COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/38/EC as regards the establishment and functioning of European Works Councils and the effective enforcement of transnational information and consultation rights

EN EN
EUROPEAN
COMMISSION
Brussels, 24.1.2024
SWD(2024) 10 final
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT REPORT
Accompanying the document
Proposal for a Directive of the European Parliament and of the Council
amending Directive 2009/38/EC as regards the establishment and functioning of
European Works Councils and the effective enforcement of transnational information
and consultation rights
{COM(2024) 14 final} - {SEC(2024) 35 final} - {SWD(2024) 9 final} -
{SWD(2024) 11 final}
Offentligt
KOM (2024) 0014 - SWD-dokument
Europaudvalget 2024
i
Table of contents
1. INTRODUCTION: POLITICAL AND LEGAL CONTEXT............................................................... 1
2. PROBLEM DEFINITION .................................................................................................................... 2
2.1. Content and objective of the Directive..............................................................2
2.2. Evaluation of the Directive................................................................................4
2.3. What is the problem?.........................................................................................4
2.4. What are the problem drivers? ........................................................................10
2.5. How likely is the problem to persist?..............................................................19
3. WHY SHOULD THE EU ACT? ........................................................................................................ 19
3.1. Legal basis.......................................................................................................19
3.2. Subsidiarity: Necessity of EU action...............................................................20
3.3. Subsidiarity: Added value of EU action..........................................................20
4. OBJECTIVES: WHAT IS TO BE ACHIEVED? ............................................................................... 21
4.1. General objective.............................................................................................21
4.2. Specific objectives...........................................................................................21
5. WHAT ARE THE AVAILABLE POLICY OPTIONS? .................................................................... 22
5.1. What is the baseline from which options are assessed? ..................................22
5.2. Description of the policy options ....................................................................23
5.3. Options discarded at an early stage .................................................................32
6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ........................................................... 32
6.1. Impacts of policy options under Policy Area 1 ...............................................33
6.2. Impacts of policy options under Policy Area 2 ...............................................35
6.3. Impacts of policy options under Policy Area 3 ...............................................37
6.4. Impacts of policy options under Policy Area 4 ...............................................41
7. HOW DO THE OPTIONS COMPARE?............................................................................................ 43
7.1. Effectiveness....................................................................................................43
7.2. Efficiency ........................................................................................................45
7.3. Coherence........................................................................................................47
7.4. Proportionality.................................................................................................49
7.5. Comparative scoring of the options – multi-criteria analysis..........................50
8. PREFERRED OPTION ...................................................................................................................... 50
8.1. Selection of the preferred policy option and analysis of combined impacts...50
8.2. REFIT (simplification and improved efficiency)............................................52
8.3. Application of the ‘one in, one out’ approach.................................................52
9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?.................................. 53
ANNEX 1: PROCEDURAL INFORMATION............................................................................................ 54
ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT) ................................................ 59
ii
ANNEX 3: WHO IS AFFECTED AND HOW? .......................................................................................... 80
ANNEX 4: ANALYTICAL METHODS ..................................................................................................... 93
ANNEX 5: COMPETITIVENESS CHECK .............................................................................................. 130
ANNEX 6: DEVELOPMENT AND CONTENT OF THE RECAST DIRECTIVE.................................. 133
ANNEX 7: COHERENCE OF THE RECAST DIRECTIVE WITH OTHER UNION LEGISLATION AND
POLICIES......................................................................................................................................... 137
ANNEX 8: OVERVIEW OF MEMBER STATES’ TRANSPOSITIONS OF THE RECAST DIRECTIVE IN
RELATION TO RELEVANT POLICY AREAS ............................................................................. 139
ANNEX 9: EXAMPLES OF NATIONAL CASE-LAW IN RELATION TO THE PROBLEM DRIVERS147
ANNEX 10: EXTERNAL PROBLEM DRIVERS .................................................................................... 152
ANNEX 11: REASONS FOR DISCARDING CERTAIN POLICY MEASURES WITHOUT DETAILED
ASSESSMENT OF IMPACTS......................................................................................................... 155
ANNEX 12: IMPACTS OF THE POLICY OPTIONS .............................................................................. 162
ANNEX 13: MONITORING AND EVALUATION ................................................................................. 217
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Glossary
Term or acronym Meaning or definition
Adaptation procedure A procedure for adapting the existing EWC agreement, where the
structure of the Union-scale undertaking or the group of
undertaking changes significantly. Employees or the management
can launch this procedure, unless the agreement already contains
provisions to that effect (Article 13 of the Directive).
Article 14 agreement EWC agreements concluded or revised during the transition period
of the Directive (June 2009 - June 2011). The Directive exempts
from its scope Union-scale undertakings with these agreements.
The national law applicable when the agreement was signed or
revised continues to apply to them (Article 14(1)(b) of the
Directive).
Central management Central management of the Union-scale undertaking or, in the case
of a Union-scale group of undertakings, of the controlling
undertaking (Article 2(1)(e) of the Directive).
CFR Charter of Fundamental Rights of the European Union
Consultation Consultation of EWCs is defined by the Directive as
“establishment of dialogue and exchange of views between
employees’ representatives and central management or any more
appropriate level of management, at such time, in such fashion and
with such content as enables employees’ representatives to express
an opinion on the basis of the information provided about the
proposed measures to which the consultation is related, without
prejudice to the responsibilities of the management, and within a
reasonable time, which may be taken into account within the
Community-scale undertaking or Community-scale group of
undertakings” (Article 2(1)(g)).
The consultation should not slow down the decision-making
process in undertakings (recital 22), it should be useful in the
decision-making process (recital 23) and the EWC opinions should
be without prejudice to the competence of the central management
to carry out the necessary consultations in accordance with the
schedules provided for in national legislation and practice (recital
37).
Directive European Works Councils Directive 2009/38/EC (‘the Directive’)
lays down rules on establishment and functioning of European
Works Councils (EWCs) and of information and consultation
procedures (ICPs). It is a recast of Council Directive 94/45/EC
(‘the 1994 Directive’).
iv
Employees representatives Employees’ representatives provided for by national law and/or
practice (Article 2(1)(d) of the Directive).
Enforcement provisions Administrative or judicial procedures defined in national laws for
enforcing right s and obligations under the Directive. Member
States must provide for ‘appropriate measures in the event of
failure to comply with this Directive’ and to ensure that ‘adequate
administrative or judicial procedures are available to enable the
obligations deriving from this Directive to be enforced’ (Article
11(2)). Recital 36 clarifies that ‘[i]n accordance with the general
principles of Community law, administrative or judicial
procedures, as well as sanctions that are effective, dissuasive and
proportionate in relation to the seriousness of the offence, should
be applicable in cases of infringement of the obligations arising
from this Directive.’
European Works Council
(‘EWC’)
Bodies of EU-based employee representatives established in a
Union-scale undertaking or groups of undertakings, with the
purpose of being informed and consulted by the management on
transnational matters.
European Works Council
agreement (‘EWC agreement’)
An agreement concluded between the central management and the
special negotiating body in accordance with Article 6(2) of the
Directive. The agreement determines detailed arrangements for
information and consultation of employees on transnational
matters.
Exempted undertakings The Directive exempts from its scope Union-scale undertakings or
Union-scale groups of undertakings with ‘voluntary agreements’
(Art. 14 (1) (a)) or with ‘Article 14 agreements’ (Art.14 (1)(b)).
(see in this Glossary ‘Article 14 agreement’, ‘voluntary
agreement’)
Information Information of EWCs is defined in the Directive as “transmission
of data by the employer to the employees’ representatives in order
to enable them to acquaint themselves with the subject matter and
to examine it; information shall be given at such time, in such
fashion and with such content as are appropriate to enable
employees’ representatives to undertake an in-depth assessment of
the possible impact and, where appropriate, prepare for
consultations with the competent organ of the Community-scale
undertaking or Community-scale group of undertakings” (Article
2(1)(f)).
Information and consultation
procedure (ICP)
A procedure established in writing by the central management and
the special negotiating body in accordance with Article 1(2) and
Article 6(3) of the Directive. It must stipulate the method of
consultation. Information should relate to transnational matters
which significantly affect workers’ interests.
Pillar European Pillar of Social Rights
v
Special Negotiating Body
(‘SNB’)
Body composed of employees representatives of the Union-scale
undertaking, established to negotiate with the central management
the setting-up of a European Works Council (EWC) or a procedure
for informing and consulting (ICP) employees on transnational
matters (Article 5(2) of the Directive).
Subsidiary requirements Subsidiary requirements are procedural rules for consultation,
composition, operation and resources of EWCs, where the
management has refused to commence negotiations within six
months of the request, or where the SNB and the central
management so decide or were unable to conclude an EWC
agreement or an ICP. (Article 7(1), in conjunction with Annex I).
Transnational matters Matters are to be considered transnational where they concern the
Union-scale undertaking as a whole, or at least two undertakings or
establishments of the company situated in two different Member
States (Article 1(4) of the Directive). Corresponding recitals 15 and
16 clarify, in particular, that the competence and scope of action of
a EWC must be distinct from that of national representative bodies
and that the transnational matter should be determined by taking
into account the scope of the potential effects and the level of
management and representation involved.1
Union-scale undertaking Any undertaking with at least 1 000 employees within the Member
States and at least 150 employees in each of at least two Member
States (Article 2(1)(a) of the Directive).
Union-scale group of
undertakings
A group of undertakings with the following characteristics:
— at least 1 000 employees within the Member States,
— at least two group undertakings in different Member States,
and
— at least one group undertaking with at least 150 employees in
one Member State and at least one other group undertaking with at
least 150 employees in another Member State. (Article 2(1)(c) of
the Directive)
Voluntary agreement Also called ‘pre-Directive agreement’, a voluntary agreement is an
agreement covering the entire workforce of the Union-scale
undertaking or Union-scale group of undertakings, which provides
for the transnational information and consultation of employees,
and which was concluded for the first time before the Directive
1994 entered into application. The Directive excludes from its
scope Union-scale undertakings with such agreements (Article
14(1)(a)).
1
Recital 16 further clarifies that “'…For this purpose, matters that concern the entire undertaking or group or at least
two Member States are considered to be transnational. These include matters which, regardless of the number of
Member States involved, are of importance for the European workforce in terms of the scope of their potential effects
or which involve transfers of activities between Member States”.
1
1. INTRODUCTION: POLITICAL AND LEGAL CONTEXT
Workers’ right to information and consultation within the undertaking is laid down in the EU
Charter of Fundamental Rights (Article 27). The Treaty on the Functioning of the European
Union (TFEU) promotes social dialogue between management and labour (Article 151) and
recognises the role of social partners (Article 152).
In the ongoing transformation of the world of work driven by environmental, economic and
social sustainability, a meaningful involvement of workers at all levels and their representatives
as regards the anticipation and management of change can help diminish job losses, maintain
employability, improve working conditions, enhance competitiveness and ease effects on social
welfare systems and related adjustment costs.2
Empirical research in the fields of industrial
relations and of applied psychology has shown that the involvement of workers through
information and consultation at company level can have positive impacts not only on workers’
well-being, but also on labour productivity as well as on firms’ profitability.3
In accordance with Article 153 TFEU, the EU shall support and complement the activities of
Member States in the field of information and consultation of workers. A comprehensive set of
directives on the information and consultation of workers establishes rules to protect their rights
notably in restructuring processes. EWCs are an important piece of that policy framework. They are
employee representation bodies for information and consultation with management of multinational
undertakings on transnational matters, established on a voluntary basis in accordance with the
European Works Councils Directive (“Directive”). Through them, the employees of undertakings
or groups of undertakings operating in two or more Member States are to be informed and
consulted on transnational matters affecting them. (For a brief description of the functioning of
EWCs see the next section. For an overview of the development and of the content of the Directive
see Annex 6.)
EWCs and transnational information and consultation procedures complement the information and
consultation of employees at national level pursuant, in particular, to Directive 2002/14/EC
establishing a general framework for informing and consulting employees in the European
Community, Directive 2001/23/EC on transfers of undertakings, and Directive 98/59/EC on
collective redundancies (see Annex 7). National legislation on information and consultation of
employees derives from these EU Directives. This initiative does not affect them.
This initiative concerns Union-scale undertakings4
and their employees in the Member States.
Principle 8 of the European Pillar of Social Rights states that "workers or their representatives have
the right to be informed and consulted in good time on matters relevant to them". The 2021
Commission European Pillar of Social Rights Action Plan underlines, amongst others, that
information, consultation and participation of workers and their representatives at different levels
2
Benefits of well-developed industrial relations and workers’ involvement during early stages of restructuring were
observed in several Eurofound studies (see Welz C. et al. (Eurofound) (2014) Impact of the crisis on industrial relations
and working conditions in Europe; Demetriades, S. et al. (Eurofound) (2016) Win-win arrangements: innovative
measures through social dialogue at company level) and in the context of the Covid-19 pandemic (see European
Parliament (2021) European Works Councils. Briefing – European Added Value Assessment, p. 9.).
3
See, for example, Hübler O. (2015). Do works councils raise or lower firm productivity? IZA World of Labor; Grund
C. & Schmitt A. (2011). Works Councils, Wages, and Job Satisfaction. Applied Economics, 45; Mueller S., &
Neuschaeffer G. (2021). Worker Participation in Decision-making, Worker Sorting, and Firm Performance. Industrial
Relations: A Journal of Economy and Society, 60(4), 436–478.
4
Any undertaking with at least 1000 employees within the Member States and at least 150 employees in each of at least
two Member States (Article 2(1)(a) of the Directive).
2
play an important role in shaping economic transitions and fostering workplace innovation, in
particular with a view to the ongoing twin transitions and the changes in the world of work.5
As a part of a broader campaign for democracy in work places, the Parliament has in its 2021
resolution on ‘democracy at work: European framework for employees’ participation rights and the
revision of the European Works Council Directive’ and, in particular, in its 2023 resolution ‘with
recommendations to the Commission on revision of the European Works Councils Directive’,
called to strengthen the role and capacity of EWCs as information and bodies in Union-scale
undertakings. European worker organisations6
and the European Economic and Social
Committee7
have made similar calls over the past years.
In the State of the Union 2023 Letter of Intent President von der Leyen announced that the
initiative on rules on EWCs is one of the key priorities of the Commission for 2024, also in the
view of the recommendations of the Parliament, and of the political commitment expressed in the
President's Political Guidelines to respond to the resolutions based on Article 225 TFEU with a
legislative proposal, in full respect of proportionality, subsidiarity and better law-making
principles.
Based on Article 153 TFEU, the legislative initiative on revision of the Directive is subject to
consultation of European social partners. The two-stage consultation took place between 11
April to 25 May 2023 (first stage) and between 26 July and 4 October (second stage). For a
synopsis of social partners’ responses in the two-stage consultation, see Annex 2.
This impact assessment considers results of dedicated evidence gathering,8
the 2018 evaluation9
as
well as other expert analysis and studies described in Annex 1.
The initiative is relevant with regard to Sustainable Development Goal (‘SDG’) 8, as transnational
information and consultation of employees can contribute to decent work. It can also promote
SDG 5 by contributing to a balanced gender representation on EWCs.
