Opinion of Advocate General Pikamäe delivered on 30 March 2023.#MO v SM acting as liquidator of G GmbH.#Request for a preliminary ruling from the Bundesarbeitsgericht.#Reference for a preliminary ruling – Social policy – Collective redundancies – Directive 98/59/EC – Information and consultation – Second subparagraph of Article 2(3) – Obligation of employer contemplating a collective redundancy to forward to the competent public authority a copy of the information communicated to the workers’ representatives – Objective – Consequences of a failure to comply with that obligation.#Case C-134/22.

1.

In the present case, the Court has been requested by the Bundesarbeitsgericht (Federal Labour Court, Germany) to give a preliminary ruling concerning the interpretation of the second subparagraph of Article 2(3) of Directive 98/59/EC. ( 2 ) More specifically, the question raised by the referring court gives the Court of Justice the opportunity to clarify the scope of the obligation imposed on an employer who is contemplating collective redundancies to notify the competent public authority during the procedure for informing and consulting workers’ representatives.

2.

Articles 2 to 4 and 6 of Directive 98/59 are relevant to the present case.

3.

Paragraph 134 of the Bürgerliches Gesetzbuch (German Civil Code; ‘the BGB’) provides:

‘Any legal act contrary to a statutory prohibition shall be void except as otherwise provided by law.’

4.

Under Paragraph 17 of the Kündigungsschutzgesetz (Law on protection against unfair dismissal), as last amended by the Law of 17 July 2017 (BGBl. 2017 I, p. 2509):

‘(1)   The employer is under an obligation to notify the public employment agency before it makes redundant:

…

2. in establishments normally employing at least 60 and fewer than 500 workers, 10 % of the workers normally employed or more than 25 workers;

…

over a period of 30 calendar days. Any other termination of an employment relationship brought about by the employer shall be assimilated to redundancy.

(2)   If the employer contemplates making redundancies that are subject to the obligation to issue a notification under subparagraph 1 it shall promptly provide the works council with the appropriate information and notify it in writing, in particular, of:

1. the reasons for the projected redundancies,

2. the number and professional categories of workers to be made redundant,

3. the number and professional categories of workers normally employed,

4. the period over which the redundancies are expected to take place,

5. the proposed criteria for selecting the workers to be made redundant, and

6. the proposed criteria for calculating any redundancy payments.

…

(3)   The employer must simultaneously forward to the Public Employment Agency a copy of the notice given to the works council; this must contain at least the details stated in points 1 to 5 of the first sentence of subparagraph 2. The notice referred to in subparagraph 1 shall be given in writing and shall enclose the observations of the works council on the redundancies. If the works council has not made any observations, the notice shall be valid if the employer can demonstrate that the works council was notified at least two weeks prior to the notice given in accordance with the first sentence of subparagraph 2 and the stage reached in consultations. The notice must include information on the name of the employer, the registered office and type of establishment, as well as the reasons for the projected redundancies, the number and professional categories of workers to be made redundant, the number of workers normally employed, the period over which it is planned to carry out the redundancies and the criteria for selecting the workers to be made redundant. The notice shall also include, for the purposes of job placement and in agreement with the works council, information on the sex, age, profession and nationality of the workers to be made redundant. The employer shall send the works council a copy of the notice. The works council may send additional observations to the Employment Agency. It must send the employer a copy of the observations.

…’

5.

MO had been an employee of G Gmbh since 1981. By order of 1 October 2019, the bankruptcy court initiated insolvency proceedings against that company. SM was appointed as insolvency administrator and in that capacity exercised the function of employer.

6.

On 17 January 2020, it was decided that G would cease business operations by no later than 30 April 2020 and the redundancy of more than 10 % of the 195 workers it employed was planned for the period from 28 to 31 January 2020.

7.

On 17 January 2020, the consultation procedure with the works council, which represented the workers, was initiated. In that context, the works council received written communication of the information referred to in point (b) of the first subparagraph of Article 2(3) of Directive 98/59, the provisions of which were transposed in Paragraph 17(2) of the Law on protection against unfair dismissal.

