Dispute over the reform of European works councils

According to the EU Commission, European works councils are not sufficiently involved. The European Union is therefore planning a reform. The employer side categorically rejects the amendment.

Last autumn, Spain’s National Labor Court ruled: British Airways should have informed and consulted its European Works Council about plans to lay off over 12,000 employees of the airline and its subsidiaries. Only: The verdict only came more than three years after the announcement in 2020. Far too late for the group’s European Works Council (EWC) to have been able to do anything about the matter.

For many trade unionists, this is just one of many examples. They have therefore been calling for a reform of the European Works Council Directive for years. The EWC should actually be informed and consulted in good time about cross-border matters, such as site closures – before final decisions are made. But trade unionists repeatedly report cases in which the committee was not consulted at all or was only informed shortly before the press.

Commission wants mandatory hearing

A study by the European Trade Union Institute ETUI with 1,600 EWC members also came to a similar conclusion: only a quarter of the European works councils found that they were informed and consulted in a timely manner before important management decisions were made. This is a particular nuisance for trade unionists, as hearing and consultation are the central competence of the European works councils. Unlike their German colleagues, they have no right to co-determination.

The EU has responded to the criticism. At the beginning of the year, the Brussels Commission presented its draft law to amend the European Works Councils Directive. The draft sharpens the previous rules and specifies that in future the European works councils must be informed and consulted before management makes a final decision on a cross-border measure. In an evaluation, the Commission found major deficits in existing practice, particularly when it comes to consultation.

confidentiality should be justified

The right to information of the European works councils should also be strengthened in other respects. In the future, according to the wishes of the EU Commission, management will have to provide reasons if it refuses to provide the EWC with information on cross-border processes for reasons of confidentiality or restricts its disclosure. Trade unionists criticize that the confidentiality argument is sometimes used too excessively.

In addition, the Commission wants to call on the member states to punish violations of the law more severely – the maximum penalty in Germany is currently a maximum of 15,000 euros. The Member States should also inform the Commission how EWCs can initiate legal and, if necessary, administrative proceedings. This is not yet clearly regulated in all EU countries.

Employment Committee wants drastic punishments

The European Parliament’s Employment Committee even sharpened the Commission’s draft again. Penalties are planned analogous to those in the General Data Protection Regulation (GDPR). In particularly drastic cases, this could be 20 million euros or up to four percent of the total annual turnover achieved worldwide. The EU parliamentarians decided this in the committee on Wednesday.

The responsible rapporteur of the European Parliament, Dennis Radtke (CDU), said opposite tagesschau.de: “The economy has changed massively in the last 15 years and we must ensure that co-determination can keep pace with these developments.”

BDA fears co-determination through the back door

But while trade unionists welcome the EU’s move, the economy is up in arms against the plan. “The existing EWC directive works well. The revision now presented is unnecessary and dangerous in many respects,” criticizes the Federal Association of German Employers’ Associations (BDA). There is particular concern that the project will bring with it a lot of new bureaucracy – and slow down important management decisions. “It should not necessarily be necessary to carry out a consultation process before every transnational measure,” says the association.

Another concern of employers is that the new directive on European works councils could also introduce co-determination in European companies – through the back door: “The EWC’s proposed legal remedies for alleged violations of information and consultation rights de facto represent a form of co-determination. You can use this to block entrepreneurial activity,” the BDA statement continues.

Changes likely

The SPD-led Federal Ministry of Labor, however, has received a positive response to the initiative. On tagesschau.de-Inquiry, a spokeswoman for the ministry said: “It is to be welcomed that the European Commission has taken up an initiative from the European Parliament for improvements to the directive, which addresses the problems reported in practice when applying the directive.” According to the ministry, Germany is therefore contributing constructively to the negotiations on the amending directive.

CDU parliamentarian Radtke also wants the new directive: “The question of social peace in companies is not acknowledged in the public debate. Evaluations such as the Biedenkopf Commission show again and again that co-determination is a location advantage – not a disadvantage.” In 2006, the committee, headed by the former Saxon Prime Minister Kurt Biedenkopf, made recommendations for the further development of co-determination.

The text of the new EU directive is not yet final anyway. As always at EU level, there are complicated negotiations between Parliament and the EU member states. And many EU initiatives go too far, especially for the member states – they often demand numerous changes and weakening measures.