EU: Draft report with recommendations to the Commission on Revision of European Works Councils Directive

The Draft Report on Revision of the European Works Council Directive presented on 12 May by MEP Dennis Radtke (EPP), contains a number of proposed amendments to the directive, which should allow EWCs to function properly, i.e. without being obstructed by management as they attempt to exercise their basic right be informed and consulted.
As Dennis Radtke pointed out, the aim here is not to create any new rights, but rather to enforce compliance with the current directive. MEPs have until 21 June to make amendments to this text, which achieves its stated aim in every way, and proposes to:
1/ Strengthen sanctions: at the present time, failure to honour the rights of European Works Councils is punishable by financial penalties ranging “from 23 euros to 187,515 euros”. Consequently, they are not effective, dissuasive and proportionate, in terms of their effect on the multinational companies concerned.
The report suggests taking action on two fronts: a) based on the example of recent European legislation, increasing the level of financial penalties, in this instance up to 10 million euros or 2% of the undertaking’s total annual worldwide turnover (double that figure for a repeat offence); b) sanctioning undertakings by excluding them from public procurement contracts and from European aid and subsidies for a three-year period.
Before the stage of imposing sanctions is reached, Dennis Radtke is calling for decisions made by central management to be suspended, on a temporary basis, when they are disputed on the grounds of a breach of workers’ rights to be informed and consulted.
2/ Facilitate access to justice: to ensure that sanctions are effective, EWCs need to be able to take legal action against their employer. The fact is that EWCs “do not have direct access to justice in many Member States”, as in Ireland, whose legislation is so appealing that multinational companies are transferring their European headquarters there.
In the rapporteur’s view, each State should draw up procedures allowing EWC rights to be exercised “in a timely and effective manner”, and the central management should bear any direct costs incurred in carrying out the procedures, including the costs of legal representation and subsistence and travel expenses for at least one workers’ representative.
3/ Restate that information and consultation rights are to be exercised in advance of any action taken: the latest ETUI survey, published in 2019, revealed that just 20% of EWCs are informed and consulted before management reaches its decision, whereas the directive requires advance consultation to be the norm.
The definition of consultation should point out that the EWC must “express a prior opinion on the basis of the information provided” by the employer, and no longer merely an “opinion”, which is the wording under the current directive.
4/ Purge the directive of any provisions that limit its effectiveness: the report tackles several provisions currently used by managements to restrict EWCs’ rights. For example, the text proposes that the previous so-called “Article 13” agreements could remain in force only if “the obligations arising from this Directive have already been fully complied with”.
The confidentiality obligation that imposes a duty of silence on some councils, would not apply to EWC members who pass on to national or local works councils, information that may affect the employees’ situation. The definition of transnationality incorporates recital 16 of Directive 2009/38 into the body of the directive and relates to matters that “directly or indirectly” concern the group as a whole or at least two entities in two different Member States.
(Article published in IR Notes 187 – 1st June 2022)