Commission staff working document accompanying the proposal for a directive of the European Parliament and the Council 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 (recasting) - Impact assessment {COM(2008) 419 final} {SEC(2008) 2167}
Date: 2008-07-02
Institutions: European Commission
Subjects: European Works Council, European undertaking, group of companies, impact study, labour law, worker consultation, worker information

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 2.7.2008 
SEC(2008) 2166 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND THE COUNCIL 

 on the 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 (recasting)  

IMPACT ASSESSMENT 

{COM(2008) 419 final} 
{SEC(2008) 2167} 

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TABLE OF CONTENTS 

Executive summary .................................................................................................................. 4 

Introduction .............................................................................................................................. 7 

Section I: Procedural issues and consultation of interested parties .................................... 9 

I.1 Institutional background ....................................................................................................... 9 

I.2 Organisation and timing...................................................................................................... 10 

I.3 Consultation and expertise.................................................................................................. 11 

Section II: Problem definition............................................................................................... 14 

II. 1 The problems that may require action .............................................................................. 14 

II. 2 Who is affected? ............................................................................................................... 23 

II. 3 Further likely developments without EU action............................................................... 25 

II. 4 The basis for EU action .................................................................................................... 25 

Section III: Objectives ........................................................................................................... 27 

III. 1 The general policy objectives.......................................................................................... 27 

III. 2 The specific objectives of the initiative........................................................................... 27 

III. 3 The consistency of these objectives with other EU policies ........................................... 29 

Section IV: Policy options...................................................................................................... 30 

IV.1 First option: No new EU action ....................................................................................... 31 

IV.2 Second option: Non-regulatory approach — additional promotion of best practices...... 33 

IV.3 Third option: Review of existing legislation.................................................................... 36 

Section V: Analysis of impacts .............................................................................................. 40 

V.1 Likely economic, social and environmental impacts of each of the options..................... 40 

V. 2 Uncertainties and how impacts may be affected by changes in parameters .................... 54 

V. 3 Impacts in the EU and outside the EU ............................................................................. 55 

V. 4 Potential obstacles to compliance..................................................................................... 56 

Section VI: Comparing the options ...................................................................................... 57 

VI. 1 Method for weighing the positive and negative impacts for each option ....................... 57 

VI. 2 Results of the weighing................................................................................................... 58 

VI. 3 Added value of EU action............................................................................................... 61 

VI. 4 Ranking the options ........................................................................................................ 61 

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VI. 5 Preferred option............................................................................................................... 62 

Section VII: Monitoring and evaluation .............................................................................. 63 

VII. 1 Core indicators of progress towards meeting the objectives ......................................... 63 

VII. 2 Outline for possible monitoring and evaluation arrangements...................................... 63 

Annex 1- European Works Councils — Compliance and figures ........................................... 64 

Annex 2- lessons learned on European Works Councils......................................................... 69 

Annex 3- Results of the 2008 second-stage consultation of the European social partners on 

the review of the European Works Councils Directive 94/45/EC ............................. 72 

Annex 4- Detailed weighing of option 3 (review of legislation)............................................. 80 

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EXECUTIVE SUMMARY 

The  present  impact  assessment  concerns  the  envisaged  review  of  the  European  Works 
Councils Directive 94/45/EC and was carried out between October 2007 and June 2008. An 
inter-service steering group was set up to this end, with the participation of eleven services. 
An external study involving a survey of 10% of existing European Works Councils (EWCs) 
was  commissioned.  The  second-stage  consultation  of  the  European  social  partners  was 
launched  in  February  2008.  While  the  Commission  would  have  welcomed  negotiations 
between  the  social  partners  as  the  solution  with  potentially  the  most  positive  impact,  social 
dialogue  talks  were  in  the  end  not  considered  practical  by  the  European  Trade  Union 
Confederation.  The  impact  assessment  has  used  external  data  and  taken  into  account  the 
results  of  academic  research  as  well  as  the  views  expressed  by  social  partners  and  other 
stakeholders in response to the consultation. It has been revised twice to take into account the 
opinions of the Impact Assessment Board. 

The  Directive  establishes  a  right  to  transnational  information  and  consultation  of  the 
workforce  on  the  progress  of  business  and  any  significant  changes  envisaged  in  large-scale 
(1 000+ employees) transnational companies. In 2007, 2257 companies employing 24 million 
workers  fell  within  the  scope  of  the  Directive.  EWCs,  whether  established  before  the 
Directive came into force, and hence excluded from compliance with the Directive, or set up 
through  an  agreement  between  a  body  representing  the  employees  and  the  central 
management, were operating in 816 companies with some 14.5 million employees.  

Fourteen years after the adoption of the Directive, there are three problems that may require 
action:  

•  The  effectiveness  of  transnational  information  and  consultation  rights  is  not  ensured, 
particularly  as  existing  EWCs  are  not  properly  informed  and  consulted  in  over  half  of 
restructuring cases and, moreover, the take-up rate of EWCs is still relatively low and has 
not increased in recent years;  

•  There are legal uncertainties giving rise to shortcomings in the application of the Directive 
and  entailing  costs  and  delays,  particularly  in  cases  of  mergers  and  acquisitions  and  as 
regards  the  interplay  between  the  national  and  European  levels  of  information  and 
consultation,  

•  The concepts of information and consultation in the 1994 EWC Directive differ from those 
contained  in  the  most  recent  Directives  in  the  field  of  workers’  information  and 
consultation, and there are no clear rules for the interplay between these directives. 

These  problems  affect  workers,  companies  and  territories  to  a  significant  extent,  and  the 
potential  role  of  EWCs  in  anticipating  and  managing  change  in  a  sustainable  way  remains 
largely  unexploited.  The  problems  would  worsen  without  new  EU  action  in  a  context  of 
increased internationalisation. Action is also necessary in order to support the completion of 
the internal market, sustainable competitiveness and social cohesion. Given the transnational 
nature of EWCs, effective remedies cannot be taken by the Member States. The legal basis for 
EU action is Article 137(1)(e) of the EC Treaty. 

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The main goal of this initiative is to put EWCs in a position where they can fully play their 
role  with  regard  to  developments  in  undertakings,  the  anticipation  and  socially  responsible 
management  of  change,  and  the  fostering  of  genuine  transnational  social  dialogue.  The 
specific objectives are as follows: 

•  To ensure the effectiveness of employees’ transnational information and consultation rights 

in existing EWCs; 

•  To increase the take-up rate (the proportion of established EWCs compared to the number 

of companies falling within the scope of the Directive); 

•  To ensure legal certainty in the setting up and operation of EWCs ; 

•  To  ensure  better  coherence  and  interplay  between  Community  legislative  instruments  on 

information and consultation of employees. 

In order to achieve these objectives, three main options have been identified and, for each of 
them, the main potential impacts have been assessed: 

•  The  first  option  No  new  EU  action  does  not  present  any  ability  to  meet  the  specific 

objectives. 

•  The  second  option  Non-regulatory  approach  —  additional  promotion  of  best  practice 
would include an increase in communication actions, possibly followed by a proposal for 
an increase in existing financial support for promotion actions and a recommendation on 
the setting up and functioning of EWCs. It has the potential to improve the dissemination 
of  best  practice  and  encourage  a  more  efficient  functioning  of  EWCs,  without  entailing 
additional direct costs for companies. However, by nature, it can address only to a limited 
extent  the  objective  of  ensuring  legal  certainty  and  coherence  in  Community  legislation 
and therefore needs to be associated with legislative action (third option). Also, one needs 
to take into account that non-regulatory measures are already in place and, therefore, any 
new measure could only have an additional impact.  

•  The third option Review of existing legislation would include amendments to the 94/45/EC 
Directive, mainly aimed at further specifying the concepts of information and consultation, 
defining  what  is  meant  by  transnational  competence,  linking  the  national  and  European 
levels  of  information  and  consultation,  adapting  the  subsidiary  requirements,  which  are 
used  as  benchmarks  for  negotiation,  establishing  a  right  to  training,  introducing  an 
adaptation  clause  in  the  event  of  significant  change  in  the  structure  of  companies,  and 
recognising  the  role  of  trade  unions.  For  each  sub-option,  the  costs  and  benefits  are 
discussed  and  a  balance  is  established  between  the  interests  expressed  by  the  different 
stakeholders. Two sub-options — lowering thresholds for the establishment of EWCs and 
registering  agreements  —  are  discarded  as  they  are  less  cost-effective.  The  other  sub-
options have the best prospects of achieving the specific objectives and show greater cost-
effectiveness.  These  sub-options  should  be  implemented  together  as  none  would  be 
sufficient by itself to achieve the desired result. The content of the third option has been 
adapted in some areas to take into account the results of the consultation and assessment 
exercise,  as  well  as  the  interest  of  the  various  stakeholders  particularly  regarding  the 
content of the subsidiary requirements. However, as the capacity of such option to improve 

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awareness-raising  and  disseminate  best  practices  is  limited,  it  should  therefore  be 
combined with awareness-raising actions from the second option. 

Taking into account its impact on established objectives and cost-effectiveness, the preferred 
option  is  the  third  option  Review  of  existing  legislation,  combined  with  awareness-raising 
actions  from  the  second  option  Non-regulatory  approach  —  additional  promotion  of  best 
practice, starting with communication actions. The likely overall impact of this option would 
be  to  improve  the  quality  of  dialogue  within  companies  and  enable  all  parties  to  better 
anticipate  and  manage  change,  while  imposing  some  additional  direct  costs.  However,  it  is 
difficult  to  see  this  entailing  significant  additional  costs  for  companies  already  complying 
with the requirements and aims of the existing Directive. It would also contribute to making 
the  existing  Community  instruments  on  information  and  consultation  more  coherent  (same 
definitions, interplay between national and transnational rules). 

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INTRODUCTION 

The  present  impact  assessment  concerns  the  envisaged  review  of  the  European  Works 
Councils Directive, which establishes a right to transnational information and consultation of 
the workforce. 

Directive 94/45/EC of 22 September 19941 requires Member States to introduce laws obliging 
large-scale  (1 000+  workers)  transnational  employers,  upon  the  request  of  100  employees 
from two countries or on their own initiative, to establish a body or procedure to inform and 
consult with workers on the progress of their business and any significant changes envisaged. 
The composition, competences, and functioning of a European Works Council (EWC) are to 
be  defined  by  agreement  between  the  ‘special  negotiating  body’  (SNB)  representing  the 
employees  and  the  central  management  (‘Article  6’  agreements).  Subsidiary  requirements 
(‘Annex’) apply only in the absence of such an agreement. Those companies that had in place 
an ‘agreed’ mechanism for informing and consulting their entire workforce on transnational 
issues  when  the  Directive  took  effect  in  1996  are  excluded  from  compliance  with  the 
provisions of the Directive (‘Article 13’ agreements).  

According to the available data, 2257 companies employing 24 million workers fell within the 
scope  of  the  Directive  in  2007.  These  companies  are  mostly  headquartered  in  Germany 
(20%), the USA (16%), the UK (12%) and France (10%) and are active notably in the metal, 
services and chemicals sectors. In 2007, EWCs were operating in 816 companies with some 
14.5 million  employees  (ETUI-REHS,  details  in  Annex  1).  Nearly  half  of  the  EWCs  were 
established by a pre-existing agreement (Article 13 of the Directive), i.e. before the Directive 
entered into force in 1996. Since then, the number of companies with an EWC, mostly large 
multinationals, has grown slowly over the years.  

The  information  and  consultation  process  in  EWCs  mainly  covers  the  economic  and  social 
topics  set  out  in  the  Directive  and  is  of  particular  importance  in  cases  of  restructuring. 
However,  some  councils  discuss  topics  related,  for  example,  to  health  and  safety,  the 
environment and equal opportunities. 

Main characteristics of European Works Councils (EPEC 20082) 

Companies 
with EWC 

Governing 
agreement 

Worldwide employees per company: up to 207 000, average 49 000 

Employees in EEA countries per company: 1 039 to 182 200, average 29 000 

Turnover: €54 million to €202 billion, average €20 billion 
Transnational restructuring event in the last three years: 74% 
Under Directive (‘Article 6’): 52%, pre-existing (‘Article 13’): 48% 
Not modified since first signed: 53%, modified: 47% 

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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,  OJ  L254  of  30.09.1994,  p.64,  as  amended  by  Directive  97/74/EC  and 
2006/109/EC  
Study commissioned by the Commission and carried out by European Policy Evaluation Consortium — EPEC — 
under the coordination of GHK Consulting (see section I). 

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Employee 
members 

Company 
representatives 
Ordinary 
meetings  

Extraordinary 
meetings 

Total  plenary 
meetings 
Select 
committee 

Working 
groups 

Number: from 5 to 47, average of 23 
Coming from 2 to 24 countries, average of 9 
Coming from host country: from 7% to 87%, average of 33% 
Trend over the last three years: increase 62%, no change 30%, decrease 8% 
Involved in meetings: from 2 to 13, average of 5 
Top management, general and HR managers 
Number/year: one 60%, two 33%, three 1%, four 6% 
Length: average of 2 days 
Preparatory meeting between employee delegates: 96%; increasing de-briefings 
Role: discussing economic and financial situation, strategic orientations, employment 
trends 
Provision in the agreement: 88% 
Face-to-face meeting held in the last three years: 59% 
With all members: 78%, with select committee or part of the members: 22% 
Role: addressing specific restructuring decisions  
Average number: 2.0 /year 

Present, with face-to-face meeting: 88% 
Employee members: from 2 to 15, average of 5 
Managers in meetings: from 0 to 4, average of 2 
Face-to-face meetings: from 0 to 12, average of 3/year 
Length of meeting: 1 day 
Role:  planning,  coordination, 
restructuring decisions 
Present: 29% 
Members: from 3 to 20, average 9, mixed employee-management 
Face-to-face meetings: usually from 1 to 4/year 
Role:  working  out  specific  issues  (e.g.  health  &  safety)  or  specific  restructuring 
events 

information  exchange,  discussion  of 

regular 

Fourteen years after the adoption of the Directive, 57% of managers feel that the benefits of 
having  an  EWC  in  their  company  outweigh  the  costs  in  terms  of  time  and  resources  spent, 
because  it  allows  them  to  communicate  information  regarding  company  strategies  and  the 
rationale for certain decisions to employees, particularly in times of change. On the other side, 
all  employee  representatives  consider  the  existence  of  EWCs  to  be  very  beneficial  (EPEC 
2008).  However,  expectations  regarding  the  role  of  EWCs  have  grown  over  the  years,  with 
the  increasing  internationalisation  of  corporate  activities,  and  are  far  from  being  fulfilled, 
particularly as regards the role of EWCs in anticipating and managing change. This has led 
various  stakeholders  and  EU  institutions  to  ask  the  Commission  to  review  the  legal 
framework in which EWCs operate. 

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 SECTION I: PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  

I.1 Institutional background 

Article  15  of  the  94/45/EC  Directive  provides  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  2000,  after  consultation  of  the  Member  States  and  the  social  partners,  the  Commission 
reported on the application of the Directive (COM(2000) 188) and linked a future review of 
the  Directive  with  the  outcome  of  the  debates  in  the  Council  and  Parliament  on  pending 
legislative  proposals  providing  for  workers’  information  and  consultation,  which  were 
adopted in 2001, 2002 and 20033. 

In  2001,  the  Parliament  adopted  Resolution  A5-0282/2001  (Report  W.  Menrad)  on  the 
Commission’s 2000 report, calling on ‘the Commission to submit a proposal for the revision 
of Directive 94/45/EC at an early date and to include in that proposal ‘precise definitions of 
information  and  consultation,  an  increased  number  of  ordinary  meetings,  enhanced 
consultation  in  cases  of  restructuring,  the  role  of  trade  unions,  training  and  facilities,  an 
adaptation  clause  in  the  event  of  changes,  conditions  for  maintaining  existing  agreements, 
reduction of the negotiation period, lowering of the threshold to 500 workers, and sanctions in 
cases of non-compliance. 

In 2002, the Commission requested the European Economic and Social Committee to draw up 
an exploratory opinion on the Practical application of the European Works Council Directive 
(94/45/EC)  and  on  any  aspects  of  the  Directive  that  might  need  to  be  revised.  In  2003  the 
EESC  adopted  an  exploratory  opinion  on  the  EWC  Directive  (CESE  1164/2003  Report  J. 
Piette), presenting a joint assessment of the added value of EWCs and the challenges facing 
their operation as well as identifying a number of open questions for the future. 

In 2006, the EESC delivered an own-initiative opinion (CESE 1170/2006 Report E. Iozia) on 
EWCs,  recommending  a  ‘rapid  updating’  in  respect  of  three  points  of  the  Directive:  the 
definitions  of  information  and  consultation,  the  role  of  trade  unions,  and  the  maximum 
number of members in the bodies. 

In 2006 and 2007 two Resolutions referring to EWCs were adopted by the Parliament: (i) the 
Resolution  on  Restructuring  and  employment  (PA_TA  (2006)0088  Report  J.L.  Cottigny) 
reiterated its request for the Commission to submit a proposal to amend Directive 94/45/EC 
and  called  on  the  Commission  to  launch  a  specific  second-stage  consultation  of  the  social 
partners  on  the  revision  of  the  Directive;  (ii)  the  Resolution  on  Strengthening  European 
legislation in the field of information and consultation of workers (PA_TA (2007)0185 joint 
motion) called on the Commission to update this legislation in order to ensure a coherent and 

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Directive  2001/86/EC  supplementing  the  Statute  for  a  European  Company  with  regard  to  the  involvement  of 
employees,  Directive  2002/14/EC  establishing  a  general  framework  for  informing  and  consulting  employees  and 
Directive  2003/72/EC  supplementing  the  Statute  for  a  European  Cooperative  Society  with  regard  to  the 
involvement of employees. 

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efficient framework of law, guarantee legal certainty, improve the linking of social dialogue at 
national  and  European  levels,  and  present  a  timetable  for  the  ‘long-awaited  revision  of  the 
Directive on European works councils’. 

I.2 Organisation and timing 

During  the  preparation  of  this  initiative,  DG  Employment,  Social  Affairs  and  Equal 
Opportunities sought the involvement of all relevant stakeholders. Within the Commission, an 
inter-service steering group was set up. The following services participated in the group: SG, 
LS,  AGRI,  COMM,  ECFIN,  ENTR,  ENV,  MARKT,  REGIO  and  TRADE.  In  addition, 
COMP, EAC and TREN were invited to take part and were sent all related documents. 

The steering group met four times: (i) 29 January 2008, when the main analytical steps, the 
work  to  be  carried  out  and  the  document  for  the  consultation  of  the  social  partners  were 
presented; (ii) 13 March 2008, for the presentation of the first findings of the external study, 
and  the  outline  of  the  IA  study;  (iii)  11  April  2008,  when  the  results  of  the  consultation  of 
social  partners  and  of  the  EPEC  external  study  were  presented,  and  the  draft  IA  report  was 
discussed; and (iv) 8 May 2008, to report back from the Impact Assessment Board meeting 
and review the impact assessment report.  

The impact assessment work was organised as follows:  

•  2000-2007: various reports and consultations (see consultation and expertise — I.3.b) 

•  October  2007:  Request  for  services  VT/2007/098  for  a  preparatory  study  on  an  impact 
assessment of the Europeans Works Councils Directive, under the DG BUDG Framework 
Services  Contract;  service  contract  signed  at  the  end  of  2007  with  the  European  Policy 
Evaluation Consortium (EPEC) 

•  December 2007: Inter-service consultation on the document intended to launch the second-

stage consultation of the social partners on the review of the Directive 

•  January 2008: First meeting of the inter-service steering group 

•  20  February  2008:  Adoption  of  document  C(2008)  660  launching  the  consultation  of  the 
social partners in accordance with Article 138(3) of the Treaty on the content of a possible 
Community initiative to revise the 94/45/EC Directive; 3 April 2008: end of consultation 
period 

•  3  March  2008  and  10  April  2008:  Interim  report  and  draft  final  report  of  the  external 

preparatory study  

•  7 May 2008: Meeting of the Impact Assessment Board, opinion issued on 14 May 2008. 

•  22 May 2008: Submission of a revised draft impact assessment report taking into account 
the  Board’s  comments  and  recommendations,  notably  as  regards  the  objective  of 
increasing  the  take-up  rate,  the  relationship  between  the  specific  objectives  and  the 
operational  objectives,  the  implications  of  the  second  option  for  the  Community  budget, 
the division of the third option into sub-options sorted by potential to address the specific 
objectives and analysed  separately, the detailed cost implications of the options and sub-
options, and the way in which the interests of the stakeholders are balanced.  

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•  9  June  2008:  Opinion  of  the  Impact  Assessment  Board.  Final  changes  to  the  impact 
assessment  report  taking  into  account  the  Board’s  comments  and  recommendations, 
notably  as  regards  the  demonstration  of  superiority  of  the  preferred  option,  the  way  it 
should  meet  stakeholders’  concerns,  the  reasons  for  discarding  two  sub-options  and  the 
readability, notably by transferring detailed tables to a new Annex 4. 

I.3 Consultation and expertise 

Both external expertise and the views of stakeholders have been requested and fully taken into 
account in the process of reviewing the European Works Councils’ Directive since 1999 and 
in the present impact assessment work. 

3.a External expertise 

The functioning of the EWCs is quite well documented.  

•  Reliable  and  updated  databases  with  full  texts  and  analyses  of  agreements  establishing 
EWCs are monitored by organisations linked to the European Trade Union Confederation4. 
Main  reference  is:  Kerkhofs,  P.,  European  Works  Councils  —  Facts  and  Figures  2006, 
ETUI-REHS Brussels, 2006; 

•  Academic research and external sources useful for analysing European Works Councils are 
summarised  up  to  2003  in  the  2006  exploratory  opinion  of  the  European  Economic  and 
Social  Committee5.  More  recent  sources  bring  further  insight  into  the  establishment  and 
functioning of European Works Councils and the problems to be addressed6. 

In  addition  to  these  data,  the  Commission  organised  another  study,  carried  out  by  external 
consultants and providing additional input, enabling the Commission to gain a comprehensive 
view  of  the  impact  of  the  options  envisaged,  notably  in  terms  of  the  operating  and 
administrative  costs  for  business.The  consultants7  carried  out  a  survey  of  the  actors  (both 
management and employee representatives) in a random selection of 80 EWCs (about 10% of 
EWCs). The study provided data on:  

4 

5 

6 

7 

ETUI-REHS,  EWC  database  —  full  texts  of  agreements,  Brussels,  permanent  update,  http://www.worker-
participation.eu/; Social Development Agency, online analysis of agreements at http://www.sda-asbl.org/; Stanzani, 
C.  &  Bernaert,  J.  Analysis  of  the  Social  Development  Agency  Infopoint  database  EWC  agreements,  SDA, 
Brussels, 2006. 
Opinion on the Practical application of the European Works Council Directive (94/45/EC) and on any aspects of 
the Directive that might need to be revised (CESE 1164/2003). 
Brian  Bercusson,  Kings  College  London,  Background  paper  to  EWC  workshop  ‘information  and  consultation 
rights  in  jurisprudence’,  Brussels,  March  2008;  Blockland,  A.,  Accounting  for  the  ‘missing’  European  works 
councils, University of Utrecht, Utrecht, 2002;Trinczek, R. et al., Technische Universität München, Understanding 
the  European  Works  Council  Deficit  in  German  Multinationals,  IIRA  European  Conference  Manchester,  2007; 
European Foundation for the Improvement of Living and Working Conditions, Analysis of agreements and studies 
on 
update 
http://www.eurofound.europa.eu/areas/participationatwork/ewc.htm;  Euroworkscouncils  training  and  consulting 
net, 
literature,  quarterly  newsletter,  Hamburg,  online  at  http://www.euro-
workscouncil.net/en/111.php;  Industrial  Relations  Services  (LexisNexis  UK)  and  Industrial  Relations  Research 
Unit (IRRU) at the University of Warwick Business School, European Works Councils Bulletin, IRS, London, six 
times a year, 1996-2006; Social Development Agency, online studies and research on EWCs and related topics at 
http://www.sda-asbl.org/;  Waddington,  J  (University  of  Manchester),  results  of  a  2005  survey  of  473  employee 
representatives summarised in ‘The performance of EWCs 12 years after the Directive’, European Works Councils 
Bulletin. No 65, IRS, London, September/October 2006, pp. 7-11. 
European  Policy  Evaluation  Consortium  (EPEC)  comprising  GHK  Consulting  as  coordinator,  the  Tavistock 
Institute and Technopolis. 

review  of  events  and 

European 

evolution 

councils, 

Dublin, 

regular 

works 

of 

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(i) functioning/practices of EWCs, in particular in restructuring situations; 

(ii) the impact of EWCs on equal opportunities, health & safety and the environment; 

(iii) the impact of the legal framework and the promotion of best practices on the operation of 
EWCs  

(iv) costs/benefits for companies (present situation vs future scenarios) 

(v) administrative costs (present situation vs future scenarios) 

The main findings of the study have been incorporated into the present report. 

3.b Consultation of European social partners 

In  2004,  the  Commission  launched  the  first  stage  of  consultation  of  the  social  partners  in 
accordance  with  Article  138(2)  of  the  EC  Treaty  on  a  review  of  the  Directive,  in  order  to 
assess the need to fully realise the potential of EWCs and consult the social partners on how 
best to achieve this result. The employees’ organisations were in favour of a rapid revision, 
especially as regards the definition and fundamental concepts of information and consultation, 
the role of the trade unions and what happens to agreements in the event of restructuring. The 
employers’ organisations were against such a revision, preferring Community action to focus 
on  implementing  the  Directive  in  the  new  Member  States  and  on  the  exchange  of  best 
practice. 

