Decision

Question 1

1. Introduction

Accepted Answer

1) On 2 June 2021, Mr. Philip Sack of EWC Legal Advisers submitted a complaint to the CAC on behalf of the HSBC European Works Council (“EWC”), (the Complainant) under Regulations 21 and 21A of the Transnational Information and Consultation of Employees Regulations 1999, as amended by The Employment Rights (Amendment) (EU Exit) Regulations 2019, (amended TICER) ^{[footnote 1]} in relation to the actions of HSBC Continental Europe (the Employer). The CAC gave both parties notice of receipt of the complaint on 2 June 2021. The Employer submitted a response to the CAC dated 16 June 2021 which was copied to the Complainant. ^{[footnote 2]}

2) In accordance with section 263 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act), the CAC Chair established a Panel to consider the case. The Panel consisted of Professor Gillian Morris as Panel Chair and Mr Michael Clancy and Mr Mustafa Faruqi as Members. The Case Manager appointed to support the Panel was Linda Lehan

Question 2

2. Background

Accepted Answer

3) The Employer employs staff in many European countries, both within the European Economic Area (“EEA”) and outside it. On 9 October 2015 the Employer’s central management and members of the Special Negotiating Body representing the Employer’s employees in the EEA Member States entered into the HSBC European Works Council Agreement (“the Agreement”). The Agreement stated that for the purposes of EU Council Directive 2009/38 EC (“the Directive”) the central management was situated in the United Kingdom (“UK”) which meant that the agreement was subject to TICER. Provisions of the Agreement of particular relevance to this case are as follows:

Article 2 - INTRODUCTION

2.1 This Agreement is made on 9 October 2015 between the central management of HSBC (hereafter “HSBC Central Management”) and the duly appointed or elected members of the Special Negotiating Body representing HSBC employees in the European Economic Area (EEA) Member States.

2.2 This Agreement is effective following the appointment of the EWC members and defines the scope, role, membership and operation of the HSBC European Works Council (the “EWC”) and fulfils HSBC’s obligations under EU Council Directive 2009/38/EC (“the Directive”).

2.3 For the purposes of the EWC Directive HSBC Central Management is situated in the United Kingdom which means that this agreement is subject to the United Kingdom’s Transnational Information and Consultation of Employees Regulations, 1999 and 2010 (TICER) ….

Article 4 - DEFINITIONS

4.1 Information given to the EWC will relate to significant transnational matters concerning the structure, economic and financial situation and major data concerning probable development, production and /or sales in the perimeter of the EEA member states covered by the EWC …

4.4 Transnational Matters: matters shall be considered to be transnational where they concern either the Group of companies in its entirety within the EEA, or at least two HSBC group undertakings in at least two different EEA Member States. Such matters include decisions which are of importance for either the HSBC Group of companies in its entirety or the HSBC European workforce in terms of the scope of their potential effects and which affect at least two EEA Member States, or which involve transfers of activities between at least two EEA Member States …..

Article 5 - OPERATIONS COVERED

5.1 This Agreement covers all wholly-owned or majority controlled operations of HSBC in the EEA Member States. A list of operations covered in this agreement is listed in Appendix 1. The list will be amended in the event of merger or acquisition or disposal.

Article 7 - APPOINTMENT OF EWC MEMBERS

7.1 For the purposes of this Agreement, the EWC members are those HSBC employees who, from time to time, have been elected or appointed to the EWC under the terms of this Agreement…. Further information in relation to the selection is set out in Appendix 1 to this Agreement ….

7.2 EWC members will be elected / appointed on a country basis.

7.3 HSBC employees of all functions / business lines working within the EEA Member States will be included in the calculation of staff numbers of each EEA Member State. Each EEA Member State in which HSBC has operations is entitled to one member plus one additional member for every 10% tranche (or part thereof rounded up to the closest whole 10%) of the entire European workforce located in that country/function/business line. Where HSBC has 20 employees or fewer in an EEA Member State, any such EEA Member State will not be entitled to their own member and the employees in that EEA Member State will be represented by such other EEA member(s) as determined by HSBC Central Management and the Select Committee.

7.4 The number of members on the EWC will be amended in the event of the expansion of HSBC into new geographical areas or in the growth of employee numbers within the EEA Member States.

7.5 On the basis of the current scope of HSBC’s operations in the EEA, employee representation by country will be as per Appendix 1.These figures will be updated annually, based on headcount as of December 31st. The Select Committee will receive in advance a full list of updated employee representatives and substitutes.

7.6 EWC members will serve for a 4 year renewable term and will be subject to re-election/appointment at the same time, except where otherwise provided for by national law and/or practice.

