Continuation of Existing European Works Councils Post-Brexit Confirmed in easyJet PLC v EasyJet European Works Council ([2023] EWCA Civ 756)

Introduction

The case of easyJet PLC v EasyJet European Works Council ([2023] EWCA Civ 756) addresses a pivotal issue in the post-Brexit landscape of UK employment law: the continuity of existing European Works Councils (EWCs) following the UK's departure from the European Union. The appellant, easyJet PLC, a prominent airline with substantial operations across Europe, contended that the amended Transnational Information and Consultation of Employees Regulations ("TICER") 1999, as modified by the Employment Rights (Amendment) (EU Exit) Regulations 2019, rendered the existing EWC defunct from 31 December 2020—the UK's exit day from the EU. The EWC, established under the original TICER framework, sought to maintain its operational status post-Brexit, leading to this appellate dispute.

The core legal question revolved around whether the existing EWC retained its authority and existence under the amended TICER post-Brexit, despite easyJet's assertions to the contrary. The stakeholders included easyJet PLC as the appellant, the EasyJet European Works Council as the respondent, and the Central Arbitration Committee (CAC) which had previously ruled in favor of the EWC's continuity.

Summary of the Judgment

The Court of Appeal upheld the decision of the Employment Appeal Tribunal (EAT), and subsequently Judge Tayler, affirming that the existing EWC continued to exist and operate under the amended TICER. The court meticulously analyzed the statutory language of the amended regulations, the Explanatory Memorandum accompanying the 2019 Regulations, and relevant legislative intent to conclude that the EWC's existence was preserved post-Brexit. The court dismissed easyJet's appeal, reinforcing that existing EWCs remain functional and fall within the jurisdiction of TICER as amended.

Analysis

Precedents Cited

The judgment references several key precedents and legislative frameworks that informed the court’s decision:

TICER 1999: Implemented EU Directives 94/45/EC and 97/74/EC, later replaced by Directive 2009/38/EC, laying the groundwork for establishing EWCs for substantial undertakings operating within the EU.
Employment Rights (Amendment) (EU Exit) Regulations 2019: Amended TICER in response to Brexit, impacting the establishment and operation of EWCs.
Pepper v Hart [1993] AC 593: Influential in interpreting legislation through parliamentary statements, although its applicability was limited in this case.
R v M Najib and Sons Ltd [2018] 1 WLR 5041: Pertinent to the weight given to explanatory notes versus memoranda, with the court distinguishing between them in the context of judicial interpretation.

The judgment heavily relied on the Explanatory Memorandum to the 2019 Regulations, which clarified governmental intent to preserve existing EWCs while preventing the establishment of new ones post-Brexit.

Legal Reasoning

The court's legal reasoning encompassed a detailed statutory interpretation of regulation 4 and 5 of the amended TICER:

Regulation 4: Despite amendments restricting new EWCs, the wording "in accordance with regulation 5" was interpreted to imply continuity for existing EWCs.
Regulation 5: Transitioned from imposing a duty to establish an EWC to a deeming provision, without explicitly terminating existing councils.

The court evaluated the "natural and ordinary meaning" of the statutory language, the consistency of the amended regulations with existing provisions like regulation 18 (subsidiary requirements of an EWC), and the transitional provisions which explicitly preserved ongoing EWC processes initiated before Brexit.

The court also considered legislative intent, as evidenced by the Explanatory Memorandum, which supported the interpretation that existing EWCs remain operational. The Minister's statements during the Delegated Legislation Committee provided supplementary, albeit not decisive, insights that reinforced the legislative framework's intent to sustain existing EWCs.

Additionally, the court addressed practical considerations raised by easyJet, such as the potential burden of maintaining separate EWCs in the UK and Germany. However, these practical challenges were deemed secondary to the statutory mandate to preserve the EWC's existence.

Impact

The judgment holds significant implications for employment law and transnational employee consultation mechanisms in the post-Brexit UK context:

Legal Precedent: Confirms that existing EWCs established under TICER continue to operate despite Brexit, ensuring continuity of employee consultation rights for multinational companies.
Corporate Compliance: Multinational corporations must recognize and maintain existing EWCs, adapting to a dual-framework environment where new councils cannot be established in the UK.
Employee Representation: Protects the rights of employees within existing EWCs, maintaining their ability to engage in transnational consultation processes on matters affecting the workforce.
Legislative Clarity: Reinforces the necessity for clear legislative drafting, as evidenced by the court's emphasis on the coherence and context of the amended TICER regulations.

Future cases involving the status of EWCs or similar bodies post-Brexit will likely reference this judgment, solidifying the legal standing of existing councils and shaping the framework for employee consultation in the UK.

Complex Concepts Simplified

European Works Council (EWC)

An EWC is a body representing employees from a company operating in multiple EU countries. It facilitates information exchange and consultation on transnational issues affecting the workforce.

Transnational Information and Consultation of Employees Regulations (TICER) 1999

TICER implements EU directives requiring large multinational companies to establish EWCs to ensure employees are informed and consulted on significant company decisions.

Employment Rights (Amendment) (EU Exit) Regulations 2019

These amendments to TICER were enacted to adjust the regulations in response to the UK's withdrawal from the EU, particularly affecting the establishment and operation of EWCs.

Central Arbitration Committee (CAC)

The CAC is a UK body that resolves disputes related to employment law, including conflicts concerning the operation of EWCs.

Explanatory Memorandum

A document accompanying legislation that explains the intent, purpose, and details of the law, aiding in its interpretation.

Conclusion

The Court of Appeal's decision in easyJet PLC v EasyJet European Works Council reaffirms the continuity of existing European Works Councils in the UK post-Brexit under the amended TICER regulations. By meticulously interpreting the statutory language and legislative intent, the court ensured that employee consultation rights remain safeguarded for multinational companies operating within the UK. This judgment not only provides legal certainty for existing EWCs but also delineates the boundaries for future employee representation frameworks in a landscape altered by the UK's departure from the EU. The ruling underscores the importance of clear legislative drafting and the protection of employee rights in transnational corporate environments.