REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE Report on the implementation by Member States of Directive 2009/38/EC on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Recast)
Date: 2018-05-14
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: European Works Council, European undertaking, group of companies, labour law, multinational enterprise, social dialogue (EU), worker consultation, worker information

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.5.2018  COM(2018) 292 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE Report on the implementation by Member States of Directive 2009/38/EC on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Recast) {SWD(2018) 187 final}  
 
 
I. 

Introduction 

This report reviews the implementation by Member States of Recast Directive 2009/38/EC on 
the  establishment  of  a  European  Works  Council)1 (‘the  Recast  Directive’),  as  required  by 
Article 15 of the Directive. It sets out  the follow-up action the Commission intends to  take. 
Annexed  to  the  report  is  a  staff  working  document  in  which  the  Commission  sets  out  in 
greater detail the results of its evaluation2. 

Council  Directive  94/45/EC3 was  subject  to  a  recast  after  consultation  with  social  partners, 
which entered into force on 6 June 2009. The end of transposition period was two years later.  

The  evaluation  underpinning  this  report  focuses  on  the  changes  brought  by  the  Recast 
Directive. The purpose of the evaluation is to assess the transposition and implementation of 
the Recast Directive in Member States, and the effects of these on:  

 
 
 

the creation of European Works Councils;  
the effectiveness of employees’ transnational information and consultation rights; and  
improvements to the legal framework.  

The evaluation also assesses the relevance, coherence, efficiency and EU added value of the 
Recast Directive, in compliance with the Better Regulation Guidelines4. 

This  report  sets  out  the  Recast  Directive’s  objectives,  the  Commission’s  main  evaluation 
findings and the corresponding policy responses. 

II.  European Works Councils and transnational social dialogue 

Social dialogue is an essential element of the European social model. Where social dialogue is 
strong,  economies  are  more  competitive  and  socially  resilient.  The  involvement  of  social 
partners in the design and implementation of policies is crucial to strengthen competitiveness 
and fairness, and is a prerequisite for the functioning of Europe's social market economy. The 

1  Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 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 (Recast) (OJ L 122, 16.5.2009, pp. 
28-44). 

2  SWD  (2018)  187  final  Evaluation  of  Directive  2009/38/EC  on  the  establishment  of  a  European  Works 

Council. 

3  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 L 254, 30.9.1994, pp. 64-72. 
http://ec.europa.eu/smart-
regulation/roadmaps/docs/2016_empl_011_evaluation_european_works_council_en.pdf 

4 

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Commission  is  committed  to  strengthening  social  dialogue,  at  all  levels.  This  is  why  it 
initiated the 'New Start for Social Dialogue' in 2015.5  

Principle 8 of the European Pillar of Social Rights6 establishes that the social partners shall be 
consulted  on  the  design  and  implementation  of  economic,  employment  and  social  policies 
according to national practices. They shall be encouraged to negotiate and conclude collective 
agreements  in  matters  relevant  to  them,  while  respecting  their  autonomy  and  the  right  to 
collective action.  

Social dialogue at all levels must be a core part of Europe's response to processes that deeply 
affect  the  world  of  work  such  as  digitalisation,  globalisation  and  demographic  change.  The 
involvement of social partners in labour market reforms and sector or company restructuring 
has  shown  to  yield  positive  results  as  their  involvement  ensures  ownership  of  reform 
processes  and  promotes  trust  and  partnership.  In  addition,  permanent  channels  for  social 
dialogue  can  help  anticipate  and  address  the  needs  and  expectations  arising  from  the 
challenges  associated  with  an  ageing  workforce  and  occupational  health  and  safety  or  with 
regard to skills and work-life balance. 

Principle  8  of  the  European  Pillar  of  Social  Rights  also  establishes  that  workers  or  their 
representatives have the right to be informed and consulted in good time on matters relevant 
to them, in particular on the transfer, restructuring and merger of companies and on collective 
redundancies.  It  sets  out  not  only  the  right  to  receive  information  but  also  the  right  to  be 
consulted  about  any  such  corporate  action,  which  implies  an  exchange  of  views  and  the 
establishment of a consistent dialogue with the employer.  

