HSBC European Works Council v HSBC Continental Europe

The Appellant, the HSBC European Works Council (“the EWC”), and the Respondent Employer (“HSBC”) were party to a European Works Council Agreement (“the Agreement”) under which the central management was located in the United Kingdom. The UK was, at the time of the Agreement – October 2015 - a member state within the European Economic Area (“EEA”). This appeal concerns the effect of Brexit on the Agreement after the UK ceased to be a member state of the EEA. HSBC took the view that for the purposes of the EU Council Directive 2009/38 EC (“the Directive”) the UK could no longer be the location of the central management under the Agreement and, on 4 December 2020, gave notice that as from 1 January 2021, it would (amongst other matters) designate a representative agent in Ireland to assume the role of central management, exclude HSBC’s UK business from the scope of the Agreement and exclude UK Representatives as members of the EWC. The EWC objected and brought a complaint before the Central Arbitration Committee (“CAC”). By a decision dated 22 June 2021 (“the First Decision”) the CAC concluded that the complaint was not well-founded. By a further decision dated 11 August 2021 (“the Second Decision”), the CAC concluded that further complaints as to HSBC’s failure to comply with certain terms of the Agreement were also not well-founded. The Appellant appeals against both decisions of the CAC by way of two separate appeals.

HSBC is a well-known Bank employing staff in several European countries, both within and outside the EEA. On 9 October 2015, HSBC’s central management and members of the Special Negotiating Body representing HSBC’s employees in the EEA Member States entered into the Agreement. Clause 2.3 of the Agreement provided:

Article 5 of the Agreement, under the heading, “Operations Covered” provided:

The list at Appendix 1 sets out those countries “as at End August 2015” comprising the EWC and the number of employees in each such country. The list included the UK with 48,307 employees and Ireland with 382 employees.

Article 7 of the Agreement dealt with the appointment of EWC members. So far as relevant, it provided:

Article 18 provided that the Agreement shall renew automatically after an initial period of four years and that it was terminable thereafter by either party upon the giving of six months’ written notice. Article 18.5 dealt with amendment:

Article 19 of the EWC Agreement provided that the Agreement was negotiated under Article 6 of the Directive and that it is to be governed and construed according to TICER and English Law.

Brexit meant that, as of 11pm on 31 December 2020 (“exit day”), the UK would cease to be a member state. In November 2020, HSBC decided to designate Ireland as its representative agent with effect from 1 January 2021. Pursuant to the Directive, Ireland, as representative agent, would be deemed to be central management. By a letter dated 4 December 2020, HSBC wrote to the EWC to give notice of its intention to designate HSBC Ireland as its central management representative agent with effect from 1 January 2021. The notice was accompanied by an updated version of the Agreement (“the Amended Agreement”) confirming the appointment of HSBC Ireland. The Amended Agreement contained amended and additional provisions under Arts 2 and 19. Articles 2.3 to 2.5 of the Amended Agreement provided:

Article 19 of the Amended Agreement provides:

The letter also stated that as the Agreement covered only EEA operations, HSBC 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 1 January 2021.

By an email dated 2 June 2021, Mr Philip Sack, Director of EWC Legal Advisers, lodged a complaint with the CAC pursuant to Regulation 21 of TICER, that HSBC Central management had not complied with the terms of the Agreement by:

The email went on to state that

The Appellant’s First Appeal lies against the First Decision. The two grounds relied upon therein are as follows:

The Appellant’s Second Appeal lies against the Second Decision. The seven grounds relied upon in that appeal are as follows:

The Respondent resists both appeals.

Article 1 of the Directive provides that its purpose is to improve the right to information and to consultation of employees in Community-scale undertakings and Community-scale groups of undertakings, and that to that end, EWCs shall be established in every such undertaking. By Article 1.6, the powers and competence of EWCs and their scope shall cover all the establishments or group undertakings “located within the Member States”, “[u]nless a wider scope is provided for in the agreements…”. This proviso does suggest that a relevant agreement could cover entities located outside Member States. Whether or not that is in fact the case will depend on the terms of the particular agreement in question.

