BEERG Newsletter - EWC: Some findings from a review of 120 agreements

Dr. Gerlind Wisskirchen from CMS Hasche Sigle outlined to our Sitges Network Meeting her findings from an analysis of some 120 EWC agreements and current trends. 

• Brexit: Since Brexit, we have noticed a significant increase of EWCs in Ireland. This is based on the fact that the UK is now considered a third country and therefore EWCs must be relocated from the UK. Companies must decide on whether or not UK employees can still nominate EWC members. Companies tend to shy away from excluding UK members completely and therefore choose another approach: Allow UK members to attend meetings, but without voting rights.
• Size of EWC: The EWC's size can be restricted either by thresholds, by maximum number of delegates per country or by maximum size of EWC. Most agreements have some kind of restricting provisions (some 60%). A threshold of 50 employees per country before they are entitled to EWC representation and a maximum size of the EWC are recommended, as this limits the costs of the EWC and ensures a well-functioning body. In more recent agreements, this is becoming the standard.
• Translation: Especially newer EWC agreements determine English as the binding language (overall some 40%). In our experience, one of the main cost factors of EWCs are translation costs. That explains, why companies try to agree on a binding language. In return, the employee representatives are offered English courses. Ultimately, this also serves to promote good interaction within the EWC.
• Virtual Meetings: Newer EWC agreements more and more explicitly provide for virtual meetings (some 30%). In our experience, more and more meetings with the select committee are being held virtually (especially in recent years). Since the EWC's mode of operation can be largely agreed, such a contractual regulation is permissible and seen in newer agreements. 
• Transnational matters: Some 30 % of the analysed EWC agreements explicitly regulate the definition of transnational matters. The question of what transnational is affects the EWC's information rights. In practice, the question of what the EWC must be informed about arises again and again. A closure of a plant in a single country? Probably not. But what if this closure also affects a plant in another country? Maybe yes. It is advisable to regulate this more precisely – e.g., by means of thresholds. If interim injunctions by the EWC in the event of infringement of its information rights were indeed to be regulated by law in the future (see Radtke report), then we believe that such a provision will be essential.

Overall, we have found that a lot of EWC agreements are outdated or at least not "state of the art". For this reason, it is important that companies pay close attention to what is happening with the proposals for a further review of the EWC Directive. Expect a second-round consultation of the social partners shortly. We advise companies to look at their agreements now and see what improvements can be made.  

However, it is not necessary to act in haste: the European legislative process will probably take several months or even years - first it is up to the European Commission to draw up a draft law amending the Directive with the involvement of the social partners, which then has to be approved by the EP and the EU Council of Ministers. And only then must any amendments to the EWC Directive be implemented in the national EWC Acts - this can also take time.