“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 Regulations1999 and 2010 (“TICER”)…”
“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.” (Emphasis added)
“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. The EWC members will be selected in accordance with the procedure providing for the election/appointment of EWC members under the requirements of that country’s national law implementing Council Directive 2009/38/EC. Further information in relation to the selection is set out in Appendix 1 to this Agreement. The Select Committee shall, if an election is called, be informed, in advance, of the method of election and provided with full details of any election result. 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 State’s 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. … 7.9 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.” (Emphasis added)
“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.” (Emphasis added)
“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) until31 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 from1 January 2021 (the “Representative Agent”). 2.4 Any references to HSBC Central Management in this agreement shall include reference to the Representative Agent with effect from1 January 2021 2.5 With effect from the date of appointment of the Representative Agent, this agreement is governed by Irish law and subject toIreland’s Transnational Information and Consultation of Employees Act 1996 (as amended) (“TICEA”).” (Emphasis added)
“19.1 This Agreement is negotiated under Article 6 of [the Directive] 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 theTransnational 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). 1 9.5 The signatories of this Agreement hereby confirm that they are fully authorised to agree the terms of this Agreement.”
“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. 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: … The Employer submitted 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 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) with 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 Panel is satisfied that Articles 7.3 and 7.5 are clear in relating the number of employee representatives to which a country is entitled to the scope of the Employer’s operations in the EEA and that on that basis a country which is outside the EEA is not entitled to a representative. The Panel has therefore concluded that the exclusion of UK representatives from the EWC does not constitute a breach of the Agreement. 27) In relation to the third complaint, Article 18.5 reads as follows: .... The Panel accepts the Employer’s submission that the exclusion of the UK business from the scope of the Agreement and exclusion of UK representatives from the EWC did not require any amendments to Articles 5 or 7 respectively and that these exclusions followed automatically from the UK ceasing to be a EEA Member State. The Panel observes that good industrial relations practice would have favoured some form of prior consultation with the EWC on these measures but is satisfied that this was not required under the Agreement. 28) As stated in paragraph 22 above, the Panel has not considered the amendments to Articles 2 and 19 for the purposes of this decision. The procedure which should be followed by the Complainant if it wishes the Panel to consider those amendments under the heading of the third complaint is set out in that paragraph.” (Emphasis added)
“36) The Panel has considered the submissions and the accompanying documentation provided by the parties carefully. Having reviewed the documentation the Panel is satisfied that, for the reasons set out below, the complaint regarding these amendments is not well-founded. The Panel is satisfied that it was able to reach a decision on the complaint fairly without a hearing and on the basis of the documentation before it without further submissions from either party. The Panel noted the parties’ submissions on the issue of the CAC’s jurisdiction under amended TICER. In the light of its conclusions on the substance of the complaint referred to, the Panel decided that it would be appropriate to dispose of that complaint on the assumption that the CAC had jurisdiction to consider it under amended TICER without determining the question of jurisdiction under amended TICER either way. For the avoidance of doubt, the Panel has not given any consideration to the question of jurisdiction under amended TICER 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. The Panel’s decision is based entirely on its interpretation of the Agreement and whether the amendments made by the Employer to the Agreement were made in breach of Article 18(5) of the Agreement. 37) The amendments to the Agreement which are the subject of the complaint cover two substantive areas: the designation of HSBC Ireland as the Employer’s representative agent with effect from1 January 2021 and the change in the law governing the Agreement from English to Irish law and, in particular, the exclusion of English law. This decision addresses each of these areas in turn. 38) It is common ground between the parties that the Employer was required by EU law to designate a representative agent within an EU Member State for the purposes of the Directive once the transition period following the UK’s withdrawal from the EU ended. The Complainant did not appear to dispute the choice of HSBC Ireland as the representative agent for the purposes of the Directive but nevertheless sought to argue that the amendments to Articles 2.3 and 2.4 which reflect this change constituted a breach of the Agreement as the procedure in Article 18.5 of the Agreement had not been followed prior to the amendments being made. The Panel does not uphold this