Decision

Decision

Updated 30 November 2020

Case Number EWC/0024(2019)

30 November 2020

CENTRAL ARBITRATION COMMITTEE

TRANSNATIONAL INFORMATION AND CONSULTATION OF EMPLOYEES REGULATIONS 1999 AS AMENDED

DECISION ON COMPLAINT UNDER REGULATION 21

The Parties:

HP Inc European Works Council

and

HP Inc

1. Introduction

1) On 11 October 2019, Mr. Philip Sack, who was appointed to act on behalf of the HP Inc. European Works Council (the EWC) (the Complainant), submitted a complaint to the CAC under Regulation 21 of the Transnational Information and Consultation of Employees Regulations 1999, (the TICE Regulations). The CAC gave both parties notice of receipt of the complaint on 15 October 2019. The Employer submitted a response to the CAC on 22 October 2019 which was copied to the Complainant.

2) In accordance with section 263 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act), the CAC Chair established a Panel to consider the case. The Panel consisted of Mr. Barry Clarke and then Professor Kenny Miller as Panel Chair and Mr. Derek Devereux and Ms. Fiona Wilson as Members. The Case Manager appointed to support the Panel was Linda Lehan.

2. The Complaints

3) The EWC raised numerous complaints of which only two complaints at the time of hearing required determination.

4) The EWC’s first complaint, made under regulation 21 of the TICE Regulations, concerned the timing of information and consultation in relation to the Transformation Project and is four-fold:

(a) that, contrary to paragraph 8(1) of the subsidiary requirements to the TICE Regulations, management failed to inform the Select Committee about the Transformation project before the board decided to go ahead with it, thereby denying the EWC the opportunity to request an exceptional information and consultation meeting and to deliver an opinion to management on the Transformation project before the board decided to go ahead with it;

(b) that, contrary to paragraphs 8(1) and 8(3) of the subsidiary requirements, management refused to hold an exceptional information and consultation meeting about the Transformation project when requested by the select committee of the EWC on 30 August 2019 and failed to hold the meeting as soon as possible after the request. That request was repeated on 1 October, 5 October and 29 October and on each occasion was not granted;

(c) that, contrary to regulation 18A of the TICE Regulations, management failed to give information about the Transformation project to the members of the EWC at a time which enabled them to undertake a detailed assessment of its possible impact and prepare for consultation; and

(d) that, contrary to regulation 18A, management failed to consult the EWC at a time that enabled it to express an opinion on the Transformation project which could have been taken into account by management having regard to the responsibilities of management to take decisions effectively.

5) The EWC’s second complaint, made under regulation 21 of the TICE Regulations, was that management refused to allow the EWC to be assisted by experts of its choice to the extent that they were entitled to in relation to the exceptional meeting held in Barcelona on 30 January 2020 by preventing the EWC’s expert (Syndex) from being in the room when the EWC met with management. The EWC believed that this was a breach of paragraph 9(4) of the subsidiary requirements.

3. Background Information provided by the Employer

6) HP Inc. (“HP USA”) is an American information technology company.

7) HP USA owns subsidiaries through which it conducts its business. These together form a corporate group (the “Global Group”).

8) The Global Group includes legal entities within member states of either or both of the European Union and the European Economic Area (each state being a “Member State” and these entities together being the “European Group”). HP UK is a member of the European Group.

9) HP USA has designated HP UK to act as its representative agent for the purposes of Directive 2009/38/EC (the “EWC Directive”). TICER transposes the EWC Directive into UK law.

10) Sharon Ellerker’s (hereafter SK) role is now Global Head of HR - Marketing, Finance & Communications. Gen Moat’s (hereafter GM) role is now Head of HR ISE Market. Oriol Abello (hereafter OA) is now Employee Relations Lead, Iberia. HP UK acted through them at all material times.

4. The EWC

11) A process of establishing a European Works Council to represent the European Group’s employees commenced in January 2014.

12) That process concluded in January 2017 without the conclusion of a European Works Council agreement.

13) Regulation 18 of TICER provided that HP UK had to establish a European Works Council operating under the provisions of the subsidiary requirements detailed in the schedule to TICER (the “SRs”) in such circumstances. HP UK therefore constituted the EWC during 2017.

14) The EWC elected a select committee of its members (the “Select Committee”) and BG as its Chair. Jonathan Hayward of Unite the Union, Philip Sack of EWC Legal Advisers and Stephane Portet of Syndex act as its experts.

TRANSFORMATION PROJECT

15) On Wednesday, 28 August 2019 the then President of HP and the then President, Imaging and Printing announced to all employees of the company across the globe that the company was commencing a Transformation project and made a series of announcements addressing key areas where the business had to improve. These included the implementation of a new operating model and structure and the creation of a Commercial organisation. One of the most significant changes set out in the announcement was to change the operating structure from three regions to a single commercial structure comprising ten geographical markets. Over the rest of the year the Company made further announcements and provided additional information about the project as it progressed. These included information about how jobs would be restructured within the company as well as an announcement made to all staff by the new company President on 4 October 2019 that there could be between 7,000 and 9,000 redundancies across the global business. The EWC was given access to this information and an informal meeting was held between central management and the EWC Select Committee on 23 October 2019 to share information about the project. However, despite the EWC’s requests to convene an “exceptional information and consultation” meeting no such meeting was scheduled until the company’s email to EWC Select Committee members on 20 December 2019 that proposals for the filling of posts for L5 to L9 staff had been formulated. At this point management accepted that an exceptional information and consultation meeting was required. This meeting took place on 20 January 2020 in Barcelona.

The Panel heard that there were various strands to the re-structuring of the company. These were:

SAM 2019

16) HP USA is regulated by the U.S. Securities and Exchange Commission (the “SEC”). The SEC is an American securities markets regulator. HP USA holds an annual securities analyst meeting (a “SAM”). In broad terms, this meeting ensures that information that might materially affect the value of securities in HP USA is disclosed in an orderly and fair way to the market. HP USA held a SAM on 3 October 2019 (“2019 SAM”). It disclosed during 2019 SAM that there would be a transformation of its business over the following three years to save US$1 billion. It disclosed that part of those savings could involve an impact on between 7,000 and 9,000 of the Global Group’s employees and that it had made a financial provision in its accounts accordingly. As already indicated, HP UK voluntarily briefed the EWC Select Committee (hereafter “the SC”) immediately before 2019 SAM on a confidential basis about the outcomes of the SAM.. HP USA wrote to all employees of the Global Group after 2019 SAM. It summarised 2019 SAM and included the following expectation extrapolated in line with its accounting practices:

“We expect between 7,000 and 9,000 positions to be impacted as part of this work over the next three years”.

Organisational Design & Selection

17) As was noted earlier, the Global Group’s operations used to be structured regionally: the “Americas” (North America and South America), “EMEA” (Europe, the Middle East and Africa) and “APJ” (Asia-Pacific and Japan). Around 12,500 of the Global Group’s approximately 60,000 employees were employed in “EMEA”. This equated to 20% of employees and was the lowest headcount of the three regions.

18) HP USA announced a new Chief Executive Officer on 22 August 2019. He was an existing senior employee. The newly constituted Executive Leadership team considered that the Global Group’s operations were not optimally structured. This led HP USA to announce a simplification of its Global Group’s operating structure. HP UK voluntarily met with the SC on 28 August 2019 to discuss this announcement.

19) HP USA’s simplification involved the abolition of its regional structure. HP USA would instead operate with a structure of 10 geographical markets. HP USA’s simplification required all of its Global Group’s employees to be mapped across from sitting within its regional structure to sitting within its markets structure. This involved a process of organisational design and then a process of selection based on it (“OD&S”).

