Report from the Commission to the European Parliament and the Council on the application of the Directive 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 (Council Directive 94/45/EC of 22 September 1994)
Date: 2000-04-04
Institutions: European Commission
Subjects: European undertaking, labour law, worker consultation, worker information, works council

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 04.04.2000
COM(2000)188 final

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT
AND THE COUNCIL

on the application of the Directive 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 (Council Directive
94/45/EC of 22 September 1994)

1.

INTRODUCTION

Directive 94/45/EC 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 was adopted by the Council on
22 September 1994. Its legal basis is Article 2 (2) of the Agreement on Social Policy
annexed to Protocol 14 on Social Policy appended to the Treaty establishing the
European Community. The Directive thus applies to all the Member States of the
European Community except the United Kingdom of Great Britain and Northern
Ireland.

Council Directive 97/74/EC was adopted on 15 December 1997, extending
application of Directive 94/45/EC to the United Kingdom of Great Britain and
Northern Ireland.

Directive 94/45/EC was due to be transposed by the Member States, with the
exception of the United Kingdom of Great Britain and Northern Ireland, by
22 September 1996. Directive 97/74/EC must be transposed by the United Kingdom
of Great Britain and Northern Ireland and all Member States, by 15 December 1999
at the latest.

Consequently, this report deals only with the status of transposition of Directive
94/45/EC. A further report covering transposition of Directive 97/74/EC will be
presented in due course.

In its analytic part concerning the national legal implementation, the report follows
the logic and structure of the Directive itself.

2.

IMPLEMENTATION BY LEGAL MEASURES AND EVALUATION OF THE PRACTICAL
APPLICATION

The vast majority of countries made a major effort not only to meet the deadline for
implementation, i.e. 22 September 1996, but also to integrate the Directive faithfully
into their national law.

Five countries met the deadline for transposition (Denmark, Finland, Sweden, Ireland
and (partly) Belgium)1, all of which adopted a transposition text which took effect on
22 September 1996.

They were closely followed by Austria (17 October 1996), Italy (partial transposition
6 November 1996), France (12 November 1996) and Germany (1 November 1996).
Transposition in the Netherlands (5 February 1997), Greece (1 March 1997) and
Spain (24 April 1997) came somewhat later.

Portugal was very late in adopting a transposing act (it was published on 9 June 1999
and entered into force on 9 July 1999).

1

The country abbreviations used in this report are as follows: A:Austria, B:Belgium, D:Germany,
DK:Denmark, EL:Greece, E:Spain, FIN:Finland, F:France,
I:Italy, L:Luxembourg,
NL:Netherlands, P:Portugal, S:Sweden.

IRL:Ireland,

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The Luxembourg text is currently being implemented.

In Italy, the Directive has only been partly transposed, through the signing of an
interconfederal agreement on 6 November 1996, and this has to be supplemented by
a law extending the collective agreement erga omnes and adopting, inter alia, rules
on sanctions and court jurisdiction. The interconfederal agreement represents only
partial implementation of the Directive, as its content and scope are limited (not all
occupational sectors are covered).

In Belgium, the collective agreement has been supplemented by two laws.

The manner in which the Directive is implemented is in keeping with each country’s
domestic legal order. As a rule, laws (acts) have been adopted by parliament. In Italy
and Belgium, collective agreements (supplemented in Belgium by an extension
procedure) have been preferred.

The social partners have often been involved in the transposition procedure, either
formally or informally.

2.1.

Evaluation of implementing legislation

The evaluation of the quality of implementing measures, even though it is not long
since the entry into force of the Directive, is clearly very positive.

In this connection, the expert group responsible for ensuring proper implementation
played a pioneering role, with the Commission providing coordination. This method
of following up the transposition work should be adopted generally, in the light of
the results obtained in implementing this Directive - a Directive that was particularly
complex because of its transnational nature and the combined use of Community
concepts and rules of private international law.

However,
completed transposition (Luxembourg and Italy).

full results cannot be provided until

the remaining countries have

Infringement proceedings were started against Luxembourg and Portugal. In the
latter case the Commission has suspended the proceedings following entry into force
of the transposing act.

Unless Italy takes appropriate action to supplement the interconfederal agreement
signed in 1996, the Commission will open infringement proceedings for incomplete
transposition.

This report draws attention to a number of minor discrepancies between the Directive
and the transposing acts (method of counting part-time workers, number of
representatives in the SNB (Special negotiating body) higher than the limit laid down
in the Directive) or aspects where there is a lack of detail (preparatory meetings). In
any event, these discrepancies must be interpreted as being in the spirit of the
Directive.

There were no difficulties in integrating the Directive into domestic legal orders,
firstly because the Directive very often refers to internal mechanisms in each
Member State, and secondly because it has enshrined the principle of collective
autonomy which in many cases is at the basis of employment law in the European

3

Union. Even in countries such as Ireland, where representation mechanisms are
optional, the Directive was well received.

However, regardless of the quality of implementing measures, there is a need for
further interpretation of some issues, which have already been identified and relate
to:

- the concept of “controlling undertaking”;
- the effects of geographical and proportional criteria;
- the conditions for renewing agreements already in force (Article 13);
- changes in the structure of the group;
- the very concept of “expert”.

In a significant number of cases those issues have been solved or will be solved by
the parties concerned. In other cases the specific nature of each individual problem of
interpretation means that they can best resolved by the courts.

As regards legal analysis, problems arise in determining the legal personality of the
EWC in many countries, the law applicable to agreements and, naturally, the legal
status of these agreements, all of which has a direct
impact on the rules on
international jurisdiction.

2.2.