Article 4 of the Directive confers the responsibility for the establishment of a EWC on the “central management”. Article 4.2 of the Directive deals with the situation where the central management is not located in a Member State:

Article 6 of the Directive provides that the agreement between central management and the special negotiating body must be negotiated “in a spirit of cooperation” and sets out “without prejudice to the autonomy of the parties” what any such agreement is to determine. Where such agreement is not reached, “subsidiary requirements”, as set out in Annex 1 to the Directive, are to apply.

As stated above, the Directive was implemented in the UK by TICER. Regulation 4 of TICER sets out the circumstances in which TICER was to apply:

Regulation 5(1) mirrored the terms of Article 4 of the Directive by conferring the responsibility for the establishment of the EWC on central management, where:

Regulation 17 includes the duty to negotiate in a spirit of cooperation. Regulation 17(4) provided that:

Regulation 17(8) mirrored Article 1(6) of the Directive as to the scope of the powers and competence of a EWC and Regulation 17(9) dealt with the information to be disclosed:

Where agreement is not reached pursuant to Regulation 17, Regulation 18 provided that the subsidiary requirements set out in the Schedule to TICER were to apply. Regulation 18A, TICER, which applied whether a EWC was established under Regulation 17 or Regulation 18, imposes the duty to provide information and to consult.

Regulation 40 of TICER, so far as is relevant, provided:

TICER was amended with effect from 30 December 2020 (“Amended TICER”) to take account of the UK’s withdrawal from the EU. Regulation 4 was amended so as to narrow the range of provisions that are to apply (down from Regulations 7 to 41 to Regulations 17 to 41), and Regulation 5 was amended by, amongst other matters, deleting the words of Regulation 5(1)(a) referring to central management being located in the UK.

Regulation 17 was amended such that only the obligation under sub-paragraph (9) to include information as to the use of agency workers remained. Regulation 18 was amended to provide for the continuation of subsidiary requirements “in any case where they applied before exit day”. Regulation 18A was similarly amended such that it applied to those EWCs established “before exit day” under Regulation 17 or 18. Regulation 40 was unamended.

Several of these provisions of TICER and Amended TICER were considered recently by the Court of Appeal in EasyJet plc v EasyJet European Works Council [2023] EWCA Civ 756 (“EasyJet”). The employer in EasyJet contended that the EasyJet EWC ceased to exist as from 31 December 2020, i.e. upon the UK’s withdrawal from the EU, thereby removing EasyJet EWC’s entitlement to bring a complaint to the CAC about a failure to inform and consult about proposed collective redundancies. In upholding the CAC’s conclusion that the EasyJet EWC and therefore the entitlement to complain to the CAC, continued to exist after 31 December 2020, the Court of Appeal (William Davis LJ) stated as follows:

The Court of Appeal went on to consider Regulations 18 (subsidiary requirements), 23(6) and the transitional provisions and considered that these were inconsistent with the employer’s proposition that any current EWC would cease to exist. The Court of Appeal concluded:

The Court of Appeal noted that the company, which was still required to comply with the Directive, had complied by appointing its German branch as its representative agent. It was argued by the company that the continued existence of EasyJet EWC in the UK would lead to the wholly anomalous situation whereby the company is obliged to operate two EWCs – one in the UK and one in Germany. As to that, the Court of Appeal said as follows:

In able and concise submissions on behalf of the EWC, Mr McCombie contended that the effect of the Court of Appeal’s decision in EasyJet was that Amended TICER continues to apply to all EWCs established before exit day. The fact that the EasyJet EWC was established under Regulation 18 (subsidiary requirements) rather than by voluntary agreement under Regulation 17, does not provide a basis for distinguishing EasyJet given that the Court of Appeal relied on a number of provisions, including those (such as Regulation 23(6)), that were common to agreements made under both Regulation 17 and Regulation 18 in support of its conclusion as to the effect of Regulations 4 and 5. Furthermore, he submits that the fact that the continuation of the EWC in this case with central management in the UK might mean the existence of two EWCs – one here and one in Ireland – does not preclude such continuation for the reasons considered by the Court of Appeal in EasyJet at [24] and [25]. Mr McCombie submits that in these circumstances, it was incumbent upon the CAC to engage with the fact that the Agreement continued in force after exit day, and that that the amendments purportedly made by HSBC were made in breach of the requirements under Article 18.5 of the Agreement for amendment by mutual consent. HSBC’s purported amendments to exclude the UK and the employee representatives there from the EWC are contrary to the restriction on contracting out under Regulation 40.

