In February 2008, the European Commission invited social partners to consult on the revision of the 1994 Council Directive on European Works Councils (EWCs) – one of its legislative priorities for 2008. With this long-awaited step, the process of revising the EWCs Directive enters a new and decisive phase. The European Trade Union Confederation and other European trade unions welcomed the second-phase consultation, while BusinessEurope has opposed this step.
The Council Directive 94/45/EC of 22 September 1994 on the establishment of European Works Councils (EWCs) or procedures in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees marked a major breakthrough in the area of European social policy. The directive represented the first genuinely European institution of employees’ representation at enterprise level. Due to its innovative character, Article 15 of the directive set 22 September 1999 as the deadline for a review of the directive. Since this date, a possible revision of the directive has been the subject of ongoing debate among political institutions and social partners.
The European Commission has declared the revision of the 1994 Directive on EWCs as one of its legislative priorities for 2008. On 20 February 2008, the Commission invited the social partners to consult on the subject over six weeks, with a deadline of 3 April 2008 (see Press release IP/08/265). The social partners were asked, in particular, to express their opinions on possible measures to ensure the effectiveness of employees’ transnational information and consultation rights. They were also asked to recommend ways to improve the practical application of the Directive and ensure more coherence among the various Community legislative instruments in the field of information and consultation of employees.
While the consultation is based on the procedure of European social dialogue via Articles 138-139 of the EC Treaty – aimed at collecting opinions and recommendations by social partners regarding the Commission’s proposals for legislative action – the Commission still opens the possibility to launch negotiations, in order to conclude a European-level agreement which could then form the basis of revised legislation.
Background
This consultation is a new and important step in a process that began in April 2000 when the Commission published its Communication on the application of the EWCs Directive (COM (2000) 188 final; 250Kb PDF) (EU0005248F). The debate that accompanied this process is marked by a clear dissent between trade unions and employer organisations: while the European Trade Union Confederation (ETUC) pleads in favour of a legislative revision of the directive in order to strengthen the rights of EWCs, BusinessEurope (previously known as the Union of Industrial and Employers’ Confederations of Europe, UNICE) strictly contested legislative action and pleaded in favour of a voluntary approach.
Early proposals for a revision
Already as far back as December 1998, ETUC made precise suggestions for amendments to the EWCs Directive (EU9901149N). After the publication of the Commission’s report in April 2000, other institutions also began to debate the case for a revision of the directive. On 4 September 2001, the European Parliament adopted a resolution on the Commission report (A5-0282/2001 PE 308.750/28) calling on the Commission to submit a proposal to revise the directive. On 24 September 2003, the European Economic and Social Committee (EESC) published an opinion on the Practical application of the EWCs Directive and on any aspects that might need to be revised (290Kb PDF) (EU0310204F). Meanwhile, ETUC developed its position and, in December 2003, its executive committee adopted a new resolution on the revision of the directive.
First phase of consultation
Finally, in April 2004, the Commission launched a first phase of consultation on the review of the EWCs Directive (EU0405203F). In accordance with Article 138 of the EU Treaty, the Commission’s first-phase consultation document (197Kb PDF) did not contain any proposals for a revision of the directive but asked the social partners for their opinion ‘on the possible direction of Community action’; more specifically, the question put forward to the social partners was whether the Commission should get active in revising the directive or whether the social partners would prefer a voluntary agreement.
In its answer (103Kb PDF), BusinessEurope (then UNICE) declared its strict opposition to a revision of the EWCs Directive, arguing that any further development of the operation of EWCs should be the task of the social partners and is better suited to European social dialogue. ETUC, on the other hand, welcomed the consultation and underlined its request for a revision of the directive. The trade union confederation highlighted in its response (58Kb PDF) the following issues: harmonising the directive with developments in more recent directives, a clearer definition of ‘information’ and ‘consultation’, acknowledgement of the role of trade unions, as well as clearer rules for renegotiating EWCs agreements.
Further delay in revision
Following this first-stage consultation, the social partners agreed to discuss case studies on the experiences of major companies in relation to the operation of EWCs. The result of this common effort was published in April 2005 in the form of a joint assessment of the operation of EWCs (EU0505204F).
On 5 April 2005, the new Commissioner for Employment, Social Affairs and Equal Opportunities, Vladimír Špidla, published a Communication on restructuring and employment (COM(2005) 120 final; 262Kb PDF), which also aimed to initiate further consultations about restructuring and enhancing the effectiveness of EWCs (EU0504202F). The reaction of the social partners was rather critical. In its comments on the communication, the ETUC executive committee criticised the Commission for launching a joint consultation on two separate issues: company restructuring and the Directive on EWCs. BusinessEurope affirmed its opposition to the beginning of a second-phase consultation on the revision of the EWCs Directive (EU0508204F).
