Case Number: EWC3/2006

Case Number: EWC3/2006

11 July 2006

CENTRAL ARBITRATION COMMITTEE

TRANSNATIONAL INFORMATION AND CONSULTATION OF EMPLOYEES REGULATIONS 1999

DECISION ON APPLICATION UNDER REGULATION 10(3)

The Parties:

CEMEX Investments Limited

and

Federation Nationale Des Salaries De La Construction CGT

Bygge-Anlægs-og Trækartellet

Fédération Générale Force Ouvrière

Industriegewerkschaft Bauen-Agrar-Umwelt

Salud Laboral y Empleo Metal, Construction y Afines, UGT MCA

Confédération Française Démocratique du Travail

European Federation of Building and Woodworkers

1. On 24 February 2006 the Central Arbitration Committee (CAC) received an application from CEMEX Investments Limited (the applicant ‘Undertaking’) under Regulation 10(3) of the Transnational Information and Consultation of Employees Regulations 1999 (TICER 1999).

2. In accordance with section 263 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act), the CAC Chairman established a Panel to consider the case. The Panel consisted of Professor Frank Burchill as Chairman and Dr Susan Corby and Mr Simon Faiers as Members. The Case Manager appointed to support the Panel was Matt Penfold.

The application

3. The Undertaking produces cement and ready-mix products in the UK and was previously known as RMC Group Plc. It was bought by the Cemex Group on 1 March 2005. The parent of the Cemex Group of companies is Cemex SA de CV which has its offices in Monterrey and is incorporated under the laws of Mexico. The Cemex Group of companies mainly manufactures cement, ready-mix concrete, aggregates, asphalt and related products.

4. The Undertaking stated that when operating as RMC, it had entered an agreement, dated 19 July 1996, in which it agreed a transnational information and consultation structure with employee representatives of the workforces in the European Union (EU) countries that were Member States at that time. After the takeover had proceeded, and subsequent to the increase in the number of the Member States of the European Union, requests had been made by six employees’ representatives for negotiations to start with a view to the setting up of a European Works Council. The undertaking submitted in its application to the CAC that the agreement it had entered into in 1996 satisfied the requirements of Article 13 of the Directive and of regulation 45 of TICER 1999; namely that there was already an agreement in force which removed the obligations that might otherwise exist.

5. The applicant Undertaking also submitted that its establishment in Surrey, England had direct operational oversight of all European wide operations of the Cemex group, except for those in Spain and Italy, and that it was the central management of the Cemex Group of companies for the purposes of requests to establish a European Works Council or a procedure for informing and consulting employees.

6. The Undertaking made its application to the CAC under regulation 10(3) seeking a declaration that the obligation to initiate negotiations for the establishment of a European Works Council or an information and consultation procedure did not apply to it as there was an Article 13 agreement in existence.

The legislation

7. The European Directives and United Kingdom legislation relevant to the CAC’s consideration of this application are Council Directive 94/45/EC, Council Directive 97/74/EC and the Transnational Information and Consultation of Employees Regulations 1999 (‘TICER 1999’).

Council Directive 94/45/EC

8. The Council of the European Union, in Council Directive 94/45/EC (22 September 1994), established the requirements and the procedures for the establishment, in Community-scale undertakings and Community-scale groups of undertakings, of a European Works Council or a procedure for the purposes of informing and consulting employees. The stated purpose of the Directive is to improve the right to information and to consultation of employees in Community-scale undertakings and Community-scale groups of undertakings. Community–scale undertakings and Community-scale groups of undertakings are defined by the Directive. In the present case it has not been disputed by the parties that the undertaking is an undertaking in accordance with Council Directive 94/45/EC or TICER 1999.

9. The Directive directs that a European Works Council or a procedure for informing and consulting employees shall be established in every Community-scale undertaking and every Community-scale group of undertakings, where requested in a manner laid down within the Directive. The Directive states, at Article 5, that either on its own initiative or at the written request of at least 100 employees (or their representatives) in at least two undertakings or establishments in at least two different Member States, the ‘central management’ shall initiate negotiations for the establishment of a European Works Council or an information and consultation procedure’. Responsibility for establishing the chosen procedure thus falls to central management and this term, a key issue in the present case, is defined within Article 4 of the Directive.