8.

However, contrary to the obligation laid down in Paragraph 17(3) of that law, which transposed the second subparagraph of Article 2(3) of that directive, no copy of the written communication to the works council was forwarded to the competent public authority, that is to say, the Agentur für Arbeit Osnabrück (Public Employment Agency, Osnabrück, Germany).

9.

By observations of 22 January 2020, the works council stated that it did not see any way in which the projected redundancies might be avoided.

10.

On 23 January 2020, the projected collective redundancies were notified to the Osnabrück Public Employment Agency. By letter dated 28 January 2020, MO’s employment contract was terminated with effect from 30 April 2020.

11.

MO brought an action before the Arbeitsgericht (Labour Court) for a finding that the employment relationship had not been terminated by his dismissal. In particular, he argued that the requirement to forward to the public employment agency the written communication of the information sent to the works council was a precondition for the validity of the dismissal.

12.

Since that action was dismissed both at first instance and on appeal, MO brought an appeal on a point of law before the Bundesarbeitsgericht (Federal Labour Court).

13.

In those circumstances, that court decided on 27 January 2022 to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘What is the purpose of the second subparagraph of Article 2(3) of [Directive 98/59], according to which the employer is to forward to the competent public authority a copy of, at least, the elements of the written communication which are provided for in the first subparagraph, point (b), subpoints (i) to (v), [of that paragraph 3]?’

14.

Observations were submitted by the parties to the main proceedings and the European Commission.

15.

By its single question, the referring court seeks, in essence, to ascertain the purpose of the second subparagraph of Article 2(3) of Directive 98/59, in so far as that provision imposes an obligation on the employer to forward to the competent public authority a copy of, at least, the elements of the written communication to the workers’ representatives which are provided for in point (b)(i) to (v) of the first subparagraph of that paragraph 3. ( 3 )

16.

In that regard, the referring court notes that, in the absence of a specific rule laid down by Directive 98/59, it is for the Member States to choose the penalty applicable in the event of infringement of that obligation. However, that court notes that it is not in a position to determine whether, under German law, infringement of that obligation must be penalised by the nullity of the dismissal. The referring court states, in particular, that such nullity would be applicable if the provisions of Paragraph 17(3) of the Law on protection against unfair dismissal, which transposes the second subparagraph of Article 2(3) of Directive 98/59 into national law, constitute a statutory prohibition within the meaning of Paragraph 134 of the BGB.

17.

The referring court adds that, in order to ascertain whether it is possible to adopt such a classification, it is necessary to determine the nature of the objective pursued by the provisions of Paragraph 17(3) of the Law on protection against unfair dismissal and, consequently, that pursued by the provisions of the second subparagraph of Article 2(3) of Directive 98/59. More specifically, the referring court asks whether, in the light of its purpose, that article is such as to confer individual protection on employees who are affected by collective redundancies.

18.

It follows from those elements that, in seeking to ascertain the purpose of that article, the referring court requests interpretation of that article in order to determine the legal consequences which national law must attach to a failure to comply with the obligation laid down by that article.

19.

In the light of that uncertainty, it seems to me that, in order to enable the referring court to give a ruling in full knowledge of the facts, it is necessary not only to analyse the purpose of the second subparagraph of Article 2(3) of Directive 98/59, but also to clarify the framework provided for by EU law to ensure compliance with the obligation laid down in that article and, accordingly, the discretion available to the national authorities in determining the penalty applicable in the event of infringement of that obligation.

20.

First of all, it should be noted that, on its own, a literal analysis of the second subparagraph of Article 2(3) of Directive 98/59, in so far as that subparagraph merely provides for the obligation to forward to the public authority certain elements of the written communication sent to workers’ representatives, does not, in itself, allow its subject matter and purpose to be understood. That being said, it must be recalled that, according to the settled case-law of the Court, it is necessary, in order to determine the meaning and scope of a provision of EU law, to consider not only its wording, but also its context and the objectives pursued by the rules of which it is part. ( 4 )

21.

