What is a European Works Council?
A European Works Council (EWC) brings together employee representatives from the different European countries in which a multinational company has operations. During European Works Council meetings, these representatives are informed and consulted by central management on transnational issues of concern to the company’s employees.
A short video, courtesy of FNV Formaat, explaining the basics of a European Works Council and its purpose.
What is the purpose of establishing a European Works Councils?
European Works Council Directive 94/45/EC of 22 September 1994 introduced European Works Councils or alternative procedures/structures in order to ensure information and consultation for employees of multinational companies that meet certain criteria. The purpose of a European Works Council is thus to bring together employee representatives from the different European countries in which a multinational company has operations. During European Works Council meetings, these representatives are informed and consulted by central management on transnational issues of concern to the company’s employees.
Which companies are affected by the European Works Council Recast Directive 2009/38/EC?
The following entities are covered by the Recast Directive 29/38/EC:
- Community-scale undertakings (multinational companies) – undertakings employing at least 1,000 employees within the EU Member States and the European Economic Area (EEA: EU 27 + Liechtenstein, Iceland and Norway) and, at the same time, employing at least 150 employees in each of at least two EU Member States.
- Community-scale groups of undertakings – groups of undertakings (i.e. a controlling undertaking and its controlled companies) employing in total within the EU Member States and EEA at least 1,000 employees and controlling at least two group undertakings in different Member States, of which each employs at least 150 employees.
The location of the headquarters of a multinational company or group of undertakings has no influence on the application of the European Works Council Recast Directive. Even if the company’s main headquarters is outside the EU, as long as the company has 1,000 employees within the EU and at least 150 in two or more EU Member States, the Directive still applies. In fact, many companies registered, for instance, in the USA or Japan, meet the above criteria and are thus covered by this Directive.
What changes did the European Works Council Recast Directive 2009/38/EC bring with regard to European Works Councils?
Amendments brought about via the European Works Council Recast Directive 2009/38/EC largely concern some new or revised procedural law provisions relating to the establishment of future European Works Councils (e.g. revised arrangements concerning the composition of the Special Negotiating Body for negotiations with the central management; additional provisions concerning matters whose inclusion in an EWC agreement has become mandatory). As a result, the situation of plant workers’ representatives and of trade unions in the founding of European Works Councils was improved and a basis formed, by means of several new provisions that now have to be included in European Works Council agreements, for making the work of the European Works Council somewhat more effective.
Provisions on cross-border information and consultation of employees and their representatives in the European Works Council have been refined significantly and clarifications provided on the forms of participation of workers’ representatives at national and European level. Existing European Works Councils retain the right to renegotiate in the event of structural changes in the company, if practicable information for and consultation of all employees in accordance with the agreed standard are no longer guaranteed.
What is the relationship between the Mergers Directive 2009/133/EC and the European Works Council Recast Directive 2009/38/EC?
The Mergers Directive shall be without prejudice to the rights provided in the European Workers Council Directive. European Works Councils can also be established in addition. In contrast to the European Company (SE) Directive 2001/86/EC, the Mergers Directive does not provide for the establishment of a transnational representative organ with information and consultation rights. These rights can, therefore, only be exercised through the establishment of a European Works Council.
What is the relationship between the European Company Statute and the European Company (SE) Directive 2001/86/EC (supplementing the European Company Statute with regard to the involvement of employees)?
As the title suggests, the latter Directive represents a supplement to the European Company Statute, with regard to the involvement of employees. No European Company (SE) with employees can be set up without an arrangement for involvement of the employees.
What is a Special Negotiating Body (SNB)?
A Special Negotiating Body (SNB) represents the employees in negotiations with the managements of the companies involved in the merger in order to reach a written agreement on employee participation in the company resulting from a merger. In principle, the Special Negotiating Body should be established if one of three exceptional cases under Art. 16 II of the Mergers Directive applies. The Special Negotiating Body must be established as soon as the enterprise managements have made known their intention to merge. The Special Negotiating Body can request that experts of its choice assist it in its work. In this context, the Directive explicitly mentions the possibility of calling in representatives of Community-level trade union organisations (Art. 16 III lit. a of the Mergers Directive in conjunction with Art. 3 IV of the European Company (SE) Directive).
