Worker Rights and State Obligations

Declaration 17 of the Lisbon Treaty makes the EU law supreme holds primacy over domestic laws. In Flaminio Costa v Ene, ECJ established EU supremacy doctrine. According to the Direct Effect doctrine, developed in Van Gend en Loos [1963] ECJ, Case 26/62, EU citizens can enforce treaty obligation against member states and thus member states legal systems should give effect to EU law. For this to take effect, a provision must be clear and precise; unconditional; and produce individual rights. It is left to the discretion of the member states, according to Article 288 of TFEU, to select the choice and form of applying the provision. EU law will be breached if national courts inconsistently interpret domestic law so as to avoid implementing EU law. The doctrine of indirect effect is a means for national courts’ harmonious interpretation between domestic laws and EU Directives. In Colson v Land Nordrhein-Westfalen, it was held that domestic courts are responsible for ensuring fulfilment of Community obligations. The individual can still claim remedy against the state if the state does not apply EU directive. If you are seeking law dissertation help , understanding these principles and their implications is considered to be very critical in your research and analysis.

The current case will determine whether Germany is bound to implement the fictitious European Union Protection of Workers Directive that provides a worker, whose employment is terminated on the grounds of redundancy, a right to one month’s gross salary for every full year of employment, payable by the employer.

Applicable Rules

About employees’ rights against redundancies. Similar with the fictitious European Union Protection of Workers Directive, there are Directives and rules that are passed by the EU. The Termination of Employment Law (Law 24, 1967-2016) entitles employees to compensation payments from the Redundancy Fund. This is subject to the condition that such redundancy arises due to economic and production related reasons, such as winding up of the company, shutting down of local undertakings, modernisation, financial difficulties, reduction of the company's turnover or any other change that reduces the needed number of employees. For such entitlement, employees should have been employed in the company for a continuous period of more than 104 weeks. Directive 98/59/EC, Article 1(1)(a) provides about collective redundancies that signifies “dismissals effected by an employer for one or more reasons not related to the individual workers concerned”. The European Union’s Charter of Fundamental Rights also provides similar provisions, such as Article 27 that provides for worker information and consultation and Article 30 that provides for the right to protection against unjustified dismissal.

Germany’s scenario. In the current case, the EU has given a deadline to it Member States a deadline for implementation of 1 January 2019. Germany has failed to implement the Directive. Andreas should note that that in Germany, its law does not provide for specific compensation in cases of dismissal for redundancy. It should also be noted here that in Von Colson v Land Nordrhein-Westfalen, ECJ held that the Von Colson is not entitled to demand the employer appoints her. The court observed that member states have the discretion to provide a remedy in the form and manner they think fit and as such can interpret and apply the legislations adopted to implement relevant directives. This discretion somehow prevents the direct effectiveness of the obligation. Andreas should, therefore, note that most redundancy cases are settled in consideration of a severance payment. Relevant German’s laws in this regard are Employment Protection Act, Article 1A and Works Constitution Act, Articles 112 and 113. The Employment Protection Act entitle Andreas, if he is an employee on permanent contract, to severance pay if her employer indicates in dismissal notice that the dismissal is based on operational grounds and further offers compensation, or if Andreas does not file a complaint against such dismissal within three weeks time. In such case, Andreas can file for severance payments of half a month’s wage for each year of the employment relationship. The maximum payment stipulated by law equals to 12 months' salary, giving rise to “15 months' salary for employees aged 50 or older, with at least 15 years of continuous service, and to 18 months' salary for employees aged at least 55 and with at least 20 years of continuous service”. There should be a social plan between the employer and the employees, which also includes redundancy compensation. In case there is no social plan, the employee can seek severance pay in a labour court.

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1. Flaminio Costa v Ene [1964] ECR 585 (6/64).
2. Ibid.
3. Treaty on the Functioning of the European Union (TFEU), Article 288.
4. E. Ciongaru, ‘The monistic and the dualistic theory in European law’ (2012) 1(1) Acta Universitatis George Bacovia. Juridica 212.
5. Colson v Land Nordrhein-Westfalen (1984) Case 14/83.