Evaluation of the practical application of the Directive outlook

2.2.1. General considerations

Clearly, it is very difficult to produce a genuine summary of how the Directive has
been implemented in practice, as this took place very recently, and the Annex to the
Directive, which establishes subsidiary requirements, has not yet been applied.
However, a number of general observations can be made on the basis of experience
to date.

As already emphasised, up to now the Directive has been smoothly integrated into
the industrial relations systems of the different countries, thanks to the Member
States’ freedom as regards the choice of representation mechanisms.

The attempt to ensure a harmonious link between worker representation at national
level was one of the legislators’ main concerns in
level and at
transnational
transposing the Directive.
In a large majority of countries the trade union
organisations have been recognised as key players, so that they can preserve the role
they play in national relations.

There is every reason why the transnational representation body should fit in well
with the existing structures of worker representation, although it is stressed that
besides the positive effects the creation of a transnational body may eventually create
certain problems. Naturally it
is to be hoped that the EWC (European Works
Council) will give a new impetus to consultation and that a fresh dialogue will begin
between the elected bodies, the trade union organisations and the “European” bodies.
But there is also the possibility of conflicts with transnational repercussions, such as
the closure of establishments, and possible friction between the positions of
“national” and “European” workers’ representatives.

Some countries have tried to strengthen the part played by the social partners. In
particular, the provision in the Directive allowing for the appointment of an expert to

4

assist the SNB and EWC has facilitated the participation of the Social Partners in the
process.

Another point to note is the practical benefit, as regards cohesion and consultation, of
national measures which require details of the composition of the SNB and EWC to
be sent
local management and national
workers’ representatives.

to all the group’s decentralised levels,

Repeatedly the importance of opening up employment relations to the transnational
dimension both with regard to worker representation and in the context of collective
bargaining has been stressed.

On the purely conceptual level, it should also be noted that the Member States
concerned have agreed to respect the sometimes innovative concepts enunciated in
the Directive. In the field of workers representation, always a sensitive question at
European level, such precision is important.

As regards common principles, the Directive and the implementing texts introduce
an obligation to negotiate in good faith, based on a spirit of cooperation between the
parties into European employment relations.

In the framework of construction of Europe, the pooling of knowledge, reciprocal
influence and strategies, as well as the synergy of interests of workers belonging to
the same group, are all positive factors.

Transnational information and transnational representation of workers constitute a
new and essential response to the impact of the global economy on Europe.

In specific terms,
the implementation of transnational representation is already
effective in that nearly 600 groups with a Community dimension, including the
largest ones, signed pre-Directive agreements before 22 September 1996 or signed
agreements based on Article 6 of the Directive after that date.

Article 13 made it easier to sign pre-Directive agreements: it allowed their validation
and made it possible for the social partners themselves, and transnational firms, to
carry on their own negotiations. The European trade union organisations also played
an essential role in this first phase of negotiating agreements. At the moment, there
are very few contentious points relating to pre-Directive agreements.

2.2.2.

Specific considerations

A major conference on “European works councils: practice and development” was
organised in Brussels by the social partners (ETUC, UNICE and CEEP), with the
support of the European Commission, on 28-30 April 1999. This event represented a
unique opportunity for nearly 650 practitioners (representatives of undertakings
which have set up a European works council, EWC members, representatives of
employers’ and workers’ organisations at national and European levels, and
representatives of the Member States) to take stock of all the experience acquired in
implementing the Directive.

Although none of the above social partner organisations called for an immediate
revision of the Directive, the debates highlighted a number of legal and practical

5

problems relating to its application. The following list of problems should not be
regarded as exhaustive:

a) The Directive is based on the principle of quasi-absolute priority and the freedom
of the social partners to negotiate appropriate agreements. This approach has proved
effective and is the reason why so many agreements have been signed. However,
some of these agreements seem to guarantee only a very low level of transnational
consultation and information.

b) A merger of undertakings or groups of undertakings might result in there being
two or more European works councils in the new undertaking or group. The
Directive does not currently require existing agreements to contain an adaptation
clause covering changes in the make-up of the undertaking or group. However, the
spirit of the Directive is that agreements must cover all workers at all times. Some
Member States have in fact already made provision for adaptation clauses to existing
agreements.

c) Between adoption of
the Directive (22 September 1994) and transposition
(22 September 1996), some 450 “pre-Directive agreements” were signed. After
22 September 1996, the frequency and number of agreements signed fell sharply.
The success of pre-Directive agreements is explained by the extensive involvement
of European trade unions in the negotiating process leading up to most of these
agreements, which is not the case with agreements negotiated on the basis of Articles
5 and 6 of the Directive.

Another reason for the fall in the number of negotiations and agreements might be
the fact that most large undertakings already have an agreement, and it is now the
turn of small and medium-sized multinationals to establish European works councils.
These undertakings have specific characteristics and requirements, and often only a
small proportion of their employees are members of a union.

d) Although the Directive on European works councils has given rise to few disputes,
considering the novelty of the transnational provisions designed to set up a cross-
border system of information and consultation, one case in particular has highlighted
the problem of whether the present text is sufficiently clear with regard to ensuring
that information is provided and consultation takes place “within a reasonable time
limit” and in any event before a decision is taken.

e) During the debates on the practical application of the Directive, repeated reference
was made to the importance of the right to training for members of the special
negotiating body and the European works council. The main argument put forward is
that the Directive on the European works councils is an instrument of transnational
representation opening up new possibilities for the representation of interests and for
transnational communication. Consequently, a certain skill level is needed by the
members of the European works council.

f) Another problem raised during the discussions on the practical application of the
Directive concerns the effectiveness of the flow of information between the different
levels of worker representation. In order to exchange information and be consulted
information and
effectively at Community level,
consultation systems to exist at national level and for the different levels of worker

is necessary for efficient

it

6

representation within undertakings or groups of undertakings to be linked with each
other.