The EU’s legal framework  in  the field  of  information  and  consultation at national level has 
developed  over  several  decades.  Directive  98/59/EC7 sets  out  rules  on  the  information  and 
consultation  of  workers’  representatives  before  collective  redundancies  are  made.  Directive 
2002/14/EC8 establishes a general framework for information and consultation of workers at 
national  level.  Directive  2001/23/EC 9  contains  provisions  ensuring  workers  employed  in 
businesses that are transferred to a new owner are informed and consulted.10 

Through  the  European  quality  framework  for  anticipation  of  change  and  restructuring,11 the 
Commission  has  set  out  principles  and  good  practices  to  follow  within  companies  and  by 

5 
http://ec.europa.eu/social/main.jsp?catId=88&langId=en&eventsId=1028 
6   Proclamation of the European Pillar of Social Rights of 17  November 2017 
7   Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating 

to collective redundancies. 

8  Directive  2002/14/EC  of  the  European  Parliament  and  of  the  Council  of  11 March  2002  establishing  a 

general framework for informing and consulting employees in the European Community. 

9  Council  Directive  2001/23/EC  of  12 March  2001  on  the  approximation  of  the  laws  of  the  Member  States 
relating  to  the  safeguarding  of  employees’  rights  in  the  event  of  transfers  of  undertakings,  businesses  or 
parts of undertakings or businesses. 

10  For an overview of employee involvement legislation, see: 
http://ec.europa.eu/social/main.jsp?catId=707&langId=en 

11  http://ec.europa.eu/social/BlobServlet?docId=11270&langId=en  

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public  authorities,  in  advance  of  changes  and  when  managing  restructuring  activities.  The 
European  Globalisation  Adjustment  Fund  was  set  up  10  years  ago  with  the  objective  of 
providing support to workers who have been made redundant as a result of major structural 
changes in world trade patterns due to globalisation or due the global financial and economic 
crisis. 

European  Works  Councils  are  an  important  instrument  for  organising  transnational  social 
dialogue in multinational companies of a certain size. They are bodies that represent European 
employees within transnational companies. European Works Councils provide for a common 
platform  for  exchanges  on  transnational  issues  between  employees  and  employers’ 
representatives  across  EU  Member  States  and  EEA  countries.  Through  them,  workers  are 
informed and consulted by management on the progress of the business and on any significant 
decision at European level that could affect their employment or working conditions. 

European  Works  Councils  have  proven  vital  to  the  development  of  transnational  industrial 
relations.  Within  multinational  companies,  decisions  affecting  employees  in  one  Member 
State  are  often  taken  by  central  management  located  outside  that  Member  State.    European 
Works Councils contribute to creating solidarity and synergies between workers in different 
Member States, to sharing best practices and to the shaping, understanding and implementing 
of decisions on transnational issues facing the multinational company.  

European  Works  Councils  allow  improving  the  communication  between  the  employees  and 
the central management. The benefit for employers can lie in increased trust and engagement 
from  workers,  bringing  in  their  knowledge  and  experience.  A  shared  understanding  of  the 
transnational  challenges  facing  the  company  and  the  involvement  of  employees  in  the 
decision-making  on  possible  solutions  can  also  facilitate  the  introduction  and  increase  the 
impact of strategic choices made by central management within a multinational company. 

Through  the  decisive  role  they  play  in  anticipating  and  managing  change,  European  Works 
Councils  allow  for  the  prevention  or  mitigation  of  the  negative  effects  of  restructuring  on 
employment and working conditions. More broadly, European Works Councils  will have an 
increasingly  relevant  role  to  play  in  formulating  fair  and  sustainable  responses  at  company 
level  to  the  transnational  impact  of  challenges  linked  to  digitalisation,  globalisation  and 
demographic change. They can address a wide variety of issues, such as the introduction of 
new technologies and the related training needs, the strategic development of the company in 
a  changing  market  environment,  or  best  practices  in  accommodating  an  ageing  workforce. 
Some European Works Councils have initiated and supported the negotiation and conclusion 
of  transnational  company  agreements  on  various  topics  such  as  training,  employment,  or 
sustainable development. 

As with other fora of social dialogue at company level, the proper legal framework conditions 
do  not  guarantee  successful  results.  The  motivation,  commitment  and  capacities  of  both 

3 

 
 
 
 
 
employee and employer representatives are an important determinant of the outcomes and the 
quality of the exchanges in European Works Councils. 

III.  The objectives of the Recast Directive 

The Recast Directive allows for European Works Councils to be set up to inform and provide 
opinion  on  transnational  matters  in  multinational  companies  that  have  at  least  1 000 
employees in the EEA and at least 150 employees in each of at least two Member States. 

The  process  of  creating  a  European  Works  Council  is  triggered  either  by  a  request  by  100 
employees from two Member States, or by a decision by the employer. The composition and 
functioning of each European Works Councils is tailored to the company’s specific situation 
through  a  signed  agreement  between  management  and  workers’  representatives  from  the 
different Member States involved. 