2. PROBLEM DEFINITION
2.1.Content and objective of the Directive
The Directive aims to ensure adequate conditions for employees’ information and consultation to
enable structured dialogue between the central management and employees on transnational
matters. It is procedural in nature. Its history and content are set out in Annex 6. The legal
framework encourages tailor-made solutions and arrangements, defined in agreements between
the central management and the employee representatives as a result of negotiations.
Implementation of these arrangements should ensure that employees can exercise their right to
5
Principle 8 of the European Pillar of Social Rights states that "workers or their representatives have the right to be
informed and consulted in good time on matters relevant to them".
6
ETUC Position paper (2017), For a modern EWC Directive in the Digital Era.
7
Opinion on the package on European company law (2018); Exploratory opinion ‘Industrial transition towards a green
and digital European economy: regulatory requirements and the role of social partners and civil society’ (2020);
Opinion ‘No Green Deal without a Social Deal’ (2021); Exploratory opinion on Democracy at Work (2022).
8
ICF(2023) Study exploring issues and possible solutions in relation to the Recast Directive 2009/38/EC on European
Works Council. Available .online HYPERLINK "https://op.europa.eu/en/web/general-publications/publications"
9
COM(2018) 292 final (Available online) and SWD(2018) 187 final (Available online).
3
information and consultation properly while also enabling the undertakings to take decisions
effectively.10
What are EWCs and how do they function?
EWCs are established in Union-scale undertakings11
upon a request of at least 100 employees or
their representatives in at least two undertakings or establishments in at least two different
Member States (e.g., Sweden and Denmark), or when initiated by the central management. They
can be set up in accordance with the Directive in Union-scale undertakings or groups for
undertaking, regardless of whether their headquarters are in a Member State or a third country
(see Annex 4 for distribution of EWCs per country of headquarters). If headquarters of the
company are located in a third country (e.g., the US), a deemed central management or a central
management representative that is located in a Member State (e.g., Germany) takes on the
responsibility of the central management for the purpose of the Directive.
The Directive sets out a compulsory negotiation procedure for establishing an EWC. This
procedure entails the setting-up of a special negotiating body12
, composed of employees
representatives, which negotiates with the central management an agreement on the detailed
arrangements for composition and operation of an EWC or of an information consultation
procedure (ICP). The Directive sets minimum requirements of the content of EWC agreements or
ICPs, but the specific modalities of their functioning are to be defined by the special negotiating
body and the central management in the agreement. Where parties are not able to reach an
agreement within a time limit specified in the Directive, subsidiary requirements set out in Annex I
to the Directive apply and created an EWC based on these provisions.13
A vast majority of EWCs
are governed by an agreement signed between the parties.14
The Directive defines minimum
standards with regard to confidentiality (Article 8), operation (Article 9) and role and protection of
employees’ representatives (Article 10), that apply in relation to all EWCs and ICPs, regardless of
whether they are specified in an agreement. Article 10 specifies that the members of an EWC must
have the means required to apply the rights arising from the Directive to represent collectively the
interests of the employees.
EWCs represent the employees of the Union-scale undertaking at EU level. The scope of
information and consultation of EWCs and ICPs within the scope of the Directive is limited to
transnational issues.15
The competence and scope of action of EWCs is thus distinct from that of
national representatives bodies. Unlike national representative bodies, EWCs are transnational
employee representation bodies, composed of members representing the undertakings and
establishments situated in the different Member States. Information and consultation of EWCs is
obligatory and must be conducted by the central management or any more appropriate level of
10
Article 1.
11
Any undertaking with at least 1000 employees within the Member States and at least 150 employees in each of at
least two Member States (Article 2(1)(a) of the Directive).
12
Special negotiating body is a temporary body of employees’ representatives established in accordance with Article
5(2) of the Directive. In accordance with the principle of subsidiarity, Member States are free to determine the method
to be used for the election or appointment of the members of the employees’ representatives.
13
Article 7. Annex I to the Directive lays down the rules applicable in the absence of agreement between the
management and employees representatives concerning an EWC’s establishment, composition and competences.
14
Only around 20 EWCs are governed by subsidiary requirements at present. See Section 3.1 of Annex 4.
15
Article 1(3) and 1(4), in conjunction with recitals 15 and 16.
4
the management of the Union-scale undertaking without prejudice to information and
consultation procedures at national level in accordance with national law16
and/or practice.
EWC members communicate with local-level employee representatives and inform them about the
content and outcome of the consultation. Information provided to the EWC relates to transnational
issues.
The requirements of the Directive start applying to the undertakings as a result of a request by at
least 100 employees or where the management has initiated such process voluntarily. There is no
general obligation for all Union-scale undertakings to set-up an EWC. This approach is an
expression of the principle of social partner autonomy, which is a basic tenet of the Directive seen
by stakeholders as a key feature of effective social dialogue at company level. This initiative does
not seek to amend the voluntary principle but focuses on making transnational information and
consultation more effective in companies where employees have exercised their right to request the
establishment of an EWC. This approach is also consistent with the complementary nature of
EWCs to the obligatory information and consultation at national/local level, which remains the
primary form of the involvement of employees affected by the implementation of management
decisions and of information and consultation at company level (irrespective of this initiative).
2.2.Evaluation of the Directive
The 2018 evaluation of the Directive confirmed its EU added value and the improvements it
had brought to the quality and scope of information to employees. The Directive was
considered relevant by all stakeholders, and the need for transnational dialogue was acknowledged
by social partners. The evaluation concluded that the Directive does not impose administrative,
financial and legal obligations which would constitute an unreasonable burden for companies.
Nevertheless, the evaluation identified several challenges: the creation rate of new EWCs is
low17
; the consultation of EWCs is sometimes ineffective; EWCs face obstacles in access to courts
in some Member States; there is a lack of effective remedies and effective and dissuasive sanctions
in some Member States.18
In response, as concluded in its evaluation, the Commission acted through non-legislative actions:
the continued financial support to social partners’ projects, proposing a handbook for EWC
practitioners,19
and engaging in a structured dialogue with Member States on enforcement.20
These
actions did not resolve the above-mentioned challenges.
2.3.What is the problem?
Despite the above-described actions, shortcomings continue to exist and the information and
consultation of employees at transnational level is not always effective under the existing
EWC framework.
16
In particular, national laws transposing Directive 2002/14/EC, Directive 98/59/EC and Directive 2001/23/EC.
17
SWD(2018)187, p. 21-22.
18
SWD(2018)187, p. 15.
19
The work on the handbook was put on hold in April 2019, following a refusal of the EU level trade union
organisations to participate in a group of experts, which would contribute to it.
20
The Commission services held a meeting with Member States’ experts with a focus on enforcement and sanctions in
2019, while an infringement procedure concerning the Irish enforcement system was launched in 2022.
5
NB. In the context of the Directive, ‘effectiveness’ refers to the establishment of a well-
functioning, clear and coherent regulatory framework for the setting up and operation of EWCs
at transnational level, and to the adequate enforcement of rights to information and consultation
on transnational matters. Accordingly, effectiveness must be determined in respect of the conditions
enabling such dialogue between employee representatives and management rather than the degree
to which companies’ decisions on transnational matters align with EWCs’ opinions.
The scale of the problem cannot be easily ascertained in objective terms, as the functioning of
transnational information and consultation depends on uncertain – often behavioural – variables
specific to each undertaking. EWCs remain complementary to the national employee representative
bodies (e.g. trade union or works councils), which may be closer to the decision-making in the
company.
As a general trend, the views of key stakeholders on the problem are polarised. Trade unions
and employees’ representatives underline perceived obstacles, while employer organisations do not
acknowledge that adaptations to the existing framework are needed (see Annex 2).
EWCs are considered overall useful by both employee representatives and managers, albeit to a
different degree. A majority of the employee representatives consider their EWC very useful (56
%) or useful (14 %) for involvement in decision-making, whereas managers consider EWCs mostly
useful (36 %) or somewhat useful (32 %).21
With regard to the EWCs’ usefulness in reducing
industrial relations conflicts in the company, a majority of employee representatives consider
EWCs very useful (57 %) or useful (13 %). Most managers considered that EWCs are useful (38
%) or somewhat useful (34 %). 10 % of managers considered them very useful.
Available literature and studies22
on the effects of employee involvement – albeit not referring
specifically to EWCs for the most part – corroborate the conclusion that (well-functioning) EWCs
can deliver tangible added-value in terms of the quality and acceptance of companies’ decisions on
transnational matters.
The available evidence nevertheless points to shortcomings regarding the effectiveness of the
existing EWC framework. Among the main issues encountered by EWCs is the timing of the
consultation and the lack of a genuine and meaningful dialogue on transnational matters. EWCs
that experienced such problems report for instance that their questions or opinions are not properly
answered by management.23
Conflicts also exist between EWCs and the central management on
whether a matter is transnational, i.e., whether the EWC is to be informed and consulted. Moreover,
there is some evidence of uncertainty regarding the process for setting up EWCs, the coverage of
their expenses, access to justice and effective remedies when rights under the Directive are
infringed. Specifically, as regards:
21
ICF(2023), Section 5.1.2.2. 14 % of employee representatives and 30 % of managers consider that EWCs’
involvement in decision-making is not useful.
22
See, e.g., Eurofound (2016), Win–win arrangements: Innovative measures through social dialogue at company level,
Publications Office of the European Union, Luxembourg; Pulignano/Turk, European Works Councils on the move:
management perspectives on the development of a transnational institution for social dialogue, KU Leuven & CESO
2016.; European Parliament Research Service (2021), European Added Value Assessment on EWCs.
23
ICF(2023), Section 4.2.1.3.
6
• timing of the consultation: the Directive does not unambiguously require that EWCs are
involved prior to the adoption of management’s decision on transnational matters, which is
an obvious condition for their effective consultation (see Section 2.4.3);
• lack of a genuine and meaningful dialogue: the Directive does not explicitly require
management to respond to EWCs’ opinions. Without such a response, consultation remains
a ‘one-way-street’ rather than a dialogue (see Section 2.4.3);
• uncertainty regarding the concept of ‘transnational matters’: the current definition in the
Directive leaves scope for divergent interpretations and hence for disputes about the
applicability of the obligation to inform and consult EWCs on given issues (see Section
2.4.3);
• resources: the Directive does not require that the coverage of certain key expenses be
specified in EWC agreements; if agreements are mute on such expenses, disputes ensue and
employees’ representatives can be left without the necessary means to fulfil their function
(see Section 2.4.3);
• access to justice and sanctions: effective implementation of minimum requirements on
transnational information and consultation depends on the prospect of enforcement if these
requirements are not respected (see Section 2.4.4). Currently, as the Commission’s 2018
evaluation found, sanctions set by Member States for non-compliance are often not
dissuasive, and EWCs do not have access to justice in some Member States for some of
their rights. In response to the findings of the evaluation, the Commission launched a
dialogue with Member States on their national enforcement procedures24
and launched
infringement proceedings against Ireland.25
Neither of these non-legislative actions has
resulted in changes to national rules so far.
The evidence is based on results of 2018 evaluation, available studies and surveys (see individual
references), review of national laws transposing the Directive and of national case-law, and
evidence-gathering activities for this initiative26
, including a survey of EWCs and management and
interviews with various stakeholders.
Evidence and data limitations
It needs to be acknowledged upfront that certain key evidence sources are affected by selection-bias
and the risk of inaccurate self-reporting by stakeholders. Throughout the various evidence
gathering activities, this was addressed by seeking the views of a broad range of relevant
stakeholders in addition to management and EWC representatives, such as legal experts,
representatives of relevant national authorities, European and national social partners. Moreover,
when presenting the results of the evidence gathering, the sources of the reported views are
systematically stated. Results are not aggregated across different stakeholder groups, in view of the
polarisation described above.
Due to the structure of the stakeholder population and the polarisation of their policy views, there
is a risk of bias also in the literature and other evidence sources on transnational information and
consultation. To mitigate the risk of a skewed evidence base, information from potentially biased
24
A meeting was held with Member States representatives in autumn 2019.
25
See a press release.
26
ICF(2023) Study exploring issues and possible solutions in relation to the Recast Directive 2009/38/EC on European
Works Council.
7
sources has been cross-checked with evidence from other sources to ensure robustness. The
respective data sources are specified transparently to acknowledge possible biases. In the
framework of the supporting study27
, a set of quality criteria was applied for the purposes of
identifying and reviewing the key sources of literature.
See further Section 2 of Annex 4.
The problem concerns primarily Union-scale undertakings and their employees, including
employee representatives, although it is not possible to specify the share of undertakings affected
by the lack of effectiveness of the transnational information and consultation framework. In 2021,
3676 multinational companies in the EEA came within the scope of the Directive, employing close
to 30 million employees in the EEA.28
Taking into account the annual growth rate, the estimate for
2023 is 3,970 eligible companies with a total of 31.7 million employees.29
Of those, EWCs or agreements on transnational information and consultation have been established
in around 1000 companies30
. The estimated average number of EU employees per undertaking
with an EWC or a voluntary information and consultation body is 16.600 (total population
estimated at 16.6 million) (see Annex 4). The take up of EWCs has not been identified as a
shortcoming in effectiveness of the legal framework. The evaluation of the Directive
31
showed that
the reasons for the low-take up mainly relate to external factors, such as the fact that some Union-
scale undertakings are headquartered in countries with a less developed tradition of employee
information and consultation or a lack of awareness about the instrument,
32
changing company
structures, existence of other social dialogue mechanisms deemed to be sufficient or the fact that
the larger multinational undertakings with most to gain from establishing an EWC had already done
so. EWCs are more likely to be established in bigger companies.
33
It is estimated that while less
than 30 % of eligible Union-scale undertakings have established an EWC, more than 50 % of
EU/EEA employees of Union-scale undertakings are covered by an EWC. The voluntary nature
of EWCs will be maintained under this initiative, as well as flexibility allowing social partners
to establish other procedures for informing and consulting workers than EWCs.34 To the
extent that factors contributing to a low take-up rate are linked to the effectiveness of the Directive,
such as the possibility for delaying or blocking launch of negotiations of EWC agreement, they are
addressed by this initiative.
27
Ibid.
28
Eurostat, ad-hoc extraction from the EuroGroups Register.
29
Based on data extractions by Eurostat, annual growth rate of Union-scale undertakings (3.92 %) and of their
employees (3.42 %). See Annex 4.
30
Source: EWC Database (ETUI, 2023).
31
See SWD(2018) 187 final, p. 21 et seq.
32
The Commission is funding, on annual basis, projects raising awareness of transnational information and consultation
and promoting best practices. For 2023, a budget of EUR 2.5 million was available for this purpose, with the main
priority to “promote actions aimed at developing employees’ involvement in undertakings in particular by raising
awareness and contributing to the application of European Union law and policies in this area and the take-up and
development of European Works Councils”. The conception and development of training materials and courses for
EWC members, as well as measures to strengthen the cooperation between employees’ representatives at national and
transnational level are eligible for funding.