7.7 Substitute EWC members may be nominated or elected per EEA Member State, according to the same procedures as for the election of effective EWC members. Each EEA Member State may nominate or elect as many substitute EWC members as there are effective EWC members from that country. They will substitute the effective EWC member in the event that the effective EWC member is unable to attend an EWC Meeting, such unavailability being notified to the EWC Chair at least one week prior to the bi- annual EWC Meeting.

7.8 Subject to the provisions of the relevant national law, in the event that an effective EWC member is unable to continue their responsibilities for whatever reason, their substitute will automatically replace the EWC member for the duration of the original term.

7.9 EWC members and substitutes who cease to be employees of HSBC or work within the Business area or Country they represent for whatever reason shall cease to be members of the EWC. They shall immediately forego any rights as employee representatives on the EWC but shall continue to be bound by a duty of confidentiality. In the event that no substitute is available this shall be discussed between HSBC Central Management and the Select Committee.

Article 8 - ADAPTATION OF THE EWC TO CHANGES IN COMPANY STRUCTURE

8.1 When HSBC makes changes to its EEA operating structure through organic growth, acquisitions, restructuring, closing of operations or facilities [or disposals], which result in a change in the employment numbers within HSBC. HSBC Central Management will inform the Select Committee of the EWC at the earliest opportunity of any changes to the membership of the EWC. In general, the following principles will guide such discussions:

a) Newly acquired businesses with operations in EEA Member States where there is already an HSBC presence and which has representation on the EWC shall be represented by the existing EWC member(s) until the completion of their term of office…

b) For newly acquired businesses with activities in EEA Member States without any HSBC presence and therefore having no member(s) on the EWC, provided that they meet the requisite employee number threshold HSBC Central Management will arrange for the election / selection of the appropriate number of members as provided for in this Agreement. Where possible, these members will take their seat on the EWC for the remainder of the current EWC term at the next meeting of the EWC following their election.

c) Where an acquisition introduces an EEA Member State, then that country will be entitled to representation in accordance with Article 7. Where possible, arrangements will be made for the members to participate at the next meeting of the EWC following their election.

d) Where the acquired business itself has a European Works Council then HSBC Central Management will arrange a meeting with the Select Committees of both in order to reach agreement on how the EWC(s) will function in the future. It is the intention of the parties to this Agreement that such discussions will be based on the provisions of this Agreement and the EWC members of the acquired company will be incorporated into the HSBC EWC on the basis of Articles 7.1 to 7.5.

Article 10 - FRAMEWORK AND SCOPE OF THE EWC

10.1 Matters to be the subject of Information and Consultation in the EWC are only those issues that are Transnational Matters and relate to one or more of the following topics:

• Situation and probable trends in employment;

• Human Resource planning;

• Investments which have the potential to impact HSBC employees in EEA Member States, such as capital expenditure projects, potential acquisitions and disposals;

• Substantial changes concerning: work organisation; transfers of business and transfers of technology, the introduction of new working methods or business processes, and cut backs or closure/(s);

• Mergers; and

• Collective or mass redundancies ….

Article 14 - EXPERT

14.1 EWC members may be assisted by an appropriately qualified expert of their choice for the performance of their duties, responsibilities and rights as EWC representatives as set out in this Agreement…..

14.3 HSBC will pay reasonable costs of experts including professional fees and disbursements as agreed in advance between the parties.

Article 15 - THE LEGAL STATUS AND PROTECTION OF EWC MEMBERS

15.1 The effective EWC members are recognised as the legal representatives of the company’s EEA workforce in respect of all rights emanating from EU Directive 2009/38/EC….

Article 18 - DURATION OF AGREEMENT …. 18.5 If HSBC Central Management and the members of the EWC deem it necessary, this Agreement may be amended by mutual consent. Either HSBC Central Management or the EWC, following a two-thirds majority vote of EWC members, can request the revision of all or part of this Agreement. A revision request must be sent in writing to all signatories, setting out the purpose of the revision request. If the revision is not agreed within six months from the opening of negotiations, the revision request is considered to be ineffective.

Article 19 - LEGAL STATUS AND DISPUTE RESOLUTION

19.1 This Agreement is negotiated under Article 6 of Council Directive 2009/38/EC and is to be governed and construed according (sic) TICER and English law.

19.2 Any disputes between the parties as regards the meaning and/or operation of this Agreement shall be resolved in accordance with the procedures set out in The Transnational Information and Consultation of Employees (Amendment) Regulations 1999 and 2010.