20) OD&S involved going through the Global Group Level by Level to map all employees from the top of the reporting hierarchy. This started at level 0 and finished at level 9. For these purposes:

(a) Level 0 or “L0” is the Chief Executive Officer of HP USA;

(b) Level 1 or “L1” are employees who report to the employee in L0;

(c) Level 2 or “L2” are employees who report to employees in L1; and

(d) this structure continues with employees in L9 reporting to employees in L8.

21) Proposals for L0 to L4 were formulated and then implemented Level by Level. These included the removal of regional heads, such as the President, EMEA, who had reported to the Chief Executive Officer of HP USA. Once the process had reached level 5, HPUK took steps to convene an exceptional information and consultation meeting with the EWC.

5. The hearing

22) The hearing took place via Zoom on 7 October 2020 and the names of those who attended are appended to this decision (Appendix 1). The parties provided for the Panel agreed bundles of authorities, correspondence and evidence. The Panel has considered material from the bundles when referred to it by the parties. The Panel’s decision on each of the complaints has been taken after full and careful consideration of the views of both parties as expressed in their written submissions and amplified at the hearing and of all the other material adduced in evidence.

Timeline of events provided by the EWC

23) On 20 December 2019 GM emailed the SC advising it of proposals for Levels 5 to 9 of the OD&S which she considered meant that “exceptional circumstances affecting the employees’ interests to a considerable extent” now existed, and asking the SC to let her know by 3 January 2020 if it would like to request an exceptional information and consultation meeting with HP Central Management.

24) BG replied on 23 December saying, “As per our previous emails on the Transformation project and as per your email confirming the “exceptional circumstances”, we do repeat our request for an exceptional information and consultation meeting”.

25) On 3 January 2020 GM emailed BG noting the request for an exceptional meeting and saying that management would begin to draw up the report on which the meeting was based.

26) An informal hearing was held at the CAC on 7 January. In the margins of the hearing, the representatives of the EWC and of management present agreed to hold the meeting in the last week of January.

27) On 9 January GM emailed BG proposing arrangements for the exceptional meeting to be held in Barcelona on 30 January, including providing the management report for the meeting by 17 January. BG replied on 10 January saying: “The proposal looks fine”.

28) On 10 January GM emailed BG regarding the annual EWC meeting to be held in Barcelona on 15-17 January. Her email provided a link to two PowerPoint presentations to be used at the annual meeting. The presentations gave some information about the Transformation project which was new to the EWC. The annual meeting went ahead as planned.

29) On 17 January GM emailed EWC members with a link to management’s report on which the exceptional meeting on 30 January would be based. The report consisted of a PowerPoint presentation with 238 slides. GM’s email also stated: “Extremely extensive background information on OD&S is also available on our dedicated intranet site Transforming HP. Please treat this information as also forming part of our report.” She also stated that some additional information was being prepared on which management also proposed to consult at the exceptional meeting, which would be sent early the following week.

30) On 17 January, whilst in Barcelona for the EWC annual meeting, the EWC discussed with GM the report that had been provided and identified some additional information it would like to receive. The EWC understood from that discussion that GM would provide more information by close on 20 January.

31) On 21 January GM emailed BG advising that she had not yet been able to provide the additional information because 20 January was a public holiday in the USA.

32) On 24 January, having waited in vain for more information, BG emailed GM with a list of additional information the EWC would like to receive.

33) Later on 24 January SE on behalf of GM emailed the EWC with a link to additional information on the impact on employees in the EU/EEA of the proposals on which management would be consulting at the exceptional meeting the following week. This comprised two PowerPoint slides giving the number of reporting line changes and the number of proposed exits broken down by four different European regions. Her email also advised of proposals being formulated that might involve a reduction in the number of EEA employees in FY20 in addition to any reduction that might result from the OD&S proposals, and asking whether the EWC wished to be consulted on this at the exceptional meeting the following week, or separately.

34) On 27 January SE on behalf of GM emailed BG apologising that it was taking longer than anticipated to prepare the additional information requested on 24 January and saying, “We are now working on our responses [to the request] and will provide as much extra information as we can before your pre-meeting”.

35) On 29 January management emailed BG attaching a response to the request for additional information. It included a link to EMEA financial data for the last 3 years (FY17, FY18 and FY19) and slides containing information on sales per quarter broken down into the two main parts of the business - Personal Systems and Print. In relation to other items of information requested, the response gave various reasons why it was not possible to provide the information or management considered the EWC was not entitled to receive it.

36) On 29 January BG emailed a list of questions to GM “to facilitate discussion” the following day and requesting that the EWC’s expert (Syndex) assist the EWC during the meeting with management the following day “not as a participant but as direct recipient of the information received by the EWC”.

37) The meeting between the EWC and management was held in Barcelona on 30 January. Contrary to the EWC’s desire to be informed and consulted about the overall Transformation project, management limited the meeting to discussing the final implementation stage of one element of the Transformation project – the changes to Levels 5 to 9 which were part of the OD&S. A pre-meeting of the EWC without management present was held on the afternoon of 29 January. A post-meeting of the EWC without management present was held of the morning of 31 January. No additional information was provided in writing at the meeting. BG’s request that Syndex be allowed to attend the meeting with management to assist the EWC was declined.

38) On 3 February – two working days after the exceptional meeting - HP began communicating to individual employees in Europe the consequences of the OD&S for their roles.

39) On 7 February BG emailed GM stating that the EWC did not consider that it had received the information it needed to conduct an in-depth assessment of either the Transformation project as a whole, or of the OD&S, and that it was therefore not in a position to give an opinion by way of follow-up to the exceptional meeting.

6. EWC’s first complaint

40) As detailed in paragraph 4 the EWC’s first complaint made under regulation 21 of the TICE regulations, concerned the timing of information and consultation in relation to the Transformation Project and is four-fold. The EWC contended that the Employer failed to comply with its obligations under paragraph 8 of the schedule and stated that:

41) Paragraph 8(1) of the subsidiary requirements states:

“Where there are exceptional circumstances affecting the employees’ interests to a considerable extent, particularly in the event of relocations, the closure of establishments or undertakings or collective redundancies, the select committee or, where no such committee exists, the European Works Council shall have the right to be informed. It shall have the right to meet in an exceptional information and consultation meeting, at its request [emphasis added], the central management, or any other more appropriate level of management within the Community-scale undertaking or group of undertakings having its own powers of decision, so as to be informed and consulted.”

42) Paragraph 8(3) states:

“The exceptional information and consultation meeting referred to in sub-paragraph (1) of this paragraph shall take place as soon as possible [emphasis added] on the basis of a report drawn up by the central management or any other appropriate level of management of the Community-scale undertaking or Community-scale group of undertakings, on which an opinion may be delivered at the end of the meeting or within a reasonable time.”

43) Regulation 18A applies where a European Works Council has been established by virtue of regulation 18, ie under the subsidiary requirements, as is the case with the HP EWC. Regulation 18A(2) requires central management, or any more appropriate level of management, to give information to members of a European Works Council in accordance with paragraph (3). Paragraph (3) states:

“The content of the information, the time when [emphasis added], and manner in which it is given, must be such as to enable the recipients to –

(a) acquaint themselves with and examine its subject matter;

(b) undertake a detailed assessment of its possible impact; and

(c) where appropriate, prepare for consultation.”

44) Regulation 18A(4) requires central management, or any more appropriate level of management, to consult with members of a European Works Council in accordance with paragraph (5). Paragraph (5) states: “The content of the consultation, the time when [emphasis added], and manner in which it takes place, must be such as to enable a European Works Council … to express an opinion on the basis of the information provided to them.”