Article 15 of Directive 94/45/EC on the establishment of a European works council
or a procedure in Community-scale undertakings and Community-scale groups of
undertakings for the purpose of informing and consulting employees states that:

“Not later than 22 September 1999, the Commission shall, in consultation with the
Member States and with management and labour at European level, review its
operation and, in particular, examine whether the workforce size thresholds are
appropriate with a view to proposing suitable amendments to the Council, where
necessary”.

In order to comply with this Article, the Commission consulted the Member States
and the social partners at European level.

The review process will continue taking into consideration the debates in the Council
and in the European Parliament on the dossiers closely linked with the Directive
(proposal for a Directive establishing a general framework for informing and
consulting employees in the European Community (COM(98)612 final, 11.11.1998),
Draft Directive on employee involvement within the European Company).

On the basis of the results of this review as well as on the basis of the evolution of
the other dossiers the Commission will at the given moment decide on the possible
revision of the Directive.

3.

ANALYSIS OF NATIONAL IMPLEMENTATING MEASURES

3.1.

Scope

3.1.1. Material and geographical scope

a) All Member States stipulate that the territorial scope is the European Union and
the European Economic Area. As some of them have specifically excluded the
United Kingdom, their provisions must be amended before 15 December 1999
following the extension to the United Kingdom of Directive 94/45/EC under the
terms of Directive 97/74 of 15 December 1997.

b) In certain countries, the scope of the transposition text implicitly or explicitly
includes the merchant navy (B, E, IRL, FIN, S, D, A, P), whereas other countries
(EL, I) exclude this sector. In Denmark and the Netherlands, persons working in the
merchant navy are not excluded from the scope of the transposition text, but they
may not be elected or appointed as members of the special negotiating group or
European works council.

c) All Member States respect the material domain of application laid down by the
Directive, both as regards the number of employees which Community-scale
undertakings and groups must have (1 000 in total, and at
least 150 in two
subsidiaries or establishments) and the requirement that there must be units in at least
two Member States.

7

d) In calculating the size of the workforce, all countries use the definition of
in accordance with the lex fori
“employee” provided by their national
qualification procedure authorised by the Directive. The essential criteria applied for
defining an employment relationship are the payment of a remuneration and a
subordination relationship.

law,

In calculating workforce numbers as such, reference is made directly or indirectly to
a period of two years.

There are differences in the way part-time employees are taken into account. In
Belgium the calculation method used diverges slightly from the pro rata temporis
rule2. In Ireland, if workers have worked less than eight hours a week for less than 13
weeks, they are not taken into account in calculating the workforce. In Spain, part-
time workers may or may not be counted depending on the length of their
employment contract3. Employees are counted as full-time workers in seven
countries (A, D, EL, F, FIN, NL, P), while elsewhere the pro rata temporis rule
applies (I).

Certain categories are excluded, such as apprentices (I, IRL), homeworkers (I),
seasonal/casual workers (FIN), or management personnel (A, D, IRL).

e) All countries except France, Finland, Denmark, the Netherlands and Sweden make
provision in their transposition text for the powers and responsibilities of the
information and
European works councils and the scope of procedures for
consultation of workers to relate, in the case of a Community-scale undertaking, to
all establishments situated in the Member States and, in the case of a Community-
scale group of undertakings, all the member undertakings situated in the Member
States; nevertheless, the agreement referred to in Article 6 of the Directive may
provide for a wider scope.

3.1.2. Concept of undertaking or group of undertakings

a) In many countries, the concept of “undertaking” as such is not defined; those
countries refer explicitly (EL, IRL, I) or implicitly to the definition adopted by the
Court of Justice of the European Communities (CJEC).

The concept of “establishment” is spelt out in Ireland on the basis of a criterion of
geographic separation. In Belgium, an establishment is a part of an undertaking
which does not possess legal personality. The Austrian transposition text refers to
section 34 of the Work Organisation Act.

Only the Spanish and Swedish transposition texts explicitly mention the case of
public-sector undertakings. Public-sector undertakings are not covered in Italy and
Belgium, where the Directive has been transposed into national legislation by means

2

3

If employees work three-quarter time they are counted as full-time workers, if not they are counted as
half-time workers.
Part-time workers with open-ended contracts or contracts for more than two years are included in their
undertaking's permanent workforce. Fixed-term contracts of less than two years are taken into account
on the basis of the number of days worked over the last two years preceding the date on which the
negotiation procedure started. One additional worker is counted for every 400 days or part-days
worked.

8

of collective agreements (in Belgium supplemented by a royal extending decree
which does not cover public-sector undertakings). This gap must be plugged.

b) The concept of “controlling undertaking” is sufficiently developed in the text of
the Directive, such that the transposition texts have not sought to amend it. The text
has been incorporated as it stands by Italy, Greece, Sweden, Ireland, Belgium,
Austria, Denmark and Portugal. Sometimes the terms used are different, although
they tally with the presumptions of the Directive and their hierarchy; this is the case
in Ireland, Germany and Spain and also, with some additional qualifications, in
France.

The transposition acts also frequently refer to ordinary company law, either in
fleshing out or in supplementing the general mechanisms of the Directive.

In the Netherlands, for example, the Directive’s presumptions, as well as their
hierarchy, are respected, but the text, in determining capital and voting rights,
excludes situations in which an undertaking holds rights on behalf of another
(indirect participation). On the other hand, bonded shares are allocated to creditors.

the Directive’s
In Finland the reference to company law would suggest
presumptions are also upheld, as well as the criterion of “controlling interest” in
describing control of subsidiaries.

that

The Irish text has the merit of addressing the difficulty created by the inclusion of
joint ventures (50%/50% holdings).

3.2.