19.3 The English text of this Agreement is the binding text.

19.4 The parties agree that the courts of England and Wales shall have non-exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).

19.5 The signatories of this Agreement hereby confirm that they are fully authorised to agree the terms of this Agreement.

4) In November 2020, the Employer decided to relocate its central management under the Directive from the UK to the Republic of Ireland with effect from 1 January 2021. In a letter dated 3 December 2020 the Employer wrote to HSBC Securities Services (Ireland) DAC (“HSBC Ireland”) confirming that HSBC Ireland would act as its representative agent with effect from 1 January 2021. On 4 December 2020, HSBC gave the EWC notice of its intention to designate HSBC Ireland as its central management representative agent with effect from 1 January 2021. This notice was accompanied by an updated version of the Agreement confirming the appointment of HSBC Ireland (at Article 2.3) and the application of Irish law and non-exclusive jurisdiction of the Irish courts over related disputes or claims (at Articles 19.2 and 19.4). These provisions read as follows:

Article 2 – INTRODUCTION

2.1 This Agreement was made on 9 October 2015 between the central management of HSBC (hereafter “HSBC Central Management”), and the duly appointed or elected members of the Special Negotiating Body representing HSBC employees in the European Economic Area (EEA) Member States.

2.2 This Agreement is effective following the appointment of the EWC members and defines the scope, role, membership and operation of the HSBC European Works Council (the “EWC”) and fulfils HSBC’s obligations under EU Council Directive 2009/38/EC (“the Directive”).

2.3 HSBC Central Management is situated in the United Kingdom, which meant that this agreement was subject to the United Kingdom’s Transnational Information and Consultation of Employees Regulations, 1999 and 2010 (TICER) until 31 December 2020 when the transition period following the United Kingdom’s withdrawal from the EEA ended. As HSBC Central Management is no longer situated in an EEA Member State, it has designated HSBC Securities Services (Ireland) DAC in the Republic of Ireland to act as its representative agent from 1 January 2021 (the “Representative Agent”).

2.4 Any references to HSBC Central Management in this agreement shall include a reference to the Representative Agent with effect from 1 January 2021

2.5 With effect from the date of appointment of the Representative Agent, this agreement is governed by Irish law and subject to Ireland’s Transnational Information and Consultation of Employees Act 1996 (as amended) (“TICEA”).

Article 19 – LEGAL STATUS AND DISPUTE RESOLUTION

19.1 This Agreement is negotiated under Article 6 of Council Directive 2009/38/EC and is to be governed and construed according to TICEA and Irish law.

19.2 Any disputes between the parties as regards the meaning and/or operation of this Agreement shall be resolved in accordance with the procedures set out in the Transnational Information and Consultation of Employees Act 1996 (as amended).

19.3 The English text of this Agreement is the binding text.

19.4 The parties agree that the courts of Ireland shall have non-exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).

19.5 The signatories of this Agreement hereby confirm that they are fully authorised to agree the terms of this Agreement.

The letter also stated that as the Agreement covered only EEA operations the Employer had concluded that it was no longer appropriate for the UK business to remain involved in its EWC, or for UK employees to be represented by it, from 2021.

Question 3

3. The Complaint

Accepted Answer

5) The Complaint dated 2 June 2020 submitted to the CAC by Mr Sack reads, so far as material, as follows:

This complaint is made pursuant to regulations 21 (Disputes about operation of European Works Council) and 21A (Disputes about failures of management) of the TICE Regulations.

On 4 December 2020, HSBC Central Management wrote to Mr Brian Statham, Chairman of the EWC Select Committee, informing him that it had decided, with effect from I January 2021:

(a) to designate a representative agent in Ireland for the purpose of the EWC Directive to assume the role of central management under the Directive;

(b) to exclude HSBC’s UK business from the scope of the EWC Agreement;

(c) to exclude UK representatives as members of the EWC; and

(d) to amend Articles 2 and 19 and Appendix I of the EWC Agreement accordingly.

The letter enclosed a revised version of the EWC Agreement with changes made to Articles 2 and 19. The EWC does not believe it has received a revised Appendix 1 to the Agreement.

The EWC’s complaint pursuant to regulation 21 is that HSBC central management has not complied with the terms of the Agreement by:

(1) Excluding its UK business from the scope of the Agreement in breach of Article 5 (Operations Covered) of the EWC Agreement (as interpreted by the amended TICE Regulations);

(2) Excluding UK representatives from the EWC in breach of Article 7 (Appointment of EWC Members) of the Agreement (as interpreted by the amended TICE Regulations); and

(3) Amending the EWC Agreement without the consent of the members of the EWC in breach of Article 18.5 of the EWC Agreement.