As for the terms of the Agreement, Mr McCombie submits that there is a clear lacuna in the Agreement in that it does not refer to what should happen when a Member State ceases to be a Member State. Whilst certain provisions, such as those under article 7.4 of the Agreement, refer to expansion into new geographical areas, no provision is made for the reverse. Although Article 5 of the Agreement covers operations “in the EEA Member States”, this ought to be interpreted as being a reference to all of those states identified in the Appendix (i.e. those who were Member States as at August 2015) and not, as HSBC contends, those that that are Member States from time to time. Alternatively, the term “in the EEA Member States” could be interpreted, post-Brexit and in accordance with Amended TICER as meaning “Relevant States”. It is only the EWC’s interpretation of the Agreement that leads to continued compliance with Amended TICER as required and it is that interpretation that ought to be given effect.

Mr Burns KC for HSBC submits that Mr McCombie’s reliance on EasyJet is misplaced for the simple reason that this is not a case where, as in EasyJet, it is being contended that the EWC in question ceased to exist after exit day. The Agreement did not at any time cease to exist. It was a voluntary agreement which expressly limited its application to operations “in the EEA Member States”. As the UK was, post-exit day, no longer a Member State, the Agreement did not apply to those operations in the UK. Mr Burns KC submits that there is no warrant at all for interpreting the express words, “in the EEA Member States” as meaning “Relevant State”, which was a concept only introduced by Amended TICER and could not have been in the parties’ contemplation at the time of entering the Agreement. The purpose of the Agreement, expressly stated as being to comply with the Directive, means that it must cover operations that are situated within an EEA Member State, that is to say those that are such Members from time to time. The UK’s change in status necessitated, under the Directive, the appointment of a representative agent, which was Ireland. Once that occurred (without objection or challenge from the EWC) the terms of Article 4 of the Agreement, and in particular the words, “which means that”, resulted in the relevant implementing legislation becoming TICEA. In these circumstances, the CAC’s interpretation gave effect to the autonomy of the parties to decide on the scope of the Agreement and did not give rise to any error of law.

As to Ground 1 specifically, Mr Burns KC submitted that this was not a ground of complaint before the CAC, and that the EWC has failed, in any event to identify any specific provision of TICER that has been excluded or limited by any provision in the Agreement.

The autonomy of the parties to agree the terms of any EWC agreement is expressly acknowledged in the Directive: see Article 6 of the Directive. Although provision is made for subsidiary arrangements where an agreement is not reached, the existence of a voluntary agreement between the parties is to be given considerable deference. As is also made clear in the Directive, the parties can agree that any EWC agreement covers operations that go beyond those situated in Member States. However, whether that is the case in a particular agreement will depend on its terms. The Agreement in the present case is a voluntary one, reached under Regulation 17 of TICER. Article 5 of the Agreement states unequivocally that it covers operations located “in the EEA Member States”. There is a question as to whether those operations are fixed as being those identified at the time of the Agreement (i.e those set out in the Appendix to the Agreement) or whether it was intended by the parties to include operations in EEA Member States as they are from time to time. In my judgment, there are several reasons to prefer the latter approach.

First, the terms of the Directive are clear that the powers and competence of a EWC shall “cover all the establishments … located within the Member States”: Article 1(6) of the Directive. If a state were to become a Member State within the lifetime of the Agreement, it would necessarily, in order to comply with the Directive, include any operations that may exist in that state. Failure to include such a state would be in breach of the Directive. Conversely, where a state ceases to be a Member State, the obligations under the Directive would not extend to operations in that state unless the parties expressly so agreed.

