Can Ireland remain a paradise for employers in terms of hosting EWCs?
In May 2022, the European Commission issued a letter of formal notice to Ireland, instructing it to review its European Works Council legislation and citing “a number of shortcomings” in Irish legislation (see press release). In practice, the problem encountered by EWCs established in Ireland, such as that of Verizon, is that access to justice is virtually impossible in cases involving a breach of information and consultation rights (see European Works Councils). EWCs are not allowed to refer their cases directly to either the Workplace Relations Commission (WRC) or the Labour Court, which are the two bodies tasked with dealing with labour law disputes. Although the possibility of recourse to arbitration exists under Irish law in the event of a dispute, this does not happen in practice, due to the absence of any implementing regulations. Moreover, the penalties payable by the employer range from 1500 to 10,000 euros – an amount unlikely to act as a deterrent for a multinational company.
Sinn Féin spokesperson, Louise O’Reilly, whose party has been calling on the government for years to update EWC legislation, emphasises that the European Commission’s warning “did not come out of the blue”. For its part, the SIPTU trade union warned the government as early as 2019 about shortcomings in the country’s legislation (see press release) and in the absence of a response, the ICTU trade union confederation submitted an official complaint to the European Commission in March 2021. Up to now, the government has made do with explaining that the legislation complies with EU law. It is true – and this is one of the astonishing aspects of this matter – that not a single grievance is raised against Irish law, either in the evaluation report on the 1994 directive, or in that of the 2009 directive, or in the working document accompanying this report.
What is the explanation for this situation? Much can be learned by reading verbatim records of the hearings conducted by a Committee of the Irish Parliament: 1/ this situation passed under the radar while the number of EWCs established in Ireland could be counted on the fingers of one hand. Following on from Brexit, the similarity between Ireland’s and the UK’s legal systems, its use of the English language and the absence of any collective bargaining laws there convinced many groups to move the seat of their EWC to Ireland. According to estimates, between 150 and 200 EWCs are now based on Irish soil, compared to 11 before Brexit (see Brexit and labour standards). This puts Ireland in second place among the ranks of EU countries where EWCs are based, behind Germany and probably ahead of France. So “the influx of EWCs to Ireland” is what “has drawn attention to a concern around how disputes relating to EWCs are processed and resolved”, explains Jonathan Lavelle (University of Limerick). 2/ The government “is going out of its way not to deal with” this matter, claims Senator Paul Gavan. All of the experts appearing at the hearings agree that it is materially impossible for EWCs to pursue legal proceedings, and they all admit that the legislation should be revised. 3/ All that is needed for this to happen – and everyone is in agreement – is firstly to extend the remit of the WRC and of the Labour Court, so that EWCs can refer their cases to these bodies directly, and secondly to provide training for a few judges.
So, why isn’t the government taking action? Is this situation the result of a desire to ensure that Ireland remains a welcoming jurisdiction for multinational companies in terms of industrial relations, in the same way it is for taxation? Is the goal an economic one, i.e. attracting EWC meetings to Ireland, in order to fill pubs and hotels? It doesn’t really matter. The important thing is that this issue extends beyond the Irish question, because at the moment, between 10% and 15% of existing EWCs are unable to take legal action if they suffer a breach of their information and consultation rights: this deprives the directive of any useful value and denies hundreds of thousands of European employees their rights. Even Tom Hayes, who advises many multinational companies, admits that allowing EWCs to access justice properly will not prompt them to leave. They would keep their EWC based in Ireland. Remedying this situation is also a requirement laid down by the European Parliament within the framework of revision of the directive, even if it is not expressly aimed at Ireland: “The Member States should determine and notify to the Commission a competent national labour court to which the European Works Council and the special negotiation body have straightforward access”.