In  transnational  undertakings,  the  central  management  shall  inform  and  consult  European 
employees  on  progress  and  significant  decisions  via  their  European  Works  Councils 
representatives. 

The Recast Directive aims to pursue in particular the following objectives12: 

  ensuring employees’ transnational information and consultation rights are effectively 

respected;  

  encouraging the creation of new European Works Councils; 

 

 

resolving the problems encountered in the practical application of Directive 94/45/EC; 

remedying the lack of legal certainty resulting from defects in some provisions (such 
as  definitions  of  information  and  consultation)  and  the  absence  of  others  (e.g. 
definition of transnationality); 

  ensuring  better  links  with  other  EU  legislation  on  informing  and  consulting 

employees. 

The Directive made the following significant changes to the enacting provisions: 

-  introducing  general  principles  regarding  the  arrangements  for  transnational 
information and consultation of employees and precise definitions of information and 
consultation; 

-  limiting  the  competence  of  European  Works  Councils  to  issues  of  a  transnational 
nature and introducing a link between national and transnational levels of information 
and consultation of employees; 

12  Recital 7 of Recast Directive 2009/38/EC. 

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-  clarifying the  role  of  the  employees’  representatives  and the  opportunity  to  benefit 
from training without loss of wages; 

-  clarifying  responsibilities  regarding  the  provision  of  information  enabling  the 
commencement  of  negotiations  and  rules  on  negotiating  agreements  to  set  up  new 
European Works Councils; 

-  making  changes  to  the  subsidiary  requirements  that  apply  in  the  absence  of  an 
agreement; 

-  introducing  an  adaptation  clause  that  applies  to  agreements  governing  European 
Works Councils if the structure of the undertaking or group of undertakings changes. 

IV. 

Findings of the evaluation 

The Commission examined the implementation of the Recast Directive in all Member States 
and  EEA  countries  and  conducted  an  assessment  on  the  basis  of  data  and  information 
collected from various sources, such as an external study13, EU and national social partners, 
European  Works  Councils'  practitioners,  research  institutes  and  labour  law  experts.  In  line 
with  the  requirements  of  the  Commission’s  Better  Regulation  strategy,  this  report  sets  out 
conclusions in respect of the effectiveness, efficiency, coherence, relevance and the EU added 
value of the new provisions  introduced  by the Directive. More details on those findings are 
provided in Sections IV and V of the accompanying staff working document14. 

A.  Transposition and legal clarity 

The large majority of Member States have properly transposed the EU legislation. While most 
provisions have been implemented verbatim in national legislation, some countries have made 
more  detailed  provisions,  which  go  beyond  the  minimum  requirements  of  the  Recast 
Directive.  

Most stakeholders and practitioners who were consulted considered that the Recast Directive 
has  improved  the  clarity  of  the  legal  framework  while  a  non-negligible  share  of  them 
considered  not  being  in  the  position  to  answer  due  to  lack  of  experience  with  the  recast 
provisions. Some challenges remain in practice, in particular when negotiating or applying the 
provisions  of  the  European  Works  Councils  agreement  at  company  level.  The  volume  of 
litigation  at  national  level  is  low,  and  shows  no  change  compared  with  the  trend  seen  in 
relation to the original Directive. No cases have been brought at EU level. 

13  ICF Evaluation study of Directive 2009/38 commissioned by DG EMPL- September 2016. 
14  SWD  (2018)  187  final  Evaluation  of  Directive  2009/38/EC  on  the  establishment  of  a  European  Works 

Council. 

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B.  Effectiveness 

The  Recast  Directive  provided  some  impetus  for  setting  up  European  Works  Councils  and 
renegotiating  existing  European  Works  Councils  agreements  while  it  did  not  stop  the 
declining trend of creation of European Works Councils. The evaluation observed that around 
20  European  Works  Councils  have  been  created  per  year  since  the  implementation  of  the 
Recast Directive, mainly in companies headquartered in France, Sweden and the US.  

Globally, France, Germany and United Kingdom host most of the European Works Councils 
due to  the  size  of the companies  at stake but  also the development of industrial relations in 
those countries. The average size of companies setting up European Works Councils since the 
Recast Directive’s adoption is smaller than under the previous legislation. 