The EWC considers that references in the EWC Agreement to “the EEA Member States” should now be read as references to “the Relevant States” in accordance with the amended TICE Regulations.

In addition, central management has informed the EWC that it will not pay for, or contribute towards, my fees for assisting the EWC members in relation to this complaint. The EWC considers this to be a breach of Article 14 (Expert) of the EWC Agreement and of regulation 19A (Means required) of the TICE Regulations. The EWC therefore brings this element of the complaint under both regulation 21 (Disputes about operation of European Works Council) and regulation 21A (Disputes about failures of management) of the TICE Regulations.

Question 4

4. Summary of the Employer’s response to the Complaint

Accepted Answer

6) The Employer opened its submissions by requesting a stay in the proceedings pending the outcome of an appeal to the Employment Appeal Tribunal (“EAT”) in EasyJet European Works Council and easyJet PLC ^{[footnote 3]} regarding the CAC’s jurisdiction to hear the Complaint on the basis that the Employer was relying (in part) on the same arguments as the employer in easyJet. The Employer said that if the CAC were to proceed with this Complaint and make the same findings on jurisdiction as it did in easyJet, only for the EAT to reach a different view, the Employer would then also need to appeal the CAC decision to the EAT on matters which would already have been determined by the EAT leading to the parties, the CAC and the EAT incurring and spending additional and unnecessary costs and time. The Employer said that the remainder of its response was provided without prejudice to its request for a stay, and subject to the outcome of the easyJet appeal.

7) The Employer said that it was committed globally to respecting its people’s right to freedom of association and to working professionally with recognised employee representative bodies and that it recognised a number of trade unions, works councils and employee representative forums across its global operations and strove to ensure that its interactions with them were constructive and collaborative. The Employer said that it recognised the important role that these bodies played in advocating for employee rights and that meetings were held regularly at which information on business strategy and context was shared and representatives were given the opportunity to provide comments, ask questions and challenge the Employer on its proposals. The Employer said that it was committed to listening and responding to these representations, and to working with its recognised employee bodies to promote employee interests in accordance with local legal requirements.

8) The Employer said that in the UK it had recognised and worked with unions for many years, and viewed its relationship with Unite and all the Employer’s social partners as an integral part of its corporate social responsibility in the UK. The Employer said that its decision to exclude its UK business from membership of its EWC was not a reflection of any change in its view of the importance of the relationship with its social partners nor, indeed, was it an attempt to minimise the rights of employees in the UK to be appropriately informed and consulted with on matters relating to the UK business. The Employer also said that its decision was not an attempt to weaken the position of the EWC, which continued to play an invaluable role in helping the Employer to maintain strong employee relations with its workforce; rather it had taken this decision for wholly legitimate reasons arising from the fact that the UK was no longer an EEA Member State.

9) The Employer said that from its inception the Agreement had been confined to EEA member countries ( Articles 2.1, 5.1, 7.3, 7.5, 7.7, 8.1 and 15.1) and solely concerned its operations in EEA member states ( Articles 4 and 10.1). The Employer said that the numbers employed in EEA countries as at August 2015 were set out in an Appendix to the Agreement and that this Appendix was used to determine the number of EWC representatives by country in 2015. The Employer said that EWC representation had been reviewed annually in subsequent years based on updated headcount figures as at each year end. The Employer said that Switzerland was an example of a non-EEA European country where it employed staff, currently 782 permanent full time equivalents. The Employer said that this figure was greater than the number of staff employed in eight of the countries represented on the EWC, and more staff than in over half of the member countries of the EWC, but that the staff in Switzerland did not fall within the scope of the EWC.

10) The Employer said that it had made the decision to relocate its central management under the Directive from the UK to the Republic of Ireland with effect from 1 January 2021, as central management could no longer be based in the UK from 2021 as a matter of EU law following Brexit. The Employer said that it had given the EWC notice of its intention to designate HSBC Ireland as its central management representative agent with effect from 1 January 2021 on 4 December 2020. The Employer said that this notice had been accompanied by an updated version of the Agreement confirming the appointment of HSBC Ireland (at Article 2.3) and the application of Irish law and non-exclusive jurisdiction of the Irish courts over related disputes or claims (at Articles 19.2 and 19.4). The Employer said that it had not been required to consult with the EWC in respect of the change of representative agent either pursuant to the Agreement or in accordance with the CAC decision in Hewlett Packard Enterprise Special Negotiating Body and Hewlett Packard Ltd ^{[footnote 4]} (“Hewlett Packard”).