What is the aim of a Special Negotiating Body?
The Special Negotiating body has the task of determining, in accord with the central management, by written agreement:
- the scope,
- functions, and
- term of office
of a European Works Council.
Can a Special Negotiating Body be assisted by external experts?
Yes, a Special Negotiating Body has the right to call upon experts of its choice. European Works Council Directive 94/45/EC (Art. 5 paragraph 6) explicitly stipulates that the cost of expert advice and any other costs of the functioning of a Special Negotiating \body shall be borne by the central management. However, in their transposition laws, Member States are entitled to limit the coverage of expert costs borne by the management to one expert only.
How are Special Negotiating Body members selected?
Procedures for the selection of Special Negotiating Body members are laid down by the national transposition laws of the Member State in which the given member is to be elected. These procedures may differ in each Member State. It is highly advisable that each elected member of the Special Negotiating Body presents it with proof of a lawful mandate (e.g. protocol of the elections).
A Special Negotiating Body must have a minimum of three and may have a maximum number of members equal to the number of Member States in which a company is active (reflecting a technical amendment of the European Works Council Directive in Council Directive 2006/109/EC in that:
- each Member State in which a company has a subsidiary must have at least one member; and
- there are supplementary members in proportion to the number of employees working in the establishments within one country of operations.
It is obligatory to inform the central and local management about the composition of the Special Negotiating Body.
What is the composition of a Special Negotiating Body?
According to Art. 16 III a of the Mergers Directive and Art. 3 II of the European Company (SE) Directive, the seats in a Special Negotiating Body are allocated proportionally among the Member States in which the companies involved in the merger have employees. For every 10% (or fraction thereof) of the total number of employees of the companies involved in the merger, the country has the right to send one member to the SNB. All countries concerned will thus have at least one representative on the Special Negotiating Body. There could be additional seats (but not more than 20% of the total number) to ensure that all involved companies are represented in the Special Negotiating Body.
It was up to the individual member states to define how their Special Negotiating Body members are elected or appointed in their national transposition laws related to the European Company (SE) Directive. Furthermore, Member States could provide that trade union representatives be allowed to become Special Negotiating Body members, even if they are not employees (Art. 16 III a of the Mergers Directive in conjunction with Art. 3 II b of the European Company (SE) Directive). In Germany, for example, in the case of a Special Negotiating Body with more than two members from the home country, every third member must a trade union representative (§8 III MgVG [Mitbestimmung Verschmelzungsgesetz – Participation Merger Law]).
What are the decision-taking majorities in a Special Negotiating Body?
In general, a Special Negotiating Body takes its decisions (e.g. to conclude an agreement) by an absolute majority of its members which must also represent the majority of the employees. Each member has one vote. However, if the decision/resolution would lead to a reduction of participation rights (i.e. a proportion of supervisory or administrative board members of the company resulting from the merger which is lower than the highest proportion previously existing within one of the companies involved - see Art. 16 III a Mergers Directive in conjunction with Art. 3 IV SE Directive), it can be passed only with a qualified majority. This is a 'double 2/3 majority' (i.e. at least two-thirds of the Special Negotiating Body members, representing two-thirds of the employees, must pronounce in favour of it). Moreover, the votes must come from at least two different Member States. These exacting requirements are applied only when participation covers 25% of the employees of the involved companies before a merger. The qualified or double 2/3 majority is necessary when a Special Negotiating Body wishes to resolve not to enter into negotiations or to break them off (Art. 16 IV b of the Mergers Directive).
What happens if negotiations between a Special Negotiating Body and central management fail?
A Special Negotiating Body and central management shall negotiate an agreement on an European Works Council in a spirit of cooperation, with a view to reaching an agreement on the detailed arrangements. Normally, such negotiations lead to the signing of an agreement. However, if no agreement is signed within three years of a request to establish an European Works Council being submitted (e.g. due to a conflict or different views of the negotiating parties), so-called ‘subsidiary requirements’ come into force. Subsidiary requirements are provisions laid down by the legislation of a Member State (in its transposition law) and need to be in line with the Annex to the European Works Council Directive 94/45. These provisions were designed to avoid a situation in which obstruction by one party during the negotiations leads to a deadlock in the process of establishing a European Works Council. Thus, they set minimal standards which stipulate basic principles governing the functioning of a European Works Council.