There is room for improvement to encourage creation of such bodies, as it is estimated that 
half of the companies eligible to do so have not yet set up a European Works Councils. While 
the  absolute  number  of  European  Works  Councils  increased  following  the  adoption  of  the 
Recast  Directive,  one  could    still  expect  a  higher  level  of  net  creation  of  such  bodies  The 
reasons  for  this  are  complex  and  multiple,  including:  a  lack  of  awareness  of  legal 
requirements  on  the  part  of  national  social  partners;  changing  company  structures  due  to 
mergers  or  acquisitions;  the  absence  of  an  obligation  to  set  up  European  Works  Councils; 
companies  being  headquartered  in  countries  with  a  less  developed  social  dialogue  tradition; 
and  the  length  of  time  for  social  partners  to  negotiate  the  European  Works  Councils 
agreement. 

While  the  concept  of  transnationality  is  better  defined  in  the  provisions  of  the  Recast 
Directive, it often remains difficult for European Works Councils practitioners to interpret in 
concrete cases. 

The Recast Directive improved the information for workers in terms of quality and scope but 
as  regards  consultation,  it  has  been  less  effective.  Despite  having  the  right  to  express  an 
opinion,  European  Works  Councils  members  seem  to  have  little  influence  in  the  decision-
making process in their companies, notably in cases of restructuring. 

European Works Councils are perceived by employers as useful tools, bringing benefits to all 
parties  in  many  ways,  including:  improving  the  common  understanding  of  issues  among 
members;  explaining  decisions;  initiating  strategic  discussions;  and  making  valuable 
proposals  for  action,  depending  on  the  topics  discussed.  Despite  not  having  any  formal 
bargaining  powers,  European  Works  Councils  also  play  a  role  in  negotiating  transnational 
collective agreements15 in some multinational undertakings. 

In  relation  to  enforcement,  the  assessment  shows  a  variety  of  situations  in  Member  States 
regarding the capacity of European Works Councils to act in justice. In half of the Member 
States, alternative  dispute  resolution  mechanisms  are in  place.  Overall,  the  evaluation  noted 

15  European Commission database: http://ec.europa.eu/social/main.jsp?catId=978&langId=en 

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weaknesses in the means in place allowing European Works Councils to enforce their rights 
and significant differences in the type and level of sanctions. 

C.  Efficiency 

The  Recast  Directive  did  not  create  additional  costs  for  employers  compared  to  the  1994 
Directive.  Quantifiable  costs  for  setting  up  European  Works  Councils  even  seem  to  have 
decreased compared to the 1994 Directive, but this may simply reflect the smaller size of the 
companies  setting  up  European  Works  Councils  following  the  recast.  For  a  majority  of 
employers, the benefits outweigh the related costs. The right to training without loss of wages 
is  largely  respected  and  constitutes  a  major  support  for  European  Works  Councils' 
representatives in exercising their roles in multinational companies. The evaluation concludes 
that the Recast Directive does not impose administrative, financial and legal obligations in a 
way which would constitute an unreasonable burden for companies. 

D.  Relevance 

The  Recast  Directive  is  considered  relevant  by  all  stakeholders,  and  the  need  to  develop 
further  transnational  dialogue  is  acknowledged  by  social  partners.  In  terms  of  improved 
employee  protection,  the  Recast  Directive  was  found  to  make  a  significant  contribution  to 
ensuring transnational social dialogue at company level. European Works Councils provide a 
mechanism  for  cascading  information  throughout  the  business,  create  leverage  between  EU 
and  local  levels  and  thereby  facilitate  the  introduction  of  strategic  initiatives,  leading  to 
qualitative improvements in the strategic solutions found in the company. 

E.  Coherence with other EU instruments 

The  new  rules  are  generally  found  to  be  internally  consistent  and  coherent  with  other  EU 
legislation  on  workers’  rights  to  information  and  consultation,  including  the  Charter  of 
Fundamental  Rights  of  the  EU.  Discrepancies  are  justified  by  the  specific  objectives  in  the 
relevant  legislative  instruments,  such  as  those  addressing  collective  redundancies  or  the 
transfer of ownership of companies.  

While  European  Works  Councils'  rights  to  information  and  consultation  apply  to  all 
transnational topics affecting workers’ employment conditions, European Works Councils are 
not a negotiating body and so have a different objective than informing and consulting at local 
level,  a  process  which  aims  to  reach  agreement  between  workers’  representatives  and  the 
employer. 

F.  EU added value 

In  terms  of  subsidiarity,  European  Works  Councils  have  a  genuine  EU  transnational 
dimension. Only an EU legal act, transposed into national legislation, can regulate the issue of 
information and consultation procedures for workers in transnational companies. 