Article 4

Responsibility for the establishment of a European Works Council or an employee information and consultation procedure

1. The central management shall be responsible for creating the conditions and means necessary for the setting up of a European Works Council or an information and consultation procedure, as provided for in Article 1 (2), in a Community-scale undertaking and a Community-scale group of undertakings.

2. 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.

3. For the purposes of this Directive, the representative or representatives or, in the absence of any such representatives, the management referred to in the second subparagraph of paragraph 2, shall be regarded as the central management.

10. The Directive recognises that there might be undertakings that, in advance of the Directive coming into force, already had in place an agreement which covered the entire workforce and established provision for the transnational information and consultation of employees. The Directive therefore included an excepting provision, under Article 13, that would remove the obligations to comply with its terms if the correct criteria were met by the existing ‘Article 13 Agreement’.

Article 13

Agreements in force

1. Without prejudice to paragraph 2, the obligations arising from this Directive shall not apply to Community-scale undertakings or Community-scale groups of undertakings in which, on the date laid down in Article 14 (1) for the implementation of this Directive or the date of its transposition in the Member State in question, where this is earlier than the above mentioned date, there is already an agreement, covering the entire workforce, providing for the transnational information and consultation of employees.

2. When the agreements referred to in paragraph 1 expire, the parties to those agreements may decide jointly to renew them.

Where this is not the case, the provisions of this Directive shall apply.

11. The Directive was addressed to the Member States and its Article 14 required Member States to bring into force laws, regulations and administrative provisions necessary to comply with the Directive no later than 22 September 1996, or to at least ensure by that date that required provisions were introduced by an agreement between the social partners - management and labour.

Council Directive 97/74/EC

12. The requirements of Directive 94/45/EC were extended to the United Kingdom of Great Britain and Northern Ireland by Council Directive 97/74/EC dated 15 December 1997. As well as extending Directive 94/45EC to the United Kingdom, Council Directive 97/74/EC also increased the maximum number of members of the special negotiating body to take account of the increase in relevant Member States and, through its Article 3, extended to the UK the ‘existing agreement’ exception established by Article 13 of the earlier Directive.

Article 3

1. The obligations resulting from this Directive shall not apply to Community-scale undertakings or Community-scale groups of undertakings, which, solely by virtue of Article 1, fall within the scope of this Directive, provided that, on the date laid down in Article 4(1) or the date of its transposition in the Member State in question, where this is earlier than the said date, there is already an agreement covering the entire workforce providing for the transnational information and consultation of employees.

2. When the agreements referred to in paragraph 1 expire, the parties to those agreements may decide jointly to renew them. Where this is not the case, Directive 94/45/EC, as extended by this Directive, shall apply.

13. Article 4(1) of this latter Directive states that Member States were required to bring into force the laws, regulations and administrative provisions necessary to comply with the extended Directive by 15 December 1999. The United Kingdom’s domestic implementation of the EC Directive 94/45, as extended to it by EC Directive 97/74, then took effect through the commencement of the Transnational Information and Consultation of Employees Regulations 1999 on 15 January 2000.

Transnational Information and Consultation of Employees Regulations 1999 (TICER 1999)

14. TICER 1999 sets out the obligations for Community-scale undertakings or Community-scale groups of undertakings to establish a European Works Council or an information and consultation procedure where, in accordance with the provisions of regulation 5 of TICER 1999, the central management is situated in the United Kingdom.

5 The central management

(1) The central management shall be responsible for creating the conditions and means necessary for the setting up of a European Works Council or an information and consultation procedure in a Community-scale undertaking or Community-scale group of undertakings where -

(a) the central management is situated in the United Kingdom;

(b) the central management is not situated in a Member 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 Member 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 Member 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 Member State,

and the central management initiates, or by virtue of regulation 9(1) is required to initiate, negotiations for a European Works Council or information and consultation procedure.

