Establishment of European Works Councils
Purpose of the Law
The Establishment of a European Works Councils Principal Law came into force on 1 May 2004 with an amendment on 21 December 2007. The Principal and Amendment Laws shall be cited in this Guide as the Law. The purpose of this Law is to safeguard and improve the right to information and consultation of employees in community-scale undertakings, and community-scale groups of undertakings. Towards this effect, a European Works Council, or a procedure for informing and consulting employees shall be established, in accordance with the procedure provided for in the Law.
Consultation
Consultation means the exchange of views and the establishment of dialogue between workers’ representatives and central management, or any other more appropriate level of management.
Central management
Central management means the central management of the community-scale undertaking or,
in the case of a community-scale group of undertakings, of the controlling undertaking.
Community-scale undertaking
Community-scale undertaking means any undertaking which employs at least 1000 employees within the member states, and at least 150 employees in each of at least two different member states.
Community-scale group of undertaking
Community-scale group of undertakings means a group of undertakings meeting the following conditions:
Calculation of minimum number of employees
The minimum number of employees employed by the undertaking and/or the group of undertakings shall be established on the basis of the average number of employees whose contract of employment is of definite or indefinite time, or part-time, and they were employed in the undertaking during the previous two years. The undertakings located in the Republic of Cyprus, whose activities lie within the scope of this Law, shall notify the competent authority of the Ministry of Labour and Social Insurance and the representatives of the employees, in writing, about the number of their employees (as defined by the Law), within three months from the date that this Law will come into force.
European Economic Area (EEA)
European Economic Area means the member states of the European Union, Iceland, Norway, Lichtenstein and Switzerland.
Controlling undertakingFor the purposes of this Law, controlling undertaking means an undertaking which can exercise a dominant influence over another undertaking (“the controlled undertaking”) by virtue, for example, of ownership, financial participation, or rules that govern it. The ability to exercise a dominant influence shall be presumed, without prejudice to proof to the contrary, when an undertaking in relation to another, (directly or indirectly):
The law applicable in order to determine whether an undertaking is a “controlling undertaking” shall be the law of the member state (of the EEA), which governs that undertaking. Where the law governing that undertaking is not that of a member state (EEA), the law applicable shall be the law of the member state within the territory of which the central management of the undertaking, which employs the greatest number of employees, is situated. An undertaking shall not be considered a controlling undertaking with respect to another undertaking in which it has holdings, notwithstanding the provisions of this Law, in the case where the former undertaking is a company which, under certain provisions, is governed by the Control of Concentrations between Undertakings Laws of 1999 to 2000.
Purpose
The Law applies:
The powers and competencies of European Works Councils and the scope of information and consultation procedures established to achieve the purpose specified in the Law shall, in the case of community-scale undertakings, cover all the establishments located within the member states and, in the case of a community-scale group of undertakings, all group undertakings located within the member states (EEA).
The application of this Law is without prejudice:
This Law shall not apply to merchant navy crews.
Establishment and operation of a European Works Council
A European Works Council or a procedure for informing and consulting employees shall be established in every community-scale undertaking and every community-scale group of undertakings, in accordance to the procedure provided for in the Law, with the purpose of informing and consulting employees under the terms, in the manner and with the effects laid down in the present Law.
The central management shall be responsible for creating the conditions and means necessary for the setting up of a European Works Council or an information and consultation procedure in the community-scale undertaking and the community-scale group of undertakings. When the central management is not situated in a member state (EEA), the central management’s representative agent in a member state, to be designated if necessary, shall take on the above mentioned responsibility. In the absence of such a representative, the management of the establishment or group undertaking employing the greatest number of employees in any one member state shall take on the responsibility referred to above.
The central management shall initiate negotiations for the establishment of a European Works Council, or an information and consultation procedure on its own initiative or following the written request of at least 100 employees or their representatives in at least two undertakings or establishments in at least two different member states (EEA). For this purpose, a special negotiating body shall be established with appointed members of employee representatives.
Special negotiating body
The special negotiating body is established in accordance to the provisions of the Law, with a view to negotiate with central management the establishment of a European Works Council, or a procedure for informing and consulting employees. The Law has special provisions-criteria for the geographical assignation of participating representatives.
Content of the agreement
The central management and the special negotiating body must negotiate in a spirit of cooperation, with a view to reach a written agreement that will include detailed arrangements for the implementation of an information and consultation procedure of employees, provided for by the Law. The central management and the special negotiating body may decide, in writing, to establish one or more information and consultation procedures instead of a European Works Council.