45) Regulation 18A(6) states that the EWC’s opinion “having regard to the responsibilities of management to take decisions effectively, may be taken into account [emphasis added] by the central management or any more appropriate level of management.”

46) The central issue in dispute between the EWC and HP management is at what point “exceptional circumstances affecting the employees’ interests to a considerable extent” arose, triggering the EWC’s right to request an exceptional information and consultation meeting. The EWC considers these circumstances arose no later than August 2019. HPUK, on the other hand, considers that they only arose once proposals for Levels 5 to 9 of OD&S had been formulated.

7. The EWC ‘s Submissions

47) The EWC considered that it should have been informed and consulted about the Transformation project before the board decided to go ahead with it (in a board meeting probably around June or July 2019), and certainly before it was announced to employees and the market in August. The EWC drew the Panel’s attention to page 6 of the announcement to staff on 28 August 2019 whereby it stated that “this will be the largest transformation our company has gone through since separation, and it will require a lot of hard work, dedication and ingenuity across the entire team to continue reinventing this great company”. The EWC stated that Management would have had the benefit of the EWC representatives’ views and opinions on the reorganisation and restructuring, at a stage when it would have been useful to the decision-making process and when management could have taken their opinion into account. The EWC’s opinion could have formed part of the information and advice that was put to the board when it was considering and taking its decision on whether to go ahead with the Transformation project. It would have been able to consider the interests of the company’s employees, alongside the interests of its other key stakeholders, in a more informed way than was possible without this input. The EWC submitted that taking the EWC’s opinion into account in this way would have been entirely in keeping with “the responsibilities of management to take decisions effectively” (as per regulation 18A(6)). The EWC stated that it would not have hindered effective decision-taking and indeed it would have enabled management to take its decision more effectively - by taking into account the views of its European Works Council.

48) The EWC cited the relevance of other CAC cases stating there are parallels between this complaint and the CAC complaint by the Emerson Electric European Works Council (case no. EWC/13/2015). In that case, Emerson had made an announcement to all its employees and to the public via press releases of a “a plan to streamline, optimize and focus our portfolio” including a plan to spin off part of its business as a new independent publicly-traded company, to “explore a range of strategic alternatives” for other parts of the business with the various transactions expected to be substantially completed by a date 15 months later. As in the present case, the employee-side chair of the Emerson EWC wrote to management expressing disappointment that the employer had announced its plans without first informing and consulting with the EWC or the Select Committee and requested a full extraordinary (exceptional) meeting of the EWC. Like HP, the Employer maintained there were no “exceptional circumstances” and declined requests for a meeting, arguing that such management decisions were not subject to prior consultation with the EWC. Like HP, Emerson said there was no additional information available to be shared with the EWC beyond that which had been shared with all employees at the time of the announcement. It claimed that the work necessary to plan for and effect the spin off was only just beginning and the decision would not be fully implemented for at least 15 months. Like HP, Emerson said it would initiate the information and consultation procedures if there were any proposed decisions that met the “exceptional circumstances” criteria. It maintained that it would only be obliged to inform and consult when “concrete proposals” had been formulated and were to be implemented.

49) The EWC commented that the CAC largely rejected the arguments made by Emerson and it said that the EWC should have been informed and consulted prior to the public announcement, and the fact that European management was not aware of the contents of the announcement in advance (implying a failure of communication at a higher corporate level) did “not constitute an excuse for non-compliance” with its legal obligations (para 35 of the decision). The CAC agreed with the complainants that the Employer should have granted the Select Committee’s request for an extraordinary (exceptional) meeting, and that it was clear that the decision to spin off part of the business would affect the interests to a considerable extent of a majority of countries or employees (para 36). It said that even if there were no information to add to that already in the public domain, it would not have rendered otiose consultation on the information which was at that stage available (para 36).

50) The EWC stated that like Emerson, HP appeared to believe that its obligation to inform and consult the EWC was only triggered at a late stage in the decision-making process. The EWC said that they were not sure when HP thought that was and would welcome clarification from HP about what it thinks its legal obligations are under the TICE Regulations in regard to the timing of consultation.

51) The EWC said that there are also parallels between this complaint and the CAC complaint by the Oracle European Works Council (case no. EWC/17/2017). In that case, which like the HP EWC involved an EWC set up under the subsidiary requirements of the TICE Regulations, the CAC ruled that employees who are potentially impacted by a transnational reorganisation are not simply those who may lose their jobs. It said: “such restructuring decisions also may affect to a considerable extent the interests of retained employees and those whose work potentially is impacted by changes in work organisation or working methods etc. connected with the [reorganisation]” (para 82). HP has sought to argue that 60 job losses does not constitute exceptional circumstances affecting employees’ interests to a considerable extent” (GM’s email of 25 Oct). Notwithstanding that we believe the EWC should have been consulted about the Transformation Project long before any job losses were announced, GM’s email overlooks the fact that such restructuring decisions also may affect to a considerable extent the interests of retained employees and those whose work potentially is impacted by changes in work organisation, and this is how the potential impact on employees should be assessed.

52) The CAC also referred approvingly in its Oracle decision to an EWC “seeking information necessary to understand the rationale or thinking behind a proposed action in order to represent the interests of those employees affected by it and to provide an opinion which “will be useful in the decision-making process” (Recital 23) [of the recast EWC directive]”. The HP EWC seeks just such information, as stated in BG’s email of 29 October – information that will “help us understand the financial background and rationale to the Transformation Project”. It wishes it had been given the opportunity to provide an opinion which would have been “useful in the decision-making process”.

53) In support of their contention the EWC outlined the relevance of the changes made by the EWC Directive stating that the changes made to the original EWC directive (directive 94/45/EC) by the recast EWC directive (directive 2009/38/EC), lend support to their view that the HP EWC should have been consulted well before the announcements to staff and to the stock market were made.

54) The European Commission’s proposal for the recast directive (Commission document COM(2008) 419 final dated 7.2.2008 [2 July 2008]) stated:

“there are some problems with the practical application of Directive 94/45/EC. The right to transnational information and consultation lacks effectiveness, as the European Works Council is not sufficiently informed and consulted in the case of restructuring” (para 4).

55) The Commission’s Impact Assessment accompanying its proposal (Commission document SEC(2008) 2166 dated 7.2.2008 [2 July 2008]) expanded on these problems. It said: “The lack of effectiveness of transnational information and consultation rights has two main aspects: EWCs are not sufficiently informed and consulted, in particular as half of the EWCs are not consulted before a restructuring decision is made public……” [emphasis added].

“This limitation of the role of EWCs is evident in the public debate that occurs following every high-profile restructuring case … regarding the shortcomings in the information and consultation of workers”.