(2) Where the circumstances described in paragraph (1)(b) or (1)(c) apply, 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.

15. Where a valid request has been made by employees or employees’ representatives and on the relevant date the undertaking is a community scale undertaking (or the group of undertakings is a community scale group of undertakings) it is then central management’s responsibility for initiating negotiations for the establishment of a European Works Council or an information and consultation procedure.

Regulation 9

(1) The central management shall initiate negotiations for the establishment of a European Works Council or an information and consultation procedure where –

(a) a valid request has been made by employees or employees' representatives; and

(b) on the relevant date the undertaking is a Community-scale undertaking or the group of undertakings is a Community-scale group of undertakings.

(2) A valid request may consist of –

(a) a single request made by at least 100 employees, or employees' representatives who represent at least that number, in at least two undertakings or establishments in at least two different Member States; or

(b) a number of separate requests made on the same or different days by employees, or by employees' representatives, which when taken together mean that at least 100 employees, or employees' representatives who represent at least that number, in at least two undertakings or establishments in at least two different Member States have made requests.

(3) To amount to a valid request the single request referred to in paragraph (2)(a) or each separate request referred to in paragraph (2)(b) must –

(a) be in writing;

(b) be sent to –

(i) the central management, or
(ii) the local management;

(c) specify the date on which it was sent; and

(d) where appropriate, be made after the expiry of a period of two years, commencing on the date of a decision under regulation 16(3) (unless the special negotiating body and central management have otherwise agreed).

(4) The date on which a valid request is made is –

(a) where it consists of a single request satisfying paragraph 2(a) or of separate requests made on the same day satisfying paragraph 2(b), the date on which the request is or requests are sent; and

(b) where it consists of separate requests made on different days satisfying paragraph 2(b), the date of the sending of the request which resulted in that paragraph being satisfied.

(5) The central management may initiate the negotiations referred to in paragraph (1) on its own initiative.

16. TICER 1999 details some exceptions to the obligations on an Undertaking to initiate negotiations following the receipt of valid requests. One such exception, in accordance with the Council Directives (see paragraph 10 above), is ‘Article 13 agreements’ as detailed in regulation 45 of TICER 1999.

Regulation 45. –

(1) None of the obligations in these Regulations applies to a Community-scale undertaking or Community-scale group of undertakings where the conditions specified in Article 13 of the Transnational Information and Consultation Directive are satisfied.

(2) The conditions referred to in paragraph (1) are that an agreement is in force which -

(a) was in force immediately before whichever is the earlier of 23rd September 1996 and the day after the date on which the national law or practice giving effect to the Transnational Information and Consultation Directive came into force in the Member State (other than the United Kingdom) whose national law governs the agreement;

(b) covers the entire workforce in the Member States; and

(c) provides for the transnational information and consultation of employees.

(3) If an agreement when taken together with one or more other agreements satisfies the requirements specified in paragraph (2) that agreement, when taken together with such other agreements, shall be treated as an agreement for the purposes of that paragraph in question.

17. Regulation 10(3) of TICER 1999 states that if the central management considers for any reason that the obligation to initiate negotiations following a valid request does not apply to it, it may, within three months of the date of the request, apply to the CAC for a declaration as to whether the obligation applied to it on the relevant date.

Events leading to the application

18. The 19 July 1996 Agreement, entered into in the name of RMC, established a transnational information and consultation structure with employee representatives of the, then, European Union Member State workforces. This included some employees from Spain and Portugal who belonged to a joint venture between RMC and another company. The Agreement set up a European Consultative Committee (ECC) and was intended to satisfy the requirements of the European Works Council Directive 94/95 EC and in particular Article 13 of that Directive. The Undertaking submitted that the July 1996 Agreement was a voluntary agreement and that at the time it was entered into there was no applicable English law deriving from the European Directive and the RMC agreement is therefore governed by the English law of contract.