Are European Works Council members entitled to training?
European Works Council Directive 94/45/EC did not mention training for EWC members. This has been one of the most serious drawbacks of this regulation, especially when compared to other EU acts dealing with employee representation such as the European Company (SE) Directive 2001/86/EC. As a consequence, negotiating provisions securing training opportunities for European Works Council members was purely a contractual affair. This weak positioning of training was reflected in a relatively low rate of European Works Council agreements (28% of all agreements, both active and no longer valid) mentioning an entitlement to education (ETUI database on EWCs in 2006).
The Recast Directive 2009/38/EC greatly improved the situation of workers with regard to the right to training. Recital 33 of the Preamble recognises that 'In order to perform their representative role fully and to ensure that the European Works Council is useful, employees’ representatives must report to the employees whom they represent and must be able to receive the training they require.' Based on the provision of Art. 10 of the Recast, 'Insofar as this is necessary for the exercise of their representative duties in an international environment, the members of the special negotiating body and of the European Works Council shall be provided with training without loss of wages.'
Indeed, training is to be provided without the loss of wages (i.e. during working time) for both members of the European Works Council and the Special Negotiating Body. A bone of contention may be the vague formulation 'insofar as this is necessary for the exercise of their representative duties.' The Directive is not clear on who decides about this and Member States do not specify it though, implicitly, worker representatives themselves should determine their needs. An increasing number of agreements on the setting up of European Works Councils or SE Works Councils contain provision for training of representatives to be financed by the firm. But while the legislative change brought about an essential improvement in European Work Councils' access to training, it is still not ideal (see De Spiegelaere and Jagodzinski, 2015).
Please note that the ETUI's Education Department provides tailor-made training in response to requess from European Works Councils, SE Works Councils and Speical Negotiating Bodies. More information can be found at: https://www.ewctraining.eu/
At which level should a European Works Council be established?
The European Works Council Directive stipulates that a European Works Council should be established at the group level. Unless wider scope is provided for in the agreements governing their powers and competences (or the scope of information and consultation procedures, if such an alternative exists at a company), the European Works Concil covers all establishments and all group undertakings located within the Member States. In other words, European Works Councils shall be established at supranational level and, at the same time, cover all the subsidiaries and establishments of a group/multinational company.
Should the meeting frequency of European Works Councils be increased?
The experience of more than 800 European Works Councils and the results of various research projects suggest a simple correlation: the more often that a European Works Council meets during a year, the greater its efficacy and the more important its role. The majority of European Works Councils (over 50%) have only one annual session foreseen in their agreement, plus an extra meeting in the case of restructuring or other exceptional circumstances. Unfortunately, these European Works Councils find it very difficult to make their meetings an effective instrument of employee representation that goes beyond merely fulfilling the formal obligation to have European Works Council sessions.
What is the difference between a German- and French-type European Works Council?
In professional jargon, one often hears about German- or French-type European Works Councils. The two terms refer to different compositions of European Works Council sessions. The criterion for distinguishing between them is whether management participates in the sessions or not. In a German-type European Works Council, only employee representatives are allowed to participate in the sessions. No management delegates are invited or admitted to such internal European Works Council sessions. This approach stems from the German tradition of industrial relations and closely relates to the concept of the German works council (Betriebsrat) which is an exclusively employee body.
By contrast, the sessions of French-type European Works Council comprise representatives of both management and employees who debate and reach decisions together. Moreover, unlike with the German model, the European Works Council is most often chaired by a representative of central management. Such a solution is not acceptable for German European Works Council members or trade unionists for whom works councils and European Works Councils are bastions of employee representation.