11) The Employer said that the question of whether the CAC had jurisdiction to hear the Complaint under amended TICER must be dealt with as a preliminary issue and requested the opportunity to provide full written submissions and legal authorities specifically on that issue following receipt of submissions and supporting material submitted by the EWC in relation to the Complaint. In outline, the Employer denied that the CAC had jurisdiction to hear this Complaint under amended TICER. The Employer submitted that amended TICER only applied as provided for in Regulation 4 (“Circumstances in which provisions of these Regulations apply”) and that the effect of Regulation 4 was that most of amended TICER only applied to Community-scale groups of undertakings whose central management was situated in the UK in accordance with regulation 5. The Employer submitted that the Complainant only had rights of action under regulations 21 and 21A before the CAC in relation to undertakings whose central management was situated in the UK in accordance with regulation 5 and that such undertakings did not include the Employer. The Employer said that the provision of TICER which had formerly applied to the Employer had been repealed (regulation 5(1)(a)) and that Parliament had expressly removed the CAC’s jurisdiction which was an inevitable consequence of Brexit as the Directive (which TICER implemented) no longer applied to central management in the UK.

12) The Employer acknowledged that another CAC panel had recently considered this jurisdiction issue in easyJet but said that the CAC was not bound by decisions of other panels and submitted that easyJet should not be followed as it was based on a fundamental error of law. The Employer also said that this case differed in significant ways which distinguished it from easyJet. The Employer said that in easyJet the employer did not confine its EWC to EEA member countries; on the contrary, the employer in easyJet promised to include the UK, and Switzerland, under its new German law model. ^{[footnote 5]} The EWC in easyJet also operated under the subsidiary requirements of amended TICER, and easyJet PLC’s designation of a German representative agent had required it to set up a new EWC under the German subsidiary requirements. In addition, regulation 18 of amended TICER provided for the continued application of the subsidiary requirements following exit day (where it had application under regulation 4). By contrast, the Employer had a negotiated Agreement and had deliberately tried to preserve the continuity of the EWC by making the changes necessary to preserve the EEA exclusivity and, in the circumstances, by appointing HSBC Ireland as representative agent to ensure that the EWC could continue operating validly for EU law purposes from 1 January 2021 without disruption or a break in continuity. The Employer said that the CAC in easyJet had confirmed that regulation 4(1) of amended TICER was capable of being interpreted as EasyJet PLC contended ^{[footnote 6]} (i.e. in accordance with its ordinary and natural meaning that the CAC had no jurisdiction to hear a complaint unless the central management was situated in the United Kingdom on the basis of the provisions contained in regulation 5 of amended TICER) and had not explained how regulations 4 and 5 could be read together to have the meaning contended for by the EWC in that case. The Employer submitted that the decision in easyJet appeared to have been reached on the mistaken basis that a “purposive approach” allowed the express wording of legislation to be disregarded or re-written and that such an approach was wrong in law. The Employer further submitted that the CAC’s decision in easyJet was significantly influenced by the application of regulation 18 of amended TICER which did not apply to the Employer and there were no comparable provisions in relation to negotiated agreements. The Employer said that this case was, therefore, distinguishable from easyJet.

13) The Employer said that its EWC representative agent was in the Republic of Ireland and that the EWC had not challenged this in the Complaint. The Employer said that section 9(2) of the Transnational Information and Consultation of Employees Act 1996 enabled the central management of a Community-scale group of undertakings to nominate a representative agent in Ireland and for that purpose, section 9(4) provided that the representative agent in Ireland was to be “regarded as” the central management (the deeming provisions reflecting Article 4 of the Directive). The Employer said that the representative agent in Ireland had assumed the relevant duties and obligations imposed by the legislation that implemented the Directive; that the legislation applicable in the Republic of Ireland applied to it, and that, as the CAC had recognised in Hewlett Packard, ^{[footnote 7]} the CAC had no jurisdiction to interpret or apply that legislation. The Employer said that the Complainant had not challenged the Employer’s right to designate its representative agent in the Republic of Ireland, so the Complaint should be dismissed on that basis. The Employer said that, in any event, the designation was lawful and valid following the approach of the CAC in Hewlett Packard and that the UK no longer had any relevance under the pre-existing terms of the Agreement which clearly established that membership of the EWC was limited to EEA member country establishments only, and that other European non-EEA countries were already excluded from membership. The Employer said that this supported a finding that the designation was made in good faith, and that it was within the Employer’s rights in accordance with the preamble to the Directive and recitals 9 and 24, i.e. the Directive intended that the effective exercise of workers’ rights under information and consultation requirements should be facilitated while keeping “to a minimum the burden on undertakings or establishments” (recital 9).