33
In a sample of eligible companies analysed by Eurofound 2015 study, companies with more than 10,000 employees
in the EU were twice as likely to have established an EWC than companies with fewer than 5,000 employees. (see
Annex 4 Section 3.1).
34
Even after introducing a request for an EWCs, employees’ representatives may decide not to seek the setting-up of an
EWC or the parties may decide on other procedures for the transnational information and consultation of employees (cf.
Article 5(1) and (5), Article 6(3), recital 31 of the Directive).
8
The available evidence does not support the conclusion that EWCs are generally more beneficial
for undertakings than other types of transnational information and consultation procedures.
Accordingly, the existence of such alternative procedures or arrangements is not identified as a
problem per se. It is however considered to be a problem that by exempting undertakings with pre-
existing agreements from the scope of the Directive, employees in such undertakings are denied the
right to request the establishment of an EWC, unlike the employees of all other Union-scale
undertakings (see Section 2.4.1).
This initiative focuses on improving the effectiveness of a specific aspect of the existing legal
framework: the EU level minimum procedural requirements on transnational information and
consultation of employees. The defined problem concerns shortcoming in the effectiveness of the
existing EWC framework, leading to unused potential of EWCs having the following
consequences.
For affected employees, the problem reduces the level of their involvement and limits the
social dialogue in their company, for instance with respect to the anticipation of company
developments. This might reduce their acceptance of change, and is not conducive to shared
understanding and smooth implementation. Ineffective or lacking dialogue reduces the employees’
possibility to provide appropriate input, e.g. on corporate restructuring, and can reduce trust
between a company’s management and its workforce. Ultimately, the lack of genuine social
dialogue can lead to lower employment levels in the companies operating in the EU (e.g.
relocation of production outside the EU leading to unemployment), less motivated workforce and
suboptimal working conditions. When properly involved, EWCs can help achieve certain
minimum standards on working conditions when it comes to downsizing and restructuring, such as
on site closures. As transnational bodies, EWCs can provide views on where production can be
moved to mitigate employee reductions. For example, an EWC provided decisive impetus in
preventing redundancies when a multinational company's manufacturing plant was shut down in a
Member State due to low-capacity utilisation as a result of the economic crisis in southern Europe.
Approximately 50 employees then moved to various other plants in the headquarter country of the
multinational company via a restructuring plan.35
For affected companies, the unused potential of EWCs may lead to higher indirect costs of
implementing measures in case of corporate restructuring (due to lack of common understanding
and lack of compromise solutions); loss of business due to a risk of delays on decision-making and
decision-implementation (including due to unclear obligations and disputes); fines for non-
compliance with information and consultation requirements, as well as reputational risk as a result
of a dispute. Companies report that, when properly consulted, EWCs are useful in business
internationalisation and in giving company an understanding of national social dialogue culture in
the context of newly acquired businesses. Some concrete examples were provided in the evidence
gathering: an EWC contributed to a stronger corporate identity during a merger; an EWC made
helpful contributions in getting in touch with acquired company representatives and integrating the
acquired business into the new corporate culture; an EWC helped local representatives to
understand the situation in the other EU countries.36
Benefits of transnational information and consultation tend to be long-term and indirect in nature
and depend on a number of factors, which are external to the scope of this initiative (i.e. national
35
ICF(2023), Section 5.1.2.2.
36
Ibid.
9
industrial relations systems, ownership structure and evolution of workforce and work practices,
external shocks, internationalisation of corporate activities, trust between the employee
representatives and the management). These external factors are described in Annex 10. Moreover,
the Directive sets a procedural framework on transnational information and consultation that leaves
broad freedom to parties to EWC agreements to tailor the information and consultation process as
well as accompanying provisions on resources, training, etc. to their specific situation and needs.
These factors make it fundamentally challenging to quantify/monetise the consequences of the
problem.
Geographically, the consequences affect employees and companies not only in Member States37
where the affected EWCs are based (see Annex 4)38
, but also in Member States where undertakings
belonging to the same group operate. While some of the challenges are more relevant in certain
national legal systems than in others39
, their effects nevertheless propagate across borders due to
the inherently transnational nature of EWCs. Transnational restructuring and accompanying
measures can have high local impacts regardless of the location of company’s headquarters,
especially where the territory specialises in a particular sector, is facing high unemployment or
where the undertaking is locally a major employer.
Indirectly, the consequences of the problem could also affect companies linked to Union-scale
undertakings in the value chain (located in the EU or outside), as well as the regional economic
systems depending on those undertakings more broadly. Subcontractors and networks of
businesses, with which the directly affected companies coexist and which they support, can be
affected along with their workers, for instance through loss of business due to major restructuring
of the multinational undertaking, especially where sudden or unannounced. Such effects are
however difficult to estimate, considering that the EWCs remain consultation bodies without
having a prerogative on the management’s decision.
The below ‘problem tree’ illustrates how the drivers analysed in the following section relate to the
problem this initiative aims at tackling, and the consequences for different stakeholders.
37
The Directive applies to EU Member States, and to EEA states via the EEA Agreement.
38
Most EWCs were established under the legislation of DE, FR, BE, IE, SE, NL, IT. While reliable post-Brexit data are
not yet available, available information shows that about half of the EWCs (70) formerly based in the UK have moved
to IE.
39
About half of Member States have a low number or no EWCs established under their jurisdiction – see Annex 4.
10
2.4.What are the problem drivers?
The four groups of drivers (see problem tree) will be presented below.
2.4.1 Workers of certain Union-scale undertakings do not have the same minimum rights
regarding establishment and operation of EWCs
The Directive excludes from its scope undertakings with voluntary agreements (323) or
Article 14 EWC agreements (28), which were concluded or revised during the transposition
period of the Directive.40
These represents a significant share of the overall 1001 agreements on
transnational information and consultation in Union-scale undertakings (see Annex 4).
Voluntary agreements, since not concluded under Union law, do not have to provide for the
elements and rights as agreements concluded under the Directive. In contrast, undertakings with
Article 14 EWC agreements are exempt only from the changes brought about by that Directive but
remain subject to the national provisions implementing the original 1994 Directive. The application
of the different legal regimes depending on when the agreement was signed for the first time has
created a complex and fragmented framework for the undertakings and different levels of
minimum rights and protection for employees in Union-scale undertakings.41
Though the voluntary agreements were considered by most interviewed stakeholders as equally
effective as those concluded under the Directive, trade unions have reported that in some cases
these agreements no longer fit the situation of the undertaking, but employees are not entitled to
make a request for an EWC. Legal experts assisting EWCs state that voluntary agreements, though
generally effective, are more difficult to enforce in some Member States.42
The different minimum
standards remain under the same legal instrument, resulting in unequal treatment between Union-
scale undertakings and their employees, more than 30 years after its initial adoption. As the
Directive respects the autonomy of the parties and provides enough scope to find company-level
solutions, it does not seem justified to shield undertakings with voluntary agreements from requests
for establishing an EWC in line with the requirements of the Directive.
Stakeholders’ views: Trade unions consider that the existing exemptions do not in some cases
ensure a level playing field and legal clarity, whereas employer organisations argue that
longstanding information and consultation bodies in the undertakings covered by the exemptions
are often particularly effective and characterised by a deep level of trust and cooperation between
workers’ representatives and central management. In workshops, among EWC representatives, a
variety of experiences were reported with regard to the voluntary agreements, depending on
corporate culture, on the sector of activity and on the governing legislation (cf. Section 3.2 of
Annex 2).
40
Data source: ETUI, unpublished analysis, 2023.
41
The legislator made a deliberate choice in the 1994 and 2009 Directives to exempt undertakings with pre-existing
agreements from new obligations, in order to stimulate take up of EWCs before these EU rules would enter into force.
Consequently, a possibility to request renegotiation of pre-existing agreements has been limited to situations of
significant changes in make-up and structure of the undertaking (such as mergers, take-overs or acquisitions) (cf.
Impact assessment SEC(2008)2166, p. 20 and 50-51).
42
ICF(2023), Section 5.2.2.3.
11
2.4.2. Not sufficiently efficient & effective setting-up of EWCs and gender imbalance
The existing rules do not adequately cover situations where the management fails to take
action following a request to set up an EWC (see point (i)) and to provide the necessary means
for the establishment of an EWC (see point (ii)). Also, the gender representation of employees
in EWCs is overall unbalanced (see point (iii)).
i) Delays in setting up of Special Negotiating Bodies (SNBs): The Directive contains deadlines for
the process of the setting up of an EWC. Where the central management refuses to commence
negotiations within six months of the request to establish an EWC, an ad-hoc EWC based on
subsidiary requirements shall be created.43
The provision can create legal uncertainty where the
management did not explicitly refuse, but at the same time did not enter into negotiations.
Such situations have to be resolved through national proceedings44
, which can be lengthy or even
not accessible in some Member States (see Section 2.4.4.), or for which workers may lack
resources. In the evidence gathering, the majority of EWC representatives and managers (64 %
overall) did not know or preferred not to answer a question about the length of setting up of their
SNB. Those who provided information about the interval between the initial request and the set up
of an SNB indicated that it exceeded six months in more than half of the cases.45
ii) Lack of sufficient resources: The Directive provides that expenses related to the setting up of the
EWC shall be borne by the central management, without limiting this obligation to certain types of
cost.46
SNBs shall have in particular access to expertise47
and necessary training without a loss of
wages.48
There is a consensus that costs, including the cost of training, are not to be borne by the
employee representatives themselves.49
Uncertainties however exist over the coverage of costs
related to potential legal disputes. Solely in the NL legislation is coverage of such costs explicitly
mentioned in the national transposing provisions. In other Member States, this aspect is not defined
and this can lead to disputes or refusal to provide resources to the SNB.50
In the evidence gathering,51
56 % of employee representatives stated to have experienced problems
in setting up of an EWC (compared to 4 % of management). Of those, 42 % cited a lack of
expertise.
iii) Gender imbalance in the composition of EWCs: The Directive provides that gender balance
shall be reflected in the composition of EWCs.52
Available evidence suggests that the Directive’s
requirement to negotiate, where possible, a balanced composition of EWCs with regard to
their gender is not effective in achieving an equal representation of men and women as the gender
43
Article 7(1). Currently, ca 2% (=20) of EWCs are established under subsidiary requirements.
44
For example a German ruling of 15.07.2016, Groupon, Arbeitsgericht Berlin – 26 BV 4223/16 (First instance). See
further Annex 9.
45
ICF(2023), Section 4.2.1.2. This reflects answers from the EWC representatives and the management.
46
Article 5(6).
47
Representatives of recognised trade union organisations may act as experts and advise workers’ representatives
during the process. Member States may lay down budgetary rules regarding the operation of the SNB and may in
particular limit the funding to cover one expert only.
48
Article 10(4).
49
Report of the Group of Experts (Commission)(2010). Implementation of Recast Directive 2009/38/EC on European
Works Councils – Report of the Group of Experts, p. 44.
50
In 2019, the UK Central Arbitration Committee (CAC) considered that the employer should pay the legal fees
incurred in relation to the proceedings (see further Annex 9).
51
ICF(2023), Section 4.2.1.2.
52
Article 6(2)(b).
12
composition of the EWCs is strongly skewed in favour of men. Insufficient representation of
women in bodies such as EWCs might contribute to gender-specific issues or consequences not
being adequately considered in the corporate decision-making process or that, conversely,
information relevant to women employees might not be disseminated effectively among them. In
the 2023 ICF survey, 62 % of respondents indicated that men account for more than 60 % of their
EWC members. A mere 2 % reported the same for women. 24 % of respondents said that each
gender was equally represented in their EWC.53
Female EWC members are less likely to be found
in more senior functions.54
Stakeholders’ views: Trade unions submit that it is not uncommon for the central management to
delay the establishment of the SNB and underline the importance of guaranteeing support by
recognised trade union organisations’ experts to SNBs and EWCs and their select committees.
Employer organisations, on the other hand, consider that the provisions on the setting-up of
EWCs work satisfactorily. In the evidence gathering, stakeholders generally acknowledged the
issue of imbalanced gender composition of EWCs, in particular in male-dominated industries like
manufacturing and construction where EWCs have been set up most frequently.
2.4.3. Obstacles to the effective operation of EWCs
Depending on the level of detail of agreements, there can be unclarity what constitutes a
transnational matter on which the EWC should be consulted on (see point (i)) and at which
moment in relation to which decision of management. The EWC opinion can also remain without
a follow-up (see point (ii)). EWCs’ capacity to deliver an opinion is sometimes limited due to a
lack of resources or expertise (see point (iii)) or due to an excessive use of confidentiality or
non-disclosure clauses by the management (see point (iv)).
(i) Legal uncertainty regarding the concept of transnational matters: EWC competence is limited to
transnational matters. This distinguishes them from national bodies under other directives.55
The 2018 evaluation concluded that the concept under Article 1(4) has been implemented in all
Member States (see Annex 8) and though it is better defined in the Directive, it often remains
difficult for EWC practitioners to interpret in concrete cases. The feedback from European social
partners during the evaluation revealed: difficulties in some cases over how to interpret the notion
of transnationality; and some confusion over the notion of transnationality due to the strategic
nature of certain decisions, stock exchange rules and the difficulty of determining if certain matters
qualify as transnational.
During the evidence gathering, both employee representatives and managers identified
disagreement over the concept of transnational matters as one of the main sources of
problems in the information and consultation process.56 A too narrow interpretation of
‘transnationality’ limits the effectiveness of the EWC. On the other hand, a too broad interpretation
53
ICF(2023), Section 5.1.2.1.
54
ETUI survey of EWC and SEWC representatives (2018). Overview published online.
55
In particular: Directive 2002/14/EC, Directive 98/59/EC, Directive 2001/23/EC.
56
ICF(2023), Section 4.2.1.3.
13
can lead to interference with the competences of the national workers’ representatives or to an
unjustified additional material and financial burden on the employer.57
Despite some existing good practices, such as the inclusion of a transnationality clause with
detailed criteria in the agreement, around 36% of EWC representatives reported frequent
discussions with management on whether or not an issue is transnational.58
In the evidence
gathering, 43% of employee representatives and 28% of management representatives said that they
had experienced problems related to the definition of transnational issues. Some managers consider
it challenging to keep EWCs as a transnational forum, as employees’ representatives tend to bring
up local issues at the EWC meetings.59
Case-studies60
indicate that a shared understanding of the
issues within the scope of EWC has developed over time in some cases, but there are still instances
where EWC representatives perceive management's interpretation of transnationality to be too
narrow.
Examples of different interpretations and disputes around the concept of transnational matters is
reflected also in national case law (see Annex 9).
(ii) Genuine exchange of views does not take place in all cases: Two key weaknesses in relation
to the exchange of views between the central management and the EWC have been highlighted
during the evidence gathering: the timing of the consultation and the follow up to the EWC
opinion.