Subsidiary requirements
In order to achieve the objective of the Law, specific provisions (subsidiary requirements) apply to the following cases:
Special subsidiary requirements also apply with regarding the establishment, scope, composition
and functions of the European Works Council.
Confidential information
Members of special negotiating bodies and of European Works Councils, any experts who may assist them, and the workers’ representatives are not authorised to reveal to third parties any information, which has expressly been provided to them within the framework of the information and consultation procedure and has been made known to them that it is confidential. This obligation for confidentiality shall continue to apply even after the expiry of the terms of office of the above mentioned persons irrespective of the location they are. Central management is not obliged to inform the European Works Council for matters:
Protection of employees’ representatives
The members of the special negotiating body, or the European Works Council and workers’ representatives exercising their functions, in accordance to this Law, enjoy the same protection and guarantees provided for workers’ representatives by Law and/or practice in force. This shall apply in particular to attendance at meetings of the special negotiating body, or the European Works Council, or any other meeting within the framework of the agreement for information and consultation of employees, and the payment of the remuneration of the members who belong to the staff of the community-scale undertaking or the community-scale group of undertakings for the period of absence necessary for the
performance of their duties.
Offences and penalties
Any person who contravenes the provisions of this Law shall be guilty of an offence and shall be liable on conviction to imprisonment not exceeding two years or to a fine not exceeding the amount of €34.172 or to both such penalties.
The Establishment of a European Works Councils Principal Law came into force on 1 May 2004 with an amendment on 21 December 2007. The Principal and Amendment Laws shall be cited in this Guide as the Law. The purpose of this Law is to safeguard and improve the right to information and consultation of employees in community-scale undertakings, and community-scale groups of undertakings. Towards this effect, a European Works Council, or a procedure for informing and consulting employees shall be established, in accordance with the procedure provided for in the Law.
Consultation
Consultation means the exchange of views and the establishment of dialogue between workers’ representatives and central management, or any other more appropriate level of management.
Central management
Central management means the central management of the community-scale undertaking or,
in the case of a community-scale group of undertakings, of the controlling undertaking.
Community-scale undertaking
Community-scale undertaking means any undertaking which employs at least 1000 employees within the member states, and at least 150 employees in each of at least two different member states.
Community-scale group of undertaking
Community-scale group of undertakings means a group of undertakings meeting the following conditions:
- employs at least 1000 employees within the member states of the European Economic Area
- has at least two group undertakings in different member states of the European Economic Area and
- has at least one undertaking employing at least 150 employees in one member state and
- at least one other undertaking employing at least 150 employees in another member state of the European Economic Area.
Calculation of minimum number of employees
The minimum number of employees employed by the undertaking and/or the group of undertakings shall be established on the basis of the average number of employees whose contract of employment is of definite or indefinite time, or part-time, and they were employed in the undertaking during the previous two years. The undertakings located in the Republic of Cyprus, whose activities lie within the scope of this Law, shall notify the competent authority of the Ministry of Labour and Social Insurance and the representatives of the employees, in writing, about the number of their employees (as defined by the Law), within three months from the date that this Law will come into force.
European Economic Area (EEA)
European Economic Area means the member states of the European Union, Iceland, Norway, Lichtenstein and Switzerland.
Controlling undertakingFor the purposes of this Law, controlling undertaking means an undertaking which can exercise a dominant influence over another undertaking (“the controlled undertaking”) by virtue, for example, of ownership, financial participation, or rules that govern it. The ability to exercise a dominant influence shall be presumed, without prejudice to proof to the contrary, when an undertaking in relation to another, (directly or indirectly):
- holds a majority of that undertaking’s subscribed capital or
- controls a majority of the votes which are associated to the undertaking’s issued share capital or
- can appoint more than half of the members of that undertaking’s administrative, or management or supervisory body.
The law applicable in order to determine whether an undertaking is a “controlling undertaking” shall be the law of the member state (of the EEA), which governs that undertaking. Where the law governing that undertaking is not that of a member state (EEA), the law applicable shall be the law of the member state within the territory of which the central management of the undertaking, which employs the greatest number of employees, is situated. An undertaking shall not be considered a controlling undertaking with respect to another undertaking in which it has holdings, notwithstanding the provisions of this Law, in the case where the former undertaking is a company which, under certain provisions, is governed by the Control of Concentrations between Undertakings Laws of 1999 to 2000.