19. The enlargement of the European Union in 2005 brought other groups of Cemex workers into the European fold who were not previously covered by the RMC agreement; the additional companies were based in Hungary, Czech Republic, Poland and Latvia – the applicant Undertaking has operational responsibility for these countries. In late 2005 the joint venture with the other company came to and end and the Undertaking then became the employer of approximately 188 workers in Spain – the operating company responsible for the 188 ‘new’ workers is Cemex Spain.

20. The planned EU enlargement led to the Undertaking, in 2004, deciding that action would need to be taken in respect of the new EU Member State employees and the Undertaking proposed to expand the ‘RMC agreement’ to include the new employees. This plan was formalised in 2005 along with some small changes to the identity of management’s representatives and to the mix of employee representatives, changes introduced to reflect the Cemex takeover of the Undertaking. It was also planned to change the name of the employer party to the agreement.

21. The RMC agreement has an amendment procedure set out within it, at its Article 7, which states:-

[RMC Agreement] Article 7 MODIFICATION AND DURATION

The parties agree that the affairs of the European Consultative Committee will be conducted in accordance with the terms of this Agreement. It is agreed that modification of the terms of this Agreement may be made, by mutual agreement between the parties. Requests for modification of terms will be referred by either party, to the Joint Administrative Sub Committee for resolution.

The Agreement will come into effect on the date of signature, and will continue indefinitely, unless either party terminates the Agreement by giving at least six months notice to this effect.

It is recognised that this Agreement is an innovation, and the parties therefore undertake not to terminate the Agreement before the fourth anniversary of it being signed, in order to provide the maximum opportunity to evaluate its effectiveness.

22. On 27 October 2005 the 10^th European Consultative Committee meeting was held in the UK. That meeting included employee representatives (and management representatives) from the UK, Ireland, France, Austria, the Czech Republic, Hungary, Poland, Latvia, Germany & Northern Europe, Spain and Portugal. The meeting agreed to change the RMC agreement name to Cemex, to change the RMC management representatives, to change the number of employees represented by country, and, to formalise the inclusion of the Czech Republic, Poland, Latvia & Hungary to the Agreement. The employee representatives of each country of operation in the EU were given a copy of the Agreement to consider.

23. After that meeting the Undertaking received the letters of request from 6 European Trade Unions asking that it take steps to establish a Special Negotiating Body within Cemex Group and to provide certain information regarding the employees. The requests were made in common terms and were received from Federation Nationale Des Salaries De La Construction CGT, Bygge-Anlægs-og Trækartellet, Fédération Générale Force Ouvrière, Industriegewerkschaft Bauen-Agrar-Umwelt, Salud Laboral y Empleo Metal, Construction y Afines UGT MCA and Confédération Française Démocratique du Travail

24. The requests set out the trade unions’ view that the Undertaking is present in a large number of European countries and that Article 5 of the Council Directive makes it compulsory that the undertaking set up a Special Negotiating Body to discuss the setting up of a European Works Council. The requests made clear that the trade unions’ view was that the RMC Agreement no longer applied to the Undertaking since its takeover by Cemex. The trade unions also requested information regarding the scope of the Group and shareholdings, the number of employees in each company, establishment or subsidiary and a breakdown of employees by occupational group.

25. In response to the requests the Undertaking sent a letter stating its commitment to informing and consulting appropriately with its whole European workforce and that employees in all operations, except those in part of Spain, were already covered by the RMC Agreement – soon to be renamed the Cemex EEC [sic]. The Undertaking also stated in its response that the forum met existing obligations & requirements and that it considered the Cemex (RMC) Agreement to be binding. The Undertaking suggested that the unions withdraw their requests on condition that it proceeded with expanding the existing Agreement to include the currently excluded workers.

