that it was questionable how much reliance should be put on the Parliamentary debates in understanding Parliament’s intentions as regards amendments to TICER as there was no discussion specifically about the proposed changes to regulations 4 and 5, which were central to the question to what extent the Regulations continued to apply to UK companies and the entire debate in both Houses was framed in the context of a possible “no deal Brexit”. The Complainant said that it was never clear in either debate whether Government ministers meant no Withdrawal Agreement with the EU or no Trade Agreement with the EU, or both. The Complainant said that the UK did subsequently sign both a Withdrawal Agreement and a Trade and Co-operation Agreement with the EU, and yet the changes to TICER still came into effect on 31 December 2020 notwithstanding.

28) The Complainant said that the TUC had written to the Minister for Small Business, Consumers & Labour Markets on 30 November 2020, expressing concern at the interpretation of amended TICER by a number of law firms advising companies with UK-based European Works Councils, including Lewis Silkin. The Complainant referred to the Minister’s reply dated 31 December 2020 where the Minister had stated that in the Government’s view “the TICE Regulations as amended from 1 January 2021 will continue to apply to UK companies with an EWC where the central management is in the UK”. He had said that the Statutory Instrument containing the EU Exit Regulations “was debated and approved by Parliament clearly and expressly on this basis (for example see paragraphs 7.4 to 7.6 of the explanatory memorandum accompanying the exit SI)” and went on to provide the Government’s interpretation of amended TICER regulations 4 and 5 as follows:

In our view, the correct interpretation both currently and from 1 January is that where the central management is in the UK, regulation 5 is not relevant to the effect of regulation 4(1). Such companies fall within regulation 4(1) on the wording of 4(1) alone, because they meet the condition that the central management is situated in the UK. Regulation 5 is only relevant to 4(1) where the central management is not situated in the UK.

As noted above, regulation 4(1) provides that the specified regulations apply “only where, in accordance with regulation 5, the central management is situated in the United Kingdom.” In our view the commas around “in accordance with regulation 5” effectively function as brackets. The effect is simply to indicate that a company may also fall within 4(1) in the two cases set out in regulation 5 where the central management is outside the UK but is treated as though it were inside the UK. The “only” applies to the phrase as a whole, i.e. the relevant regulations apply only where the central management is in the UK, including the cases where that is deemed to be the case under regulation 5. It is not that the relevant regulations apply only in the two cases set out in regulation 5.

The Complainant said that on this interpretation, regulations 17 etc applied only where the central management was situated in the United Kingdom (as distinct from the regulations cited in regulation 4(2) which applied to all undertakings/groups), and that this included where central management was deemed to be situated in the United Kingdom in accordance with regulation 5. The Complainant said that regulation 4(1) could therefore be read as saying:

“4 (1) Subject to paragraph (2) the provisions of regulations 17 to 41 and of regulation 46 shall apply in relation to a Community-scale undertaking or Community-scale group of undertakings only where, including in accordance with regulation 5, the central management is situated in the United Kingdom.

The Complainant said that it did not contend that the Employer fell within the scope of regulation 4(1) because of regulation 5, but because, to quote from regulation 4(1), its “central management is situated in the United Kingdom”.

29) The Complainant said that other changes made to TICER lent strong support to the view that the Regulations continued to apply in full to the Employer. The Complainant said that, regulation 18, which was highly relevant to this Complaint, states:

8. Subsidiary requirements

18.— The provisions of the Schedule continue to apply on and after exit day in any case where they applied before exit day.

The Complainant said that this was the strongest and clearest statement of Parliament’s intentions with regard to the continuing applicability of the subsidiary requirements; they applied in any case where they applied before exit day. The Complainant said that the Employer had acknowledged that between 2011 and 11pm (UK time) on 31 December 2020, easyJet (UK) was required to comply with the subsidiary requirements detailed in the Schedule to TICER (as in force prior to 11pm (UK time) on 31 December 2020). The Complainant said that according to the amended regulation 18, the provisions of the Schedule therefore “continue[d] to apply” in the case of easyJet (UK). The Complainant also referred to the amended regulation 18A, which stated:

9. Information and consultation

18A.—(1) This regulation applies where—

(a) a European Works Council or information and consultation procedure has been established before exit day under regulation 17; or

(b) a European Works Council has been established before exit day by virtue of regulation 18.

