HR Policy Global

BEERG Perspective: A New Proposal to Give Significant Leverages to European Works Councils

Recently, a set of legislative changes were submitted to the European Works Council (EWC) Directive, which, if adopted, would turn EWCs into bargaining bodies with the ability to interfere with business decisions. Tom Hayes, Executive Director of BEERG and HR Policy Global, has provided a comprehensive analysis of the new report 

A few key takeaways:  

  • The new proposal allows EWCs to be involved in any “transnational” matters. This couldhowevereffectively make all business decisions “transnational” as EWCs have been claiming so. Further, the burden will be on the employers if the companies are trying to prove otherwise 

  • More significantly, the draft requires EWCs to give its opinion prior to management finalizing any proposed transnational decision, which potentially could delay critical business decisions and block opening local-level information and consultation procedures, if EWCs inquire more information.  

  • Further, Member States would be obliged to establish procedures that temporarily suspenmanagement decisions if EWCs allege that their information and consultation rights have been infringed.  

  • Finally, the new report includes astonishingly severe punishment for any violations, up to €10,000,000 or 2% of the undertaking’s total annual worldwide turnover in the preceding business year, whichever is higher 

As Tom pointed out, it could take a long time for the proposal to be approved. However, in the case of being enacted, they would hand enormous leverage to EWC and severely limit management prerogatives. The developments and considerations will be discussed on our BEERG Network Meeting in June in Sitges 

Published on: May 25, 2022

Authors: Wenchao Dong

Topics: The UK and European Union

Wenchao Dong

Director, Global Affairs, HR Policy Association

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