In  2004,  the  European  social  partners  examined  company  cases  in  order  to  assess  the 
functioning  of  EWCs.  In  2005,  they  produced  a  joint  document  on  Lessons  learned  on 
European works councils (in Annex 2), which highlights the usefulness of EWCs, the benefits 
of clear procedures, training  for members and assistance from experts, and the positive role 
that trade unions can play. They noted that it  is difficult  to organise useful  information and 
consultation without delays and uncertainties and that ensuring ownership of an EWC by all 
workers constitutes a challenge. 

In  2005,  through  its  Communication  COM(2005)  120  Restructuring  and  employment,  the 
Commission  consulted  the  European  social  partners  simultaneously  on  the  restructuring  of 
undertakings  and  on  the  ‘best-practice’  aspect  of  European  Works  Councils,  encouraging 
them to negotiate with a view to reaching agreement on the promotion of best practices. The 
European social partners reiterated their 2004 positions on the revision of the Directive, and in 
2006  decided  to  include  the  promotion  and  evaluation  of  their  joint  Lessons  learned  on 
European works councils in their 2006-2008 work programme. 

On  20  February  2008,  the  Commission  adopted  document  C(2008)  660,  launching  the 
second-stage consultation of the European social partners in accordance with Article 138(3) 
of  the  EC  Treaty  on  the  content  of  a  possible  Community  initiative  to  revise  the  EWC 
Directive and inviting them to negotiate.  

The  Commission  would  have  welcomed  negotiations  between  the  social  partners  as  the 
solution with potentially the most positive impact for workers and companies. At the end of 
the consultation period, the European Trade Union Confederation (ETUC) and the European 
employer organisations, BusinessEurope, CEEP and UEAPME, declared their willingness to 
negotiate  on  the  review  of  the  EWC  Directive.  However,  the  ETUC  concluded  after  a  few 

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days  that  it  was  ‘not  ready  for  negotiations  within  the  framework  of  the  social  dialogue’ 
considering  ‘the  time  constraints  and  the  depth  of  differences  with  the  employers’  and 
counted  on  the  Commission  to  present  a  revised  Directive.  The  employers’  organisations 
regretted this decision and asked the Commission not to start the legislative process by itself 
(see  Annex  3).  On  30  April  2008,  the  Commission  made  a  last  call  to  the  social  partners, 
inviting them to make their best efforts to negotiate on European Works Councils. A few days 
later, it was confirmed that there would be no such negotiation.  

In addition to the positions regarding the opening of negotiations, the Commission received 
four  responses  to  its  consultation  document  from  the  consulted  employers’  organisations 
CEEP,  Eurocommerce,  European  Banking  Federation  EBF  and  Hotrec,  two  from  the 
consulted workers’ organisations ETUC and CEC European Managers, as well as eleven other 
contributions  from  companies  and  employers,  trade  unions  and  European  Works  Councils8. 
Hotrec stressed there was no need to revise the Directive. EBF highlighted the importance of 
EWCs  for  the  banking  sector  and  the  need  for  flexibility  and  hoped  to  make  a  positive 
contribution to future negotiations. Eurocommerce made detailed comments on the envisaged 
proposals,  opposing  most  of  them,  but  supporting  the  training  of  representatives  and  the 
further  definition  of  competence  on  transnational  issues.  All  other  contributors  shared  the 
main  orientations  of  the  envisaged  proposals  and  made  suggestions  for  reviewing  some  of 
them  and  adding  others.  These  responses  are  considered  in  detail  in  the  analysis  of  impacts 
(section V) as well as in Annex 3. 

8 

Employers  and  companies:  Association  Française  des  Entreprises  Privées  (AFEP),  American  Chamber  of 
Commerce  in  the  European  Union  (AmCham  EU),  Confederación  Empresarial  Española  de  la  Economía  Social 
(CEPES),  Generali;  Trade  unions:  Confederation  of  the  Nordic  Bank,  Finance  and  Insurance  Unions  (NFU), 
Finansforbündet;  European  works  councils:  Total,  Handelsbanken,  HeidelbergerCement,  EADS,  joint  reply  IF, 
Nordea and Danske Bank. 

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SECTION II: PROBLEM DEFINITION 

II. 1 The problems that may require action 

By  establishing  processes  for  transnational  workers’  information  and  consultation  in 
Community-scale  companies,  EWCs  are  able  to  play  a  major  role  in  the  anticipation  and 
proper  management  of  change  and  in  developing  European  dialogue  at  corporate  level  in  a 
context  where  the  cross-border  dimension  is  becoming  more  and  more  important.  Where 
active,  EWCs  contribute  to  improving  corporate  governance  in  large  transnational 
undertakings,  a  key  factor  for  their  competitiveness,  and  to  reducing  the  negative 
consequences of unprepared restructuring for both the workers and the territories affected.  

All  employee  representatives  consider  EWCs  to  be  beneficial  (EPEC  2008  survey).  Despite 
the financial and the other non-quantifiable costs of operating an EWC, 57% of the companies 
with  an  EWC  accept  that  the  benefits  of  having  an  EWC  outweigh  its  costs  (while  35% 
consider  that  costs  outweigh  benefits  and  8%  give  no  clear  answer).  The  reason  for  this  is 
largely the ability of companies to communicate information regarding company strategy and 
the rationale for certain decisions to employees, particularly in times of change9.  

Views of involved parties on the benefits associated with the operation of EWCs (EPEC 2008) 

Agree 

Companies 
Neutral  Disagree Agree  Neutral  Disagree

Employees 

88% 

4% 

8% 

96% 

0% 

Better  ability  to  talk  to  employee  reps 
from other countries 
Better  ability  to  talk  directly  to  group 
management 
Improved understanding of management 
decisions 
Better exchange of information 
Improved 
management and employees 
Increased trust 
Better  corporate  culture  at  European 
level 
More effective decision-making 
Enhanced productivity 

relations 

between 

79% 

82% 

80% 

76% 

63% 

62% 

23% 
0% 

4% 

4% 

10% 

10% 

91% 

4% 

10% 

12% 

22% 

29% 

28% 

33% 
38% 

8% 

10% 

2% 

8% 

11% 

44% 
62% 

76% 

98% 

63% 

61% 

73% 

37% 
19% 

15% 

10% 

2% 

17% 

20% 

22% 

22% 
46% 

0% 

20% 

20% 

5% 

41% 
35% 

These benefits, although non–quantifiable, have very concrete impacts upon both workers and 
companies. For companies, they minimise the risks associated with social unrest in terms of 
the company’s public image as well as costs and delays, which far more than outweighs the 
operational costs of running an EWC10. They reduce resistance to change, support adaptation 

9 

10 

Also: three-quarters of the managers it interviewed in 24 major, mainly American, multinationals felt that EWCs 
brought added value to the company. Results — Organization Resources Counselors Inc., ORC EWC Survey 2002, 
summarised in EIROnline 01/2003. 
For  example,  restructuring  costs  of  €200  million  at  Nokia  Bochum  (up  to  €220  000  redundancy  benefits  per 
worker)  instead  of  the  €80  million  initially  planned  for  2300  workers,  with  high-profile  political  interventions 

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14 

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on the part of workers, contribute to the building of an integrated corporate culture following 
mergers,  convey  qualitative  root-level  information  about  the  company’s  life  to  top 
management, and help in attracting and retaining qualified employees.  

As regards the operational costs of EWCs, given the considerable flexibility provided by the 
11 
Directive, they vary between as little as €7 500 and €2.3 million a year, averaging €272 000
including management and employee time (EPEC 2008).  

Operational costs associated with EWCs, in euros (EPEC 2008) 

Annual ordinary costs 

Total 

Fixed 

Time 

Annual ordinary meeting 

101 200

52 500

48 700

time, 

employee 

Comments 
22% 
29% 
translation,  15% 
interpretation  & 
travel,  14%  management  time,  7% 
accommodation 
venue, 
+ 
subsistence, administration 
Fixed costs from €5 000 to €370 000 

13% 

Second  annual  ordinary  or 
extra meeting 
3 select committee meetings 
Training  
Total ordinary annual costs 

101 200

52 500

48 700 Idem 

25 700
43 800
271 900

12 100
43 800
160 900

13 600 Average €8 600 per meeting 

From €1 300 to €150 000 

111 000 From €7 500 to €2.3 million 

Additional costs in some EWCs, in euros (EPEC 2008) 

Expert fees 

Total 

Average 3 500 
(non FR)
143 700 (FR)

Comments 
Travel  and  subsistence  of  trade  union  experts  ( 
companies not headquartered in France) 
Accountancy,  environmental  and 
expertise (companies headquartered in France) 

restructuring 

Legal assistance costs 

0- 66 000

Labour disputes 

0- 500 000

Working groups 

 Average 25 700

In  half  of  cases,  often  linked  to  restructuring 
event 

In  16%  of  cases;  comprising  costs  of  additional 
meetings and expert fees rather than sanctions 
In 29% of cases; average €8 600 per meeting (4 000 
fixed costs and 4 500 time costs); up to €1.5 million 
(13 different working groups) 

Administration of ballot 
Dissemination costs 

0-25 400 In some cases 
0-25 000 E.g. for setting up an internet or intranet platform 

Costs of preparatory work 

0-238 000

Estimated  by  some  companies  to  be  five  days  for 
HR team 

Other costs 

0-250 000 Small minority: Annual report, field visits, etc. 

The  non-financial  costs  are  less  clear  than  the  benefits  and  operational  costs.  Employee 
representatives  see  few  drawbacks  with  EWCs,  with  the  exception  of  a  regretted  lack  of 
decision-making powers and international solidarity generated in EWCs. From the employers’ 
perspective, they relate mainly to raised employee expectations and the attempt made by some 
EWC members to use the forum to address what the employer considers to be purely national 
concerns.  Other  concerns  relate  to  the  perceived  lack  of  preparation  and  dissemination  of 

calling for a boycott and risks of market losses, reflected in Nokia Q1 08 results,, compared with an average fixed 
cost of €52 500 for an EWC plenary meeting.   
In relation to an average €20 billion turnover and 29 000 EEA employees represented.  

11 

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meeting  information  by  employee  representatives,  which  limits  the  added  value  of  EWCs 
(EPEC 2008).  

Views of involved parties regarding non-financial costs associated with the operation of EWCs 
(EPEC 2008) 

Agree 
52% 
51% 

Companies 
Neutral  Disagree Agree  Neutral  Disagree
12% 
23% 
32% 
23% 

Employees 

25% 
26% 

15% 
10% 

5% 

19% 

23% 

57% 

73% 
59% 

Increased bureaucracy 
Raised employee expectations 
Slowed  down  managerial  decision-
making  
Introduced  Unnecessary  rigidities  into 
employee relations 
Led to Calls for transnational collective 
bargaining 
Led to Breaches of confidentiality 
Led to Coordinated industrial actions 
The studies analysing the operation of EWCs (monographs or exchange of practices12) point 
to a dynamic process of development in successive stages, from initial reservations regarding 
the  establishment  of  EWCs  to  wide  recognition  of  the  positive  role  they  play  in  improving 
social dialogue and information/consultation in companies.  

80% 
66% 

75% 
69% 

17% 
20% 

10% 
21% 

2% 
15% 

15% 
10% 

88% 

68% 

92% 

55% 

53% 

25% 

21% 

26% 

19% 

26% 

8% 

7% 

0% 

8% 

However,  the  effectiveness  of  transnational  information  and  consultation  rights  is  not 
guaranteed and social unrest and higher economic and social costs arise due the subsequent 
absence of anticipation and negotiated accompanying measures in a significant proportion of 
the companies where EWCs are established.  

Legal  uncertainties  and  practical  problems  encountered  in  the  application  of  Directive 
94/45/EC,  notably  as  regards  the  interplay  between  national  and  transnational  levels  of 
dialogue and the consequences of mergers and acquisitions, are costly and may hinder or slow 
down the decision-making process in companies.  

In  addition,  the  current  legislation  governing  the  information  and  consultation  of  workers 
comprises  a  series  of  directives  containing  different  definitions  of  information  and 
consultation and lacking clear rules for their interplay. 

Drivers of the problems as identified 

The problems are not primarily caused by shortcomings in enforcement. The Commission has 
verified that the Directive is properly implemented by Member States and has carried out in-
depth  studies  to  that  end.  The  results  indicate  that  all  Member  States  have  adopted  national 
implementing measures that are close to the text of the Directive and put in place sanctions in 
the  event  of  infringements.  As  a  general  rule,  the  competent  national  authorities,  including 
courts,  have  taken  measures  to  ensure  the  correct  and  effective  application  of  the  national 
transposing rules and to ensure that companies meet their obligations.  

Three main drivers of the problems may be identified: 

12 

References to the studies in I.3(a). 

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•  Evolution  of  the  economic  context:  growing  internationalisation  of  corporate  activities, 

increasing number and importance of transnational restructuring operations; 

•  Lack  of  awareness  and  competence  on  the  part  of  the  company  actors:  difficulties  for 
smaller and less internationalised companies and their worker representatives, insufficient 
knowledge of EWC procedures and competences, insufficient coordination between EWCs 
and national information and consultation bodies, need for information on best practices13; 

•  Evolution  of  the  legal  framework  at  EU  level,  leading  to  the  lack  of  clear  and  coherent 
legal  rules:  no  interplay  between  different  instruments,  different  sets  of  definitions, 
different outcomes of court cases. 

1.a Lack of effectiveness of transnational information and consultation rights 

The  lack  of  effectiveness  of  transnational  information  and  consultation  rights  has  two  main 
aspects: 

•  EWCs are not  sufficiently informed and  consulted, in particular as half of the EWCs are 

not consulted before a restructuring decision is made public, 

•  Workers are not in a position to exert their rights, as no EWC has been established in their 

company although it falls within the scope of the Directive. 

Shortcomings in the information and consultation of European Works Councils  

Fourteen years after the adoption of Directive 94/45/EC, all European stakeholders emphasise 
the  added  value  of  European  Works  Councils  and  the  decisive  role  they  play  in  the 
anticipation and responsible management of change. However, their potential remains all too 
often unexploited, particularly in the event of transnational restructuring. 

A  large-scale  survey14  in  2005  found  that,  where  applicable,  the  EWC  was  consulted  on 
restructuring: 

•  before the decision was finalised in 20% of cases, 
•  before the decision was made public in 30% of cases, 
•  after the decision was made public in 20% of cases, 
•  not at all in 30% of cases. 

The  2008  EPEC  survey15  furthermore  indicates  that  only  20%  of  company  and  employee 
representatives  consider  that  the  EWC  consultation  process  did  make  a  difference  to  the 
implementation of restructuring plans. The overwhelming view expressed by both employee 

13 

14 

15 

Despite considerable efforts to promote best practices, as described in section IV.1, only half of EWC actors are 
aware of best practice publications on EWCs, mostly issued by social partners at national level. Three years after 
their adoption, only every sixth/seventh company is familiar with the Lessons learned on European works councils 
published by the European social partners (EPEC 2008). 
Professor  J.  Waddington  (University  of  Manchester)  analysed  the  answers  of  473  employee  representatives  in 
EWCs, see ref. in I.3. 
The  results  of  the  2008  EPEC  survey  on  45  restructuring  events  are  similar  to  those  of  Waddington  2005.  The 
EWC was informed and consulted on restructuring at the same time as the board in 38% of cases, before the press 
release (in most cases just hours before) in 18% of cases, at the same time as the press in 20% of cases, after the 
press in 20% of the cases, not at all in 4% of cases. 

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and  management  representatives  is  that  EWCs  are  largely  information  and  not  consultation 
bodies — let alone negotiation bodies. 

Although  74%  of  companies  with  EWCs  have  experienced  one  or  more  transnational 
restructuring  operations  over  the  last  three  years,  only  59%  have  held  face-to-face 
extraordinary  meetings  to  discuss  them  during  this  period  (EPEC  2008).  In  addition  to  the 
regular  exchange  of  information,  the  provisions  of  the  agreements  establishing  EWCs 
regarding  the  right  to  request  extraordinary  meetings  and  the  way  to  exercise  this  right  are 
important in this regard16. 

This limitation of the role of EWCs is evident in the public debate that occurs following every 
high-profile  restructuring  case  (examples  of  Nokia  Bochum,  Volkswagen  Forest,  Delphi 
Cadiz) regarding the shortcomings in the information and consultation of workers.  

Lack  of  transnational  information  and  consultation  in  companies  without  European 
Works Councils 

The  Directive  provides  for  negotiations  on  setting  up  an  EWC  to  start  at  the  initiative  of 
management or upon the request of at least 100 workers or their representatives in at least two 
Member States. Until such an initiative or request is forthcoming, there is no obligation to set 
up an EWC. 1441 companies falling within the scope of the Directive (64% of the companies 
concerned),  employing  9.5  million  employees  (38%  of  the  employees  concerned),  had  not 
established an EWC in 2007 (ETUI-REHS database). 

Smaller  companies  and  companies  with  a  more  limited  international  character  often  do  not 
have an EWC. 

•  There is a direct relationship between the degree of internationalisation of a company and 
the  likelihood  of  an  EWC  being  established.  The  percentage  of  companies  falling  within 
the scope of the Directive and having an EWC is 65% where internationalisation is highest 
(operations in 15 or more countries), decreases with the number of countries of operation 
and falls to less than 20% where internationalisation is lowest (operations in 2 countries).  

•  Size  is  a  major  factor  in  the  variation  in  EWCs.  61.3%  of  relevant  companies  with  a 
workforce  larger  than  10  000  employees  have  EWCs,  43.3%  of  companies  with  5000  to 
10 000 employees and only 23% of companies with fewer than 5000 employees.  

The  findings  of  academic  research17  regarding  the  absence  of  EWCs,  particularly  in  the 
Netherlands and in Germany (with a low take-up rate of 27%), give two reasons for this, both 
related to the perception that EWCs have limited added value: 

•  The main reason is the lack of action on the part of home-country worker representatives 
on account of a lack of interest. This may be due to a lack of knowledge regarding EWCs, 
the fact that the representative bodies at headquarters are already informed and consulted 
by central management, or the view that EWCs may interfere with the powers of national 

16 
17 

See III-2a. 
Bercusson  2008,  based  on  case  investigation,  Blockland  2002  and  Trinczek  et  al.  2007,  based  on  systematic 
investigation  of  companies  headquartered  in  the  Netherlands  and  Germany  and  9+6  in-depth  case  studies  — 
references in I.3.  

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bodies, jeopardise home-country cooperative industrial relations or are too weak to bring 
any  benefit.  Without  the  support  of  the  home-country  representatives  or  European  trade 
unions, it is difficult for worker representatives in subsidiaries to take the necessary steps 
towards the creation of an EWC. 

•  A  second  reason  is  the  negative  reaction  of  management  to  the  establishment  of  EWCs 
because  of  a  hostile  attitude  to  participation,  the  desire  to  avoid  costs  or  a  concern  that 
worker  solidarity  across  company  subsidiaries  may  increase  as  a  result.  However,  this  is 
not the main reason,  as management often  prefers to  adopt a  ‘strategic waiting position’. 
Still,  such  a  reaction  can  be  problematic,  as  documented  in  the  three  preliminary  rulings 
brought before the European Court of Justice (see below) and the cases investigated.  

According to  research findings, set-up and operating costs do not seem to rank high among 
the factors influencing the take-up of EWCs. Furthermore, no statistically significant relation 
can be observed between cost levels and take-up rates on a cross-country basis18. 

Set-up costs of EWCs, in euros (EPEC 2008) 

Time 

Total 

Fixed 

39 750

17 650

22 100

Average set-up costs 
Before 1996  
(‘Article 13’ agreements) 
Since 1996  
(‘Article 6’ agreements)  
The absence of EWCs is therefore partly due to a lack of need19, e.g. in companies with a very 
decentralised  structure  or  a  low  level  of  internationalisation,  and  partly  a  problem,  where 
workers  are  prevented  from  exercising  their  rights  by  the  hostile  reaction  on  the  part  of 
company  management  or  consider  that  the  costs  and  barriers  that  they  need  to  overcome  in 
order to establish an EWC are not worthwhile, given the low perceived benefits .  

Comments 
4 meetings  
5 employee reps and 3 managers  
4 meetings  
12 employee reps and 7 managers  

124 360

72 120

52 240

1.b Legal uncertainties in the application of the Directive  

A number of different court cases have highlighted important legal uncertainties, which have 
influenced the correct implementation of the Directive on EWCs and have entailed significant 
costs and delays in decision-making processes.  

Information needed to open negotiations for setting up a new European Works Council 

As  regards  the  setting  up  of  new  EWCs,  three  cases  brought  before  the  European  Court  of 
Justice  for  a  preliminary  ruling20  have  established  the  principle  that  the  managements  of  all 
undertakings  located  in  Member  States  are  required  to  supply  any  information  required  to 
open  negotiations  on  setting  up  an  EWC,  in  particular  information  on  the  structure  or 
organisation of the group, to employee representatives, irrespective of where the headquarters 

18 

19 
20 

Although based on small samples, comparing operating costs (fixed plenary meeting costs incl. experts) with take-
up rate by country of headquarters does not show any relationship (France €155 000/38%, Germany €78 000/27%, 
Italy €72 000/38%, Finland €40 000/44%, UK €36 000/41%  and non-European countries €24000/34% (EPEC 2008 
—  all  countries  with  cost  calculation  for  a  sample  greater  than  4  —  half  of  average  annual  costs  for  experts 
included (ETUI-REHS 2006 for take up rate).  
There is insufficient evidence to allow a quantitative assessment of the ‘lack of need’ for EWCs. 
C-62/99 Bofrost, C-440/00 Kühne & Nagel, C-349/01 ADS Anker GMbH. 

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of  the  group  is  located  or  of  the  central  management’s  opinion  as  to  the  relevance  of  the 
Directive. This principle would need to be made clear.  

Composition of the special negotiating body (SNB) 

The  Directive  (Article  5(2))  states  that  the  special  negotiating  body  (SNB)  must  have  a 
minimum  of  three  members  and  a  maximum  number  of  members  equal  to  the  number  of 
Member States involved. It must have an employees’ representative for each Member State in 
which the group has at least one establishment or undertaking, plus supplementary members 
in  proportion  to  the  number  of  employees.  The  original  maximum  number  of  17  members, 
corresponding  to  the  number  of  Member  States  when  the  Directive  was  adopted,  was 
increased  to  18  by  Directive  97/74/EC  (to  include  the  United  Kingdom)  and  in  2007  to  the 
‘number of Member States’, i.e. 3021, by Directive 2006/109/EC. Nonetheless, the application 
of  this  provision  creates  a  practical  difficulty,  as  it  may  lead  to  imbalances  in  the 
representation on the SNB, and a group employing workers in most Member States may not 
be able to comply with the maximum number stipulated or other provisions. 

Validity, renewal and continuity of the agreements establishing EWCs 

Many ‘Article 13’ and some ‘Article 6’ agreements do not make any practicable provision for 
amendment and/or termination, thus reducing the ability to adapt the structure and functioning 
of EWCs as and where necessary, in particular in cases of merger, acquisition or changes in 
make-up. Indeed, just less than half of companies have renewed their agreement since it was 
first signed, the most frequent reason being reorganisation or changes in the company (EPEC 
2008). National court cases also highlight legal uncertainties as to: 
•  the conditions for a pre-existing agreement under Article 13 of the Directive to be valid22, 
•  the possibility to amend ‘Article 13’ agreements in cases of changes in make-up23, 
•  the continued existence of the EWC when the make-up of the company changes24. 

Capacity of the EWC to represent workers and act in legal proceedings 

The European Courts do recognise the competence of European Works Councils to represent 
employees,  which  is  not  restricted  to  the  internal  matters  of  the  company  in  question25. 
However,  national  court  cases  highlight  legal  uncertainties  as  to  the  right  of  employee 
representatives  to  pursue  complaints,  in  particular  where  the  EWC  includes  management 
representatives26 . 

Concepts of information and consultation (see also definitions below) 

21 
22 

23 
24 
25 

26 

European Economic Area: Norway, Iceland and Liechtenstein included. 
CEMEX  decision  (Central  Arbitration  Committee,  11.7.2006);  Beiersdorf  (TGI  Melun,  13.10.2006),  Marks  & 
Spencer (TGI Paris, 9.4.2001) and Bouygues (Cour d’Appel de Paris, 12.10.2006, Cour de Cassation, 5.3.2008). 
CEMEX decision (Central Arbitration Committee, 11.7.2006). 
Global one/Equant (Amsterdam District Court, 23.1.2003, Amsterdam Court of Appeal, 1.4.2004). 
For  example,  the  Court  of  First Instance  of the European  Communities  accepted  the  intervention  of  the Legrand 
European Works Council in the dispute over competition law connected with the merger with Schneider (CFI, T-
77/02, Schneider Electric, Judgment of 6.6.2002). 
Preliminary  hearing  on  the  issue  of  court  costs,  P&O  (Employment  Appeal  Tribunal,  28.6.2002);  Panasonic 
(Appeal against Bobigny TGI, 4.5.1998). 