The Complainant said that the amended regulation 21, under which the Complaint has been brought, now stated:

10. Disputes about operation of European Works Council or information and consultation procedure

21.—(1) Where–

(a) a European Works Council or information and consultation procedure has been established before exit day under regulation 17; or

(b) a European Works Council has been established before exit day by virtue of regulation 18, a complaint may be presented to the CAC by a relevant applicant where paragraph 1A applies (emphasis added).

(1A) This paragraph applies where a relevant applicant considers that, because of the failure of a defaulter—

(a) the terms of the agreement made before exit day under regulation 17 or, as the case may be, the provisions of the Schedule, have not been complied with; or

(b) regulation 18A has not been complied with, or the information which has been provided by the management under regulation 18A is false or incomplete in a material particular.

The Complainant said that it was a European Works Council that had been established before exit day by virtue of regulation 18 and therefore the requirements concerning information and consultation in regulation 18A applied and the EWC could present a complaint to the CAC that the provisions of the Schedule and regulation 18A had not been complied with.

30) The Complainant said that in its response to the Complaint, the Employer had referred to designating its German branch as the representative agent for the purposes of the Directive. The Complainant said that it did not dispute central management’s right to do so, or indeed its obligation to designate a representative agent in a member state of the European Economic Area, for the purposes of the Directive which was clear from the wording of the Directive and from the EU Commission’s Notice to Stakeholders. The Complainant said that the UK Parliament had now created a legal regime for European Works Councils distinct from that required by the Directive, however, and that easyJet (UK) must comply with both the Directive and TICER. The Complainant said that the Employer could not take itself out of the scope of TICER by appointing a representative agent in Germany for the purposes of the Directive. The Complainant said that the contention by the Employer that the fact that the term “representative agent” was not defined in the Regulations meant that it must be construed having regard to its meaning under the Directive was irrelevant to the Complaint because the Complainant considered that regulation 4(1) applied to easyJet (UK) by virtue of the fact that it was the central management of the easyJet group of companies and it is situated in the UK.

31) The Complainant said that the Employer had disputed the CAC’s jurisdiction to hear complaints concerning events that predated 11pm (UK time) on 31 December 2020 on the grounds that Parliament had explicitly legislated in paragraph 41 of the EU Exit Regulations to allow complaints that predated 11pm (UK time) on 31 December 2020 but did not do so in the case of events that predated that time, implying that it did not intend to do so. The Complainant said that it did not believe this “argument from silence” was valid. The Complainant said that the Employer had acknowledged that regulations 17 to 41 and 46 would continue to apply to some undertakings or groups, and it would negate the rights conferred by the Regulations if it was not possible to bring a complaint to the CAC in respect of those undertakings or groups where the events predated 31 December 2020 and would be inconsistent with the clear wording of regulation 21(1B) which allows a complaint to be brought within six months of the alleged failure or non-compliance.

32) The Complainant said that if regulation 4(1) were interpreted in the way the Employer had contended, it would create a bizarre situation where regulations 17 to 41 and 46 only applied to undertakings or groups based outside the European Economic Area which had designated a representative agent in the UK before 31 December 2020 and there was no indication in the Parliamentary debates, or in the Explanatory Memorandum to the EU Exit Regulations, that this would be the effect or intention of the changes to TICER. The Complainant said that paragraphs 35 to 40 of the EU Exit Regulations provided that TICER continued, on and after exit day, to have effect in relation to negotiations for the establishment of a European Works Council commenced before exit day but still ongoing at exit day, as they had effect immediately before that day, but subject to certain relatively minor modifications listed in paragraph 33 of the EU Exit Regulations. The Complainant said that in those cases, amended TICER would apply to the EWC subsequently established, including, if relevant, the subsidiary requirements (for example if no agreement were reached within three years) and that this was stated to be “Despite the amendments and revocations made by Part 1 of this Schedule”, ie the amendments to TICER made by the EU Exit Regulations, including the changes to regulations 4 and 5. The Complainant said that if the Employer’s interpretation of the amended regulations 4 and 5 were correct, this would lead to a situation where regulations 17 to 41 and 46 (and potentially the subsidiary requirements) applied to:

• Undertakings or groups with actual or deemed central management in the UK in respect of which there were on-going negotiations at exit day; and

• Undertakings or groups based outside the European Economic Area which had designated a representative agent in the UK before 31 December 2020;

• But not undertakings or groups with actual central management in the UK with an EWC established before exit day.

and that there would not seem to be any rationale to this.