The Undertaking’s submissions

Central management

26. The Undertaking submitted that whilst its Group headquarters were in Mexico, outside the European Union, the body that was central management for the purposes of the Directive was the applicant Undertaking (Cemex Investments Limited). In support of this submission the Undertaking cited that it operated the RMC agreement; that it had been designated as the central management by its ultimate parent company Cemex SA de CV; that Cemex intended, through the New Cemex Agreement, that the Undertaking would be responsible in European Works Council terms for the entire European Union workforce including Spain (notwithstanding Spain’s operational independence); that the Undertaking had operational responsibility for the vast majority of the European Union workforce, that European Union wide group corporate functions (such as planning, accounting, legal, finance & Human Resources) were centralised in the United Kingdom and were the applicant Undertaking’s responsibility.

27. The Undertaking submitted that both English law and the European Directive permitted it to carry out the function of central management. The Undertaking referred to Article 4.2 of the Directive which states that in the absence of any specific instruction by the controlling shareholder, which in this case there had nonetheless been, the operating country that has the largest number of employees should be designated as central management; the applicant Undertaking, in the UK, had the largest number of the employees in the Member States. The Undertaking submitted that the business independence of its operations in Spain did not raise a conflict with the Undertaking’s role as central management for the purposes of the Directive. Furthermore the Undertaking submitted that if it was not the central management then it believed it had no standing before the CAC.

Modification

28. The Undertaking submitted that the implication behind the trade union requests was that a business takeover would of itself invalidate an existing agreement or that this invalidation would occur automatically on the expansion of the European Union if the accession of other states brought in other employees of the Group that were previously outside the European Union. The Undertaking referred the Panel to the Directive and highlighted that it did not provide that an agreement would be invalid simply because there would be a takeover. The RMC Agreement should, it submitted, remain in place until the New Cemex Agreement, or a variant thereof, was agreed.

29. The Undertaking supplied the CAC with copies of the existing Agreement and the proposed new Agreement. The front page of the former Agreement states that it is made between RMC Group plc and its European Subsidiary Companies, and Representatives of RMC Employees. The revised Agreement is similar in terms to the existing RMC Agreement.

30. At Article 6 of the Agreement, under the heading ‘Jurisdiction’, it is stated that

‘It is the intention of the parties that this Agreement should satisfy Article 13 of the European Directive Number 94/95 EC of 22.09.94.

The parties agree that in order to ensure the importance of this agreement, it will be legally binding under English law’.

31. At Article 7 of the RMC Agreement, under the heading ‘Modification and Duration’, it is stated that:

The Agreement will come into effect on the date of signature, and will continue indefinitely, unless either party terminates the Agreement by giving at least six months notice to this effect.

32. The Joint Administrative Sub Committee (JASC) can meet outside of the annual ECC meetings. The JASC comprises three members of each of the parties and is formed to handle administrative matters and matters arising in relation to the procedure of the European Consultative Committee.

33. On receipt of comments from the interested parties the Undertaking was asked, in a letter dated 6 April 2006, to provide further submissions to the Panel. In its further submissions, dated 21 April 2006, the Undertaking stated that the ‘New Agreement’ (the one in the name of Cemex as opposed to RMC) had been signed by the required employee representatives apart from the Irish representative whose signature was expected imminently. The German signatory had indicated that the ‘New Agreement’ should be regarded as temporary for the calendar year 2006 as further amendments were desirable. In an effort to address the concerns of the German, and possibly other, employee representatives, the Undertaking was formulating proposals for discussion at a meeting of the Joint Administrative Sub-Committee and that it expected that employee representatives on the Committee were doing likewise. The outcome would be to submit whatever was agreed at the JASC to the plenary session of the ECC in the autumn of 2006. The Undertaking anticipated that some of the amendments would aim to avoid future problems caused by movements within and without the Cemex Group.

