European Works Council or procedure for information and consultation of employees in undertakings

The European Union

1) OBJECTIVE

To improve the right to information and to consultation of employees in Community-scale undertakings and Community-scale groups of undertakings.

2) COMMUNITY MEASURES

Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees.

3) CONTENTS

The main provisions of the Directive are as follows:

• Establishment of a European Works Council or a procedure for informing and consulting employees in every Community-scale undertaking and every Community-scale group of undertakings, following agreement between the central management and a special negotiating body.

For the purposes of the Directive:

• "Community-scale undertaking" means any undertaking with at least 1 000 employees within the Member States and at least 150 employees in each of at least two Member States;
• "group of undertakings" means a controlling undertaking and its controlled undertakings;
• "Community-scale group of undertakings" means a group of undertakings with the following characteristics:

• at least 1 000 employees within the Member States,
• at least two group undertakings in different Member States, and
• at least one group undertaking with at least 150 employees in one Member State and another group undertaking with at least 150 employees in another Member State;

• "controlling undertaking" means an undertaking which can exercise a dominant influence over another undertaking by virtue, for example, of ownership, financial participation or the rules which govern it;
• "consultation" means the exchange of views and establishment of dialogue between employees' representatives and central management or any more appropriate level of management.

The central management:

• will be responsible for creating the conditions and means necessary for the setting up of a European Works Council or an information and consultation procedure;
• will initiate negotiations on its own initiative or at the written request of at least 100 employees or their representatives in at least two undertakings in at least two Member States.

The special negotiating body, comprising a minimum of three and a maximum of 17 members:

• will have the task of determining, with the central management, by written agreement, the scope, composition, competence and term of office of the European Works Council(s) or the arrangements for implementing a procedure for the information and consultation of employees;
• may decide, by at least two-thirds of the votes, not to open negotiations or to terminate the negotiations already opened; such a decision would stop the procedure to conclude the agreement and would nullify the provisions of the Annex.

Members of the special negotiating body and of the European Works Council, and any experts who assist them, will not be authorized to reveal any information which has expressly been provided to them in confidence.

Community-scale undertakings and Community-scale groups of undertakings in which there is already an agreement covering the entire workforce, providing for the transnational information and consultation of employees, will not be subject to the obligations arising from the Directive. When these agreements expire, the parties involved may decide jointly to renew them. Where this is not the case, the provisions of the Directive will apply.

Subsidiary requirements laid down by the legislation of the Member State in which the central management is situated will apply:

• where the central management and the special negotiating body so decide, or
• where the central management refuses to commence negotiations within six months of the initial request to convene the special negotiating body, or
• where, after three years from the date of this request, they are unable to conclude an agreement to establish a European Works Council or an information and consultation procedure, and the special negotiating body has not taken the decision not to open negotiations or to terminate the negotiations.

These subsidiary requirements must satisfy the provisions set out in the Annex, whereby:

• the competence of the European Works Council will be limited to information and consultation on matters which concern the Community-scale undertaking as a whole or at least two establishments or group undertakings situated in different Member States;
• the European Works Council is to have a minimum of three and a maximum of 30 members and, where its size so warrants, is to elect a select committee from among its members, comprising at most three members;
• four years after the European Works Council is established, it is to consider whether to open negotiations for the conclusion of the agreement on the arrangements for implementing the information and consultation of employees, or to continue to apply the subsidiary requirements adopted in accordance with the Annex;
• the European Works Council will have the right to meet with the central management once a year in order to be informed and consulted, on the basis of a report drawn up by the central management, on the progress of the business of the Community-scale undertaking or Community-scale group of undertakings and its prospects;
• where there are exceptional circumstances affecting the employees' interests to a considerable extent, particularly in the event of relocation, closure or collective redundancy, the select committee or, where no such committee exists, the European Works Council will have the right to be informed;
• the members of the European Works Council are to inform the employees' representatives of the content and outcome of the information and consultation procedure;
• the operating expenses of the European Works Council are to be borne by the central management; in compliance with this principle, the Member States may lay down budgetary rules regarding the operation of the European Works Council.

4) DEADLINE FOR IMPLEMENTATION OF THE LEGISLATION IN THE MEMBER STATES

22.09.1996

5) DATE OF ENTRY INTO FORCE (if different from the above)

6) REFERENCES

Official Journal L 254, 30.09.1994

7) FOLLOW-UP WORK

On 23 September 1997, the Commission presented a proposal for a Council Directive on the extension to the United Kingdom of Great Britain and Northern Ireland of Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (COM(97)457 final, not yet published).
Directive 94/45/EC still applies, subject to a technical adaptation: the maximum number of workers' representatives in the special negotiating body is raised from 17 to 18.
As under Directive 94/45/EC, the obligations arising from the new Directive will not apply to Community-scale undertakings or Community-scale groups of undertakings where there is already an agreement, covering the entire workforce, providing for the transnational information and consultation of workers.
When such agreements expire, the parties may decide jointly to extend them. If not, the provisions of the Directive will apply.
This Directive will apply to all Member States, by reason of the transnational aspects of its application:

• undertakings covered by the proposal which were not covered by Directive 94/45/EC because of their total number of employees in all Member States;
• inclusion of workers from the United Kingdom in existing European Works Councils.

For all Member States, the date for transposal will be two years from the date on which the Directive is adopted.