33) The Complainant said that it considered that the Employer may well be required to operate two EWCs, one under the subsidiary requirements of the TICER including UK representatives, and one under the subsidiary requirements of the German legislation without UK representatives. The Complainant said that it might be possible to combine these two EWCs into a single EWC with UK representatives under an agreement. In response to the Employer’s suggestion that this would be contrary to the approach detailed in recital 24 of the Directive and reflected in the UK’s transposition of it that the legal framework applicable to groups should “keep to a minimum the burden on undertakings or establishments while ensuring the effective exercise of the rights granted” the Complainant said that the Directive was no longer relevant to the interpretation of TICER and that the legal framework created by amended TICER constituted the minimum burden on undertakings that ensured the effective exercise of the rights granted. The Complainant referred to the Employer’s argument that the construction of amended TICER for which the Complainant contended would render meaningless Parliament’s careful efforts when enacting regulations 4 and 5 of both TICER and amended TICER to ensure that a European Works Council only operated under UK law if no European Works Council would be operating in respect of the same group under the legislation of a member state of the European Union. The Complainant said that, even under the Employer’s interpretation, Parliament had legislated so that the amended Regulations would apply – in parallel to an EEA member state’s European Works Council law - to undertakings or groups based outside the European Economic Area which had designated a representative agent in the UK before 31 December 2020. Parallel laws would also apply to undertakings or groups with actual or deemed central management in the UK in respect of which there were on-going negotiations at exit day. The Complainant also referred to the Employer’s argument that the construction for which the Complainant contended would raise significant practical issues such as how, other than UK members, members of the European Works Council operating under amended TICER would be elected or appointed. The Complainant said that the same alleged problem would arise in respect of European Works Council members from countries like Switzerland which had no EWC legislation at all and that in practice it did not seem to be an insurmountable problem and that in any event if Parliament wished to create a new legal regime for European Works Councils based in the UK it would not be able to legislate to overcome the alleged problem anyway.

34) In relation to the Employer’s contention that the Complainant was not a relevant applicant for the purposes of regulations 21 and 21A of the TICE Regulations the Complainant said that this was part and parcel of its argument that most of the Regulations no longer applied to easyJet (UK). The Complainant said that for all the reasons given above it considered that the Regulations continued to apply to easyJet (UK) in their entirety and that therefore the EWC continued to exist and was a relevant applicant for the purposes of regulation 21, while its members were relevant applicants for the purposes of regulation 21A.

35) The Complainant said that in its response on behalf of the Employer, the Employer’s solicitor, Lewis Silkin, had maintained that the exclusion of undertakings and groups with actual central management in the UK was the deliberate policy intention of the Government and Parliament. The Complainant quoted a note on the amendments to TICER posted on the Lewis Silkin website in January 2019 where Lewis Silkin had acknowledged that:

the Regulations purport to continue the existence of EWCs already operating under UK law yet, through what appears to be poor drafting, repeal the provision that makes the UK’s law on EWCs apply to businesses located in the UK.

