BEERG Newsletter - EWCs: Another demand for another revision

It is like hearing the first cuckoo of spring. If it is September, then we are bound to hear the first call of the season for yet another revision of the European Works Council Directive. Like the sound of the cuckoo, the call for an EWC revision sounds all too familiar. EWCs should be able to go to court and seek injunctions where they believe that management has failed to observe information and consultation obligations. Management decisions should be put on hold until the EWC is satisfied. But how do you ever satisfy an EWC if difficult decisions are under consideration?

The latest September call came from Isabelle Schömann, ETUC Confederal Secretary, at the annual ETUC/ETUI EWC conference.  Speaking on the Radtke report, which is currently being considered by the European Parliament, Schömann said:

“The first decision to take for MEPs is to strengthen the EWC in their daily work and to make their rights effective: information and consultation of EWC are key democratic features in the European Union and should be the conditions for any multinational business to operate in Europe and to do business in Europe. for the moment it doesn’t. The EP report to be voted by the end of this year has to deliver more and better rights for EWCs; it has to guarantee proper enforcement and deterrent sanctions for any violation of a the right of information and consultation.”

The Radtke report is an “own initiative” report by a German MEP, Denis Radtke. If adopted by the Parliament, it will be sent to the Commission with a request that the Commission bring forward legislation to completely overhaul the Directive. Radtke’s proposals include:

• Recital 16 to become an integral part of the text of the Directive as a new Article 7a. This would mean that issues affecting only one country could be considered transnational. 
• In case of disagreement as to whether the EWC should be involved or not, central management would have to justify precisely why EWC information and consultation is not necessary. (Justify to whom?)
• EWC consultation must be concluded before national consultations can be concluded. This would give EWCs unlimited blocking and delaying powers. 
• All EU countries would have to create administrative and judicial procedures so that EWCs are able to enforce their rights in a timely and effective manner. This includes the right to go to court and ask for injunctions.
• Court fees, legal fees and travel expenses for at least one EWC representative to attend a court hearing must be covered by central management.
• There should be penalties of up to €10 million or 2% of total annual worldwide turnover where information and consultation rights are infringed, and double that in the case of intentional infringements. (How is the decision that the right to offer nothing more than an “opinion” has been infringed to be determined?)
• Companies should only classify documents vis-à-vis the EWC as confidential if this is authorised by defined regulations of the country in which the EWC is based.
• Article 13 agreement to be scrapped unless they meet the requirements of the Directive. (Goodbye Article 13 agreements)
• EWCs to meet with management twice a year.
• The timeline for SNBs to be reduced from three years to one. (Given that it takes about six months to put an SNB together this would leave just six months for negotiations). 

The Directive does not give the EWC the right of co-decision. Nor does it require consultation with a view to reaching an agreement. All it requires is that the EWC can offer an opinion on proposed management decisions. What is being proposed by Radtke is completely out of proportion when all an EWC can do is to offer an opinion. What is really in play here is an attempt to turn conflicts of interest into conflicts of rights. Workers and their representatives will always object to management decisions to cut jobs or close facilities. This is a clash of interests, a clash between what management believes to be right and what workers and their unions believe. These are conflicts that cannot be resolved by judges. 

All the law can do is to establish a procedure that must be followed. It cannot mandate an outcome to that procedure. Which is really what Radtke wants. That courts can strike down management decisions, that judges can second-guess management as to what is best for the business. 

Read the above proposals carefully. In the first place, EWCs are to be the judges that management has not properly followed information and consultation procedures to their satisfaction. Then they go to court and ask that their interpretation be endorsed. They want the judge to rule that management must make them happy. 

That is an impossible ask. 

BEERG COMMENT:

The seriousness of what is in play here should not be underestimated. Were the main Radtke proposals to make their way into law, then the ability of management to make to make necessary organisational changes would be severely curtailed and held hostage by the activists who dominate EWCs. Companies need to talk to their national and industrial employers’ associations about this issue and brief their local MEPs about their concerns.