The 2018 evaluation reported a vast majority of EWC agreements reflected the Directive’s
definition of consultation. Some contain additional provisions such as a list of information to be
provided or an extensive list of subjects for consultation. In the evaluation, most social partners
considered that the Directive improved the legal framework for the information and consultation
process.61
However, the evaluation recognised that in some cases the consultation remains only a
formal step rather than an opportunity to seek and consider a substantive opinion from the EWC.62
The timing of the consultation of the EWC depends on the specific agreement. Based on the
evidence gathering, it is estimated that approximately 42% of EWC agreements contain at least
some rules on the timing of consultation. Late consultation has nevertheless been reported as the
most frequent problem experienced by EWCs in relation to the consultation procedure.63
Only a
small proportion (ca 20 %) of consultations takes places before the decision on the relevant issue is
finalised, whereas in most cases the consultations are carried out before or close to the
implementation of the management’s decision (44% before and 19% during the implementation
process). Close to 10% of EWC representatives report that they were informed and/or consulted
only after the implementation of the relevant decision.64
The later the consultation of the EWC
57
The Impact assessment for the recast Directive stressed that “the potential risk of bringing up local issues at European
level (with a subsequent increase in the number of meetings and the associated costs) where decision-making is
centralised would nevertheless need to be avoided” (SEC(2008)2166, p. 54).
58
ETUI survey of EWC and SEWC representatives (2018). Overview published online.
59
ICF(2016) Evaluation study on the implementation of Directive 2009/38/EC on the establishment of a European
Works Council, p. 96. Available online.
60
Turlan, F., Teissier, C., Weber, T., Kerckhofs, P., & Rodriguez Contreras, R. (Eurofound) (2022) Challenges and
solutions: Case studies on European Works Councils. Available online.
61
SWD(2018) 187 final, p. 26.
62
SWD(2018) 187 final, p. 27-28.
63
ICF(2023), Section 5.1.2.3. 115 (91 %) out of 126 employee representatives who had experienced problems with the
consultation procedure raised the issue of the timing of the consultation (“too late, after the decision has been taken”).
64
ETUI survey of EWC and SEWC representatives (2018), op.cit.
14
takes place in relation to the management’s decision, the less effective the consultation is
considered to be by the respondents.
For employers, the timing of information and consultation is closely linked to the issue of
confidentiality (see point (iv) below). Managers have reported that the modes and timing of the
information provided to employee representatives can vary, depending on the company’s need to
fulfil stock market requirements. In most cases, information is provided when it is official and
certain. The need to be certain is used to justify the timing of the release of information, which, in
most cases, is ‘just a little before’ or ‘at the same moment’ as the formal announcement of
restructuring, and it is always in accordance with confidentiality rules.65
The Directive leaves discretion to the parties to the agreement to decide on how the EWC
opinion is to be followed up. Where no EWC agreement has been concluded, subsidiary
requirements (set out in Annex I of the Directive) oblige the management to provide a reasoned
response to any opinion that the EWC might express. This requirement is not obligatory in the
EWC agreements concluded under Article 6, so it exists only in some of them. In the evidence
gathering, 46 % respondents to the survey said that their agreement contained an obligation on
management to give a reasoned response and 33% said that it contained an obligation on
management to take account of the EWC's opinion.66
(iii) Insufficient resources and subsidiary requirements for EWCs: The Directive provides that
EWC agreements must include information on the financial and material resources allocated to the
EWC.67
A vast majority of agreements, including the voluntary (pre-Directive) agreements indeed
include clauses on coverage of expenses.68
Most agreements contain provisions on the EWC’s right
to solicit expert advice69
and right to training.70
Nevertheless, during the 2018 evaluation, employee representatives reported a lack of resources and
expertise as one of the shortcomings of the information and consultation procedure. In the evidence
gathering, access to external expertise and coverage of legal costs were mentioned by
stakeholders as aspects that would benefit from more legal certainty. Employee representatives
confirmed that the involvement of external experts is essential, especially during restructuring, and
that budget constraints hinder their ability to operate effectively on all levels. Management
representatives, on the other hand, expressed concern about incurring unnecessary costs.71
Based on
65
Pulignano V. et al. (2016) op.cit., p. 40-41.
66
ICF(2023), Sections 4.2.1.3. and 5.1.2.3. These responses include responses both from the management and the
employee representatives regardless of the type of agreement (including pre-Directive agreements).
67
Article 6(2).
68
According to the 2016 KU Leuven study, 95 % of EWC agreements provide that the company will cover the basic
expenses of EWC activity, such as travel and accommodation costs, administrative assistance and communication
facilities linked to the operation of the EWC (Pulignano V. et al. (2016) op.cit., p. 53). Similarly, a 2015 ETUI study
revealed that 74% agreements provide a general statement of cost coverage – complemented by some specific mentions
of various costs covered – while the remaining 26% have a limited list of expenses covered (De Spiegelaere S.,
Jagodzinski R. (2015), op. cit., p. 40.). Provisions guaranteeing independent financial resources have been introduced in
some EWC agreements, but this seems to be very rare.
69
Based on the ETUI EWC database, almost 70% of EWC agreements contain provisions on the EWC’s right to solicit
expert advice, with over 80% of these agreements providing for the choice of an independent external expert, around
18% referring to an in-company and/or independent expert, and less than 2% allowing only for support by an in-
company expert.
70
De Spiegelaere S. (2016) op.cit., p. 54. In 2016, the right to training was included in 58 % of the agreements signed.
In the same year, two thirds of employee representatives reported having attended training in the past three years.
71
ICF(2023), Section 4.2.1.3.
15
available data, among EWCs with access to external support on a continuous basis 68% of EWC
agreements provide access to one expert, 27% to two, and 5% to three or more.72
Regarding the coverage of legal costs (court fees or costs of a legal representation in case of a
dispute), no Member State lays down an explicit requirement for a dedicated budget or coverage of
such costs, although these costs are in principle part of the operating expenses of EWCs.73
This
creates legal uncertainty and can give rise to disputes on access to resources. Such disputes are
difficult to quantify, as they are not generally reflected in court cases.74
Some indications about the
lack of resources stem from a previous survey,75
in which ca. 17 % of those EWC representatives
who had experienced a dispute stated that the lack of resources was a reason for not bringing a
dispute before a court. Nevertheless, mostly other reasons were given for not initiating a legal case
(see Section 2.4.4.).
For EWCs operating without an agreement the subsidiary requirements provide that operating
expenses shall be borne by the central management in order to enable EWCs to perform their duties
in an appropriate manner (e.g. cost of meeting organisation, of interpretation, of accommodation
and travelling). While the number of EWC operating on subsidiary requirements is low76
,
subsidiary requirements serve as benchmark in negotiations of EWC agreements and their impact
goes beyond EWCs based on subsidiary requirements. The Parliament and trade unions have
criticised that certain rights under subsidiary requirements are insufficient, namely, a lack of
clarification of the coverage of legal costs in case of disputes77
and a requirement for one plenary
meeting per year. Survey data shows that EWCs with multiple plenary meetings per year are more
likely to consider those meetings effective as a means of consultation.78
Regardless of whether an EWC operates on basis of an agreement or subsidiary requirements, the
Directive provides that EWC members shall have access to training without loss of wages. There
is a consensus among stakeholders that under the existing rules costs are not to be borne by the
employee representatives themselves.79
Nevertheless, the 2018 evaluation reported that among
those who requested training, some 20 % reported obstacles created by management, while a large
majority of EWC members noted that there had been no particular challenges in securing it.
(iv) Confidentiality imposed disproportionately can create obstacles to effective information and
consultation: In the 2018 evaluation, workers’ representatives cited extensive use of
confidentiality clauses as one of the shortcomings in implementation of information and
consultation processes in practice.80
The scale of or reasons for the issue were not identified in
72
Source: ETUI EWC Database (data available as of June 2023).
73
SWD(2018) 187 final, p. 34. Some Member States have introduced statutory release from court fees for EWCs (AT,
LT, ES, BG, FR, DE, RO, SE, NL) and others have introduced a general regulation concerning the operating costs of
EWCs. The latter is the case in the vast majority of the Member States. See Annex 8.
74
Overall, only a low number of cases concerning EWCs have been brought before the national courts. See Annex 9.
75
ETUI survey of EWC and SEWC representatives (2018), op.cit.
76
As of the 1st
quarter of 2023, ETUI database records 20 EWCs based on subsidiary requirements. See Annex 4.
77
For EWCs operating under subsidiary requirements, HU and NL specify that funding of EWCs extends to assistance
from legal experts and covers legal costs (see Annex 8).
78
Data extracts from ETUI survey of EWC and SEWC representatives (2018), op.cit. Specifically, there is a clear
correlation between having more than 2 plenary meetings per year and a better perceived effectiveness of such
meetings. This data includes all types of EWCs, including those operating on basis of agreements. Approximately half
of EWCs have one plenary meeting per year, 38 % have two plenary meetings and 10 % have three or more plenary
meetings per year.
79
Group of Experts (Commission)(2010) op.cit., p. 44.
80
SWD(2018) 187 final, p. 27-28.
16
the evaluation, but available research indicates that when confidentiality issues do arise, they are
more likely to occur in larger companies and in companies based in liberal market economies,
where social dialogue at company level is more prominent.81
Member States determine rules for the protection of confidential information within the limits set
by the Directive.82
About half of Member States apply stricter conditions for application of
confidentiality clause than those in the Directive and limit the possibility of applying confidentiality
to business and trade secrets, or require that confidentiality is justified by a legitimate interest of the
undertaking (see Annex 8).83
In the remaining Member States, undertakings are provided with a
wide discretion, in accordance with the existing rules, to impose confidentiality to protect further
circulation of information disclosed to EWCs.
Around 87% of EWC agreements contain provisions on confidentiality.84
In spite of the fact that
overall few legal cases concerning alleged abuse of confidentiality clauses have been reported,85
in
the 2018 ETUI survey over 39% of responding EWC representatives replied that management often
refuses to give information due to confidentiality, compared to around 34% who disagreed or
‘absolutely disagreed’ with that statement.86
In the evidence gathering,87
49% of employee representatives (and 4% of managers) said that the
use of confidentiality effectively limits or prevents meaningful consultation, and 15% of managers
(and 3% of employee representatives) believe that consultation involves the risk of disclosure of
confidential company information. In the evidence gathering workshops, both EWC members and
managers highlighted the importance of striking a balance and keeping an open and transparent
discussion.
On management’s side, confidentiality is an ongoing concern for companies listed on the stock
exchange, principally because a trade-off exists between confidentiality and the timing of
information and consultation.88
Stakeholders’ views: Trade unions consider that the Directive does not ensure enough legal clarity
on essential consultation requirements, such as the need to have sufficient time to carry out an in-
depth assessment and prepare an opinion or ensuring a proper follow-up to the EWC opinion. They
state that the confidentiality clause is often misused by the management. They also submit that
EWCs are not assured sufficient resources (covering e.g. expert advice, training or legal costs),
which hinders their ability to engage effectively in information and consultation processes, and that
there are often disagreements with central management about the scope of transnational matters.
Employer organisations consider that the current concept of transnational matters is fit for
81
ICF(2023), Section 4.2.1.3., and sources quoted therein.
82
Article 8 of the Directive. See Annex 6.
83
Analysis by European Centre of Expertise in the field of labour law, employment and labour market policies
(ECE)(2023), unpublished.
84
ETUI EWC database.
85
For example: Central Arbitration Committee (UK), Verizon, decision of 9 October 2019, No EWC/22/2019. Central
Arbitration Committee (UK), Oracle, No EWC/17/2017, para 87 (see Annex 9).
86
Data extracts from ETUI survey of EWC and SEWC representatives (2018), op.cit.
87
ICF(2023), Section 4.2.1.3. Responses to this question were received from 90 employee representatives and 13
managers.
88
Pulignano V. et al. (2016) op.cit., p. 28-31. In the context of that study, only few interviewed managers reported that
no solution had been found to the question of confidentiality that was acceptable to management and EWC
representatives. The lack of solution occurred in companies where adversarial relations existed between management
and EWC representatives and/or there was a marked heterogeneity in expectations among the EWC representatives.
17
purpose and does not cause any disputes in practice beyond what can reasonably be expected in any
corporate setting. They state that many EWC agreements either already provide for specific
timeframes for information and consultation procedures and a formal response by management to
EWC opinions. Employers consider that the existing obligations to reimburse the trips,
accommodation, paid leave for employee representatives, and translation/interpretation costs
already puts a heavy financial burden on them.
2.4.4. Shortcomings in enforcing the Directive
The Directive contains provisions on enforcement in accordance with general principles of Union
law, respecting the procedural autonomy of the Member States. Insufficient access to justice and
lack of remedies (point (i)), as well as ineffective penalties and sanctions for non-compliance in
some Member States (point (ii)) prevent effective enforcement of workers’ rights and contribute to
the problem of ineffective information and consultation of EWCs.
(i) Insufficient access to justice and lack of effective remedies in some Member States:
Weaknesses have been identified in some Member States as regards the capacity of employees
and their representatives to launch legal proceedings, either due to the lack of resources or
because the national legal regimes do not provide a capacity of EWCs or SNBs to bring a legal
action before a court. Some legal regimes also limit the types of disputes or infringements of
rights that can brought to court.
The 2018 evaluation revealed a variety of situations in Member States regarding the capacity of
EWCs to access the courts and noted overall weaknesses in the means in place allowing EWCs to
enforce their rights.89
The evaluation reported that there is no consistent practice across Member
States as to whether EWCs have the legal status to bring an action before the national courts and the
capacity of EWCs to seek legal redress varies across Europe and often depends on trade unions’
capacity to act.90
There is evidence that access to justice is more difficult in some countries than others (see Annex
8). The Commission received complaints describing a lack of access to justice in IE, against which
the Commission launched infringement proceedings in May 202291
, and FI. It should be noted that
around half of Member States (those with few or no EWCs established under their jurisdiction; as
described in Annex 4) generally lack experience in enforcement of the Directive under their laws.92
In the evidence gathering93
, 13.7 % respondents said there was no access to a court to enforce
EWC-related rights in their respective Member State. Other reasons regularly mentioned by EWC
representatives for not taking a matter to court were risk of damage of mutual trust with
management (28.1%), uncertain outcomes (25%), lengthy judicial proceedings (20.3%), no clarity
89
COM(2018) 292 final, p. 6-7.
90
SWD (2018) 187 final, p. 34-36.
91
Section 10 of the press notice.
92
160 national court cases have been identified since 1995 until the first quarter of 2023. Source: ETUI database. Per
Member State, EWC-related cases were decided by the courts in FR (50), DE (32), UK (29), ES (14), BE (10), NL (7),
AT (4), CZ, RO and IT (3), SE (2), SK, LU, NO (1). Source: ETUI database.
93
ICF(2023), Section 4.2.1.4.
18
on how to take a matter to court (18.8 %), lack of effective remedies (15.6%), not enough financial
resources (14.1%), not clear choice of competent court (10.9%).94
(ii) Ineffective pecuniary sanctions / sanctions for non-compliance in some Member States:
Furthermore, in a number of Member States, there are no effective financial penalties and
sanctions for non-compliance with national rules transposing the Directive.
