International: Unions issue guidelines for pre-June 2011 EWC talks

The EU member states must implement the recast Directive on European Works Councils by June 2011. European-level trade unions have issued recommendations to guide the negotiation of EWC agreements during this period before the recast Directive's enhanced rights for EWCs come into effect.

On this page:
Recast Directive
Types of EWC agreement
New union recommendations
Trade union involvement
Information and consultation
Exceptional circumstances
Training entitlement
Reporting back
Linking European and national levels
Adaptation to change
Ensuring benefits of recast Directive
Recast Directive's influence in practice.

Recast Directive

The "recast" Directive on European Works Councils (2009/38/EC) was adopted in May 2009. The EU member states must implement the Directive by 5 June 2011, whereupon the existing EWCs Directive (94/45/EC) will be repealed.

The main changes made by the recast Directive (on the EUR-Lex website) are as follows:

• The information and consultation rights of EWCs are strengthened and more clearly defined.
• The information and consultation of EWCs and of national information and consultation bodies are both linked and more clearly differentiated (with a new definition of the "transnational matters" covered by EWCs).
   

   

  The EU member states must implement the recast EWCs Directive by 5 June 2011.

   
• Management responsibilities for providing information to allow negotiations over the establishment of an EWC to begin are clarified (in line with a number of European Court of Justice rulings).
• The composition of the special negotiating bodies (SNBs) that negotiate agreements establishing EWCs, and of statutory EWCs (which apply where no agreement can be reached) are amended to reflect more closely the size of the multinational company's workforce in the various European countries in which it operates.
• SNBs are given new rights to meet without management being present and to be assisted by representatives of EU-level trade union organisations.
• Agreements establishing EWCs must include new provisions, for example on the balanced representation of employees, by activity, category and gender.
• EWC members are granted the "means required to apply" their rights and (along with SNB members) must be provided with necessary training without loss of pay.
• Where the structure of a multinational changes significantly, and the existing EWC agreement does not contain provisions on adapting to this restructuring, a new EWC agreement must be negotiated.
• The subsidiary requirements that define the role and operation of statutory EWCs have been amended, for example by strengthening information and consultation rights

Types of EWC agreement

At present, in legal terms, there are three main types of agreements establishing EWCs:

• The original 1994 EWCs Directive's obligations do not apply to multinationals which, by its implementation date (22 September 1996), already had in place an agreement, covering the entire workforce, providing for the transnational information and consultation of employees. These pre-existing accords are known as Article 13 agreements (after the relevant article of Directive 94/45/EC). If these agreements expire, the parties to them may jointly decide to renew them: if not, the Directive's requirements apply.
• Since the 1994 Directive's implementation date on 22 September 1996, all new EWC agreements have been governed by the Directive's rules (as implemented in national law) on the negotiating parties and process, and on their content. These are known as Article 6 agreements.
• The 1994 Directive did not originally cover the UK but was extended to include it by Directive 97/74/EC, which took effect in December 1999. This Directive provided Article 13-type protection to agreements concluded before 15 December 1999 in multinationals that came within the scope of the EWCs Directive because of its extension to the UK. These agreements are known as Article 3 agreements.

The recast Directive provides that its obligations do not apply to multinationals that have in place Article 13 or Article 3 agreements, or where these agreements are adjusted because of changes in the structure of the multinational concerned.

The recast Directive does not establish a general obligation to renegotiate Article 6 agreements. Further, its obligations do not apply to multinationals that sign or revise an Article 6 agreement between the recast Directive's adoption and 5 June 2011. In these cases, the national law applicable to an agreement when it was signed or revised continues to apply.

After 5 June 2011, where Article 13, 3 or 6 agreements expire, the parties to them may decide jointly to renew or revise them. Where this is not the case, the provisions of the recast Directive apply.

In all cases, the protection for existing EWC agreements is without prejudice to the application of the recast Directive's provisions on revising agreements where the structure of the multinational changes significantly.

New union recommendations

At EU level, national trade unions in each sector are represented by European industry federations affiliated to the European Trade Union Confederation (ETUC). These federations have played an important role in initiating negotiations over EWC agreements, supporting SNB members during negotiations, advising employee representatives on EWCs, and generally coordinating EWC activity in their sector. Many of the federations have issued guidelines for negotiating EWC agreements and eight of the largest have now drawn up a set of joint recommendations - made publicly available in early 2010 - for negotiations in the period up until the implementation deadline for the recast Directive on 5 June 2011. The federations are:

• European Federation of Building and Woodworkers (EFBWW);
• European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT);
• European Federation of Public Service Unions (EPSU);
• European Metalworkers' Federation (EMF);
• European Mine, Chemical and Energy Workers' Federation (EMCEF);
• European Trade Union Federation - Textiles Clothing and Leather (ETUF-TCL);
• European Transport Workers' Federation (ETF); and
• Union Network International (UNI) Europa, which broadly involves unions representing private services and white-collar workers.