In addition, in accordance with that method of interpretation, it seems to me necessary to describe the objectives essentially pursued by Directive 98/59 and to analyse the obligations imposed on the employer in order to achieve those objectives, including the obligation provided for in the second subparagraph of Article 2(3) of that directive.

22.

In that regard, it is clear from recital 2 of Directive 98/59 that that directive is designed to strengthen the protection of workers in the event of collective redundancies. ( 5 ) In particular, according to recitals 3 and 7 of that directive, the differences still remaining between the provisions in force in the Member States concerning measures apt to alleviate the consequences of collective redundancies are among the matters to be covered by a harmonisation of laws. ( 6 )

23.

Moreover, as evidenced by recital 4 of Directive 98/59, distortions between the levels of protection provided in relation to collective redundancies by national legislation can have a direct effect on the functioning of the internal market. Accordingly, the objective of the protective rules laid down by Directive 98/59 is also to harmonise the costs which such rules entail for EU undertakings. ( 7 ) In that regard, that directive helps to ensure fair competition by reducing the risk that an employer might choose to take advantage of the existence of less protective employment legislation in certain Member States.

24.

However, it should be pointed out that Directive 98/59 provides for only a partial harmonisation of the rules for the protection of workers in the event of collective redundancies and relates only to the procedure to be followed when such redundancies are to be made. It follows, in particular, that that directive does not seek to establish a mechanism of general financial compensation in the event of loss of employment. ( 8 ) At the same time, Article 5 of that directive gives Member States the right to apply or to introduce laws, regulations or administrative provisions which are more favourable to workers or to promote or to allow the application of collective agreements more favourable to workers. ( 9 )

25.

The main objective of Directive 98/59 is, more specifically, to make collective redundancies subject to prior consultation with the workers’ representatives and prior notification to the competent public authority. ( 10 ) Accordingly, that directive imposes on employers two complementary sets of procedural obligations. First, under Article 2 of Directive 98/59, employers are required to inform and consult workers’ representatives. Secondly, under the second subparagraph of Article 2(3) and Article 3(1) of that directive, employers are to notify the competent public authority in writing of any projected collective redundancies and to forward to it the elements and information referred to in those provisions.

26.

With regard to the first obligation, it is clear from Article 2(2) of Directive 98/59 that the main aim of the consultation is to avoid collective redundancies or, failing that, to reduce their number. ( 11 ) It is only in the event that those redundancies are unavoidable that consultations should be directed towards recourse to accompanying social measures aimed, inter alia, at aid for redeploying or retraining workers made redundant.

27.

In that context, Article 2 of Directive 98/59 imposes an obligation to negotiate. ( 12 ) It is clear from the wording of that provision that consultations must be carried out with a view to reaching an agreement and that workers’ representatives must be enabled to make constructive proposals on the basis of the information which the employer is required to make available to them. To that end, that directive specifies both the point at which the workers’ representatives must be consulted and the content of the information which must be notified to them.

28.

In the first place, the consultation procedure must, in accordance with Article 2(1) of that directive, be initiated as soon as an employer is contemplating collective redundancies. Thus, according to the case-law of the Court, the obligation to consult workers’ representatives comes into being prior to the decision to terminate employment contracts ( 13 ) and arises in connection with the existence of an intention on the part of the employer to make collective redundancies. ( 14 ) Those employment contracts can be terminated by the employer only after that procedure is concluded, in other words after the employer has fulfilled the obligations set out in Article 2 of that same directive. ( 15 )

29.

In the second place, according to Article 2(3) of Directive 98/59, employers must, in good time, supply workers’ representatives with all relevant information and in any event notify them in writing of the reasons for the redundancies, the number and categories of workers to be made redundant, the number and categories of workers normally employed, the period over which the projected redundancies are to be effected and the criteria proposed for the selection of the workers to be made redundant.

30.

In other words, the completeness of that information and the time at which it is to be notified to the workers’ representatives must ensure that those representatives have relevant information giving them the opportunity to participate effectively in the dialogue with the employer and, where possible, to reach an agreement with that employer.

31.