56) The Commission proposed four new recitals, and new definitions of “information” and “consultation” as a response to the perceived lack of effectiveness of transnational information and consultation rights. The wording of these clauses, which are substantially the same in the final version of the directive as in the Commission proposal, is as follows:

Recital 7: “It is necessary to modernise Community legislation on transnational information and consultation of employees with a view to ensuring the effectiveness of employees’ transnational information and consultation rights [and] resolving the problems encountered in the practical application of Directive 94/45/EC …”;

Recital 21: “It is necessary to clarify the concepts of information and consultation of employees … with the objectives of reinforcing the effectiveness of dialogue at transnational level …” [emphasis added];

Recital 22: “The definition of ‘information’ needs to take account of the goal of allowing employees’ representatives to carry out an appropriate examination, which implies that the information be provided at such time, in such fashion and with such content as are appropriate without slowing down the decision-making process in undertakings”;

Recital 23: “The definition of ‘consultation’ needs to take account of the goal of allowing for the expression of an opinion which will be useful to the decision-making process, which implies that the consultation must take place at such time, in such fashion and with such content as are appropriate” [emphasis added];

Article 2.1: “(f) ‘information’ means transmission of data by the employer to the employees’ representatives in order to enable them to acquaint themselves with the subject matter and to examine it; information shall be given at such time, in such fashion and with such content as are appropriate to enable employees’ representatives to undertake an in-depth assessment of the possible impact and, where appropriate, prepare for consultations with the competent organ of the Community-scale undertaking or Community-scale group of undertakings” [emphasis added];

Article 2.1: “(g) ‘consultation’ means the establishment of dialogue and exchange of views between employees’ representatives and central management or any more appropriate level of management, at such time, in such fashion and with such content as enables employees’ representatives to express an opinion on the basis of the information provided about the proposed measures to which the consultation is related, without prejudice to the responsibilities of the management, and within a reasonable time, which may be taken into account within the Community-scale undertaking or Community-scale group of undertakings” [emphasis added].

57) These new definitions were incorporated into the TICE Regulations in Regulation 18A (Information and consultation).

58) The HP EWC believed that HP was trying to limit the EWC’s role to giving an opinion late in the decision-making process when it would not be useful and when it was too late to be taken into account within the company. In other words, HP was continuing an approach that was all too prevalent during the period of the original directive, and which the recast directive was intended to improve.

59) The EWC stated that it wished to take the opportunity to set out how it believed the subsidiary requirements of the TICE Regulations should be implemented in practice, and then to apply that to a company reorganisation such as HP’s Transformation project:

(1) Management should keep the EWC informed about the progress and prospects of the business in such a way that the EWC can understand which parts of the business are doing well and which parts less well. It should provide information that helps the EWC understand why some parts are performing less well, for example, because of a downturn in the market (with figures demonstrating that), or because of loss of business to competitors (with figures on market share), or because of increased costs (with figures showing which costs). If there is a loss of competitiveness, management should provide its analysis of why that is so, for example, the business is less price-competitive, or was slow to innovate, or had poor marketing or poor product support. Such information will enable the EWC to understand the economic and financial situation of the business.

(2) Management should provide this information primarily through the annual meeting for which it is required to produce a report on the progress and prospects of the business, including information about the structure, economic and financial situation, the probable development of the business and of production and sales, the situation and probable trend of employment, investments, and substantial changes concerning organisation, the introduction of new working methods or production processes, transfers of production, mergers, cut-backs or closures of undertakings or establishments and collective redundancies (paragraph 7 of the subsidiary requirements).

(3) Management should also keep the EWC informed about these topics at other times during the year if it would be too late to wait until the next annual meeting to do so. Paragraph 8(1) of the subsidiary requirements gives the EWC a self-standing right to be informed at any time where there are exceptional circumstances affecting the employees’ interests to a considerable extent. It also gives the EWC a separate right, having been informed of the existence of exceptional circumstances, to request an exceptional information and consultation meeting to be informed and consulted about those exceptional circumstances. The EWC is entitled to choose whether and when to make that request for a meeting, based on the on-going provision of information about the circumstances, judging when it believes its input may be most useful to the decision-making process.

(4) It is vitally important that management pro-actively keeps the EWC informed about exceptional circumstances since normally only management will know about them. The EWC is reliant on management informing it about the exceptional circumstances, otherwise it will not know about them, and so will not be able exercise its right to request a meeting to be informed and consulted about them. It is not for management to decide unilaterally whether there are exceptional circumstances, since this is an objective test. Management should therefore provide enough information about the exceptional circumstances for the EWC to come to its own view on whether a matter is “transnational” and whether there are “exceptional circumstances affecting the employees’ interests to a considerable extent” bearing in mind previous decisions of the CAC on these points.

(5) Management should inform the EWC about what it is doing, or proposing to do, to respond to perceived problems and it should consult the EWC about its plans. Again, this should primarily be at the annual meeting, but, if necessary, during the course of the year in an exceptional meeting (if requested by the EWC) if it would be too late to wait until the next annual meeting to do so.

(6) Where there are different elements to what a company is doing in response to a perceived problem, developing on different timescales, management should inform and consult the EWC about those different elements according to the different timescales, either at the annual meeting or in exceptional meetings if requested by the EWC.

60) Applying the foregoing to HP’s Transformation project, in the EWC’s view HP management should have informed the EWC about the disappointing performance of parts of the business in the EMEA region at the annual meetings in January 2018 and January 2019 and informed the EWC about actions it was planning in response. It only did so at a general, not a detailed, level. Management should have informed the EWC about the “comprehensive global review of the company’s strategy and business operations” when it instigated the review some time during 2018, and certainly no later than the annual meeting in January 2019. It did not do so. Management should have kept the EWC informed about the progress of the review during 2018 and 2019, including plans for the Transformation project which would have been developed during the course of the review. It did not do so. If the EWC had known about the review and the developing Transformation project, it could have requested an exceptional meeting to be informed and consulted about the review and the project, when it considered its input would be most useful to the decision-making process – possibly in the final weeks of the review as the Transformation project was taking shape. This would have allowed the EWC to provide the benefit of its members’ combined knowledge and experience within HP in the form of an opinion which could either have been fed into the review or provided to the board to sit alongside the results of the review and the Transformation project when these were presented to the board some time in 2019. The EWC would also have had the benefit of management’s “reasoned response” to its opinion (paragraph 9(7) of the subsidiary requirements), which would have helped it further to understand the rationale for, and the different elements of, the Transformation project.

61) One element of the Transformation project which was developed and implemented at an early stage was the OD&S. Information about the OD&S was shared with the Select Committee on 23 September in a PowerPoint presentation and with all employees in a set of FAQs. The presentation described criteria for selecting people to fill posts in the new organisation, plus a detailed timeline on the different Levels to be announced. It is clear that the OD&S had already been decided. The EWC considers it should have been informed and consulted about the OD&S as it was being developed, as part of the consultation on the overall Transformation project, so that it could have given its opinion on the OD&S before the decision was taken to proceed with it.

62) Going forward, management should pro-actively inform and consult the EWC as it develops the various streams of the Transformation project, including how it plans to make the stated cost savings, and how it will determine where the 7,000 to 9,000 job cuts will fall.

63) To sum up, the EWC seeks a ruling from the CAC that HP central management was in breach of paragraph 8 of the subsidiary requirements and regulation 18A as described in paragraph 26 above and that management:

(a) should have informed and consulted the EWC about the Transformation project before the board decided to go ahead with it. Having failed to do so, it

(b) should have informed and consulted the EWC about the Transformation project before making an announcement about it to all employees on 28 August 2019. Having failed to do so, it

(c) should have granted the Select Committee’s request made on 30 August 2019 for an exceptional information and consultation meeting about the Transformation project, holding the meeting as soon as possible after that request. Having failed to do so, it

(d) should have granted one of the Select Committee’s further requests for an exceptional information and consultation meeting made on 1 October, 5 October and 29 October 2019.

64) Given the passage of time, and the fact that a meeting was finally held on 30 January 2020, the EWC stated that it did not seek an order against HP in relation to this first complaint.

8. Employer’s response to first complaint

65) By way of introduction the Employer stated that the Transnational Information and Consultation of Employees Regulations 1999 (as amended) (“TICER”) impose legal obligations on HP UK to engage with the EWC in prescribed ways. HP UK voluntarily engages with the EWC in a manner that goes above and beyond its legal obligations. It does so because it recognises the importance of social dialogue.