Second, the terms of the Agreement suggest that it was intended to apply to those operations in EEA Member States from time to time. Article 5 of the Agreement provides that “The list will be amended in the event of merger or acquisition or disposal”. This expressly envisages that the list of operations can expand or contract (and that it would in fact do so automatically- “will be amended” - without the need to amend following the procedure envisaged under Article 18.5). The fact that such expansion or contraction is by reason of merger, acquisition or disposal, (i.e. by reason of a commercial decision on the part of HSBC) does not in my view preclude an amendment to the list necessitated by other factors, such as the admission into the EU of another country. Article 7.4 of the Agreement provides that 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.” This expressly envisages amendment of the list of operations (once again automatically) where operations expand into another EEA Member State. In my view, the same would apply if such expansion were to occur, not by reason of the opening of a new facility in another country, but because an existing facility is located in a country that becomes, post-Agreement, a Member State. Such an interpretation would be consistent with the purpose of the Directive, which is to ensure that information and consultation obligations are complied with in respect of all workers located within Member States. Article 8.1 of the Agreement, which stipulates the principles that are to guide discussions where HSBC makes changes to its EEA operation structure “Through organic growth, acquisitions, restructuring, closing of operations or facilities [or disposals], which result in a change to employment numbers within HSBC.” One of those principles, set out at article 8.1(c) is that “[w]here an acquisition introduces an EEA Member State, then that country will be entitled to representation in accordance with Article 7…”

The upshot of these provisions is that the list of operations will be amended whenever operations are expanded so as to involve another EEA Member State or reduced by result of a closure or disposal of operations in a particular EEA Member State. Where the parties have expressly agreed that the Agreement is only to cover operations located in the EEA Member States, there is no reason why the same should not apply where the expansion or contraction results from a change in membership of the EEA rather than a commercial decision on the part of HSBC. Mr McCombie submits that there is a lacuna in the Agreement that cannot be filled by taking the same approach as that taken for commercial expansion or contraction. However, it appears to me that where the parties had expressly agreed what operations are covered (i.e. those in EEA Member States) and had provided for automatic changes to take effect when operational changes brought in or removed a particular Member State, they can be taken to have agreed that the same would occur where the change is the result of a change in a State’s membership status.

I was referred to Arnold v Britton in which the Supreme Court reiterated the well-known principle that:

The Supreme Court went on to emphasise seven factors important in the interpretative exercise. The sixth such factor was as follows:

It is apparent from its terms that although Brexit was a possibility at the time of entering into the Agreement, the parties had not expressly contemplated a change in the operations to which the Agreement applied resulting from the departure from the EU of a Member State. However, this is not a case where the parties had not contemplated changes to the list of operations at all. Clearly, they had, and in so doing they had made express provision for changes to the list to take effect automatically as a result of commercial decisions that brought into play or excluded a particular Member State. In such circumstances, it is reasonably clear, in my judgment, that the parties would have intended that changes resulting from a change in Membership status would equally result in changes to the list of operations. The Agreement makes no provision for operations outside EEA Member States so as to give rise to any argument that the parties might have intended to retain within scope those operations that were no longer located within an EEA Member State. Of course, it might be said, on the basis of the nature of the appeal now being brought, that the EWC would not have intended that at all. However, to take account of that would be to have regard to subjective intentions, which are not relevant. In my judgment:

The decision in EasyJet does not undermine that analysis. In my judgment, contrary to Mr McCombie’s submissions, it is significant that the dispute in that case was whether or not the EasyJet EWC continued to exist after exit day. HSBC has not argued at any stage that the Agreement in the present case ceased to have effect, and neither was the EWC’s complaint to that effect. Instead, the contention throughout has been that the Agreement has continued to operate but that it has been unlawfully amended so as to exclude the UK operations.

I do not accept Mr Burns KC’s contention that EasyJet is irrelevant because it was concerned with a Regulation 18 agreement rather than a voluntary agreement reached by the parties under Regulation 17. I accept Mr McCombie’s submission that the principle established in EasyJet, namely that a pre-existing EWC agreement continues to exist after exit day, applies as much to Regulation 17 agreements as it does to those made under Regulation 18. That is clear from the Court of Appeal’s unqualified statements about the continued existence of EWC agreements and because, as Mr McCombie highlighted, some key planks of the Court of Appeal’s reasoning applied to both types of agreement. However, the potential applicability of EasyJet is not determinative of the essential question in this case, which is whether the CAC erred in law in interpreting the Agreement as it did. In this regard, it is significant, in my view, that the Agreement was one reached between the parties, in circumstances where the autonomy of the parties to so agree is to be respected, and where express provision has been made as to the scope of the Agreement. The fact that the Agreement continues post-exit day (as per the decision in EasyJet) does not mean that amendments are impermissible or that an interpretation that removes UK Operations from being within scope is precluded. Whether or not such amendments and/or such interpretation is permissible and/or correct in law depend very much on the terms of the Agreement. As such, the significance of EasyJet is somewhat limited. That view gains support from what the Court of Appeal in EasyJet said about the continuing EWC agreement in that case:

That is to be contrasted with the terms of the Agreement which provide very clearly that it fulfils HSBC’s obligations under the Directive: Article 2.2 of the Agreement. Moreover, it has not been and cannot be contended that the Directive no longer governs the operation of the Agreement in the present case; indeed, the opposite is the case.

The difficulty with this ground, as Mr Burns KC highlights, is that the EWC has not identified any specific provision in the Agreement that purportedly excludes or limits the operation of any provision of TICER or Amended TICER. The EWC’s argument appears to be that HSBC has interpreted certain provisions of the Agreement so as to exclude UK Operations from its scope and that by doing so, has rendered void the obligation under Regulation 18A, TICER, as to the provision of information and consultation. However, Regulation 18A imposes obligations on central management to give information and consult with members of the EWC. There is nothing on the face of Regulation 18A that requires such members to include those that were previously representative of UK employees. Whether or not a person is a member of the EWC at the time Regulation 18A is invoked will depend on an application of other provisions in the Agreement. For reasons already stated, such members will only derive from operations “in the EEA Member States”: see article 5 of the Agreement. There is nothing in Regulation 18A that requires that such members will include those from operations in a “Relevant State” (i.e. Member States and the UK).

Even if it were the case that Article 5 of the Agreement breached Regulation 40, the effect would be to render that provision void. Regulation 40 does not operate by leaving the impugned provision intact and subject only to an acceptable interpretation. If, on a correct interpretation, it gives rise to a breach it must be voided. However, that would render the Agreement unworkable as there would be no definition as to the scope of the Agreement. The EWC’s argument is that Article 5 should be amended to read “in the Relevant States”. However, a breach of Regulation 40, TICER would confer no power to amend, and even if it could, such power would not extend to an amendment to incorporate a term – i.e. “Relevant States” - that was not in existence at the time of the agreement and could not have been in the parties’ contemplation.

For these reasons, Ground 1 of the First Appeal fails and is dismissed.

This ground raises a procedural issue. It is said that the EWC was denied the opportunity to make representations on the grounds of complaint, which did not refer, expressly or otherwise to Regulation 40, TICER. By contrast, HSBC was permitted to lodge a detailed response to the EWC’s brief statement of complaint. The CAC then moved straight to a decision on the papers without receiving any further representations from the EWC.

I consider this ground to be unfounded. The statement of complaint was brief, but it is not contended that the CAC failed to understand the complaint being made or that it failed to take any aspect of the complaint into account. Indeed, the entirety of the complaint was replicated at [5] of the First Decision. The complaint did not indicate that any further representations were to be made. Crucially, there was no reference at all to Regulation 40, or any argument based thereon. Furthermore, there is no correspondence before me to suggest that having received HSBC’s response, the EWC sought and was denied an opportunity to make further representations, whether based on Regulation 40 or the matters in the Complaint. Nor is there any complaint that the matter was determined by the CAC on the papers. In these circumstances, I can discern no unfairness in the procedure adopted by the CAC. The CAC has the discretion to determine its own procedure: s.263(5) Trade Union and Labour Relations (Consolidation) Act 1992. By Regulation 38(2), TICER, the CAC shall “give any person whom it considers has a proper interest in the application or complaint an opportunity to be heard”. The complaint here was “heard” in that it was comprehensively addressed by the CAC in a detailed written decision. The fact that the EWC’s argument on Regulation 40 went “unheard” was due to the fact that it had not been raised at the time of the complaint or at any stage prior to the decision. There was nothing to prevent the EWC from raising the point had it so wished. The CAC was fully entitled to proceed as it did and cannot be criticised for not inviting submissions on an issue that had not been raised.