As regards the obligation to inform the competent public authority laid down by Directive 98/59, it must be pointed out that that directive does not merely provide, in the second subparagraph of Article 2(3) thereof, that the employer is to forward to the competent public authority certain elements of the written communication sent to workers’ representatives. Under Article 3(1) of that directive, employers are to notify the competent public authority in writing of any projected collective redundancies. As the Commission points out in its written observations, ( 16 ) those two obligations cover two procedural stages with different timetables. ( 17 ) While the obligation laid down in Article 2(3) of Directive 98/59 must be fulfilled when the employer is only contemplating collective redundancies and to that end informs and consults the workers’ representatives, the obligation laid down in Article 3(1) of that directive applies when the employer has prepared its projected collective redundancies and forms part of the redundancy procedure in the strict sense. ( 18 )

32.

It follows from the fourth subparagraph of Article 3(1) of Directive 98/59 that the notification of the projected redundancies is to contain all relevant information concerning the projected collective redundancies and the consultations with workers’ representatives provided for in Article 2 of that directive, and particularly the reasons for the redundancies, the number of workers to be made redundant, the number of workers normally employed and the period over which the redundancies are to be effected.

33.

The EU legislature intended to ensure the effectiveness of that notification obligation by providing, in Article 4(1) of Directive 98/59, that projected collective redundancies notified to the competent public authority are to take effect not earlier than 30 days after notification. ( 19 ) In any event, the termination of the employment contracts cannot, according to the case-law of the Court, take place before notification of the projected collective redundancies to that public authority. ( 20 )

34.

Article 4(3) of Directive 98/59 clarifies the purpose of the obligation to notify the projected redundancies, since the competent public authority must, in essence, use that minimum period of 30 days to seek solutions to the problems raised by the redundancies. In that regard, it seems to me that the nature of the analysis to be carried out by that authority can be defined in the light of the scope of that directive, which, according to the case-law of the Court, concerns the socioeconomic effects that collective redundancies may have in a given local context and social environment. ( 21 ) It follows that the obligation to notify the projected collective redundancies to the public authority must allow that authority to explore, on the basis of all the information forwarded to it by the employer, the possibilities of limiting the negative consequences of those redundancies by means of measures tailored to the data concerning the labour market and economic activity to which the collective redundancies relate.

35.

In my view, the preceding discussion makes it possible to clarify the purpose of the provisions of the second subparagraph of Article 2(3) of Directive 98/59.

36.

I consider that the obligation to forward to the competent public authority certain elements of the communication sent to workers’ representatives, as provided for in that article, pursues an objective analogous to the obligation to notify the projected redundancies imposed by Article 3 of that directive. In that respect, it must be recalled that the information communicated by the employer relates, in essence, to the reasons for the projected redundancies, the extent of those redundancies and the period over which redundancies are contemplated. It seems to me that such information on the nature of the collective redundancies is likely to enable the public authority to assess the consequences of those redundancies and to design appropriate measures. It is true that those elements are forwarded to the public authority at a time when, since the collective redundancies are only being contemplated, the employer is initiating negotiations with workers’ representatives. However, the fact remains that, at that stage, the redundancies may already be highly probable, or even inevitable, with the result that, in such a situation, the fact that the public authority is informed promptly is likely to enable it to prepare its intervention prior to notification of the projected redundancies.

37.

As the Commission points out, such an interpretation is, moreover, supported by an analysis of the travaux préparatoires for Directive 75/129/EEC, ( 22 ) Article 2(3) of which provided, in essence, for a similar obligation to forward to the competent public authority the written communication sent to the workers’ representatives. That obligation was introduced, on a proposal from the Kingdom of the Netherlands, on the ground that it would enable the competent authorities immediately to become aware of a situation liable to have a crucial impact on the labour market and to prepare itself for any necessary measures. ( 23 )

38.

That said, it seems to me that the purpose of the second subparagraph of Article 2(3) of Directive 98/59 must be clarified by an additional aspect of the obligation laid down in that article. It is true that that directive imposes, on employers, distinct obligations vis-à-vis the workers’ representatives and the competent public authority. Nevertheless, those obligations, both of which contribute to the protection of employees in the event of collective redundancies, are not entirely separated. On the contrary, there are links between those two obligations, ( 24 ) from which it follows that the role of the competent public authority depends on the course and outcome of the procedure for informing and consulting workers’ representatives.