Request to open negotiations

All countries comply with the Directive’s requirements as regards both the
obligations incumbent on the central management and selection of the bodies entitled
to initiate negotiations (100 employees or their representatives in at least two States).

Italy's provisions also stipulate that the trade union organisations which have signed
the collective agreement applicable may request the creation of a special negotiating
body.

The obligations incumbent on the central management are spelt out in detail in
Sweden and reinforced in the Netherlands, Germany and Austria as regards the
circulation of information to local management and trade union organisations. In
Austria, requesting parties are entitled to ask central and local management how
many persons are employed in the undertaking or establishment. These details are of
interest in that information concerning the creation of an SNB is then conveyed to all
interested parties in the Community-scale group.

3.3.

Special negotiating body (SNB)

3.3.1. Geographical and proportionality criteria

All countries comply with the Directive as regards the geographical distribution of
SNB members (one per country) and the proportional distribution of additional
members as a function of the size of the workforce in each country. Several Member
States have introduced a finer-grained breakdown (six workforce size classes), and
Denmark has established thresholds for the additional members (thresholds of 2 000,

9

then 5 000), but the principle of proportionality seems to have been respected in all
cases.

3.3.2. Number of representatives

The number of representatives on the SNB (3-17) is often stipulated (DK, EL, FIN, I,
IRL, NL) but sometimes omitted (B, D, E, S, A, P). In some cases distribution is not
consistent with the maximum of 17 members stipulated in the Directive (A, D, E, F),
but the group has to be established in more than 14 States for the maximum of 17 to
be exceeded in these countries.

3.3.3. Modification of the structure of the group during negotiations

Most countries do not provide for changes to the composition of the SNB during
negotiations (A, F, FIN, I). However, specific rules have been laid down in Spain,
the Netherlands, Portugal and Greece covering changes to the structure of the
Community-scale undertaking or group of undertakings.

3.3.4.

Representatives of third countries

Most Member States provide for including representatives of third countries, but
procedures differ from country to country. They may be included as observers
without voting rights (EL, E, F, NL, P), they may be entitled to be elected or
appointed as full members in accordance with national legislation (DK), or provision
may be made for details concerning their appointment and status to be set out in an
agreement signed by the central management and the SNB (A, D, EL). In Portugal,
the central management is not obliged to cover observers' costs.

Finland, Denmark, Italy and Belgium do not have any provisions concerning third
countries outside the EEA.

3.3.5.

Information on the composition of the SNB

Most Member States require the central management
to be informed of the
composition of the SNB, but others (e.g. Finland) widen the scope of this
information obligation to include all employees. The scope has been extended in
Italy to include trade union organisations and local management, and in Austria it
includes local management. Similarly, in Germany, the central management must
inform local management, employee representatives, and trade unions present in
establishments located in Germany.

3.3.6. Composition of the SNB

In each country the appointment of SNB representatives depends on and is in line
with the country’s existing representation arrangements.

Election by the members of the works council if there is one, or
Belgium:
otherwise by the health and safety committee. Failing this, the joint committee may
allow the trade union delegation to select the SNB members for Belgium.

Denmark: Election by the representatives of the cooperation committee, otherwise
by the shop stewards, or failing that by the employees.

10

Germany: Appointment by the existing structures in the following order of
priority: group committee, central works council (Zentralbetriebsrat), works council
(Betriebsrat), or works committee (Betriebsauschuss).

Greece:
organisations, in their absence by the works council, or failing that by the workers.

Election in the following order of priority: by the trade union

Spain:
Appointment by joint agreement among the trade union representatives,
who together form the majority of members of the works council(s), or the employee
delegates where appropriate, or by agreement of the majority of the members of
those councils and delegates.

Appointment by the trade union organisations from among the elected
France:
members of the works council or establishment council or from the trade union
representatives in the group; in the absence of a trade union organisation in the group
in France, election by the employees.

Ireland:
between central management and employees.

Appointment or election by the employees, possibility of an agreement

Appointment by the trade union organisations that have signed the
Italy:
collective agreement. Otherwise, agreement between the trade union organisations
and the central management on the appointment of members.

Netherlands:
Election by the highest-level council: group council, central
council, works council; if not all the works councils are represented in these other
councils,
the appointment must be made jointly by the councils that are not
represented and the group council; if some of the workers are not represented on the
works council, they must be consulted on the choice of SNB members; in the
absence of a works council, election by the employees.

Appointment by existing structures in the following order of priority:
Austria:
group committee, works council or works committee; trade union representatives
may be appointed as SNB members even if they are not members of a committee or
council.

Portugal: Appointment by joint agreement between, in order, the elected bodies
and trade unions, between the elected bodies if no trade unions are represented in the
undertaking or establishment, between the trade unions representing at least two
thirds of the workers, or between the trade unions representing at least 5% of the
workers; failing agreement, if no representatives are appointed, if there is no elected
body or trade union, or if at least one third of the workers so request, the SNB
members are directly elected by secret ballot, on the basis of lists presented by at
least 100 or 10% of workers.

Organisation of an election by agreement;

in the absence of an
Finland:
agreement, the election must be organised by the health and safety delegates and the
most representative workforce delegates.

Election by the trade union which has signed the collective agreement
Sweden:
with the controlling undertaking; if there are several such unions they must negotiate
an agreement
the most
representative union makes the appointment.

in the absence of agreement,

to organise the election;

11

Hence, in all the countries which give the works council or elected representatives a
major role in the representation of workers, notably as regards information and
consultation of workers (or co-decision), it is they who appoint the members of the
SNB. Thus the central role is vested in the works council (or central council or group
the Netherlands and
council) in Germany, Austria, Denmark, Finland, France,
Belgium, while workforce delegates or shop stewards play a subsidiary role in
Denmark and Belgium.