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The lack of a definition of information, the present definition of consultation in the Directive 
as well as the existence of other directives on information and consultation lead to different 
interpretations affecting the clarity of the legislative framework: 

•  National  courts  have  had  to  deal  with  the  lack  of  a  definition  of  information  in  the 

Directive27; 

•  The more precise definition of consultation laid down in the other directives, particularly 
the Framework Directive 2002/14/EC, has already been used in some national court cases, 
but not in others28; 

•  The  general  EC  law  principle  of  ‘useful  effect’  information  and  consultation  processes, 
although  it  does  not  appear  explicitly  in  the  Directive,  was  highlighted  in  Renault 
Vilvoorde29 and a series of further national court cases; 

•  As to timing, the principle set out in the Charter of Fundamental Rights of the European 
Union30  that  workers  or  their  representatives  must  be  guaranteed  information  and 
consultation ‘in good time’ is not clearly expressed in the present Directive and is therefore 
unclear to companies and workers; 

•  The  Gaz  de  France  rulings31  state  that  the  Board  of  Directors  cannot  take  decision  on  a 
merger before consultation of the EWC and that national and European consultative bodies 
may  have  different  information  needs.  The  legal  proceedings  have  delayed  the  planned 
merger between Gaz de France and Suez for over a year.  

Interplay  between  national  and  transnational  levels  (see  also  below  interplay  between 
directives)  

The interplay between national and transnational levels of information and consultation is a 
key legal uncertainty in the operation of EWCs in the event of restructuring: 

•  In a series of cases32, it has been ruled that national bodies cannot be consulted to useful 
effect in the event of transnational restructuring before consultation at transnational level is 
achieved.  However,  this  route  has  not  been  followed  in  the  more  recent  Alcatel  Lucent 
case33.  

•  Given  the  absence  of  interplay  between  directives,  information  and  consultation  at 
European  level  may  impede  full  compliance  with  procedures  at  local  or  national  level 
under  national  measures  implementing  other  directives,  and  may  prove  difficult  to  carry 
out in practice34.. 

27 
28 
29 
30 
31 
32 
33 
34 

Alcatel Lucent (TGI Paris, 27.4.2007). 
Beiersdorf (TGI Melun, 13.10.2006); Alcatel Lucent (TGI Paris, 27.4.2007). 
Cour d’Appel Versailles, 7.5.1997. 
Article 27. 
TGI Paris 21.11.2006, Cour d’Appel Paris 21.11.2006, Cour de Cassation 16.1.2008. 
Alstom (TGI Nanterre, 1.8.2003), Altadis (TGI Paris, 10.10.2003) and Beiersdorf (TGI Melun, 13.10.2006).  
TGI Paris, 27.4.2007. 
For example Marks & Spencer (TGI Paris, 9.4.2001).  

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The American Chamber of Commerce to the European Union (AmCham EU) underlines that 
companies  of  American  parentage  have  often  encountered  complexities  and  confusion  in 
linking the different levels of information and consultation due to a lack of specificity in the 
Directive  and  conflicting  court  cases  at  national  level  and  stresses  that  it  is  critical  that  the 
process  at  European  level  should  not  interfere  with  but  be  complementary  to  the  process  at 
national level.  

1.c Shortcomings in the coherence and interplay between Community legal instruments  

Definition of information and consultation  

The  EWC  Directive  does  not  include  a  definition of information.  The Framework Directive 
2002/14/EC  defines  information  as  the  ‘transmission  by  the  employer  to  the  employees’ 
representatives of data in order to enable them to acquaint themselves with the subject matter 
and to examine it’ and states that ‘information shall be given at such time, in such fashion and 
with  such  content  as  are  appropriate  to  enable,  in  particular,  employees’  representatives  to 
conduct  an  adequate  study  and,  where  necessary,  prepare  for  consultation’.  Equivalent 
provisions  are  also  found  in  the  directives  on  the  involvement  of  employees  in  a  European 
Company  (‘SE’)  and  European  Cooperative  Society  (‘SCE’)  —  Directives  2001/86/EC  and 
2003/72/EC. 

The  EWC  Directive  defines  consultation  as  ‘the  exchange  of  views  and  establishment  of 
dialogue  between  employees’  representatives  and  central  management  or  any  more 
appropriate level of management’. A more precise and concise definition is used in Directives 
2001/86/EC  and  2003/72/EC,  i.e.  ‘the  establishment  of  dialogue  and  exchange  of  views 
between the body representative of the employees and/or the employees’ representatives and 
the competent organ [of the Company], at a time, in a manner and with a content which allow 
the employees’ representatives, on the basis of information provided, to express an opinion on 
measures envisaged by the competent organ which may be taken into account in the decision-
making process within [the Company]’. This definition corresponds to the provisions of the 
Framework Directive 2002/14/EC, which also states that consultation must take place at the 
relevant level of management and representation, depending on the subject under discussion, 
in  such  a  way  as  to  enable  employees’  representatives  to  meet  the  employer  and  obtain  a 
response, and the reasons for that response, to any opinion they might formulate, and with a 
view to reaching an agreement on decisions within the scope of the employer’s powers which 
may bring about substantial changes in work organisation or in contractual relations.  

More recent directives also include the concepts of appropriate time, means and content and 
stipulate that ‘information and consultation procedures shall be established and implemented 
(…) so as to ensure their effectiveness’. 

Transnational competence of the EWC  

The concept of ‘transnational’, which distinguishes the area of competence of an EWC from 
that of national bodies, as set out in other directives35, is not defined in Directive 94/45/EC. It 
is a regular issue for dispute between employee and management representatives, especially 
where a company’s restructuring occurs in different stages affecting one country after another. 

35 

In  particular:  the  Framework  Information  And  Consultation  Directive  2002/14/EC,  Collective  Redundancies 
Directive 98/59/EC, Transfer Of Undertakings Directive 2001/23/EC. 

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In the British Airways case36, for example, the Court ruled that the EWC had to be consulted 
over  a  decision  to  outsource  activities  in  Austria,  as  the  decision  was  taken  in  another 
Member State. 

Interplay between directives governing national and transnational levels of information 
and consultation 

The  interplay  between  national  and  transnational  levels  of  information  and  consultation, 
which is not addressed by any of the directives concerned, is a major challenge as well as a 
key legal uncertainty in the operation of EWCs (see above).  

According  to  the  2008  EPEC  survey,  three  quarters  of  companies  have  undergone  a 
restructuring  that  has  affected  more  than  one  European  country  in  the  last  three  years.  In  a 
very  high  proportion  of  cases  (60%  —  to  be  further  researched),  company  and  employee 
representatives had differing views on which level had been consulted first for the same past 
restructuring event. In those cases where there were no divergent views:  

•  in 51% of cases, information and consultation took place at national or local level first, 
•  in 16% of cases, EWCs were consulted first, 
•  In 33% of cases, all levels were consulted at the same time. 

Companies needed  to seek legal advice as  to  which  level  had  to  be informed  and consulted 
first  in  27%  of  cases,  and,  in  as  many  as  39%,  companies  had  already  been  challenged  by 
employees on this issue. 

II. 2 Who is affected? 

The problems identified affect workers, companies and territories. 

2.a Workers 

The EWC Directive establishes a transnational information and consultation right for workers. 
The Charter of Fundamental Rights of the European Union also defines the information and 
consultation of workers as a fundamental right.37 24 million workers are directly affected.  

The  existence  of  EWCs  is  considered  overall  to  be  very  beneficial  by  employee 
representatives,  for  whom  the  benefits  of  having  an  EWC  always  outweigh  the  costs  (2008 
EPEC survey). Actual benefits of EWCs include: information on company strategies and the 
direction  of  companies,  provision  of  information  in  a  structured  format,  ability  to  put 
questions  directly  to  company  management,  enhanced  communication  between  employees 
and company management, and sharing of knowledge, lessons learned and good practice with 
employee representatives from other countries.  

The problems identified affect workers in particular, mainly as regards: 

•  the anticipation of company developments, the acceptance of change, and the capacity for 

mobility and adaptability,  

•  the existence of negotiated accompanying measures in cases of corporate restructuring, 

36 
37 

Brussels Labour Court, 6.12.2006. 
Article 27 of the Charter of Fundamental Rights of the European Union. 

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•  the  development  and  quality  of  dialogue  with  the  employer  and  of  cross-border 

relationships.  

2.b Companies  

The problems encountered with EWCs affect the 2257 large transnational companies falling 
within  the  scope  of  the  Directive  in  that  they  do  not  gain  any  benefit  from  these  bodies  or 
suffer from shortcomings in their operation. 

The  problems  affect  companies  and  the  capacity  of  EWCs  to  bring  added  value  to  them  in 
particular as regards: 

•  The control of social risks, the avoidance of social  unrest  and the image  of the company 

(example of Nokia Bochum38),  

•  The cost, design and use of appropriate accompanying measures in the case of corporate 

restructuring (example of Volkswagen Forest39), 

•  Legal  certainty,  the  related  protection  and  balance  issues  and  the  timing  of  decision-

making processes (example: the delay of over a year in the Suez-GDF merger), 

•  The  anticipation,  acceptance  and  proper  management  of  change,  the  related  social  and 

economic costs, the impact on the company’s competitiveness over time, 

•  The mobility and adaptability of workers and the related quality of the company’s human 

resources, 

•  The quality of social dialogue, 
•  Cost-efficiency in the operation of the EWCs. 

2.c Territories, related companies and workers  

The  EWC  Directive  and  the  problems  encountered  in  its  application  affect  not  only  the 
workers and the companies coming directly under its scope, but also the territories in which 
these  companies  operate.  Proper  anticipation  and  management  of  change  and  negotiated 
accompanying  measures  in  cases  of  corporate  restructuring  are  of  major  importance  for  the 
local  economic  and  social  situation,  especially where  the  territory  specialises  in  a  particular 
sector,  is  facing  high  unemployment  or  where  the  multinational  is  locally  the  only  or  the 
major  employer.  The  recent  vigorous  reactions  to  planned  plant  closures  without  proper 
anticipation through information and consultation of the EWCs (such as with the automotive 
plants in Azambuja-Portugal and Cadiz-Spain in 2006-2007) illustrate this impact.  

Similarly, subcontractors and networks of small and medium-sized businesses, with which the 
directly  affected  companies  coexist  and  which  they  support,  are  affected  along  with  their 
workers.  For  example,  subcontractors  and  their  workers  at  the  Forest-Belgium  automotive 
plant  in  2006-2007  were  heavily  hit  by  the  sudden  major  restructuring  announced  without 
notice and the subsequent strike, without being in a position to take the necessary measures to 
face its consequences.  

The  identified  shortcomings  in  the  anticipation  of  change  and  the  capacity  to  build 
partnerships  for  managing  it  in  a  sustainable  way  therefore  have  a  significant  impact  on 
competitiveness and social cohesion in Europe.  

38 
39 

See consequences above. 
Immediate and long strike, redundancy benefits up to 144 000 euros per worker, absence of appropriate measures 
for subcontractors, risk of market losses.  

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II. 3 Further likely developments without EU action 

Without  EU  action,  the  number  of  companies  with  an  EWC  would  probably  continue  to 
increase but slowly and the take-up rate would remain around 35%40.  

The  increasing  transnational  character  of  economic  activities,  companies  and  restructuring 
processes  is  intensifying  the  need  for  proper  information  and  consultation  at  transnational 
level. Despite the internal learning process within the EWCs, the gap between needs, workers’ 
expectations and the actual operation of EWCs will probably continue to grow, as observed 
over the last ten years.  

The  legal  uncertainties  and  shortcomings  in  the  interplay  between  levels  and  Community 
instruments  governing  the  information  and  consultation  of  workers  are  likely  to  persist 
without new EU action.  

II. 4 The basis for EU action 

4.a Legal basis 

Directive 94/45/EC establishing EWCs was adopted in 1994 on the basis of Article 2(2) of the 
Social  Policy  Agreement,  annexed  to  Protocol  14  on  Social  Policy,  in  turn  annexed  to  the 
Treaty  establishing  the  European  Community  (as  amended  by  the  Maastricht  Treaty).  This 
corresponds to the present Article 137(1)(e) of the Treaty (as amended by the Treaty of Nice), 
which  states  that  ‘with  a  view  to  achieving  the  objectives  of  Article  13641,  the  Community 
shall support and complement the activities of the Member States in the following fields (…) 
the information and consultation of workers’42.  

The  right  of  workers  to  information  and  consultation  within  undertakings  is  now  also  a 
fundamental  right.  According  to  Article  27  of  the  Charter  of  Fundamental  Rights  of  the 
European  Union:  ‘Workers  or  their  representatives  must,  at  the  appropriate  levels,  be 
guaranteed  information  and  consultation  in  good  time  in  the  cases  and  under  the  conditions 
provided for by Community law and national laws and practices.’ Any Community legislation 
in  this  field  therefore  has  to  be  interpreted  in  the  light  of  these  principles  and  must  respect 
them. 

4.b Necessity of EU action 

The  problems  described  affect  workers,  companies  and  territories  in  a  significant  way:  the 
potential  role  of  the  EWCs  in  anticipating  and  managing  change  in  a  sustainable  way  is  at 

40 
41 

42 

As it has done since 2000 — See Chart ‘Evolution in the take-up rate' in Annex 1.  
‘The  promotion  of  employment,  improved  living  and  working  conditions,  so  as  to  make  possible  their 
harmonisation while the improvement is being maintained, proper social protection, dialogue between management 
and  labour,  the  development  of  human  resources  with  a  view  to  lasting  high  employment  and  the  combating  of 
exclusion.’ 
Article 137(2) of the Treaty states furthermore that, in these fields, ‘the Council: (a) may adopt measures designed 
to  encourage  cooperation  between  Member  States  through  initiatives  aimed  at  improving  knowledge,  developing 
exchanges  of  information  and  best  practices,  promoting  innovative  approaches  and  evaluating  experiences, 
excluding any harmonisation of the laws and regulations of the Member States; (b) may adopt, (…) by means of 
directives, minimum requirements for gradual implementation, having regard to the conditions and technical rules 
obtaining  in  each  of  the  Member  States.  Such  directives  shall  avoid  imposing  administrative,  financial  and  legal 
constraints  in  a  way  which  would  hold  back  the  creation  and  development  of  small  and  medium-sized 
undertakings.’ 

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present  largely  unexploited  and  the  legal  uncertainties  entail  costs  and  problems  for 
companies  and  workers  alike.  The  problems  would  worsen  without  new  EU  action  in  a 
context of increased internationalisation. The action is therefore necessary, particularly with a 
view  to  sustainable  competitiveness,  social  cohesion,  acceptance  of  globalisation  and 
developments in international trade, completion of the internal market and better regulation.  

The EU action potentially has a major added value, as 

•  the problems to be tackled are of a transnational nature, 

•  the set of rules for transnational workers’ information and consultation is already provided 

by a directive, 

•  individual action by Member States cannot sufficiently respond to the problems identified. 

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SECTION III: OBJECTIVES 

III. 1 The general policy objectives  

European  Works  Councils  must  be  in  a  position  to  play  their  full  part  with  regard  to 
developments  in  undertakings,  in  anticipating  and  accompanying  change  and  fostering 
genuine  transnational  social  dialogue  in  a  rapidly  changing  economic  and  social  context. 
Sustainable competitiveness for large transnational undertakings and also for the network of 
small  and  medium-sized  businesses  with  which  they  co-exist,  and  which  they  support, 
depends on this, as does social and territorial cohesion. 

III. 2 The specific objectives of the initiative 

EU  action  should  have  the  following  specific  objectives  in  order  to  address  the  different 
aspects of the problems identified. 

2.a To ensure the effectiveness of employees’ transnational information and consultation 
rights in existing EWCs  

The  existing  EWCs  are  not  properly  informed  and  consulted  in  over  half  of  restructuring 
cases and transnational information and consultation rights are not exercised where no EWC 
has been established. 

Looking at the key factors for the effectiveness of EWCs, the 2003 EESC opinion singles out 
the timing, content and frequency of transnational information and meetings, in particular:  

•  the  quality  of  regular  information  and  actual  access  to  such  information  for  interested 

parties, 

•  early intervention by EWCs in the decision-making process,  
•  broad acceptance of the transnational nature of issues addressed by EWCs 

The  EESC  furthermore  considers  that  the  establishment  of  real,  fruitful  dialogue  within  an 
EWC is linked to its mode of operation, as this determines how information is circulated and 
its capacity to coordinate and respond, in particular:  

•  the select committee, the frequency of meetings, the contacts with national representative 
bodies,  the  possibility  of  contacts  with  the  company’s  various  sites,  and  translation 
facilities;  

•  the skills and competence of EWC members and the resources at their disposal.  

A 2005 survey on restructuring in German-based companies in the metal sector highlights the 
importance  of  the  EWC’s  right  to  request  an  extraordinary  meeting  to  ensure  proper 
consultation43. 

The  operational  objectives  that  need  to  be  achieved  in  order  to  ensure  the  effectiveness  of 
employees’ information and consultation rights include:  

43

As reported in EWC Bulletin, No 66, November 2006. 

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27 

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•  To develop the concepts of information, consultation and transnational competence; 
•  To enlarge the scope of matters that can be dealt with in an EWC; 
•  To  enhance  references  as  to  the  operation  of  EWCs,  including  the  number  of  ordinary 
meetings, the rules regarding extraordinary meetings, the role of the select committee; 
•  To  increase  the  circulation  of  information  within  the  EWC,  notably  by  having 

representatives report back to their members; 

•  To develop the capacity of EWC through training and support; 
•  To clarify sanctions in cases of non-compliance; 
•  To raise awareness of best practices for information and consultation at transnational level. 

2.b To increase the take-up rate 

The previously quoted studies identify the key factors that might boost the number of EWCs 
by  increasing  the  likelihood  of  requests  from  employees  and  acceptance  by  employers:  the 
awareness  of  the  added  value  of  EWCs,  the  availability  of  information  on  the  company  to 
workers  and  the  capacity  to  take  the  initial  steps,  particularly  for  employee  representatives 
within subsidiaries.  

The  operational  objectives  that  need  to  be  achieved  in  order  to  increase  the  take-up  rate 
include:  

•  To raise awareness of the role of information and consultation at transnational level;  
•  To  make  information  on  companies  falling  under the scope of the Directive and existing 

agreements establishing EWCs easily available; 

•  To  clarify  the  responsibility  of  local  management  in  making  the  information  needed  to 
request  the  opening  of  negotiations  on  the  establishment  of  a  new  EWC  available  to 
employee  representatives,  especially  in  subsidiaries,  as  the  lack  of  action  on  the  part  of 
home-country  workers”  representatives  is  a  key  to  low  take-up  rate44  (see  also  legal 
certainty below); 

•  To shorten the negotiating period; 
•  To recognise the role of trade unions. 

2.c  To  ensure  legal  certainty  in  the  setting  up  and  operation  of  European  Works 
Councils 

Legal  uncertainties  in  the  application  of  the  Directive,  particularly  as  regards  the 
consequences  of  mergers  and  acquisitions  and  the  interplay  between  national  and  European 
levels of information and consultation, need to be addressed. With regard to the operational 
objectives, the following need to be clarified: 

•  the information to provide to enable a new EWC to be set up, 
•  the composition of the Special Negotiating Body, 
•  the concepts of information, consultation and transnational competence, 
•  how to adapt agreements to changes in make-up, 
•  how to link the national and transnational levels of information and consultation, 
•  the legal standing of EWCs. 

2.d  To  ensure  better  coherence  and  interplay  between  directives  in  the  field  of 
information and consultation 

44 

See section II 1.a p.18-19. 

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The  concepts  of  information  and  consultation  in  the  EWC  Directive  differ  from  those 
contained in most recent directives in the field of workers’ information and consultation, and 
there  are  no  clear  rules  for  the  interplay  between  these  directives.  In  order  to  ensure  better 
coherence between different EU instruments, the initiative should define:  

•  coherent concepts of information and consultation across the applicable directives, 
•  the transnational competence of EWCs and the way in which the national and transnational 

levels of information and consultation are linked, 

•  lower  thresholds  for  the  establishment  of  EWCs,  in  line  with  the  thresholds  in  other 

directives. 

III. 3 The consistency of these objectives with other EU policies  

The  proposed  action  is  consistent  with  the  Commission’s  policies  on  social  dialogue, 
corporate restructuring and industrial policy. It is also in line with the better regulation agenda 
by  improving  the  quality  of  EU  legislation,  which  needs  to  be  adapted  to  the  increasing 
number and scale of transnational restructuring operations.  

The  present  initiative  is  part  of  the  renewed  Lisbon  strategy,  the  aim  of  which  is  to  create 
more growth and jobs in Europe, and in particular to create more better-quality jobs in a more 
dynamic and competitive Europe. It supports the development of a flexicurity approach in that 
it aims to enhance the capacity of companies and workers to adapt to changing patterns while 
ensuring security through better anticipation and management of change. It forms part of the 
initiatives related to the completion of the internal market included in the Commission’s 2007 
Communication A single market for 21st century Europe45. 

It  may  in  addition  constitute  a  first  step  towards  the  simplification  of  information  and 
consultation directives as planned in the Social Agenda 2005-2010. 

The initiative would contribute to the effectiveness of the right of workers to information and 
consultation at the appropriate levels and in good time as required by Article 27 of the Charter 
of Fundamental Rights of the European Union. 

45 

COM(2007) 725 of 20.11.2007, chapter 2.4. 

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SECTION IV: POLICY OPTIONS 

Presentation of the possible options  

Three possible options for meeting the objectives and tackling the problems are identified:  

•  First option: No new EU action,  

•  Second option: Non-regulatory approach with additional promotion of best practices,  

•  Third option: Review of existing legislation. 

It has to be underlined that the second and third options do not exclude each other and can be 
used in combination. The main measures envisaged in each of the options are set out in the 
following table and discussed in more detail further below. 

Specific  objectives 
— 
and 
aspects 
operational 
objectives 

Option 1 

Option 2  

Option 3  

No new EU action 

Non-regulatory 
approach 

Review of existing 
legislation 

Main measures  

Objective: to ensure the effectiveness of employees’ transnational information and consultation rights  

Remedy  shortcomings  in 
the 
& 
information 
consultation of EWCs 

- Monitoring 
implementation  
- Financing projects 
with exchange of best 
practices 
-Participation in 
conferences 
-Consultation of social 
partners and support 
for social dialogue 

- Increased 
communication  
- Additional financing of 
projects 
- Guidance on information 
and consultation processes 
- Guidance on EWCs’ 
mode of operation 
- Guidance on training for 
and reporting back by 
employee representatives 

-Information for social 
partners when opening 
negotiations 
- Definition of information 
and transnational competence 
- Further developed concept of 
consultation 
- Adapted content of 
subsidiary requirements used 
as benchmark for negotiations 
- Right to training 
- Duty for representatives to 
report back 
- Clarification of sanctions 

Objective: to increase the take-up rate  

Increase the take-up rate 

-Financing of database 
-Financing of projects 
to set up new EWCs 
-Support for social 
dialogue 

- Increased 
communication  
- Additional financing of 
projects 
- Guidance on setting up 
new EWCs 

- Clarification of information 
to provide to workers 
- Shorten negotiation period 
- Recognition of the role of 
trade unions 
- Registering agreements 

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Objective: To ensure legal certainty in the setting up and operation of EWCs 

Address legal 
uncertainties as to 

- Information for opening 
negotiations 
- Composition of Special 
Negotiating Body (SNB) 

- Validity, adaptation and 
continuity of agreements 

- Capacity of EWC to act 

- Concepts of information 
and consultation 

- Interplay between 
national and transnational 
levels 

- Monitoring 
implementation of the 
Directive 
- Financing of 
information and 
observation points 
- Consultation of social 
partners 

- Guidance on information 
to provide to workers 

- Guidance on adaptation 
to change 

- Guidance on information 
and consultation processes 

- Incorporation of ECJ rulings 
in information to provide to 
workers 
- Reviewed composition of 
SNB 
- Adaptation clause 
- Transitional provisions 
- Registering agreements 
- Capacity of EWC 

- Definition of information 
and transnational competence 
- Precise concept of 
consultation 
- Rules on linking levels 
- Adaptation of requirements 
for national-level information 
and consultation 

Objective: To ensure coherence and interplay between directives in the field of information and consultation 

Ensure coherence as to 
- Definition of 
information and 
consultation 
- Transnational 
competence of EWC 
- Interplay between 
instruments regulating 
national and transnational 
levels 

- Coherent scope 

- Guidance on information 
and consultation processes 

- Align definitions of 
information and consultation 
- Define transnational 
competence 
- Rules on linking levels with 
adaptation provisions for 
national legislation 

- Lower thresholds  

IV.1 First option: No new EU action 

Important actions have already been taken at European level in order to address the problems 
identified. No new EU action would imply  

•  the  continuation  of  the  Commission’s  monitoring  of  the  implementation  of  the  EWC 

Directive, as well as the 

•  continuation of EU awareness-raising activities and promotion of best practices for EWCs. 

1- Monitoring of the Directive’s implementation 

The Commission has carried out extensive monitoring of the Directive’s implementation since 
1994. In particular, it has: 

•  organised a working party with national experts and provided clarifications and guidance 

where necessary to support Member States in their implementation of the Directive, 

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•  commissioned  a  series  of  studies  on  the  practical  implementation  of  the  Directive  in  the 

Member States, in 1999 (EU-15) and 2007 (EU-10), 

•  adopted a report on the application of the Directive (COM(2000)188), in 2000, 

•  verified continuously the proper implementation and notification of national implementing 

measures and launched infringement procedures where necessary46, 

•  followed  on  an  ongoing  basis  cases  relating  to  the  EWC  Directive  brought  before  the 

national courts. 

This  has  resulted  in  an  in-depth  knowledge  of  the  Directive  and  its  implementation  and 
ensured  the  good  quality  of  national  implementing  measures.  Good  cooperation  between 
national experts on this issue has also been developed. 

2- Awareness-raising and promotion of best practices 

Since 1994, the European  Union has provided  substantial  support  for  awareness-raising  and 
the promotion of best practices.  

