1.1.

A well-functioning social dialogue and meaningful involvement of workers, respecting the autonomy of social partners and taking into consideration specific circumstances of Member States’ labour market systems and company-specific needs, is the best way to anticipate and manage change at work-place level.

1.2.

The EESC considers that the revision of the Directive as proposed by the Commission (1) and especially as requested by the European Parliament would seriously overcomplicate European Works Councils’ (EWC) functioning and run the risk of turning EWCs away from vehicles for constructive information and consultation at company level to ill-functioning and burdensome sources of disputes and legal uncertainty, thus impairing the much-needed spirit of cooperation and trust at work-place level.

1.3.

The EESC proposes allowing the pre-directive agreements to exist respecting their specific legal status and without imposing mandatory requirements on them.

1.4.

The EESC considers that the current definition of transnationality should not be changed, since the text of the definition rightly states that matters can only qualify as transnational if they concern at least two undertakings or establishments of the undertaking or group situated in two different Member States.

1.5.

The EESC welcomes the view of the Commission that the EWC’s are not co-decision bodies and should not delay the decision-making in companies.

1.6.

The EESC considers that the directive should not prevent undertakings from adopting decisions within a reasonable time in a swift manner needed in a fast-changing business environment, with full respect of national information and consultation procedures. The EESC stresses that consultation, meetings and contribution from EWC must also be possible through digital channels.

1.7.

The EESC stresses that for the sake of protecting confidential business information and ensuring smooth decision-making it must be an exclusive competence of management to decide the confidential nature of information.

1.8.

The EESC points out that as the existing Directive enables obtaining assistance of an expert, and therefore the use of additional experts should be subject to prior approval of management.

1.9.

The EESC rejects the idea of central management covering the costs of legal representation and participation in administrative or judicial proceedings. These costs should be allocated, as currently is the case, according to national law.

1.10.

The EESC regrets the approach of the Commission to encourage judicial intervention instead of promoting alternative dispute resolution mechanisms which can support negotiated solutions between social partners.

1.11.

The EESC welcomes the proposal of the Commission regarding the setting of effective, dissuasive and proportionate sanctions which will remain the remit of the Member States, in line with EU legislative practice under the social policy chapter in the EU Treaty. In the same vein the EESC agrees with the Commission not to endorse the idea of GDPR-sized fines and the right of the workers to require a court injunction for the temporary suspension of a company decision as these are disproportionate measures for the scope of the Directive, and could seriously harm the competitiveness of European companies.

1.12.

EESC welcomes the approach of the Commission not to endorse the proposal of the Resolution of the European Parliament (2) regarding extension of the scope of the Directive to cover structurally independent undertakings such as those based on franchising agreements.

1.13.

While the EESC does not welcome the proposed revision, it presents its views on a number of aspects included in the Commission proposal and European Parliament’s resolution

2.1.

The EESC has always been a strong supporter of social dialogue at all levels of companies and other organisations. A well-functioning social dialogue and meaningful involvement of workers, respecting the autonomy of social partners and taking into consideration specific circumstances of Member States’ labour market systems and company-specific needs, is the best way to anticipate and manage change at work-place level and thus face the challenges driven by economic, environmental and social transformations in the world of work.

2.2.

As the business environment of European companies has over the years increasingly opened up and internationalised to face the challenges of Single Market and globalisation there has been a general need in companies to adapt the workers’ involvement systems accordingly to better meet the company-level requirements.

3.

The European Works Councils were rightly created to serve the purpose of providing a solid base for informing and consulting workers in multinational undertakings or groups. As a proof of this there are more than 350 well-functioning voluntary agreements concluded and agreed by social partners at company level (3). These agreements are based on key concepts of the existing Directive as well as well-established company level practices.

3.1.

The proposal of the European Commission to revise the European Works Councils Directive (European Works Councils are here referred to as EWCs), requested by the European Parliament (4), following calls by the European trade unions for such a revision, is in strong contradiction with the current reality in and feedback by the companies operating EWCs. Furthermore, this proposal does not take into account business realities and it is not coherent with the expressed European Union’s policy approach aimed at protecting European companies’ competitiveness and reducing regulatory barriers.

3.2.

The EESC points out that Commission impact assessment did not conclude whether and to what extent exemptions under the voluntary EWC agreements concluded under Article 13 of the original EWCs directive 94/45/EC or concluded or revised during the transition period following adoption of the recast directive 2009/38/EC create legal uncertainties or prevent effective information and consultation in these undertakings.

3.3.

