The European Commission proposal to revise the European Works Councils Directive - a BusinessEurope position paper

Key messages

• The revision of the European works councils (EWCs) directive has been proposed by the European Commission, whereas the overwhelming feedback by companies operating EWCs is that their European works council operates well.
• This revision needs to be conducted based on the real companies’ evidence to support improvements in the operation of EWCs that are conducive to the development of a trust-based social dialogue culture in the concerned companies, a culture that underpins economic and social progress in each of the concerned companies.
• The Commission’s proposal to include in the Directive the voluntary EWCs agreements concluded under Article 13 of the original EWCs directive 94/45/EC or concluded or revised during the transition period following adoption of the recast directive 2009/38/EC from June 2009 to June 2011 will damage many well-functioning European Works Councils and existing social dialogue practices at company level.
• EWCs are the only legally enabled transnational employee representative body in the world. The Commission’s proposal introduces a set of amendments that, holistically considered, would significantly overcomplicate EWC’s functioning, undermining European companies’ competitiveness. Passing the EWC Directive as it is now proposed could further deteriorate the attraction of investments from MNCs within the EU in favour of other regions globally.
• In particular, the new dimension of the meaning of “Consultation” in conjunction with “Transnational” and “Confidential Information” and the provision of almost unlimited resources to act against the company, including legal costs, would evolve EWCs from valuable social dialogue forums between employees and management to highly confrontational bodies for legalistic contestation.
• The proposed presumption of transnationality in cases that only involve one Member State creates the risk of overlaps in national and European information and consultation processes and would lead to legal uncertainty.
• The ability of management to keep information confidential without delays to the decision-making process is essential and should be therefore protected. Commission’s proposal to allow Member States to impose prior administrative or judicial authorisation of non-disclosure of confidential information by companies would harm business competitiveness and delay companies’ decision-making.
• The proposed change for the consultation requirements which would enable employees’ representatives to express an opinion prior to the adoption of the decision and that such an opinion must receive a reasoned written response from central management before the latter adopts its decision on the proposed measure is likely to cause significant delays in the decision-making processes without improving the EWCs consultations. In practice, the timelines around consultation should be defined within each EWC agreement, respecting that an opinion should be delivered within a reasonable time.
• The proposed wording related to experts must be clarified, and legal costs left at the discretion of Member States per their internal frameworks and practice. The possibility for EWCs to be assisted by an expert is already acknowledged in the existing Directive and no changes are therefore required. However, if additional experts should be available to the EWC at management cost, we believe that management should decide on the expert’s mandate and the level of costs incurred. For this reason, it is not enough for management to be informed of the costs in advance, as an approval procedure is necessary. Moreover, it is important to clarify that the scope of the mandate of the external experts involved is to support social dialogue solutions.
• We welcome that the proposal of the Commission respects, in line with Article 153 TFEU, Member States competence to decide the precise level of penalties to be applied. Financial penalties should be restricted to cases where the abuse of the information and consultation process has been intentional.