The 2018 evaluation highlighted significant differences in the type and level of sanctions
available in Member States.95
Employee representatives stressed that differences in the level and
scope of sanctions set at national level are an obstacle to effective redress and an insufficient
incentive for the respect of EWC rights.96
The evaluation concluded that, in many cases, the nature
and level of sanctions are not effective, dissuasive and proportionate. As mentioned under the
previous point, lack of effective remedies and sanctions discourage the employees representatives
from bringing serious disputes to a court in around 15 % of cases.
In most Member States, sanctions usually consist of a pecuniary sanction imposed on the employer.
A comparison between the concrete upper thresholds in national systems shows a significant
difference in levels of penalties, also reflecting the diversity of the legal procedures and practice in
the Member States more broadly.97
Only few Member States do not rely solely on penalties to
provide for an effective remedy. For example, the French courts have granted in some cases cease
and desist orders and obliged companies to comply with the information and consultation rules.98
(See further Annexes 8 and 9.)
Stakeholders’ views: Trade unions highlight insufficient access to justice and ETUC attributes the
low litigation level to the obstacles of EWCs to access the courts. They consider that the remedies
and sanctions guaranteed by the Directive are not sufficiently effective. In contrast, employer
organisations do not attribute the shortcomings regarding access to justice, sanctions or remedies
to the Directive, but to the incorrect transposition of the EU law by certain Member States. They
submit that the existing sanctions are sufficient and effective. BusinessEurope argues that the
limited number of court cases is not because EWCs lack the means to go to court but because most
of them work satisfactorily.
94
Similar results were recorded in the 2018 ETUI survey of EWC and SEWC representatives, op.cit. In that survey,
15.7% of EWC members said to have had a serious conflict with management over the functioning of the EWC
between 2015–2018. Court action was taken in 16% of these cases. Reasons for not going to court included: the low
importance of the issue itself (ca. 36 %), afraid of consequences (ca. 26 %), trade union advised not to go to court (ca.
20 %), no sufficient resources (ca. 17 %), unclarity how to proceed (ca. 13 %), sanctions deemed to small (ca. 11 %),
no consensus within the EWC (ca. 7 %), other reasons (17 %).
95
SWD(2018)187 final, p. 33-36, 57-63.
96
Ibid.
97
Generally, sanctions for administrative infractions apply to EWC-related breaches. In most cases, sanctions provided
under national laws remain low, the average range being around 5.000-10.000 EUR. Upper limits to sanctions are quite
common (the maximum scale ranging from a few hundred EUR to 187.500 EUR (ES). In DE, the maximum
administrative fine is 15.000 EUR, although more severe criminal sanctions (pecuniary or custodial) are theoretically
also available. Elsewhere, stricter sanctions (e.g. up to 800.000 in BE) or prison sentences may theoretically be imposed
in criminal law proceedings. Such sanctions have not in practice been applied to EWC-related offences.
98
In a judgment of 19 November 2020 (case no 20/06549), the French Cour de Cassation upheld the suspension of
operations of undertakings on the grounds of a violation of EWCs’ information and consultation rights.
19
2.5.How likely is the problem to persist?
It cannot be excluded that future clarifications by the Court of Justice of the European Union
(CJEU) could help mitigate certain of the issues described above, for instance by interpreting the
notion of consultation as including a requirement for a written response from management; but it
seems unlikely that the CJEU will in the baseline scenario play a significant role in clarifying the
issues outlined above considering that, due to the low level of litigation at national level, no cases at
all have been yet referred to the CJEU for a preliminary ruling in relation to the 2009 Directive.
In absence of future clarifications by the CJEU or in the absence of EU action, the above
described drivers are likely to persist, although the driver related to the scope and coverage of the
Directive (see Section 2.4.1.) could gradually become less relevant, through a gradual dissolution of
pre-Directive agreements (e.g. due to restructuring) and through setting up of new ones under the
current rules. This process would however be slow and unsystematic, since the pre-Directive
agreements can provide for clauses allowing them to stay in force even when the undertaking
changes significantly its structure. The risk is then that the agreement no longer corresponds to the
needs of the restructured undertaking.
For the remaining drivers, there are no indications or trends which would lead to the conclusion that
the existing problems may resolve.
It is not expected that the drivers would be addressed by the individual Member States.
Considering its transnational and procedural nature, very few Member States have adopted national
legislation going beyond the prescriptive norms of the Directive. Where the Directive leaves
autonomy to the Member States to define their rules or procedures (such as enforcement procedures
and sanctions), Member States’ laws differ according to their industrial relations regimes and
existing administrative and judicial structures (see Section 2.4.4.).
The increasing transnational character of economic activities, companies and restructuring
processes are intensifying the need for proper information and consultation at transnational level.
Certain problem issues could be partly mitigated through digitalisation. For instance, the use
of digital working methods can allow for efficient solutions in EWCs’ access to training and ad hoc
meetings, as evidenced during the Covid 19 pandemic.
Despite these trends, given the context of increased internationalisation and challenges demanding
quick management decisions (e.g. due to pandemic, energy crisis), there is a risk of an increasing
gap between employees’ needs and expectations regarding transnational information and
consultation, and the actual operation of EWCs.
3. WHY SHOULD THE EU ACT?
3.1.Legal basis
The Directive was adopted under Article 137 of the Treaty establishing the European Community.
In the current Treaty framework, the appropriate legal basis for a revision of the Directive is Article
153(1)(e) in conjunction with Article 153(2)(b) TFEU. Article 153(1)(e) TFEU provides the legal
basis for the Union to support and complement the activities of the Member States to improve the
information and consultation of workers. In this field, Article 153(2)(b) TFEU empowers the
European Parliament and the Council to adopt – in accordance with the ordinary legislative
procedure – directives setting minimum requirements for gradual implementation, having
regard to the conditions and technical rules obtaining in each of the Member States. Possible
adjustments to the existing EU rules must hence be without prejudice to Member States’
20
responsibility and discretion to integrate those requirements into their respective legal and industrial
relations systems, particularly with regard to the arrangements for designating or electing
employees’ representatives, their protection and the appropriate sanctions. The initiative will also
preserve the nature and basic purpose of EWCs as an information and consultation – rather than co-
determination – instrument.99
Moreover, the social partners in Union-scale undertakings play a key
role in implementing the legislation via the negotiation of EWC agreements. Their autonomy,
enshrined specifically in the Directive, is another guiding principle for this initiative.
3.2.Subsidiarity: Necessity of EU action
Only an EU initiative can set common rules on information and consultation of workers at
transnational level within the EU. The identified problem drivers (see Section 2) are closely linked
to the coverage and content of the obligations under the Directive and create effects in companies
and their workers across the EU.
Common minimum requirements at EU level remain necessary to improve workers’ right to
information and consultation at transnational level across all Member States.100
Given the cross-
border nature of the undertakings/groups within the scope of the Directive and the transnational
nature of the matters subject to the information and consultation, individual Member States cannot
enact the basic regulatory requirements to define a coherent framework for such information and
consultation. Challenges which reduce the effectiveness of workers’ right to transnational
information and consultation must be addressed at EU level, in particular where they relate to the
scope and substance of information and consultation requirements under EU law.
Given the transnational nature of EWCs, actions of individual Member States could address the
identified issues only to a limited extent (e.g. by revising their laws on enforcement and sanctions).
As described in Section 2.3., in geographic terms, the effects of the problem materialise not only in
the Member State where the EWC is based, but also in all those were undertakings belonging to the
same group operate. No Member State can thus be excluded from the outset. Consequently, EU
action is needed to clarify and further develop the minimum standards that apply to all
multinational undertakings of a certain size operating in the EU.
3.3.Subsidiarity: Added value of EU action
The specific EU added value lies in the establishment of minimum standards, below which
Member States cannot compete on the single market. These contribute to upwards convergence in
employment and social outcomes between Member States, whose economies and labour markets
are increasingly interlinked.
By reinforcing the effectiveness of the existing minimum requirements for EWCs, the initiative
aims to create a simplified and more consistent legal framework regarding the minimum level of
protection of workers. EWCs’ potential should be fully exploited in the current context of the twin
digital and green transitions and profound industrial transformations, bearing in mind the need to
avoid unnecessary burdens, preserve competitiveness and the ability of undertakings to react to
rapidly changing market circumstances, and the need to ensure adequate working conditions.
99
The legal basis for an EU instrument on co-determination is Article 153(1)(f). This legal basis requires adoption by a
special legislative procedure (Article 153(2)).
100
Recital 45 of the recast Directive.
21
These considerations are consistent with the 2021 European Added Value Assessment prepared by
the Parliament in support of its legislative own-initiative resolution on a revision of the Directive.
That assessment concluded that in the future, more systematic information and consultation of
workers at transnational level could lead to even greater economic benefits – by fostering job
quality, reducing the rate at which people leave their jobs (’quit rate’), reducing the number of
redundancies, limiting the costs of structural adjustment, helping to eliminate distortions of
competition within the single market and inequalities in treatment of workers, and/or easing the
burden on social welfare systems.
4. OBJECTIVES: WHAT IS TO BE ACHIEVED?
The initiative is intended to address challenges, through EU-level action, related to several
principles set out in the European Pillar of Social Rights (‘Pillar’), most importantly principle 8 on
Social dialogue and involvement of workers, principle 2 on Gender Equality and Principle 5 on
Secure and adaptable employment.
4.1.General objective
The general objective of this initiative is to improve the effectiveness of the framework for the
information and consultation of employees at transnational level. This objective is consistent
with the existing aims and principles set out in the current Directive: to improve the right to
information and to consultation of employees in Union-scale undertakings and groups (Article
1(1)), and to define and implement the arrangements for informing and consulting employees in
such a way as to ensure their effectiveness and to enable the undertaking or group of undertakings
to take decisions effectively (Article 1(2)). For the purposes of this general objective, effectiveness
is to be understood as described in the context of the general problem (Section 2.3.). The basic
nature of the Directive as an information and consultation instrument will not be changed in the
context of this initiative, given the choice of the legal basis, which allows for the establishment of
minimum requirements as to the procedural framework but not for guaranteeing that management
decisions are aligned in substance with the opinions of EWCs101
(see Section 3.1.). This approach
and perspective are reflected in the specific policy objectives.
4.2.Specific objectives
The specific objectives through which the general objective will be addressed are to:
(1) Avoid unjustified differences in workers’ minimum information and consultation rights at
transnational level.
(2) Ensure an efficient and effective setting-up of EWCs by preventing delays in the setting up
of EWCs, ensuring appropriate resourcing of special negotiating bodies and improving gender-
balance on EWCs and special negotiating bodies).
(3) To ensure appropriate resourcing of EWCs and an effective process for their information
and consultation by improving legal certainty of key concepts and strenghtening genuine
exchange of views between EWCs and central management on transnational matters (see
Section 2.3.).
(4) Promote a more effective enforcement of the Directive, including through access to justice
for employee representatives, SNBs and EWCs and effective, dissuasive and proportionate
sanctions.
101
The latter provisions would fall under the legal basis in Article 153(1)(f) TFEU .
22
The specific objective are further clarified by the indicators used to assess the degree to which
different policy options would achieve those objectives (“effectiveness”), see Section 7.1.
5. WHAT ARE THE AVAILABLE POLICY OPTIONS?
5.1.What is the baseline from which options are assessed?
The policy options include a no-policy-change scenario, which serves as a baseline for assessing
and comparing the policy options described under Section 5.2.102
As the policy options include
amendments to the Directive, a timeframe of 10 years is assumed for the baseline.103
All relevant EU-level policies and measures described in Annex 7 are assumed to remain applicable
under the baseline scenario. The national legislation implementing the existing EU level
requirements would also continue to apply during the baseline scenario. The fact that no major
changes to the national provisions in the field of the Directive have been notified following the
transposition of that Directive indicates that the national legislation is stable and unlikely to
change.104
The proposed Directive on Corporate Sustainable Due Diligence (CSDDD)105
is likely to be
adopted during the baseline period. It would set out obligations for large companies regarding the
information and consultation of employees in relation to adverse environmental and human rights
impacts in their global value chains. The CSDDD has the potential to achieve synergies with the
Directive, as EWCs’ opinions can contribute to the development and dissemination of the due
diligence policy of multinational corporations. However, that Directive would not affect the legal
framework for the operation of EWCs.
Considering the evolution of EWCs over the last years, the number of EWCs is expected to
increase at a low linear rate of 9 per year, and the number of Union-scale undertakings at a rate of
3,9%, similarly to the number of employees of those undertakings (see Annex 4).
Under the baseline scenario, the Commission would continue its longstanding and substantial
support of projects raising awareness of transnational information and consultation and promoting
best practices.106
Such projects can help alleviate some of the identified problem drivers under the
baseline scenario, such as legal uncertainty regarding certain concepts laid down in the Directive
and EWC members’ perceived lack of expert advice. The Commission would also continue to
102
Better Regulation Tool #60.
103
This timeframe corresponds to the period required for amendments to produce their full impacts, taking into account
the likely duration of the legislative procedure at Union level, the transposition period, a possible additional period of
deferred application or transitional measures allowing for the adaptation of pre-existing EWC agreements to the new
legislative requirements, and a period of practical application by social partners in Community-scale undertakings.
104
The same is true of possible policy developments at international level. Likewise, it is unlikely that the CJEU would
be given the opportunity to address uncertainty regarding the interpretation of the recast Directive, given that no
questions on that Directive have thus far been referred by national courts for a preliminary ruling.
105
COM(2022)71 final.
106
For 2023, a budget of EUR 2,5 million is available for this purpose, with the main priority to “promote actions
aimed at developing employees’ involvement in undertakings in particular by raising awareness and contributing to the
application of European Union law and policies in this area and the take-up and development of European Works
Councils”.
23
monitor the correct transposition of the Directive through a structured dialogue with Member
States, and if necessary, infringement procedures.107
Despite the actions outlined above, it is unlikely that the identified problem and its drivers will
become significantly less relevant in the absence of additional policy measures on EWCs, as
evidenced by the fact that the issues identified in the 2018 evaluation since remained unresolved.
As the Directive sets minimum requirements and thus a benchmark for individual agreements
between central management and employees’ representatives, the effectiveness of information and
consultation activities on transnational matters is likely to remain suboptimal if the relevant drivers
are not tackled through EU action.
Undertakings with a well-functioning EWC could continue to reap the benefits of constructive
dialogue at transnational level. In contrast, undertakings experiencing disputes and uncertainty
regarding information and consultation requirements would continue to be ill-equipped to
implement the radical changes required in the context of climate change and increased automation
and digitalisation. Without EU action addressing the problem drivers, it is unlikely that this
potential can be harnessed on a larger scale, to benefit the competitiveness of the EU economy as a
whole and improve working conditions.
As stated above under Section 2.5., it is unlikely that the CJEU will play a significant role in the
baseline scenario. Although the Commission may be able to take up certain grievances by means of
infringement procedures, for example, for a lack of conformity with the requirement to provide
effective enforcement mechanisms, Member States are much less likely to address that deficit
systematically if they are not required to do so by a new EU initiative.
See Annex 12 for detailed explanations of impacts of no EU policy action over the baseline period,
by problem area, including quantification where possible. There is no indication of any significant
variance in the real costs identified in relation to the problem drivers over the baseline period.