The  main  financial  instrument  is  budget  heading  04.03.03.03  (previously  B3-4003  and  B3-
4004)  Information,  consultation  and  participation  of  representatives  of  undertakings,  which 
provides  support  for  measures  fostering  the  development  of  employee  involvement  in 
undertakings by promoting in particular Directive 94/45/EC, to which a sum of €8.1 million 
has been allocated for 2008. This budget heading, like the others relating to social dialogue, is 
‘autonomous’  and  depends  entirely  on  decisions  taken  by  the  European  Parliament  and  the 
Council on an annual basis.  

The  appropriation  for  budget  heading  04.03.03.03  covers  in  particular  the  funding  of 
measures  to  strengthen  transnational  cooperation  between  workers’  and  employers’ 
representatives  in  respect  of  information,  consultation  and  participation.  It  also  provides  for 
the setting up of information and observation points to inform and help the social partners and 
undertakings to set up European Works Councils and to foster relations with EU institutions 
in  this  respect.  The  appropriation  may  also  be  used  to  fund  short  training  courses  for 
negotiators  and  representatives  working  with  transnational  information,  consultation  and 
participation bodies as well as for representatives of social partners in the candidate countries. 
It may also be used to finance measures to enable the social partners to exercise their rights 
and  their  duties  as  regards  information,  consultation  and  participation  in  Community-scale 
undertakings, especially within European Work Councils, and to strengthen their cooperation 
at Community level.  

Priority objectives include  

•  For transnational cooperation projects: promoting the setting  up of new European  Works 
Councils,  improving  transnational  information  and  consultation  processes,  and  enabling 

46 

Now all closed as the Member States have taken the necessary measures, except reasoned opinions sent in February 
2008 to three Member States for not having notified the measures implementing Directive 2006/109/EC amending 
Directive  94/45/EC  as  to  the  maximum  number  of  members  of  the  Special  Negotiating  body  by  reason  of  the 
accession of Bulgaria and Romania to the European Union. 

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the  social  partners  to  exercise  their  rights  and  their  duties  as  regards  information, 
consultation and participation, especially within European Work Councils;  

•  For  information  and  observation  points:  providing  support  for  the  preparation,  launching 
and monitoring of transnational cooperation projects for the information, consultation and 
participation  of  workers;  monitoring,  analysing  and  assessing  the  experience  with  the 
establishment  of  transnational  representative  bodies  at  enterprise  level  and  the  extent  to 
which the objectives for information, consultation and participation have been effectively 
met within such bodies. 

The allocations and commitments for budget heading 04.03.03.03 over the past ten years have 
been as follows: 

Year 

Allocated in call  Appropriations 

Commitments 

1998 
1999 
2000 
2001 
2002 
2003 
2004 
2005 
2006 
2007 
2008 

7 600 000
7 700 000
8 000 000
8 100 000

6 000 000
5 000 000
4 000 000
4 000 000
6 000 000
6 350 000
7 288 000
7 600 000
6 200 000
6 540 000
8 100 000

5 982 000 
4 964 000 
3 977 000 
3 809 000 
5 840 000 
5 819 000 
7 253 500 
6 898 000 
5 250 000 
5 427 000 

Since  2005,  the  Commission  has  organised  annual  meetings  with  project  promoters,  at  an 
average cost of €20 000, to improve the monitori ng and promotion of the projects financed. 

The  Commission  further  promotes  awareness  and  best  practices,  principally  in  support  of 
social partners, through: 

•  consultations  of  social  partners  and  follow-up  activities,  including  joint  consultation  on 
best practices in corporate restructuring and EWCs (2005), the restructuring forum and the 
partnership for change in the automotive sector; 

•  information on texts produced by the social partners on best practices in the field of EWCs, 

•  support for social dialogue, at cross industry and sectoral levels, 

•  participation in numerous seminars and conferences. 

IV.2 Second option: Non-regulatory approach — additional promotion of best practices 

All  contributions  and  studies  point  to  the  need  to  promote  the  exchange  of  experiences  and 
best practices to help speed up the learning process of EWCs. The promotion of best practices 
has therefore been an important element in the EU’s action to date (see previous chapter).  

However,  there  is  still  work  to  do,  as  the  2008  EPEC  survey  shows  that  only  half  of  EWC 
actors  are  aware  of  best  practice  publications  on  EWCs,  mostly issued  by  social  partners  at 
national  level.  Three  years  after  their  publication,  only  every  sixth/seventh  company  is 
familiar with the European Lessons learned. 

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As substantial support for awareness-raising and the promotion of best practices has already 
been  provided,  this  option  would  focus  on  additional  measures  aimed  at  ensuring  the 
effectiveness  of  employees’  transnational  information  and  consultation  rights  and  solving 
problems identified in the practical application of the Directive. 

This option includes: 

•  An increase in communication actions, possibly followed by a proposal for an increase in 
the  sum  allocated  to  the  budget  heading  04.03.03.03.  Information,  consultation  and 
participation of representatives of undertakings, 

•  A recommendation for the setting up and functioning of EWCs. 

1-  Increase  in  communication  actions  and  proposed  increase  to  budget  heading 
04.03.03.03 

The  projects  financed  under  budget  line  04.03.03.03  on  the  information  and  consultation  of 
workers are recognised as a major instrument in awareness-raising and the promotion of best 
practices.  The  objectives  of  the  budget  heading  (see  previous  chapter)  are  shared  by 
stakeholders. In 2007, a total of 92 applications were submitted for co-financing, and a total 
of 46 projects were approved by the Authorising Officer by Sub-delegation on the basis of the 
proposals  of  the  Evaluation  Committee.  Most  of  the  projects  approved  were  submitted  by 
European and national trade union organisations.  

Increasing the resources allocated to this budget heading (€8.1 million for 2008) would allow 
more  projects  to  be  developed,  in  particular  to  facilitate  the  setting  up  of  new  EWCs,  to 
exchange experiences and promote best practices for the functioning of EWCs, and to foster 
relations between stakeholders in order to develop the role of EWCs. As the average grant for 
a cooperation project was €118 000 in 2007, an in crease of €1.2 million would, for example, 
support 10 new annual projects47. However, the number of applications in response to the call 
for proposals under this budget heading  decreased slightly from 102 in 2006 to 92 in 2007. 
Furthermore, the insufficient number and quality of the projects submitted in 2006 and 2007 have 
led to a decrease in commitments as compared to the levels reached in 2004 and 2005. A proposal 
to  increase  the  allocated  sum  can  only  be  made  on  the  grounds  that  the  current  amount  is 
insufficient to support all the good-quality projects submitted.  

Any  action  in  this  direction  therefore  needs  to  be  preceded  by  increased  communication 
measures to improve public awareness of this budget heading, particularly through better access 
(web  portal,  links  on  specialised  websites)  and  increased  cooperation  with  stakeholders.  The 
public debates surrounding the 2008 initiative to reinforce EWCs will also probably contribute 
to  enhancing  the  interest  in  EWCs  and  encouraging  the  submission  of  more  projects,  as  was 
already evident in 2004-2005. 

Increased communication actions by both the Commission and other stakeholders would also be 
useful to increase awareness and promote best practices. In particular, the results of activities 

47 

The increase in the number of projects will have mainly an impact upon the EU budget as the projects 
are supported up to the level of 80% of eligible costs. 

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34 

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by the social partners in this field at cross industry and sectoral levels as well as the results of 
projects financed by the budget heading should be made easily available48.  

A  communication  plan  would  be  established  in  cooperation  with  social  partners  and  key 
actors in the field of EWCs and could be financed under the PROGRESS programme, which 
may be proposed to dedicate a sum of €1 million to that aim.  

2- Recommendation on the setting up and functioning of European Works Councils 

On the basis of the actions already undertaken to support the social partners, the Commission 
may  also  produce  a  recommendation  on  the  setting  up  and  functioning  of  European  Works 
Councils  to  provide  the  guidance  needed  by  employers  and  employee  representatives.  The 
following aspects would be covered. 

Guidance on the setting up of new EWCs:  

•  Mechanisms to inform workers of their right to ask for the opening of negotiations in order 

to set up an EWC, 

•  Possible role of experts, 
•  Arrangements for the conduct of negotiations.  

Guidance on the EWC’s mode of operation: 

•  Ways  to  ensure  the  effective  continuity  of  the  EWC  and  the  respective  roles  of  ordinary 

and extraordinary meetings,  

•  Role of a select committee, 
•  Arrangements for communication and translation facilities, use of expertise. 

Guidance on information and consultation processes: 

•  Specific role of transnational information and consultation, 
•  Interest of including the subjects of mobility, health and safety at work, work organisation 

and environment in the information and consultation of the EWC, 

•  Justification and use of confidential information, 
•  Ways to achieve effective consultation following an anticipatory approach, 
•  Arrangements for the linking of information and consultation levels. 

Guidance on the adaptation of EWCs to change: 

•  Possible procedures for adaptation and termination to be included in new agreements, 
•  Methods for negotiating new arrangements following a merger or acquisition, 
•  Arrangements for transition mechanisms during periods of important change. 

Guidance on the role and competence of employee representatives: 

•  Methods  enabling  employee  representatives  to  report  back  to  the  workers  they  represent 

and to gather their views, 

•  Effective training. 

48 

The Europa website where the budget heading is publicised should in particular make the main results of projects 
centrally accessible in order to enhance their multiplier effect. 

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35 

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Benchmark  on  the  way  to  deal  with  new  topics  such  as  health  and  safety  at  work,  work 
organisation, environment or mobility within the remit of an EWC should have a particularly 
positive impact on the promotion of best practices in this area. 

IV.3 Third option: Review of existing legislation 

The  Commission  launched  a  second-stage  consultation  on  possible  changes  to  Directive 
94/45/EC in February 2008. The responses to the consultation are described in section I and 
detailed in Annex 3.  

None  of  the  envisaged  changes  in  this  consultation  are  intended  to  modify  the  general 
framework  of  the  Directive,  which  provides  for  considerable  flexibility  at  company  level. 
This flexibility is necessary in order to adapt EWCs to the wide variety of company structures 
and activities and systems for management-employee relations. In particular, the fact that the 
Directive  mainly  provides  a  framework  for  negotiating  at  company  level  all  the  practical 
arrangements  for  the  composition  and  operation  of  EWCs,  with  hardly  any  minimum 
requirements, is considered as a key positive factor to be maintained. Moreover, the priority 
given to negotiated solutions at company level is reinforced.  

An additional principle for the review is to support good practice and to limit the necessary 
adaptation  to  new  rules  to  those  companies  or  EWCs  for  which  improvements  are  deemed 
necessary to achieve the objectives. Well-functioning EWCs  should not have to change and 
should only benefit from the review of the Directive. 

An underlying principle of the review is to contribute to improving the rights of workers to 
transnational  information  and  consultation  through  means  that  are  efficient  and  balanced, 
taking into account the interests of all stakeholders, in particular companies.  

The  changes  envisaged  include  the  following  sub-options  1  to  10,  in  order  of  increasing 
potential  to  meet  one  or  more  of  the  specific  objectives.  Most  of  these  sub-options  were 
presented  in  the  second-phase  consultation.  A  few,  however,  were  suggested  by  the 
stakeholders themselves in reply to the consultation.  

Sub option 1 — Lower thresholds for setting up EWCs 

Directive  94/45/EC  applies  to  companies  and  groups  with  at  least  1 000  employees  in  the 
European  Economic  Area,  including  150  in  two  different  Member  States.  The  European 
Parliament in its 2001 Resolution as well as the  European Trade Union Confederation have 
asked for the threshold to be lowered to 500 and 100 employees, respectively. However, this 
change was not included in the document for the consultation of the European social partners 
for the reasons described in section V.  

Sub option 2 — Registration of agreements 

At present, the monitoring of European Works Councils relies on data collected by the trade 
unions. A compulsory mechanism for the registration of agreements would be useful for legal 
certainty, and has been requested by the ETUC. However, this change was not included in the 
document  for  the  consultation  of  the  European  social  partners  for  the  reasons  described  in 
section V.  

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Sub option 3- Technical update of the composition of the special negotiating body (SNB) 
and clarification of the organisation of negotiations 

In order to address the legal uncertainties (described in II.1(b)) and clarify the process for the 
negotiation of agreements establishing EWCs, the proposal here is to: 

•  simplify the composition of the SNB by deleting the reference to the maximum number of 
members  and  introducing  a  system  that  allows  the  SNB  to  better  reflect  the  number  of 
employees in the company: 1 member per 10% of the workforce (as in the SE Directive, 
2001/86/EC), 

•  provide that Member States with only a small number of employees could be represented 

through a group arrangement or indirectly, 

•  clarify the right of employees’ representatives to meet without the employer being present, 
with the linguistic facilities necessary for communication, before and, where appropriate, 
after negotiation meetings with the employer,  

•  clarify the right of SNB experts to be present at such negotiations. 

Sub option 4- Clarifications regarding the protection of rights  

In order to improve compliance by making clear to company actors the existence of sanctions 
in  the  event  of  violations  of  information  and  consultation  rights  and  to  address  legal 
uncertainties  regarding  the  capacity  of  the  European  Works  Council  to  represent  workers’ 
interests and regarding the information needed to open negotiations to set up a new EWC, and 
therefore contribute to increasing the take-up rate, the proposal here is to: 

•  reiterate the general principle according to which, in the event of infringements, sanctions 

must be effective, proportionate and dissuasive, 

•  explicitly recognise the European Works Council as the representative of the undertaking’s 

or group’s employees, 

•  incorporate the principles established in preliminary rulings by the Court of Justice that all 
information essential for the opening of negotiations to set up a European Works Council 
must be supplied to the employees’ representatives by the managements concerned in the 
Member States. 

Sub option 5- Recognition of the role of trade union organisations 

It is proposed in the consultation document to recognise explicitly the special role that trade 
union  organisations  can  play  in  negotiations  and  support  for  European  Works  Councils,  by 
including trade union organisations among the experts who may be present at meetings of the 
special negotiating body, at the request of the latter. 

Sub option 6- Adaptation of the subsidiary requirements (applying in the absence of an 
agreement)  

Subsidiary requirements are fall-back provisions that regulate the operation of EWCs in the 
absence  of  an  agreement.  They  are  not  minimum  requirements  all  EWCs  would  have  to 

EN 

37 

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observe, and have been applied up to now only in a very limited number of cases (about five), 
as  nearly  all  European  Works  Councils  are  established  on  the  basis  of  an  agreement. 
However,  they  play  an  important  benchmark  role,  especially  in  the  negotiation  or 
renegotiation  of  agreements.  The  following  changes  could  be  envisaged.  In  the  absence  of 
agreed mechanisms within the undertaking or group, these would establish: 

•  the  right  of  the  European  Works  Council  to  obtain  a  response,  and  the  reasons  for  that 

response, to any opinions they have expressed; 

•  a precise definition of exceptional circumstances, in order to improve anticipation; 

•  the  possibility  of  a  second  meeting  to  seek  an  agreement  in  the  event  of  exceptional 

circumstances;  

•  the  possibility  of  increasing  the  number  of  ordinary  meetings  of  the  European  Works 

Council from one a year to two a year;  

•  the  possibility  of  introducing  new  subjects  for  the  information  and  consultation  of  the 
European Works Council, in line with practical developments (mobility, health and safety 
at work, work organisation, environment). 

Sub option 7- Introduction of an adaptation clause and transitional provisions 

The  introduction  of  an  adaptation  clause  to  stipulate  what  should  happen  to  representative 
bodies in the event of a significant change in make-up (merger, acquisition, take-over) could 
help improve legal certainty and be useful for the introduction of transitional arrangements to 
ensure the information and consultation of workers at key moments in reorganisations and for 
modifying  operational  frameworks  that  have  become  obsolete.  A  proposal  could  therefore 
provide that: 

•  all new agreements must include procedures for their adaptation and termination, and also 

for their renegotiation, especially in the event of a change in make-up; 

•  in the absence of provisions in existing agreements or in the event of conflicts between the 
relevant  provisions  of  two  or  more  agreements,  negotiations  on  the  new  make-up  should 
start at the request of employees or on the initiative of the central management within an 
appropriate  timescale,  with  transitional  arrangements  in  place  for  the  existing  body  or 
bodies for the duration of negotiations; 

•  a request for the opening of negotiations with a view to adapting or replacing a pre-existing 

agreement that has become obsolete may be acceptable under certain conditions. 

The proposal could include provisions to ensure that European Works Councils which operate 
to  the  satisfaction  of  the  parties  involved  are  able  to  continue.  The  review  of  legislation 
should  not  entail  compulsory  changes  or  obligations  to  renegotiate  existing  agreements  in 
such cases. 

Sub  option  8-  Clarification  of  the  role  and  reinforcement  of  the  competence  of 
employees’ representatives 

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In  order  to  allow  employees’  representatives  to  perform  their  duties  to  the  full,  a  proposal 
could introduce: 

•  an obligation for European Works Council representatives to report to the workers they are 

representing; 

•  a right to training for employees’ representatives. 

Sub  option  9-  Alignment  of  the  concepts  of  information  and  consultation  across  the 
directives 

Adding  a  definition  of  ‘information’  and  clarifying  the  definition  of  ‘consultation’  would 
clarify  the  concepts  and  better  link  them  with  the  definitions  in  more  recent  directives 
concerning 
information  and  consultation  of  workers  (2002/14/EC,  2001/86/EC, 
2003/72/EC). This would also significantly enhance the role and effectiveness of EWCs. 

the 

Sub option 10- Definition of the transnational competence of European Works Councils, 
linking  information  and  consultation  levels  and  organising  the  interplay  between  the 
directives 

In line with the principle of dialogue at the relevant level of management and representation 
depending on the subject under discussion, the transnational competence of European Works 
Councils could be defined as relating to issues going beyond the powers of decision-making 
bodies in a single Member State. 

Information and consultation levels could be linked through a procedure taking into account 
the diversity of situations and allowing both an anticipatory approach and consideration of the 
employees potentially most affected by decisions, based on: 

•  the  principle  of  dialogue  ‘at  the  relevant  level  of  management  and  representation, 

depending on the subject under discussion’, 

•  priority for negotiations on procedures for linking the information and consultation of the 
European Works Council and national representative bodies, in compliance with the above 
principle; 

•  the  introduction  of  provisions  applicable  in  the  absence  of  an  agreement  on  the  subject 
under  discussion  in  exceptional  circumstances,  which  would  allow  the  information  and 
consultation of the European Works Council and the national bodies to start in parallel. 

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SECTION V: ANALYSIS OF IMPACTS

49 

V.1 Likely economic, social and environmental impacts of each of the options 

1.a Impact of first option: No new EU action  

Overall analysis and position of stakeholders 

As described in section II, the identified problems most likely cannot be tackled without EU 
intervention.  Therefore,  the  No  new  action  option  would  meet  none  of  the  three  specific 
objectives. 

The most likely impact of the No new EU action option is an increasing gap between the lack 
of  proper  anticipation  and  the  need  to  respond  to  changes  in  economic  reality  through 
company  restructuring.  This  has  considerable  economic  and  social  consequences  for 
companies,  workers  and  regions,  as  this  may  undermine  the  conditions  for  sustainable 
competitiveness, social cohesion and a well-functioning internal market. 

No new EU action was the option preferred by the European employers’ organisations until 
2007, and is still preferred by the employers’ organisation HOTREC. 

The absence of new EU action would result in only slow improvement of existing EWCs in 
the face of increased needs and expectations, very few new EWCs being set up, and continued 
legal uncertainties. 

Benefits (data EPEC 2008) 

•  Cost  savings:  companies  without  an  EWC  would  continue  to  save  average  yearly  total 
direct  costs  of  €272  000 50,  including  management  and  employee  time,  and  those  with 
EWCs would not have to bear more expenses. 

•  Unquantifiable  benefits:  companies  without  EWCs  would  not  have  to  bear  the  costs  of 
increased internal bureaucracy, removing employees and management from their ‘normal’ 
work, risks of breaches in confidentiality, and interplay with stock-market regulations. 

•  Flexibility and absence of interference: companies with an EWC would continue to enjoy 
considerable  flexibility  in  organising  their  EWC  with  no  external  interference  in  the 
learning process of the EWC. 

49 
50 

This report is not intended to be an ex-ante evaluation under the Financial Regulation. 
Annual EWC expenditure ranges from €7 500 to €2.3 milli on. Companies without EWCs are on average smaller 
and less internationalised than companies with existing EWCs, so new EWCs would therefore entail less travel and 
lower translation costs.  

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40 

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Disadvantages 

•  Limitations  in  information  and  consultation:  workers  in  companies  without  an  EWC  or 
with  limited  EWC  activity  would  not  be  informed  on  company  strategies,  be  able  to  put 
to  company  management,  share  knowledge  with  employee 
questions  directly 
representatives from other countries, be in a position to give their views so as to anticipate 
and  manage  transnational  change,  or  benefit  from  a  clear  understanding  of  company 
decisions, which is likely to limit the acceptance of such decisions.  

•  Limited anticipation and management of change with its consequences for the capacity of 
workers  and  companies  to  adapt  and  the  subsequent  impact  on  human  resources, 
sustainable competitiveness and territorial development.  

•  Costs due to social  unrest: companies would bear the growing costs of collective  actions 
due  to  social  unrest  consequent  upon  unprepared  restructuring  processes  as  well  as  the 
higher  economic  costs  of  corporate  restructuring  in  the  absence  of  anticipation  and 
negotiated  accompanying  measures  (examples:  €144  000  package  per  worker  made 
redundant at Volkswagen Forest or €220 000 at  Nokia Bochum, compared to the average 
total cost of €101 000 for an EWC plenary mee ting, including management and employee 
time, or an average €8 600 for an EWC select committee meeting). 

•  Uncertain and slower decision-making process due to legal uncertainties (delay of over one 

year for the planned Suez-GDF merger),  

•  Litigation instead of dialogue, as 40% of companies have already been challenged by their 

EWC over which level to consult first in cases of restructuring. 

•  Growing  costs  of  labour  disputes  (at  present  affecting  every  sixth  company,  with  costs 
legal fees due to legal uncertainties 

ranging from €10 000 to €500 000 per company) and 
(at  present  included  in  overall  legal  costs  or  varying  from  €1500  to  €66  000  a  year  for 
specific fees, particularly important in merger cases). 

In  addition,  the  absence  of  new  EU  action  would  not  result  in  any  improvement  in  the 
coherence and interplay between directives in the field of information and consultation. 

1.b Impact of second option: Non-regulatory approach — additional promotion of best 
practice  

Overall analysis and position of stakeholders 

The  Non-regulatory  approach  option  is  likely  to  enhance  the  effectiveness  of  the  right  to 
transnational information and consultation and may encourage the setting up of new EWCs. 
However, it addresses only to a limited extent the two other specific objectives of EU action, 
i.e.  legal  certainty  and  coherence  in  Community  legislation,  and  therefore  has  to  be  seen  as 
complementary to action in the field of legislation.  

According  to  the  2008  EPEC  survey,  over  a  quarter  of  management  representatives  and  all 
employee  representatives  are  in  favour  of  further  guidance  and  regulation.  Employer 
regulation,  whereas  employee 
further 
representatives  prefer  guidance  over 
representatives are split between guidance, legal rules and a combination of both.  

legal 

EN 

41 

   EN 

 
1-  Impact  of  an  increase  in  communication  actions  and  a  proposed  increase  in  budget 
heading 04.03.03.03  

Increased  communication  action,  notably  through  a  web  portal,  would  raise  awareness, 
facilitate the availability of information and increase the lasting impact of best practices. This 
is likely to have a positive impact in terms of the setting up of new EWCs and the improved 
operation of existing EWCs.  

The  cost  of  such  communication  action  would  amount  for  €1  million,  be  proposed  to  be 
financed  under  the  PROGRESS  programme  and  be  coordinated  with  in  the  overall 
communication arrangements already in place in the Commission. Its potential impact would 
be  higher  if  social  partners  as  well  as  Member  States  were  to  contribute  with  their  own 
communication actions. 

Increased communication is also likely to increase the number of projects submitted under the 
budget heading 04.03.03.03 and therefore improve its use. By further increasing the amounts 
allocated  to  budget  heading  04.03.03.03  (€8.1  million  already  in  2008),  a  larger  number  of 
projects51  could  be  supported,  thereby  enhancing  the  exchange  of  information  and  good 
practice  with  a  positive  impact  on  the  functioning  of  existing  EWCs.  However,  given  the 
decline  in  the  use  of  the  available  funds,  such  an  increase  could  only  be  justified  by  the 
submission of more good-quality projects. 

Both measures would have a direct effect on the EU budget, which will have to be increased 
in order to cope, first, with communication costs and, in a second stage, with a an increase in 
the number of funded projects 

2- Impact of a recommendation on the setting up and functioning of European Works 
Councils 

A recommendation would provide further guidance so as to: 

•  Provide  easier  access  to  information  for  employees  and  employers  who  are  not  familiar 

with transnational social dialogue and clarify the rules for setting up new EWCs; 

•  Increase  awareness  of  the  major  principles  for  effective  transnational  information  and 
consultation  activities,  raising  the  proportion  of  companies  and  worker  representatives 
familiar with the best practices identified by the European social partners (currently one in 
every six/seven companies — EPEC 2008); 

•  Promote  best  practices,  thus  increasing  the  effectiveness  of  EWCs,  particularly  in  the 

anticipation and management of change. 

Depending on how transnational information and consultation is implemented and developed, 
best  practices  could  impact  on  business  (short-term  costs  as  against  long-term  benefits),  on 
workers  (increased  protection  in  times  of  restructuring  in  return  for  acceptance  of  change, 
increased mobility and adaptability) and on the social dialogue between them.  

51 

€1.2 million could support  about ten new projects.  