Jurisdiction

34. The Undertaking stated that it was true that “theoretical “central management”” was located in Mexico since that was the location of the ultimate parent company of the Group. However, that Company had nominated the applicant Undertaking as its agent for the purposes of information and consultation mechanisms throughout Europe. The Undertaking supplied a copy of a letter of confirmation sent by the parent Group’s Senior Vice President Human Resources to the European Human Resources Director (based in the UK with the applicant Undertaking). That letter, dated 10 February 2006, states;

“[….] I can confirm on behalf of Cemex SA de CV as the ultimate indirect global parent of Cemex Investment Limited, it has taken the decision that Cemex Investment Limited will be the European based entity charged with the responsibility for creating, operating and maintaining the information consultation mechanisms of transnational issues raised across our entire EU operations. This decision was based on the existence of the RMC Agreement already in place at the time of the acquisition of the RMC Group by Cemex and the fact that the UK is the country within the EU with the largest number of Cemex employees in the countries where we operate in the EU including the operations under your direct responsibility within the former RMC Group and other jurisdictions in the EU where we operate.

I believe that the technical term for this decision is that we have nominated Cemex Investments Limited in the UK as the Cemex representative agent for the purposes of the EWC Directive and that the European Executive Team based at Cemex House in Thorpe England constitutes the “Central Management” for purposes of all matters arising.[….]”

35. The Undertaking submitted that there were two elements to the jurisdictional issue, namely whether, 1) the CAC has jurisdiction over the RMC Agreement/New Agreement and, (2), whether the CAC has jurisdiction over the employees’ representatives’ requests. The Undertaking maintained on the one hand that the CAC had no jurisdiction over the Agreements since they were Article 13 Agreements. On the other hand the CAC did have jurisdiction over the requests since those requests were valid in terms of being written by employee representatives representing the appropriate number of employees. Regulation 10(3) of TICER 1999 does not ask the CAC to assess the validity of the parties’ requests, only whether or not these should proceed, and that will only be the case if the CAC finds that the Undertaking is under the obligation imposed by regulation 9. The Undertaking submitted that the CAC had jurisdiction to decide the issue of the requests due to the location of designated central management. The Undertaking submitted that its designation as central management for the Directive’s purposes was conclusive. The Undertaking also provided a list of Member States where Cemex had operations with the numbers of employees in each state; the single largest number of employees was in the UK.

36. Commenting on the representatives’ submission that the RMC agreement could not be expanded to embrace the workforces that came under the influence of the Undertaking with the expansion of the EU (and the ending of the Undertaking’s joint venture) it was submitted by the Undertaking that the CAC had no jurisdiction to comment on the point since the RMC Agreement/New Agreement was a voluntary Agreement governed by the law of contract and that it was open to parties to a contract to add further parties to it by appropriate amendment. The Undertaking submitted that the Article 13 Agreement had not expired in any way that would match the circumstance detailed by Article 13(2) of the Directive, which stipulates that if an agreement expired and the parties did not renew it then terms of the Directive would apply. The original Agreement was due to last for four years and did so. It was an open-ended Agreement subject to notice, and notice had never been given.

37. The Undertaking provided details of the representatives who signed the original agreement and identified which constituencies they represented. The Undertaking also provided details of the representatives who signed the amended agreement and identified which constituencies they represented. Additionally the Undertaking provided a breakdown of how each of these two sets of representatives had been elected, or appointed, to represent their constituencies in 1996 and in 2005 respectively. The Undertaking noted that one of the French trade unions (the FGFO) would have an opportunity in the coming months for its representative to stand as a candidate for the ECC. The Undertaking stated that the FGFO representative had stood at the previous election but had been unsuccessful.

The employees’ representatives' submissions

38. Following receipt of the application at the CAC, the six European trade unions that had submitted the requests to the Undertaking, whom the CAC accepted as interested parties due to the Undertaking’s confirmation of their status as employees’ representatives, were asked, in letters dated 6 March 2006, to comment on the Undertaking’s application. Four of the interested parties replied. The interested parties stated that they had approached Cemex at the request of European employees. They also submitted that the Undertaking had its central management in Mexico which meant it could only establish a body under the Council Directive (as opposed to TICER 1999) and that this meant the CAC did not have jurisdiction to decide the issues presented in the application. Nonetheless if the CAC did find it had jurisdiction, the RMC Agreement, even if amended, could not be transposed to the new Cemex organisation as it did not cover the same states. It was submitted that the RMC Agreement could not be expanded to include the new Member States, it simply became null and void and a new agreement must be reached in accordance with the EU Directive. With regard to the Undertaking’s New [amended] agreement the interested parties submitted that there was no indication given as to whether one had been ratified.

