Present situation

24 January 2024 European Commission has proposed the revision of the European Works Councils (EWCs) Directive to further improve social dialogue in the EU. EWCs are information and consultation bodies that ensure that employees are involved in decisions related to transnational issues. This concerns companies with more than 1,000 employees operating in at least two EU or EEA countries.

Meaningfulinformation and consultation of employees in key company decisions can help anticipate and manage changes, such as those linked to the green and digital transitions, like addressing labour shortages or introducing new technologies. In transnational settings, European Works Councils can play a key role in these respects.

The current Directive outlines the processes for creating EWCs and for informing and consulting them on transnational matters. The proposed revision aims to strengthen the role of EWCs by facilitating their creation, fostering more meaningful information and consultation, and ensuring they have the necessary capacity to carry out their work. It also aims to strengthen gender balance of EWCs.

In 2023, the European Parliament adopted a legislative own-initiative resolution calling on the Commission to strengthen the role and capacity of EWCs. Today’s proposed revision delivers on the political commitment by President von der Leyen to respond to such resolutions with a legislative proposal, in full respect of proportionality, subsidiarity and better law-making principles.

The Commission’s main proposed changes include:

• Giving equal rights to workers of multinational companies operating in the EU/EEA to request the creation of a new EWC: exemptions from the current Directive will be removed, allowing 5.4 million workers in 320 multinational companies with pre-existing agreements to request the establishment of an EWC.
• Clarifying the definition of transnational matters: ensuring that EWCs complement and do not overlap with the work of national information and consultation bodies. A clear definition is crucial for determining when EWCs must be consulted and informed.
• Ensuring that workers in multinational companies are consulted in a timely and meaningful way on issues concerning them:
  • EWC members should receive a reasoned response to their opinion before company management adopts a decision on transnational matters.
  • Company management must provide justifications whenever confidentiality is given as a reason for restricting the further sharing of information or not disclosing information on transnational matters.
• Making sure EWCs have the necessary capacity to do their work: EWC agreements must specify the financial and material resources allocated, for instance as regards experts, legal costs, and training.
• Strengthening gender balance: whenever an EWC agreement is (re)negotiated, provisions will have to be put in place for attaining, as far as possible, a gender-balanced composition. This includes a requirement to actively pursue gender balance in special negotiating bodies, which are temporary groups of employee representatives negotiating an EWC agreement with the company.
• Improving access to legal remedies: Member States must notify the Commission of how EWCs can bring judicial and, where applicable, administrative proceedings. Member States are also obliged to put in place effective, dissuasive and proportionate sanctions to enforce the Directive.

The Commission’s proposal amending the European Works Council Directive will be discussed by the European Parliament and the Member States. Once adopted, Member States will have one year to incorporate the Directive into national law. The new rules will then start to apply two years later. During the two-year period, parties can adapt their EWC agreements to the revised requirements.