The EESC regrets that the Commission’s proposal is based on an impact assessment that ignores the real evidence from companies on the functioning of the EWCs and especially the cumulative impact of possible new obligations for companies. The EESC refers to the fact that while the employers have expressed serious doubts about the negative impact of the proposed revision on the competitiveness of European companies, also the Regulatory Scrutiny Board (RSB) has expressed doubts about the conclusions of the impact assessment conducted by the Commission (5). Furthermore, the RSB considered that the Commission report is not sufficiently clear on the initiative’s scope, objectives and coherence with the subsidiarity principle, including full respect of the prerogatives of social partners and competences of Member States.

3.4.

The EESC notes the views expressed in the amendments put forward by a number of Group I members for the EESC opinion Democracy at work (6), where it is clearly stated that there are other ways than the revision of the Directive to promote the transnational social dialogue: ‘Over the years European Works Councils (EWCs) have made a positive contribution to companies’ long-term economic, social and environmental objectives. To increase their potential and effectiveness the EESC considers that there is need to further promotion of proper enforcement and guidance based on practical tools such as benchmarking with best practices. In this context, the EESC notes the European Parliament's recent resolution on the revision of the EWC Directive and calls on the Commission to take appropriate measures to promote the proper enforcement of the Directive in a timely manner.’

3.5.

The EESC regrets that notwithstanding the concrete feedback on the ground from companies and their concerns of an obvious negative impact of the proposed amendments on the competitiveness of European companies, the European Commission has decided to launch the revision of the Directive in its current form instead of having considered alternative policy measures.

4.1.

The EESC considers that the revision of the Directive as proposed by the Commission and especially as requested by the European Parliament would seriously overcomplicate EWCs’ functioning and run the risk of turning EWCs away from vehicles for constructive information and consultation at company level to ill-functioning and burdensome sources of disputes and legal uncertainty, thus impairing the much-needed spirit of cooperation and trust at work-place level.

4.2.

While acknowledging the value of views of workers as an important element to improve the quality of decision-making the EESC stresses the need to ensure the swift decision-making in multinational companies which should be supported by smoothly operating structures for informing and consulting workers. In this regard the EESC welcomes the view of the Commission that the EWCs are not co-decision bodies and should not delay the decision-making in companies.

4.3.

There are EWCs in some 1 000 companies today and another 2 600 companies are potentially concerned. The legal framework governing the functioning of EWCs deals with crucial issues for the social partners, and it should not be transformed into an overregulated framework based on a very legalistic approach that would discourage companies from creating new EWCs to avoid judicial risks.

4.4.

Consequently, the EESC regrets that the Commission’s proposal introduces a set of amendments that, holistically considered, would significantly overcomplicate EWCs’ functioning, thus undermining European companies’ competitiveness. These negative effects are likely to serve as a disincentive to improve the take-up of EWCs. Adopting the EWC Directive as it is now proposed could also further deteriorate the attraction of investments from multinational companies within the EU in favour of other regions globally.

4.5.

The provision of resources to act against the company, such as court costs and legal experts, promotes a judicial approach and risks to transform EWCs from valuable social dialogue forums between employees and management to highly confrontational bodies. Further, the new provisions for consultations, confidentiality, and transnationality, risk distorting the purpose of consulting and informing of employees and actually reduce the cooperation based on trust between the two parties which is essential for the functioning of EWCs.

5.1.1.

The EESC deeply regrets the approach of the Commission regarding the voluntary information and consultation agreements concluded before the original EWCs directive 94/45/EC or concluded or revised during the transition period following adoption of the recast directive 2009/38/EC from June 2009 to June 2011. These well-functioning agreements should be respected and not unilaterally challenged. The pre-directive agreements are the result of negotiations between management and workers’ representatives and specifically tailored to the needs of both parties at undertaking level.

5.1.2.

The EESC refers to the Commission impact assessment which did not conclude whether pre-directive agreements would create legal uncertainty or harm meaningful information and consultation processes in companies.

5.1.3.

Therefore, it would be against the spirit of constructive social dialogue and mutual trust between employers and employees within companies to allow workers’ representatives unilaterally challenge the existence of voluntary well-working agreements.

5.1.4.

The EESC proposes allowing the pre-directive agreements to exist respecting their specific legal status and without imposing mandatory requirements on them.

5.2.1.

Another issue of great concern for the EESC is the proposed concept of transnationality which could seriously lead to legal uncertainty by causing overlapping situations between national and transnational information and consultation processes.

5.2.2.