Nonetheless, these two models are not so different from one another. This is because, in the German-type European Works Council, such exclusively internal meetings are followed by a joint session with management, during which all issues are discussed again. In the French-type European Works Council, however, it is a commonplace that the joint sessions of the European Works Council are preceded by preparatory meetings of the employee representatives. During these pre-sessions, employee delegates prepare the agenda, discuss points of special interest, agree upon strategy, and so forth. Thus, although the two models represent different philosophies and traditions of industrial relations, this has relatively moderate implications for the functioning of European Works Councils.
A compromise between the French and German models is a system of alternate chairing. In this approach, the employees’ representative holds the chair for a certain period of time, after which their management counterpart takes over. Another alternative may be a system of joint chairing whereia the chair is a two-person office held jointly by employees’ and management representatives. The latter may have serious legal implications in the case of a conflict between the European Works Council and company management. However; in some cases, where the possibility of a joint chair is not foreseen by national legislation, the European Works Council can be hindered in bringing a case to court as a consequence of having a management representative as the chair.
Are European Works Council members protected in law in performing their functions?
Yes, all EWC members, as well as members of the special negotiating body, enjoy the same protection as trade union members in their home countries (the countries which they represent).
Does law on European Works Councils provide for sub-structures (e.g. working groups) within the European Works Council?
The European Works Council Directive does not mention any sub-structures within a European Work Council apart from the offices of Chair and Select Committee. Nonetheless, the European Works Council is not limited in its freedom to establish, for example, working groups. Such working groups exist in some European Works Councils and have the task of tackling specific issues on a regular basis or ad hoc matters that arise in the course of the functioning of the European Works Council. Such sub-groups present the European Works Council with reports and possible solutions, and are often equipped to work closely with company management between the plenary sessions of the European Works Council.
How are negotiations to establish a European Works Council initiated?
The first step to establishing a European Works Council involves negotiations between a Special Negotiating Body and the management of the company. Negotiations may be initiated either by the management (less common) or at the written request of at least 100 employees or their representatives from at least two undertakings or establishments in at least two Member States.
In the case of employees or their representatives submitting a demand to the management to start negotiations, it is necessary for the workers’ side to obtain information about employee numbers and company undertakings operating in other Member States. Management is obliged to provide such information to employees or their representatives without unnecessary delay and cannot refuse to fulfil this obligation by saying that they do not have access to such data.
How often should a European Works Council meet?
Under the ‘Subsidiary requirements’ of the European Works Council Directive, 'the European Works Council shall have the right to meet with the central management once a year, to be informed and consulted, on the basis of a report drawn up by the central management.’ This provision states a normal frequency of meetings (in exceptional circumstances, the European Works Council must meet more often).
Despite Directive 94/45/EC speaking about only one meeting, this should be considered a minimal standard. Much research has shown that one European Works Council session per year is insufficient to enable this body to function effectively. The relationship between the frequency of meetings of an European Works Council and its efficacy is clear: the more often its members meet, the more effective they are in representing employee interests.
Why is confidentiality of information important for the functioning of a European Works Council?
European Works Councils are likely to become cognisant of confidential information. Various kinds of information may be of crucial importance for the company’s interests and performance and their dissemination should be protected in order to avoid the European Works Council becoming the source of ‘leaks’, causing losses for the company. On the other hand, if a European Works Council is to be taken seriously, it must be treated as an insider with insights on the company’s performance, financial and production reports, and so forth, and on all data concerning the functioning of its undertakings. These circumstances have the potential for a conflict of interests.
Art. 8 of the Directive thus stipulates that the information conveyed to a European Works Council or experts as explicitly confidential must not be passed on by European Works Council members or experts. Individual Member States were granted a rather wide margin of discretion as regards setting rules for confidentiality. However, European Works Council practice reveals that managements sometimes abuse the confidentiality clause, hindering the flow of information both to ordinary employees and to external experts (e.g. trade union experts) assisting the European Works Council. Such cases are extremely difficult to litigate on the grounds of Art. 9 of the Directive - the obligation to work in a spirit of cooperation with due regard to the reciprocal rights and obligations of the parties. It can be argued that an abuse of the confidentiality clause in extreme cases can be countered with an appeal to a labour court on the basis of, for example, Art. 9 of the Directive. Nonetheless, lawsuits are costly, represent the last resort for a European Works Council and are by no means advisable as a universal instrument.
