Judgement of the Finnish Supreme Court following preliminary ruling in case C-44/08

Body: Undetermined/Unknown

Company: Undetermined/Unknown

Type: judgment indirectly related to EWC

Date: 08/03/2010

Reference language: Finnish

Notes: Linked to preliminary ruling before ECJ http://www.ewcdb.eu/more_details.php?agreement_ID=9380&type=European%20Court%20of%20Justice This case was not initiatied or did not involve an EWC. Press release of International Metalworkers Federation: http://www.imfmetal.org/index.cfm?c=22601 Fujitsu case is decided in favour of workers Finnish High Court rules Fujitsu to pay almost three million euros to workers illegally dismissed ten years ago. FINLAND: In 2000 the company Fujitsu closed its factory in Espoo near Helsinki that was producing personal computers. The decision was taken without prior mandatory corporate consultation with workers' representatives and therefore came in violation of the legislation regulating industrial relations. Ten years after the start of the legal process between eleven Finnish trade unions, including IMF affiliates Metallityöväen Liitto r.y. (Finnish Metalworkers' Union) and Toimihenkilöunioni - TU (Union of Salaried Employees), representing 223 of the 450 dismissed workers and the company the court ruled in favour of workers who will get compensation for their unjust dismissals. On March 8, 2010 the High Court of Finland gave its verdict according to which the company will have to pay six months of salaries and wages to the dismissed employees. The total compensation rises to 2.45 million euros plus the interests to be paid from May 2001. In addition Fujitsu has to pay all the costs of the legal process. The decision is based on the interpretation of the directive on mass dismissals made by the European Court of Justice's (ECJ) and received by the Finnish High Court in September 2009. The ECJ states that Fujitsu should have consulted its factory employee representatives in Espoo before the final corporate-level decision was taken. Most of the workers who will receive compensation are members of the Metallityöväen Liitto r.y. They are entitled to 1.44 million euros. The second largest share of the compensation goes to the members of the Toimihenkilöunioni - TU. They are set to receive over 0.49 million euros. Among the eleven unions there are affiliated members from all three Finnish union confederations SAK, STTK and Akava. The unions believe that the High Court decision has set a precedent. Therefore, in the future they hope employers will consider carefully the cost of ignoring the legislation on cooperation and consultation in companies. Mar 30, 2010 – Alex Ivanou Commentary from EMCEF: http://www.emcef.org/news/list2.asp?jobid=150 Supreme Court Finland: Fujitsu to pay EUR 3M to dismissed employees Monday, March 15, 2010, 13:05 Hrs The Supreme Court of Finland gave its judgment in Fujitsu Siemens case on 9 March 2010. The Supreme Court hold that Fujitsu had breached the Finnish Co-operation within the Undertakings Act when the mother company had made a decision which led to closing a daughter company's plant before negotiations in that daughter company had been concluded. Fujitsu has to pay almost EUR 3 million to employees concerned as indemnification. The Supreme Court's judgment (KKO:2010:20) and the European Court's preliminary ruling which was asked in the case, may pave the way to better information and consultation procedure in the groups of companies - prior to company decisions being taken - between employer and employee representatives. The Supreme Court's judgment is the final verdict in the decade-long legal process between Fujitsu Technology Solutions Oy (company's new official name) and 11 Finnish trade unions, three of them affiliates of EMCEF, that represented 223 of the 450 dismissed employees. In 2000 Fujitsu, daughter of the former multinational group Fujitsu Siemens Computers, closed its PC factory in Espoo near Helsinki. Lower court decisions had favoured Fujitsu but the Supreme Court decided the dispute in favour of the employees. Finland had implemented the Collective Redundancies Directive 98/59 (CDR) by changing the Act on Co-operation within Undertakings. This directive covers the consultation obligations in a group of companies, too. The Supreme Court asked a preliminary ruling from the European Court (ECJ). The case was the first one concerning the interpretation of Article 2(4) of directive on the application of the consultation procedure in groups of companies. The questions submitted for a preliminary ruling by the Supreme Court dealt with both the starting and closing point of the consultation obligation. The crucial issue was whether the so-called strategic business decisions taken by a parent company fall under the CRD, thus requiring the consultation already before such a decision is taken. In its Judgment (C-44/08) the ECJ for the first time defined the point of time when the employer has to launch the information and consultation procedure. The ECJ, in the context of a group of companies, hold that the consultation procedure in a daughter company must be brought to an end before the mother company can take a strategic business decision (like closing a factory and terminating R&D activities) which - as a direct effect - compels the subsidiary to collective redundancies. Further on, the ECJ hold that the so-called strategic business decisions fall under the CDR. For more information please contact: Jorma Rusanen, Political Secretary, EMCEF [jrusanen@emcef.org] Also, info from EWC Newsletter 3/2009: "Precisely defined Consultation procedure Based on the Fujitsu Siemens Computers case in Finland, the European Court of Justice in Luxembourg (photo) ruled on 10th September 2009 on mass redundancy information and consultation obligations for employers. According to the opinion of the court the consultation procedure must be completely finalized before any layoffs can be notified. The judges assume the following sequence of events: firstly the parent company makes a fundamental strategic decision, followed by the information and consultation process carried out in the subsidiary and only thereafter can the final decision of the parent company be taken. Any dismissals made in disrespect of this flow are invalid. This judgment is also of great importance for European work councils, since it emphasizes the formal operational sequence of the consultation process. The employer can act only if the consultation with the EWC has been correctly completed. The consultation procedure is considered finalized once the EWC has expressed an opinion resolution. Such a resolution is only possible if the employer has fulfilled its obligation to provide necessary information. This was defined exactly for the first time in the Alcatel-Lucent case in 2007 by a French court (see report in EWC News 2/2007). An incompletely terminated consultation procedure can lead to invalidation proceedings, illustrated well by the example of Gaz de France (see report in EWC News 1/2008). "