13th Apr 2024

EU proposes new powers for European Works Councils

  • There are around 1,000 European Works Councils, representing more than 11.3 million workers (Photo: Unsplash)
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15 years after it was last revised, the European Commission on Wednesday (24 January) proposed updating theEuropean works councils directive to give workers a stronger voice in large multinational companies.

The original directive dates back to 1994, when it pioneered the creation of these bodies, which are a bridge between employers and employees at company level — but at that time it did not properly define what they should do.

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"Works councils can indeed help to anticipate and manage substantial changes, and this is the time when we are seeing such changes in many sectors with transnational activities," stressed EU jobs commissioner Nicolas Schmit.

There are now around 1,000 European works councils (EWCs) representing more than 11.3 million workers, but this is still less than a third of the estimated 4,000 eligible companies, according to the EU executive.

And the directive's shortcomings are not limited to the scope of these bodies.

"The commission itself noted, in its 2018 evaluation report, the overall weaknesses of the tools in place to enable EWCs to enforce their rights," Oliver Roethig, regional secretary of UNI Europa, an organisation representing seven million service workers, told EUobserver.

The aim of these bodies is to ensure that employees in companies with more than 1,000 employees, operating in at least two EU or European Economic Area (EEA) countries, are consulted and informed on transnational issues. For example, when restructuring takes place or when changes are introduced in connection with the digital and green transition.

"If companies become more and more European, workers' participation must keep up with that trend," MEP Dennis Radtke, of the centre-right European People's Party, who led the parliament's report calling the commission for this revision, told EUobserver ahead of the proposal.

"That is why we want to strengthen and clarify the current rules accordingly," he added.

The commission has now proposed removing some exemptions from the directive, enabling some 5.4 million workers in 320 multinational companies to request the creation of a new EWC, as well as clearly defining "transnational matters", and ensuring that information and consultation rights are more timely and meaningful.

In contrast, the lobby group BusinessEurope has already expressed serious concerns about Wednesday's announcement.

"The commission's proposal to include agreements made before 1996 or between 2009-2011 in the directive will damage many well-functioning European Works Councils," its director general Markus J. Beyrer said.

The EU executive has also called on member states to introduce effective, dissuasive and proportionate sanctions to enforce the directive.

"We need a tougher penalty system like the one set out in the General Data Protection Regulation (GDPR)," MEP Radtke warned.

Along the same lines, the European Trade Union Confederation (ETUC) stressed that the directive still needs penalties strong enough to deter companies from violating these rights — citing that the maximum fine for non-compliance in Germany is only €15,000, for example.

Its deputy general secretary, Isabelle Schömann, said the current directive was "a toothless tiger that multinational companies continue to abuse to flout workers' rights to information and consultation".

The confederation also believes that the directive should be extended to franchises to ensure that companies such as McDonald's are covered by an EWC.

UNI Europa welcomed the proposal as an important step forward, but did not expect it to be as "ambitious" as the parliament's.

"The right for trade union representatives to participate in all EWCs and to have access to all sites is a necessary condition for supporting and coordinating the EWC's work more effectively," Roethig said.

The commission's proposal will now have to be examined by the co-legislators: the European parliament and the member states.

Once a final text is adopted, EU countries will have one year to transpose the directive into national law, and a further two years for the new rules to apply.

"We will do our best to have a position of the European parliament before the European elections," Radtke concluded.


Is there more than coffee for European Works Councils?

In 1994, the EU decided that, at least, the employee representatives of a multinational were to meet each other and the management from time to time. In these meetings, management had to inform and consult the employees about transnational issues.


MEPs push for greater powers for workers' councils

European Works Councils can play a key role for workers and their unions to bargain effectively — but what are they, why have they been neutered, and why is big business objecting to greater powers?

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