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1. Fujitsu-Siemens-case
Finnish Supreme Court
9.3.2010
Keypoints
Maria Jauhiainen
Legal Counsel
The New Union Of Professional Engineers in
Finland

2. 2
The Back Ground
• The case was about a shutdown of a Finnish computer
factory and R&D activities in Espoo, Finland
• This happened in 2000
• As a result of this about 450 blue and white collar
workers lost their jobs
• The main question was that had the mother company
made the (decisive) decision about closing the factory
before the co-operation negotiations (Act on Co-
operation within Undertakings) in Finland and if that
would result in duty to pay workers indemnifications
according to the law

3. 3
What happened
• Fujitsu and Siemens merged in 1999
• After this the Finnish factory was deemed too small and
when there was free capacity in Germany Siemens
Factory, it was decided to focus all actions in there and
shut the Espoo factory down
• The German personnel was told as early as in the
summer 1999 that the factory in Germany would
remain the same and nobody would be laid
off/dismissed there and that the cut-backs needed
would be made elsewhere

4. 4
What happened
• The executive board of the mother company made a
decision to suggest the shut down of the Finnish factory
on the 7th December 1999 and in reality this meant that
the operations were to be moved to Germany
• The board of directors of the mother company decided
to back this decision up in a meeting held on the 14th
December 1999
• After this the formal decisions of the shut-down were
made both in the mother and in the daughter company
• The co-operation negotiations were held during 20th
December 1999 and 31st January 2000

5. 5
Legal aspects
• The employer stated that the real and binding decision
of the shut-down can only be made by the daughter
company´s board of directors, because that is the “real
employer” according to the Finnish law/the Directive
• The 11 trade unions, representing the case, stated that
the real decision had been made by the mother
company before the co-operation negotiations and that
was the decision that mattered the most
• The daughter company stated, on the other hand, that
they cannot have a responsibility to negotiate about a
decision that has not been done by them, but another
company, albeit the mother company

6. 6
Legal aspects
• The case was lost in the District Court (the first
instance) as well as in the Court of Appeal
• The Court of Appeal based its verdict on the employer´s
view even thought the trade unions stated that the
crucial decision had already been made by the mother
company because it had the power of decision over the
daughter company
• After this the case was referred to the Finnish Supreme
Court that decided to ask the European Court of Justice
for a preliminary ruling about the content and the
interpretation of the Collective Redundancies Directive
(98/59/EC)

7. 7
The Collecitve Redundancies
Directive (the main points)
• 2 art. 1: Where an employer is contemplating collective
redundancies, he shall begin consultations with the
workers„ representatives in good time with a view to
reaching an agreement
• 2 art. 2: These consultations shall, at least, cover ways
and means of avoiding collective redundancies or
reducing the number of workers affected, and of
mitigating the consequences by recourse to
accompanying social measures aimed, inter alia, at aid
for redeploying or retraining workers made
redundant.

8. 8
The Collecitve Redundancies
Directive (the main points)
• 2 art. 3: To enable workers' representatives to make
constructive proposals, the employers shall in good
time during the course of the consultations supply
them with all relevant information and in any event
notify them in writing (of several thing)
• 2 art. 4: The obligations laid down in paragraphs 1, 2
and 3 shall apply irrespective of whether the decision
regarding collective redundancies is being taken
by the employer or by an undertaking controlling
the employer

9. 9
The preliminary ruling of the Court
of Justice
• The Directive must be interpreted and implemented so
that even the daughter company must finish the co-
operation negotiations before it possibly makes
employees redundant according to a decision made by
the mother company
• The essence of the preliminary ruling was that according
to the Directive the co-operation negotiations must be
finished in the actual employer company (=daughter
company) well before the crucial decision is made by
the mother company so that all the obligations set out
in 2 art. 2 can be effectively fulfilled

10. 10
The Supreme Court
• The Finnish Supreme Court ruled that in principle the
obligation to negotiate falls only for the real/direct
employer of the people being made redundant/laid off
and cannot be broadened to apply also to an ”outsider
company” (the mother company)
• But taking legal certainty and the purpose of the
Directive into account the decision made by the mother
company that is crucially effecting the daughter
company must be considered equal to a decision made
directly by the daughter company

11. 11
The Supreme Court
• So all in all the Supreme Court ruled that the co-
operation negotiations had been kept too late and they
were void in the eye of the Finnish law
• The maximum indemnification could have been a sum
equaling 20 months´ salary, but in this case the court
ruled 6 months´ salary per person adequate (taking
into account the fact that some pains were taken e.g. to
relocate people and so on)
• But with the interests the final sums equaled salaries for
11 months per person and the company had to pay
about 2,4 ME altogether with the legal fees included

12. 12
The Supreme Court
• People not belonging to trade unions got nothing,
because they did not appeal further to the Supreme
Court after the loss in the Court of Appeal (223 of the
plaintiffs belonged to the 11 trade unions representing
this case and won the case)

13. 13
About the EWC
• A written question was made to the Commission by
Esko Seppänen on the 24th February 2000 and its
subject was the revision of the EWC Directive:
“The German mother (parent) company of Fujitsu
Siemens Computers has closed its company in Finland
for reasons which are clearly not economic, in order to
preserve jobs in Germany. In this connection the
company was clearly in breach of its consultation and
information obligations under the EWC directive, and of
its obligation to discuss its decision with the managers
and decision-makers responsible (COM(1998) 612
fin.(1). Is it within the Commission's power to monitor
compliance with this directive and does it have plans to
amend the directive to make it more binding?”

14. 14
About the EWC
• Answer given by Mrs Diamantopoulou on behalf of the
Commission on the 3rd April 2000:
“The Commission does not have any information at its
disposal which enables it to conclude that the employee
information and consultation obligations under Council
Directive 94/45/EC have not been respected in the case
referred to by the Honourable Member.
“In any event, as this Directive has been properly
incorporated into German law, it is first and foremost
the task of the national authorities to assess any
infringements of the rules in force which may be
brought to their attention by those who feel they have
been wronged.”

15. 15
About the EWC
”The Commission is currently looking at how this
Directive has been implemented. Within the next few
weeks it will adopt a report to the European Parliament
and Council on this subject.”
”The Commission has on several occasions emphasized
the need for the proposal for a Council Directive
establishing a general framework for informing and
consulting employees to be adopted by Parliament and
the Council without delay. Clearly, the provisions
contained in the proposal are not yet in force.”
• For some reason this question was not dealt with in the
national courts after this