The trade unions play a central role in appointing members in Italy, Greece, Portugal
and Spain, jointly with the works council.

But they also have an indirect role, either because the trade union organisations draw
up the lists of candidates (F, S), because they play an essential part in constituting the
works council or group council, or because the members of the SNB must have been
elected from the lists prepared by the trade union organisations (F) or appointed on a
delegation basis (B).

The trade union organisations also play an important role in Sweden, where elections
are organised amongst the representatives of the unions which have signed the
collective agreement applicable.

Because of the voluntary approach to representation in Ireland, the election system
there is not grounded in already existing representation. Election by all employees
may thus be replaced by an agreement signed by the employees and management of
each undertaking concerned by transnational representation.

In the absence of the body chiefly responsible for appointing or electing SNB
members, the Member States rely on various systems: either appointments are made
by the workforce delegates (B, DK) or the health and safety delegates (B, FIN), or
the members are appointed by agreement between the central management and the
trade union organisations (I) or employees (IRL), or they are elected by all the
employees (F, NL, P). In Sweden, in the absence of a trade union bound by a
collective agreement with the controlling undertaking,
the local employees'
organisation representing the greatest number of employees assumes responsibility
for appointing the members.

Only three Member States have failed to provide for subsidiary mechanisms, namely
Spain, Germany and Austria. In these countries workers have the right to establish
representations, and it is their responsibility if there is no works committee. The
threshold for the creation of such a committee is very low (five employees in Austria
and Germany, and six in Spain).

Finally, all Member States have taken measures to ensure worker representation and
establish a system for the appointment of SNB members which is in keeping with
their domestic representation arrangements and the role handed down to the trade
union organisations in each country.

3.4.

Agreements - Article 6

Most Member States comply with the Directive's provisions concerning the content
of the agreement resulting from negotiations between the central management and

12

the SNB. However, several of them have inserted in their national texts certain rules
which are not laid down in the Directive:

- rules concerning the selection of workers' representatives for the negotiations and
the establishment of the European works council are provided for in Spanish,
Finnish, French, Irish and Italian legislation;

- concerning the content of the agreement establishing the European works council,
the Spanish and Greek legislation requires full identification of the parties to the
agreement; the Italian interconfederal agreement requires the content of information
and consultation to be laid down in the agreement;
the Irish act requires the
agreement to specify how the information given to employees' representatives is to
be passed on to employees in the Member State concerned and how employees'
opinions on that information are to be recorded; Portuguese legislation allows the
parties to specify the law applicable to the agreement and the subjects to be treated as
confidential;

- concerning the content of
the agreement establishing the information and
consultation procedures, French, Irish and Netherlands legislation requires the
agreement to stipulate the establishments to which the procedure is to apply, the way
in which workers or their representatives are to be informed and consulted on
transnational questions significantly affecting the workers, the material and financial
resources allocated for the procedure,
the duration of the agreement and the
procedure for renegotiating it. Austrian legislation requires the agreement to specify
the consequences to the EWC in the event of restructuring.

Most of the transposition texts refer to the principle of collective autonomy. The
others assume it implicitly. Hence in all countries the agreement must lay down all
the conditions for the creation and operation of the transnational representation body
chosen.

Several texts establish the principle of negotiating in good faith or in a climate of
cooperation4. In Spain there is an express provision that negotiations may be
suspended in the case of bad faith on the part of one party, which is regarded as
equivalent to refusing to start negotiations.

Belgium, in addition to the compulsory particulars required under the Directive,
prescribes the preparation of a protocol laying down all the concrete rules governing
the operation of the European works council. In the other countries these rules are set
out in detail in the works council’s rules of procedure.

With regard to the operation of the European works council and the worker
relations with the central
information and consultation procedures
management, the Danish, French, Finnish and Netherlands texts do not explicitly
impose an obligation to work in a spirit of cooperation in compliance with their
reciprocal rights and obligations.

in their

4

In their transposition texts, Finland, France, the Netherlands and Sweden omit any reference to
negotiating in a spirit of cooperation. However, in some States, including the Netherlands, negotiating
in a spirit of good faith is a general principle of civil law. Furthermore, given the legal scope of the
preamble and national case law on the subject, the absence of this concept in certain transposition texts
does not limit its legal scope.

13

A two-thirds majority is required in several countries (A, D, F, I, E, P) in order to
decide not to start negotiations or to suspend negotiations in progress. This point is
not specifically covered in the other Member States' transposition texts.

3.5.

Subsidiary requirements

the subsidiary
All Member States respect
requirements (refusal
to commence negotiations within six months of being
requested to do so and failure to reach an agreement within three years). Sometimes
there are variations.

the conditions for application of

Finland, Italy and Sweden make provision for the application of the subsidiary
requirements where an expired agreement predating the Directive has not been
renewed within six months of termination (FIN) or expiry (S).

Spain and Sweden make provision for the application of the subsidiary requirements
where an agreement post-dating the Directive has not been renewed within six
months of the expiry of its period of validity.

3.5.1. Composition of the European works council

All Member States have adopted rules governing appointment to the European works
council which are identical to those used for the SNB.

The rules on geographical distribution are also identical to those for the SNB (one
member per country). The same applies to the proportional distribution of members
as a function of workforce size.

All Member States provide for the possibility of appointing a select committee of
three members. In some (B, E, IRL), the select committee may be enlarged in
exceptional circumstances.

Most Member States expressly prescribe a minimum of three and a maximum of
thirty members (not specified in B, NL and P).

Austria and Denmark permit the presence of permanent trade union representatives if
they are already members of a works council.

3.5.2.

