The Gazette 1982

JULY/AUGUST 1982

GAZETTE

agement of each subsidiary or establishment is required to communicate the information without delay to the em- ployees' representatives in each subsidiary or establish- ment, The information must be forwarded at least every six months and must relate in particular to: (a) structure and manning; (b) the economic and financial situation; (c) the situation and probable development of the business and of production and sales; (d) the employment situation and probable trends; (e) production and investment pro- grammes; (f) rationalisation plans; (g) manufacturing and working methods, in particular the introduction of new working methods; (h) all procedures and plans liable to have a substantial effect on employees' interests 12 . In the event of the management of the subsidiaries or establish- ments being unable to communicate the said information to employees' representatives, the management ofthe domin- ant undertaking itself (or where the undertaking has one or more establishments in a member state as distinct from one or more subsidiaries, the management of the undertaking) must communicate the information to any employees' rep- resentatives who have requested it to do so. Criticisms Various criticisms have been levelled against the infor- mation requirements prescribed by the Proposed Direc- tive. Leaving aside the question of the confidentiality of information, which will be discussed later, it has been suggested that the Directive does not make it clear in relation to the six monthly reports, as to the time limitwithin which information is to be prepared and forwarded and the extent of the detail of the contents required. From the employees' point of view, information forwarded by man- agement is bound to have a 'management' slant so that it is imperative for the employees to have persons trained from their ranks who will be able to analyse documents and monitor statements issued by management. Just as share- holders do not have to rely totally on management's inter- pretation of the company's performance, by virtue of the appointment of an auditor who can examine any original company document and make an independent assessment ofthe company's financial state ofaffairs, so also ithas been suggested that employees should have some kind of inde- pendent assessor appointed on their behalf, whose job it would be to ensure that whatever information is released by the management is clear and complete. Furthermore it has been argued that the increased disclosure requirements may lead to friction between and within unions— what will be the reactions of workers in one plant on hearing their unit is to be closed so that a plant in another town may survive? The employers, on the other hand, oppose the proposed information procedures not only on practical grounds (that the information required to be forwarded is not available, that it would in any event be too costly to compile given its value, and that many of the items required to be disclosed exceed the needs of employees in relation to collective bargaining), but also on the grounds that it will increase trade union bargaining power vis a vis management and that it will in effect entitle employees to receive more information than the shareholders of the company 13 . Information and Consultation The Directive specifies proposals to make decisions concerning the whole or major part of an undertaking or of one of its subsidiaries or establishments which are liable to have a substantial effect on the interests of its employees. 152

These decisions are stated to relate to: (a) the closure or transfer of an establishment or major parts thereof; (b) restrictions, extensions or substantial modifications to the activities of the undertaking; (c) major modifications with regard to organisation; (d) introduction of long-term co- operation with other undertakings or the cessation of such co-operation. The Directive proposes that in these circumstances pre- cise information would be forwarded to the management of each subsidiary or establishment not later than 40 days before adopting the decision, giving details of (a) the grounds for the proposed decision; (b) the legal, economic and social consequences of such decision for the em- ployees' concerned; (c) the measures planned in respect of these employees. The management of each subsidiary or establishment would be obliged in turn to transmit this informationwithoutdelay to itsemployees'representatives and to request the latter to state theiropinion within 30 days. Furthermore, if, in the opinion of the employees' represen- tatives the proposed decision would be likely to have a direct effect on employees' terms of employment or work- ing conditions, the management of the subsidiary or estab- lishment would be obliged to hold consultations with them with a view to reaching agreement on the measures planned in respect of such employees 14 . Where the management ofthe subsidiary or establishment fails to convey the details of information mentioned above or to hold the requisite consultations the employees' representatives will be authorised to open consultations, through authorised dele- gates, with the central management or management (as the case may be) of the undertaking with a view to obtaining such information, and, where appropriate, to reaching agreement on the measures planned with regard to the employees concerned. The obligation to negotiate lies primarily on local management in the transnational con- text. The above provisions, allowing employees' repre- sentatives recourse to central management, will not lead to the undermining of the authority of local management in view of the fact that recourse is only permitted in excep- tional circumstances. Further Criticisms The information and consultation procedures outlined above have been the subject ofmuch criticism. It has first of all been argued that the text ofthe proposed Directive is am- biguous . When the management ofthe dominant undertak- ing (or undertaking where establishments are concerned) contemplates taking a decision which may have a substan- tial effect on the interests of its employees, the Directive does not make it clear whether the information and consul- tation procedures must be pursued with the employees' representatives ofall the subsidiaries (orestablishments) in the group or only with the employees' representatives of those subsidiaries (or establishments) which have in their employworkers whose interests will be substantially affect- ed. The Economic and Social Committee has recently issued an opinion in favour of the latter interpretation 15 . Secondly it has been argued that the 40 day notice period will slow down the decision making process of the under- taking andwill prevent the undertakingfromreactingquick- ly and effectively to changes in market conditions. It has been suggested that there should be some provision which allows an undertaking to by-pass this requirement when urgent and prompt measures are required to be taken.