German MEPs argue for reform of European Works Councils Directive

Social Democrat Gabriele Bischoff and Christian Democrat Dennis Radtke argue for a review of the European Works Councils Directive to give workers of large European companies more influence in strategic decisions, but European businesses fear this might weigh them down.

“If we want to successfully manage the digital and green transitions, we have to ensure the involvement of employees,” Gabriele Bischoff told EURACTIV, laying out the reasoning behind her push to strengthen European Works Councils.

“We need a lot of trust to manage this transition,” she said.

European Works Councils (EWC) are councils that employees of large European companies can form to represent their interests at a company level. They have been made possible by an EU directive from 1994 that was updated in 2009. An EWC can be established in companies that have at least 1,000 employees in the EU and at least 150 employees in each of at least two member states.

In 2020, there were 1,182 EWCs in Europe, but this number only rose very sluggishly in the past years.

The idea is that the management of a company informs and consults with the EWC ahead of important decisions. However, trade unions lament that this often does not happen.

In a 2018 report on the implementation of the directive, the EU Commission concluded that the enforcement of the EWC’s rights was weak in many member states. In fact, only four member states allow the EWC’s representatives to seek legal redress if they feel like they have not been properly consulted.

“There are gaps in this directive that can be exploited by companies,” Bischoff told EURACTIV.

In December 2021, the European Parliament passed her own-initiative report on democracy at work, calling for increased involvement of employees in the decision-making of companies.

Now, Dennis Radtke of the centre-right European People’s Party, like Bischoff, is himself working towards an own-initiative report with recommendations for a revision of the EWC directive.

“More possibilities to sanction companies need to be included,” he said at an event on EWC reform in Brussels on Monday (26 September).

Moreover, he argued for a legally protected right to a reconciliation of interests for workers in case of a major restructuring or relocation, which is something that exists already for German works councils.

Radtke also wants to define in more detail what kind of information companies have to share with EWCs. “Today companies often say ‘we would really like to give you the information, but we can’t because it’s a business secret,’” he said, calling for a clear definition of what counts as a business secret.

Bischoff welcomed Radtke’s draft report, but also said that “it can still be improved,” as she called for even more possibilities to sanction companies that ignore their EWCs.

The business community, meanwhile, opposes the push for a review of the EWC directive. “BusinessEurope supports the development of social dialogue at company level through the development of the existing EWCs and by the creation of new ones,” a spokesperson of the business association told EURACTIV.

“However, the direction taken by the European Parliament to initiate a legislative report calling for changes in the EWCs 2009 recast directive is counterproductive,” he said.

For example, BusinessEurope argued, the proposed changes would slow down decision-making in companies.

If this is the case, strengthened EWCs might be counterproductive to the green transition since this transition is likely to require some fast and courageous decisions by European companies.

Gabriele Bischoff, however, vehemently rejected this argument, saying it was not the goal to delay change. “The strategy is to proactively shape the transition through an early and active involvement,” she told EURACTIV.

“Shaping is the opposite of delaying,” she added.

It remains to be seen how much the European Parliament can shape this directive in the direction the two German MEPs would prefer, however. Radtke hopes his own-initiative report can be passed by the end of this year, but then it is up to the EU Commission to take up the ball or not since the EU Parliament does not have the right to initiate legislation on its own.

[Edited by Nathalie Weatherald]

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