Strengthening Social Dialogue in the EU through the European Works Council

The Commission welcomes a significant political step to strengthen social dialogue in the EU. This morning, the European Parliament and EU Member States reached a political agreement on the revised European Works Council Directive, aimed at strengthening social dialogue in the EU.

European Works Councils (EWCs) ensure that employees are informed and consulted on transnational decisions by companies with over 1,000 employees operating in multiple EU or EEA countries. Engaging employees in company decisions helps manage changes like restructuring or new technologies.

In 2024, the Commission proposed updating the Directive to facilitate the establishment of EWCs, improve gender balance, and enhance enforcement. The revised Directive also improves access to justice in case of disputes and strengthens penalties for breaches. It guarantees companies decision-making abilities and simplifies implementation by removing complex exemptions and enhancing legal clarity.

More effective European Works Councils

Key improvements in the revised Directive include:

Timely and meaningful consultation: EWC members must receive a reasoned response before companies make decisions on transnational matters. Companies must also explain why confidentiality restrictions apply to sharing information on transnational matters.
Equal rights for workers to request EWCs: Removing exemptions extends these rights to 5.4 million workers in 320 multinationals with agreements predating 1996.
Clear definition of transnational matters: The revised Directive clarifies when a topic qualifies as transnational, including indirect effects on workers in other Member States.
Increased capacity to perform their work: EWC agreements must specify financial and material resources, including budget, expert support, and training.
Better gender balance: When forming EWCs or special negotiating bodies (SNBs), parties must aim for at least 40% representation of each gender. If this is not possible, workers must be informed of the reasons.
Improved access to justice: Member States must ensure EWCs and SNBs can access justice for breaches of their rights, either through employer-funded costs or other means such as legal aid. Member States must also notify the Commission on how EWCs can initiate judicial or administrative proceedings.
Stronger enforcement: Member States must put in place effective, dissuasive, and proportionate penalties. These should consider the companys annual turnover or have a similarly dissuasive nature.

Next Steps

The European Parliament and the Council must now formally adopt the political agreement. Member States will then have two years from the publication of the revised Directive in the Official Journal to implement the legislation. New rules will apply one year after this. During this transition, existing EWC agreements can be adapted to meet the revised requirements.

Background

European Works Councils (EWCs) are information and consultation bodies representing European workers in multinational companies. They are established either upon employees or central managements initiative. EWCs are consulted on transnational matters and complement national employee representative bodies.

EWCs and other forms of transnational information and consultation exist in around 1,000 multinational companies, representing approximately 16.6 million EU employees. They contribute to protecting employment and industries in Europe and ensuring the EUs competitiveness. There are currently around 1,000 transnational information and consultation bodies, two-thirds of which are EWCs. About 20 new EWCs are created each year.

A 2018 Commission evaluation identified shortcomings in the consultation process of EWCs and the means for employees representatives to enforce their rights. In February 2023, the European Parliament called on the Commission to revise the 2009 Directive and strengthen the role of EWCs. The Commission then carried out a two-stage social partner consultation to gather insights from interested parties, including national administrations, businesses, employees representatives, and legal and academic experts. In January 2024, the Commission proposed revising the Directive.