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Fujitsu-Siemens-caseFinnish Supreme Court9.3.2010KeypointsMaria JauhiainenLegal CounselThe New Union Of Professional Engineers inFinland
2The 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
3What 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
4What 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
5Legal 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
6Legal 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)
7The Collecitve RedundanciesDirective (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.
8The Collecitve RedundanciesDirective (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
9The preliminary ruling of the Courtof 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
10The 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
11The 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
12The 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)
13About 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 Commissions power to monitor compliance with this directive and does it have plans to amend the directive to make it more binding?”
14About 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.”
15About 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