66) HP UK voluntarily engaged with members of the EWC between 28 August 2019 and 20 December 2019. It did so during meetings on 28 August 2019, 24 September 2019, 3 October 2019 and 23 October 2019 and engaged in an exceptional information and consultation process under TICER after 20 December 2019. The position of HP was that there was no hesitation on its part not to engage in consultation. The issue was whether there was sufficiency of information to trigger the requirement to hold an exceptional information and consultation meeting. In HP’s view that only arose on 20 December 2019.

67) The Employer stated that the complaint therefore concerned whether HP UK was required to engage with the EWC in accordance with TICER before 20 December 2019 and HP UK submitted that the answer to this question was “no”.

68) The Employer stated that HP UK voluntarily met with the SC for a third time on 23 October 2019 to discuss the L4 review. HP UK provided information at that meeting that approximately 60 roles were “at risk”. These equated to fewer than 0.5% of roles in EMEA and 0.1% of roles in the Global Group. It also offered to repeat the meeting with all members of the EWC but the EWC rejected HP UK’s offer indicating that it did “not see any point in holding such a call because it is apparent to us that the L4 changes have been decided by management already, so there would be no point in our offering our views”.

69) The EWC provided this justification for rejecting HP UK’s offer notwithstanding that the information that had been shared on 23 October 2019 had merely been “L4 proposals” and the EWC recognised that they had not been announced.

70) HP USA had intended also to adopt a Level by Level approach for L5 to L7 before undertaking the reviews for L8 and L9 at the same time. However, HP USA’s approach changed during the course of the OD&S process. This was possible because the Level by Level approach meant that no proposals had already been formulated for L5 to L9. The change led to the reviews for L5 to L9 taking place simultaneously.

71) The Employer confirmed that the EWC requested HP UK to hold an exceptional information and consultation meeting (an “exceptional I&C meeting”) on numerous occasions before 20 December 2019. HP UK rejected those requests because it did not have information indicating that circumstances existed requiring it to notify the EWC and entitling the EWC to request such a meeting. It made its position clear to the EWC in writing on 14 October 2019, on 23 October 2019 and on 25 October 2019.

72) HP UK also provided the EWC with an unambiguous commitment on both 23 October 2019 and 25 October 2019 that it would notify the EWC if such circumstances arose.

73) The Employer stated that HP UK received information about proposals affecting L5 to L9 employees in the European Group on 20 December 2019. It indicated that a significant number of roles were at risk. HP UK considered that these proposals amounted to “exceptional circumstances affecting the employees’ interests to a considerable extent” and it promptly notified the EWC about them at 17.17 on 20 December 2019. In the view of the company this was the earliest point at which an exceptional information and consultation meeting was required

74) The Employer stated that there is no decision binding on the CAC in its determination of this complaint and therefore suggested that the CAC could determine it solely by reference to the wording of TICER and made the following submissions on that basis.

75) Having regard to paragraph 7 of the SRs HP UK is always obliged to inform and consult with the EWC at an annual information and consultation meeting (an “annual I&C meeting”). The topics prescribed for such meetings include any “probable trend” of “substantial changes concerning organisation… and collective redundancies”.

76) Having regard to paragraph 8(1) of the SRs HP UK is only obliged additionally to inform the EWC “[w]here there are exceptional circumstances affecting the employees’ interests to a considerable extent” such as when HP UK has proposals for “collective redundancies”. Only then may the EWC request an exceptional I&C meeting.

77) It was the view of the Employer that paragraphs 7 and 8 are interlinked and that paragraph 8 is contextualised by paragraph 7. The topics listed for information and consultation are more limited in para 8 in comparison with para 7. Although the list in para 8 is not exhaustive given the use of the word “particular” the list of topics suggest a seriousness requiring significant changes before the duty to inform and consult is triggered.

78) Having regard to paragraphs 8(1) and 8(3) of the SRs such circumstances need to exist and not merely be anticipated to arise. This reflects the use of the present tense in the phrase “[w]here there are exceptional circumstances affecting the employees’ interests to a considerable extent, particularly in the event of…” and the obligation on HP UK to hold any exceptional I&C meeting “as soon as possible”.

79) Having regard to paragraph 8(2) of the SRs HP UK needs to know the “establishments or undertakings which are directly concerned by the circumstances in question”. A probability of them being directly concerned is insufficient. HP UK cannot otherwise identify which members of the EWC have “the right to participate” in any exceptional I&C meeting.

80) Having regard to regulations 18A(2) and 18A(3) of TICER and paragraph 8(3) of the SRs HP UK needs to have information so as to be able to provide a sufficiently detailed report to the EWC. TICER cannot properly be construed as requiring HP UK to hold an exceptional I&C meeting before the proposals in respect of which the meeting would be held have been formulated.

81) Having regard to regulation 19E(2) of TICER HP UK is obliged to link its exceptional I&C meeting with processes with national employee representation bodies “so as to begin within a reasonable time of each other”. TICER cannot properly be construed as requiring HP UK to hold an exceptional I&C meeting before knowing with which national employee representation bodies’ processes with which it has to link.

82) The Employer stated that in conclusion TICER cannot properly require HP UK to commence an exceptional information and consultation process before it can comply with the process that TICER prescribes that it must then follow. HP UK was therefore not obliged to notify the EWC under TICER before 20 December 2020.

83) The Employer also pointed to the Preamble to the 2009 Directive where in para 12 it is stated that “[a]ppropriate provisions must be adopted to ensure that the employees of Community-scale undertakings … are properly informed and consulted when decisions which affect them are taken in a Member State other than that in which they are employed”. The Employer argued that this placed a positive obligation on the Employer for all the information in Europe to be aggregated and taken together. Such a finding was made by the ECJ in Gesamtbetriebsrat der Kuhne & Nagle AG &Co KG and Kuhne and Nagal AG & Co KG – a case where the Employer claimed that it was not possible to effectively inform and consult because the necessary information was held by a parent company outside the EU. In that case the ECJ held that where central management does not have the necessary information for setting up an EWC the employee representatives must request that information from all the other undertaking in the Member States and has the right to receive that information. So other managements with the EU should help provide information to the deemed central management.

84) The Employer also made arguments over the existence of by-pass procedures. By reference to the Collective Redundancies Directive the Employer argued that there was no provision entitling employees to seek consultation with the undertaking’s central administration or with the management of a controlling undertaking.

85) The Employer also made arguments about the meaning of the word “measures” as used in Art 2(1(g) of the 2009 Directive. Reference was made to the decision of the EAT in Hinrichs and the Oracle Corporation UK Ltd [UKEAT/0194/18/RN] where measures was defined as proposals. The Employer also pointed to several decisions of the ECJ under the Collective Redundancies Directive where the meaning of the word measures was analysed. In Junk and Kuhnel (27 January 2005) the ECJ considered that there had to be a “project” before the information and consultation provisions were triggered. In Akavan Erituisalojen Keskusliitto AEK and Fujitsu Siemens Computers Oy (10 September 2009) where the ECJ opined that the raison d’etre and effectiveness of consultations presuppose that the factors to be taken into account have been determined given that it is impossible to undertake consultations in an appropriate manner when there has been no definition of the factors relevant to the collective redundancies. The Employer argued that these definitions were equally applicable to cases under TICER where something specific and concrete had to exist before the duty to inform and consult is triggered.

86) Further the Employer stated that the EWC indicated in its comments of 11 November 2019 that “the EWC should have been informed and consulted about the Transformation Project before the board decided to go ahead with it”. It suggested, without any supporting evidence, that this was because information, such as detailed “information about potential job losses in Europe”, “must exist within HP, possibly at a more senior level within the company” and HP UK respectfully suggested that detailed consideration of such arguments was unnecessary given the clear wording of TICER.

