European Works Council: a step closer to guaranteeing rights

European Works Councils (EWCs)—more than 1,200 of them in the European Union—are bodies representing employees within companies operating in at least two Member States and have at least 1,000 employees. They are set up on the initiative of at least 100 employees from two Member States, and their composition and operation depend on the type of company and a signed agreement between the management and the employees’ representatives. EWCs are responsible for keeping employees properly informed of all important decisions at the European level that could affect their employment or working conditions, and for ensuring consultation between employees and management on the progress of the business of the company in question.

The Directive on the establishment of a European Works Council was last recast in 2008 and ten years later, the Commission’s evaluation reports concluded that European Works Councils have been a key factor in improving access to a broader scope of information available to employees in transnational companies, while safeguarding jobs during restructuring processes. Yet, alongside the positive effects, this report also identifies some gaps in guaranteeing workers’ rights which, when the rights are implemented in a fragmented fashion, create an unequal situation for employees of the same company in different Member States. The report also identifies a lack of enforcement of the Directive in some Member States.

That is why the Committee on Employment and Social Affairs, of which I am a full member, drafted a legislative report which was adopted by a large majority in today’s plenary session of the European Parliament.

The adopted text calls on the Commission to carry out a revision of the EWC Directive with a view to clarifying its objectives, definitions and procedures, as well as strengthening the right of employee representatives to information and consultation. It is necessary to ensure that EWCs are stronger in the future and better able to enforce employees’ rights, while at the same time to raise the awareness and visibility of EWCs by mobilising companies that meet the criteria for setting up a EWC to actually set them up. And, above all, it is necessary to clearly demonstrate the added value of EWCs to employees’ representatives and company managements through the involvement of social partners from various sectors and national labour market institutions.

The text further addresses the importance of timely and meaningful consultation on matters of transnational character, especially those affecting jobs and working conditions, which is an important factor in maintaining worker satisfaction in the light of the green and digital transitions, when many companies across Europe are exploring and implementing new working methods. At the same time, a provision was adopted requiring company managements to take the opinions of EWCs into account when making important decisions.

The Commission’s evaluation reports have in some cases found breaches of the Directive (cases where workers’ rights haven’t been enforced), which is why the adopted text includes the introduction of effective, dissuasive and proportionate penalties. EWCs will thus have the right to suspend—or even reject—a decision taken by the company management where the provisions of the Directive are breached.

The text also calls on the Member States to end the exemptions for all agreements concluded before the adoption of the Directive, as we want to ensure that all EWC agreements are governed by the same rights and obligations, in order to ensure equal treatment of workers, access to the application of high Union standards, and legal certainty through the regulatory conditions for the operation of the EWCs as laid down in the Directive.

We have called to ensure effective access to justice by providing EWCs with access to the courts or the competent national labour market authorities. In this respect, Member States will have to ensure that administrative and judicial procedures are facilitated, and they are also tasked with setting up specific negotiating bodies and specifying the legal status of the EWCs. While guaranteeing the right to due process, the adopted legislative report provides that the burden of judicial costs, legal representation, subsistence and travel expenses of the workers’ representative shall be borne by the company’s central management. The penalties to be imposed on undertakings in the event of established infringements depend on the individual Member State and the nature, gravity and duration of the infringement. In the case of serious infringements, in addition to being fined, the company shall also be excluded from an entitlement to some or all public benefits, aids and subsidies, both at the national and European level.

I wish to point out that the Directive on the establishment of a European Works Council is the only piece of legislation addressing at a supranational EU level the rights of workers in transnational companies. It does that by putting in place a legal framework to promote the organisation of information and consultation within companies. It is therefore crucial that the revised directive, which this legislative report calls for, continues to provide such a legal framework at the EU level, while providing both the EWCs and employees with adequate legal protection, including with appropriate penalties in the event of infringements in the application of the Directive. The adopted text truly brings us a step closer to guaranteeing workers’ rights.