Trade unions call for review of European Works’ Council Directive

The European Trade Union Confederation (ETUC) has called on the European Commission to come up with a reviewed directive that would strengthen the power of European Works’ Councils multinational corporations.

While the association of European businesses BusinessEurope wants to negotiate a deal among social partners, ETUC does not see a basis for negotiation, instead calling on the European Commission to propose a revision of the directive.

European Works’ Councils (EWC) are a tool that should guarantee employees the right to be consulted on important issues in large multinational companies that are active in multiple EU countries.

The weakness of EWCs

EWCs were first set up in 1994 following an EU directive – revised in 2009 – but have long been criticised for being ineffective as they have only limited rights to information and little influence.

“[T]he ETUC is convinced of the urgent need to act in order to ensure legal certainty and legal predictability for all parties,” ETUC deputy general secretary Isabelle Schömann said.

“Among the main gaps are unclear definitions of key rights such as information, consultation, transnationality, confidentiality, as well as non-dissuasive sanctions and ineffective access to justice, to name but a few, which mean that EWC information and consultation rights only exist on paper,” Schömann said.

Earlier this year, the European Parliament passed an own-initiative report calling for a revision of the EWC directive. According to this report, the EWCs should meet more often, get access to more information, and there should be tougher penalties for corporations that ignore those rights to information.

As a reaction to the Parliament’s report, the EU Commissioner for Jobs and Social Rights Nicolas Schmit announced that the Commission would come forward with a legislative proposal to amend the EWC directive by the end of 2023.

BusinessEurope prefers negotiations over legislation

To prepare this review, the Commission has conducted two consultations for stakeholders. The second consultation phase ended in early October, after which the ETUC came forward with its call for a reviewed directive to be proposed soon.

BusinessEurope, meanwhile, would prefer a deal to be found among social partners, meaning between business associations and trade unions.

“We are convinced that the European social partners are the best placed to effectively deal with the revision of the European Works Councils Directive,” Markus Beyrer, BusinessEurope’s director general, said in a press release.

“We call on the ETUC to live up to its responsibilities and engage in negotiations aimed at improving the functioning of the European Works Councils,” he added.

In theory, if social partners agree on a revision of the rules, they can ask the EU Commission and EU Council to pass the agreed changes directly. However, this option is only very rarely used. And it won’t be used this time either.

For the trade unions, there is no basis for bilateral negotiations since BusinessEurope is strictly opposed to most changes that are important for them. Instead, they want the Commission to come forward with a proposal for a revision soon and before next year when a new Commission takes office that might not feel as responsible to honour the promises to act on the Parliament report as the current Commission does.

“Given the importance, timing and scope of the initiative, a legislative proposal by the Commission in the form of a directive remains the most suitable instrument to achieve substantial improvements of the rights of EWCs still in this legislature period,” Schömann said.

[Edited by Nathalie Weatherald]

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