87) The Employer stated, however, if HP UK were not to answer the allegations about senior management knowledge then the CAC might infer that HP UK accepts them. For the avoidance of doubt, HP UK does not accept them and provided further submissions in an Appendix in order to protect its ability to advance them before the CAC.

88) In conclusion the Employer stated that the CAC should determine that this complaint is not well-founded.

9. EWC’S second Complaint

89) As stated in paragraph 5 the EWC’s second complaint, made under regulation 21 of the TICE Regulations, was that management refused to allow the EWC to be assisted by experts of its choice to the extent that they were entitled to in relation to the exceptional meeting held in Barcelona on 30 January 2020 by preventing the EWC’s expert (Syndex) from being in the room when the EWC met with management. The EWC believed that this was a breach of paragraph 9(4) of the subsidiary requirements and pointed out that Paragraph 9(4) of the subsidiary requirements states:

“The European Works Council or the select committee may be assisted by experts of its choice, in so far as this is necessary for it to carry out its tasks.”

90) The EWC stated that on 17 January 2020 BG advised GM of a change in the designation of its paid expert, from EWC Legal Advisers to Syndex UK & Ireland, as of 17 January and that GM replied on 20 January acknowledging the change. The Syndex expert travelled to Barcelona to assist the EWC, at its request, in relation to the exceptional meeting with management held on 30 January. By email of 29 January, BG asked GM that the EWC’s expert should assist during the meeting, not as a participant, but in order to hear directly the answers provided by management to questions posed by the EWC. The EWC explained that at the start of the meeting on 30 January GM refused that request and the Syndex expert did not attend the meeting. The EWC said that it did not recall that GM explained why the expert could not attend.

91) The EWC argued that it needed Syndex expert’s assistance at the meeting with management in order to understand what was being said including financial information terminology and be able to respond with well-informed questions. The EWC said that if the expert was not allowed at the meeting then they would have to keep breaking off the meeting to let them know what management said and to seek their advice and the EWC may feel reluctant to keep asking for breaks. The EWC said that their preference was to have the expert in the meeting as their exclusion from the room meant that he was reliant on the EWC members having to relay the answers given by management which by the nature of things would be greatly inferior to hearing the answers directly.

92) The EWC stated that it noted that the CAC had already ruled on the question of experts attending EWC meetings and in its decision in Emerson the CAC said:

“… the Panel considers that a three-day annual meeting facilitates the opportunity for effective dialogue and, if appropriately organised, allows the EEEWC, with the help of experts [emphasis added], to consider, question and give feedback to management on the information given” (paragraph 51).

93) The EWC said that the CAC, in its Emerson decision, recognized the need for help from experts for the EWC to consider, question and give feedback to management, and this process of questioning and giving feedback can, realistically, only occur in the meeting with management.

94) The EWC said that it sought a ruling from the CAC that HP management was in breach of paragraph 9(4) of the subsidiary requirements by refusing to allow the EWC to be assisted by experts of its choice to the extent that they were entitled to in relation to the exceptional meeting held in Barcelona by preventing the EWC’s expert from being in the room when the EWC met with management.

95) The EWC said that given that the event complained of was in the past, the EWC did not seek an order from the CAC in relation to this complaint.

10. Employer’s response to second complaint

96) The Employer in their submissions confirmed that the HP UK commenced an exceptional information and consultation process under TICER on 20 December 2019 and that the EWC requested on 29 January 2019 that an expert of Syndex be allowed to attend the exceptional I&C meeting on 30 January 2020. The Employer confirmed that it did not permit them to attend and that the complaint therefore concerned whether HP UK was required to allow the expert to attend; to which they submitted the answer to the question was “no”.

97) The Employer stated that the parties had orally agreed arrangements for the exceptional information and consultation process on 7 January 2020 and that HP UK confirmed to them in writing on 9 January 2020 stating:

“I wanted to recap and build on the discussion we had in London on the logistics for our exceptional I&C meeting. Based on it our proposals are:

• The select committee will be enlarged to include all members of the EWC.

• Management’s report will be provided to you all by first thing on 17th January. This means you can use the time we’re already making available for you to meet without management after our annual meeting for an extra pre-meeting with your experts if you wish.

• You raise any issues with our report by the end of the day on 23rd January so we have time to address them before your pre-meeting on 29th January. We’ll also do our best to address any other issues that come up after 23rd January by then or give you an update on our efforts at the start of our meeting on 30th January if that’s not been possible.

• 29th January will be for you to travel to Barcelona and have a pre-meeting with your experts.

• 30th January will be a full day for you to meet with management.

• 31st January will be for you to have a post-meeting with your experts before you travel home.

We are looking to finalise these proposals as soon as possible but would welcome your feedback on them before we do so” (emphasis added).

98) The Employer stated that the EWC confirmed that HP UK’s “proposal looks fine” in an email on 10 January 2020. The Employer stated that it provided its report on which the exceptional I&C meeting would be based on 17 January 2020 and that the EWC raised questions on HP UK’s report on 24 January 2020 and that all questions were answered by them on 29 January 2020.

99) The Employer stated that the EWC had a pre-meeting with its expert on 29 January 2020 and that it wrote to HP UK at 19.46 on 29 January 2020 following its pre-meeting as follows:

“Thanks for having interacted today with the EWC which was needed and much appreciated. We shared our expectations and look forward to an open and constructive discussion. Maybe the attached questions could help you to facilitate the discussion.

We do like to open the request to have our expert assisting during the meeting, not as a participant but as direct recipient of the information received by the EWC. We are not against your advisor joining them too” (emphasis added).

100) The Employer confirmed that HP UK did not agree to the EWC’s request and that the expert did not attend the exceptional I&C meeting on 30 January 2020. The Employer also confirmed that HP UK was also not joined by any advisor.

101) The Employer stated that the EWC was able to be assisted by its expert during breaks. For example, the meeting included a break during the morning, a lunch break and a recorded 42-minute break immediately before its conclusion during which the EWC was able to engage with its expert.

102) The Employer referred us to Paragraph 9(4) of the SRs which provides that the EWC “may be assisted by experts of its choice, in so far as this is necessary for it to carry out its tasks”. The Employer stated that the EWC suggests that the CAC should construe this as meaning that HP UK should have allowed its expert to attend the exceptional I&C meeting, however, regulation 16(5) of TICER provides that a special negotiating body (a “SNB”) negotiating a European Works Council agreement:

“may be assisted by experts of its choice (which may include representatives of European trade union organisations) who may, at the request of the special negotiating body, attend in an advisory capacity any meeting”

103) The Employer stated that the phrase “may be assisted by experts of its choice” does not include them actually being in the room. The Employer stated that TICER does not treat EWCs and SNBs differently except only in respect of their experts’ attendance in meetings with management:

(a) an EWC is only entitled to be assisted “in so far as this is necessary for it to carry out its tasks”. No such test of necessity applies to SNBs being assisted;

(b) an EWC has no entitlement to meet without management after any meeting with management. Regulation 16(1A) of TICER provides that SNBs have such a right and may continue to be assisted by their expert during such meetings, and

(c) paragraph 4(2)(c) of the SRs requires UK members of EWCs to be employees. Regulation 13(3)(c) of TICER imposes no such requirement for UK members of SNBs. When read in conjunction with the definition of “employees’ representatives” in regulation 2(1) of TICER, it allows officials of recognised trade unions to be members of a SNB.

