EU Strengthens European Works Councils Framework

The European Union has revised the European Works Councils (EWC) directive, significantly strengthening employees’ rights to information and consultation across multinational organizations operating in the European Union or the European Economic Area.

KEY POINTS

• End of exemptions on establishing an EWC
• Broadening of the notion of transnational issue by establishing a presumption of transnationality
• Introduction of an obligation to provide a written, reasoned response to the EWC’s opinion
• Introduction of a gender balance objective for representation
• Establishment of effective, dissuasive, and proportionate financial sanctions for failures to meet information and consultation obligations

CONTEXT

The EWC was established by Directive 94/45/EC to guarantee employees’ cross‑border rights to information and consultation in companies of community dimension. This framework was recast by Directive 2009/38/EC, but subsequent evaluations revealed gaps that Directive 2025/2450 seeks to address.

MAIN PROVISIONS OF THE REVISED DIRECTIVE

Removal of Exemptions and Transitional Provisions

Exemptions and transitional provisions for companies that concluded transnational agreements before 23 September 1996 and for companies with an agreement concluded under Article 6 of Directive 94/45/EC that was signed or revised between 5 June 2009 and 5 June 2011 are removed.

Broadening the Notion of Transnational Issue

The directive introduces a presumption of transnationality when it can be reasonably expected that the measures envisaged will affect employees in more than one member state.

Strengthening EWC Rights

Consultation of employees must take place in good time, at a moment, and in a form that allows a thorough assessment of the project and the formulation of an opinion before any decision. The opinion must be issued within a reasonable period, the length of which will be assessed on a case‑by‑case basis according to the urgency of the matter.

Provided the EWC has issued its opinion within a reasonable period, the EWC is entitled to a reasoned response from management before the decision is taken.

Organization of Meetings

The directive confirms the possibility of holding EWC meetings remotely and invites the parties to determine the meeting format (virtual, physical, or hybrid).

Confidentiality of Information

Management must now justify the confidential nature of information provided and explain any refusal to transmit information, all within the framework of an information‑consultation procedure.

Non‑Transmission of Information

Management’s ability not to transmit certain information is now limited to information whose disclosure would seriously harm the functioning of the companies concerned.

EWC Resources and Training of Elected Representatives

EWC agreements must detail the financial and material resources allocated to the EWC and state that central management will cover the costs of training the elected representatives.

Gender Balance Objective

Women and men must each make up at least 40% of the members of the EWC and of the select committee. If this objective is not met, the establishment of the EWC remains possible, but the EWC must provide the represented employees with a written explanation justifying the situation.

Sanctions

The directive requires effective, dissuasive, and proportionate sanctions for breaches of information and consultation obligations, with financial penalties determined according to intent, gravity, duration, and consequences. The directive specifies that, in the case of a financial sanction, the company’s turnover must be considered. or, at the very least, the sanction must have a comparable deterrent effect.

ENTRY INTO FORCE

Member states will have until 1 January 2028, to transpose the directive, and the new provisions will enter into force on 1 January 2029.

However, Article 14b, which provides that the renegotiation of EWC agreements concluded before 11 December 2027 and whose provisions are not compliant with Article 6 of the directive (financial and material resources, training, and balanced representation) may be opened at the initiative of the employer or at the written request of the EWC or of at least 100 employees or their representatives in at least two companies or establishments located in at least two member states, will apply from 2 January 2028.

CONCLUSION

Companies or groups of companies of community dimension will face expanded obligations, a heavier consultation procedure, and tougher sanctions. Given the specific rules governing the negotiation of EWC agreements, a proactive revision of existing agreements is recommended.