Stage One of European Works Council Directive revision completed
MEPs have adopted a report, by 385 votes in favour and 118 against, calling on the European Commission to submit a proposal for a revision of Directive 2009/38 on European Works Councils by 31 January 2024. This step has been welcomed by the European trade union movement, which regards it as a successful conclusion to several years of pressure exerted through its More Democracy at Work campaign.
The purpose of the text, which is supported by a broad majority of Parliament’s largest political groups, giving it an undeniable strength, “is not to reinvent the wheel, but to strengthen the existing law and apply it more effectively”, explains its rapporteur Dennis Radtke, MEP (EPP). The report contains a resolution, as well as a more detailed legal annex covering the various articles of Directive 2009/38 that require amendment. Without going into detail, the philosophy here is to point out that European Works Councils serve a useful purpose, especially when they maintain “a relationship of trust between the EWC and the management based on a constructive dialogue” and that placing obstacles in their way is no longer acceptable. Examples include: consultation taking place after the employer has already made its decision or even started to implement this, excessive use of confidentiality clauses designed to prevent information and consultation rights being exercised effectively, making it difficult or even impossible to access the legal system, ineffective sanctions in cases involving a breach of information and consultation rights, etc.
Parliament also wants to make it easier to set up EWCs by boosting the resources available to the special negotiating body and by shortening the deadline for negotiating an agreement, from the current three years to 18 months. This desire to make European Works Councils effective is prompting Parliament to formulate proposals that are at odds with the positions adopted by employers: as far as sanctions are concerned, these proposals include granting the courts powers to prevent the employer making a decision until the EWC has been consulted and bringing the financial penalties applicable, which at present are often insignificant, into line with those stipulated by the EU’s GDPR regulation: a fine of 10 million euros or up to 2% of the company’s global turnover (or double this amount in the event of an intentional breach). MEPs also want to bring all opt-out agreements, especially those concluded in September 1994 and September 1996, into line with the future directly. Consequently, a full range of measures will be available to ensure that companies take European Works Councils seriously, addressing many of the problems experienced so far by EWCs that have attended hearings with MEPs.
We shall have to see what remains of the text once it has completed the next stage: the Commission, which is now going to analyse it, will no doubt perform a sorting process of its own before submitting a proposal for a directive to the European social partners, within the framework of the two consultation cycles provided for by the treaty. These partners can be expected not to negotiate on the revision, as the employers’ organisations are totally opposed to it. BusinessEurope believes that it will be “counter-productive for competitiveness”, is likely to slow down the decision-making process within companies and will include “unrealistic penalties”. “It’s surplus to requirements – even the Commission believes so”, adds Germany’s influential employers’ organisation BDA, which is calling on the Commission to abide by the principle of “Better regulation”. This however has long served as the basis for inaction in the area of social legislation. The vote in Parliament is certainly a victory for the trade unions, but a long battle lies ahead and the positions set out in the Radtke report will be difficult to maintain.