EU proposes revisions to EWC Directive, enhancing employee rights, transparency, and inclusivity in transnational workforce matters.
Following calls by the EU Parliament for potentially far-reaching modifications, the European Commission has now initiated the EU legislative process to modify the European Works Council (EWC) Directive. Amid objection that the Directive currently delivers EWCs little practical influence over an employer’s decision-making procedure concerning transnational efforts, early in 2023 the European Parliament called on the European Commission to present legislation to revise the Directive.
The European Commission has recently unveiled its proposed revisions to the Directive, aligning with many suggestions from the European Parliament. These revisions aim to expand and clarify various aspects of transnational employment matters within the European Union. Key points include broadening the scope of issues subject to information and consultation obligations. It ensures timely and meaningful consultation with employee representatives before management decisions and addresses the practical influence of Employee Representative Bodies (ERBs) in decision-making processes.
While the Commission’s recommendations reflect many of the changes desired by the European Parliament employers may be facilitated to see they do not include specific conditions for member countries to present GDPR-level fines nor EWC rights to take injunctive activity against employers to non-compliance with the Directive. Nevertheless, the Commission’s proposals represent a significant and intentional strengthening of the influence of EWCs involving transnational acquisitions, disposals and restructurings in the European Union.
Whilst there are always some steps in the legislative process before the suggested changes can become lawfully binding across member states, all multi-national institutions with operations in the EU should observe the progress of the proposed revisions. If adopted, restructurings and reorganizations involving more than one jurisdiction in the EU will become more difficult and require thorough planning before being executed.
The EWC Directive needs certain multi-national organizations to specify an EWC or a procedure for reporting and consulting employees about transnational workforce-related topics where this is asked by a qualifying group of employees. The commitment applies to undertakings with at least 1000 employees within the EU and the other nations of the European Economic Area and at least 150 workers in each of at least two member states.
Moreover, the proposals seek to enhance rights for renegotiating ERB agreements, ending exemptions for outdated agreements, and allowing a significant number of employees to request revisions. The suggested changes also aim to increase the involvement of experts, including trade union representatives, in advising ERBs, ensuring adequate financial support for ERBs, and refining confidentiality provisions.
Enforcement mechanisms are also set to be strengthened, requiring member states to impose effective penalties for non-compliance with the Directive. However, specific penalty levels and injunctive action rights proposed by the European Parliament have been omitted, leaving discretion to member states.
Furthermore, the proposals highlight the need for gender balance within ERBs and special negotiating bodies, though practical implementation remains uncertain. These revisions aim to foster a more transparent, inclusive, and effective framework for transnational employment matters across the EU, potentially impacting millions of workers in multinational companies. Overall, the proposed changes aim to modernize and strengthen the Directive, ensuring its relevance and effectiveness in the evolving landscape of European labour relations.
