Greek law states that in the absence of an agreement on a 'social plan' with the workers' representatives employers can only undertake any collective redundancy procedures if the labor administration does not oppose such a procedure. The Luxembourg courts do not in principle see authorization by the administration as running counter to EU law and in particular to Directive 98/59 on collective redundancies. Nonetheless in a decision handed down on 21 December, the judges did admit that such authorization could run counter to EU law if the administration's authorization could encourage workers' representatives not to engage in social dialogue in so far as they could rely on the backstop of the administration's refusal to authorize and thus deprive the employer of the possibility of making workers redundant. The case considered had a cross-border element as it considered a Greek subsidiary of a French business group (Lafarge). The CJEU added that the administration authorization system intended by the legislation actually runs counter to freedom of establishment as enshrined in the EC Treaty.
Directive 98/59 and administrative authorization. From the outset of the dispute on Greek soil, AGET Iraklis, a Lafarge subsidiary, invoked that Greece’s legislation ran counter to EU Directive 98/59 on collective redundancy, which requires worker involvement in the negotiations over and procedure for any social plans. In fact Greek national law says that in the absence of any agreement with the workers’ representatives over a social plan, employers can only proceed towards redundancies if the
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