Information and consultation

All Member States provide for information and consultation of workers within the
meaning of the Directive, including (in Italy, France, Spain, Greece and Portugal) the
right to express an opinion in exceptional circumstances. In the Netherlands an
opinion may be delivered within a reasonable time limit after a meeting.

Certain Member States (e.g. IRL) specify that
the SNB must be informed and
consulted in good faith. Even if texts do not spell out the need for this spirit of
cooperation, it may be considered as implicit, or as resulting from the spirit of the
text or from general legal principles.

Austria and Germany partially exclude ideologically oriented enterprises from the
domain of information and consultation of the EWC. Sweden merely excludes them
in relation to the objectives and direction of their activities.

14

3.5.3. Competence of the European works council

The competence of the European works council as prescribed by the Directive, as
regards both the annual meeting and exceptional circumstances, have been faithfully
reproduced by all Member States. As regards the transnational dimension of the
subjects dealt with, the wording of national provisions sometimes differs slightly
from that of the Directive.

As regards the annual meeting, besides the requirement on the prior circulation of an
information report, the provisions governing general competence are taken over
almost verbatim by all Member States. Italy adds equal opportunities, while the
Netherlands adds the environment. As in the Directive, the list of subjects is not
exhaustive.

Exceptional circumstances within the meaning of the Directive (or similar terms, as
in Italy, where reference is made to a substantial impact on workers’ interests) are
valid grounds for extraordinary meetings in all Member States.

Finally, preparatory meetings are explicitly provided for in certain national texts (A,
B, IRL, P) to enable the European works council to be convened before meeting the
central management. Other Member States do not mention this possibility, even
though preparatory meetings are specifically provided for in the Directive. But the
lack of appropriate provisions does not entitle the central management to disallow
such meetings, or any other measure, if they are necessary for the operation of the
European works council.

3.5.4.

Temporal organisation of information and consultation

The terms used in some transposition texts concerning the moment of consultation in
the event of exceptional circumstances are different, but all are inspired by the
principle of timely fulfilment of obligations enshrined by the CJEC. Consultation
must take place either as soon as possible (IRL, FIN, NL, P) or soon enough to have
a useful effect (E).

The absence of specific provisions does not detract from the obligation on the central
management to comply with its information and consultation obligations “in good
time”,
in line with the CJEC’s interpretation of the obligation to ensure that
Community legislation has a useful effect. This interpretation is also binding on
national courts.

Several Member States (A, I, F, NL, P) also require negotiations to be reopened
within four years of the application of the subsidiary requirements with specific
provisions. In Germany and Austria, the EWC must make a decision with a view to
reopening negotiations based on Article 6 of the Directive.

3.5.5. Changes to the structure of the group

Adjustments to the composition of the European works council are provided for:

in Denmark, Germany and Portugal as a function of the number of employees in the
different countries;

in France when a new European works council is appointed (every two years);

15

in the Netherlands when justified by changes (integration of additional members).

3.5.6. Chairing of the EWC

Specific rules have been adopted in some Member States for selecting the chairman
of the European works council. He or she may be appointed on the basis of an
agreement between the central management and the European works council (EL, E,
IRL), the chair may alternate between the management and the European works
council (NL), the rules of procedure may cover the matter (B), the members of the
European works council may elect the chairman (A, D) or the head of the controlling
undertaking may take the chair (F).

3.6.

Agreements in force - Article 13

All Member States comply with the requirements of Article 13 of the Directive
concerning the applicability of agreements already in force. In several countries there
is a gap between the date laid down in the Directive (22/09/1996) and the date of
entry into force of the transposition text validating these agreements (D, F). The
Austrian legislation backdates the validity of agreements to the date stipulated in the
Directive. Italy and the Netherlands make provision for the validity of agreements
signed after 22 September 1996; in Italy, agreements signed by November 1996 are
valid, in the Netherlands those signed by February 1997.

The Portuguese act explicitly recognises agreements entered into in third countries,
provided they comply with the conditions laid down there, wherever national law is
applicable.

The conditions set out in the Article are spelt out explicitly in Belgium (where all
situations in which signatures validate the agreement are provided for5), in Germany
and the Netherlands (where appropriate worker participation is required) and in
Spain (where the legitimacy of signatories is checked)6.

In addition, some Member States have introduced additional criteria to those laid
down in Article 13 of the Directive for the validity of agreements in force. In Ireland,
the agreement must have been accepted by the majority of the workforce to which it
applies. In Austria, the protection of workers' representatives applies ex lege, also in
the case of Article 13 agreements, and all bodies representing staff must be informed
of the text of the agreement. In Denmark, the agreement must relate to information
and consultation on matters concerning undertakings or establishments located in
several Member States.

Certain Member States (A, B, D, FIN) allowed revision of agreements in force
within the six months following 22 September 1996, with a view to making them
compatible with the requirements of Article 13.

5

6

Signature by the trade unions that have signed the collective agreement and are represented in the
group, by the majority of workforce delegates in the country concerned, by the majority of employees,
by a European organisation acting on behalf of the undertaking’s trade union organisations. This
presumption of validity for certain types of signatory also exists in Germany, France and Italy.
Provision for checking the legitimacy of signatories is also made in Finland and the Netherlands.

16

In Greece and Belgium, conditions governing the written form of agreements have
been added to authorise their validation.

Ireland, Austria, France, Germany, Belgium, Spain and the Netherlands provide for
the possibility of renewing these agreements. The provisions differ, depending on
whether or not agreements were concluded for a specific period.

Finally, some Member States provide for incorporating changes in the structure of
the group into the system established through earlier agreements (NL after five
years).

3.7.