14) The Employer rejected the Complainant’s first complaint on the basis that exclusion of the UK business from the point in time at which that business ceased to be an operation of HSBC in an EEA Member State was wholly in accordance with the express wording of Article 5, under which the defining criterion was that the operation in question is located within an EEA Member State. The Employer referred to Article 5 which states (both in the original and the updated versions):

5.1 This Agreement covers all wholly-owned or majority controlled operations of HSBC in the EEA Member States. A list of operations covered in this agreement is listed in Appendix 1. The list will be amended in the event of merger or acquisition or disposal.

The Employer said that the Complainant was asking the CAC to imply words into that article by reference to amended TICER. The Employer said that it was trite law that implied terms could not conflict with express terms and that, given the clarity of the wording of Article 5, and the established practice of excluding operations in non-EEA Member States, be they European or not, there was no valid basis to amend that article by the implication contended. The Employer said that words of an agreement between two parties were not amended by legislation such as amended TICER and that, in any event, there could be no grounds for substituting the language chosen by the parties for “Relevant States” when that term had no meaning in the Agreement. The Employer said that the Agreement was only subject to TICER under Article 2.3 – i.e. on the express basis that the central management was situated in the UK for the purposes of the Directive which was no longer the case after designation (and could no longer be the case after Brexit).

15) The Employer rejected the second complaint on the basis that the exclusion from the EWC of UK representatives was wholly in accordance with the express wording of Articles 7.2 and 7.3, under which the defining criterion was that the operation in question must be located within an EEA Member State in order to be entitled to a representative. The Employer said that it would have been a failure on its part to comply with the terms of the Agreement if the UK representatives had been allowed to remain part of the EWC following the UK’s exit from the EU and its simultaneous cessation of being a contracting party to the EEA. The Employer also said that Article 7.5 provided for annual updating of Appendix 1 (the list of how many representatives each country is entitled to based on employee headcount). The Employer said that the Agreement contained no provision for discretion regarding that updating: it flowed directly, objectively and automatically from the numbers of employees in the EEA countries at the time. The Employer said that the lack of provision for discretion meant that there was no need to consult, nor purpose in consulting, over such changes; this was the mechanism for changes to EWC membership that the parties had agreed upon when the Agreement was put in place. The Employer further submitted that Articles 7.8 and 7.9 provided for the removal of EWC members before the expiry of their 4-year term where there was some reason for their being unable to continue their responsibilities (Article 7.8) and where they ceased to work in a country which was entitled to a representative on the EWC (Article 7.9). The Employer said that, for the avoidance of doubt, the wording of Article 7 of the Agreement was not amended, so reliance on the provisions of Article 7 was unaffected by the outcome of the third complaint.

16) The Employer said that the third complaint - that it had not complied with the terms of the Agreement by amending the Agreement without the consent of the members of the EWC in breach of Article 18.5 of the Agreement - was academic because the amendment procedure in Article 18.5 was not engaged. Article 18.5 reads as follows:

If HSBC Central Management and the members of the EWC deem it necessary, this Agreement may be amended by mutual consent. Either HSBC Central Management or the EWC, following a two-thirds majority vote of EWC members, can request the revision of all or part of this Agreement. A revision request must be sent in writing to all signatories, setting out the purpose of the revision request. If the revision is not agreed within six months from the opening of negotiations, the revision request is considered to be ineffective.

The Employer said that, as set out in its response to the first complaint, even on the original version of the Agreement, the exclusion of the UK business was wholly in accordance with Article 5, and as set out in its response to the second complaint, even on the original version of the Agreement, the UK workforce was no longer entitled to have representatives on the EWC. The Employer said that this meant that no amendment to the Agreement was required to give effect to these changes. The Employer also said that, in any event, the power to designate or re-designate central management or a representative agent was at the Employer’s discretion and its exercise did not require EWC approval particularly in circumstances where the designation or re-designation was done in order to satisfy a legal obligation. The Employer said that the EU Commission Withdrawal Notice obliged employers – including the Employer – to relocate their UK-based EWCs from “exit day” if they were not content to have them automatically relocated elsewhere outside of the UK under other provisions of that notice. The Employer said that the choice as to whether to actively relocate its EWC, or to allow it to relocate automatically by default under the provisions, was not relevant to the issues before the CAC in this matter. The Employer said that it designated a central management representative agent solely to comply with the EU Commission Withdrawal Notice and its obligations under the Directive to ensure that the EWC could continue to operate validly from 2021. The Employer said that Article 18.5 did not apply to amendments that were necessary and consequential on a change to EWC membership and/or a change of representative agent; rather it was intended to provide for changes to be mutually agreed in so far as they related to the rights of workers employed in operations in EEA Member States to be informed and consulted on transnational matters (as set out in Articles 3 and 4). The Employer said that there was no failure to comply with the terms of the Agreement as alleged in the third complaint when Article 18.5 was properly construed.