EN 

42 

   EN 

 
                                                 
As  regards  environmental  impact,  at  present  over  half  of  EWCs  deal  with  environmental 
concerns  (EPEC  2008),  for  example  reviewing  environmental  guidelines  or  the  design  of 
more  environmentally  friendly  products.  Promoting  the  integration  of  environmental  issues 
within the work of EWCs in the guidance provided may ensure better mainstreaming of the 
environmental  dimension  in  the  economic  and  social  policies  of  the  large  multinational 
companies concerned. 

The new recommendation should take into account the action already taken by the European 
social partners: in March 2006 they decided to include the promotion and evaluation of their 
joint  Lessons  learned  on  European  Works  Councils  in  their  2006-2008  work  programme, 
although they failed in April 2008 to launch negotiations on the review of the EWC Directive. 
For  this  reason,  the  design  of  the  recommendation  in  this  context  should  be  extensively 
discussed with the social partners. 

1.c Impact of third option: Review of existing legislation 

Position of stakeholders 

Legislative review has been the option preferred over the last ten years by the trade unions, 
EWC representatives, the EESC and the European Parliament, which have produced detailed 
proposals on the content of such a review. In 30 letters sent to the Commission at the end of 
2007 and in early 2008, European and national trade unions organisations as well as European 
Works  Councils  detailed  the  need  for  a  legislative  review  and  the  measures  they  suggested 
that the Commission should propose. 

According to the 2008 EPEC survey, a small proportion of management representatives and 
over  half  of  employee  representatives  in  existing  EWCs  are  in  favour  of  further  legal 
regulation on EWCs in relation to restructuring.  

The Commission would have welcomed negotiations between the social partners in response 
to its 2008 consultation, as this would have been a positive sign of the dynamism of European 
social dialogue and also an important new impetus to EWCs. However, as explained in detail 
in Annex 3, this did not happen.  

In  addition  to  the  positions  regarding  the  opening  of  negotiations,  the  Commission  has 
received  four  answers  to  its  consultation  document  from  the  consulted  employers’ 
organisations  CEEP,  Eurocommerce,  European  Banking  Federation  EBF  and  Hotrec,  two 
from  the  consulted  workers’  organisations  ETUC  and  CEC  European  Managers,  as  well  as 
eleven other contributions from companies and employers, trade unions and European Works 
Councils52.  Hotrec  stresses  there  is  no  need  to  revise  the  Directive.  EBF  stresses  the 
importance of EWCs for the banking sector and the need for flexibility, and hopes to make a 
positive contribution to future negotiations. Eurocommerce makes detailed comments on the 
envisaged  proposals,  opposing  most  of  them,  but  supporting  the  training  of  representatives 
and  the  requirement  for  them  to  report  back.  The  other  contributors  support  the  main 
orientations of the envisaged proposals and make suggestions for reviewing some and adding 

52 

Employers  and  companies:  Association  Française  des  Entreprises  Privées  (AFEP),  American  Chamber  of 
Commerce  to  the  European  Union  (AmCham  EU),  Confederación  Empresarial  Española  de  la  Economía  Social 
(CEPES),  Generali;  Trade  unions:  Confederation  of  the  Nordic  Bank,  Finance  and  Insurance  Unions  (NFU), 
Finansforbündet;  European  works  councils:  Total,  Handelsbanken,  HeidelbergerCement,  EADS,  joint  reply  IF, 
Nordea and Danske Bank. 

EN 

43 

   EN 

 
                                                 
others.  The  responses  are  detailed  in  Annex  3  and,  where  specific  to  a  particular  point,  are 
discussed below. 

The impact of the legislative review option can be broken down into the impacts of the ten 
different sub-options, listed in order of increasing potential to meet the specific objectives. As 
indicated  in  section  IV,  most  of  the  sub-options  correspond  to  the  proposals  made  in  the 
consultation  document  of  February  2008.  A  few  were  prompted  by  the  responses  to  the 
consultation. 

Sub option 1 — lower thresholds for the setting up of EWCs 

Only  23%  of  companies  with  between  1000  and  5000  employees  have  established  EWCs. 
Therefore, the impact of lowering the threshold on the establishment of new EWCs is likely to 
be  very  limited,  as  the  take-up  rate  decreases  with  the  size  of  the  workforce53.  Before  such 
measure could be proposed, increasing the take-up rate in the lower range already covered by 
the  Directive  would  have  to  be  achieved  first54.  By  increasing  the  number  of  established 
EWCs  less  than  proportionally  to  the  number  of  covered  companies,  this  measure  would 
lower the overall take-up rate in the new scope of the directive and therefore be contrary to 
the specific objective of increasing it. 

In  addition,  despite  the  very  considerable  flexibility  offered  by  the  Directive,  there  are  few 
economies of scale in the operation of EWCs and the relative cost of their operation is higher 
on average for smaller companies than for bigger companies. This effect would run counter 
the objective of reducing the compliance costs of SMEs that is central to the Small Business 
Act proposed. Lowering the threshold, as requested by Parliament in 2001 and the ETUC in 
its response to the consultation, would therefore not be a proportionate measure in relation to 
the objective of implementing transnational information and consultation rights.  

Sub option 2 — Registration of agreements 

The  existing  database  maintained  by  the  trade  unions  and  already  partly  financed  under 
Budget  Heading  04.03.03.03,  already  provides  a  good  knowledge  base,  although  it  is  not 
exhaustive. 

Apart  from  the  ETUC,  stakeholders  have  not  expressed  the  need  for  registration,  and  the 
introduction of a central registration mechanism would not be welcomed by either company 
or employee representatives (2008 EPEC survey).  

In addition, this would entail administrative compliance costs (an annual €200 per company 
on average — EPEC 2008). 

The  information  of  both  employers’  and  workers’  organisations  at  the  starting  of  new 
negotiations  to  establish  EWCs  (included  in  sub-option  3)  should  improve  the  knowledge 
about  EWC  agreements  and  thus  address  the  objective  of  enhanced  legal  certainty  a 
registration mechanism is intended to meet, without entailing such costs. Social partners can 
use the support possibilities provided by Budget Heading 04.03.03.03 in order to put in place 
their  own  registration  scheme.  This  would  in  addition  allow  social  partners  to  promote  the 

53 
54 

See Section II 1.a p18 and Annex I. 
As for the overall take-up rate, there is insufficient evidence to assess the proportion of absence of need explaining 
the present situation and therefore to determine a precise rate to be achieved. 

EN 

44 

   EN 

 
                                                 
dissemination  of  the  best  practices  they  have  identified  to  new  EWCs  and  therefore  also 
address the objective of enhanced effectiveness.  

Sub option 3- Technical update of the composition of the special negotiating body (SNB) 
and clarification of the organisation of negotiations  

The  main  impact  of  changes  in  the  composition  of  the  special  negotiation  body  and  the 
organisation  of  negotiations  would  be  improved  legal  certainty  and  the  related  savings  on 
legal fees and proceedings. The present rules would also be simplified.  

The  calculations  by  EPEC  in  2008  suggest  that  updating  the  Directive  with  regard  to  the 
composition of SNBs, bringing it into line with Directive 2001/86/EC, should have a minimal 
impact on set-up costs (present average of €124 4 00, including time, see II1.a). It should only 
lead to a limited increase in the number of SNB members and therefore in the costs for larger 
companies established in a large number of Member States. 

This change in the composition of the SNB is not controversial.  

As  regards  the  proposal  for  grouped  or  indirect  representation  to  address  the  situation  of 
countries  with  very  few  employees,  the  fact  that  the  election  or  appointment  of  employee 
representatives  is  organised  country  by  country  may  lead  to  new  legal  uncertainties,  so  an 
alternative solution could be to: 

•  set  a  threshold  for  the  representation  of  workers  in  a  particular  country  as  proposed  by 
CEEP, which would also reduce set-up costs by some €8 000 for each country under the 
threshold.  This  threshold  may  be  set  at  the  level  for  employee  representation  in 
undertakings under the Framework Directive 2002/14/EC, i.e. 50 employees; 

•  provide  for  majority  rules  for  the  signature  of  an  agreement  (as  suggested  by  the  trade 
unions), requiring a majority of both the members and a majority of workers represented 
from at least two countries, which would also clarify the present unclear rules for adopting 
agreements and contribute to reinforcing their legitimacy  

The  information  of  both  employers’  and  workers’  organisations  at  the  starting  of  new 
negotiations to establish EWCs should be proposed to improve the monitoring of EWCs, via 
the social partners, instead of a administrative registering mechanism (see sub-option 2). This 
information  would  also  allow  social  partners  to  promote  the  dissemination  of  the  best 
practices they have identified to the parties starting negotiations to establish new EWCs.  

As  regards  the  impact  of  the  envisaged  clarifications  relating  to  SNB  meetings  and  the 
presence  of  experts  during  negotiations,  where  requested  by  the  employee  representatives, 
they should help workers’ representatives get to know each other, in particular workers from 
subsidiaries,  and  facilitate  the  development  of  working  relations  during  the  initial  starting 
period.  The  presence  of  experts  at  negotiations  is  also  useful  as  this  could  help  raise 
awareness of best practices. Even if opposed by some individual companies wishing to reduce 
the negotiating power of their counterparts, the presence of experts is not controversial for the 
European social partners, which recognise its positive role in their joint Lessons learned55.  

55 

Point  4  ‘reconciling  different  cultures’  and  point  5  ‘ensuring  ownership  of  the  EWC  by  the  workforce’  —  see 
Annex 2. 

EN 

45 

   EN 

 
                                                 
In addition to the measures envisaged in the consultation document, CEC European Managers 
proposes different systems for the representation of managers in the SNB. This proposal is 
difficult  to  take  on  board,  given  the  very  considerable  differences  in  industrial  relations 
systems  between  Member  States  and  the  principle  of  subsidiarity  governing  the  election  or 
designation of employee representatives. A recital in the Directive already states that Member 
States, if they consider this appropriate, may provide for a balanced representation of different 
categories  of  employees.  However,  it  could  be  envisaged  that  the  composition  of  an  EWC 
established  by  agreement  should  ensure,  where  possible,  a  balanced  representation  of  the 
workforce in terms of employee categories, as well as gender and company activities.  

ETUC proposes shortening the negotiation period from three years to one. The negotiation 
process for ‘Article 6’ agreements takes less than 6 months in 21% of cases, 7-12 months in 
37%  of  cases,  13-24  months  in  26%  of  cases,  and  more  than  24  months  in  16%  of  cases 
(EPEC  2008).  The  number  of  meetings  varies  from  1  to  13,  with  an  average  of  four.  This 
average number of meetings is the same as for ‘Article 13’ agreements, which were concluded 
faster (43% in less than 6 months) and SE agreements, which have to be concluded within 6 
months, with a possible extension to one year by joint agreement. The limitation of the length 
of  the  negotiation  process  is  therefore  likely  to  speed  up  the  establishment  of  new  EWCs 
without entailing more costs or preventing the conclusion of agreements. However, the risk of 
shortening  the  negotiation  period  would  be  the  more  frequent  application  of  the  subsidiary 
requirements (at present very rare). 

Sub option 4- Clarification of the protection of rights 

Measures proposed for the protection of rights are in general likely to improve legal certainty, 
with the related benefits, and the effectiveness of these rights. 

As regards the clarification of local management’s responsibility for information needed to 
open negotiations on setting up new EWCs, in line with ECJ rulings, this is not controversial. 
It is likely to ease the first steps for workers in subsidiaries, a key to boost new requests for 
EWCs56, and therefore contribute to increasing the take-up rate.  

As regards the clarification on sanctions, it is likely to make clearer to company actors the 
existence  of  sanctions  in  the  event  of  violations  of  information  and  consultation  rights,  and 
therefore increase compliance. However, this would not necessarily require adding anything 
to the present Directive, as the need for Member States to provide for appropriate, dissuasive 
and proportionate sanctions is already a general principle in Community law.  

Trade  union  and  EWC  contributions  as  well  as  Parliament  resolutions  have  insisted  on  the 
need for sanctions, given the numerous breaches of the right of workers to be informed and 
consulted  at  transnational  level.  However,  AmCham  EU  considers  tht  sanctions  are  already 
provided for and CEEP that they should remain national. In addition, a further reinforcement 
or  more  detailed  prescription  of  sanctions  would  not  be  in  conformity  with  the  subsidiarity 
principle,  as  the  responsibility  for  establishing  appropriate,  dissuasive  and  proportionate 
sanctions lies, as a general principle, with the Member States. 

As  regards  the  capacity  of  the  EWC  to  represent  workers’  interests,  this  sub-option  is 
likely  to  help  this  body  express  employees’  interests  more  effectively,  at  cross-border  level 

56 

See sections II 1.a p.18 and III 2.b p.28. 

EN 

46 

   EN 

 
                                                 
where  necessary.  It  will  be  useful  in  clarifying  the  legal  standing  of  the  EWC  in  court 
proceedings  in  the  event  of  violations  of  information  and  consultation  rights,  so  is  likely  to 
increase  compliance,  while  potentially  increasing  legal  fees  for  some  companies.  It  is  also 
likely to bring about legal certainty regarding the role of the EWC in expressing employees’ 
interests  in  decisions  affecting  them  but  where  the  decision-maker  is  not  only  the  company 
itself (such as in insolvency or competition proceedings).  

. In its response to the consultation, CEC agrees that EWCs could represent workers provided 
they also represent managerial staff. CEEP would oppose granting a legal personality to the 
EWC. Eurocommerce considers that managers should represent employees’ interests vis-à-vis 
the  outside  world.  However,  this  would  be  contrary  to  the  principles  established  by  the 
European Court and the Commission’s proceedings in competition matters. 

Sub option 5- Recognition of the role of trade union organisations 

Through  the  provision  of  expertise,  trade  unions  already  do  play  a  role  in  the  negotiation 
process  and  in  giving  support  to  EWCs.  This  role  has  been  recognised  by  European  social 
partners — the main cross industry employer and trade union organisations — in their joint 
2005 publication Lessons learned on European works councils, particularly in answering the 
challenges of reconciling different cultures and ensuring ownership by the workforce57. 

Recognising  a  specific  role  for  trade  unions  in  the  Directive  is  likely  to  increase  the 
awareness, coordination, promotion of best practices and the creation of new EWCs, notably 
in  smaller  companies  or  where  workers  from  the  home  country  have  not  requested  the 
launching of  negotiations. It may also lead to increased opposition from  companies without 
EWCs  to  the  establishment  of  such  bodies,  as  they  may  be  reluctant  to  countenance  the 
involvement of trade unions.  

All  trade  union  and  EWC  contributions  sent  to  the  Commission  over  the  past  few  years,  as 
well as Parliament’s resolutions, insist on this recognition. The 2006 EESC opinion, although 
adopted  against  the  opposition  of  the  employers’  representatives,  proposed  the  same  route. 
ETUC  considers  that  trade  unions  should  have  the  right  to  attend  SNB  meetings  and  EWC 
meetings  where  requested  by  members  and  that  full-time  officers  should  not  be  prevented 
from becoming EWC members. In addition, ETUC and CEC propose that the European trade 
unions should be able to trigger the opening of negotiations for setting up new EWCs. CEC 
proposes that agreements may be signed by European trade union federations. AmCham EU 
stresses that employee representation  and external  expertise are and  should remain different 
concepts, and that the role of experts, including European trade unions, should be agreed on a 
voluntary  basis  between  the  SNB  or  the  EWC  and  central  management.  CEEP  and  AFEP 
agree with trade unions being considered as experts, where needed, but not as members of the 
bodies.  Eurocommerce  considers  that  the  role  of  trade  unions  should  not  been  made 
compulsory.  

Taking  into  account  the  interests  of  both  workers  and  companies,  the  position  of  the 
stakeholders  and  the  principle  of  subsidiarity  regarding  the  determination  of  who  the 
employee representatives are to be, the following conclusion may be drawn: 

57 

See text in annex 2 as above. 

EN 

47 

   EN 

 
                                                 
•  the  role  of  trade  unions  should  be  recognised  in  supporting  company  employee 
representatives but not as members — if not considered as employee representatives under 
national legislation — nor as signatories of the agreements, 

•  the employee representatives should have the choice whether to ask trade unions to assist 
them or not, and to decide whether or not to exert their right to transnational information 
and  consultation,  so  trade  unions  that  are  not  considered  to  be  employee  representatives 
under  national  legislation  should  not  be  allowed  to  trigger  themselves  the  opening  of 
negotiations, and their role should not be made compulsory.  

Under  these  conditions,  without  entailing  significant  fixed  costs  for  companies  (average 
annual cost of trade union assistance to EWCs is €3 500), recognising the role of trade unions 
is  likely  to  contribute  to  the  objective  of  increasing  the  take-up  rate  and  to  making  existing 
EWCs more effective.  

This  would  also  bring  the  EWC  Directive  into line  with  the  other  transnational  information 
and consultation directives (2001/86/EC and 2003/72/EC) on this aspect. 

Sub option 6- Adaptation of the subsidiary requirements  

Changes in the content of subsidiary requirements would not have a direct impact, as they are 
fall-back provisions for new negotiations and not minimum requirements. However they have 
an  indirect  impact  to  the  extent  that  they  provide  a  benchmark  for  parties  during  the 
negotiation of new agreements or amendments to existing agreements.  

As a general rule, adapting the subsidiary requirements would: 

•  Contribute,  through  their  benchmark  role,  to  setting  objectives  for  the  content  of 
agreements,  with  all  the  associated  direct  costs  as  well  as  the  economic  and  social  costs 
and benefits, 

•  Risk  preventing companies from entering  into new negotiations  or  preventing companies 

and workers reaching an agreement if they are too ambitious. 

More  specifically,  the  changes  envisaged  in  the  consultation  document  would  have  the 
following impact: 

•  A  second  ordinary  plenary  meeting  costs  on  average  some  €101  000,  half  for  fixed 
expenses, half for employee and management time. 40% of companies already have two or 
more ordinary meetings a year. An ordinary meeting is considered to be more effective for 
dialogue  than  an  extraordinary  meeting  because  it  takes  place  in  a  more  favourable 
environment  and  allows  the  more  general  context  of  the  company’s  projects  to  be  taken 
into  account.  Most  EWCs  already  have  on  average  one  annual  extraordinary  meeting, 
either with the whole EWC present or with the select committee (EPEC 2008). 

•  The  right  of  the  European  Works  Council  to  obtain  a  response,  and  the  reasons  for  that 
response,  to  any  opinions  they  have  expressed  would  contribute  to  more  effective 
consultation and quality of dialogue but might slow down the decision-making process.  
•  The  change  in  the  definition  of  exceptional  circumstances  would  indirectly  ensure  better 
anticipation,  with  the  associated  economic  and  social  benefits,  notably  as  regards  the 
acceptance  and  management  of  change,  and  increased  legal  certainty.  However,  it  could 
involve increasing the number of extraordinary meetings (with an associated cost of €8 600 
where held with a select committee). 

EN 

48 

   EN 

 
•  The second meeting to seek an agreement in the event of exceptional circumstances would 
lead  indirectly  to  more  extraordinary  meetings  (with  an  associated  cost  of  €8  600  where 
held  with  a  select  committee),  and  more  effective  consultation.  However,  it  might  slow 
down  the  decision-making  process  and  effectively  lead  to  a  negotiation  process  at 
European level.  

•  The  possibility  of  new  subjects  for  the  information  and  consultation  of  European  Works 
Councils  would  have  only  an  indirect  impact.  Some  EWCs  have  already  extended  the 
scope  of  information  and  consultation  to  include  measures  relating  to  health  and  safety 
(72%  of  companies  in  2008),  equal  opportunities  (50%  of  companies  in  2008)  and  the 
environment,  notably  as  part  of  discussions  on  corporate  social  responsibility  (53%  of 
companies in 2008). Promoting the inclusion of these topics would bring benefits in terms 
of  effective  policies  in  the  areas  of  health  and  safety  at  work,  equal  opportunities  and 
environment, without incurring specific additional costs. 

This  sub-option  is  the  most  controversial.  ETUC  agrees  with  the  changes  proposed  in  the 
consultation document and proposes additional elements: a select committee with up to five 
members where the EWC has nine or more members, follow-up meetings, facilities, experts, 
interpretation  and  translation  as  needed,  and  topics  to  include  disability,  discrimination, 
gender and data protection. Eurocommerce opposes the proposed changes as non-relevant, as 
the  EWC  is  not  supposed  to  be  a  body  that  delivers  opinions,  and  liable  to  incur  additional 
costs. CEEP considers that a second ordinary meeting and new topics are helpful but should 
remain  voluntary  and  that  any  requirement  on  the  employer  to  give  a  response  to  questions 
posed by the EWC must not hamper or delay decision-taking nor lead to negotiation. AFEP 
opposes  also  the  provision  for  a  second  meeting  to  seek  agreement  in  the  exceptional 
circumstances  as  it  does  not  consider  the  EWC  to  be  a  negotiating  body,  and  suggests 
reinforcing the select committee instead of plenary meetings. AmCham EU expresses similar 
opinions. 

In  order  to  meet  the  objectives  of  increased  effectiveness  while  minimising  costs,  to  avoid 
setting  barriers  to  the  take-up  of  new  EWCs,  to  take  into  account  as  much  as  possible  the 
views  of  stakeholders  and  to  balance  the  interests  of  workers  and  companies,  the  following 
conclusions may be drawn: 

•  Even if, under the present conditions, a majority of companies disagree with the assertion 
that  the  EWC  slows  down  managerial  decision-making  (EPEC  2008,  see  II.1),  the 
operation of the EWC has to contribute to an efficient decision-making process allowing 
companies to adapt as necessary. This should be made clear as a general principle in the 
Directive. 

•  Reinforcing the role of the select committee may be more cost-effective than increasing the 

number of plenaries and should therefore be favoured. 

•  Anticipation, as a key element in the effectiveness and positive economic and social impact 
of EWCs, should be promoted, so the change in the definition of exceptional circumstances 
should be supported.  

•  The right to a reasoned answer to any opinion expressed appears to be a more important 
element  in  effective  consultation  than  the  imposition  of  additional  meetings  with  the 
consequent increase in costs, and should therefore be favoured.  

EN 

49 

   EN 

 
•  As  environmental  issues  will  have  to  be  increasingly  mainstreamed  in  all  company 
policies,  the  addition  of  this  topic  to  the  items  for  the  information  and  consultation  of 
EWCs appears necessary.  

Sub option 7- Introduction of an adaptation clause and transitional provisions 

The introduction of an adaptation clause would ensure: 

•  Legal certainty, with the related benefits, 

•  An  effective  information  and  consultation  process  during  mergers  and  acquisitions, 
diminishing social unrest, allowing the negotiation of appropriate accompanying measures 
and favouring the emergence of a unified group within the new boundaries. 

The  adaptation  clause  is  likely  to  meet  the  needs  of  both  workers  and  companies  and  the 
envisaged measures are not controversial in themselves. CEEP considers that renegotiations 
should be limited to cases of significant changes in company structure and conflicts between 
two  or  more  agreements  and  proposes  shortening  the  negotiation  period  in  that  case.  AFEP 
agrees  with  the  general  aim  of  the  measures  proposed,  provided  that  the  negotiations  are 
carried out by the members of the existing EWCs and not by a new Special Negotiating Body, 
and that only one EWC is to exist after a merger or acquisition. CEC also supports this latter 
position. AmCham EU would welcome guidelines on the way to deal with EWC agreements 
in cases of mergers and acquisitions.  

The  envisaged  clause  would  indeed  enable  two  EWCs  to  be  merged  when  the  companies 
merge, so would save on the costs of two EWCs continuing to operate because of the absence 
of adaptation provisions in one of the pre-existing agreements.  

As  to  the  composition  of  the  negotiating  body,  while  favouring  continuity  by  involving 
members of the existing EWCs, all possible changes in make-up should be taken into account, 
including where some of the workers were not previously represented at transnational level. 
This would provide for both the setting up of an SNB and bringing together the leaders of the 
existing EWCs.  

The controversial point is the renegotiation of existing agreements, whether ‘Article 13’ or 
‘Article 6’ agreements. Trade unions and EWCs have asked for the compulsory renegotiation 
of  Article  13  agreements  and  an  obligation  to  renegotiate  all  agreements  upon  request, 
whereas companies and employers’ organisations consider that the agreements, in particular 
the pre-existing agreements, should be better protected. 

Retaining  those  EWCs  that  work  to  the  satisfaction  of  the  parties  involved  would  limit  the 
changes to those EWCs where changes are needed. Disproportionate changes would therefore 
be avoided and best practices supported. Transitional provisions were proposed to that end in 
the consultation document. 

Providing for pre-existing agreements to be maintained in all cases would limit the potential 
impact of changes in the Directive to new EWCs to be established. This would not allow legal 
uncertainties  to  be  addressed  in  the  event  of  changes  in  make-up.  This  would  also  risk 
preventing  the  creation  of  new  EWCs  while  bringing  no  improvement  to  those  that  already 
exist, and should therefore be avoided. 

EN 

50 

   EN 

 
Allowing any request to trigger the renegotiation of a pre-existing agreement may on the other 
hand risk encouraging ‘freerider’ actions and destabilising well-functioning EWCs, so should 
be avoided too. 

Limiting  requests  for  renegotiating  pre-existing  agreements  to  those  situations  where 
significant  changes  in  make-up  and  structure  occur  (such  as  mergers,  take-overs  or 
acquisitions) should avoid these two opposing risks.  

Sub  option  8-  Clarification  of  the  role  and  reinforcement  of  the  competence  of 
employees’ representatives 

An  obligation  for  European  Works  Council  representatives  to  report  back  to  the  workers 
they represent would increase the quality of dialogue and the EWC’s added value, as well as 
improve  the  interplay  between  local/national  and  European  levels,  with  a  major  impact  on 
anticipation,  adaptability  and  mobility.  It  would  entail  limited  costs,  mainly  related  to  the 
potential need for EWC members to travel to local sites in order to report back to the workers.  