The Complainant said that it agreed with Lewis Silkin’s 2019 assessment that the Regulations purported to continue the existence of EWCs already operating under UK law, and that, rather than being a deliberate policy intention to exclude UK companies from their scope, any doubt about the continuing application of the Regulations to UK companies was the result of poor drafting. The Complainant said that both the Government’s and the CAC’s websites stated that a complaint could be made to the CAC regarding the operation of a European Works Council:

a) The Government website at Participating in a European Works Council - GOV.UK (www.gov.uk) states, under the heading Complaints about creating the European Works Council: “You can complain that …. your employer has not followed the right procedure for running an EWC”;

b) The CAC website at Guide to European Works Councils - GOV.UK (www.gov.uk) states:

Below lists the applications and complaints that can be submitted to the CAC under The Transnational Information and Consultation of Employees Regulations 1999 (Statutory Instrument 1999 No. 3323) as amended by The Transnational Information and Consultation of Employees (Amendment) Regulations 2010 (Statutory Instrument 2010 No. 1088).

Under the heading 5) Disputes about operation of the EWC or I & C procedure, it states

A complaint may be made to the CAC that the terms of the agreement under regulation 17 or the provisions of the Schedule have not been complied with or information has not been provided in accordance with regulation 18a or information has been provided but is false or incomplete.

The Complainant said that it did not claim that the guidance on the Government or CAC websites had any legal authority, but said that it meant that it was perfectly justified in believing it was entitled to bring this complaint. The Complainant said that, in summary, it considered that easyJet (UK), as the controlling undertaking of the easyJet group of undertakings, continued to be subject to amended TICER in their entirety; that the CAC had jurisdiction to hear the Complaint, and that the EWC and its members were relevant applicants for the purpose of bringing the complaint.

11. Considerations

36) The Panel has considered the submissions and accompanying documentation provided by both parties relating to the preliminary issue carefully. As stated in paragraph 7 above the Panel is satisfied that it has been able to reach a decision on the preliminary issue fairly without a hearing and on the basis of the documentation before it without further submissions from either party.

37) The dispute between the parties centred on the interpretation to be given to regulation 4(1) of amended TICER and the implications of their preferred interpretation. Regulation 4(1) of amended TICER reads as follows:

Subject to paragraph (2) the provisions of regulations 17 to 41 and of regulation 46 shall apply in relation to a Community-scale undertaking or Community-scale group of undertakings only where, in accordance with regulation 5, the central management is situated in the United Kingdom.

The Employer submitted that regulations 4 and 5 of amended TICER governed the application of amended TICER to easyJet (UK); in effect they acted as the gateway to the application of regulations 18A, 19E, 21 and 21A and paragraphs 7 and 8 of the Schedule to amended TICER. The Employer submitted that regulation 4(1) was confined to situations where the central management was situated in the United Kingdom on the basis of the provisions contained in regulation 5 of amended TICER only and that the CAC therefore had no jurisdiction to hear the Complaint. The Complainant submitted that regulation 4(1) additionally applied where the central management was situated in the United Kingdom without being deemed to be so in accordance with the terms of regulation 5. It was common ground between the parties that the Employer did not fall within regulation 5 of amended TICER.

38) The Panel concurs with the view that regulation 4(1) of amended TICER is poorly drafted and agrees that it is capable of being read in the way that the Employer contends. However the matter is not free from doubt. The Panel notes that applying regulation 4(1) to exclude situations where central management is situated in the UK without recourse to regulation 5 would conflict with other provisions of amended TICER. Regulation 18, headed “Subsidiary requirements”, states that:

The provisions of the Schedule continue to apply on and after exit day in any case where they applied before exit day.

The Employer acknowledged that, pursuant to regulation 18, it was required to comply with the subsidiary requirements contained in the Schedule between 2011 and exit day although it also submitted that the basis of this requirement was regulation 5(1)(a) of TICER, which had read “the central management is in the United Kingdom” and which had been repealed by the EU Exit Regulations. The Panel notes that regulation 18 of amended TICER states that the provisions of the Schedule continue to apply on and after exit day in any case where they applied before exit day without regard to the initial source of the obligation to comply with those provisions. That being so, it would seem to be irrelevant that the provision imposing the requirement for the Employer to create the conditions and the means necessary for the setting up of a European Works Council in the first place - regulation 5(1)(a) of TICER - had been repealed. Regulation 18A, headed Information and consultation” states that it applies, inter alia, where a European Works Council has been established before exit day by virtue of regulation 18. Regulation 21, headed so far as material “Disputes about operation of European Works Council …” allows complaints to be presented to the CAC by a relevant applicant where a European Works Council has been established before exit day by virtue of regulation 18. The only requirement under both regulations 18A and 21 is that the European Works Council should have been established before exit day.