The recommendations are intended to: provide guidance on how to anticipate the changes in the Directive; ensure that new and renegotiated agreements benefit from all the improvements in the new Directive; and support employee representatives faced with "management attempts to fast-track negotiations or renegotiations in order to circumvent the new obligations".

According to the unions, the arrangements that apply during the "transposition period" between the recast Directive's adoption and the deadline for national implementation require particular attention from trade unions and workers' representatives. Any new agreement signed, or Article 6 agreement revised or renegotiated, during the transposition period will continue to operate on the basis of the legal obligations arising from the 1994 Directive, even after the new laws implementing the recast Directive come into force.

The European federations therefore state that it is "advisable to be very cautious about signing any EWC agreement" during the transposition period and that "from a strictly legal point of view the safest option is to avoid signing any new agreements or renegotiated agreements before 6 June 2011". However, they accept that it might not always be possible or desirable to avoid signing new or renegotiated agreements during this period. If and when there are clear reasons to sign an agreement before 6 June 2011, unions and employee representatives should try to ensure that the agreement is "worded in such a way that it becomes fully covered by Directive 2009/38/EC in due course".

Furthermore, when negotiation or renegotiation takes place during the transposition period "the parties should be working with the provisions of" the recast Directive: there is "no reason to further delay their integration into ongoing negotiations or renegotiations or to limit their application to existing EWC agreements".

Trade union involvement

The recast Directive underlines the fact that SNBs or EWCs involved in a renegotiation process can be assisted by trade union representatives, according to the European federations. They therefore stress that it is important that the involvement of unions is explicitly demanded by employee representatives involved in negotiating or renegotiating agreements.

Information and consultation

The unions strongly recommend that negotiated and renegotiated agreements should include the new (and stronger) definitions of information and consultation, and of transnational matters falling within the remit of EWCs, set out in the new Directive, as these "provide clarity for all concerned". The recommendations warn that employers "might try to alter" these definitions and argue that this is unlawful. However, improved practice going beyond the minimum standards of the Directive is always possible.

Exceptional circumstances

The unions recommend that EWCs' information and consultation rights where exceptional circumstances arise should reflect the recast Directive's subsidiary requirements and new definitions. EWC agreements should thus state that where there are exceptional circumstances or envisaged measures potentially affecting the employees' interests to a considerable extent (particularly in the event of relocations, the closure of establishments or undertakings, or collective redundancies) the EWC's select committee or, where no such committee exists, the EWC as a whole, has the right, at its request, to meet the central management so as to be informed and consulted (in the sense of the new definitions). Members of the EWC representing the multinational's establishments and/or undertakings that are directly concerned by the circumstances or envisaged measures should have the right to participate if the meeting is organised with the select committee.

The information meeting should, the federations recommend, take place at the earliest possible moment on the basis of a written report drawn up by central management. The information provided must enable workers' representatives to conduct an in-depth assessment of the envisaged measures. During the meeting, employee representatives and management should agree on a consultation process, covering matters such as timing and the role of experts in helping workers' representatives form their opinion on the measures in question. On the basis of the agreed timing, a consultation meeting should take place to allow workers' representatives to deliver their opinion and hold discussions with management. Following the consultation meeting, an additional meeting should be held to allow management to respond to the EWC's opinion.

The federations warn that some employers may try to limit the time for consultation in the agreement and state that this is not acceptable. Appropriate information and consultation processes should be decided on a case-by-case basis, depending on the scale of the envisaged measures. It is also important that consultation should not be treated as an obstacle to the decision-making process but as a contribution to effective company decision making, as is "made clear" by the recast Directive.

Training entitlement

The recast Directive adds a new requirement that EWC and SNB members must be provided with training without loss of wages "in so far as this is necessary for the exercise of their representative duties in an international environment". On this basis, the European union federations state that new agreements should contain clear rules for the training of EWC members (and SNB members in cases where new negotiations are held following a significant change of company structure). Training and related costs should be borne by management. Employee representatives should be able to determine the content of the training, choose the trainers and decide how the training will be organised (individually, at national level or at EWC level).

Reporting back

Under the recast Directive, EWC members must inform employee representatives at establishment or undertaking level - or, in the absence of representatives, the workforce as a whole - about the content and outcome of the EWC's information and consultation procedure. As a result of this obligation, the union federations state that management must provide each EWC member with the appropriate means of communication with national worker representative structures. In the absence of such structures, access to company sites should be organised on a regular basis, including access to the workforce via electronic communication, where this exists.