Applying EU supremacy in states’ legal principles regarding redundancies. There are many cases where courts have repeatedly struck down attempts by member states to narrow definition of redundancies in domestic implementation measures. In Defrenne v Sabena, the court held that employers shall comply with EU law, enforceable by individuals concerning their rights directly against the employer. ECJ developed the principle of state liability in Francovich v Italy, wherein individuals are entitled to seek damages in the event a state breaches EU law, causing loss to them. The transposing of EU law in state law was seen in the case of Brasserie du Pêcheur v Germany and R (Factortame) v SS for Transport, which was concerning liability of state for its for breach of EU law. It dealt with the applicability of a member state’s obligation to pay compensation for damages suffered by an individual due to its breach of Community law. Domestic courts need to determine conditions for liability of Germany, which would have to make good the damage. Such determination has to consider the national substantive and procedural conditions around reparation of damage. The absence of relevant Community provisions requires the member states to lay down criteria for such determination and should not be less favourable than those in similar claims within the jurisdiction of domestic law and should not make it impossible or difficult to obtain the reparation. Thus, a broad interpretation allowing companies belonging to the same group to make the Directive’s application more difficult “to escape the obligation to follow certain procedures for the protection of workers and large groups of workers could [thus] be denied the right to be informed and consulted”. However, this may not always be the case. An illustration could be drawn from Directive 59/1998 where one of the trigger need is a minimum number of employees affected by planned mass redundancies. The UK chose the trigger requirement in “Article 1(1)(a)(ii) of the Directive: the dismissal of at least 20 workers over a period of 90 days, whatever the normal size of the establishment.”

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6. Von Colson v Land Nordrhein-Westfalen (1984) Case 14/83.
7. Commission v Portugal (n 24); Case C-383/92 Commission v UK [1994] ECR I-2479.
8. Defrenne v Sabena (No 2) (1976) Case 43/75.
9. Francovich v Italy Case C-6&9/90 [1991] ECR I-5357.
10. Brasserie du Pêcheur v Germany and R (Factortame) v SS for Transport (No 3) (1996) C-46/93 and C-48/93.
11. Ibid.
12. Francovich v Italy Case C-6&9/90 [1991] ECR I-5357.

In Athinaiki Chartopoiia AE v Panagiotidis, it was held that if the definition of establishment is narrower, it would be easier for an employer to compartmentalise its workforce, and thus “spread” the redundancies in order to avoid triggering the relevant provisions. As it is seen here, difficulties in identifying the relevant employer may give rise to situations where redundancy decision is being taken by entities other than the immediate undertaking’s management. In Akavan Erityisalojen Keskusliitto AEK ry and Others v Fujitsu Siemens Computers, where Fujitsu Siemens, as a Dutch holding company, had full de facto control over the issues of redundancies in a Finnish plant. The Court rejected the claim of the trade unions that alleged that Fujitsu Siemens did not comply with obligations under Directive 98/59/EC, which provides for “determination of the time when an obligation arises on the part of a subsidiary to begin consultations with the representatives of its staff”. The Court suggested that obligations under the Directive were squarely based on the “employer”, who may be a natural or legal person standing in an employment relationship with the workers who may be made redundant. It was held that if an undertaking is capable of controlling the employer through binding decisions, it does not have the status of an employer. The goal of the Directive is not to restrict the commercial freedom of corporate groups to choose management structures of their organisations. As such, any of its provisions could not be interpreted to impose direct obligations on the controller.

Claim by Andreas

The current analysis of the case could be best reflected in the the operative part of the judgment by the ECJ in the case of A. Foster and others v British Gas plc. It was held that a directive, which is unconditional and sufficiently precise, may be relied upon against any bodies either under the control of the State or possess special powers beyond those under normal rules that applies to individual relations. Andreas should note that in Germany does not have any agreed statutory level of redundancy pay. Any amount (if any) of any redundancy pay made to employees will be determined by the social plan agreed between the works council and United Utilities. So, subject to specific co-determination rights, a works council may request a preliminary injunction to prevent the implementation of measures, such as in this case, which violates co-determination rights. In case of inability to come to an agreement between United Utilities and the works council, either of the parties can call for conciliation committee proceedings to pass a binding ruling.

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13. Roxul USA, Inc. v Armstrong World Industries Inc. Civil Action No. 17-1258. 2019; Catherine Barnard, EU employment law (Oxford: Oxford University Press 2012).
14. Jeremias Prassl, The concept of the employer (Oxford: Oxford University Press 2015).
15. Case C-270/05 Athinaiki Chartopoiia AE v Panagiotidis [200.7] ECR I-1499
16. Case C-44/2008 Akavan Erityisalojen Keskusliitto AEK ry and Others v Fujitsu Siemens Computers Oy [2009] ECR I-8163.
17. Ibid
18. Case C-188/89. A. Foster and others v British Gas plc.

