Will European Works Councils be better positioned?

The European Works Council (EWC)

The idea of transnational employee representation in international companies in the EU or European Economic Area (EEA) dates back to the 1960s.

However, the EWC did not become a reality until the 1990s: The European Works Council Directive was ratified in 1994 and implemented in Germany in 1996 as the European Works Council Act (EBRG). Since then, companies with more than 1,000 employees in at least two member states of the EU or the EEA have been able to establish an EWC.

Last amended in 2009, the directive is now slated to be updated. At the beginning of 2024, the Commission proposed a new amendment to incorporate legal developments and improve social dialog on an international level.

If the directive is adopted and enters into force, national legislators will then have time to adapt national regulations accordingly.

What rights does the EWC have?

Works council traditions in Europe vary considerably. Consequently, the legal organization of transnational works councils is anything but simple. As such, it is also no surprise that the rights and obligations of the EWC are not overly complex.

The EWC is granted information and consultation rights pertaining to the economic and financial development of the company. However, they do not have any “real” right to co-determination. Moreover, the rights of the EWC are limited to “transnational matters” within the company.

Aim of the amendment

Changes such as following are intended to modernize the EWC and strengthen its role as a whole:

• A simplified procedure for establishing the EWC,
• Ensuring the financial and human resources that EWCs need to function properly,
• Encouraging and ensuring important information and consultations as well as
• Introducing regulations to achieve a balanced gender ratio.

The most important new regulations

To achieve these aims, the directive will see numerous new amendments. As such, the Commission’s most important proposed amendments include:

• Defining the central term “transnational matters”.
• Exceptions which previously made it difficult or impossible to establish an EWC will be removed. This will enable more EWCs to be established.
• Regulations will be created to ensure the timely and meaningful involvement of the EWC when the EWC needs to be involved.
• In future, companies will be required to justify why information on transnational matters is not passed on to the EWC for reasons of confidentiality.
• The directive will also include regulations to ensure that the EWC agreement will guarantee sufficient financial and personnel resources for the EWC in future.
• The member states will be obliged to implement effective sanctions so that the directive and its national implementation are more than just paper tigers.

What can we do for you?

Do you have questions about the EWC or collective labor law in general? Do not hesitate to contact us!