The EC wants ‘stronger voice for European Works Councils’!

This week, the European Commission adopted the proposals to amend the EWC Directive 2009/38/EC. These amendments are an important step forward to improve the framework for the information and consultation of employees at the transnational level. All in all, I’m positive!

The summary, as well as the link to the official documents, you can find below, but these are my first reactions:

So what’s the good news?

The proposed amendments to the EWC Directive offer some good opportunities for EWCs to improve their functioning. Especially on the improved definition of ’transnational’ and the clear provision that management has to provide the EWC with a written response to the EWC opinion before the company adopts that decision! This will hopefully lead to earlier EWC engagement, more realistic timelines and improved decision-making processes.

The fact that all existing exemptions will be removed and have to be negotiated under the amended EWC Directive 2009/38/EC is really good news for all the EWCs that are currently struggling with their existing (pre) Directive Agreement. With this proposal they can finally negotiate a new EWC Agreement, taking into account all the provisions from the Directive. Equally, the existing Agreements have to be adopted to be compliant with the amended EWC Directive.

The improved provisions that Central Management is to cover all ‘reasonable’ costs and necessary resources such as training and use of experts including legal assistance, should minimise the burden of continuous discussions with management about this. It is an opportunity for the EWC to strengthen its position and take the lead in setting up the EWC training programs suited to their needs, organizing their own support, and if needed legal assistance. Please bear in mind that management must be notified of those costs before they are incurred.

Any bad news?

Well, perhaps not so much bad news as a missed opportunity: I am not that positive – and not yet certain – how the improved access to legal remedies will work out in practice. Member States must put in place effective and proportionate sanctions to enforce the Directive. A lot of this is up to the Member States and this may lead to undesirable differences in sanctions. It could add to more complexity, especially in situations when Companies (not EEA based) can choose a legally representative Member State, in which the legal sanctions are more favourable.

I really think that it would have been so much better if the demand from the European Parliament, and the trade unions, that EWCs be given the right to seek injunctions to block management decisions had been included in these proposals. But they’re not.

Next steps

The Commission’s proposal amending the European Works Council Directive will now be discussed by the European Parliament and the Member States. Once adopted, Member States will have one year to incorporate the Directive into national law. The new rules will then start to apply two years later. During the two years, parties can adapt their EWC agreements to the revised requirements. I guess we have our work cut out for us! I will keep you posted!

For the full text of the adaptation in your own language you can click on the following link: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2024:14:FIN

And in summary: what are the main proposals for improvement?

1. Ensuring that workers in multinational companies are consulted in a timely and meaningful way on issues that concern them: Clarifying and broadening the definition of transnational matters – also matters in one country but with a possible impact in other countries – is transnational. Ensuring a reasoned response from management to their opinion BEFORE the company adopts a decision on transnational matters. Restriction of the use of confidentiality
2. Making sure EWCs have the necessary resources to do their work: Clear rules on allocated financial and material resources – such as training, legal costs and expert support. Central management is to cover the costs of training the members of the special negotiating body and of the European Works Council, as well as other associated costs, which are necessary for the exercise of their duties, where management has been informed of those costs in advance.
3. These expenses shall include reasonable costs of experts, including for legal assistance, insofar as necessary for that purpose, as well as reasonable costs of legal representation and participation in administrative or judicial proceedings. Expenses shall be notified to central management before they are incurred.
4. Improving access to legal remedies. Member states are obliged to put in place effective, dissuasive, and proportionate sanctions to enforce the Directive and to make sure information and consultation with the EWC is timely and effective.
5. All existing exemptions (prior to the 94/95 Directive and those in which a European Works Council agreement was signed or revised between 5 June 2009 and 5 June 201) will be removed and will have to negotiate a new EWC Agreement under the amended EWC Directive 2009/38/EC.  Potentially allowing employees in roughly 320 multinational companies to request the establishment of such a Council.
6. All existing Agreements not compliant with the amended Directive should be adapted / (re)negotiated accordingly.
7. The number of meetings in the subsidiary requirements is increased to two per year. And the time to negotiate EWC Agreements before applying subsidiary requirements is now two years (instead of three).
8. There are new terms in place to ensure better gender balanced EWCs.