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With regard to proportionality, the Recast Directive allows Member States flexibility to adapt 
the  Recast  Directive’s  provisions  to  suit  national  industrial  relations  and  legal  systems, 
particularly  in  determining  the  arrangements  for  designating  or  electing  employees’ 
representatives, their legal protection and determining appropriate penalties in case of breach 
in the application of the legislation. 

The Recast Directive provides a legal framework at EU level for fostering the organisation of 
transnational information and consultation within companies, which would otherwise have a 
purely voluntary character and take place in a legal vacuum. 

V. 

Policy responses at EU level 

The analysis set out above identified the following challenges that require action at EU level:  

the limited number of new European Works Councils; 
the effectiveness of the consultation procedure 
the need to share and exchange existing good practices; and  

 
 
 
  shortcomings in implementing and enforcing some of the Directive’s provisions.  

Therefore, the Commission proposes to pursue the following measures:  

  creating and sharing a practical handbook for European Works Councils' practitioners;  
  providing  funding  to  social  partners to  support the  implementation  and effectiveness 

of European Works Councils; and  

  ensuring  the  full  transposition  of  key  provisions  of  the  Recast  Directive  in  Member 

States. 

A.  Improving the establishment and functioning of European Works Councils by 

means of a practical handbook 

To  facilitate  the  implementation  of  the  Recast  Directive,  the  Commission  envisages  the 
publication of a handbook that would aim to: 

- 

- 

- 

increase the take-up of European Works Councils, particularly in Member States and 
sectors that have so far set up few; 
further improve the effectiveness of European Works Councils, particularly as a tool 
for supporting  the raising of social standards across the EU; 
spread good practice by codifying and sharing concrete examples of approaches that 
have worked well in practice. 

This handbook would provide concrete advice and guidance for employers, European Works 
Councils'  members,  trade  union  representatives,  workers,  and  other  stakeholders.  It  should 
also help employers and company representatives to fulfil their duties as set out in the Recast 

8 

 
 
 
Directive  and  help  people  in  the  process  of  setting  up  and  operating  European  Works 
Councils. 

The Commission will develop this guidance document in 2018, in cooperation with the social 
partners  and  with  the  support  of  experts  and  practitioners.  Working  closely  with  social 
partners will help the Commission to collect examples of good practice and specific examples 
of agreements made in multinational companies that could be shared across the EU. 

In  order  to  share  the  handbook  as  widely  as  possible  and  to  raise  awareness  among 
practitioners  and  social  partners  at  all  levels,  a  range  of  communication  measures  are 
envisaged. These will include publicity via a dedicated website, the organisation of activities 
with  social  partners  and  events  supported  by  the  Commission.  The  handbook  will  be 
published in all official EU languages. 

B.  Mobilising EU funding instruments to support European Works Councils  

Each  year,  the  Commission  launches  a  call  for  proposals 16 to  fund  activities  to  develop 
employee involvement in companies, i.e. any activity (including information, consultation and 
participation) through which employees’ representatives may influence decisions to be taken 
within the company. A specific priority relating to European Works Councils will be included 
in  the  first  call  for  proposals  issued  following  publication  of  the  handbook.  It  will  offer 
financial support17 to social partners for setting up projects to publicise and support the use of 
this  practical  guide  among  stakeholders.  It  may  also  finance  initiatives  that  support  the 
implementation of the existing legal requirements, raise awareness of the potential benefits of 
European  Works  Councils  for  companies  and  employee  representatives,  and  improve  the 
establishment and functioning of European Works Councils. 

C.  Ensuring the implementation of the Recast Directive in the Member States 

This  summary  report  and  the  associated  staff  working  document  identify  the  key  areas  for 
future cooperation with Member States and for enforcement activity. 

The Commission will continue to support Member States’ work to improve implementation of 
the Directive’s provisions, and will facilitate exchanges between Member States, notably on 
the design of 'effective, proportionate and dissuasive' sanctions18 in the event of infringement 
of the Directive's provisions. 

16  European  Commission  call for  proposals  –‘Information,  consultation  and representation of representatives 
of  undertakings’  DG  EMPL  Prerogative  and  Specific  competencies  —  Commission  Decision  C 
(2016)6596/F1 for call for proposals 2017. 
http://ec.europa.eu/social/main.jsp?catId=629&langId=en&callId=511&furtherCalls=yes 

17   This initiative will not require additional resources from the EU budget. 
18  Article 10.1 and Recitals 35 and 36 of Directive 2009/38/EC. 

9