contention. The Panel is satisfied that once HSBC Ireland had been designated as the representative agent for the purposes of the Directive (such designation not having been disputed by the Complainant) it would have been anomalous for the Agreement to continue to state, as it did in Article 2.3 in its unamended form, that for the purposes of the Directive the central management was situated in the United Kingdom. The Panel has therefore concluded that it was a necessary consequence of the change of representative agent to HSBC Ireland that the Agreement should be amended to reflect that change and rejects the submission that the amendments to Articles 2.3 and 2.4 were made in breach of the Agreement because the amendments were not agreed by the EWC. The Panel also observes that the procedure in Article 18.5 does not appear to have been designed to cover amendments which are required by law rather than being proposed at the will of the parties. Article 18.5 lays down a procedure for amending the Agreement by mutual consent in which failure to agree to a revision of the Agreement within six months of the opening of negotiations means that the revision request is “considered to be ineffective” and the status quo prevails. It is clear that the Agreement would no longer have been compliant with the Directive if the substantive position as represented in unamended Article 2(3) had remained unchanged; indeed, under the Directive the role of representative agent would have been automatically transferred to the establishment or group undertaking employing the greatest number of employees in a Member State had the Employer itself failed to designate a new representative agent in a Member State. In such circumstances it would be anomalous for the text of the Agreement not to reflect the new reality regardless of whether the EWC had explicitly consented to that amendment. 39) The remaining amendments to Article 2.3, the amendments to Articles 19.1, 19.2 and 19.4, and the inclusion of Article 2.5, refer to the change in the law governing the Agreement from English to Irish law. The Complainant acknowledged that an EWC governed by TICER would not comply with the Directive and that it followed from the designation of HSBC Ireland as the representative agent for the purposes of the Directive that Irish law would apply to the Agreement (see paragraphs 27 and 29 above). However the Complainant submitted that the application of Irish law did not preclude the continued application of English law; rather, both systems would apply unless and until the EWC had consented to the removal of English law in accordance with the procedure in Article 18.5. The Employer submitted that the change to Irish from English law occurred as a matter of law rather than as a matter of the choice of the parties to the Agreement and that the amendments to Articles 2 and 19 merely informed readers of the accurate situation, removing any room for confusion between the text of the Agreement and the current legal position. 40) It was common ground between the parties that it followed from the designation of HSBC Ireland as the representative agent for the purposes of the Directive that Irish law would apply to the EWC (although they differed on whether English law would also continue to apply, the Complainant saying that Article 19.4 of the Agreement envisaged that the Agreement may be subject to more than one jurisdiction). On that basis it was clear that some amendments to Articles 2 and 1 9 of the Agreement, which in their unamended form referred only to English law and TICER, were required to reflect the application of Irish law, even if English law were to continue to apply. The Panel does not consider that the introduction of references to Irish law in these articles without the procedure in Article 18.5 being followed would, in itself, constitute a breach of the Agreement as it would merely reflect the legal position as understood by both parties. The Panel also reiterates its observation set out in paragraph 38 above that Article 18.5 does not appear to be designed to cover situations in which, should the parties fail to reach agreement on a proposed amendment, retention of the status quo is not an option. 41 ) The Complainant submitted that the Employer had breached the Agreement by seeking to remove the application of English law to the Agreement without the Complainant’s consent. The Complainant submitted that the choice of law governing a European Works Council Agreement was a matter for negotiation between the parties and the designation of HSBC Ireland did not automatically mean that English law ceased to apply. The Panel is content to assume for the purposes of this decision (without deciding the matter) that the choice of law governing a European Works Council agreement is potentially a matter for negotiation. However the Panel is satisfied that under the Agreement the parties saw the designation of the central management for the purposes of the Directive governing the Agreement as inextricably linked. Article 2.3 in its unamended form reads as follows: 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). It follows from this provision that once the Employer’s central management ceased to be situated in the UK for the purposes of the Directive, HSBC Ireland being the ‘deemed central management’ for those purposes, the Agreement ceased, under the terms of that Agreement, to be subject to TICER. The Panel does not consider that the Employer was unilaterally and illegitimately removing itself from TICER’s scope as the Complainant contended; rather it was a consequence of the link (and severance of the link) between the situation of central management for the purposes of the Directive and the governing law laid down in unamended Article 2.3, itself a product of agreement between the parties. 