EU Parliament wants to strengthen European Works Councils

A report proposing strengthening the rights of the European Works Councils (EWC) to reinforce the voice of employees in large European companies was supported in European Parliament on Thursday (2 February).

With a majority of 385 votes in favour versus 118 against, Parliament supported the report drafted by the centre-right member of the European Parliament, Dennis Radtke.

“We don’t want to reinvent the wheel, but to strengthen existing law and implement it better,” he said in a statement after the vote.

Improving the quality

European Works Councils are bodies that represent the European employees of large companies, and they are regulated under the European Works Councils Directive. Under this directive, member states have to guarantee the right of workers of companies with at least 1000 employees and at least 150 employees in each of the two member states to form a European Works Council.

Through these councils, the employees of a company should get access to information from the company leadership and be consulted on major business decisions.

In 2020, there were 1182 European Works Councils, with numbers growing only very slowly in the past years, if not stagnating.

To Radtke, however, “quality is more important than quantity”. He does not necessarily have the goal of increasing the number of European Works Councils. Instead, he wants to make them more effective.

For example, he wants to increase the minimum number of meetings an EWC should have per year from one to two.

More power for EWCs

One of the problems EWCs often complain about is the lack of relevant involvement by business leadership. As management teams often keep EWCs out of the loop by citing business secrets, Radtke’s report now proposes to use a standardised definition of what qualifies as a business secret.

Moreover, the report seeks to ensure that EWCs have access to justice. “There are EWCs that have been looking for a court that would hear their case for more than two years now,” Radtke said.

He also wants to enshrine a rule that companies must pay for the legal costs of court proceedings between the EWC and the management. This is already the case in Germany but not in all EU member states.

Maybe most importantly, Radtke and his fellow EU lawmakers that voted for his report want to decisively increase the maximum amount companies can be fined if they do not respect the rights of the EWC.

The report hereby orients itself at the General Data Protection Regulation (GDPR). “I don’t see why a company should pay more for a violation of data protection rules than if it violates the right of workers to shape their workplace,” Radtke told journalists in a briefing ahead of the vote in Parliament.

While companies previously often only paid several thousand euros, they might find themselves paying several million under the rules proposed by Parliament.

Too constraining or a precondition for success?

Although most members of Parliament supported the report, some lawmakers are against a reform of the rules governing EWCs. In a parliamentary debate in mid-January, for example, Margarita de la Pisa Carrión of the far-right Spanish Vox party accused the regulatory changes proposed by the report of stifling entrepreneurship.

“Essentially, this is trampling national legislation once again, undermining the freedom of companies to do business in Europe,” she said.

One argument companies can bring forward against the proposed changes is that it might make decisions harder at a time when fast changes seem necessary.

When confronted with this argument, Radtke countered that, on the contrary, “EWC are extremely important in the green transformation.”

“Workplace participation must finally be seen as an added value for companies and not as a hurdle,” he said, arguing that the digital and green transitions can only succeed if “works councils are closely involved in possible restructuring.”

The Commission’s turn

By passing the report, the European Parliament called on the EU Commission to table a legislative proposal to change the European Works Council Directive within a year. Although the EU Commission is not legally obliged to follow this request, the Commission had committed itself at the beginning of the legislature to follow up on successful own initiative reports from the EU Parliament.

“There will be a follow-up to this report, including also legislative amendments if so needed,” EU Commissioner for Jobs and Social Rights Nicolas Schmit said at a press conference on 25 January when asked how it would react to adopting the report by the Parliament.

[Edited by Alice Taylor]

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