Linking European and national levels

According to the recommendations, EWC agreements should ensure that national and European levels of information and consultation are linked. The union federations interpret the recast Directive's provisions in this area to mean that the information process at European level should start before or at least at the same time as national processes, in order to guarantee their effectiveness.

Adaptation to change

The recast Directive introduces requirements that apply where the structure of a multinational changes significantly, and the existing EWC agreement does not contain provisions on dealing with the effects of such change on the EWC, or there is a conflict between the relevant provisions of two or more agreements (eg in the case of a company merger). In such cases, central management must initiate negotiations over a new EWC agreement, either on its own initiative or at the written request of at least 100 employees or their representatives in at least two undertakings or establishments in at least two different member states. This requirement to hold new negotiations applies to all EWC agreements, including Article 13, 3 and 6 agreements and agreements negotiated during the transposition period.

The union federations' recommendations underline that this clause gives the opportunity for the renegotiation of old agreements under the terms of the recast Directive, but that it applies only if those agreements do not already contain provisions dealing with adaptation to structural change or if the relevant provisions of agreements conflict. The unions warn that, when renegotiating existing agreements or negotiating new ones up until June 2011, some employers may try to incorporate clauses on adaption to change in order to "permanently remove the possibility" of renegotiating those agreements under the terms of the recast Directive. This is unacceptable, and should be avoided by including an adaptation clause equivalent to the wording of the recast Directive.

Ensuring benefits of recast Directive

The recommendations end with guidance on how to ensure that agreements negotiated or renegotiated during the transposition period "benefit fully" from the recast Directive. They suggest that an agreement's general principles or preamble should contain a clear reference to the application of the new legislation implementing the recast Directive once in force. It should be made clear that the agreement is signed or revised in "full awareness and knowledge" of the recast Directive and that it sets out to define the rights and obligations of the parties as intended by that Directive.

Further, to reaffirm the parties' intention to apply the new legislation, agreements could contain a renegotiation clause stating that:

• the agreement will be renegotiated within six months following the entry into force of the national laws implementing the recast Directive, with a view to integrating the obligations arising from that Directive;
• if a renegotiated agreement is not in place one year after the entry into force of the national laws, the EWC will operate under the rules set out in the recast Directive's subsidiary requirements, until the renegotiated agreement is in place; and
• the present agreement will continue to be valid and applicable during the renegotiation period, until a new agreement enters into force.

Recast Directive's influence in practice

According to figures from the European Trade Union Institute's (ETUI) EWC database (external website), nearly 2,400 multinational companies are covered by the EWCs Directive. As at November 2009, 938 EWCs were known to be in existence (as some multinationals have more than one EWC, for example separate divisional EWCs, the number of companies with EWCs is somewhat lower). Of these EWCs, 48% were based on Article 6 agreements, 41% on Article 13 agreements and 6% on Article 3 agreements (the remaining 5% were of other types, for example being based directly on the Directive's subsidiary requirements).

Since the early 2000s, new EWCs have been created at a rate of around 30 to 40 a year. According to the ETUI figures, in 2009 this slowed to only 18 new EWCs. It is possible that the adoption of the recast Directive may have influenced this drop in the number of EWCs created, with employee representatives reluctant to negotiate in advance of the more advantageous provisions of the recast Directive coming into effect, accompanied by a general uncertainty surrounding the legal position during the transposition period.

A number of the agreements that have been signed since the content of the recast Directive became clear have reflected its provisions in varying degrees, such as those at International Paper (US, paper and pulp), Lennox (US, heating and ventilation) and RR Donnelley (US, printing).

The RR Donnelley agreement, for example, is influenced by the recast Directive's provisions on: definitions of information, consultation and transnational issues; the consultation procedure in exceptional circumstances; the links between national and European levels; and the allocation between countries of EWC seats. Further, the agreement states that the provisions of the recast EWCs Directive will apply fully to the accord once the Directive has been transposed into national legislation. The International Paper agreement incorporates the recast Directive's definitions of information and consultation, and contains provisions influenced by the Directive in areas such as the links between national and European levels.

Renegotiated agreements that have incorporated many of the changes made by the recast Directive - and notably the strengthened definitions of information and consultation - include those at AXA (France, financial services), Colgate-Palmolive (US, household goods) , EADS (Netherlands, aerospace), GDF Suez (France, energy), L'Oréal (France, cosmetics), Stena Line (Sweden, shipping) and UTC Fire & Security (US, safety and security equipment). For example, the revised GDF Suez agreement reflects the recast Directive in areas such as the definitions of information, consultation and transnational issues, and the negotiation of a new agreement where major company restructuring occurs.

This article was written by Mark Carley, European editor.

European employment policy, practice and law, March 2010