Experts

All countries have provisions authorising the SNB and the European works council
to consult experts. Most countries stipulate that recourse to experts must be essential
(EL, DK, FIN, S) and/or that the associated costs may be charged to the central
management in respect of one expert only (A, D, B, EL, F, IRL, NL, P). Netherlands
law specifies that this means one expert per agenda item. The right to consult several
experts, even if the central management must pay for only one of them, means that
SNBs and EWCs can draw on the assistance of trade union representatives belonging
to national or European confederations, while at the same time seeking the help of a
“technical” expert.

In agreements concluded pursuant to Article 6, the consultation of experts and rules
on the covering of costs are clearly matters for negotiation.

3.8.

Other operating rules

3.8.1. Material and financial resources

All countries stipulate that the central management shall bear the operating expenses
of the transnational representation bodies.

As regards the SNB, it is generally specified that these expenses include the material
and financial resources it needs to perform its task (DK, FIN, P, A). Even if this is
not spelt out, it is clear that the expenses to be borne by the central management are
those essential to the functioning of the SNB.

Sometimes, these are set out in detail (I, IRL, P, A): meetings, equipment, travel,
translation, accommodation, experts’ costs. In Sweden and Spain,
the costs of
appointing the SNB members are also mentioned.

As regards EWCs set up under the subsidiary requirements, the same general formula
applies: the central management has to cover essential operating expenses. These are
almost
of meetings,
accommodation, equipment (without details as regards fax machines, telephones or
computers). In Germany, the central management has to provide premises.

organisation

translation,

specified:

always

travel,

All countries anticipate disputes as to whether costs incurred by the EWC are
necessary and/or reasonable. The national courts carry out an assessment based on
the objective utility of operating expenses
transnational
representation.

in the context of

17

3.8.2.

Resources given to the representatives

In all countries, representatives are entitled to paid absence to perform their duties.
However, the number of hours granted varies tremendously: 20 hours a month in
France, eight hours every four months in Italy, two hours a week in Greece, 60 hours
a year in Spain, necessary absence in Austria, reasonable absence in Ireland, a non-
specified general entitlement in the Netherlands, and absence agreed between the
employer and the representative employees' organisation in Sweden.

3.9.

Confidentiality

3.9.1. General confidentiality requirement

With the exception of Belgium, where the confidentiality requirement is contained
only in a text accompanying the transposition act, all countries' transposition texts
impose confidentiality requirements on SNB and EWC representatives and experts.

The requirement is a general and continuous one, generally of unlimited duration, but
sometimes limited in time (end of all terms of office in Ireland, three years in Italy).
Naturally the confidentiality requirement covers representatives' and experts'
in Sweden and Austria the it does not bind
relations with third parties, but
representatives inter se, so as to avoid disputes concerning the circulation of
information within the EWC.

3.9.2.

Right to withhold confidential information

The central management’s right to withhold information it deems to be confidential
(Article 8) has been enshrined in Denmark, Sweden, Italy, Greece, Ireland, Spain, the
Netherlands and Portugal.

France and Austria have not made use of this possibility, and Germany has not used
it for the SNB.

The confidential nature of information must be assessed on the basis of objective
criteria. Besides standard legal procedures, specific procedures are sometimes
provided for in Greece, Belgium and Portugal, while Finland makes provision for
arbitration.

3.9.3.

Penalties for infringement of the confidentiality requirement

All countries provide for penalties, but their nature differs from one country to
another. Sometimes civil penalties are stipulated (F, P), but as a rule sanctions are of
a penal nature: Ireland ("offence"), Germany, Finland, France ("manufacturing
secrets").

Spain and Greece do not make specific provision for penalties. In Denmark, penalties
are set out in a separate text (not in the transposition text).

Several countries have specific (often emergency) procedures for disputes relating to
infringement of manufacturing secrets (notably France, Germany and Belgium).

18

3.10.

Protection of workers’ representatives

Protection is provided in all countries for workers exercising representative
functions.

The principle of equal treatment is expressly reiterated in certain countries (D, EL,
IRL) as a fundamental guarantee of performance of the functions in question.

In each country, protection is organised in line with the rules governing worker
representation. Sometimes, this protection results from a collective agreement (DK),
but as a rule the transposition text contains a reference to the country’s general rules
governing representatives (shop stewards or trade union representatives) (B, E, F, I,
NL, S, A, P).

Representatives may be dismissed only on serious grounds not related to the activity,
or for serious misconduct (FIN, F). Grounds which the employer may not invoke are
specified in Finland (illness, strike, religious opinions, etc.).

Specific procedures concerning prior authorisation of dismissal exist
Germany and Finland.

in France,

3.11.

Penalties

All countries prescribe penalties in the event of infringement of the Directive’s
requirements, as regards both the obligation to set up a special negotiating body
(SNB) and obligations concerning the operation of the transnational representation
body.

There are various systems: penalties for infringement of collective agreements (DK,
S), or general procedures under employment law.

Some countries impose penalties in the form of various types of fine ("compensatory
fine" in DK, "conditional fine" in FIN) or, more broadly, penal sanctions which in
some cases allow the court to impose a range of penalties: IRL ("offence"), EL, E
("administrative offence"), B ("administrative fines"), A and D ("administrative
offence"), F ("obstructionism"), P ("quasi-offence").

Not all countries specify how these penalties are to be applied in the case of
infringement of obligations entered into under an earlier agreement, and so it may be
assumed that they also apply in this case, except in Denmark and Sweden, where
agreements already in force are not covered by the system of penalties.

As a rule, penalties are imposed by the general courts. In Greece it is the prefectoral
administration that is responsible, and fines are paid into a workers’ welfare fund.

3.12.

Remedies

Jurisdiction in all countries lies with the courts that adjudicate on disputes
concerning worker representation.

These are usually (A, B, D, E, EL, F, I, S, NL, P) the employment tribunals for
individual disputes and/or the general courts (DK, FIN, F for collective disputes), or
courts dealing with company law (NL).

