Basic information about EWC

In the ongoing transformation of the world of work driven by environmental, economic and social sustainability, a meaningful involvement of workers at all levels and their representatives as regards the anticipation and management of change can help diminish job losses, maintain employability, enhance competitiveness and ease effects on social welfare systems and related adjustment costs. European Works Councils (EWCs), information and consultation bodies representing EU-based employees within multinational companies, whose rules are laid down in European Works Councils Directive 2009/38/EC1 (‘recast Directive’), are an important piece of an extensive policy framework on social dialogue.

The right to information and consultation is laid down in the EU Charter of Fundamental Rights of 2000 (Article 27). The Treaty on the Functioning of the European Union (TFEU) also promotes social dialogue between management and labour (Article 151) and recognises the role of social partners (Article 152).

EWCs are bodies representing EU-based employees within multinational companies. Through them, the employees of undertakings or groups of undertakings operating in two or more Member States are to be informed and consulted on transnational matters affecting them. EWCs play an important role in reconciling economic and social objectives within the single market, especially in a changing world of work. EWCs create a link between employees of the same company or group in different Member States and provide a structure enabling effective dialogue between central management and worker representatives within these entities.

EU law on EWCs aims to bridge the gap between increasingly transnational corporate decision-making and workers’ nationally defined and nationally confined information and consultation rights. When company decisions are taken at a transnational level, the national system of information and consultation does not enable employees in the different Member States to organise inputs and voice their views or concerns on these transnational issues together.

EWCs promote a shared understanding of the transnational challenges facing large multinational companies and the involvement of employees in the decision-making process, with the objective of exchanging possible solutions, facilitating their implementation and increasing the impact of strategic choices made by the employer.

According to the available data, in 2021, 3676 multinational companiesoperational in the European Economic Area (EEA) constituted an undertaking or group of undertakings within the scope of the Directive, employing close to 30 million workersin the EEA.55 European Works Councils or agreements on transnational information and consultation agreed between employee representatives and the central management are operating in around 1000 companies^[1].

The number of companies with EWCs has been relatively stable in the last decades. The take up rate and the overall number of EWCs have not changed significantly since the recast, with newly established EWCs taking the place of those dissolved, mainly due to restructuring (mergers).

Several types of information and consultation agreements in large multinational companies co-exist today:

– Pre-1996 agreements (‘voluntary agreements’): undertakings with these agreements are not subject to the Directive. When jointly renewed or revised by the parties upon their expiry, these agreements continue not to be subject to the 1994 Directive (nor to the recast Directive);

– agreements signed or revised during the transposition period 2009-2011: undertakings with these agreements are subject to the rules applicable when the agreements were signed/revised (i.e. those set out in the law transposing the 1994 Directive). When subsequently renewed or revised by the parties, these agreements continue not to be subject to the recast Directive);

-agreements concluded under or 2009 Directive the 1994 Directive (and not revised during the transposition period 2009-2011) or under the 2009 Directive: Undertakings with these agreements are subject to the recast Directive.

– information and consultation procedures: instead of an EWC, parties can set up an information and consultation procedure under Article 6(3) of the recast Directive.

The EWCs can be established in companies under a jurisdiction of an EU/EEA Member State, even if the companies’ headquarters are situated outside of the EU.58 The largest number of EWCs are located in multinational companies headquartered in the United States (170), Germany (124), France (102), the United Kingdom (92), Sweden (69), the Netherlands (58), Switzerland (48), Italy (38), Finland (37), Belgium (36), Japan (31).

By sector of activity, the majority of EWCs are concentrated in large metal, services or chemical multinational companies.

Overall, EWCs are not equally spread across all sectors. According to the European Trade Union Institute^[2], the main reason for the variation in number of EWCs between sectors is their differing characteristics, namely:

• company size;
• companies that operate on sites with a high concentration of employees (factories or production facilities) facilitate worker organisation;
• companies in sectors where the workforce is spread across different States (e.g. building or transport industries) tend to establish EWCs

The overall annual costs of operating an EWC depend on the structure of the EWC and the number of meetings held. These costs often increase when an extensive restructuring is under way, as the intensity of EWC work increases. The 2018 Commission evaluation established the following cost estimates for operation of an EWC under the recast Directive: fixed costs only for the operation of EWCs with average annual running costs EUR 160 900. When taking into account not only fixed costs but also expenditure related to the time spent by employees on EWC-related activities, the average total cost of a recast EWC per year is EUR 240 000, or 0.009 % of the turnover of the average company with an EWC^[3].

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^[1] EWC data base ETUI

^[2] De Spiegelaere S.; Jadodzinski R. (ETUI) (2015) European Works Councils and SE Works Councils in 2015. Facts & Figures 

^[3] SWD(2018) 187 final, p. 37.