It  would  meet  one  of  the  main  employers’  concerns  relating  to  the  lack  of  preparation  of 
employee representatives and their dissemination of meeting information (EPEC 2008). 

The  2005  Lessons  learned  published  by  the  European  social  partners  states  that  ‘ensuring  a 
real sense of ownership of the EWC by the whole workforce (is) a considerable challenge’. 
Indeed,  the  obligation  to  report  back  would  help  meet  this  challenge,  and  is  likely  to  be 
welcomed  by  all  stakeholders.  In  their  response  to  the  consultation,  CEEP,  Eurocommerce 
and AFEP agree with this proposal, provided that the reporting respects confidentiality. 

As  regards  the  training  of  employee  representatives,  the  present  situation  is  as  follows 
(EPEC 2008) 

Training  

Right to training: 60% of EWCs 
Training for at least some EWC members in the previous year: 79% of EWCs 
Where  provided,  training  is  offered:  to  entire  EWC,  46%,  to  10  or  more  EWC 
members, 38%  
Average length of training where provided: 1.6 day/year 
Training expenditure where provided: from €1 300 to €150 000, average of €43 800

58 

Introducing  a  right  to  training  for  employees’  representatives  would  therefore  entail  extra 
costs for companies not already providing it, i.e. for one fifth of companies, with an average 
of  €43  800  per  company.  Introducing  a  right  to  tr aining  for  employee  representatives  is  the 
envisaged measure with the most direct and significant impact on costs for companies. 

However,  this  measure  is  not  controversial  and  meets  the  interests  of  both  workers  and 
companies.  All  stakeholders  have  expressed  their  support,  while  the  2005  Lessons  learned 
published by the social partners states that ‘the ability to understand complex issues discussed 
in  the  EWC  determines  the  quality  in  communication.  Investing  in  language  as  well  as 
technical/content training helps to optimise the functioning of the EWC and to reduce overall 
functioning costs’. 

58 

Average of €76 700 for companies headquartered in France, €24 800 for others.

EN 

51 

   EN 

 
                                                 
 
Provided that the efficiency of such training action is ensured, a right to training is likely to 
have  a  positive  impact  in  the  20%  of  companies  not  providing  EWC  members  with  any 
training.  

Sub  option  9-  Alignment  of  the  concepts  of  information  and  consultation  across  the 
directives 

Introducing  a  definition  of  information  and  expanding  the  definition  of  consultation,  in  line 
with Directive 2002/14/EC establishing a framework for information and consultation, would 
bring about: 

•  Legal  certainty,  thus  reducing  labour  disputes  (in  every  sixth  company,  with  associated 
costs ranging from €10 000 to €500000 per compa ny — EPEC 2008) as well as the risks of 
uncertainty and delays in decision-making (e.g. the delay of over one year in the Suez-GDF 
merger), 

•  Better acceptance and management of change, reduced social unrest (avoiding companies 
such as Nokia in Bochum having to pay very high redundancy benefits), improved image 
of the company, enhanced adaptability and mobility, 

•  Improved perception of the added value of EWCs, which is likely to improve the interest 

of workers’ representatives in EWCs and therefore the take-up rate, 

•  A coherent set of Community rules on these matters, which is likely to develop the role of 
the transnational level of information and consultation on transnational matters, to clarify 
the rules and facilitate the linking of national and transnational levels of the dialogue. 

All  trade  union  and  EWC  contributions  sent  to  the  Commission  over  the  past  few  years,  as 
well as Parliament’s resolutions, insist on the adoption of these definitions. The 2006 EESC 
opinion, (although adopted against the opposition of employers’ representatives) proposed the 
same  route.  Eurocommerce  opposes  changes  to  the  definitions,  as  they  would  bring  no 
clarification  and  risk  slowing  down  the  decision-making  process.  CEEP  and  AmCham  EU 
favour  agreements  at  company  level  on  consultation  mechanisms  going  beyond  the  present 
definition of ‘exchange of views and establishment of a dialogue’ rather than changes in the 
definitions,  and  underline  that  consultation  should  not  be  associated  with  collective 
bargaining  or  any  obligation  by  central  management  to  reach  an  agreement.  AFEP  sees  no 
problem in using for EWCs the definition of consultation in Directive 2002/14/EC.  

At  present,  a  majority  of  companies  disagree  with  the  assertion  that  an  EWC  slows  down 
managerial decision-making. On the other hand, it is clear that the operation of EWCs should 
contribute to an efficient decision-making process allowing companies to adapt as rapidly as 
necessary.  It  is  particularly  important  for  companies,  as  recalled  by  AmCham  EU,  that  any 
changes preserve the speed of decision-making in order to enable undertakings to compete in 
the global economy. This should be achieved by: 

•  adopting as a general principle of the Directive that EWCs should contribute to the goal of 

efficient decision-making at company level,  

•  establishing an appropriate interplay between national and transnational levels of dialogue, 

in order to avoid overlaps that risk lengthening the decision-making process. 

EN 

52 

   EN 

 
Sub option 10- Definition of the transnational competence of European Works Councils, 
linking  information  and  consultation  levels  and  organising  the  interplay  between  the 
directives 

Defining  the  transnational  competence  of  EWCs  and  linking  the  levels  of  information  and 
consultation  are  the  measures  most  likely  to  contribute  to  all  specific  objectives  of  the 
initiative.  

Defining the transnational competence of the EWC as relating to issues going beyond the 
powers of decision-making bodies in a single Member State would: 

•  Increase  legal  certainty,  thus  reducing  labour  disputes  on  the  issues  to  be  addressed  in 
EWCs and their associated costs as well as the risks of uncertainty and delays in decision-
making, 

•  Facilitate dialogue at the relevant levels of management and representation and help ensure 
a better link between the levels of information and consultation, thus enhancing the quality 
and effectiveness of dialogue, 

•  Reduce the reluctance of national representation bodies to accept EWCs by limiting clearly 

their sphere of competence, thereby facilitating the creation of new EWCs, 

•  Allow the development of coherent and linked Community rules. 

The potential risk of bringing up local issues at European level (with a subsequent increase in 
the number of meetings and the associated costs) where decision-making is centralised would 
nevertheless  need  to  be  avoided.  CEEP  favours  agreements  at  company  level  to  define  the 
transnational competence or refers to issues where two or more Member States are involved. 
AmCham EU is opposed to the inclusion of any provision for consultation on single-country 
events  whether  or  not  decisions  are  taken  outside  the  affected  country.  AFEP  proposes 
defining transnational competence with reference to the effects of a decision and not the body 
taking the decision in order to avoid the risk described. However, this solution may present an 
equivalent risk of any decision with a direct or indirect impact in other Member States being 
unduly brought before the EWC. 

Trade union and EWC contributions sent to the Commission over the past few years propose 
defining  ‘transnational’  as  covering  issues  going  beyond  the  powers  of  decision-making 
bodies in a single Member State. In its answer to the 2008 consultation, the ETUC proposes 
putting the burden of proof that an issue is not transnational on management. However, this 
provision would constantly oblige companies to justify themselves and would be contrary to 
the  principle  of  subsidiarity.  Eurocommerce  agrees  with  the  proposed  definition,  while 
considering that it requires co-determination rules at national level to be adapted. 

In order to take into account as much as possible the views of the stakeholders and to avoid 
the various risks, the solution envisaged in the consultation document may be adapted in order 
to provide a definition of transnational competence: 

•  based primarily on the effects of a decision;  

•  recalling the principle of dialogue ‘at the relevant level of management and representation, 

depending on the subject under discussion’. 

EN 

53 

   EN 

 
In  exceptional  circumstances,  where,  for  example,  the  decision  to  close  down  an 
establishment in a subsidiary is taken by headquarters and the management of the subsidiary 
has  no  major  involvement  in  that  decision,  the  latter  principle  should  lead  to  a  solution 
enabling a meaningful consultation to take place.  

Defining the transnational competence of EWCs goes hand in hand with linking information 
and consultation levels. 

Favouring  company-agreed  mechanisms  for  linking  levels,  with,  as  a  fall-back,  the  parallel 
start of information and consultation processes at national and EWC levels, would: 

•  Limit litigation and reduce labour disputes on the timing of consultation at national level. 
The  associated  costs,  as  well  as  the  risks  of  uncertainty  and  delays  in  decision-making, 
would  also  be  reduced  (at  present  almost  40%  of  companies  have  been  challenged  by 
employees on who to consult first in cases of restructuring), 

•  Allow the development of coherent and linked Community rules, 

•  Ensure  better  acceptance  and  management  of  change,  reduced  social  unrest,  enhanced 

adaptability and mobility, 

•  Increase  the  interest  of  national  representation  bodies  in  EWCs,  thereby  facilitating  the 

creation of new EWCs, 

•  Enhance the added value and cost effectiveness of EWCs.  

Trade union and EWC contributions sent to the Commission over the past few years insist on 
the  need  to  address  the  uncertainties  in  the  links  between  the  levels  of  information  and 
consultation.  

CEEP supports the proposal. AmCham EU underlines that companies of American parentage 
have  often  encountered  complexities  and  confusion  in  linking  the  different  levels  of 
information and consultation due to a lack of specificity in the Directive and conflicting court 
cases  at  national  level,  and  that  it  is  critical  that  the  process  at  European  level  should  not 
interfere  with  but  be  complementary  to  the  process  at  national  level.  It  would  therefore 
welcome confirmation of the approach of parallel or simultaneous consultation at the various 
levels as a legitimate method for linking the levels. AFEP also agrees with the general aim of 
the  measure  envisaged  and  proposes  in  addition  that  the  national  group  works  council  be 
dissolved  where  an  EWC  exists.  In  order  not  to  slow  down  the  decision-making  process, 
Eurocommerce considers it should not be possible to consult at national level first.  

These non-controversial measures for the linking of levels have potentially the most important 
positive impact on both existing EWCs and the creation of new EWCs. 

V. 2 Uncertainties and how impacts may be affected by changes in parameters 

The position and/or involvement of the social partners might change the content of the non-
regulatory approach and the application of the revised legislation, and therefore its impacts. 

EN 

54 

   EN 

 
V. 3 Impacts in the EU and outside the EU 

Most impacts would be measured in the European Union. However, the impacts of setting up 
and operating EWCs would also be felt outside the EU, as: 

•  The Directive fully applies to the EEA states (Norway, Iceland and Liechtenstein) with 22 
companies falling under the scope of the EWC Directive headquartered in these countries 
and 626 with operations in these countries (ETUI-REHS 2006); 

•  562 companies falling under the scope of the EWC Directive are headquartered outside the 
EEA, notably 344 in the United States, 104 in Switzerland and 56 in Japan (ETUI-REHS 
2006);  The  Directive  only  applies  to  EEA  workers,  but  most  of  the  companies 
headquartered in Switzerland and many companies with operations in that country provide 
for  the  inclusion  of  Swiss  employee  representatives  in  their  EWCs59.  Companies  of 
American parentage account for over 120 of existing EWCs. Those companies, through the 
American Chamber of Commerce to the  European Union (AmCham EU), have therefore 
expressed their particular interest in EWCs and the proposed revision of the Directive and 
wish to contribute to the debate.  

•  Companies  with  an  EWC  employ  on  average  49  000  employees,  including  29  000 
employees in the EEA (EPEC 2008), so the non-European proportion, accounting for 2/5 
of the global headcount, is likely to be influenced by the 3/5 European share. 

•  EWCs  have  contributed  to  the  development  of  social  dialogue  including  worker 
representatives from candidate and neighbouring countries, thus preparing for and helping 
to consolidate the economic and social integration of new Member States, as observed in 
the case of the 2004 enlargement60; 19 EWC agreements currently include Turkey in their 
scope, 4 Croatia, 1 FYROM, 3 Serbia, 2 Bosnia Herzegovina, 1 Moldova, 7 Ukraine61. 

•  Some of the European Works Councils have become World Works Councils. 

•  EWCs  play  a  major  role  in  the  signing  of  global  framework  agreements  on  fundamental 
rights and corporate social responsibility, the impact of which extends far beyond the EU. 

Thus, the impact of EU action covers:  

•  the  building  of  partnerships  and  the  dissemination  of  the  European  model  and  ‘decent 

work’ policies in non-EU countries, 

•  the integration of new Member States and candidate countries,  

•  the  acceptance  of  internal  market  rules,  globalisation  and  changes  in  international  trade 

rules, 

•  the development of corporate social responsibility policies. 

59 

60 

61 

19%  of  EWC  agreements  include  Switzerland  in  their  scope,  meaning  usually  that  they  include  Swiss  worker 
representatives (141 EWC agreements out of 762 in the SDA database on 14.05.08). 
See in particular studies by the European Foundation for the Improvement of Living and Working Conditions- ref. 
I-3. 
SDA database 14.05.08. 

EN 

55 

   EN 

 
                                                 
V. 4 Potential obstacles to compliance 

Potential  incentives  or  obstacles  to  compliance  are  primarily  linked  to  the  positions  of  the 
social partners at European and national levels, contributing either to promoting or hindering 
compliance. Their involvement in any future action is crucial from this perspective. 

EN 

56 

   EN 

 
SECTION VI: COMPARING THE OPTIONS 

VI. 1 Method for weighing the positive and negative impacts for each option 

For the three options and for every sub-option of the third (legislative) option, the following 
elements  are  taken  into  account,  each  being  given  an  assessment  from  zero  to  three,  with  a 
negative (–) or positive (+) impact, on the basis of the detailed analysis carried out in section 
V: 

•  Ability to achieve the specific objectives  

–  to  ensure 

the  effectiveness  of  employees’ 

transnational 

information  and 

consultation rights in existing EWCs; 

–  to increase the take-up rate; 

–  to ensure legal certainty in the setting up and operation of EWCs; 

–  to  ensure  a  better  coherence  and  interplay  between  Community  legislative 

instruments on the information and consultation of employees. 

For options  2 and 3 and  for every sub-option of the third (legislative) option, the following 
elements  are  taken  into  account,  each  being  given  an  assessment  from  zero  to  three,  on  the 
basis  of  the  detailed  analysis  carried  out  in  section  V,  compared  to  the  baseline  scenario  of 
non-EU action (option 1):  

•  likely decrease (–) or increase (+) in set-up costs, operational costs, dispute-related costs, 

non-financial costs for companies. 

•  Likely negative (–) or positive (+) economic and social impact. 

As regards the impact on the EU budget, the impact of options 2 and 3 are taken into account, 
each being given an assessment from zero to three, on the basis of the detailed analysis carried 
out in section V, compared to the baseline scenario of non-EU action (option 1):  

•  Likely decrease (-) or increase (+) in the EU budget  

The environmental impact of EU action regarding EWCs is limited to promoting the inclusion 
of  a  company’s  environmental  policies  in  the  topics  discussed  at  EWC  meetings  and  the 
projects that might be developed in this context. It is more positive, but not significantly so, 
under the second and third options. 

EN 

57 

   EN 

 
 
VI. 2 Results of the weighing 

2.a Ability to achieve the specific objectives 

Options 

1.No  new  EU 
action 

2.Non-
regulatory 
approach 

3.Review 
legislation 

of 

of 
Effectiveness 
information 
and 
consultation rights 
in existing EWCs 

+ 
Slow improvement  

++ 
- Increased 
awareness leading 
to better practices  
- Increased lasting 
impact and 
additional projects 
to promote best 
practices 
- Benchmark for 
best practices 
++ 
- Reinforced role 
and competence of 
EWCs 
- Increased added 
value through better 
relations between 
EWC and national 
bodies and workers 
-Adapted 
benchmark rules 
-Possible support 
by trade 
unions/employers 

Increase  in  take-
up rate 

certainty 
Legal 
in  the  setting  up 
and  operation  of 
EWCs 

and 
Coherence 
interplay  between 
directives 

No progress 

No progress 

No progress 

+ 
Guidance to bring 
some 
clarifications 

+ 
Guidance to 
promote best 
practices 

+++ 

Legal 
uncertainties 
resolved 

+++ 
Coherence and 
interplay ensured 

++ 
- Increased 
awareness leading 
to new initiatives 
- Additional 
projects to support 
setting up new 
EWCs  

-/++ 
- Increased added 
value perceived by 
employees 
- Information 
available to 
employees to take 
first steps 
-Clarified 
relationship 
between national 
bodies and EWCs 
-Support by trade 
unions 
-Increased 
concerns of 
employers about 
efficiency of 
decision-making 

The  first  option  does  not  meet  any  of  the  objectives.  Both  the  second  and  the  third  option 
meet  the  objective  of  enhancing  the  effectiveness  of  information  and  consultation  rights  in 
existing  EWCs,  by  different  means.  While  the  non-regulatory  approach  will  use  additional 
promotion of best practices, the legislative option will strengthen the role of EWCs through 
clarified  rules,  notably  on  the  links  between  information  and  consultation  levels.  As  to  the 
objective  of  increasing  the  take-up  rate,  the  non-regulatory  option  is  expected  to  contribute 
through  increased  awareness  of  the  importance  of  EWCs  among  stakeholders,  while  the 
legislative  option  will  encourage  employees  to  set  up  EWCs  in  addition  to  national 
representation structures, as they will perceive more clearly their value added. However, this 

EN 

58 

   EN 

 
 
 
 
 
 
 
 
 
option  may  also  increase  the  opposition  by  employers  to  the  extent  that  they  may  perceive 
risks  (e.g.  delays)  in  the  decision  process  as  a  result  of  their  strengthened  role.  Finally,  the 
legislative  option  is  clearly  superior  in  meeting  the  objectives  of  legal  certainty,  coherence 
and interplay between directives.  

The  ability  of  every  sub-option  under  the  third  (legislative)  option  to  achieve  the  specific 
objectives is detailed in Annex 4. Overall, all the ten sub-options are expected to bring about 
positive  outcomes  as  regards  the  four  objectives  considered.  One  exception  is  the  first  sub-
option (lower thresholds) , which will reduce the take-up rate measured over the entire new 
hypothetical  scope  of  application  of  the  Directive  (transnational  companies  with  more  than 
500 employees) . It is also debatable the extent to which some of the sub-options may or may 
not contribute to the objective of increasing the take-up rate, as they will perceived differently 
by employees and employers. 

2.b Likely impact on costs for companies and on EU budget 

Options 

Set-up 
costs 

Operational 
costs 

Dispute-
related costs 

Non-financial costs 

EU Budget 

- 
- Funding 
of projects 
limits 
need for 
costly 
legal 
expertise 

- 
- Support 
by trade 
unions/em
ployers 
limits 
need for 
costly 
expertise  

2.Non 
regulatory 
approach 

3.Review 
of 
legislation 

++ 
-Immediate 
impact: 
communication 
costs (1 mil. 
€/year) 
- increase 
funding for 
EWC projects 
(indicative €1.2 
million for 10 
new annual 
projects) 
+ 
- Indirect impact 
on commitments 
through 
increased 
interest in EWCs 
and monitoring 
by social 
partners 

+ 
- Benchmark 
for more 
costly best 
practices 

- 

- 
Clarifications 
and guidance

-/+ 
-Better preparation 
and anticipation 
-Raised employee 
expectations 

--- 
-Saves high 
costs linked 
to social 
unrest 
(strikes, level 
of 
redundancy 
payments, 
etc.) 
-Saves costs 
of additional 
meetings and 
legal fees in 
the event of 
disputes 

-/++ 
- Direct cost of 
training for 
20% of EWCs 
- Benchmark 
for more 
costly fall-
back 
provisions, 
save for select 
committee 
instead of 
plenary 
- Saves costs 
of lack of 
interplay 
between levels 
and lack of 
anticipation 

---/+ 

-Saves high costs 
linked to the absence 
of anticipation and to 
social unrest 
(acceptance of 
change, corporate 
culture, image of 
company)  
-Raised employee 
expectations and 
coordination 
-Different impacts on 
decision-making 
(need to take 
employees’ opinion 
into account but 
fewer delays due to 
disputes and 
interplay) 

EN 

59 

   EN 

 
 
 
 
The second and the third option diminish set-up costs as they bring the expertise needed by 
companies at a lower cost than what is available on the market62. They both lead to a limited 
increase in operational costs, mainly through higher benchmark. They both diminish dispute-
related  costs,  the  third  (legislative)  option  having  a  higher  impact  through  saving  important 
costs linked to social unrest and legal proceedings. The third option is superior in diminishing 
non-financial  costs,  mainly  through  its  impact  on  better  anticipation,  acceptance  of  change 
and social climate and legal certainty. While the non-regulatory approach will have a direct 
effect  on  the  EU  budget,  which  will  have  to  be  increased  in  order  to  cope,  first,  with 
communication  costs  and,  in  a  second  stage,  with  a  an  increase  in  the  number  of  funded 
projects63,  the  legislative  approach  will  have  only  an  indirect  impact,  to  the  extent  that  the 
interest produced by the revision of the Directive and the increase in take-up rate are expected 
to generate more and better projects in the future.  

The detailed impact of every sub-option of the third (legislative) option on the different costs 
is detailed in Annex 4. The first sub-option (lower thresholds) leads to a significant increase 
in  all  company  costs.  As  the  extension  of  EWCs  to  companies  in  the  range  500-1000 
employees will affect SMEs, and costs tend to be invariant with size, it can be claimed that 
this  sub-option  will  increase  compliance  costs  for  SMEs  more  than  proportionally,  and  is 
therefore  contrary  to  the  objective  of  the  Small  Business  Act.  The  second  sub-option 
(registration)  leads  to  more  set-up  and  non-financial  costs  while  diminishing  dispute-related 
costs.  The  information  of  social  partners  at  the  start  of  negotiation  to  establish  new  EWCs 
(included  in  sub-option  3)  could  help  meet  the  same  objectives  while  being  more  cost-
effective.  All  other  sub-options  contribute  to  diminishing  all  or  most  categories  of  costs, 
particularly  the  seventh  (adaptation  clause)  and  the  tenth  sub-option  (linking  levels)  as  they 
have an important impact in lowering dispute-related and non-financial costs. The third (SNB 
and negotiation), fifth (role of trade unions) and sixth (subsidiary requirements) sub-options 
lead however to limited increase in operational costs, mainly through the benchmark for more 
costly practices, while diminishing set-up or dispute-related costs.  

As  a  result,  the  non-regulatory  approach  and  sub-options  3  to  10  under  the  legislative 
approach globally diminish costs, whereas the first (lower thresholds) and second sub-option 
(registering agreements) globally increase them. 

2.c Likely economic and social impact  

Options 

Economic impact 

Social impact 

Environmental impact 

+ 

++ 

2.Non-
regulatory 
approach 

Improved anticipation and 
acceptance of change  

Benchmark for well-
functioning dialogue, 
anticipation and 
management of 
restructuring 

+ 
Invitation 
address 
to 
environmental  policies  in 
EWCs 

62 

63 

See table on operational costs in II.1 – for example, assistance by trade unions cost on annual average € 
3 500 while other expertise cost € 143 700. 
The increase in the number of projects will have mainly an impact upon the EU budget as the projects 
are supported up to the level of 80% of eligible costs. 

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3.Review 
legislation 

of 

-/++ 

+++ 

Improved anticipation and 
acceptance of change at 
company and territorial 
level 

Saves high costs related to 
social unrest and 
unaccompanied 
restructuring 

Some additional costs for 
companies 

Effective information  

Improved capacity to 
adapt through 
anticipation 

Involvement of 
employees in strategic 
corporate decisions and 
preparation of 
restructuring measures, 

Quality of social dialogue 

+ 
Environmental policies 
part of topics for EWC 
information and 
consultation 

Both the second and the third options have limited positive economic impact, mainly through 
improved  anticipation  and  acceptance  of  change  and  environmental  impact  through  the 
inclusion of environmental policies in the topics dealt with by the EWCs. The most positive 
impact  of  both  options  lies  in  the  social  area:  improved  capacity  to  adapt  to  change  and 
improved social dialogue.  

VI. 3 Added value of EU action  

The  three  options  identified  do  not  go  beyond  what  is  necessary  to  ensure  more  effective 
transnational information and consultation rights for workers and more coherent Community 
legislation, which Member States cannot achieve on their own. In particular, adaptation to the 
particular needs of each situation is possible through the priority given to negotiated solutions, 
and  the  proposed  legislative  review  will  focus  on  resolving  actual  identified  problems  and 
reinforcing  effectiveness,  while  avoiding  unnecessary  burdens  on  business  and  providing 
flexible solutions. 

Within option 3, however, sub-option 1 (lowering thresholds) would not meet the objectives 
and not be a proportionate solution.  

VI. 4 Ranking the options 

The options are ranked as follows:  

(1) 

The third option Review of existing legislation is the most able generally to achieve the 
four  stated  objectives  and  yield  the  most  significant  economic  and  social  benefits. 
Additional operational costs for companies are limited and seem generally more than 
compensated by savings. Within this legislative approach, however, sub-options 1 and 
2  (respectively  lowering  the  threshold  and  registering  EWCs)  do  not  demonstrate 
sufficient cost-effectiveness, as benefits seem to be outweighed by costs especially for 
SMEs. The objectives of Sub-option 2 (registering agreements) could be achieved by a 
voluntary  mechanism  (of  the  responsibility  of  the  social  partners)  not  entailing 
administrative  compliance  costs.  .  None  of  the  remaining  sub-options  3  to  10  shows 
globally  a  negative  impact  on  costs.  Asnone  would  bring  a  radical  change  to  the 
present  rules  governing  EWCs  nor  be  sufficient  by  itself  to  achieve  the  desired 
objectives  they  should  therefore  be  implemented  together.  The  content  of  some  of 

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these sub-options has been adapted to take into account the results of the consultation 
exercise, as well as the interest of the various stakeholders. Particularly the content of 
the  subsidiary  requirements,  the  protection  clauses  (including  sanctions)  and  the 
definition  of  the  transnational  scope  have  been  reviewed  in  order  to  minimize  the 
concerns that employers may have about the effects of the new rules on the length and 
complexity of the decision-making procedures inside the companies. In any case, the 
revised Directive should  allow  for  regular monitoring  of the effects of the new rules 
particularly on these grounds. 