19

In Ireland, arbitration is the rule. This should be emphasised in the light of the
transnational nature of disputes (appeals possible only if questions of law are
involved).

some countries have particular

the Ministry of
Finally,
Employment has a supervisory role, while in Italy the interconfederal agreement
provides for the creation of a special committee to deal with questions connected
with the transnational body.

In Finland,

rules.

20

ANNEX

References of measures transposing Directive 94/45/EC on European works councils

– 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 -
Published: Official Journal of the European Communities; 30.9.1994; L 254/64

– Council Directive 97/74/EC of 15 December 1997 extending, to the United Kingdom of
Great Britain and Northern Ireland, Directive 94/45/EC 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 -
Published: Official Journal of the European Communities; 16.1.1998; L 10/23

Belgium

– Arrêté royal du 22.03.1996 rendant obligatoire la convention collective de travail n° 62,
conclue le 6 Février 1996 au sein du Conseil national du Travail, concernant l’institution
d’un comité d’entreprise européen ou d’une procédure dans les entreprises de dimension
communautaire et
les groupes d’entreprises de dimension communautaire en vue
d’informer et de consulter les travailleurs. Published: Moniteur Belge, 11.04.1996, p. 8465.

– Arrêté royal du 27.11.1998 rendant obligatoire la convention collective de travail n° 62bis
du 6 octobre 1998 modifiant la convention collective de travail n° 62 du 6 février 1996,
conclue au sein du Conseil national du Travail, concernant
l’institution d’un comité
entreprises de dimension
d’entreprise
communautaire et
les groupes d’entreprises de dimension communautaire en vue
d’informer et de consulter les travailleurs. Published: Moniteur Belge, 16.12.1998, p. 935.

européen ou d’une procédure dans

les

– Arrêté royal portant exécution de l'article 8 de la loi du 23 avril 1998 portant des mesures
d'accompagnement en ce qui concerne l'institution d'un comité d'entreprise européen ou
les groupes
d'une procédure dans les entreprises de dimension communautaire et
d'entreprises de dimension communautaire en vue d'informer et de consulter
les
travailleurs. Published: Moniteur Belge, 17.10.1998, p. 1252.

– Loi du 23 avril 1998 portant des mesures d'accompagnement en ce qui concerne
l'institution d'un comité d'entreprise européen ou d'une procédure dans les entreprises de
dimension communautaire et les groupes d'entreprises de dimension communautaire en
vue d'informer et de consulter les travailleurs – Published: Moniteur Belge, 21.05.1998,
p. 2192.

– Loi du 23 avril 1998 portant des dispositions diverses en ce qui concerne l'institution d'un
comité d'entreprise européen ou d'une procédure dans les entreprises de dimension
communautaire et
les groupes d'entreprises de dimension communautaire en vue
d'informer et de consulter les travailleurs – Published: Moniteur Belge, 21.05.1998,
p. 2192.

21

Denmark

Lov N. 371 af 22.05.1996 om europæiske samarbejdsudvalg - Published: Ministerialtidende,
j. nr. 1996-534-8

Germany

Gesetz
Bundesgesetzblatt Teil I, 31.10.1996, S. 1548

über Europäische Betriebsräte

(EBRG)

vom 28.10.1996

- Published:

Greece

Presidential Decree n° 40/97; 18.3.1997 - Published: FEK A n° 39; 20.3.1997; p. 599

Spain

Ley 10/1997, de 24 de abril, sobre derechos de información y consulta de los trabajadores en
las empresas y grupos de empresas de dimensión comunitaria N 10/97; 24.4.1997 - Published:
Boletín oficial del Estado N 99; 25.4.1997; p. 13258

France

Loi N. 96-985 du 12.11.1996 relative à l’information et à la consultation des salariés dans les
entreprises et
les groupes d’entreprises de dimension communautaire, ainsi qu’au
développement de la négociation collective - Published: Journal Officiel de la République
Française; 13.11.1996; p. 16527

Intégration au Code du Travail sous les articles L 439-1 modifié, L 439-6 à L 439-24, L 483-
1-2

Ireland

Transnational Information and Consultation of Employees Act of 1996; Transnational
Information and Consultation of Employees Act of 1996 (Commencement) Order of 1996;
3.7.1996 - Published: Statutory Instruments n° 20 of 1996; Statutory Instruments n° 276 of
1996

Italy

Accordo Interconfederale per
06.11.1996

Netherlands

il Recepimento della direttiva 94/45 CE del 22.9.1994;

Wet van 23.1.1997 op de Europese ondernemingsraden tot uitvoering van richtlijn
nr. 94/45/EG - Published: Staatsblad 1997/32 pp 1-15 ; 4.2.1997

Portugal

Lei n° 40/99 de 9 de Junho que assegura a informação e consulta dos trabalhadores em
empresas ou grupos de empresas transnacionais e regula a instituição de conselhos de
empresa europeus ou de procedimentos simplificados de informação e consulta em empresas
e grupos de empresas de dimensão comunitária. DR n° 133, 9.6.1999, p. 3237 et seq. Entry
into force: 9.7.1999.

22

Austria

Bundesgesetz vom 17. Oktober 1996, mit dem das Arbeitsverfassungsgesetz, das Arbeits- und
Sozialgerichtsgesetzes und das Bundesgesetz über die Post-Betriebsverfassung geändert
werden - Published: Bundesgesetzblatt für die Republik Österreich Nr. 601/96, 31.10.1996

Finland

Laki yhteistoiminnasta yrityksissä annetun lain muuttamisesta 614/96; 9.8.1996

Sweden

Lag (1996:359) om europeiska företagsråd; utfärdad den 9 maj 1996

Luxembourg

Transposition delayed

23