Collective redundancies: staff information and consultation

SUMMARY OF:

Council Directive 98/59/EC on the approximation of EU countries’ laws regarding collective redundancies

WHAT IS THE AIM OF THE DIRECTIVE?

• It requires employers to inform and consult staff representatives in the case of collective redundancies*.
• It specifies the points which these consultations must cover and the information which the employer is required to provide.
• It also lays down procedural rules for collective redundancies.

KEY POINTS

The directive does not apply to:

• collective redundancies effected under contracts of employment concluded for limited periods of time or for specific tasks, except where those redundancies take place prior to the date of expiry or the completion of such contracts;
• workers employed by public administrative bodies or by establishments governed by public law.

In addition, the rights of employees when the ownership of a business changes or the business becomes insolvent are covered by other EU rules.

Consultations

Any employer considering collective redundancies must hold consultations with the workers’ representatives in good time with a view to reaching an agreement. Consultations must at least cover the ways and means of:

• avoiding collective redundancies or reducing the number of workers affected and
• mitigating the consequences through accompanying social measures aimed notably at aid for redeploying or retraining those workers made redundant.

The European Works Council improves workers’ rights to information and transnational consultation within companies operating across the EU.

Information to be provided by the employer

EU countries may put in place measures that enable workers’ representatives to call on the services of experts, in accordance with national rules. The employer must provide workers’ representatives with all relevant information during the course of the consultations and must notify them of the following in writing:

• the reasons for the redundancies;
• the period during which the redundancies will be made;
• the number and categories of workers normally employed;
• the number and categories of workers to be made redundant;
• the criteria used to select those workers to be made redundant;
• the method used to calculate compensation (where applicable).

Procedure for collective redundancies

The employer must follow the following procedure:

• Notify the competent public authority in writing of any projected collective redundancies. This notification must contain all the relevant information concerning the projected redundancies and consultations held, except for the method used to calculate compensation.
• Where the employees are crew of a seagoing vessel, the employer must notify the authorities of the country in which the vessel is registered.
• Forward a copy of the notification to the workers’ representatives, who may send comments to the competent public authority.
• Collective redundancies take effect — at the earliest — 30 days after the notification; the competent public authority uses this period to seek solutions.
• EU countries can grant the public authority the power to reduce this period or to extend it to 60 days following notification, in cases where the problems cannot be resolved within the initial period. Wider powers of extension may be granted.
• The employer must be informed of any extension and the grounds for it before expiry of the initial period.

FROM WHEN DOES THE DIRECTIVE APPLY?

It has applied since 1 September 1998.

BACKGROUND

For more information, see:

• ‘Employee involvement — collective redundancies’ on the European Commission's website.

* KEY TERMS

MAIN DOCUMENT

Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies (OJ L 225, 12.8.1998, pp. 16-21)

Successive amendments to Directive 98/59/EC have been incorporated in the original text. This consolidated version is of documentary value only.

last update 04.12.2016