Purpose
The Law applies:
- to community-scale undertakings located in Cyprus and
- to community-scale group of undertakings whose controlling or parent undertaking is located in Cyprus (central management).
The powers and competencies of European Works Councils and the scope of information and consultation procedures established to achieve the purpose specified in the Law shall, in the case of community-scale undertakings, cover all the establishments located within the member states and, in the case of a community-scale group of undertakings, all group undertakings located within the member states (EEA).
The application of this Law is without prejudice:
- to the employees’ existing rights in relation to information and consultation in accordance with existing legislation and practice
- to the provisions of the Law providing for Collective Redundancies of 2001, and the Law providing for the Safeguarding of Employees’ Rights in the Event of Transfers of Undertakings, Businesses or parts of Businesses 2000 to 2002.
This Law shall not apply to merchant navy crews.
Establishment and operation of a European Works Council
A European Works Council or a procedure for informing and consulting employees shall be established in every community-scale undertaking and every community-scale group of undertakings, in accordance to the procedure provided for in the Law, with the purpose of informing and consulting employees under the terms, in the manner and with the effects laid down in the present Law.
The central management shall be responsible for creating the conditions and means necessary for the setting up of a European Works Council or an information and consultation procedure in the community-scale undertaking and the community-scale group of undertakings. When the central management is not situated in a member state (EEA), the central management’s representative agent in a member state, to be designated if necessary, shall take on the above mentioned responsibility. In the absence of such a representative, the management of the establishment or group undertaking employing the greatest number of employees in any one member state shall take on the responsibility referred to above.
The central management shall initiate negotiations for the establishment of a European Works Council, or an information and consultation procedure on its own initiative or following the written request of at least 100 employees or their representatives in at least two undertakings or establishments in at least two different member states (EEA). For this purpose, a special negotiating body shall be established with appointed members of employee representatives.
Special negotiating body
The special negotiating body is established in accordance to the provisions of the Law, with a view to negotiate with central management the establishment of a European Works Council, or a procedure for informing and consulting employees. The Law has special provisions-criteria for the geographical assignation of participating representatives.
Content of the agreement
The central management and the special negotiating body must negotiate in a spirit of cooperation, with a view to reach a written agreement that will include detailed arrangements for the implementation of an information and consultation procedure of employees, provided for by the Law. The central management and the special negotiating body may decide, in writing, to establish one or more information and consultation procedures instead of a European Works Council.
Subsidiary requirements
In order to achieve the objective of the Law, specific provisions (subsidiary requirements) apply to the following cases:
- where the central management and the special negotiating body so decide, or
- where the central management refuses to commence negotiations within six months of the relevant request, or
- where, after three years from the date of this request, the two sides are unable to conclude an agreement.
Special subsidiary requirements also apply with regarding the establishment, scope, composition
and functions of the European Works Council.
Confidential information
Members of special negotiating bodies and of European Works Councils, any experts who may assist them, and the workers’ representatives are not authorised to reveal to third parties any information, which has expressly been provided to them within the framework of the information and consultation procedure and has been made known to them that it is confidential. This obligation for confidentiality shall continue to apply even after the expiry of the terms of office of the above mentioned persons irrespective of the location they are. Central management is not obliged to inform the European Works Council for matters:
- whose nature is such that, according to objective criteria, they may seriously harm the functioning of the undertakings concerned or would be prejudicial to them
- which are classified as confidential by legislation in force, like for banking, judicial matters, national security and patent confidentiality. The dispensation of a matter considered as confidential, as provided for above, must be subject to prior administrative or judicial authorization.
Protection of employees’ representatives
The members of the special negotiating body, or the European Works Council and workers’ representatives exercising their functions, in accordance to this Law, enjoy the same protection and guarantees provided for workers’ representatives by Law and/or practice in force. This shall apply in particular to attendance at meetings of the special negotiating body, or the European Works Council, or any other meeting within the framework of the agreement for information and consultation of employees, and the payment of the remuneration of the members who belong to the staff of the community-scale undertaking or the community-scale group of undertakings for the period of absence necessary for the
performance of their duties.
Offences and penalties
Any person who contravenes the provisions of this Law shall be guilty of an offence and shall be liable on conviction to imprisonment not exceeding two years or to a fine not exceeding the amount of €34.172 or to both such penalties.