Supreme Court ruling on interpretation of Collective Redundancies Directive Supreme Court, 26 April 2013, Case SKC-1106/2013
LATVIA - On 26 April 2013, the Senate of the Supreme Court adopted a decision on the interpretation of Directive 98/59 on collective redundancies. The Court found that non-compliance with the obligation to provide consultation may not serve as a legal basis for reinstatement.
This finding was based on the following arguments: In the joined cases C-178 and C-190/05, the ECJ held that collective redundancies occur, irrespective of the employee’s wishes and preference. Thus, according to the finding of the ECJ in case C323/08, the decision on collective redundancies is at the employer’s full discretion. Furthermore, in cases C-323/08, C-188/03 and C-449/93, the ECJ has held that the main objective of Directive 98/59 is to consult employees with a view to avoiding redundancies or to decreasing the number of employees to be dismissed and to inform the administrative authorities about collective dismissals to give them time to prepare a plan to address problems that arise as a result of a collective redundancy. In the Senate’s view, it follows from ECJ case law that an obligation to consult employees does not imply an obligation to reach an agreement. Accordingly, the fact that employees were not consulted by their employer prior to the collective dismissal may not necessarily nullify a notice of dismissal or entail reinstatement. Interestingly, the Court found that employees who were not consulted by their employer prior to a collective dismissal may be entitled to claiming compensation for idle time. The Supreme Court held that an employee may have been dismissed earlier than necessary because he or she was not consulted by the employer and in that case would be entitled to compensation.