What are 'subsidiary requirements' and in what circumstances are they applied?
Subsidiary requirements are provisions that set minimal standards for a European Works Council's functioning. They are laid down in the Annex to the Recast Directive 2009/38/EC. Article 7 lists situations in which subsidiary requirements come into force:
- when the parties to negotiations decide it;
- when the central management refuses to commence negotiations within six months of the submission of a request; and
- when, three years from the date of this request, the parties are unable to conclude an agreement.
However, a key problem exists with the implementation of Article 7 at national level as, in most countries, there are no clear provisions stating what the procedure is for applying Subsidiary Requirements when management have refused to commence negotiations or when negotiations failed after three years.
How is 'information and consultation' defined in the Recast Directive 2009/38/EC?
The old (repealed) European Works Council Directive 94/45/EC (Article 2 point f) defined consultation as 'the exchange of views and establishment of dialogue between employees’ representatives and central management or any more appropriate level of management.’ However, the Recast Directive 2009/38/EC made substantial progress on this, and its Article 2.1 provides a definition of both information and consultation:
- information means the transmission of data by the employer to employee representatives to enable them to acquaint themselves with subject matter and to examine it. It shall be given at a such time, fashion and content as are appropriate to enable employee representatives to undertake an in-depth assessment of its possible impact and, where appropriate, prepare for consultations with the competent organ of the Community-scale undertaking or Community-scale group of undertakings; and
- consultation means the establishment of dialogue and exchange of views between employee representatives and central management or any more appropriate level of management, at such time, fashion and content as enables employee representatives to express an opinion on the basis of the information provided about the proposed measures to which the consultation is related, without prejudice to the responsibilities of the management, and within a reasonable time, which may be taken into account within the Community-scale undertaking or Community-scale group of undertakings.
Is a European Works Council the only legally possible solution under the Recast Directive 2009/38/EC?
The ultimate aim of the European Works Council Recast Directive 2009/38/EC is to provide the employees of multinational companies with proper information and consultation procedures. The European Works Council is a concept/structure proposed by the Directive as, in legal terms, the most precisely described and thus the easiest to apply form of institutionalised flow of information and channel for consultation. Nonetheless, it is not the only solution. The Directive gives the contracting parties (Special Negotiating Body and company management) the ability to elaborate a solution that will be the functional equivalent of a European Works Council. However, such an alternative must not be named a European Works Council, even if it performs the minimal functions foreseen for a European Works Council (i.e. first and foremost, exchange of information and consultation). Such a body may even go far beyond the competencies of a standard European Works Council, may have another name, and so forth yet the procedures for its establishment and, to some extent, its functioning need to be in line with the requirements foreseen for European Works Councils.
What is the geographical scope of the Recast Directive 2009/38/EC?
At the time of its adoption, the European Works Council Directive 1994/45/EC was applicable to companies having operations in the then EU Member States (excluding the United Kingdom on the basis of the opt-out clause in the Maastricht Social Protocol): Belgium , Denmark, Germany, France, Greece, Ireland, Italy, Luxemburg, the Netherlands, Portugal and Spain. In 1995, with the accession of three new Member States – Austria, Sweden and Finland – the scope of the Directive was increased to companies operating also in these countries. Meanwhile, on 22 June 1995, by means of the Decision of the Joint Committee of the European Economic Area (EEA), the application of Directive 94/45/EC was extended to the three EEA Member States: Iceland, Liechtenstein and Norway.
In 1997, Directive 97/74/EC of 15 December extended the application of the European Works Council Directive to the United Kingdom. Finally, in 2004, with the enlargement of the EU by 10 new Member States, the European Works Council Directive became applicable to undertakings operating in Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovenia and Slovakia. On 1 January 2007, as a result of the latest round of EU enlargement and the accession of Bulgaria and Romania, the geographical scope of the European Works Council Directive increased again, as the acquis communautaire was adopted on entry to the EU. On 1 July 2013, Croatia became the 28th EU Member State and the European Works Council Directive now applies there. The European Works Council Directive currently applies to community-scale undertakings operating in the 30 Member States of the EU and EEA.
