In the wake of the portentous 2016 Brexit referendum, attempts to predict its possible consequences are emerging. Brexit may well pull the rug out from under one of the linchpins of company-level employment relations: European Works Councils (EWCs). In these councils, employee representatives from all over Europe meet with the company’s central management to be informed and consulted about transnational company issues. They are thus an important source of influence and rights for UK workers in MNCs. Drawing on ETUI data, we explore how and how many EWCs might potentially be affected by Brexit. We look at EWC representatives from the UK, EWCs working under UK law, and EWCs with company activities in the UK. Firstly, the most immediate effect could be felt by the EWC representatives from the UK. According to the ETUI’s European Works Council Database (www. ewcdb.eu), an estimated 2,400 UK-based employee representatives might see their seat called into question if the UK steps out of the system underpinning their mandates. This is about 12% of all EWC representatives (see Figure 4.13b).
However, the UK has been out of the EWC system before, being exempt from the EWC Directive until 1999. In that period, however, only eight agreements excluded the UK explicitly; of these, three agreements simply referred to the fact that the UK was excluded from the scope of the Directive, with the immediate consequences being unclear, and three agreements provided for guest status for UK employee representatives. This means that only two agreements actually explicitly excluded the UK employee representatives from taking part. Moreover, many EWC agreements currently provide for seats for representatives from beyond the EU/EEA. If past experience is any guide, then relatively few, if any, UK representatives should see their seat called into question. However, it remains unclear on what legal basis, if any, these mandates would be based, which raises questions about the enforceability of their rights. A second effect may be felt in those companies whose EWCs are based on the UK transposition of the EU Directive. If the UK decides to retract this legislation, these EWCs will lose their legal basis. In total, 138 currently active EWCs are based on the UK legislation, which represents 12% of the total (EWCs and SE-WCs) currently active (see Figure 4.13). Most of them are based in the metal (31%), service (27%) and chemical (19%) sectors, and about 43% are so-called ‘pre-Directive’ EWCs based on Article 13 of the original EWC Directive. If the UK EWC legislation disappears, then these EWCs will need to renegotiate their legal basis according to the legislation of another EU Member State. In total, an estimated 2,800 representatives (of which 850 are UK representatives) are active in those 138 EWCs under UK legislation (see Figure 4.13a). Finally, if discounting the UK share of total EU employment pushes the overall employment figures in a company below the thresholds required to establish an EWC (1,000 employees in all, of which at least 150 are in two different EEA countries), then these EWCs may face dissolution. 78% of all currently active EWCs cover activities in the UK (see Figure 4.13a). Unfortunately, the ETUI does not have sufficient data to estimate the number of EWCs that may become defunct after a Brexit. In any case, however, the EWC can still be continued on a voluntary basis. In conclusion, Brexit may affect the mandates of UK employee representatives in existing EWCs, will certainly affect those EWCs which are based on the UK transposition laws, and might change the eligibility of some firms to have an EWC. Based on the available data, we conclude that there could be an impact on many EWCs and EWC representatives, but it will most likely be fairly limited. Much will depend on company-level solutions, and whether and to what extent Theresa May honours her promise to maintain EU workers’ rights in UK legislation.
Source: ETUI and ETUC (2017) Benchmarking Working Europe 2017