104) The Employer stated that TICER’s different treatment of EWCs and SNBs reflects their meetings’ differing natures:

(a) EWCs’ meetings with management are discrete events. They are held for the purpose of “consultation”. Regulation 2(1) of TICER defines this as an “exchange of views and establishment of dialogue between the members of a European Works Council… and central management”. Their conclusion ends TICER’s restrictions on management’s ability to implement its proposals. The only actions for members of an EWC following them are to provide management with their, the EWC’s, opinion and personally to report back on the content and outcome of the process in accordance with regulation 19C of TICER; and

(b) SNBs’ meetings with management form part of an ongoing process of negotiations that are contemplated to last for up to three years. An ongoing role for their expert exists to justify SNBs’ experts’ attendance in meetings as SNBs’ meetings are linked.

105) In conclusion the Employer stated that TICER should be construed as a single piece of legislation. Its clear meaning is that the EWC has no right to be accompanied in meetings with HP UK. The Employer said that HP UK respected the agreement reached on 7 January 2020 regarding the involvement of the EWC’s experts. The EWC provided no good reason to justify any subsequent departure from its terms and that the CAC should determine that this complaint is not well-founded.

106) Finally, the Employer stated that HP UK wished to reassure the EWC that it hopes that the parties can put this dispute behind them and continue to engage in meaningful social dialogue in future.

11. Decision

Issue one

107) As already indicated this issue concerns the point at which the duty on the Employer to inform and consult with the EWC is triggered. The Employer acknowledges that there was a point in time when there were exceptional circumstances affecting the employees’ interests to a considerable extent triggering a right on the part of the EWC to be informed and consulted and was committed to engaging with the EWC when that point had been reached. The disagreement between the parties is over when that point in time arrived and stems from the parties’ substantially different views on the approach that Para 8 of the Schedule to TICER requires.

108) The EWC’s principal argument is based largely on the preparatory documentation to the revised Directive passed in 2009 which highlights the importance of anticipating change and ensuring that EWC members are able to intervene early in the decision-making process particularly in re-structuring cases. The EWC, therefore, argues that the provisions of para 8 should have been triggered before the Transformation project was even launched so as to give it an opportunity to influence the decision-making process. The Employer, on the other hand takes the view that the duty to inform and consult is only triggered once there are concrete proposals that can be put to the EWC. In support of this argument the employer points to Art 2(g) of the 2009 Directive where in the definition of consultation, reference is made to the provision of information about the “proposed measures” and decisions of the European Court of Justice in cases under the Collective Redundancies Directive.

109) It is clear that one important driver for recasting the 1994 Directive on the establishment of European Works Councils was the importance of dialogue. Para 8 of the Preamble to the 2009 Directive highlights the importance of dialogue between management and labour as a key objective of the European Union. This is bolstered by Para 14 which stresses that arrangements for informing and consulting need to be defined and implemented in such a way as to ensure their effectiveness, that EWCs should be able to give their opinions in a timely fashion without calling into question the ability of undertakings to adapt and that dialogue at the level where directions are prepared and effective involvement of employees’ representatives should make it possible to anticipate and manage change.

110) The important task for the Panel is what meaning to ascribe to TICER, and para 8 of the Schedule in particular, to support this objective. The scheme of TICER provides for two types of meetings - an annual meeting between the EWC and central management and an exceptional information and consultation meeting between the parties. Para 7 of the Schedule regulates the arrangements for annual meetings where the EWC is to be informed and consulted on the basis of a report from central management on the progress of the business. It also sets out the categories of information that should be provided to the EWC and then lists the matters for consideration at the information and consultation meeting. The list is wide, covering situation and probable trend of employment, investments, and substantial changes concerning organisation, introduction of new working methods or production processes, transfer of production, mergers, cut-backs or closures of undertakings, establishments or important parts of such undertakings or establishments and collective redundancies

111) Para 8 is much more circumscribed. An exceptional information and consultation meeting can only be triggered where there are exceptional circumstances affecting the employees’ interests to a considerable extent, particularly in the event of relocations, the closure of establishments or undertakings or collective redundancies. This is a much more limited list than that set out in para 7. However, both parties accepted that the use of the word “particularly” meant that the list was not exhaustive; though the Employer contended that the limited list suggested seriousness and should be restricted to serious events. It might be argued that there is no more serious event than the re-structuring of a global business. Indeed, in the Explanatory Memorandum accompanying the proposal for a recast Directive dated 7/2/2008 it is stated that one reason for a revised Directive was that “[t]he right to transnational information and consultation lacks effectiveness, as the European Works Council is not sufficiently informed and consulted in the case of restructuring”.

112) In construing para 8, the EWC encouraged us to take an expansive approach which reflected what it perceived to be the key objectives of the recast Directive which were around anticipating change and fostering genuine transnational social dialogue. The Employer, on the other hand, argued that the only exceptional circumstances in the present case were when an announcement was made that there were to be redundancies which was the point that the Employer acknowledged that an exceptional information and consultation meeting would be required. In the Employer’s view this was the only part of the Transformation project which affected employees’ interests to a considerable extent.

113) Yet, it could be argued that the launch of the Transformation project with its move from three regions to ten geographic markets and the subsequent acknowledgement that there would be between 7,000 and 9,000 redundancies across the business with its consequential impact on the four European market areas are in themselves matters which will affect employees to a considerable extent. Moreover, the Employer’s exclusive emphasis on redundancies meant that information and consultation requirements were only started at the end of the year which could be viewed as denying the EWC the opportunity to engage in the sort of dialogue that the framers of the recast Directive envisaged.

114) Both parties acknowledged that the issue raised in this case was novel and had not been the subject of direct consideration in previous cases. The EWC suggested that the key provisions in TICER concerning exceptional information and consultation should be construed purposively to achieve the key ambitions of the recast directive around effectiveness, dialogue and anticipating change. The Employer, on the other hand, encouraged us to look closely at the language used in TICER and to seek guidance from case law largely drawn from collective redundancy cases. One concern of the Panel is that such an approach, if taken to the extreme, would turn the exceptional information and consultation provisions into mere transnational variants of the Collective Redundancies Directive. We note that whereas both the recast Directive and the definition of consultation in TICER, Reg 2 emphasise the exchange of views and the establishment of dialogue, neither the 1998 Collective Redundancies Directive nor the equivalent UK provisions have a similar emphasis.

115) In addition, there are very specific information requirements placed on employers in relation to collective redundancies. For example, there are requirements around reasons, categories of worker to be made redundant, number and categories of workers normally employed, projected period for the redundancies and the criteria for selection. Equally, there are specific consultation requirements. In particular, the consultations must at least cover ways and means of avoiding collective redundancies or reducing the number of workers affected and mitigating the consequences. Given these very explicit and detailed requirements it is understandable that the European Court of Justice envisaged something specific and concrete before the information and consultation provisions were triggered in the case of collective redundancies.

116) Neither the recast Directive nor TICER have definitions of similar detail. Consultation is defined in TICER, Reg 2 to mean “the exchange of views and establishment of dialogue between members of a European Works Council …and central management or any more appropriate level of management”. Reg 2 does not define information. Instead, it refers to Reg 17 which sets out the provisions for the content and scope of a European Works Council agreement and the information and consultation procedure. The Panel was not referred to either of these in this case. Reg 18A(3) does make it clear that the content of the information, the time when, and the manner in which it is given, must be such as to enable the recipients to acquaint themselves with and examine its subject matter, undertake a detailed assessment of its possible impact and, where appropriate, prepare for consultation. We would argue that the information already available to HPUK was sufficient to enable the members of the EWC to effectively carry out the functions listed in reg 18A(3).

