European Works Council

We would like to inform you about a verdict obtained by our law firm on November 27th for the multinational company Alcoa who was sued by its European Works Council (hereafter: EWC) in connection with envisaged redundancies at two factories in Spain. The case was handled by our Dutch employment team.

This is the first judgment in the Netherlands on the concurrence of European and national employee consultation for transnational matters.

Alcoa (company producing aluminum) had started a consultation process with its EWC and the Spanish works councils simultaneously in connection with a possible collective redundancy of its employees (approximately 700) from two locations in Spain.

The EWC sued Alcoa and considered that the decision to close the Spanish locations had already been taken and that, as a result, the consultation obligation had also been breached since its advice would no longer have any weight. The central question was whether a decision has already been taken, and when the EWC should be consulted. The court ruled in Alcoa’s favor because it did not breach the consultation obligations by running the European and Spanish consultations in parallel and the court concluded that there was no proof that the decision to close the two locations had been taken.

A summary of the main legal considerations is given below:

  • The Dutch European Works Councils Act must be interpreted in accordance with Directive 2009/38/EC. The Directive concerns the information to and consultation of employees, which is implemented through a EWC. The information and consultation obligation applies to matters of a transnational nature (Dutch law refers to cross-border matters). The judge considers it sufficiently plausible that a cross-border case exists because of the large number of employees (20%) that are likely to be made redundant and the influence it is likely to have on the Shared Service Center in Hungary. Besides that, Alcoa has informed the EWC itself of the intention and it therefore seems that Alcoa itself also assumes that there is a cross-border case.
  • The Judge has established that there is no objective evidence that the decision to close the two Spanish establishments has already been taken. No written evidence to this effect has been submitted, nor has the EWC claimed that Alcoa orally stated this. It is not important in this respect that Alcoa has now started a consultation process with Spanish trade unions and employee representative bodies. It cannot be assumed that Alcoa has violated its legal obligation to inform and consult the EWC in good time. The EWC has also not disputed that various consultations have taken place with it in in the meantime.
  • Alcoa is not obliged to consult the EWC before entering into consultation with the EWC and trade unions. The EWC’s reliance on the Dutch Collective Dismissal Notification Act is incorrect. The trade unions must be informed in good time. Nor does it follow from the EWC agreement that the EWC must be consulted first, nor does the Directive stipulate this. Finally, the court considered that the consultation in Spain is intended for national matters and that the consultation with the EWC is intended for national matters of a cross-border nature. Therefore, there can be no coordination problems.
  • Because the EWC cannot be ordered to pay the costs of the proceedings, the Court will compensate the costs of the proceedings in the sense that each of the parties shall bear the costs of the proceedings.

Do not hesitate to contact us if you have any questions. We will be happy to explain the considerations of the Court of Rotterdam or put you in contact with our Dutch colleagues.