5.2.Description of the policy options
5.2.1. Structure and logic of the policy options
The structure of the policy options mirrors that of the drivers in four distinct problem areas.
Therefore, it is appropriate to aggregate the policy measures at the level of problem areas, in
accordance with the specific policy objective they aim to achieve. The policy options thus consist
of alternative packages of measures addressing a specific problem driver.108
To ensure a
proportionate and targeted impact assessment, the analysis focuses on substantive policy measures
likely to have a significant impact on stakeholders. Accompanying measures are identified as such
and are not assessed individually. Some measures were discarded for reasons of legality or a clear
lack of coherence or proportionality (see Annex 11). The effectiveness, efficiency, coherence and
proportionality of the policy options linked to the same policy objective are compared, considering
their impacts, to identify the preferred option taking into account the necessary trade-offs between
107
Infringement proceedings on the Irish system of remedies and access to justice for the enforcement for EWCs’ rights
were launched in 2022. The dialogue with the Irish authorities on the relevant grievances is ongoing.
108
As regards the first specific policy objective, the Commission has identified, on the basis of available evidence and
its own legal analysis, one appropriate approach to remove the exemptions from the scope of the recast Directive. By
way of exception, there is hence only a single policy option, as an alternative to the no-policy change option (baseline),
in this case. See Section 5.2.2.
24
different approaches (see Section 7).109
In combination, the preferred policy options form the
overall preferred policy option for which joint impacts are analysed in Section 8.
Except for problem driver 1, which is linked to the exemptions laid down in Article 14 of the
Directive and can therefore not be addressed by a non-regulatory measure, each group of policy
options contains a non-regulatory alternative as well as different combinations of legislative
amendments. For each specific policy objective, the policy options are organised in the order of
escalating intensity of the envisaged policy interventions. Furthermore, a distinction is made
between policy measures that entail substantive changes and therefore require an assessment of
their significant impacts, and policy measures which are of an accompanying and/or clarifying
nature. As the latter merely reinforce the effects of the initiative and address drafting issues in the
legal text without changing the existing provisions in substance, they do not warrant a detailed
assessment of impacts, in line with the proportionality principle applicable to the better regulation
process.
In designing the policy measures and packaging them to form policy options, the Commission was
guided by the following key considerations:
(i) the need to give sufficient discretion to Member States in implementing any revised minimum
requirements on transnational information and consultation, allowing them to complement those
requirements as appropriate and to integrate them into their respective rules, industrial relations
traditions and practices, in accordance with the principle of subsidiarity and the Treaty legal base
for social policy measures;
(ii) full respect of the autonomy of social partners in giving practical effect to the minimum
requirements, which is generally accepted as a key factor for effective information and
consultation; the principle of social partner autonomy also entails preserving the possibility for
social partners to choose other forms of company-level social dialogue on transnational matters,
or to agree to limit themselves to employee involvement at national or local level;
(iii) the fact that business stakeholders generally favour non-binding measures over legislative
amendments whereas trade union organisations and employee representatives generally consider
non-binding measures ineffective and hence support legislative amendments. Therefore, while
various possible combinations between legislative and non-legislative measures could be
imagined in theory, stakeholder feedback did not indicate any particular such combination;
(iv) Non-legislative measures, such as the funding of projects to promote the awareness of the
transnational information and consultation framework, and the Commission’s monitoring of the
implementation of the Directive by the Member States form part of the baseline scenario. A
legislative initiative would therefore automatically be combined with such continuing non-binding
measures. Indeed, the clarifications and specifications to the Directive envisaged in the policy
options will enable more effective monitoring measures by the Commission, as the vague and
general nature of some key requirements – for instance regarding sanctions and access to justice –
has thus far hampered a more frequent pursuit of infringement cases.
For information on the need for adapting the existing national implementing rules in light of
specific options, see Annex 8.
109
This approach follows the better regulation guidelines on building policy options, specifically the alternative shown
in Figure 1b on p. 119 of the guidelines.
25
The following section describes considered policy options for each of the four main problem areas.
The intervention logic below provides an overview of the policy options and their links with the
problem drivers and policy objectives.
5.2.2. Policy options aimed at avoiding unjustified differences in workers’ minimum
information and consultation rights at transnational level (Policy Area 1)
Policy option 1a would bring currently exempted undertakings in the scope of the Directive.
This concerns undertakings with ‘voluntary agreements’, which were concluded before Union law
was established in this field, and ‘Article 14 agreements’, concluded or revised during the
transposition period of the recast Directive (see Section 2.4.1). This option ensures a consistent,
clear, and comprehensive framework for information and consultation at transnational level for all
Union-scale undertakings. It aims to guarantee equal access of employees to the rights under the
Directive and make all Union-scale undertakings subject to the same obligations to negotiate an
EWC agreement on receipt of a valid request. Only one option has been identified, since there is no
plausible alternative that could avoid unjustified differences in workers’ information and
consultation rights.
With respect to undertakings with Article 14 agreements, this option would provide for the
application of the revised requirements of the Directive, in the same way as those requirements will
apply to agreements that are currently already subject to the Directive. The application of revised
minimum requirements is likely to entail the need to adapt at least some of the pre-existing EWC
agreements. This would be consistent with the approach followed by the 2009 Directive. The
transitional period for the adaptation of Article 14 agreements would be two years, just as for
undertakings with pre-existing EWC agreements that are not currently exempted from the
Directive.
With respect to ‘voluntary agreements’, since they were concluded outside the scope of EU law
and since, in the absence of a request by the requisite number of employees or employees’
26
representatives, establishment of EWCs is not obligatory in Union-scale undertakings, removing
the exemption of undertakings with such agreements cannot trigger the automatic application of the
Directive’s requirements to these agreements. Following the removal of the exemption, the
employees and management of these undertakings can maintain their existing arrangements and
agreements for information and consultation on transnational measures, without an
obligation to renegotiate them in accordance with the revised Directive. Employees or
management will, however, have the possibility to request and initiate negotiations of an EWC
agreement in accordance with the Directive’s procedures.110
As a result, unless the management
and employees agree otherwise, a newly established EWC under the Directive would replace the
transnational information and consultation body based on the previous voluntary agreement.
Stakeholders views: The European Parliament called for an end to the exemption from the
Directive with the view to creating a regulatory level-playing field. Trade unions and EWC
representatives mostly support such a measure, but some express reservations regarding the need
for renegotiation of existing agreements it may entail.111
Employer organisations prefer to
maintain the exemptions, stressing the autonomy of the parties and the need to preserve well-
functioning information and consultation mechanisms.112
In the targeted survey for the supporting
study113
, EWC representatives were overwhelmingly in favour (81.7%) of removing the existing
exemptions, compared to only 13.2% of respondents on behalf of management. 43.4% of managers
did not express any views about this issue. Respondents (combining both employees and
management) linked to information and consultation bodies created before the first EWC Directive
were less in favour of removing the exemptions (53.7 %) than those with EWCs created under EU
rules (69.2%). (See Annex 2)
5.2.3. Policy options aimed at ensuring an efficient and effective setting-up of EWCs (Policy
Area 2)
Policy options under Problem Area 2 to would provide more legal certainty in relation to the
timeframe for the initiation of negotiations as well as the resources available to SNBs.
Option 2a involves the issuing of non-binding interpretative guidance by the Commission on the
rules governing the setting up of EWCs, based on established best practice and with due
consideration to the views of European social partners. Such guidance could for instance clarify the
timeframe for setting up of the SNB and initiating negotiations, the coverage of SNBs’ costs,
including legal costs, and how to achieve a balanced gender composition of EWCs.
Option 2b would cover some of the same issues as Option 2a but translate the envisaged
clarifications into binding legislative amendments to the Directive.
Substantive changes under option 2b would include a clarification in the Directive that the
central management’s obligation to bear SNBs’ expenses includes also the coverage of reasonable
costs of legal advice, representation and proceedings. The limitation to “reasonable” legal costs is
designed to prevent cost coverage for frivolous legal actions. The approach of using an abstract
legal term is consistent, e.g. with Union rules on legal aid which use the concept of “appropriate”
110
Article 5(1).
111
See Annex 2 and ICF(2023), Sections 5.2.2.1., 5.2.2.2. and 5.2.2.3.
112
Ibid.
113
ICF(2023), Section 5.1.2.8.
27
legal aid.114
It is not possible to pre-determine more concretely in the legislation whether legal
action is warranted in an individual case.
Accompanying measures under option 2b include:
(i) the provision of the Directive prescribing the application of subsidiary requirements “where the
management refuses to commence negotiations” would be reformulated to clarify that management
is to convene the first SNB meeting within six months of the request. The deadline remains
unchanged under this option, which merely aims to address the ambiguity of the existing wording.
(ii) The existing right of SNBs to training “without loss of wages” would be clarified to address
any doubts as to whether undertakings must cover the costs of necessary training and related
expenses.
Option 2c would introduce, in addition to option 2b, a new substantive requirement for the SNB
and central management to include an objective of gender-balanced representation when
negotiating new or re-negotiating existing EWC agreements. More specifically, that objective
would be for the underrepresented sex to account for at least 40% of EWC members, and where
applicable select committee115
members. In line with the approach of the Directive on gender
balance on company boards116
, the gender composition of EWCs would not necessarily be
representative of the overall workforce in order to meet that objective. Indeed, it would not be
conducive to achieving the policy objective if EWCs were to mirror a possible general lack of
gender balance in the undertaking. In order not to compromise the functioning of EWCs, the option
would however not take the form of a fixed binding quota but allow for a certain flexibility. Parties
could tailor the arrangements they agree concerning the gender-balance objective to take full
account of the case law of the CJEU on positive action117
, practical constraints linked to the
possible lack of suitable candidates of the underrepresented sex in some cases, and the national
rules and practices on the election of employees’ representatives. The measure would aim to
achieve changes in the composition of the vast majority of existing EWCs during the renegotiations
(see Section 2.4.2). The same accompanying measures as under option 2b would be taken also
under 2c.
Stakeholders’ views: The European Parliament recommended the accompanying measures under
options 2b and 2c and the gender balance objectives as per option 3c. Further it recommended
shortening the existing negotiating deadline from three years to 18 months and requiring SNBs in
need of support by experts to consult trade union representatives by priority and only if needed,
further experts of their choice. The latter two measures were discarded for the reasons set out in
Annex 11.
Trade unions considered that there is a need for certain improvements and clarifications of the
procedure for setting up EWCs, welcoming for instance the clarification described in the first
accompanying measure under options 2b and 2c.118
Employer organisations oppose adapting the
framework for setting up EWCs and stress the importance of reducing financial strain on
114
Directive 2003/8/EC (Article 3).
115
The select committee is a coordinating body comprising at most five members elected from among EWC members.
Where a select committee exists, it typically has a special role in the ad-hoc information and consultation on
extraordinary circumstances or decisions. Such a body is optional for EWCs subject to negotiated agreements, but
mandatory for EWCs subject to subsidiary requirements, cf. point 1(d) of the Annex to the recast Directive.
116
Directive (EU) 2022/2381.
117
Cf. Judgment of the Court of Justice of 28 March 2000, Badeck and Others, C-158/97, ECLI:EU:C:2000:163.
118
ICF(2023), Sections 4.2.1.2. and 5.1.2.4.
28
companies. During the evidence gathering for the supporting study, both employer and trade
union organisations, while generally supporting the objective of gender balance, questioned the
feasibility of binding gender quotas, having regard to challenges in some sectors and diverse
nominations or selection systems of employee representatives in Member States. Sector and
country-specific considerations in this regard would be necessary.119
5.2.4. Policy options aimed at ensuring the appropriate resourcing of EWCs and an effective
process for their information and consultation (Policy Area 3)
Policy options under Policy Area 3 pertain to various contributing factors: the issue of legal
certainty regarding the concept of ‘transnational matters’, requirements for consultation, including
as regards the timing of the follow-up to EWCs’ opinions, appropriate resourcing of EWCs to carry
out their role effectively, and the matter of confidentiality or non-disclosure of sensitive
information.
Option 3a involves the issuing of non-binding interpretative guidance clarifying the concept of
transnational matters, the need for management to provide a reasoned response to EWCs’ opinions,
the timing of information and consultation, the coverage of training expenses and the conditions for
restricting information based on confidentiality grounds resp. withholding sensitive information
from EWCs.
Option 3b would introduce substantive amendments (see below) in the Directive. Except for the
measures concerning the subsidiary requirements set out in the Annex to the Directive, all Union-
scale undertakings and their EWCs are potentially directly concerned by the amendments described
below. Member States would need to implement the amendments into national law and enforce the
amended requirements.
Substantive changes under option 3b:
(i) The concept of transnational matters would be clarified without significantly broadening it.
For this purpose, certain elements of recital 16, such as the scope of the potential effects of a
matter, would be incorporated into the enacting terms.
(ii) As regards the procedural requirements for consultation, an obligation on management to
provide a reasoned response to EWCs’ opinions prior to the adoption of a decision on
transnational matters would be laid down in the Directive. It implicitly requires management to
take EWCs’ opinions into account, because a reasoned response cannot be provided without
having first considered those opinions on their merits.120
(iii) The types of financial and material resources that must be determined in an EWC agreement
would be specified, in particular the access to and costs of support by experts, and the costs of legal
advice, representation and proceedings. In accordance with the principle of party autonomy, no
fixed requirements would be imposed.121
The option would instead require the SNB and central
management to negotiate and determine the coverage of those costs in their EWC agreement, in
accordance with applicable national law.
119
See Annex 2 and ICF(2023), Sections 5.2.2.1. and 5.2.2.2.
120
This policy measure thus encompasses in substance the European Parliament’s suggestion to state that management
“shall” – instead of “may” – take EWCs’ opinion into account.
121
This is consistent with the expert group report of 2010 on the implementation of the recast Directive, which
concluded that flexibility is needed to determine who is to bear the costs related to legal actions, taking into account
national practice or the relevant EWC agreement (Group of Experts (Commission)(2010), p. 39).
29
(iv) In order to ensure that effective information and consultation is not undermined by excessive
recourse to non-disclosure and confidentiality restrictions, it would be clarified that central
management may declare information confidential only in the legitimate interest of the
undertaking. To increase transparency and enable employees’ representatives to challenge
confidentiality restrictions or non-disclosure, management would be required to inform them,
upon request, of the grounds justifying the confidentiality/non-disclosure.
(v) Finally, the subsidiary requirements would be amended to require at least two annual plenary
meetings of central management with the EWCs that function on the basis of those requirements.
Accompanying clarifications under option 3b: To address uncertainty regarding the
interpretation of the requirement to provide EWC members with necessary training “without loss of
wages”, it would be clarified that undertakings have to cover the costs of such training and
related expenses. Such clarification would be in line with the existing interpretation of the
provision by stakeholders (see Section 2.4.3). It would also be clarified that the parties should agree
on the format for EWC meetings, which may make use of virtual as well as physical formats, which
is not explicit in the current wording.