On the other hand, Andreas can also enforce her rights under EU laws. The existing fictitious European Union Protection of Workers Directive entitles Andreas the right to one month’s gross salary for every full year of employment, payable by the employer. Even if Germany does not have any law that is in line with this Directive, or if the existing law, such as Termination of Employment Law (Law 24, 1967-2016) entitles employees to compensation payments from the Redundancy Fund, does not provide for the same level of protection or compensation, in her case, Andreas can enforce the applicability of relevant EU law. For instance, if there is a chance of unjustified dismissal, Andreas can cite EU Charter of Fundamental Rights, Article 27 that provides for worker information and consultation and Article 30 that provides for the right to protection against unjustified dismissal. In the event United Utilities claims that the national laws do not provide for the same level of redundancy payment as those under EU law, Andreas can enforce supremacy and applicability of EU laws. EU laws precede state laws, including German Law. Andreas can enforce these principles by invoking Direct Effect doctrine and enforce against member states to give effect to EU law whether by directly applying and adjudication or by adopting or translating Eu law as a part of the national law. Andreas can also enforce EU law by applying the principle of state liability and he is entitled to seek damages in the event a state breaches EU law, causing loss to them, in this case United Utilities breach of EU law will cause her financial loss.

In the event the employer is a part of network of companies, for example Andreas was employed by Aldi, a major German supermarket chain, the applicability of supremacy of EU law will slightly differ. In this case, Aldi will be a holding company and the place where Andreas work will be a subsidiary/unit. In such scenario, the principle laid down in the case of Akavan Erityisalojen Keskusliitto AEK ry and Others v Fujitsu Siemens Computers, will be taken into consideration. Aldi, as holding company, will have full de facto control over the issues of redundancies in the unit where Andreas work. Therefore, Any claim of non-compliance of EU laws, such as Directive 98/59/EC, which provides for “determination of the time when an obligation arises on the part of a subsidiary to begin consultations with the representatives of its staff” will fall. Accordingly, Aldi will not be considered an employer and it is not standing in an employment relationship with Andreas. The best measure for Andreas in such case is to enforce relevant German’s laws in this regard are Employment Protection Act, Article 1A and Works Constitution Act, Articles 112 and 113. There should be social plan between him and the employer and in case of its absence he can seek severance pay in a labour court. Accordingly, Andreas is entitled to severance pay of half a month’s wage for each year of the employment relationship and the maximum stipulated payment equals to 12 months' salary. , giving rise to “15 months' salary for employees aged 50 or older, with at least 15 years of continuous service, and to 18 months' salary for employees aged at least 55 and with at least 20 years of continuous service”.



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19. M. Ebisui, S. Cooney and C. Fenwick, ‘Resolving Individual Labour Disputes’ (2016) Geneva: International Labour Organisation.
20. Case C-44/2008 Akavan Erityisalojen Keskusliitto AEK ry and Others v Fujitsu Siemens Computers Oy [2009] ECR I-8163.

Cases

Brasserie du Pêcheur v Germany and R (Factortame) v SS for Transport (No 3) (1996) C-46/93 and C-48/93.

Case C-270/05 Athinaiki Chartopoiia AE v Panagiotidis [2007] ECR I-1499

Case C-44/2008 Akavan Erityisalojen Keskusliitto AEK ry and Others v Fujitsu Siemens Computers Oy [2009] ECR I-8163.

Case C-188/89. A. Foster and others v British Gas plc.

Commission v Portugal (n 24)

Case C-383/92 Commission v UK [1994] ECR I-2479

Colson v Land Nordrhein-Westfalen (1984) Case 14/83

Defrenne v Sabena (No 2) (1976) Case 43/75

Flaminio Costa v Ene [1964] ECR 585 (6/64).

Francovich v Italy Case C-6&9/90 [1991] ECR I-5357

Von Colson v Land Nordrhein-Westfalen (1984) Case 14/83.

Bibliography

Books

Barnard C, EU employment law (Oxford: Oxford University Press 2012).

Prassl J, The concept of the employer (Oxford: Oxford University Press 2015).

Journal

Ciongaru E, ‘The monistic and the dualistic theory in European law’ (2012) 1(1) Acta Universitatis George Bacovia. Juridica 212.

Ebisui M, Cooney S and Fenwick C, ‘Resolving Individual Labour Disputes’ (2016) Geneva: International Labour Organisation.

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