Finally, in 2019, when Brexit becomes reality the geographical scope of the Recast Directive 2009/38/EC on EWCs shrank as it will no longer apply to the United Kingdom. This is a cause of significant concern for the operating European Works Councils, workers in the United Kingdom, and social partners supporting the European Works Councils.
Which companies, in principle covered by the European Works Council Recast Directive 2009/38/EC, are actually exempt?
Companies (and thus European Works Councils) that established a European Works Council or a procedure for information and consultation before 22 September 1996 (the deadline for transposition into national legal systems of the original European Works Council Directive 94/45/EC) are exempt from the regime of the European Works Council Directive (as so-called ‘Article 13 agreements’ or voluntary EWC agreements).
Furthermore, based on Article 14 of the Recast Directive 2009/38/EC, obligations arising from this Directive do not apply to companies where a European Works Council agreement was concluded pursuant to Article 13(1) of Directive 94/45/EC (or Article 3(1) of Directive 97/74/EC), that is, so called Article 13 agreements, or where such agreements are adjusted because of changes in the structure of the undertakings or groups of undertakings; or an agreement concluded pursuant to Article 6 of Directive 94/45/EC is signed or revised between 5 June 2009 and 5 June 2011. When such agreements expire, the parties to those agreements may jointly decide to renew or revise them. Where this is not the case, the provisions of this Directive shall apply. Also, Article 1 paragraph 7 of the Directive states that it shall not apply to merchant navy crews.
Companies with headquarters outside the EU, although fulfilling the criteria laid down in the Directive, are NOT exempt from the Directive.
How can it be determined whether a company or group of companies meet(s) the criteria in terms of number of employees?
To check whether a company meets the criteria laid down in the European Works Council Directive 94/45/EC, one must ensure that it is active in at least two EU or European Economic Area (EEA) Member States. Furthermore, conformity with the given employee thresholds needs to be verified. All of the prescribed employee thresholds should be based on the average number of employees, including part-time workers, employed during the previous two years. Methods of calculation must be in line with national legislation and/or practice.
Who represents a company with headquarters (central management) outside the EU or European Economic Area (EEA)?
The main partner of a European Works Council is always the central management of the company. In the case where central management/headquarters are situated outside the EU or EEA (e.g. in the USA), central management shall be represented by a designated agent who is responsible for all issues concerning the European Works Council (or its establishment).
In the absence of such a representative of central management, the management of the establishment (or group undertaking) employing the largest number of employees in any Member State is considered the agent of the central management located outside the EU or EEA, and hence has all the consequent responsibilities.
Is there a legally prescribed size for a European Works Council?
The 'Subsidiary requirements' of European Works Counil Directive 94/45/EC stipulate that a European Works Council shall have a minimum of three members and a maximum of 30. However, taking into consideration that, in some large multinational companies there are representatives from all EU or European Economic AreA (EEA) member states and that often there is more than one representative from a single country (on the basis of proportional formulae calculated according to the workforce in a given country), the maximum number is often exceeded (e.g. the European Works Council at Saint Gobain has 70 members).
Where can I seek assistance or obtain more information on European Works Councils?
Several institutions provide assistance for already existing European Works Councils and Special Negotiating Bodies, as well as for those trying to start the process of establishing a European Works Council. The first, most practically-oriented bodies are the European Trade Union Federations (ETUFs) which were previously referred to as European Industry Federations (EIFs). They are European-level bodies that represent employee interests in assorted ways at the international or European level. Each ETUF operates in a specific sector and is responsible for coordinating and contacts with employee representatives and trade unions acting in undertakings within that sector. They are:
- IndustriAll (a regrouping of the former European Metalworkers Federation (EMF), European Mine, Chemical and Energy Workers’ Federation (EMCEF), European Trade Union Federation – Textile, Clothing and Leather)
- UNI-Europa (covering services)
- European Federation of Food, Agriculture and Tourism (EFFAT)
- European Federation of Building and Woodworkers (EFBWW)
- European Transport Workers' Federation (ETF)
- European Federation of Journalists
Furthermore, the European Trade Union Confederation regroups the trade unions' arguments and positions on European Works Councils.