42) As stated in paragraph 40 above the Panel regards the inclusion of Article 2.5 and the amendments to Articles 19.1, 19.2 and 19.4 as a necessary consequence of the application of Irish law to the Agreement following the designation of HSBC Ireland as the representative agent. The removal of any reference to English law in those articles follows from the Panel’s interpretation of Article 2.3 set out in paragraph 41 above and does not, in the Panel’s view, constitute a breach of the Agreement. 43) The Complainant drew attention to the wording of Article 19.4 which states that the Agreement is subject to the non-exclusive jurisdiction of the courts of England and Wales, in its unamended form and, as amended, to the non-exclusive jurisdiction of the courts of Ireland. The Complainant said that this meant that the Agreement itself envisaged that it may be subject to more than one jurisdiction to settle any dispute or claim arising. The Panel does not consider that, in either its unamended or amended form, Article 19.4 changes the identity of the governing law specified in Articles 2.5, 19.1 and 19.2; rather it deals with the fora in which disputes or claims under that governing law may be settled. The CAC is a creature of statute whose jurisdiction does not extend to TICEA or other provisions of Irish law. The Panel does not consider, therefore, that Article 19.4 can be relied upon to retain the CAC’s jurisdiction under the Agreement over disputes or claims arising out of the Agreement. 17. Decision 44) For the reasons given in paragraphs 38-43 above the Panel’s decision is that the complaint that the Employer has not complied with the terms of the Agreement by amending Articles 2.3, 2.4, 19.1, 19.2, 19.4 and including Article 2.5 without the consent of members of the EWC in breach of Article 18.5 of the Agreement is not well-founded. 18. Concluding observation 45) The Panel has held that the Employer did not breach the Agreement by making the amendments to the Agreement which are the subject of this complaint without the consent of members of the EWC. However, the Panel observes that good industrial relations practice would have favoured some form of prior consultation with the EWC on these measures prior to their introduction regardless of whether this was required under the Agreement itself.” (Emphasis added)
“2. Where the central management is not situated in a Member State, the central management’s representative agent in a Member State, to be designated if necessary, shall take on the responsibility referred to in paragraph 1. In the absence of such a representative, the management of the estab lishment or group undertaking employing the greatest number of employees in any one Member State shall take on the responsibility referred to in paragraph 1. 3. For the purposes of this Directive, the representative or represen tatives or, in the absence of any such representatives, the management referred to in the second subparagraph of paragraph 2, shall be regarded as the central management. …”
“4.— Circumstances in which provisions of these Regulations apply (1) Subject to paragraph (2) the provisions of regulations 7 to 41 and of regulation 46 shall apply in relation to a Community-scale undertaking or Community-scale group of undertakings only where, in accordance with regulation 5, the central management is situated in the United Kingdom. …” (Emphasis added)
“…(a) the central management is situated in the United Kingdom; (b) the central management is not situated in a Member State and the representative agent of the central management (to be designated if necessary) is situated in the United Kingdom; or (c) neither the central management nor the representative agent (whether or not as a result of being designated) is situated in a Member State and– (i) in the case of a Community-scale undertaking, there are employed in an establishment, which is situated in the United Kingdom, more employees than are employed in any other establishment which is situated in a Member State, or (ii) in the case of a Community-scale group of undertakings, there are employed in a group undertaking, which is situated in the United Kingdom, more employees than are employed in any other group undertaking which is situated in a Member State, and the central management initiates, or by virtue of regulation 9(1) is required to initiate, negotiations for a European Works Council or information and consultation procedure. …” (Emphasis added)
“Without prejudice to the autonomy of the parties, where the parties decide to proceed with the establishment of a European Works Council, the agreement establishing it shall determine: (a) the undertakings of the Community-scale group of undertakings or the establishments of the Community-scale undertaking which are covered by the agreement; (b) the composition of the European Works Council, the number of members, the allocation of seats and the term of office of the members; …”
“17 … (8) Unless a wider scope is provided for in an agreement referred to in paragraph (1), the powers and competence of a European Works Council and the scope of an information and consultation procedure shall, in the case of a Community-scale undertaking, cover all the establishments located within the Member States and, in the case of a Community-scale group of undertakings, all group undertakings located within the Member States. (9) Where information disclosed under a European Works Council agreement or an information and consultation procedure includes information as to the employment situation in the Community-scale undertaking or, as the case may be, the Community-scale group of undertakings, this shall include suitable information relating to the use of agency workers (if any).”