17) The Employer said that under the Trade Union and Labour Relations (Consolidation) Act 1992 Schedule A1, paragraph 171, the CAC must have regard to the object of encouraging and promoting fair and efficient practices and arrangements in the workplace. The Employer said that to accept the Complaint would result in the unfair practice and arrangements that workers from the non-EEA Member State of the UK would be entitled to participate in the EWC, contrary to the express and long-standing provisions limiting participation to EEA Member States. It would also be inefficient for UK workers to participate in a consultation forum which was specifically set up to deal with rights and obligations arising under provisions which no longer governed their work in the UK. The Employer said that, by contrast, a rejection of the Complaint would allow the EWC to proceed on the fair basis that it was dealing solely with issues between EEA Member States, in accordance with the purpose of the governing Directive. This would allow for an efficient process to deal with the implications of EEA rules which had equal effect between the EEA Member State participants.

18) The Employer stated that its EWC had been set up with a very deliberate and exclusive EEA focus, illustrated by the fact that its Swiss employees had never been represented on the EWC. The Employer said that the UK workforce had had a substantial majority on the EWC prior to this year, but had never argued that it was necessary or appropriate to include the Swiss workforce. The Employer said that it had agreed (at its own discretion and without admission as to any entitlement under amended TICER or under the terms of the Agreement) to make a contribution towards the reasonable costs of the EWC’s chosen representative in this matter in an attempt to show its continuing good faith towards the EWC and in the hope that this Complaint could be resolved efficiently, and the EWC could proceed to function under the law of the Republic of Ireland without a prolonged period of doubt and dispute.

19) The Employer concluded its response by acknowledging the significant and valuable contribution that the former UK members had made to the EWC over the years and said that the decision to remove the UK business from the EWC had not been taken lightly. The Employer said that it had considered that it was necessary in order to comply with its obligations under EU law and to apply the terms of the Agreement fairly and consistently. The Employer said that following 4 December 2020 (i.e. the date that HSBC gave notice to the EWC of its intention to designate HSBC Ireland as its central management representative agent with effect from 1 January 2021), the Employer and the EWC had engaged in extensive dialogue in the aim of seeking a resolution to this matter. The Employer said that as part of these collaborative exchanges, the Employer had taken steps: (i) to ensure that the EWC had sufficient opportunity to fully articulate its concerns; and (ii) to seek to address these concerns. The Employer said that examples had included hosting an extraordinary roundtable session on 17 March 2021, which one of the former UK representatives had attended, to discuss the matters that were the subject of the Complaint, and inviting the former UK members (including the former UK Chair) to attend a meeting on 14 May 2021 to consider points around information to be provided to the EWC in relation to employee exits (notwithstanding that there was no requirement for the former UK member to attend this meeting). The Employer said that unfortunately these steps had not led to a resolution but that it remained fully committed to: (i) continuing to foster positive relations with the EWC going forward; and (ii) continuing to comply in full with its information and consultation obligations to the UK workforce on local matters that affect the UK as required under UK law.

Question 5

5. Considerations

Accepted Answer

20) The Complainant contended that the Employer had not complied with the terms of the Agreement by

(1) excluding its UK business from the scope of the Agreement in breach of Article 5 (Operations Covered) of the EWC Agreement (as interpreted by the amended TICE Regulations) (“the first complaint”);

(2) excluding UK representatives from the EWC in breach of Article 7 (Appointment of EWC Members) of the Agreement (as interpreted by the amended TICE Regulations) (“the second complaint”); and

(3) amending the EWC Agreement without the consent of the members of the EWC in breach of Article 18.5 of the EWC Agreement (“the third complaint”).

The Complainant also contended that the Employer had breached Article 14 of the Agreement and regulation 19A of TICER in informing the Complainant that it would not pay for, or contribute towards, Mr Sack’s fees for assisting the Complainant in relation to this complaint.