Option 3c would involve a more far-reaching policy intervention, by introducing the following
substantive amendments, in addition to the targeted measures under option 3b:
(i) The concept of transnational matters would be substantially expanded to include notably
matters with potential effects indirectly concerning employees in two different Member States, as
well as any matters decided in a Member State other than the one in which they produce their
effects, even if those effects are confined to a single Member State. Such amendments would
substantially broaden the competence and scope of action of EWCs to matters for which the
national or local level of employee representation was thus far considered appropriate. Moreover, in
the case of a dispute between the central management and the EWC as to whether an information
and consultation is to be carried out, the central management would be required to justify the
absence of transnational issues in writing. (ii) In terms of resources, a general right of EWCs
to be supported by experts of their choice at the expense of the Union-scale undertakings would
be introduced, instead of leaving it to the parties to the EWC agreement to negotiate the conditions
for involving experts. (iii) The sharing of information with employees’ representatives at national
or local level would be exempt from confidentiality restrictions, provided that those employees’
representatives are subject to equivalent restrictions. In addition, the dispensation of management
from its obligation to provide information to EWCs if that disclosure could seriously harm the
undertaking would be made subject to a general condition of prior administrative or judicial
authorisation.
Stakeholders views: The European Parliament recommended to broaden the definition of
transnational matters, require central management to provide a reasoned response to EWCs’
opinion prior to the adoption of the decision, allow for the imposition of confidentiality only in the
legitimate interest of the undertaking, require management to provide EWCs with the objective
criteria justifying confidentiality, make non-disclosure of information on transnational matters
subject to a mandatory prior authorisation, entitle EWCs to request assistance from experts of their
choice, require management to bear EWCs’ judicial costs and costs of legal representation, and
30
increase the number of annual plenary EWC meetings from one to two in the subsidiary
requirements.122
Trade unions and EWC representatives support a clarification of the concept of transnational
matters, requirements for a reasoned response by management, ensuring that the latter takes EWCs’
opinions into account, and clear provisions on the grounds justifying the withholding of information
on transnational matters, strengthening EWCs’ entitlement to support by trade union
representatives, and increasing the number of annual plenary meetings under subsidiary
requirements. In contrast, employer organisations and management representatives are sceptical
vis-à-vis such measures, stressing notably the need to preserve companies’ capacity for fast and
efficient decision-making and the importance of protecting sensitive information such as trade
secrets and complying with the stock-exchange rules, and cautioning against a giving co-
determination powers to EWCs. Employer organisations called instead to alleviate administrative
and financial burdens by promoting online EWC meetings .123
5.2.5. Policy options aimed at promoting a more effective enforcement of the Directive (Policy
Area 4)
The effective enforcement of the rights guaranteed by the Directive depends on several factors: (i)
compliance monitoring by the European Commission (and if necessary, infringement proceedings),
(ii) appropriate sanctioning by national competent authorities, and (iii) effective judicial and/or
administrative remedies available to the rightsholders (primarily employee representatives and
members of the special negotiating bodies and the EWCs). For the purposes of the first component,
Member States would be required to provide the Commission with (and update as necessary) the
information on how access to justice is provided for each right. Regarding the other two
components, the requirements regarding access to justice and penalties could be clarified or
strengthened. The policy options in Problem Area 4 could be combined with either non-binding
or legislative measures relating to the coverage of reasonable legal costs (see options 2a, 2b, 2c, 3a
and 3b above).
Option 4a consists of specific Commission recommendations addressed to Member States,
clarifying how the latter can comply with their obligation, in accordance with the general principles
of Union law, to apply administrative or judicial procedures, as well as sanctions that are effective,
dissuasive and proportionate in cases of infringement of the obligations arising from the Directive.
Option 4b would include the following substantive changes:
(i) To enable the Commission to effectively monitor and ensure the requirement of effective access
to justice, Member States would have to notify the means by which EWCs, SNBs and
employees’ representatives can bring judicial proceedings in respect of all their rights under
the Directive.124
This one-off information requirement could be discharged in the framework of the
122
The European Parliament recommended certain additional measures in resolution, which were however discarded
without detailed assessment of their impacts, for the reasons explained in Annex 11.
123
See Annex 2 and ICF(2023), Section 5.2.2.2.
124
While it is legally conceivable to combine such a notification obligation on Member States with Commission
recommendations on the enforcement of transnational information and consultation requirements (option 4a), it was
considered more relevant and consistent to package that obligation (only) with binding amendments strengthening and
specifying the enforcement provisions in the Directive, for the following reasons:
- information on the implementation of the existing enforcement rules in the Directive was already gathered in
the context of the evaluation, and updated for the purposes of this impact assessment. Shortcomings were
31
notification by Member States’ of the measures transposing the revision of the Directive. As the
relevant information concerns the rules on judicial remedies under national law, it is fully available
to the national authorities. Consequently, this option would not impose any reporting or
administrative obligations on businesses.
(ii) The level of pecuniary sanctions should take account of the annual turnover of the
sanctioned undertaking or group of undertakings, as well as of any relevant aggravating and
mitigating factors related to the gravity, scope, impacts and duration of the offence. Sanctions
have to be determined in accordance with principles of effectiveness, dissuasiveness and
proportionality (see accompanying clarification below). The rationale of explicitly prescribing the
turnover criterion is that the existing fixed lump sums as pecuniary sanctions in the Member States
are in practice disproportionately small for undertakings with a large turnover, and thus devoid of
any dissuasive effect, see Section 2.4.4.(ii).125
The payable amount needs to be related to the
financial capacity of sanctioned Union-scale undertaking or group126
, in order to ensure the
dissuasiveness and effectiveness of this type of sanctions. At the same time, the option requires
Member States to ensure the proportionality of any sanctions. The fact that the impacts of non-
compliance with the Directive might be limited, including in terms of their geographical scope,
must therefore be taken into account by national courts and administrative authorities when
determining the percentage of turnover to be levied as a sanction. This option does not specify
percentages by way of thresholds or limits for the imposition of fines and leaves it for Member
States to define how individual sanctions are to be determined, having regard to the sanctioned
undertaking’s turnover. Member States must in any case avoid potentially excessive penalties.
Accompanying clarification under option 4b: The existing requirements under general principles
of Union law for access to judicial remedies and effective, dissuasive and proportionate
sanctions would be incorporated into the enacting terms of the Directive. This would clarify
that these requirements apply whenever rights under the Directive are infringed, e.g., where
undertakings restrict the dissemination of information on transnational matters or refuse to disclose
such information to EWCs on confidentiality grounds, without sufficient justification.
Option 4c would go further by introducing, in addition to the measures under policy option 4c, the
following further substantive changes:
(i) Determining specific maximum shares of undertakings’ net turnover that could be imposed
by way of pecuniary sanctions: up to 4% where a violation of rights and obligations under the
identified for some Member States regarding access to justice, as explained in the problem definition. There
are no indications that a reporting exercise on the same issues would yield substantively different findings
following the adoption of a non-binding Commission recommendation, not least because of the likely limited
take-up of such recommendations in the legal systems where the issue was identified as most pronounced. In
contrast, following legislative amendments enhancing the enforcement provisions in the Directive, Member
States would be legally required to address shortcoming regarding access to justice. In such a context, the
reporting obligation is linked to transposition and would have a clear added value in enabling the Commission
to monitor compliance;
- when combined with binding legislative amendments, the reporting obligation can be discharged in the
framework of the standard procedure for the notification of transposition measures, using the IT tools available
for that purpose. The process would also be accompanied by an expert group set up to support the
transposition. If a mandatory reporting requirement were to be combined with a non-binding initiative, it is not
clear how a similarly efficient process could be ensured.
125
This rationale is consistent with the approach followed in the proposed corporate sustainability due diligence
directive, COM(2022)71 final, Article 20(3).
126
Limiting the calculation base to turnover in the Union would entail less favourable treatment of European
undertakings compared to international groups and place them in a competitive disadvantage.
32
Directive is found to be intentional, or else up to 2% of global annual net turnover. (ii) Introducing
a right to injunctive relief allowing EWCs to request the suspension of management decisions
taken in violation of the information and consultation requirements under the Directive.
Stakeholders’ views: The European Parliament called for facilitated administrative and legal
proceedings for an effective access to justice for EWCs and special negotiation bodies, including
the possibility to request a preliminary injunction for the temporary suspension of management
decisions and timely decisions on judicial appeals against the imposition of confidentiality, as well
as pecuniary sanctions of up to 4 % of the undertaking’s global annual turnover.127
Trade unions supported the Parliament’s recommendations128
, whereas employer organisations
and management representatives considered them disproportionate, cautioning against the risk of
delays in companies’ decision-making and undermining trust between social partners.
5.3. Options discarded at an early stage
A number of policy measures that have either been considered at the early preparatory stages of this
initiative or were put forward by social partners during the consultation process have been
discarded without a detailed assessment of their impacts, either because it was not possible to
establish sufficient evidence to confirm the issue that those measures would have aimed to address,
or because the measures were unsuitable to achieve the policy objectives, clearly disproportionate,
or incoherent with the existing legal framework. Annex 11 contains a description of those policy
measures and the reasons for discarding them.
6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS?
This section presents key findings with details in Annex 12. However, certain points warrant
general clarification, by way of introduction. First, the analysis focuses on the impacts of
implementing the policy options in the EU Member States, in line with the geographic scope of a
possible amending Directive or non-binding Commission instrument. As the Directive applies also
to other EEA countries129
, it is reasonable to assume that clarifications or amendments to that
Directive would eventually also be adopted EEA-wide. EEA countries have therefore been included
in the assessment of impacts.130
There are no indications that the impacts in the EEA would
substantially diverge from those in EU Member States. Second, as undertakings with EWCs are
primarily concentrated in the metal, services, chemicals, building, food, agriculture and tourism
sectors, the identified social and economic impacts across all policy areas will materialise also
primarily in those sectors.131
Third, due primarily to the geographic distribution of undertakings’
127
Insofar as the Parliament also called on Member States to grant legal personality to EWCs and SNBs and to include
in the possible sanctions the exclusion from public benefits, aids, subsidies or public contracts, it is explained in
Annex 11 why such measures were not included in the policy options.
128
ETUC went further by requesting administrative or judicial systems allowing extremely fast decisions on the
suspension or nullification of management decisions taken in violation of information and consultation obligations vis-
à-vis EWCs. See Annex 11 for explanations why such measure has been discarded.
129
The recast Directive was inserted in Annex XVIII to the EEA agreement by decision No 54/2010 (OJ L 181,
15.7.2010, p. 22) and EEA Supplement No 37, 15.7.2010, p. 29.
130
The analysis of whether and how national laws might need to be adapted to implement the policy options did not
cover non-EU countries, because the scope of application of the considered amendments would be limited to the EU
(with the possibility to subsequently expand the amendments to the whole EEA by including them in the EEA
agreement).
131
See Annex 4, figure 5.
33
headquarters, most EWCs are located in seven Member States, namely DE, FR, BE, SE, NL, IE,
IT.132
Nevertheless, the impacts policy options would affect employees across Member States
where the undertaking operates, primarily in the abovementioned sectors, because they are
represented by the EWCs.133
Fourth, most EWCs are subject to the national law of the seven
Member States, whereas around 10 Member States have either no or only one EWC body
established under their law. The impacts of certain policy measures can vary depending on
which national law is applicable to an EWC. Some national laws may already contain rights and
obligations in line with certain policy measures, which would therefore not require any
amendments to the relevant national law. The respective measure would thus not change the
situation of undertakings and EWCs subject to those laws. Such cases are pointed out in the
presentation of impacts below. Fifth, for the reasons presented in more detail in Annex 12 (Section
1), the initiative will not have any relevant or foreseeable impacts on consumers, SMEs134, or the
environment. These types of impact are therefore not discussed separately under each policy area.
Sixth, possible impacts on employment are discussed only where relevant in this section, in relation
to policy options 2c and 4c, whereas Annex 12 (Sections 2-5) contain further explanations about the
reasons why no effects on employment can be anticipated for the rest. Seventh, the accompanying
measures described above in Section 5 do not involve substantive changes to the existing
provisions but mere technical drafting clarifications. These measures are generally assumed to
reinforce the effects of the options without producing significant self-standing impacts. Therefore,
they do not warrant a detailed analysis of impacts. Eigth, available cost estimates are presented
below in terms of average unit costs per option, in relation to the average turnover of the Union-
scale undertakings.135
However, for the following reasons, the scope for meaningful quantification
of impacts is limited: (i) the specific characteristics of the transnational information and
consultation framework make it fundamentally challenging to establish a causal link between the
policy options seeking to develop or clarify that framework, and specific economic or social
outcomes. This challenge pertains for instance to the autonomy of social partners in designing and
handling the information and consultation process in their respective undertaking, the fact that the
establishment of EWCs is only mandatory when employees representatives request it, and external
– often behavioural – factors such as the established culture of employee involvement in the
respective undertaking. (ii) Costs and benefits of transnational information and consultation tend to
be long-term and indirect in nature. (iii) Due to often polarised stakeholder views, key evidence
sources are affected by selection-bias and the risk of inaccurate self-reporting by stakeholders.
6.1.Impacts of policy options under Policy Area 1
6.1.1. Economic impacts
Costs for Union-scale undertakings: By removing the exemptions from the scope of the Directive,
option 1a would expand the right to request the establishment of an EWC to employees of the 323
undertakings with voluntary agreements. Where such requests are made, the latter undertakings
may hence face the one-off adjustment costs and possible marginal opportunity costs of
132
See Annex 4, figure 3.
133
Union-scale undertakings’ activities extend by definition to more than one Member State. EWCs represent
employees from the different Member States in which the undertaking operates vis-à-vis central management: the
recast Directive requires that one seat on the EWC be allocated per portion of employees employed in a Member State
amounting for 10 %, or a fraction thereof, of the employees employed in all the Member States taken together.
134
Given the thresholds set out in the definition of ‘Community-scale undertakings’ in the recast Directive, the
requirements under the Directive do not apply to SMEs. For explanations why there are also no foreseeable indirect
impacts on SMEs see Annex 12 Section 1.
135
For the preferred option, estimates of total costs are developed in Annexes 3 and 4.