“40.— Restrictions on contracting out: general (1) Any provision in any agreement (whether an employee's contract or not) is void in so far as it purports– (a) to exclude or limit the operation of any provision of these Regulations other than a provision of Part VII; …”
“8 In its unamended form regulation 4 dealt with the procedure for setting up an EWC and the way in which an EWC was to be conducted once established. Regulations 6 to 16 were concerned with the establishment of an EWC via requests made by employees. Regulations 17 to 41 dealt with the operation of an EWC. Complaints to the CAC were provided for in regulations 21and 21A. Those various provisions were only to apply where the central management was situated in the UK. 9 Regulation 5 in its unamended form established the duty on an undertaking to establish an EWC. The central management of the undertaking was to be responsible for creating the conditions necessary for the setting up of an EWC where one of three criteria applied: the central management was located in the UK; the central management was not situated in an EU member state and the representative agent of the central management was situated in the UK; neither the central management nor the representative agent were situated in an EU member state and, in respect of a Community-scale undertaking or group of undertakings, there were more employees of the undertaking in the UK than in any other EU member state. 10 The amendments to regulation 4 repealed the provisions concerned with the establishment of an EWC. Both parties to this appeal agree that the effect of these amendments is that, subject to any transitional provisions, no new EWC can be established after31 December 2020 . Regulation 4 otherwise was unamended. The critical words of the regulation for the purposes of this appeal are ""only where, in accordance with regulation 5, the central management is situated in the United Kingdom”
“17 All of those factors point to an interpretation of regulation 4(1) which provides for the continued existence of EWCs which were established prior to exit day. Such an interpretation is not inconsistent with the words of the regulation. I do not agree with the argument that the words unequivocally remove existing EWCs from TICER. The regulation applies TICER where ""the central management is situated in the UK”
“23 I accept that practical difficulties may arise from the existence of two EWCs operated by the same undertaking. I do not accept that, as put by Mr Stilitz, the position would be wholly unworkable. For the problems created by the existence of two EWCs to be determinative of the issue in the appeal, that would have to be the position. In fact, whilst there are obvious problems, they are far from insuperable. In any event, whilst the EWC now operating in Germany allows participation by UK employees, it is only on a permissive basis. The practical difficulties created by the existence of two EWCs must be set against the protection of employees in the UK via the existing EWC. 24 The Directive no longer governs the operation of the existing EWC in the UK. The purposes of the Directive are of little relevance to the EWC which is governed by the provisions of TICER i e English law. If, as I consider to be the case; those provisions require the existing EWC to continue in existence, the significance of the Directive falls away.”
“15 When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean”, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd[2009] AC 1101 , para 14. And it does so by focusing on the meaning of the relevant words, …, in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party's intentions. In this connection, see Prenn[1971] 1 WLR 1381 , 1384—1386; Reardon Smith Line Ltd v Yngvar Hansen-Tangen (trading as HE Hansen-Tangen)[1976] 1 WLR 989 , 995—997, per Lord Wilberforce; Bank of Credit and Commerce International SA v Ali[2002] 1 AC 251 , para 8, per Lord Bingham of Cornhill; and the survey of more recent authorities in Rainy Sky[2011] 1 WLR 2900 , paras 21—30, per Lord Clarke of Stone-cum-Ebony JSC.”
“22 Sixthly, in some cases, an event subsequently occurs which was plainly not intended or contemplated by the parties, judging from the language of their contract. In such a case, if it is clear what the parties would have intended, the court will give effect to that intention. An example of such a case is Aberdeen City Council v Stewart Milne Group Ltd 2012 SC (UKSC) 240, where the court concluded that “any…approach” other than that which was adopted “would defeat the parties' clear objectives”, but the conclusion was based on what the parties “had in mind when they entered into” the contract: see paras 21 and 22.”
“24 The Directive no longer governs the operation of the existing EWC in the UK. The purposes of the Directive are of little relevance to the EWC which is governed by the provisions of TICER i e English law. If, as I consider to be the case; those provisions require the existing EWC to continue in existence, the significance of the Directive falls away.”
“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 Regulations1999 and 2010 (“TICER”)…” (Emphasis added)