In any event, given that the Regulation 40 issue has been dismissed under Ground 1 of the First Appeal, Ground 2 is rendered redundant. Even if the CAC had considered the Regulation 40 point it would have been bound to conclude that it was not well-founded for the reasons already set out.

Under these grounds (which were drafted by other Counsel and before the decision in EasyJet), the EWC contends that by failing to grapple with the issue of jurisdiction, and by taking the shortcut of assuming jurisdiction in the EWC’s favour, the CAC failed to come to the correct conclusion on the interpretation of Articles 4 and 5 of the Agreement. Had it properly considered the jurisdiction point, it would have been bound to conclude that it did have jurisdiction by reason of the continued effect of TICER. In such circumstances, the CAC would not have found that the amendments to the Agreement were permissible.

Mr Burns KC submits that these grounds are academic in view of the fact that the CAC proceeded on the assumption, in the EWC’s favour, that it had jurisdiction.

I agree with Mr Burns KC that the approach taken by the CAC to jurisdiction renders these grounds academic. Jurisdiction was assumed in the EWC’s favour. It is not contended by the EWC that the CAC ought to have found that it lacked jurisdiction or that its operative assumption was incorrect. The real dispute here is that the CAC failed to treat Amended TICER as continuing to apply to the Agreement and the EWC, and that had it done so, it would not have taken the approach that it did to the purported amendments to the Agreement. However, those are arguments that could be (and have been) raised elsewhere in the appeal. It is not necessary or appropriate to challenge a decision by way of appeal where there is no disagreement with the substance of the decision.

The submission here is that the CAC erred in failing to acknowledge that the Agreement continued to operate after exit-day with the provisions relating to the UK operations intact and that the CAC’s acceptance of the amendment to Article 2.3 to refer to Ireland as the central management was wrong in law. The CAC’s approach, it is said, leads to an unnatural interpretation of Article 2.3 that was not justified by the need to prevent anomalies, given that it would be neither anomalous nor unworkable to find that two EWCs continued after exit day – one in the UK and one in Ireland.

Mr Burns KC submits that the change to Article 2.3 of the Agreement was one that was required by operation of law under the Directive as the UK could no longer after exit day be the central management. The intention of the parties as to the continued applicability of TICER can be discerned from their use, in Article 2.3 of the phrase “which means”. That phrase indicates that the parties’ intention at the time of the Agreement was to apply the implementing law of the country in which central management was located.

Article 2.3 of the Agreement, prior to amendment, provided:

The highlighted words clearly indicate that the parties’ intention was that the location of the central management, for the purposes of the Directive, would determine the applicable implementing law. At the time of the Agreement, that was the UK and TICER respectively.

Post-exit day, it was not permissible for the purposes of the Directive, for the UK to be the location of central management. Compliance with the Directive required a representative agent to be designated or, in the absence of designation, to be located in the Member State with the largest number of employees. HSBC, in accordance with the Directive, designated Ireland to be the location of central management. As the CAC found (which finding is not challenged), the EWC “did not dispute the choice of Ireland as the representative agent for the purposes of the Directive”. The CAC was correct, in my judgment, to conclude that it would have been anomalous in those circumstances for Article 2.3 to continue to refer to the UK as the location of central management. Such a stipulation would in fact have resulted in a provision that was contrary to the expressly stated purpose of the Agreement which was to fulfil HSBC’s obligations under the Directive. In my judgment, this change can properly be described as one that is imposed by law.

Mr McCombie’s submission is to the effect that there is a rival legal obligation that ought to govern the interpretation of Article 2.3 and that is the need to comply with Amended TICER, which continues to apply to the Agreement. That submission, which relies on EasyJet, fails to recognise that the principle established in that case, namely that a pre-existing EWC agreement would not cease to exist after exit day, does not have the effect of precluding changes that are consistent with the intentions of the parties to this voluntary agreement. Furthermore, the continued application of TICER does not, of itself, mean that the Agreement cannot be amended in accordance with its terms so as to apply a different implementing law consequent upon a necessary change to the location of central management or the appointment of a designated representative agent. Thus, in the present case, and unlike the position that pertained in EasyJet, the Agreement expressly provided that it would only cover operations in EEA Member States and that, as at the date of the Agreement, the central management was located in the UK “which meant” that TICER would apply. For reasons already set out, it was necessary, post-exit day, to designate another country as representative agent, namely Ireland (a designation to which no objection was taken), which would be deemed the central management for the purposes of the Directive. As stipulated by the parties, the applicable implementing law was determined by the location of central management, “which meant” that TICEA would apply.

