The role of works councils in negotiating with employers over the dismissal of employees varies widely throughout Europe, often depending on whether the termination is a collective dismissal or involves one individual. As global economic growth continues to slow, multinational employers should be aware of the extent of their obligation to communicate termination plans to works councils in several of Europe’s largest economies.
Germany: Notice of Individual and Mass Dismissals Required
In Germany, workers at companies with more than five employees may elect a works council to represent them and consult with the employer on various workplace issues. Works councils in Germany must be informed beforehand of both planned individual dismissals and mass terminations, according to Ulrike Conradi, an attorney with Ogletree Deakins International LLP in Berlin.
In the case of an individual dismissal, the employer must inform the works council of the employee’s identity, position and starting date as well as the reason for the planned dismissal. The works council may object to the planned dismissal within one week of being informed.
“Otherwise, consent is deemed to be given,” Conradi said. However, the works council’s objection does not prevent the employer from dismissing the employee.
An individual has the right to file an unfair dismissal claim in labor court within three weeks of receiving a dismissal letter.
In mass dismissals, the employer must inform the works council in writing in advance of the planned dismissals and consult with the works council on whether dismissals can be avoided or reduced and how their consequences can be mitigated, Conradi said.
Prior to a mass dismissal, the employer must inform the works council of:
- The reason for the planned dismissals.
- The number and professional categories of the employees to be dismissed.
- The number and professional categories of the regularly employed employees in the respective business operation.
- The period during which dismissals will take place.
- The selection criteria for the dismissals.
- The criteria for the calculation of severance payments.
If an operational change is contemplated, such as shutdown of a site, the employer must inform the works council and provide a business rationale for the action. The employer and the works council must try to negotiate a “balance of interest” agreement that defines the operational measure, its implementation and timing, the departments and positions affected, and the number of anticipated dismissals. The employer must also identify the employees affected and the “social criteria” used in selecting them, including number of years of service, age, family obligations and any serious disabilities of the affected employees.
“In case of mass dismissals and/or operational changes, the works council can significantly delay the procedure, but in the end cannot prevent it,” Conradi noted.
France: Notice of Only Mass Layoffs Required
In 2020, France replaced works councils with Social and Economic Committees (CSEs). Any company with 11 or more employees must establish a CSE.
An employer must inform the CSE in advance of a mass layoff. However, it does not have to inform the committee of a planned individual termination for personal reasons, with the exception of dismissal of a protected employee, such as a CSE member or a union member.
“In case of termination of a physically disabled employee, the CSE is not exactly consulted on the termination, but is consulted on the reclassification proposals before the employee receives them,” according to Jean-Marc Albiol, an attorney in the Paris office of Ogletree Deakins.
The timing of notice “depends on the project,” Albiol said, and is regulated by the French labor code. Two months’ notice is required when fewer than 100 layoffs are anticipated, three months’ notice when between 100 and 249 terminations are expected, and four months’ notice when 250 or more employees are affected.
The employer must inform the CSE of the economic rationale behind the action, the timing of layoffs, the selection criteria used and any social measures, such as incentives for voluntary retirement or retraining.
A CSE may challenge a mass redundancy by arguing against the economic rationale, the social measures or the extent of the planned layoffs, but never the terminations directly. Similarly, a CSE can argue against the termination of a protected employee or reclassifications made in the case of a physically disabled employee who is terminated, but it can’t block the employer’s action.
“One should understand that the CSE can vote positively or negatively on the project he is consulted on, but can never block a project,” Albiol explained.
An individual may challenge their termination in a civil labor and employment court or, if the worker is a protected employee, in an administrative court.
Spain: Notice of All Dismissals Required, but Rights Differ
An employer in Spain with 50 or more employees must establish a works council. Those organizations employing between 11 and 49 employees must allow employees to elect employee delegates to represent their interests, according to Ignacio Regojo, an attorney with Squire Patton Boggs in Madrid.
A works council must be informed of all planned terminations, but the type of dismissal will determine whether the council has the right only to be informed or to also engage in a consultation period, Regojo said.
“In cases of objective dismissal motivated by economic, technical, organizational or production reasons, the legal representatives of the workers are entitled to a copy of the letter of dismissal,” he said. There is no further obligation of prior communication or consultation.
In the case of disciplinary dismissal, the company must inform the works council, but no further formalities are required. If notice is omitted by the company, “this does not make the dismissal unfair or null and void, but it can be considered as behavior that can be administratively sanctioned,” Regojo said.
In cases of collective dismissal, the company is obligated to open a consultation period on the proposed measure with the legal representatives of the workers before proceeding with the dismissal.
“This allows for negotiation on the proposed measure, discussion of alternatives to it and the possibility of reaching an agreement on the amount of compensation for the workers affected,” Regojo noted.
If the company fails to provide a consultation period, or isn’t open to negotiation, the dismissal will be declared null and void.
If the consultation ends without agreement, the employer has 15 days from the concluding meeting to notify the works council of its final decision on the collective dismissal, Regojo said. This notification must occur prior to the employer notifying individual workers of the consultation outcome.
The works council has standing to challenge collective dismissals, although individual workers do not.
In the case of an individual dismissal, an employee has 20 working days in which to challenge his or her termination by filing a conciliation petition with the Mediation, Arbitration, and Conciliation Unit. If no agreement is reached through this process, the case must be referred to the labor courts.
Rosemarie Lally, J.D., is a freelance legal writer based in Washington, D.C.