European Works Councils

A European Works Council (EWC) is a legal consultative body based on the European Works Council Directive (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31994L0045&from=EN) and established by multinational companies with operations in the European Union (EEU) to provide a means of communication and consultation between the company’s management and its employees in the various EEA countries in which it operates.

EWCs are established by an agreement between the company and the representatives of its employees and are intended to promote cooperation and understanding between the company and its employees in different EEU countries.

Multinational companies need an EWC because it allows them to keep employees informed and consulted on decisions that may affect them, such as changes to working conditions, production, and employment levels. EWCs also provide a means for employees to express their views on matters of common concern, such as the company’s business strategy, social and environmental policies, and the impact of technological change. This can help to promote a sense of shared ownership and commitment among employees, which can be beneficial for both the company and employees in the long term.

Challenges

There can be several challenges for a company while dealing with a European Works Council (EWC), some of these include:

1. Complexity: EWCs can be complex to establish and maintain, as they involve coordination and communication between the company and its employees in multiple EEU countries, each with their own laws and regulations regarding labour relations.
2. Language barriers: Language barriers can make communication and consultation difficult, especially if the company does not have a common language among all its employees or if translationand interpretation services are not provided.
3. Cultural differences: Cultural differences can also create challenges for a company when dealing with an EWC, as different countries may have different values, attitudes, and expectations regarding employee representation and participation in decision-making processes.
4. Cost: Setting up and maintaining an EWC can be costly for a company, both in terms of financial resources and management time.
5. Legal compliance: Companies must comply with legal requirements when establishing an EWC, including the EEA;s EWC Directive, which sets out the rights and obligations of companies and employees in relation to EWCs. Failure to comply with these requirements can result in legal action.
6. Resistance from management: Some managers may be resistant to the idea of an EWC, as they may view it as an additional layer of bureaucracy or a potential source of conflict.
7. Lack of employee participation: Employees may not be interested in participating in the EWC, or may not be aware of its existence, which can make it difficult for the EWC to be effective.

Overall, while European Works Councils can be beneficial for companies, they also come with several challenges that companies need to consider and address in order to make the most of this consultative body.

Pemota Consultancy can help organizations to make the European Works Council more effective and ‘make the EWC work, always with the best interests in mind of both the company and the employees.