Legal Update

Did European Works Councils Survive Brexit? 'Yes' Rules the Court of Appeal

Under European law, substantial undertakings operating within the EU are required to set up European Works Councils (EWCs) to facilitate employee consultation – but did EWCs previously established by UK companies survive Brexit? In an important ruling, the Court of Appeal has answered that question with a resounding 'yes' (Easyjet PLC v Easyjet European Works Council).

EWCs are the means by which substantial European employers provide information to, and consult with, their employees on transnational issues. The obligation to set them up arose from EU directives that were transposed into English law by the Transnational Information and Consultation of Employees Regulations 1999 (TICER). TICER was, however, significantly amended on the UK's exit from the EU.

At the height of the COVID-19 pandemic, an airline which operates across Europe announced plans to reduce its staff numbers by up to 30 per cent. In that context, the airline's EWC lodged a complaint with the Central Arbitration Committee (CAC). The airline asserted that the EWC ceased to exist on 31 December 2020, the date on which the UK's departure from the EU was completed, and that the CAC thus had no jurisdiction to consider the matter. That argument, however, persuaded neither the CAC nor the Employment Appeal Tribunal (EAT).

Ruling on the airline's challenge to the EAT's ruling, the Court noted that the critical amendment to TICER on which the case hinged was poorly drafted and capable of more than one interpretation. It was undisputed that the creation of any new EWCs was precluded after Brexit day. The sole issue, therefore, was whether previously established EWCs continued to exist after that date.

In dismissing the appeal, the Court found that they did. Whilst acknowledging that its reading of the amendment would create practical difficulties – amongst other things, the airline would be obliged to establish two EWCs, one in Europe and the other in the UK – they were far from insuperable. Ruling that the CAC had jurisdiction to hear the EWC's complaint, the Court found that such an outcome did not conflict with the will of Parliament and had the advantage that the airline's UK employees would continue to be protected via the existing EWC.