39. The interested parties submitted that the Undertaking known as RMC became Cemex Investments Limited with effect from 22 July 2005 and it was an operating division of Cemex SA de CV group. The applicant Undertaking covered only some European states (including France, Germany and the UK) but another group, ‘Iberian, etc Region’, covered Spain, Portugal and Italy.

40. On 30 May 2006 a European trades union federation, the European Federation of Building and Woodworkers (EFBW), affiliated to the European Trades Union Congress, made further submissions on behalf of the interested parties. It provided copies of letters from some of the interested parties mandating its involvement. The EFBW submission maintained the interested parties’ position on the issue of central management, namely that it was not in the UK. It was further submitted that the article 13 agreement could no longer be valid, even if amended and that a Special Negotiating Body therefore had to be set up.

41. The EFBW submitted that the Undertaking was referring to an Agreement concluded by the former RMC Group with representatives of its employees. Following the takeover by Cemex the Undertaking had decided to renegotiate the agreement. It was submitted that the way in which RMC and Cemex had concluded the agreements was at odds with deep rooted national traditions recognising workers’ representation through trade unions. Although both agreements (article 2) said that they had opted for ‘employee representatives to be chosen according to national custom, either by an election of all employees or by nomination from elected representatives’, this had not been done: several EU member states had traditions of recognising workers’ representation through trade unions.

42. It accepted that the Article 13 clause of the Directive was silent on the identity of workers’ representatives that may conclude information and consultation agreements. It submitted, however, that if that silence was interpreted literally it would have the effect of validating any agreement satisfying its conditions and would undermine the sovereignty of Member States to define worker representation. Indeed, some member states had chosen to legislate for this in their domestic transpositions by adding conditions relating to the required status of a body that concludes a ‘pre-existing agreement’.

43. Where this had not been done, then national customs should be the criterion. For instance in the absence of clear legislation in France the Tribunal de Grande Instance de Paris in a judgment of 18 June 1996 had refused to recognise a European Works Council governed by French law because French trade unions had been bypassed in favour of elected representatives. Similarly a further judgment of the Tribunal de Grande Instance de Paris, dated 19 September 2001, had found that the central management was Ireland and Irish law, as opposed to French law, did not compel an employer to engage in bargaining with trade unions. Accordingly it held that an EWC agreement concluded with a body of workers’ representatives was valid. The EFBW submitted that it was for the CAC to determine whether the UK had a sufficient tradition of granting “bargaining rights” to bodies other than trade unions and thus whether the Agreements in this case were valid.

44. The EFBW submitted that a further issue was the degree to which the body concluding the European Works Council agreement could define the composition of the conventional EWC or the identity of the worker representatives involved in an information and consultation procedure; as already pointed out, the Directives do not state whether the identity of the national workers’ representatives should be defined according to the laws and practices of the member states. This creates a risk that member states would have a particular, and possibly unfamiliar, type of worker representation, for example either trade union orientated or according to elected channels, forced upon them.

45. The EFBW submitted that the applicant Undertaking’s European Consultative Committee had played a central role in renegotiating the former ‘RMC Agreement’ and that, whilst there was no bar to such a renegotiation role in the Directive or TICER 1999, such a role has been specifically precluded by the RMC Agreement itself; Article 3 of the RMC Agreement stated that the European Consultative Committee was not competent for negotiation.

46. The EFBW also submitted that the CAC could be assisted by the instruments at International Labour Organisation (ILO) level regarding workers’ involvement. These instruments regarding workers’ involvement had consistently repeated the idea that they should not be used as a means to weaken the position of trade unions and drew the CAC’s attention to article 5 of Convention 135. The EFBW submitted that RMC and Cemex had used the European Consultative Committee as a tool to bypass trade unions.