21) The Panel has considered the submissions and the accompanying documentation provided by the parties carefully. The Panel noted the request by the Employer for a stay in the proceedings. Having reviewed the documentation the Panel was satisfied that, for the reasons set out below, the first and second complaints were not well- founded in their entirety and that the third complaint was not well-founded insofar as it related to the exclusion of the UK business from the scope of the Agreement and the exclusion of UK representatives from the EWC. The Panel is satisfied that it was able to reach a decision on those matters fairly without a hearing and on the basis of the documentation before it without further submissions from either party. That being so, the Panel did not give any consideration to the merits of the Employer’s request for a stay in the proceedings on the basis that such a stay, even if it had been granted, would have merely constituted an unnecessary delay in informing the parties of the Panel’s decision on those matters. The Panel also noted the Employer’s request for the issue of jurisdiction to be treated as a preliminary issue on which the Employer wished to make further submissions. In the light of its conclusions on the substance of the complaints referred to, the Panel decided that it would be appropriate to dispose of those complaints on the assumption that the CAC had jurisdiction to consider them without determining the question of jurisdiction either way. For the avoidance of doubt, the Panel has not given any consideration to the question of jurisdiction for the purpose of this decision and nothing in this decision should be taken as expressing the Panel’s view on any of the submissions relating to that question.

22) The Employer stated in its response to the Complaint that the Complainant had not challenged the Employer’s right to designate its representative agent in the Republic of Ireland (see paragraph 13 above). In the light of its view that it was appropriate to dispose of the complaints referred to in paragraph 21 above without delay, the Panel did not consider it appropriate to investigate before disposing of those complaints whether the Complainant wished to challenge the change of representative agent or other amendments to Articles 2 and 19 of the Agreement under the heading of the third complaint. It is common ground between the parties that amendments have been made to Articles 2 and 19, although the Employer has submitted that Article 18.5 of the Agreement did not apply to amendments of that nature. If, having considered the contents of this decision, the Complainant wishes to challenge any of the amendments to Articles 2 and 19 of the Agreement under the heading of the third complaint it should inform the CAC of this in writing within 21 days of this decision, specifying the amendments which are the subject of challenge. Consideration of such matters will require the Panel first to consider the jurisdictional issue, and the Complainant should respond to the Employer’s request, outlined in paragraph 6 above, that consideration of the jurisdictional issue should be stayed pending the outcome of an appeal to the EAT in easyJet. The Complainant should not at that stage, however, send detailed submissions relating to the jurisdictional or substantive issues.

23) The Complainant contended that the Employer had breached Article 14 of the Agreement and regulation 19A of TICER in informing the Complainant that it would not pay for, or contribute towards, Mr Sack’s fees for assisting the Complainant in relation to this complaint. In its response to the complaint the Employer stated that it had agreed, at its discretion, to make a contribution towards the reasonable costs of the Complainant’s chosen representative. In the light of this statement the Panel has not investigated this complaint at this stage. In the event that the Complainant wishes to pursue a complaint relating to payment of Mr Sack’s fees it should inform the CAC in writing within 21 days of this decision whereupon the CAC will follow the procedure set out in paragraph 22 above in relation to such a complaint.

24) If the CAC is not informed within 21 days of this decision that either the Complainant wishes to (i) challenge any of the amendments to Articles 2 and 19 of the Agreement under the heading of the third complaint, or (ii) pursue a complaint relating to payment of Mr Sack’s fees, the case will be closed by the CAC.

25) In relation to the first complaint, Article 5 of the Agreement reads as follows:

OPERATIONS COVERED

5.1 This Agreement covers all wholly-owned or majority controlled operations of HSBC in the EEA Member States. A list of operations covered in this agreement is listed in Appendix 1. The list will be amended in the event of merger or acquisition or disposal.

The Panel is satisfied that Article 5 is clear and unambiguous in stating that the Agreement is confined to the Employer’s operations in the EEA Member States. It is not disputed that the UK ceased to be a party to the EEA Agreement after its withdrawal from the EU. The Complainant contended that references in the Agreement to “the EEA Member States” should, following withdrawal, be read as references to “the Relevant States” in accordance with amended TICER and should thus include the UK within its scope. ^{[footnote 8]} The Panel does not accept that the Agreement can be read as covering a “Relevant State” as defined in amended TICER in the absence of any express amendment to the Agreement to this effect; the Panel does not accept that the reference to the concept of a “Relevant State” in amended TICER means that the express terms of the Agreement are thereby overridden. Having examined both the original and the amended Agreement the Panel is satisfied that no amendment was made to the Agreement changing its scope from EEA Member States to Relevant States as defined in amended TICER. The Panel has concluded therefore that the UK business ceased to be covered by the Agreement once the UK ceased to be an EEA Member State and on this basis the Panel rejects the first complaint.

26) In relation to the second complaint. Article 7 of the Agreement, so far as material reads as follows: