EWCs should be installed when companies have over 1000 workers in the European Economic Area and at least 150 workers in two member states. In 2018, the EU Commission evaluated the 2009 EWC Recast Directive, which currently contains the EU rules regarding EWCs. It was deemed to need certain amendments to improve its effectiveness in installing a genuine social dialogue at European company/group level. Therefore, the EU Commission proposed amendments to the Directive in January 2024. Recently, the European Parliament and Council reached a political agreement regarding the proposed amendments. This means that the 2009 EWC Directive will soon be formally updated with some important changes.
Main changes:
- As in practice, companies were only last-minute and superficially consulting the EWC, the amendments aim to promote a timely and meaningful consultation of employees. EWC members must receive a reasoned response before the company makes decisions on transnational matters.
- Another issue with the current directive was that companies would refuse to share certain information or declare all the shared information as confidential, even if this was not really the case. Therefore, companies must explain why confidentiality restrictions apply to the sharing of information regarding transnational matters.
- Under the current system, companies which already had their proper multinational social dialogue system before 1996, did not have to follow the rules of the 1994 and 2009 EWC Directives and could maintain their existing structures. These exemptions will now become a thing of the past. All companies that fall under the scope should install an EWC according to the rules of the EU Directive. This would affect over 350 companies.
- The revised Directive clarifies when a topic qualifies as ‘transnational' (and thus up for information and consultation by the EWC). The new definition makes it clear that this not only includes decisions that directly affect workers in multiple member states, but also decisions with an indirect effect. E.g. dismissals in one entity could have an indirect effect on entities in other member states. Of course, this new definition leaves room for discussion.
- EWC agreements (which lay down the rules for a EWC) must specify financial and material resources, including budget, expert support, and training. This needs to ensure that the EWC members have sufficient means to properly perform their role.
- When forming EWCs, parties must aim for at least 40% representation of each gender. If this is not possible, workers must be informed of the reasons.
- Member States must ensure EWCs can access justice for breaches of their rights, either through employer-funded costs or other means such as legal aid.
- Member States must put in place effective, dissuasive and proportionate penalties. These should take into account the company's annual turnover or have a similarly dissuasive nature.
It is not yet clear how many textual changes have been made to the initial proposal of the Commission. First, the text will have to be formally adopted by the Parliament and the Council. After publication and entry into force of the Directive, the Member States will have 2 years to transpose the rules into national law. The proposed Directive then provides that the companies will have one year to conform to the new rules. This means that the actual deadline for companies to apply the new rules will probably be somewhere in 2028.
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