The ETUI, via its European Workers' Participation Competence Centre (EWPCC), provides expertise on this worker-participation.eu website. It also runs the European Works Council database (EWCDB). The ETUI Education provides European Works Councils, trade unions and other partners with customised training on various issues concerning the functioning of European Works Councils.
What has the recasting of the Directive meant for existing European Works Councils?
Most of the regulations in the Recast European Works Council Directive 2009/38/EC apply in the first instance to European Works Councils that are yet to be established or revised/renegotiated after 2011. It was not possible to push through an automatic obligation to revise existing European Works Council agreements. Nonetheless, the text of the 2009 Directive now contains a quite useful revision clause that it will be possible to apply for many existing European Works Council in future.
Existing European Works Councils retain the right to renegotiate the European Works Council agreement if substantial changes in the size or structure of the undertaking no longer guarantee practicable information and consultation of all employees in compliance with the agreed standard. Clarifications on this point are to be particularly welcomed, in accordance with which existing agreements are to remain in place during renegotiation.
European Works Councils founded before the existing Directive came into force at national level in September 1996 a reexplicitly entitled to exercise this option. In the event of renegotiation of agreements reached voluntarily and with weak provisions, however, the regulation contains no compulsion for employers to agree to a better and more effective agreement. For example, the Recast Directive lacks clarification on what must happen if agreement is not reached in the event of such renegotiation.
However, from 2011, the Directive has not applied to agreements revised or newly concluded during the transitional period between May 2009 and May 2011. In these negotiations, the improved regulations of the Directive should have been used proactively as guidelines in concluding new agreements or in follow-up negotiations on existing European Works Council agreements. Alternatively, these agreements would be set to expire at the end of the transitional period or if an appropriate adjustment clause can be agreed related to the European Works Council legislation.
When did the regulations of the Recast Directive 2009/38/EC come into force?
The revised Directive on European Works Councils was adopted at its first reading by a large majority in the European Parliament in mid-December 2008. Further substantial amendments were made on which almost unanimous agreement was reached immediately afterwards in the Council. As a result, there was no obstacle to the formal adoption of a resolution on the new European Works Council Recast Directive by the Council of Ministers of Employment and Social Policy in spring 2009.
The Recast Directive replaced the European Works Council Directive 1994/45/EC but did not come into force immediately. With the publication of the EU Official Journal began the usual process for EU directives of implementing European framework legislation in the labour codes of individual member states. This applies to all 27 EU member states and the European Economic Area (EEA) countries. All of the countries that have joined the EU to date have to have implemented this Directive at accession.
In effect, the revised legal foundation for European Works Councils thus did not come into force before 2011. From then, no matter what the new procedural rules for founding European Works Councils, as well as the revised legal entitlements of European Works Council members and the regulations on the revision clause for existing European Works Councils in the case of substantial structural changes in the undertaking shall apply.
Has the Recast Directive 2009/38/EC led to the establishment of more European Works Councils?
We can assume that the situation of enterprise workers’ representatives and trade unions has improved as regards the setting up of European Works Councils (e.g. it has become easier to get company managements to divulge the information needed on the structure of the company to prepare for the commencement of negotiations). Clarification on such contributes to avoiding possible disputes on this point. In the past, on several occasions, related problems had to be fought over before the European Court of Justice. In extreme cases, legal disputes lasted years, concerning who exercised a dominant influence in a firm, among other conditions, for establishment a European Works Council. Under the Recast, it has become more difficult for enterprises to eschew their responsibility when employees wish to found a European Works Council.
Nevertheless, enterprises are still under no obligation to inform over mergers or takeovers possibly resulting in the renegotiation of European Works Council agreements by virtue of being structural changes. However, trade unions were granted a much more significant role in the implementation of the Recast Directive: both the European trade union confederations and the European employers’ organisations are to be informed of the commencement of negotiations and the composition of a Special Negotiating Body. This amounts to express recognition of the positive role of trade unions in negotiations and makes their participation in the European Works Council easier. Trade union assistance for workers’ representatives in undertakings should thus be ensured at an early stage.