39.

That link is established in particular by an analysis of the provisions of Directive 98/59, which provides, in Article 3(1) thereof, that the notification to the competent public authority is to contain all relevant information concerning the consultations with workers’ representatives and, in Article 3(2) thereof, that employers are to forward to the workers’ representatives a copy of the notification of the projected redundancies, those workers’ representatives also being able to send any comments they may have to the competent public authority.

40.

It therefore follows from those provisions that the public authority’s intervention is based inter alia on the content and outcome of the procedure for informing and consulting workers’ representatives and on the observations which those representatives may submit at the end of the negotiations which the employer must initiate.

41.

Moreover, it follows from an examination of the provisions of Article 2(3) of Directive 98/59 that that relationship is also established, prior to notification of the projected collective redundancies, during the process of informing and consulting workers’ representatives. In that regard, it should be recalled that the obligation to forward to the competent public authority certain elements of the written communication sent to workers’ representatives forms part of the procedure for informing and consulting those representatives. As I have already explained, that procedure requires that those representatives have, in good time, relevant information allowing them to participate effectively in the dialogue with the employer.

42.

From that point of view, the employer’s fulfilment of its obligation to inform and consult workers’ representatives is not limited to initiating the procedure but is spread over a period of time. In that regard, it is clear from the case-law of the Court that the obligation which has arisen for the employer to start consultations on collective redundancies contemplated does not depend on whether the employer is already able to supply to the workers’ representatives all the information required in point (b) of the first subparagraph of Article 2(3) of Directive 98/59, with the result that that information can be provided during the consultations, and not necessarily at the time when the consultations start. The logic of Article 2(3) of that directive is that the employer is to supply to the workers’ representatives the relevant information throughout the course of the consultations. Since information may become available only at various stages in the consultation process, the employer has the opportunity and the obligation to supplement that information during that process, and any new relevant information must be supplied up to the end of the process. ( 25 )

43.

Since the competent administrative authority is the recipient of the elements of the written communication sent to workers’ representatives, it follows that that authority is to be notified, during the information and consultation period, of the content and quality of the information on the basis of which those representatives are negotiating with the employer. It can be inferred from this that that authority is, by that means, aware of the course and progress of the procedure for informing and consulting workers’ representatives.

44.

The proper conduct of the negotiations, in so far as it is a key element in the ability of the employer and the workers’ representatives to reach agreement, has a decisive impact on how the projected collective redundancies are dealt with and, consequently, on the extent and the nature of the solutions which the public authority must begin to explore in order to remedy the adverse consequences of those redundancies.

45.

In the light of all those considerations, I consider that the second subparagraph of Article 2(3) of Directive 98/59, the subject matter of which is notifying the competent public authority of the nature of the collective redundancies contemplated by the employer and the course of the procedure for informing and consulting workers’ representatives, is intended to allow that authority to assess, prior to the notification of the projected collective redundancies, the possible consequences of those redundancies and, where appropriate, to prepare itself for the measures necessary to remedy those consequences.

46.

That said, for the purpose of providing guidance to the referring court, it remains necessary to clarify the framework established by EU law for ensuring compliance with the obligation laid down in that article and, consequently, the discretion enjoyed by the national authorities in determining the penalty applicable in the event of infringement of that obligation.

47.

In the present case, the referring court asks whether, in the light of its purpose, the second subparagraph of Article 2(3) of Directive 98/59 confers individual protection on workers, with the result that, under German law, infringement of those provisions should be penalised by the nullity of the dismissal.

48.

In that connection, it is established that, in so far as that article imposes an obligation on the employer, it is, under Article 6 of that directive, for the Member States to ensure that judicial and/or administrative procedures for the enforcement of that obligation are available to the workers’ representatives and/or to workers.

49.