In February 2006, the European Parliament Committee on Employment and Social Affairs published its Report on restructuring and employment (A6-0031/2006) criticising ‘that the second-phase consultation on the European Works Council is only a minor subchapter encompassed in a broader Commission Communication’. The report also called on the Commission to launch a proper second-phase consultation on the revision of the directive. On 13 September 2006, EESC joined the demand for a revision of the EWCs Directive in its opinion on European Works Councils: a new role in promoting European integration (142Kb MS Word doc).
Second-phase consultation
With the long-awaited start of the second-phase consultation on the revision of the EWCs Directive, the Commission responds to these demands. The Commission document (47Kb PDF) initiating the consultation process outlines three thematic fields where the Commission considers a revision of the directive necessary:
- enhancing the effectiveness of employees’ transnational information and consultation rights;
- resolving legal uncertainties and problems in the practical application of the directive;
- harmonising the EWCs Directive with more recent directives on employee representation.
Enhancing the effectiveness of employees’ transnational information and consultation rights
This part of the consultation aims to strengthen the rights of employee representatives in transnational information and consultation processes. It also tries to solve some of the directive’s weaknesses that have become manifest in the experience of existing EWCs. The first issue to be addressed is a clearer definition of the terms ‘consultation’ and ‘information’ in line with those in more recent directives. As the subsidiary requirements also play a benchmark role for voluntary agreements, a revision of these requirements is proposed based on best practice examples. Furthermore, the important role of the European-level trade union federations in establishing EWCs should formally be acknowledged. Finally, to protect the rights of EWCs, effective sanctions in the event of infringement must be provided.
Resolving legal uncertainties and problems in practical application
The second area covers difficulties in the application of the directive. First, the Commission addresses the demand of clearer rules for the renegotiation of EWCs, particularly in the event of mergers, acquisitions and other changes in company structure. In addition to the introduction of transitional arrangements that ensure the functioning of EWCs in decisive moments of company reorganisation, the document proposes that new agreements must contain an adaptation clause for such cases.
Furthermore, drawing on the consequences of three rulings by the European Court of Justice (EJC) – namely those of C-62/99 Bofrost (EU0106218F), C-440/00 Kühne and Nagel (DE0404202N) and C-349/01 ADS Anker GmbH (EU0409203F) – the Commission proposes an obligation for employers to supply all information required for the opening of negotiations on an EWC.
Finally, the rules for composing the special negotiating body (SNB) must be revised. Although the maximum number of 17 members in the SNB was adapted to the increased number of EU Member States by Council Directive 2006/109/EC (168Kb PDF), this provision still causes problems in groups employing workers in most Member States.
Increased coherence with other directives regarding employee representation
Since the adoption of the EWCs Directive, EU legislation on employee involvement has developed significantly with the adoption of further directives, notably the 2002 Council Directive 2002/14/EC on establishing a general framework for informing and consulting employees (EU0204207F), as well as Council Directive 2001/86/EC supplementing the 2001 Statute for a European company with regard to the involvement of employees (EU0206202F) and Council Directive 2003/72/EC supplementing the Statute for a European Cooperative Society regarding employee involvement. Therefore, it seems appropriate to transfer these developments to the legal framework for EWCs.
Position of social partners
The Commission’s consultation document addresses most of the issues that ETUC has proposed for revising the EWCs Directive in its response to the first-phase consultation. Some issues which were part of ETUC’s 2003 resolution are still absent, such as the request to lower the workforce size thresholds, although a review of the thresholds is explicitly mentioned in Article 15 of the directive, as well as a better definition of ‘controlling undertaking’, an obligation to register EWCs agreements, and including a reference to gender balance in EWCs. Furthermore, the changes proposed for the subsidiary requirements do not meet all of ETUC’s demands. In general, however, the document follows the trade unions’ demands rather closely. Therefore, it is not surprising that ETUC and other European trade union federations – including the European Federation of Public Service Unions (EPSU) and UNI Europa – welcomed the start of the consultation. Nonetheless, in its press release, EPSU expressed its concerns over the employers’ lack of intention to reach an agreement on the revision of the directive, while UNI Europa re-emphasised in its statement to the press the high priority of revising the EWCs Directive.
As BusinessEurope opposed the start of a second-phase consultation, the employer organisation is now in a difficult position. Consequently, it did not issue any statement at the launch of the consultation.
Stefan Lücking, Technical University Munich