Keeping a Council in place after a EWC agreement has been revoked
On 9 December, the Versailles Appeal Court delivered a ruling on the dispute that arose between the Atos EWC (Atos SE Council) and the management of the digital services group Atos SE (107,000 employees), following the company’s decision to dissolve its Council.
In 2020, management denounced the agreement establishing the Atos SE Council, and at the end of a fruitless six-month negotiation period, it then decided to abolish the body. Article 23 para. 4 of the agreement states that “in the event of notification of termination, both parties will immediately commence the renegotiation process”. This is what happened. However, the article adds that “until both parties have signed a new agreement, this agreement shall prevail”.
This provision implies that the Atos SE Council should remain in place until such time as the parties have agreed on a new text. However, management believed that this clause amounted to extending the agreement on an open-ended basis, and was therefore in breach of French law, which prohibits “perpetual engagements”.
The case was referred in the form of urgent proceedings to the Pontoise court in France, which held that dissolving the Council did not constitute a manifestly unlawful disruptive action, but at the same time ruled that this clause was subject to interpretation. However, this opinion was not shared by the Versailles Appeal Court, which firstly noted the manifestly unlawful disruptive action resulting from the Council’s abolition, and secondly, emphasised drily that “the parties do not have the power to obfuscate clauses that are already clear, especially by means of applying an interpretation that is unnecessary”.
The Court’s view is that there is no doubt that “this clause clearly means that the agreement will endure until such time as another agreement is signed”. It also rejects the “prohibition of perpetual engagements” argument, emphasising that the process of negotiating a new SE Council agreement is time-limited: it is due to last for six months (which can be extended to one year), failing which the company must establish a EWC based on the subsidiary provisions of the directive on worker participation in the SE. In practice, the Court ruled as follows:
1/ dissolving the Atos SE Council was unlawful and it must be reinstated, including the mandates held by all of its members;
2/ the agreement establishing the Council will remain valid on a temporary basis until at least March 2022, i.e. until the end of the period allowed for negotiating a new agreement (or until September 2022 at the latest, if the parties decide to extend the negotiations);
3/ if no agreement is reached by the end of this negotiation period, management will have to set up a SE Council based on the subsidiary provisions of the directive.
In practice, even though management’s decision to dissolve the EWC was declared unlawful, management still remains in control of the negotiation: either an agreement will be reached by March 2022, seeing some EWC resources scaled back, which is what management wants, or alternatively, management will have to set up a SE Council as required by law. In reality, this new body will be much less favourable than the previous agreement denounced by management, was.
(Article published in IR Note 176 - 15 december 2021)