39) The Panel concurs with the Complainant’s view that regulation 18 constitutes the strongest statement of Parliament’s intentions with regard to the continued applicability of the subsidiary requirements. Regulations 18A and 21 also reflect an intention that the provisions they contain should continue to apply, without qualification, to a European Works Council that has been established under regulation 18 prior to exit day. Having considered the provisions of amended TICER as a whole the Panel has decided that regulation 4(1) does not apply to exclude situations where central management is situated in the United Kingdom without recourse to the provisions of regulation 5. The Panel notes the Employer’s contention in paragraph 21 above that the Explanatory Memorandum to the EU Exit Regulations should be given limited if any weight. The Panel concurs with this view but observes that its conclusion does not conflict, and indeed accords, with the provisions of that memorandum recorded in paragraph 25 above.

40) The Panel notes the Employer’s submission that the saving and transitional provisions in the EU Exit Regulations referred to complaints that predated 11pm (UK time) on 31 December 2020 but made no reference to events that preceded that time and that had Parliament wished the CAC to have continued jurisdiction over such events then it could have legislated to that effect. The Panel also notes the Complainant’s submission that the Employer had acknowledged that some undertakings or groups, at least, would still be covered by regulations 17 to 41 and regulation 46 and that it would negate the rights conferred by the Regulations if complaints could not be brought to the CAC in respect of those undertakings or groups where events preceded exit day. Having considered the matter carefully the Panel has concluded that it retains jurisdiction to hear complaints relating to alleged failures or non-compliance by the Complainant occurring prior to exit day (as well as subsequently) which fall within the time limit imposed by regulation 21(1B). The Panel observes that the Employer’s submission would have the consequence that there would potentially be no forum in which an employer’s alleged failures in relation to a European Works Council governed by TICER which occurred prior to exit day could be challenged and does not consider that this is an outcome which Parliament could have intended.

41) The Employer contended that the Complainant was not a “relevant applicant” under regulation 21 as there was no European Works Council in existence at the time of the Complaint, the former EWC having ceased to exist after 11pm (UK time) on 31 December 2020. The Complainant said that the Employer’s contention was part and parcel of its argument that most of amended TICER did not apply to easyJet (UK) and that on the basis of the Complainant’s submissions the EWC continued to exist. It follows from the Panel’s conclusions in paragraphs 38 to 40 above that the Panel considers that the Complainant was a “relevant applicant” at the time of the Complaint being lodged with the CAC. ^{[footnote 20]}

12. Decision

42) For the reasons given in paragraphs 38 to 41 above the Panel’s decision is that the CAC has jurisdiction to hear the Complaint.

13. Concluding observation

43) The Employer submitted that a construction of amended TICER that required it to operate two European Works Councils, one operating under TICER and one under the national law of an EU Member State, would lead to absurdity (as such term is understood in the context of statutory interpretation). The Panel notes the Employer’s statement that since exit day easyJet (DE) has been taking steps towards the establishment of a European Works Council operating under German law. The Complainant said that it might be possible to combine these two European Works Councils into a single European Works Council with UK representatives by agreement. Although not material to the Panel’s decision-making process the Panel notes that its decision allows the Complainant’s rights to be preserved pending such an outcome.

Panel

Professor Gillian Morris, Panel Chair

Mrs Anna Berry

Mrs Maureen Chambers

1 June 2021

1. In this decision we refer to The Transnational Information and Consultation of Employees Regulations 1999 prior to their amendment by The Employment Rights (Amendment) (EU Exit) Regulations 2019 as “TICER” and The Transnational Information and Consultation of Employees Regulations 1999 following their amendment by The Employment Rights (Amendment) (EU Exit) Regulations 2019 as “amended TICER”. ↩

