New EU Works Council Rules Poised to Impact U.S. Multinationals

EU institutions recently reached an agreement on changes to the European Works Council (EWC) directive. While negotiators did not include the heavy sanctions supported by unions, such as injunctions and GDPR-sized fines, the new directive will have significant impact on U.S. companies operating in Europe.

What are EWCs? Established under EU law, EWCs are employee representative bodies for multinational companies that must be informed and consulted about “transnational issues affecting” employment or working conditions within the European Economic Area. EWCs do not give workers any binding rights or input over management decisions.

What is Changing? Several notable changes are affecting the approximately 1,000 established European Works Councils.

• Approximately 350 existing EWC agreements are so-called “Article 13 Agreements,” meaning they were established before the original EWC Directive and were grandfathered in, exempting them from full compliance. The new Directive ends this grandfathered status, giving employees the right to seek the creation of an actual EWC.  

• The definition of "consultation" now requires management to provide a "reasoned" written response to EWC opinions before decisions are finalized. 

• The Directive replaces "employees" with "workers," which could potentially extend EWC rights to contractors, gig workers, and possibly franchisees. 

• All EWC agreements must now explicitly address the funding for experts, including legal experts in disputes, as well as training for EWC members.

What’s next: The final document is expected to be published in the Official Journal of the EU around September or October 2025.  Compliance with the revisions will not be necessary until it becomes national law in Fall 2027. Now is the time to prepare for the changes.

• Read HR Policy Global’s Europe Newsletter for a full summary of the revised EWC directive and prepare for the Global workshop on the new directive in October 2025 in Spain.

• Our in-house experts, Alan Wild and Tom Hayes, both have extensive experience in EWC negotiation and implementation. Please reach out to HR Policy Global if you have any questions or would like to connect us with your European teams.