In that respect, it is clear first from the settled case-law of the Court that Article 6 of Directive 98/59 does not require Member States to adopt a specific measure in the event of a failure to comply with the obligations laid down in that directive, but leaves them free to choose between the different solutions suitable for achieving the objective pursued by that directive, depending on the different situations which may arise. However, those measures must ensure real and effective judicial protection under Article 47 of the Charter of Fundamental Rights of the European Union and have a real deterrent effect. ( 26 )

50.

It must next be pointed out that Article 6 of that directive does not require Member States to penalise infringement of any of the obligations laid down in that directive by the nullity of the dismissal. It is apparent from the travaux préparatoires for Directive 92/56 that the Commission had proposed to the Member States to provide expressly that the measures for ensuring compliance with the obligations imposed on employers should include, in particular, procedures to render null and void collective redundancies. ( 27 ) However, that proposal was rejected by the EU legislature, which adopted, in Article 5a of Directive 92/56, provisions having identical wording to that of Article 6 of Directive 98/59 and containing no reference to the nullification of collective redundancies. However, although the latter article makes no reference to procedures to render null and void collective redundancies, the Member States nevertheless have the option, under Article 5 of Directive 98/59, of laying down laws, regulations or administrative provisions which are more favourable to workers.

51.

As regards the nature of the protection conferred on workers by the second subparagraph of Article 2(3) of that directive, it is clear from the foregoing considerations that the obligation laid down by that article is intended to enable the administrative authority to assess, prior to the notification of the projected collective redundancies, the possible consequences of those redundancies and, where appropriate, to prepare itself for the measures necessary to remedy those consequences. At a stage where the redundancies are only contemplated by the employer, the action taken by the competent public authority is intended not to deal with each worker’s individual situation but to gain an overall understanding of the collective redundancies and to evaluate means of remedying their adverse consequences. It follows, in my view, that that article confers on workers collective, and not individual, protection.

52.

Moreover, it must be recalled that, according to the case-law of the Court, the right to information and consultation, which is intended to benefit workers as a collective group and is therefore collective in nature, is exercised through workers’ representatives. ( 28 ) In so far as the obligation to forward to the public authority certain elements of the written communication sent to workers’ representatives forms part of the procedure for informing and consulting those representatives, it is logical to take the view that that obligation creates a right which is similar in nature.

53.

In addition, the collective nature of the protection conferred by the second subparagraph of Article 2(3) of Directive 98/59 seems to me to require that the Member States should, as a matter of priority, provide in their domestic law for the possibility of workers’ representatives taking action to ensure that employers comply with the obligation laid down in that article. It nevertheless remains true that the collective nature of the protection in no way deprives Member States of the possibility, in the light of their discretion, to supplement that provision and to grant workers an individual right of action having the same purpose, and/or to rely on the consequences of any infringement of that article on the termination of the employment relationship.

54.

However, beyond that guidance, the precise determination of the measures necessary to ensure compliance with the obligation laid down in the second subparagraph of Article 2(3) of Directive 98/59 is, as I have already stated, a matter for Member States and is largely dependent on the particular features of each Member State’s national labour law. It follows that it is neither possible nor, in my view, desirable to set out in detail the specific procedures which Member States should include in their national law. It is sufficient that those measures ensure effective judicial protection and have a real deterrent effect.

55.

In the light of the foregoing considerations, I propose that the Court of Justice should answer the question referred by the Bundesarbeitsgericht (Federal Labour Court, Germany) as follows:

The second subparagraph of Article 2(3) of Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies

must be interpreted as meaning that the obligation to forward to the competent public authority a copy of, at least, the elements of the written communication provided for in point (b)(i) to (v) of the first subparagraph of Article 2(3) of that directive is intended to allow that authority to assess the possible consequences of the collective redundancies regarding the situation of the workers concerned and, where appropriate, to prepare itself for the measures necessary to remedy those consequences. Member States must, in their domestic law, provide for measures enabling workers’ representatives to ensure compliance with that obligation. Those measures must ensure real and effective judicial protection under Article 47 of the Charter of Fundamental Rights of the European Union and have a real deterrent effect.