(2) 

The second option Non-regulatory approach — additional promotion of best practice 
presents some economic and social benefits, without entailing compulsory additional 
costs for companies. It entails a direct increasing effect on EU budget, but of a very 
limited  relative  scale.  However,  by  nature,  the  option  can  address  only  to  a  limited 
extent the objectives of legal certainty and coherence in Community legislation and is 
therefore  inferior  to  the  legislative  approach.  Also,  given  the  extent  of  activities 
already undertaken in this area, under the budget heading 04.030303, additional non-
regulatory measures cannot be expected to bring about immediate, spectacular results. 
Priority in planning should be given to communication actions in order to raise interest 
for EWCs and their potential, and then reinforce budget credits for supporting a larger 
number of projects.  

(3) 

The  first  option  No  new  EU  action  does  not  present  any  ability  to  meet  the  specific 
objectives. 

VI. 5 Preferred option 

The preferred option is the third option Review of Existing legislation, excluding sub-options 
1  (lower  thresholds)  and  2  (registering  of  agreements),  combined  with  awareness-raising 
actions  from  the  second  option  Non-regulatory  approach  —  additional  promotion  of  best 
practice, starting with communication actions.  

The  likely  overall  impact  of  the  combination  of  options  2  and  3  would  be  to  improve  the 
quality  of  dialogue  within  companies  and  enable  all  parties  to  better  anticipate  and  manage 
change,  while  imposing  some  additional  direct  costs.  However,  it  is  difficult  to  see  this 
entailing significant additional costs for companies already complying with the requirements 
and aims of the existing Directive. The initiative would also contribute to making the existing 
Community  instruments  on  information  and  consultation  more  coherent  (same  definitions, 
interplay between national and transnational rules) 

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SECTION VII: MONITORING AND EVALUATION 

VII. 1 Core indicators of progress towards meeting the objectives 

The core indicators of progress towards meeting the objectives are as follows: 

•  to ensure the effectiveness of employees’ transnational information and consultation rights 

in existing EWCs:  

–  the proportion of EWCs consulted before a restructuring decision is made public 

–  the proportion of trained employee representatives 

•  to increase the take-up rate  

–  the  proportion  of  companies  falling  within  the  scope  of  the  Directive  having 

established EWCs (take-up rate) 

–  the number and proportion of workers represented through EWCs 

•  to ensure legal certainty in the setting up and operation of EWCs:  

–  the number of renegotiated agreements 

–  the  proportion  of  companies  challenged  by  employees  on  the  levels  of 

consultation 

•  to ensure better coherence and interplay between Community legislative instruments on the 

information and consultation of employees: 

–  the  number  of  EWC  agreements  on  the  linking  of  information  and  consultation 

levels. 

VII. 2 Outline for possible monitoring and evaluation arrangements 

In order to monitor and evaluate the progress towards meeting the objectives, the following 
measures may be envisaged: 

•  Continued updating of database on EWC agreements, 

•  Monitoring of litigation on EWCs to be continued, 

•  Regular  and  consistent  company  surveys  on  timing  of  consultation  in  cases  of 

restructuring, on training and on internal challenges, 

•  Normal monitoring of Community legislation by the Commission. 

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ANNEX 1- EUROPEAN WORKS COUNCILS — COMPLIANCE AND FIGURES 

Compliance with the Directive 

Council  Directive  94/45/EC  concerning  European  Works  Councils,  extended  to  the  United 
Kingdom by Council Directive 97/74/EC, and adapted by Directive 2006/109/EC by reason of 
the  accession  of  Bulgaria  and  Romania  to  the  EU,  provides  for  the  information  and 
consultation of employees in Community-scale undertakings and groups of undertakings, i.e. 
undertakings and groups of undertakings having at least 1000 employees within the Member 
States and at least 150 employees in each of at least two Member States.  

The  European  Works  Councils  Directive  has  been  implemented  in  all  30  states  of  the 
European  Economic  Area  (27  EU  Member  States,  Norway,  Iceland  and  Liechtenstein).  All 
have adopted national  implementing measures that are quite similar and close to the text of 
the Directive. 

Negotiations  for  the  establishment  of  a  European  Works  Council  or  an  information  and 
consultation procedure in any Community-scale undertaking or group of undertakings may be 
initiated  on  the  initiative  of  central  management  or  at  the  written  request  of  at  least  100 
workers or their representatives in at least two undertakings or establishments in at least two 
different  Member  States.  Until  such  an  initiative  or  request  is  forthcoming,  there  is  no 
obligation to set up a European Works Council. 

Companies affected by the Directive and established European Works Councils 

As there is no registration mechanism, there are no official data on European Works Councils 
or  on  the  companies  covered.  Data  are  collected  by  the  trade  unions  and  the  databases  are 
monitored at European level by the ETUI-REHS and the SDA. 

According to the most recent data64, EWCs were present and active in 829 companies in early 
March  2008  and  negotiations  on  the  setting  up  of  EWCs  were  ongoing  in  30  additional 
companies. EWCs that were dissolved or merged with another were reported in 33 companies. 
The EWCs had been set up or renewed through a total of 1265 agreements.  

In  200765,  2257  companies  employing  24  million  workers  fell  within  the  scope  of  the 
Directive.  European  Works  Councils  were  operating  in  816  companies  (36%  of  companies 
covered) with some 14.5 million employees (62% of employees covered). 

The most comprehensive and detailed data66 go back to 2005 (see table for detailed data). Out 
of  the  2204  relevant  companies  employing  23.6  million  employees  in  2005,  20%  were 
headquartered in Germany, 16% in the USA, 12% in the UK and 10% in France.  

Of these companies, 772, employing 14.45 million workers, had established European Works 
Councils,  i.e.  35%,  covering  61%  of  the  workforce.  The  proportion  of  companies  with  an 
EWC  compared  to  the  companies  covered  by  the  Directive  per  country  of  ownership  —  in 

64 
65 
66 

ETUI-REHS EWC database, http://www.ewcdb.eu/. Consulted on 7.3.2008. 
ETUI-REHS Benchmarking working Europe 2007. 
Kerkhofs, P., European Works Councils facts and figures 2006, ETUI-REHS, Brussels, 2006. 

EN 

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decreasing  order  —  is  highest  (at  least  40%)  for  companies  headquartered  in  Norway, 
Belgium,  Sweden,  Finland,  UK,  Denmark  and  Luxemburg  and  lowest  (less  than  30%)  for 
companies  headquartered  in  Germany,  Canada,  Greece,  Spain,  Ireland,  Portugal,  Hungary, 
Austria, Czech Republic and Poland. 

Particularly relevant for the information and consultation of workers is also the proportion of 
companies  with  an  EWC  among  those  operating  in  a  particular  EEA  Member  State.  For 
example, 777 companies falling within the scope of the Directive have operations in Sweden 
and, of these, 414 have established EWCs. Similarly, 819 companies covered by the Directive 
have  operations  in  Poland  and  425  of  them  have  established  EWCs.  Over  half  of  relevant 
companies  with  operations  in  the  new  Member  States  have  set  up  EWCs  (see  table  for 
details). 

The number of companies with an EWC has grown over the years: 

More than the country of ownership, size is a major factor in the variation in the presence of 
EWCs.  61.3%  of  relevant  companies  with  a  workforce  larger  than  10  000  employees  have 
EWCs, compared with 43.3% of companies with 5000 to 10000 employees and only 23% of 
companies with fewer than 5000 employees. 

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Companies 
covered by 
Directive and 
headquartered in 
country  

Companies 
headquartered in 
country with 
established 
EWCs 

Companies 
covered by 
Directive and 
operating in 
country 

Companies 
operating in 
country with 
established 
EWCs 

786 
1085 
65 
636 
666 
181 
503 
1539 
1753 
358 
662 
50 
560 
1118 
155 
20 
162 
274 
56 
1182 
556 
819 
617 
340 
185 
1167 
777 
1556 

394
556
33
333
357
101
283
676
697
221
337
27
297
546
84
9
87
152
29
556
308
425
335
199
108
563
414
660

Austria 
Belgium 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Iceland 
Ireland 
Italy 
Latvia 
Liechtenstein 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Norway 
Poland 
Portugal 
Slovakia 
Slovenia 
Spain 
Sweden 
UK 
EEA Total 

Australia 
Canada 
Japan 
Russia 
South Africa 
Switzerland 
USA 
Other 
Non-EEA Total 

TOTAL 

46
72
0
8
60
0
64
210
450
5
12
0
43
66
0
0
0
5
0
133
22
11
9
0
0
41
120
265
1642

8
16
56
4
6
104
344
24
562

2204

17
39
0
0
24
0
28
79
123
1
1
0
6
25
0
0
0
2
0
51
14
0
1
0
0
6
57
109
583

3
4
21
0
2
37
120
2
189

772

Source: Kerkhofs, P., European Works Councils, facts and figures 2006, ETUI-REHS, Brussels, 2006 

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There is also a direct relationship between the degree of internationalisation of a company and 
the likelihood of an EWC being established. Looking at the number of EEA countries where 
companies covered by the Directive are operating, it appears that 12% have operations in 15 
or  more  countries  (high  internationalisation),  21%  in  10  to  15  countries,  32%  in  5  to  9 
countries  and  34%  in  2  to  4  countries  (limited  internationalisation).  The  percentage  of 
relevant companies with an EWC is 65% where internationalisation is the highest, decreases 
with the decrease in the number of countries of operation, and falls to less than 20% where 
internationalisation is lowest.  

As  the  number  of  companies  falling  within  the  scope  of  the  Directive  has  increased  since 
2000 (the increase between 1998 and 2000 is more likely to be due to improvements in the 
database),  the  slow  increase  in  the  number  of  companies  with  EWCs  did  not  lead  to  an 
increase in the take-up rate, which has remained at around 35% of companies. 

Evolution in the take-up rate of EWCs

s
e
i

n
a
p
m
o
c

f
o
r
e
b
m
u
N

2500

2000

1500

1000

500

0

e
t
a
r

p
u
-
e
k
a
T

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1995

1998

2000

2002

2004

2006

2008

Companies identified as falling within the scope of the directive

Companies with EWCs

Take-up rate

Source: ETUI-REHS Benchmarking working Europe 2008 

As regards the distribution among sectors, an overview of the agreements establishing EWCs 
is given in the chart below. The metal, services and chemicals sectors are the most significant 
in terms of the number of companies falling within the scope of the Directive (see table). The 
first two are also the most significant as regards the workforce covered by the Directive. Over 
70% of the relevant workforce is actually represented by EWCs in the metal and chemicals 
sectors, over 60% in the food, hotel and catering sector and in the building and wood sector, 
over  50%  in  the  services  sector,  whereas  representation  is  less  than  40%  in  the  textile  and 
transport sectors. The differences may be primarily attributed to the variation in the size of the 
companies concerned. 

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Companies 
covered by the 
Directive 

Companies 
with 
established 
EWCs 

Proportion of 
companies 
with 
established 
EWCs 

Workforce 
in 
companies 
covered 
(million) 

Proportion 
of workforce 
represented 

735 
437 
595 
241 

193 

96 
81 

302
177
143
92

73

25
19

41%
41%
24%
38%

37%

26%
25%

8.0 
3.7 
8.0 
2.7 

2.3 

0.3 
1.1 

71%
72%
55%
65%

63%

37%
29%

Metal 
Chemicals 
Services 
Food, 
catering 
Building 
wood 
Textile 
Transport 

hotel, 

and 

Source: Kerkhofs, P., European Works Councils facts and figures 2006, ETUI-REHS, Brussels, 2006 

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ANNEX 2- LESSONS LEARNED ON EUROPEAN WORKS COUNCILS  

by European social partners UNICE, CEEP, UEAPME, ETUC, April 2005 

Introduction 

Ten years ago, the Council adopted Directive 94/45/EC on the establishment of a European 
Works  Council  (EWC)  in  Community-scale  undertakings  and  Community-scale  groups  of 
undertakings. Eight years after the deadline for transposition of the Directive at national level, 
companies and workers that have put in place EWCs report the positive role these bodies can 
play  in  improving  the  information  flow  between  workers  and  management,  allowing  for 
consultation  of  workers  on  relevant  cross-border  issues  affecting  the  group,  developing  a 
corporate  culture  in  transnational  groups  and  gaining  acceptance  for  necessary  change. 
Reference was also made to the cost and complexity of organising transnational information 
and consultation in such European structures. 

Today,  some  750  transnational  companies  or  groups  have  established  EWCs  or  similar 
bodies.  This  represents  approximately  45%  of  the  companies  or  groups  of  companies  and 
about 70% of the employees potentially concerned. The majority of agreements establishing 
EWCs were concluded before 1996, on the basis of Article 13 of the Directive, which allowed 
greater  flexibility  to  workers  and  management  to  design  and  operate  procedures  for 
transnational  information  and  consultation  in  their  company.  In  the  meantime,  a  number  of 
these agreements have been renegotiated. 

Since  May  2004,  the  EWC  Directive  has  been  applicable  in  the  10  new  Member  States. 
Enlargement is a major challenge for groups and companies operating in both the old and new 
Member  States  which  are  now  enlarging  their  EWCs  or  seeking  to  establish  transnational 
information and consultation bodies as they now fall under the scope of the Directive. 

Building on the work programme for the European social dialogue 2003-2005, which foresaw 
the  organisation  of  a  seminar  on  the  enlargement  of  EWCs,  and  after  the  first-stage 
consultation  of  the  Social  Partners  by  the  Commission  in  April  2004,  UNICE/UEAPME, 
CEEP  and  ETUC  decided  to  discuss  the  functioning  of  EWCs  in  the  enlarged  European 
Union  on  the  basis  of  practical  case  studies.  Examples  of  the  nine  company-case  studies 
presented during two social dialogue seminars in September and October 2004 are attached. 

The lessons learned 

On the basis of these case studies, ETUC, CEEP and UNICE/UEAPME drew the following 
lessons.  

1. EWC: a useful tool to organise transnational information and consultation. 

Practice shows that EWCs can help management and workers to build a corporate culture and 
adapt  to  change  in  fast-evolving  transnational  companies  or  groups,  when  changes  concern 
the group’s strategy and affect sites in several countries. 

In a context of globalisation and ongoing technological innovation, companies and workers in 
all European countries are confronted with continuous and rapid change in the organisation of 
work  and  production.  The  existence  of  a  good  social  dialogue  climate  of  confidence  and  a 

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constructive attitude to change are key factors which may contribute to ease the management 
of change in companies and to prevent or limit possible negative social consequences when 
more far-reaching restructuring is necessary. 

2. Mutual trust 

The  establishment  of  a  climate  of  mutual  trust  between  management  and  workers’ 
representatives in the EWC is important for a good functioning of this body. 

Clarity in procedures is important to create the basis for this mutual trust. Some companies, in 
the  agreement  creating  the  EWC,  have  developed  fairly  detailed  rules  on  the  kind  of  and 
moment at which information is given to this body. Others have chosen to function with broad 
rules  and  entrusted  a  restricted  steering  committee  with  the  task  of  recommending  how  to 
handle information and consultation on a particular issue. 

Adopting  a  pragmatic  approach  on  both  sides  to  the  operation  of  the  EWC,  developing 
informal  relations  between  the  management  and  worker  representatives  in  the  EWC  or  the 
restricted steering committee, plays a crucial role. 

Openness  on  the  side  of  management  to  releasing  information  at  an  early  stage  and  a 
constructive attitude in the search for solutions on the workers’ side are also important. 

3. Understanding complex issues 

The  ability  to  understand  complex  issues  discussed  in  the  EWC  determines  the  quality  in 
communication. Investing in language as well as technical/content training helps to optimise 
the functioning of the EWC and to reduce overall functioning costs. Ensuring the efficiency of 
such training actions is essential. 

Some agreements foresee the worker representatives to be assisted by experts, helping them to 
analyse and discuss the group’s strategy, financial situation or consequences of decisions and 
to formulate their proposals and opinions. 

4. Reconciling different cultures 

Finding  ways  of  reconciling  different  national  industrial  relations  practices,  occupational 
traditions and addressing an increasingly diverse workforce is a constant challenge. As part of 
their  efforts  to  see  the  EWC  play  a  positive  role  in  developing  a  common  approach  in 
companies undergoing rapid internationalisation, some agreements have been negotiated and 
signed  by  European  sectoral  federations  only.  In  some  cases,  they  were  co-signatories 
alongside  companies’  workers’  representatives  or  their  experts  played  an  informal  but 
important role in facilitating the synthesis of different cultures during the negotiation process. 
In  other  cases,  priority  was  given  to  working  exclusively  with  designated  worker 
representatives within the companies. 

5. Ensuring ownership of the EWC by the workforce 

All the case studies demonstrated that ensuring a real sense of ownership of the EWC by the 
whole workforce was a considerable challenge. However, the practical issues to be addressed 
varied depending on the structure of the company, the range of its activities, its geographical 
coverage and possible numeric dominance of the workforce of some countries, the existence 
of  a  restricted  steering  committee,  the  dissemination  of  EWC  activities,  the  possible  role  of 
European sectoral federations or other external experts, etc. 

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6. Difficulty of identifying worker representatives in new Member States 

Some  companies  have  anticipated  the  enlargement  of  their  EWC  and  do  not  seem  to  have 
encountered  insurmountable  difficulties  in  identifying  worker  representatives  from  those 
countries.  However,  other  companies  currently  seeking  to  enlarge  their  EWC  report 
considerable  difficulties  in  identifying  worker  representatives  in  the  new  Member  States  in 
which they operate. 

7. Managing multiple layers of information and consultation 

A  complexity  encountered  by  both  management  and  worker  representatives  is  to  organise 
meaningful information and/or consultation without creating undue delays and uncertainties. 
The  necessary  respect  of  obligations  arising  from  the  legislative  and  contractual  framework 
on worker information and consultation as well as confidentiality requirements influence the 
information and consultation process. Tensions can also arise from the fact that even if some 
decisions  on  the  strategy  of  the  group  are  taken  at  European  level,  managing  its  social 
consequences remains local and governed by national rules. 

8. The good functioning of EWC is an evolving process 

All  case  studies  underlined  that  the  good  functioning  of  EWCs  is  a  learning  and  evolving 
process  through  fine-tuning  over  the  years.  Creating  a  good  working  atmosphere  and 
functioning  in  an  EWC  requires  time,  openness  and  efforts  from  both  sides,  notably  to 
overcome  possible  misunderstandings  and  tensions  due  to  differences  in  national  situations 
and social dialogue traditions across Europe. 

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ANNEX  3-  RESULTS  OF  THE  2008  SECOND-STAGE  CONSULTATION  OF  THE 
EUROPEAN  SOCIAL  PARTNERS  ON  THE  REVIEW  OF  THE  EUROPEAN 
WORKS COUNCILS DIRECTIVE 94/45/EC 

Consultation process 

On 20 February 2008, the Commission adopted document C(2008) 660 launching the second-
stage consultation of the social partners in accordance with Article 138(3) of the EC Treaty on 
the  content  of  a  possible  Community  initiative  to  revise  Directive  94/45/EC  on  European 
Works  Councils  (EWCs)  and  inviting  them  to  negotiate  in  accordance  with  Articles  138(4) 
and 139 of the Treaty. The consultation lasted for six weeks, ending on 3 April 2008. 

Positions of the European social partners on the opening of negotiations 

On 20 February 2008, in a press release, the European Trade Union Confederation (ETUC) 
welcomed  the  Commission’s  initiative  launched  the  same  day  and  its  Deputy  General 
Secretary declared that ‘The ETUC will be ready for a substantial and rapid negotiation. But 
we will not accept the employers playing for time’.  

On  2  April,  the  European  employer  organisations  BusinessEurope,  CEEP  and  UEAPME, 
‘considering  that  the  European  social  partners  are  best  placed  to  address  this  legislative 
review  effectively’,  declared  they  were  ‘looking  forward  to  the  opening  of  negotiations  on 
European Works Councils’ with the objective ‘to agree on amendments to the EU legislative 
framework, which will help improve the functioning of EWCs in practice’. On the same day, 
the European Trade Union Confederation (ETUC), considering its objective ‘to see action to 
revise the Directive during the lifetime of this Commission and this Parliament’, declared it 
was  ‘ready  to  negotiate  but  only  on  a  basis  which  includes  a  tight  timetable  and  a  quick 
conclusion of the talks’.  

On 3 April, the sectoral employers’ organisation European Banking Federation EBF awaited 
‘with interest the decision of the social partners on whether to open negotiations and would 
hope to make a positive contribution to the debate over the next few months’. The same day, 
EUROCOMMERCE  declared  it  had  ‘no  objections  to  start  negotiations  at  EU  level’  but 
considered  ‘it  should  be  made  possible  to  benefit  from  an  open-ended  social  dialogue  and 
negotiation  procedures’  and  felt  there  was  a  risk  of  not  having  ‘fair  and  balanced 
negotiations’. On 10 April, CEC European Managers expressed its ‘wish that European social 
partners  start  a  negotiation  procedure  on  the  basis  of  the  Commission’s  proposals  and  of 
CEC’s responses’ and ‘to actively take part to the negotiations within the drafting group’. 

On  11  April,  claiming  it  had  made  ‘serious  efforts  to  allow  a  social  dialogue  solution’,  the 
ETUC  concluded  it  was  ‘not  ready  for  negotiations  within  the  framework  of  the  social 
dialogue’ considering ‘the time constraints and the depth of differences with the employers’ 
and  counted  on  the  Commission  to  present  a  revised  Directive.  On  the  same  day, 
BusinessEurope, CEEP and UEAPME regretted ‘the decision made by the ETUC to reject the 
opening  of  negotiations’,  recalled  their  commitment,  good  will  and  ‘motivation  to  find  an 
agreement with ETUC’ but that ‘employers could not agree to open pre-negotiations without 
involving all affected employers’ organisations and their respective members in a democratic 
process’,  and  asked  the  Commission  to  make  its  ‘best  efforts  to  enable  a  social  dialogue 
solution’ and in the meantime not to enter into a legislative process by itself. 

EN 

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On 30 April, the Commission launched a last call to the social partners, inviting them to make 
their  best  efforts  to  negotiate  on  European  Works  Councils.  A  few  days  later,  it  was 
confirmed that there would be no such negotiations. 

Responses  from  the  European  social  partners  consulted  under  Article  138  of  the  EC 
Treaty 

In  addition  to  the  above-mentioned  responses  regarding  the  opening  of  negotiations,  the 
Commission  received  six  contributions  from  the  European  social  partners  consulted  under 
Article 138 of the Treaty. 

CEEP,  the  European  centre  of  enterprises  with  public  participation  and  of  enterprises  of 
general economic interest, underlined that “the existence of good, constructive social dialogue 
can have an important role to play in managing the impact of change, including that resulting 
from  transnational  restructuring”  and  that  “effective  information  and  consultation,  without 
hampering the process of company level decision making is important” to achieve this result. 
It commented on the proposals (see table). It broadly supported, with some suggestions, the 
envisaged  proposals  for  the  concepts  of  information  and  consultation,  the  role  and 
competence  of  employee  representatives,  the  adaptation  clause  and  the  linking  of  levels.  It 
opposed any measure giving the EWC a legal personality and a negotiating role. It proposed 
other  solutions  for  the  role  of  trade  unions  and  transnational  competence.  In  addition,  it 
proposed a threshold to hold a seat on the Special Negotiating Body and to shorten the period 
of negotiation to adapt existing agreements. 

HOTREC, on behalf of the hospitality industry, stressed that ‘there is no need for a revision of 
the Directive’, which, ‘as it currently stands (…) provides companies and employees with a 
sufficient framework for efficient consultation’. 

The  European  Banking  Federation,  EBF,  stressed  the  importance  of  EWCs  for  the  banking 
sector and ‘the need for flexibility in responding to economic and technological change’. 

EUROCOMMERCE  insisted  ‘on  the  principle  that  social  partners  at  company  level  need  a 
maximum of flexibility to agree solutions best suited to their own circumstances’ and made 
detailed  comments  on  the  envisaged  proposals  (see  table).  It  supported  those  relating  to  the 
role  and  competence  of  employee  representatives  and  to  the  transnational  competence  of 
EWCs. It opposed those relating to the concepts of information and consultation, the content 
of subsidiary requirements, the role of trade unions and the protection of rights. It proposed 
another solution for the linking of consultation levels. 