The proposed wording suggests that the presumption of transnationality not only covers cases where measures considered by the management can reasonably be expected to affect workers in more than one Member State but it also covers cases where measures themselves only affect workers in one Member State but where the consequences of those measures will reasonably be expected to affect workers in another Member State. Such a structure creates a sphere of uncertainty and source of disputes as it would trigger a process to analyse an increased number of purely national management decisions in companies instead of focusing on real transnational cases.

5.2.3.

The EESC considers that the current definition of transnationality should not be changed, since the text of the definition rightly states that matters can only qualify as transnational if they concern at least two undertakings or establishments of the undertaking or group situated in two different Member States.

5.3.1.

The EESC has serious doubts about some of the amendments proposed in the revision as they are prone to cause unnecessary delays and uncertainties in the decision-making of companies. The proposed Article 9 specifies that consultation is to enable employees’ representatives to express an opinion prior to the adoption of the decision and that such opinion must receive a reasoned response from central management before the latter adopts its decision on the proposed measure. The EESC considers the proposed process formalistic, burdensome and incompatible with widely agreed methods of communication in EWCs.

5.3.2.

The EESC considers that the directive should not prevent undertakings from adopting decisions within a reasonable time in a swift manner needed in a fast-changing business environment, with full respect of national information and consultation procedures. Moreover, the EESC prefers the timing of the consultation to be defined within each EWC agreement, not by mandatory rules.

5.3.3.

The EESC stresses that consultation, meetings and contribution from EWC must also be possible through digital channels. This is even more important if the minimum number of yearly meetings would be two, as suggested by the Commission proposal.

5.3.4.

As regards the issues to be covered by the EWCs the EESC calls for a maximum flexibility for the management and EWCs to agree on the company-relevant issues.

5.4.1.

Furthermore, the EESC points out problems linked to protection of confidential information whereby the Commission’s proposal would harm business competitiveness, potentially conflict with other legal requirements (e.g. Market abuse regulation) and delay companies’ decision-making.

5.4.2.

The EESC stresses that for the sake of protecting confidential business information and ensuring smooth decision-making it must be the exclusive competence of management to decide the confidential nature of information. To stress and clarify this prerogative the EESC would like to see the possibility for Member States to impose prior administrative or judicial authorisation removed from Article 8.

5.5.1.

The proposed wording on experts and legal costs without prior approval of management is vague and could lead to unnecessary disputes. The EESC points out that as the existing Directive enables obtaining assistance of an expert, there is basically no need to change the text. If additional experts such as legal assistance would be needed, it should be for the management to approve the role and scope of expert and the ensuing costs.

5.5.2.

Regarding legal costs, the EESC rejects the idea of central management covering the costs of legal representation and participation in administrative or judicial proceedings. Such a liability could lead to a situation where the company must pay in advance the legal costs of the EWC negotiating team in a potential dispute against the company. These costs should be allocated, as currently is the case, according to national law.

5.5.3.

Furthermore, as the EWCs are representative of all workers of the undertaking, the participation of trade unions in EWCs in advisory capacity should respect diverse industrial practices across Europe. The right of trade union representatives to be present on every EWC irrespective of the number of trade union members in the company can in some cases be incompatible with national practices.

5.6.1.

As regards dispute resolution the EESC regrets the approach of the Commission whereby Court intervention is prioritised to the detriment of alternative dispute resolution mechanisms. This approach undermines the existing and well-functioning national social partners’ mediation and conciliation structures. Instead, the use of alternative dispute resolution mechanisms, with easy access and agreed by social partners as genuine element of well-functioning social dialogue systems should be encouraged in Member States, by the Member States and with the support of the European Commission.

5.7.1.

The EESC welcomes the proposal of the Commission regarding the setting of effective, dissuasive and proportionate sanctions which will remain the remit of the Member States, in line with EU legislative practice under the social policy chapter in the EU Treaty. The EESC suggests that setting financial penalties should be restricted to cases involving clear and intentional abuse of the rules. In the same vein the EESC agrees with the Commission not to endorse the ideas of GDPR-sized fines and the right of the workers to require a court injunction for the temporary suspension of a company decision, as these are disproportionate measures for the scope of the Directive, and could seriously harm the competitiveness of European companies.

5.7.2.

Finally, the EESC welcomes the approach of the Commission not to endorse the proposal of the Resolution of the European Parliament regarding extension of the scope of the Directive to cover structurally independent undertakings such as those based on franchising agreements as this type of arrangement should not be taken into account to define ‘dominant influence’.