The CAC’s construction of Article 2.3 was correct. Grounds 3 to 5 therefore fail and are dismissed.

The EWC contends here that the CAC erred in finding that “any pre-existing agreement which otherwise was effective under UK law would cease to have effect”. The EWC goes on to suggest that “the EWC agreement before the EWC (sic) could operate in parallel to any EWC effective under Irish Law”. I have already addressed the first limb of this ground above: the CAC did not find that the Agreement ceased to have effect; rather it found that it continued, albeit on terms that reflected the legal position as understood by the parties.

The basis for the second limb of this ground, namely that there could be two EWCs operating in parallel, is the finding in EasyJet that the existence of two EWCs – one in the UK and one in Germany - was not unworkable. However, that finding in EasyJet has no relevance to the present case. That is because here there is only one EWC established by the Agreement. The Agreement can only be subject to one law, either English or Irish; it cannot simultaneously be governed by both.

Mr McCombie submitted that the CAC’s conclusions as to the lawfulness of the changes made to Article 2.3 of the Agreement ignored the express requirement under Article 18.5 that any change of terms must be by consensus. The CAC found that HSBC’s revised document was not a breach of Article 18.5 as it “merely reflect[ed] the legal position as understood by both parties”. It reflected that the EWC was now based in Ireland (p.137, para 18), and so was subject to Irish law and jurisdiction. The CAC correctly held that on a proper construction of the Agreement there was one EWC, one designated representative agent and one choice of law “inextricably linked” to that designated representative agent.

All of that said, the extent of the changes to Articles 2.3 and 2.4 and the inclusion of a new Article 2.5 could be said to go beyond the sort of changes that even the parties might have contemplated could be made without invoking the procedure under Article 18.5. However, it seems to me that the changes, whilst ostensibly extensive, effectively amount to:

The first of these was necessitated by the UK’s withdrawal from the EU. The second was not disputed by the EWC. Designation was, under the Directive, a matter for HSBC and did not require the EWC’s consent or approval. As for the third, for reasons already discussed, this followed from the designation of Ireland as representative agent. The other changes that we see in Articles 2.3 to 2.5, are by way of explanation of the changes made. Such explanation is not a necessary incident of a contract, but its inclusion does not, in my judgment, render unlawful changes that are otherwise lawful and properly made. The inclusion of an explanation for the changes perhaps underlines the CAC’s “Concluding Observation” that whilst HSBC:

I agree with that observation, although that has no effect on the question of law, which I have determined against the EWC.

Ground 6 therefore fails and is dismissed.

The EWC’s contention here is that the CAC erred in law in finding that the parties’ choice of law in Article 19 had been overridden in the absence of a specific legislative provision having that effect.

This point has largely been addressed by the analysis under Ground 6. The parties’ choice of wording for Article 2.3 (“which means that…”) inextricably linked the location of the central management with the implementing law to be applied. Once Ireland was designated representative agent, and therefore deemed to be central management for the purposes of the Directive, the choice of implementing law, namely TICEA, followed. Far from overriding it, the parties’ choice of law was applied. Mr McCombie submitted that it was not open to the parties (whether by agreement or otherwise) to disapply the UK provisions of TICER in so far as they continued to apply after exit day. However, that submission, which is based on EasyJet, ignores the fact that there was a voluntary agreement in this case entered into by the parties. The Agreement contains express terms as to its scope and envisages (as discussed above) automatic changes to that scope consequent upon expansion or contraction of operations. The procedure under Article 18.5 of the Agreement for a requested change of terms does not apply to such changes.

Ground 7 also fails and is dismissed.

For the reasons set out above, and notwithstanding Mr McCombie’s powerful submissions, these appeals are dismissed.