ETUC shared the Commission’s view that ‘substantial changes in the legislation are needed if 
EWCs are to play their appropriate role on the ongoing process of European integration’ and 
made  detailed  comments  on  the  envisaged  proposals  (see  table).  It  broadly  supported,  with 
some suggestions, those relating to the concepts of information and consultation, the role of 
trade  unions,  the  role  and  competence  of  employee  representatives,  the  protection  of  rights, 
the adaptation clause, and the responsibilities of management. It opposed part of the proposal 
regarding the composition of the Special Negotiating Body. It proposed other solutions for the 
content of the subsidiary requirements and transnational competence. In addition, it proposed  

•  Lowering the thresholds from 1000 to 500 and from 150 to 100, respectively 

•  Deleting the exemptions for merchant navy crews and ideological guidance undertakings 

EN 

73 

   EN 

 
•  Specifying more precisely the definition of controlling undertaking to cover, for example, 

joint ventures, franchise companies and monopsonies 

•  Making possible the opening of negotiations by trade union federations 

•  Reducing the negotiation period from 3 years to one, with a possible agreed extension of 6 

months 

•  Applying the subsidiary requirements where negotiations are not resumed 4 months after 

the last negotiating meeting 

•  Establishing  majority  rules  for  an  agreement  to  be  concluded:  absolute  majority  of 

members as well as of employees from at least two Member States 

•  Deleting  the  possibility  to  agree  on  a  procedure  instead  of  a  body  for  information  and 

consultation 

•  Including  expertise  and  operating  expenses  within  the  compulsory  items  for  an  Article  6 

agreement 

•  Promoting equality between men and women in the composition of EWCs 

•  Defining  a  procedure  for  agreement  on  decision-making  rules  within  the  EWC  and  fall-

back provisions 

•  Specifying more precisely the definition of confidential information and placing the burden 

of proof on the company 

•  Providing for a decision to be abandoned if information and consultations rights have been 

violated 

•  Defining more precisely the protection of employees, as in Directive 2001/86/EC 

•  Providing  for  the  cost  of  legal  assistance  and  court  proceedings  to  be  borne  by 

management 

•  Making all EWC agreements accessible in a public register. 

CEC European Managers considered ‘a consolidation of the EWC role can only take place if 
executives and managers are adequately represented within it’. It proposed different solutions 
to  ensure  executives  and  managers  are  represented,  informed  and  consulted,  such  as 
compulsory  inclusion  in  national  delegations  with  at  least  three  representatives  or  in  the 
national delegation of the country with the highest number of executives, the establishment of 
specific  committees  for  managers,  an  obligation  to  take  into  account  the  interests  of  the 
managers  within  EWC  discussions  and  the  right  for  the  negotiating  body  to  be  assisted  by 
managers’  representatives.  CEC  made  detailed  comments  on  the  envisaged  proposals  (see 
table). It broadly supported, with some suggestions, most of the proposals, except for the role 
of  trade  unions,  the  composition  of  the  Special  Negotiating  Body,  and  transnational 
competence, where it proposed other solutions. In addition, it proposed 

•  Making possible the opening of negotiations by trade union federations  

•  Removing the limit of one expert on the Special Negotiating Body 

•  Defining  more  precisely  the  content,  level  and  timetable  for  information  to  be 

communicated to the EWC 

EN 

74 

   EN 

 
•  Guaranteeing the communication of documents in several languages, for example the three 

main languages spoken in the group 

•  Specifying  that  confidentiality  is  applicable  vis-à-vis  third  parties  but  not  between 

employee representatives and authorising the EWC to create a website 

•  Introducing  an  early  warning  procedure  for  the  supervisory  board  in  the  event  of  severe 

deficits in information and consultation. 

Contributions from other stakeholders 

The  Commission  also  received  eleven  other  contributions  in  response  to  the  consultation 
document:  four  from  employers  and  companies  and  seven  from  trade  unions  and  European 
Works  Councils.  The Confederación Empresarial Española de la Economía Social  (CEPES) 
considered  that  the  specificities  of  companies  in  the  social  economy  should  be  taken  into 
account and their organisations consulted. The other contributors shared the main orientations 
of the envisaged proposals and made suggestions for reviewing some of them and removing 
or adding others. 

Employers and companies: 

•  The  Association  Française  des  Entreprises  Privées  (AFEP  —  French  private  companies) 
commented on the proposals (see table). It broadly supported, with some suggestions, the 
envisaged  proposals  for  the  concepts  of  information  and  consultation,  the  role  and 
competence of employee representatives, the adaptation clause and the linking of levels. It 
opposed any measure in the subsidiary requirements giving the EWC a negotiating role. It 
proposed  other  solutions  for  the  role  of  trade  unions,  transnational  competence  and  the 
transitional provisions. In addition, it proposed reinforcing the role of the select committee 
to deal with specific circumstances and regulating the use of expertise by agreement 

that  enable 

the  speed  of  decision-making  processes 

•  The American Chamber of Commerce to the European Union (AmCham EU) expressed its 
interest in EWCs and the proposed revision of the Directive since a substantial number of 
its  member  companies  had  EWC  agreements  and  recalled  that  companies  of  American 
parentage accounted for at least 130 of the total 820 EWCs. It stressed the need for flexible 
solutions  ‘preserving 
these 
undertakings  to  compete  in  the  global  economy’.  It  commented  on  the  proposals  (see 
table).  It  broadly  supported,  with  some  suggestions,  the  envisaged  proposals  for  the  role 
and competence of employee representatives, the responsibilities of local management, the 
composition of the SNB, the expression of opinions and the inclusion of new subjects in 
the subsidiary requirements, the adaptation clause, the linking of levels and the transitional 
provisions.  It  firmly  opposed  any  measure  that  could  be  associated  with  collective 
bargaining or creating an obligation to reach an agreement, a predefined role for experts, as 
well as a definition of transnational competence for EWCs that could sanction consultation 
on single-country events whether or not the decision is taken outside the affected countries. 
In  addition,  it  favoured  company-level  agreements  over  a  definition  of  information  and 
the  definition  of  exceptional 
consultation  going  beyond 
circumstances  so  as  to  favour  anticipation,  the  content  and  modalities  of  training,  and 
proposed reinforcing the role of the select committee. 

the  present  definitions, 

•  The  company  Generali  shared  its  experience  and  comments  in  detail  on  the  consultation 
document, considering that the changes envisaged to the Directive and the amendments to 

EN 

75 

   EN 

 
the  EWC  agreement  go  in  the  same  direction  and  suggested  empowering  the  select 
committee. 

Trade unions and European Works Councils 

•  NFU  Finance,  the  Confederation  of  Nordic  Bank,  Finance  and  Insurance  Unions, 
emphasised  how  consultation  was  understood  in  the  Nordic  context,  as  mandatory  with 
opinions taken into account before decisions are made. It proposed provisions for ensuring 
the  legitimacy  of  employee  representatives,  organising  network  meetings  between 
employees,  establishing  that  the  burden  of  proof  regarding  confidentiality  and  non-
transnational character rests with management, and having decisions taken without proper 
consultation declared null and void 

•  Finansforbündet,  the  Swedish  financial  sector  union,  focused  on  the  concept  of 
consultation and its relationship with the concept of negotiation in the Swedish context and 
supported the adaptation clause  

•  Contributions 

from  European  Works  Councils  and  company  unions  at  Total, 
HeidelbergerCement, Handelsbanken,  and EADS, together with a joint contribution from 
IF,  Nordea  and  Danske  Bank,  provided  detailed  comments  based  on  their  experience, 
mostly  supporting  the  measures  envisaged  and  making  additional  proposals  similar  to 
those  put  forward  by  the  ETUC.  They  especially  insisted  on  the  concepts  of  information 
and consultation, the number of meetings, access to sites, expertise and training. 

Contributions received ahead of the consultation 

Ahead of the consultation, it should be noted that stakeholders sent letters to the Commission 
at  the  end  of  2007  and  in  early  2008  to  share  their  experiences,  opinions  and  suggestions 
concerning the review of the EWC Directive. The Commission received 35 letters from: 

•  Five  organisations  representing  workers:  the  European  Trade  Union  Confederation  and 
four European Industry trade union federations in the metal (EMF), textile (ETUF/TCL), 
services (UNI Europa) and public services (EPSU) sectors, stressing the need to launch the 
process  for  revising  the  Directive,  notably  with  regard  to  the  particular  situation  in  their 
sector,  and  proposing  measures  along  the  lines  found  in  the  ETUC’s  response  to  the 
consultation; 

•  Six national trade union organisations from Austria (OGB Vida), the Czech Republic (OS 
KOVO),  Germany  (DGB),  Poland  (Solidarnosc  and  OPZZ)  and  the  United  Kingdom 
(UNISON),  describing  the  need  to  revise  the  Directive  with  reference  to  the  particular 
situation  in  their  country,  and  proposing  measures  along  the  lines  found  in  the  ETUC’s 
response to the consultation; 

•  Three  German  employers’  organisations  at  cross-industry  level  (BDA)  as  well  as  in  the 
banking  (AGV  Banken)  and  insurance  (AVB  and  member  companies)  sectors,  sharing 
their experience of the EWCs and opposing the Commission’s planned initiative to launch 
a review of the Directive, underlining the absence of a need to do so and that the initiative 
would run counter to the autonomy of the social partners; 

EN 

76 

   EN 

 
•  Four  German  companies  (Deutsche  Bank,  Heimbach,  Leoni,  Renolit),  sharing  the 
experience  with  their  EWCs  and  underlining  the  absence  of  a  need  for  revision  of  the 
Directive; 

•  Seventeen  European  Works  Councils  (Alcatel-Lucent,  Akzo  Nobel,  BNP,  Caterpillar, 
Chemtura,  Federal  Mogul,  GDF,  GlaxoSmithkline,  Italcementi,  Parker  Hannifin, 
Rheinmetall,  Riva  Group,  Seco  tools,  Securitas,  St  Gobain,  Volkswagen,  Wyeth  Farma), 
sharing their experience with EWCs and describing the need for revision of the Directive, 
notably as regards the definitions of information and consultation and the other proposals 
found in the ETUC’s response to the second consultation. 

EN 

77 

   EN 

 
+ support - 
opposition 
*Alternative 

1.1  Concepts  of 
information  & 
consultation 

Subsidiary 

1.2 
requirements 

1.3  Role  of trade 
unions 

1.4  Role  & 
competence 
of 
employee 
representatives 

1.5  Protection  of 
rights 

ETUC 

CEC 

CEEP 

Eurocommerce 

AmCham EU 

AFEP 

+  Use  definition  in  Dir. 
2001/86 

+  Use  definition  in  Dir. 
2001/86 

Dir.2001/86 
+ 
Without involvement 
in decision making  

-  Would  slow  down 
decision-making 
and 
bring no clarification 

*  Select  committee  up  to  5 
mb  where  EWC  has  9  or 
more  mb,  right  to  min.  2 
regular  meetings,  follow-up 
meeting,  facilities,  experts, 
and 
interpretation 
needed, 
translation 
topics: 
disability, 
discrimination,  gender,  data 
protection 

as 

+  Right  of  TU  to  attend 
SNB  meetings  and  EWC 
meetings  where  required  by 
members,  full-time  officers 
not  to  be  prevented  from 
being EWC members 

+ Implies access to sites and 
link between sites, free time 
costs 
for 
covered, 
economic, 
legal & social topics 

training 

also 

and 

+  Use  provisions  in  Dir. 
2001/86 

At least 1 meeting/year 

Define  resources  for  the 
EWC 

*  Agreements  with 
signature  of  European 
federations 

+  Explicit 
financing 
for 
access to sites 

topics  & 
training, 

* 
to 
Response 
opinion  not  to  delay 
decisions 
-  Second  ordinary 
meeting  and  new 
remain 
to 
topics 
voluntary 
-  no new meeting as 
no  negotiating  role 
of EWC  

involvement 
*  TU 
to  need, 
according 
TUs 
be 
not 
members  of  SNB 
and EWC as internal 
bodies 

to 

Training 

+ 
appropriate, 
back 
reporting 
important, 
be 
linked  with  rules  on 
confidentiality 

to 

to  give 
-  EWC  not 
maintain 
opinions, 
limit 
costs/benefits, 
topics 
addressed, 
maintain  definition  of 
extraordinary 
circumstances 

*  To  be  defined  by 
agreement 

+  See  definition 
Dir. 2002/14 

in 

- no bargaining 
+ Express opinion, new 
subjects 
*anticipatory 
exceptional 
circumstances 
agreement 

by 

reaching 

-no 
agreement 

of 

-  New  meeting  not 
with  view  to  reaching 
as 
an 
agreement, 
EWC 
a 
negotiating body 

not 

-  No  compulsory  TU 
inadequate 
role, 
references 
Dir. 
to 
2001/86 

*  Per  agreement,  no 
predefined 
of 
expert 

role 

*  Only  internal  TU 
representatives  to  be 
present 

+  Mandatory  reporting 
to  country  of  origin, 
continuing 
training 
necessary,  obligation  to 
for 
attend 
representatives 

+Training needed to be 
discussed in EWC 
*Ways 
communicating 
adapt to MS 

of 
to 

+  Training  important, 
reporting  back  to  be 
linked  with  rules  on 
confidentiality 

+  EWC 
personality and capacity 

to  have 

legal 

+  On  condition  EWCs 
also represent managerial 
staff 

-  Sanctions  national, 
EWC  not  to  have 
legal personality  

-  Managers  to  represent 
interests 
employees’ 
vis-à-vis outside world 

-  Sanctions  already 
provided for 

EN 

78 

EN 

 
  
 
 
ETUC 

CEC 

CEEP 

Eurocommerce 

AmCham EU 

AFEP 

2.1  Adaptation 
clause 

+  Obligation  to  renegotiate 
Art. 6 or 13 upon request 

+  Obligation 
single body after M&A 

to  have 

In 

case 

+ 
of 
significant  changes 
in company structure 
request   
& 
* 
Shorten 
renegotiating period 

on 

2.2 
Responsibility 
management 

2.3 Composition 
of SNB, 
negotiation 

+  European  TU  federations 
entitled to request info 

+  European  managers 
federations  entitled 
to 
request info 

+ 

-  No  grouped  or  indirect 
representation  but  OK  to 
remove  maximum  limit  on 
SNB 

*  Representation 
managers 

for 

+  With  threshold  for 
holding  a  seat  at 
SNB 

3.2 
Transnational 
competence 

*  Burden  of  proof  on 
management  that  issue  is 
non-transnational 

*  Use  definition  in  Dir. 
2001/86 

*  To  define  per 
agreement,  or  where 
to  or  more  Member 
states are concerned 

requires 
+ 
But 
adaptation 
of 
codetermination  rules  at 
national level 

3.3 
levels 

Linking 

+ 

+  Linking  of  levels 
per 
agreement, 
to  all 
information 
levels  at  the  same 
time 
case  of 
transnational 
restructuring 

in 

* 
It  should  not  be 
possible  to  consult  first 
at  national  level,  so  as 
not 
slow  down 
decision-making  

to 

4  Transitional 
provisions 

long 

as 
+ 
As 
representation 
of 
executives  &  managers 
satisfactory 

+  Revision  not  to 
require 
all 
to  be 
agreements 
renegotiated 

+Encourage adaptation 
13 
but 
Article 
be 
agreements 
own 
modified 
provisions  

by 

to 

+ Only one EWC after 
M&A  but  Article  13 
agreements  not  to  be 
challenged 

*guidelines on M&As 

provided 

+ 
confusion 
unnecessary burden 

no 
or 

+ 

*Significant  impact  on 
employees  in  at  least 
two 
no 
countries, 
competence  over  single 
country 

+  Principle  of  relevant 
level,  confirmation  of 
possible  parallel  or 
simultaneous 
consultation 
different levels 

at 

*  Refer  to  effects  of 
decision and not to its 
origin 

+  Fall-back:  parallel 
and  autonomous  start 
of process 

+ 
With 
according 
provisions 
agreements 

to 

revision 
own 
of 

* 
13 
Article 
agreements  not  to  be 
challenged 

EN 

79 

EN 

 
  
 
 
 
 
 
 
 
 
 
ANNEX 4- DETAILED WEIGHING OF OPTION 3 (REVIEW OF LEGISLATION)  

Ability to achieve the specific objectives 

Increase  in  take-
up rate 

Legal  certainty 
in  the  setting  up 
and  operation  of 
EWCs 

Coherence 
interplay 
between 
directives 

and 

Sub-options 
option 3 

in 

1.Lower 
thresholds 

2.Registering 
agreements 

Effectiveness 
of 
information  and 
consultation 
rights  in  existing 
EWCs 

+ 
-Easier dialogue in 
smaller companies

+ 
-Benchmark text 
for agreements 

--- 
-Will lower take-
up rate in the new 
scope 
+ 
-Better access to 
information to 
ease first steps 

+ 

3.Composition of 
SNB 
and 
negotiation 
process 

-Helps work in 
starting period 
-Agreements using 
best practices  

+ 
-Supports start of 
negotiations  

No progress 

No progress 

++ 
-Clarity and 
transparency of 
agreement 
-facilitates 
monitoring of 
implementation 
+ 
-Resolves 
uncertainty on 
composition of 
SNB 

+ 
-Same provisions 
in SE/SCE 

+ 
-Same mechanism 
as for SE and SCE 

4.Protection 
rights 

of 

++ 
-Clarifies existence 
of sanctions in 
cases of non-
compliance 
-Clarifies 
possibility for 
EWCs to represent 
workers’ interests 

-/++ 
-Information 
necessary to take 
first steps 
available 
-Fear of sanctions 
among employers

+ 
-Role of EWC in 
expressing 
employees’ 
interests and legal 
standing of EWC 
clarified 

+ 
-Same provisions 
as Framework 
Directive 

EN 

80 

   EN 

 
 
 
 
 
 
 
 
Sub-options 
option 3 

in 

5.Role  of  trade 
unions 

6.Subsidiary 
requirements 

7.Adaptation 
clause 
transitional 
provisions 

and 

and 
of 

8.Role 
competence 
employee 
representatives 

Effectiveness 
of 
information  and 
consultation 
rights  in  existing 
EWCs 

++ 
- Promotion of best 
practice 
-Increased added 
value through 
better coordination 
and relations 
between EWC and 
national bodies and 
workers 
-Possible support 
for draft 
agreements from 
trade unions/ 
employers 

+++ 
-Benchmark for 
best practices on 
responses to 
opinions, 
anticipation, role 
of select 
committee 
++ 

-Secures 
information and 
consultation during 
changes in make-
up  
-Allows obsolete 
agreements to be 
changed 

+++ 
-Increases added 
value  
-Increases capacity 
to analyse 
information and 
have meaningful 
consultation 
-Increases cost-
effectiveness 

Increase  in  take-
up rate 

Legal  certainty 
in  the  setting  up 
and  operation  of 
EWCs 

Coherence 
interplay 
between 
directives 

and 

+ 

-Provision of 
expertise on 
EWCs  

+ 
-Same provisions 
as for SE/SCE 

+ 
-Benchmark for 
consultation in 
exceptional 
circumstances 

+ 
-Same provisions 
as for other 
directives 

+++ 

-Resolves 
uncertainty as to 
changes in make-
up 
-Secures existing 
agreements 

+ 

-Better 
knowledge 
/observance of 
legal framework 

+ 

-Similar 
provisions in 
SE/SCE 

+ 
-Same provisions 
in SE/SCE 

-/++ 
-Provision of 
information useful 
to take first steps 
-Support for 
initiatives by 
workers of 
subsidiaries 
-Promotion of 
EWCs 
-Fear of trade 
union intervention 
among some 
employers 

-/++ 
-Increased added 
value of EWCs 
perceived by 
employees 
-Fear of slower 
decision-making 
among employers
-/+ 
-Eases agreements 
for newly formed 
groups  
-Faster 
termination of 
EWCs in the 
event of mergers  

-/++ 
-Increased added 
value of EWCs 
perceived by 
employees  
-Fear of 
additional 
operating costs 
among employers

EN 

81 

   EN 

 
 
 
 
Sub-options 
in option 3 

Effectiveness 
information 
consultation  rights 
existing EWCs 

of 
and 
in 

Increase 
rate 

in  take-up 

Legal  certainty 
in  the  setting 
and 
up 
operation 
of 
EWCs 

Coherence 
and 
interplay 
between 
directives 

+++ 

-Strong reference to 
information and 
consultation with useful 
effect 
-Better anticipation 

9.Concepts 
of 
information 
and 
consultation 

10.Transnati
onal 
competence 
and 
levels 

linking 

+++ 
-Proper and appropriate 
interplay between levels, 
which is the key 
challenge during 
restructuring 
-Better anticipation 
-Dialogue at relevant 
level of management and 
employee representation 
-Increased added value 
and cost-effectiveness of 
EWC 

-/++ 
-Improved perception 
of added value of 
EWC leading to new 
initiatives from 
employees 
-Fear of workers’ 
involvement and 
slower decision-
making among 
employers 

-/+++ 
-Better perception of 
link between national 
bodies and EWCs may 
increase interest and 
avoid reluctance of 
employees, but fear of 
losing power at 
national level may 
increase reluctance 
-Possibility to save 
time in consultation 
processes may lead to 
employers’ initiatives 

+++ 
-Coherent 
concepts of 
information 
and 
consultation 
across 
directives 

+++ 
-Organises 
the link 
between 
directives 

++ 
-Clarification 
leading to less 
disputes  

+++ 

-Avoids 
disputes in 40% 
of companies 
-Makes it 
legally possible 
to consult first 
or at same time 
at European 
level 

EN 

82 

   EN 

 
 
Likely impact on costs 

Sub  options 
option 3 

in 

Set-up costs 

Operational 
costs 

Dispute-related 
costs 

Non-financial 
costs 

1.Lower 
thresholds 

2.Registering 
agreements 

3.Composition of 
and 
SNB 
negotiation 
process 

4.Protection 
rights 

of 

5.Role  of  trade 
unions 

++ 

-Higher relative 
costs for smaller 
companies 

++ 
-Higher relative 
costs for smaller 
companies 

No impact 

+ 

Administrative 
costs of sending 
the agreement to 
register 

- 
-Support by trade 
unions/employers  

No impact 

+ 
-Benchmark for 
more costly 
practices  

No impact 

No impact 

-/++ 
-Benchmark for 
more costly 
practices 

-More efficient 
operation 

--/+ 
-Support for 
initiatives 
-Support for draft 
agreements 
-Eases working 
together of 
representatives 
-Cost of travel and 
subsistence where 
no expert before  

- 
-Clarity and 
transparency of 
agreement 

-- 
-Clear provision 
of information 
and composition 
of SNB 
-Legitimacy of 
agreements 
--/+ 

-Increased 
observance of 
rights 
-Easier legal 
standing for 
EWCs 

-/+ 
-Provision of 
expertise on 
EWCs 
-Negotiation 
instead of 
litigation 
-Experience on 
legal proceedings  

++ 
More rigid 
employee-
management 
relations in 
smaller companies
+ 
External control 

-/+ 
-More efficient 
negotiation 
-Involvement of 
external 
organisations  

---/+ 
-Saves high costs 
linked to absence 
of consultation  
-Different impacts 
on decision-
making  

-/+ 
-More efficient 
negotiation and 
operation 
-Involvement of 
external 
organisations 
-Raised employee 
expectations and 
coordination 

EN 

83 

   EN 

 
 
 
 
 
 
 
 
 
Sub-options 
option 3 

in 

Set-up costs 

Operational 
costs 

Dispute-related 
costs 

Non-financial 
costs 

-/+ 
-To be set neither 
too low nor too 
high to avoid either 
party playing for 
time and holding 
more meetings 
than necessary  

-/++ 
-Benchmark for 
more costly 
practices, save for 
select committee 
instead of 
additional 
plenaries 

-- 
-Benchmark for 
more timely 
information & 
consultation 
-Benchmark for 
better 
anticipation 

-/+ 
-Eases agreements 
for newly formed 
groups 
-SNB to be 
established where 
necessary 
-Transitional costs 

--/+ 

-Faster 
termination of 
EWCs in cases of 
mergers  
-Benchmark for 
pre-existing 
agreements 

-/+ 

-More efficient 
negotiation 
-Right to training 

--/++ 
-New training in 
20% of EWCs 
-Increases cost-
efficiency 

--- 
-Lowers high 
costs due to 
social unrest 
-Resolves legal 
uncertainty as to 
changes in make-
up and 
termination of 
agreements 
-/+ 

-Better 
knowledge 
/observance of 
legal framework 

6.Subsidiary 
requirements 

7.Adaptation 
clause 
transitional 
provisions 

and 

and 
of 

8.Role 
competence 
employee 
representatives 

-/+ 
-More efficient 
benchmark for 
operation  
-Benchmark for 
need to take 
employees’ 
opinion into 
account 

---/+ 
-Helps build new 
corporate culture 
in mergers 
-Lowers social 
unrest 
-Need to take into 
account 
employees’ 
opinion 

---/+ 
-Saves costs 
linked to absence 
of feed-back and 
to social unrest  
-Raised employee 
expectations and 
coordination 
-Different impacts 
on decision-
making  

EN 

84 

   EN 

 
 
 
Sub  options 
option 3 

in 

Set-up costs 

Operational 
costs 

Dispute-related 
costs 

Non-financial 
costs 

9.Concepts 
of 
information  and 
consultation 

10.Transnational 
competence  and 
linking levels 

No impact 

No impact 

--/++ 
-Saves costs of 
lack of 
anticipation 
-More meetings 
(either plenary 
either select 
committee) 

---/+ 
-Saves high costs 
linked to social 
unrest  
-Saves costs of 
additional 
meetings and 
legal fees in the 
event of disputes 

--/+ 
-Better prepared 
and more 
effective 
information and 
consultation 
processes 
-More meetings 
where EWC 
previously not 
consulted 

--- 
-Avoids disputes 
in 40% of 
companies 
-Makes it legally 
possible to 
consult first or at 
same time at 
European level 

---/++ 
-Saves high costs 
linked to absence 
of anticipation 
and to social 
unrest  
-Raised employee 
expectations and 
coordination 
-Different impacts 
on decision-
making  

---/+ 
-Saves high costs 
linked to absence 
of anticipation 
and to social 
unrest  
-Possibility to 
save time in 
consultation 
processes  
-Raised employee 
expectations and 
coordination 
-European level 
potentially more 
important 

EN 

85 

   EN