117) We agree with the EAT in Oracle that before the exceptional information and consultation requirements are triggered the employer has to be proposing something. But, in our view this does not require the level of detail or specificity that is required in collective redundancies. In this case, the employer was proposing a global re-structure of the business, changing from 3 regions (including EMEA) to a single commercial organisation with 10 geographical markets. It was proposing to achieve this by a top down layered selection process where the majority of functions would be affected and up to 9,000 redundancies could result from this proposal. These all seem to the Panel to be important matters for the exchange of views and dialogue.

118) Para 8(1) makes clear that there must be “exceptional circumstances affecting the employees’ interests to a considerable extent” before an exceptional information and consultation meeting is required. In the message to all HP employees sent out by the President and CEO and the President, Imaging and Printing on 28 August 2019 they stressed that “[t]his will be the largest transformation our company has gone through since separation.” In our view it more than meets the requirements to constitute “exceptional circumstances”. The message also contained a call for “each one of us [to] transform and perform – as organisations, as teams and as individuals”. This statement was followed up by a global “Organisation, Design and Selection” approach which provided the structure and timing for the realignment and subsequent selection of talent to support the new organisation and the later announcement of 7,000 – 9,000 redundancies. This plan was supported by a detailed question and answer document explaining what and why these organisational changes were proposed. We would argue that the project did affect employees to a considerable extent.

119) Clearly Transformation was a global project affecting the business and its workers across the world. Of course, the locus of the EWC is restricted to Europe and the Employer has acknowledged this. For example, in slides provided to the EWC on 25 September 2019 there is disclaimer in language that suggests a degree of planning and forethought that “for those countries that require consultation with works councils, this is not intended to provide regional or country-specific information on this project (but only details of the possible measures contemplated) (our italics) and in no way reflects that final decisions have been made at country level. With respect to such countries, final decisions are subject to prior consultation with works councils”. But even at this stage the guiding principles, the organisational realignment methodology, the outline selection process, together with the likely timelines for implementation were all available for consultation. These features of the project were to be applied universally including Europe.

120) The Employer also argues that exceptional circumstances information and consultation was not possible because either there was no masterplan (“we are literally building the plane while we fly”) or that critical information was held by HPUSA which was not made available to HPUK. On the first point, we have already suggested there were elements that were sufficiently clear to merit consultation as part of a project that was exceptional. In addition, opening consultation at an earlier stage might have led to dialogue which, hopefully, would have helped management to manage and anticipate change. On the second point, there is a risk that if this argument is accepted too readily it would enable unscrupulous employers (and we certainly do not believe that HP is one of these) to circumvent their obligations under TICER. In any event, we do not believe that this argument arises in this case because as we have already indicated there were already matters that we believe could have been the subjects of effective consultation and dialogue.

121) Another reason made by the Employer for not consulting was that the lack of specific information would have made it difficult to comply with the requirements of para 8(2) which gives a right to members of the EWC who are not members of the Select Committee to participate in the meeting if the undertaking they represent is directly concerned by the exceptional circumstances. The Employer argued that in such circumstances it would not be possible to identify who these employees were. The Panel is not convinced that this is an insurmountable obstacle and would argue that the safety-first approach would be to invite all members of the EWC to the meeting. In any case, the issue does not arise in the present case, of course, given the universality of the proposals affecting the entire business. In this case the circumstances would necessitate all members of the EWC being given a right to attend the information and consultation meeting. Indeed, all members did attend the exceptional information and consultation meeting held in Barcelona on 30 January, 2020.

122) During the hearing we heard arguments for and against the potential extraterritoriality of TICER. In our view, it is not necessary for us to consider this issue because we believe that HPUK as the representative agent did have sufficient information to trigger a right on the part of the EWC to request an exceptional information and consultation meeting. By not consenting to the EWC’s various requests of 30 August, 1 October, 5 October and 29 October, we declare that HP central management is in breach of paragraph 8 of the subsidiary requirements and regulation 18A of TICER. In addition, we hold that, contrary to regulation 18A of the TICER, management failed to give information about the Transformation project to the members of the EWC at a time and in a manner which enabled them to undertake a detailed assessment of its possible impact and prepare for consultation; and that, contrary to regulation 18A, management failed to consult the EWC at a time that enabled it to express an opinion on the Transformation project which could have been taken into account by management having regard to the responsibilities of management to take decisions effectively.

Issue two

123) The second issue concerns the Employer’s refusal to allow the EWC’s chosen expert to attend the exceptional information and consultation meeting held on 30 January 2020. Para 9(4) of the Schedule to TICER indicates that the EWC or the select committee may be assisted by experts of its choice in so far as this is necessary for it to carry out its tasks. The EWC’s expert had provided pre-meeting advice to the EWC and had travelled to Barcelona, the venue for the meeting, to assist the EWC, at its request, in relation to the meeting to be held on 30 January. On January 29 the EWC requested that the expert be permitted to attend the meeting not as a participant but in order to hear directly the answers provided by management to questions posed by the EWC. At the outset of the meeting on the 30th the request was refused and the expert did not attend.

124) The EWC argues that the expert should have attended the meeting to help it understand the points that management made so as it could respond to those points in an informed manner. If the expert was not present at the meeting this would lead to more breaks and longer meetings and would be inferior to the expert simply hearing the responses first hand from management. The EWC also argued that the expert’s absence impeded dialogue which made the meeting of less value to both parties.

125) The Employer argues that there is no legal right to attend the meeting and contrasts the provisions concerning the rights of experts to attend meetings of a Special Negotiating Body and EWC. In the case of a SNB there are specific provisions - notably reg 16(5) - which enable experts at the request of the SNB to attend meetings in an advisory capacity for the purpose of the negotiations. The lack of such a provision in para 9, so the Employer argued, was deliberate because negotiating an EWC agreement is a continual process whereas extraordinary information and consultation meetings are infrequent events. The Employer also argued that the EWC had agreed to a procedure that did not encompass the expert attending the exceptional meeting.

126) The Panel takes the view that an exceptional information and consultation meeting is about dialogue and anything that facilitates and enhances this should be encouraged. We agree with the statement of a previous CAC Panel in Emerson (a case where the parties EWC agreement did authorise the attendance of experts at meetings) that a meeting if appropriately organised should allow the EWC with the help of experts to consider, question and give feedback to management on the information given. This should include attendance at the meeting if the EWC so requests. We also accept that keeping the expert out of the meeting may lead to a stop and start atmosphere, extend the length of the meeting and impede dialogue – the meeting’s key purpose. We note the Employer’s comments about the difference in statutory approach between SNB and EWCs. But we do not regard this as determinative. For as Mr Sack argued before us Reg 16(5) could have been added because attendance by experts at an SNB was in doubt and this needed to be cleared up without reference to the position under Reg 9. It would also raise issues over the attendance of trade union representatives. In any event we are not convinced that the continuous process of negotiating an EWC agreement is a significant difference. As we have already said, the issue for us is about the quality of the dialogue.

127) In our view there were good reasons for both parties to have the expert in attendance. So, we believe that denying the expert the opportunity to hear the comments and responses of management by attendance at the meeting of 30 January was in breach of para 9(4) of the subsidiary requirements of TICER and so declare.

The Panel

Professor Kenny Miller, Panel Chair

Mr Derek Devereux

Ms. Fiona Wilson

20 November 2020

12. Appendix 1

Attendees for the complainant:

Bart Gastmans HP Belgium - EWC Chair

Jose Antonio Del Castillo HP Spain - EWC Select Committee member

Philip Sack Director EWC Legal Advisers

Attendees for the Employer

David Hopper Managing Associatem Lewis Silkin LLP

Kerry Salisbury Associate, Lewis Silkin LLP

Sharon Ellerker Global Head of HR – Marketing, Finance & Communications

Gen Moat Head of HR ISE Market

Oriol Abello Labor Relations Lead, European Markets & ISE