2. The Complaint also stated that were central management to refuse to cover Mr Sack’s expenses in relation to assisting the EWC in bringing the Complaint, the EWC would consider that this would be a breach of paragraphs 9(4) and (5) of the Schedule to TICER and of regulation 19A of TICER and would wish to add this to its Complaint under regulations 21 and 21A of amended TICER. Mr Sack’s participation in assisting the EWC and the terms of that participation were subsequently resolved between the parties. ↩

3. Both parties, in their submissions, added emphasis to specific words or phrases when citing statutory provisions and other sources and this is indicated by italics in this decision. Given the frequency with which this was done by the parties, the words “emphasis added” have not been included on each occasion. ↩

4. EWC/8/2013, paragraphs 82-86. ↩

5. EWC/19/2018. ↩

6. EWC /34/2020. ↩

7. Above note 4 at paragraph 81:

   Where, as here, the central management of the Community-wide group is based outside the UK, only certain of the provisions of the UK rules, the Transnational Information and Consultation Regulations 1999, as amended, apply. See Reg. 4(2). A complaint of non-compliance with an EWC agreement may be made under Regulation 21 to (now) the CAC, but Regulation 21 is not one of the UK regulations which is made applicable by Regulation 4(2) where the central management of the group is outside the UK. ↩

8. Above note 5 at paragraphs 53 and 54:

   53) It follows that central management relocated from the UK to Ireland on 12 October 2016. Because central management was no longer situated in the UK at the time of the refusal on 16 August 2018 to provide Ms Maier with the means required to undertake training, the Regulations do not apply.

   54) This complaint is inadmissible because the CAC has no jurisdiction to consider it. ↩

9. UKEAT/0096/18/DA. ↩

10. [2018] EWHC 3342 (Admin), Supperstone J at [67]:

    Realistically Mr Hendy did not press Option Three. I reject Mr Hendy’s suggestion that the words “or otherwise” could be read into s.296(1)(b) to give effect to the Convention right (Skeleton Argument, para 118). That, as Mr Jeans observes, is the equivalent of inserting the words “or not” i.e. it achieves the opposite meaning from that which is intended. ↩

11. The Employer referred to footnote 9 of Mr Gordon Lean & Manpower Group (3) [EWC/15/2017]:

    [p]ublications put out by law firms such as Eversheds Llp or Lewis Silkin Llp, or BEERG are not binding on us, and the BIS publication Mr Hayward referred to is not statutory guidance. It is the Regulations that are to be construed, not commentary on the Regulations. ↩

12. EWC 33/2020. ↩

13. Above, note 5. ↩

14. LCR14189. ↩

15. Above note 3 at 81:

    Even if Regulation 21 were applicable, the Complainants in this case are not ‘relevant applicants’ with Regulation 21. Right of complaint under Regulation 21 is given to the central management of the group and to the European Works Council but not to employee representatives (Regulation 21(3)(a)). It appears that if a complaint of non-compliance with the agreement is to be made in this straightforward way, it will have to be made to the relevant French court, which we understand to be the Tribunal de Grande Instance in Versailles. ↩

16. Above note 10 at [50]: a complaint being made other than by a “relevant applicant” is determinative and fatal to it. ↩

17. Sixth Report, 21 November 2018, paragraphs 1 and 2. The TUC’s submissions and BEIS response quoted above are in Appendix 1 to the Sixth Report. ↩

18. We welcome the Government’s commitment to maintaining British participation in existing EWCs, but this commitment does not extend—at least as yet—to including new ones or to absorbing into UK law any changes in EWC arrangements that come into force over the next period. No new EWCs will be required to be set up under UK law after Brexit. We are worried that—at least in some cases—UK workers might lose their seats on the European works councils and therefore put British jobs at much greater risk than those of our neighbours across the channel and the North Sea. In other cases, I think there would be voluntary agreement. There are specific measures on the rights of UK worker representatives, such as paid time off to attend meetings. I note that these will be maintained after Brexit in relation to EWCs, but not necessarily to new EWCs that have a British component.” HL Debs 6 February 2019, column 1573. ↩

19. HC Debs 13 February 2019, no column reference given. ↩

20. The parties made analogous arguments relating to the application of regulation 21A. As recorded in paragraph 7 above the complaint under regulation 21A was subsequently withdrawn by the Complainant. ↩