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In Akavan Erityisalojen Keskusliitto AEK ry and others v Fujitsu Siemens Computers Oy C-44/08, the European Court of Justice (ECJ) ruled that there is a duty to consult under the EC Collective Redundancies Directive where there are strategic decisions or changes of activities which compel the employer to plan collective redundancies. In the context of group companies, the obligation to consult falls on the subsidiary which may be making redundancies, even if the decision is taken by the parent company.
Fujitsu Siemens Computers Oy (Fujitsu) was a subsidiary of Fujitsu Siemens Computer (Holdings) BV (the Parent). On 7 December 1999, the executive directors of the Parent made a proposal to its board of directors that Fujitsu's factory in Finland should be closed. The board supported this proposal during a meeting on 14 December, although no specific decisions were made at this time. Fujitsu subsequently commenced consultation with the representatives of Fujitsu employees between 20 December 1999 and 31 January 2000. On 1 February, the board of directors of the Parent decided to terminate Fujitsu's operations in Finland and Fujitsu began dismissing its employees on 8 February. It was argued by some employees that Fujitsu had breached Finnish collective consultation legislation as the final decision to close the operations was taken by the Parent's board of directors on 14 December 1999, which was before any consultation had begun.
The ECJ ruled that the duty to consult is triggered where an employer is obliged to contemplate or plan for redundancies due to a strategic decision. The ECJ confirmed that where decisions adopted by a parent company are likely to have repercussions on the jobs of employees in its subsidiary companies, it is for the affected subsidiary to commence consultation with its employees. As a result, it is the subsidiary that will be responsible for the consequences of any breach of its consultation obligations, even if it was not properly informed of the parent company's decision.