34
negotiating new EWC agreements in accordance with the Directive. There is no way reliably to
estimate the likely incidence of such requests, as it depends on internal dynamics within each
individual undertaking and EWCs remain voluntary instrument (i.e. a request is needed either by
workers or initiated by the management). The average overall costs per negotiation were estimated
at ca. EUR 148 000.136
They may be considered negligible as they correspond to only 0.0006% of
the average global turnover of Union-scale undertakings with an EWC or voluntary agreement.137
These one-off adjustment costs could be offset to some extent where, due to the negotiations of the
new agreement, undertakings do not incur baseline costs of renegotiating existing voluntary
agreements.138
For undertakings with voluntary agreements, the upper number of potentially
affected companies is 323, whereas there are 28 companies with Article 14 agreements (see Section
2.4.1.). The latter would become subject to the Directive following the removal of the exemptions
and hence may have to be re-negotiated to comply with the revised requirements unless they
already cover all requirements. The available evidence suggests that most Article 14 agreements
(ca. 16 out of 28) are already aligned with the current Directive, but a revision of that Directive is
likely to require a renegotiation for adapting the agreement to the new EU requirements. Evidence
suggests that re-negotiations on average take less time than the process for setting up a new EWC,
but may require multiple meetings in complex cases. Based on the available evidence, it was
possible to monetise certain costs linked to meetings (ca. EUR 18 400 per meeting139
) between
management and EWC representatives for the renegotiation of existing agreements. This partial
monetisation can provide an indication of the order of magnitude of the overall costs related to
renegotiations, bearing in mind that it should not be taken as an approximation of those overall
costs. In any case, the costs of renegotiation even if several meetings are needed should not have
any significant economic consequences for businesses. Furthermore, the data gathered indicates
that agreements are regularly re-negotiated (on average every 5 years). Therefore, the re-negotiation
linked to option 1a could take place within the framework of this regular negotiation, entailing no
or limited costs compared to the baseline scenario. There are no indications that option 1a would
result in higher running costs of EWCs and therefore no recurrent adjustment costs have been
identified in relation to this option (cf. Annex 12 Section 2).
Benefits for undertakings: Option 1a would ensure the equal application of rights and obligations
under the Directive to all Union scale undertakings and thus establish a simpler and more coherent
legal framework.
Impacts on competitiveness: No such impacts have been identified in relation to option 1a. There is
no evidence that the setting-up or operation of an EWC under the Directive would have negative
impacts on the competitiveness of companies which are currently exempted. The costs for setting
up and operating EWCs are negligible in relation to the turnover of companies with EWCs or with
voluntary agreement (see above ‘Costs for Union-scale undertakings’ and Annex 12). Likewise,
while studies have shown that the involvement of employees is linked to better performance of
undertakings140
, potential positive impacts of policy option 1a on the competitiveness of companies
cannot be estimated with any degree of certainty.
136
ICF(2016), estimates adjusted to today’s prices. See Annex 4 ‘Analytical methods’ (Section 4.3.).
137
The estimated annual global turnover for undertakings with EWCs or voluntary agreement is € 24 billion (average).
ICF(2023), Section 5.1.2.1.
138
See Section 6.3.1. below and Annexes 4 and 12 for explanations and quantification of renegotiation costs.
139
See Annex 4 ‘Analytical methods’ (Section 4.4.).
140
Eurofound (2019) European Company Survey 2019, Workplace practices unlocking employee potential.
35
Impacts on internal market: Although the deletion of the exemptions under option 1a would lead to
a less fragmented legal framework at EU level, the associated economic benefits in terms of market
efficiency are likely negligible. First, the establishment of an EWC remains a discretionary choice
of the social partners in Union-scale undertakings and the take up of EWCs under the revised rules
cannot be reliably estimated. Second, the available evidence does not suggest important differences
in overall functioning and operational costs of the voluntary agreements and EWCs agreements.
6.1.2. Social impacts
Benefits for employees: While there is no conclusive evidence that the operation of voluntary
agreements is less effective than of EWC agreements, option 1a would ensure the equal application
of minimum rights and obligations to all Union scale undertakings and to their EU employees.
Replacing voluntary agreements, where so requested by employees or initiated by the management,
with EWC agreements can also facilitate redress because the rights of EWCs are enforceable under
EU law, in line with the fundamental right to an effective remedy (Article 47 CFR). Potentially ca.
5.4 million employees could benefit from this alignment of the minimum rights if all 323
undertakings with voluntary agreements would instead establish EWCs operating under the
Directive. It is however also possible that the parties will opt to preserve well-functioning voluntary
agreements.
6.2. Impacts of policy options under Policy Area 2
6.2.1. Economic impacts
Costs for undertakings: All policy options – with regard to the clarification of coverage of
reasonable legal costs - could entail some adjustment costs when setting up an EWC (one-off
costs) or renegotiating an EWC agreement with an SNB (recurrent costs, renegotiations are
estimated to occur on average every five years,141
but do not necessarily involve an SNB). A small
increase in costs linked to the coverage SNBs’ expenses for legal advice can be expected due to
more requests for legal advice from employees’ representatives. This is more likely for options 2b
and 2c owing to their binding character. The data does not allow for a precise estimation of these
incremental costs. They would represent only a negligible share of the one-off cost of setting up an
EWC (estimated at EUR 148 000 per negotiation procedure, representing ca. 0.0006 % of the
average global annual turnover of Union-scale undertakings), or cost of renegotiation of an existing
EWC agreement.142
No additional costs are expected from actions to ensure gender-balance (option
2c) as this objective would need to be taken into account when renegotiating an existing EWC
agreement or creating a new EWC. Thus, no additional/ad-hoc renegotiation is needed. See Section
3 of Annex 12 for details.
Benefits for undertakings: The policy options could lead to certain benefits for undertakings
setting up an EWC. The interpretative guidance (option 2a) could speed up the negotiation process
only to some extent and thereby slightly reduce costs of negotiations, as the number of meetings or
disputes could be marginally reduced. The positive impacts are likely to be limited as it would
depend on the extent to which the guidance would be taken into account by the stakeholders. The
141
See Section 4.5 of Annex 4.
142
In the context of renegotiations, the obligation to cover SNBs’ reasonable legal costs would be relevant if an SNB is
involved in the renegotiation. The described impacts are not expected to apply to undertakings and SNBs applying the
NL legislation, which already contains a requirement for the undertaking to cover reasonable legal costs of employees’
representatives (see Annex 8).
36
improved legal clarity (options 2b and 2c) would improve accessing the required legal expertise
and avoiding discussions about the scope of the SNB’s costs that are to be covered by the
management, leading to a more efficient process. Cost savings linked to a reduction of the
frequency of issues associated with unclear resourcing of SNBs (for example, reduced risk of
disputes, and hence reduced opportunity costs for companies), would compensate some of the
above-mentioned additional costs. Given the negligible share of overall negotiation/renegotiation
costs in comparison to turnover, the potential direct benefits are however negligible. In light of
research showing the beneficial effects of gender balance143
, option 2c could have a positive effect
on the quality of EWCs’ non-binding opinions, and thus indirectly on management decisions on
transnational matters.
Impacts on competitiveness: No negative impacts on competitiveness have been identified in
relation to any of the options in Policy Area 2. The costs for setting up EWCs are overall negligible
in relation to the turnover of companies with EWCs and the clarification of the obligation to cover
reasonable legal costs in the process of negotiation or renegotiation would contribute to improved
legal clarity regarding the setting up procedure (see above ‘Costs for Union-scale undertakings’ and
Annex 12). Given the evidence from studies showing a positive relationship between female
representation and business performance144
, and the potential contribution of more gender-balanced
EWCs to the quality of management decisions, it is plausible that option 2c might contribute to
some extent to fostering companies’ competitiveness.
Impacts on internal market: There is no firm evidence of significant direct impacts of the policy
options in area 2. Nevertheless, as regards the objective of gender-balanced composition of EWCs
under option 2c, it can be expected, considering the abovementioned research demonstrating
economic benefits of gender balance in relation to various aspects of the economy145
, that increased
gender balance on EWCs will contribute, in conjunction with the general benefits of a more
effective information and consultation process described above, to delivering benefits such as a
higher level of employment and productivity. These benefits however cannot be quantified.
6.2.2. Social impacts
Benefits for employees and undertakings (quality of social dialogue): The interpretative guidance
(option 2a) is likely to entail only limited positive impacts on the process of setting up EWCs and
renegotiations involving the establishment of an SNB. Through guidance on access to legal advice,
this option could indirectly improve the quality of future or renegotiated EWC agreements. It could
also contribute to a better gender balance within these EWCs by clarifying how the parties may take
this need into account. A better informed, smoother negotiating process could also benefit
management and the undertaking, e.g., by decreasing legal uncertainty and facilitating clearer and
more targeted EWC agreements. However, these positive effects are likely to be limited due to the
non-binding nature of the measure and would depend on the extent to which the guidance would be
followed by the stakeholders. By providing important binding clarifications of employees’ rights
during the (re)negotiation process, options 2b and 2c entail stronger social benefits. It is however
not possible to quantify them. In addition, option 2c would also ensure, through specific objectives,
a better gender balance in current and future EWCs. Around 60 % of existing EWCs could benefit
from this measure. This could improve the quality of social dialogue, with possible indirect positive
143
See e.g. the findings of the European Institute for Gender Equality (EIGE) in a large scale 2017 study on ‘Economic
Benefits of Gender Equality in the European Union’.
144
Ibid.
145
Ibid.
37
impacts on working conditions and employment. Therefore, option 2c is likely to entail significant
positive impacts for employees.
Impacts on fundamental rights: Policy options under Policy Area 2 would improve employees’
rights to information and consultation within the undertaking (Article 27 CFR) and would also
indirectly bring benefits regarding the right to an effective remedy (Article 47 CFR) and equality
between women and men (Article 23 CFR). While benefits under option 2a would be limited due
to its non-binding nature, option 2b, by ensuring that reasonable legal costs are covered by the
management, would contribute positively to the quality of the dialogue between employees and
management and of the resulting agreements, as well as to the capacity of employees and their
representatives to access legal advice and justice. Option 2c, would in addition to the coverage of
reasonable legal costs also entail positive impacts in achieving a more equitable environment in
EWCs by setting specific objective for gender balance in EWCs and thus contribute to better
equality between men and women.
6.3. Impacts of policy options under Policy Area 3
6.3.1. Economic impacts
Costs for undertakings: Option 3a could create some one-off adjustment costs where parties choose
to renegotiate their EWC agreement specifically to align it with the non-binding guidance, which is
however not expected to occur often. Partial monetisation of the renegotiation costs (see Section
6.1.1. above) suggest the costs of renegotiation, even if several meetings are needed in most
complex cases, should not have any significant economic consequences for businesses.
Furthermore, the data gathered indicates that agreements are regularly re-negotiated (on average
every 5 years). Where such renegotiations lead to expanding EWCs’ right to the coverage of
expenses, such as legal costs and expert fees, they could entail an incremental increase in
undertakings’ costs of running an EWC. However, given that the average overall costs linked to the
operation of an EWC are estimated at ca. EUR 300 000146
(representing ca. 0.0012 % of the
average global annual turnover of Union-scale undertakings) such incremental recurrent adjustment
costs would likewise account only for a negligible share of undertakings’ turnover. The requirement
under option 3b to address the questions of access to expertise, coverage of training costs
(including expenses) and legal costs in EWC agreements would require renegotiation of EWC
agreements that do not yet cover those issues. While it is not possible, for lack of comprehensive
information about the content of all EWC agreements, to estimate the incidence of such
renegotiations with certainty, most agreements include at least some clauses on coverage of
expenses (e.g., coverage of expertise, training) (see Section 2.4.3.).147
In any case, one-off
renegotiation costs would account only for a negligible share of undertakings’ turnover. Moreover,
in a substantial number of cases, the necessary adaptations of EWC agreements could be agreed as
part of regular renegotiations, entailing no or only very limited additional costs compared to the
baseline.148
Option 3b could entail also limited recurrent adjustment costs for undertakings.
Specifically, for each of the undertakings with EWCs based on subsidiary requirements (20), the
increase in the number of annual plenary meetings is expected to lead to an additional cost of ca.
146
ICF(2016), estimates adjusted to today’s prices. See Annex 4 ‘Analytical methods’ (Section 4.4.).
147
ICF(2023), Section 5.1.2.6. In the targeted survey, ca. 35% of respondents among employee representatives and
managers (81 out of 233) stated that their EWC agreement did not contain any provisions on financial and human
resources.
148
As mentioned above, EWC agreements are revised on average every 5 years.
38
EUR 42 000 per year.149
Moreover, the requirement to address the issues of access to experts, legal
costs and costs of training (including related expenses) in EWC agreements could lead to
adjustment costs for undertakings in respect of those EWCs where these aspects were not yet
clearly regulated. However, the scale depends on the results of autonomous negotiations between
parties so cannot be estimated. All of the possible costs described above could at least partially be
offset by the benefits for undertakings described further below.
According to management representatives, the requirement of a reasoned response to EWCs’
opinions prior to the adoption of a decision on transnational matters (options 3b and 3c) could also
lead to indirect recurrent costs due to delayed decision-making.150
However, these concerns are not
expected to materialise on a significant scale in practice, as EWCs would remain information and
consultation bodies without substantive powers over management decisions, and no such impacts
have been substantiated with respect to other types of worker representation bodies that are already
entitled to a reasoned response.151
Furthermore, during the two-stage consultation, employer
organisations responded that an obligation to provide a reasoned response to an EWC opinion
already exists in many agreements (see Section 2.4.3.).
The amendments under option 3c regarding the concept of transnational matters, access to external
experts and confidentiality restrictions could incrementally increase one-off renegotiation costs
compared to the baseline, as the parties to the agreement may need more time to agree on how to
implement these requirements in practice. Moreover, several measures under option 3c are expected
to entail recurrent adjustment costs: a broader concept of transnational matters, combined with
management’s obligation to justify why a matter is not transnational in order to be discharged of the
obligation to inform and consult the EWC, is likely to lead to more information and consultation
procedures and require increased capacity and resources allocated to EWCs; increased recourse by
EWCs to external expertise and related fees; costs linked to the requirement to obtain a prior
authorisation in order to withhold information the disclosure of which would seriously harm the
undertaking. In proportion to the global turnover of the undertakings concerned, these costs are
nevertheless expected to be moderate as they would only incrementally increase the current costs of
operating an EWC, described above. However, the indirect costs linked to a substantially broadened
concept of transnational matters are likely to be more significant, due to frictions, overlaps and
unclear delineation between information and consultation procedures at different levels.152
Likewise, requiring a mandatory prior judicial authorisation in order to avoid the disclosure of
potentially harmful information could lead to delays in decision-making and economic harm,
depending on the length of the relevant authorisation procedures.
Benefits for undertakings: Option 3a would promote legal clarity regarding the relevant issues to a
limited extent and thus potentially deliver small cost savings due to a marginally smaller number of
disputes. The general benefits for undertakings linked to having an EWC153
would likewise be
increased due to option 3a, by means of smoother information and consultation procedures, but
149
See Annex 4 ‘Analytical methods’ (Section 4.4.). This policy option may affect also EWCs based on agreements, for
which the subsidiary requirements can serve as a benchmark during the negotiations. Currently, ca. 50% of EWC
agreements provide for one annual plenary meeting. However, such an effect would be a free choice of the parties.
150
ICF(2023), Section 5.1.2.3.
151
The requirement of reasoned response by the central management already exists for EWCs operating based on
subsidiary requirements (Annex I point 1(a) of the Directive) and bodies of employee representatives at national level.
152
ICF(2023), Section 5.1.2.3.
153
For example, reinforcement of mutual trust on both sides of the industrial relationship, better informed strategic
decision-making, and better targeted measures accompanying structural change. Cf. Pulignano V. et al. (2016) op.cit.,
p. 56-57.
39
only to a negligible extent. As Option 3b would clarify the binding legal requirements with respect
to several potentially contentious issues regarding those procedures, it is expected to increase legal
certainty significantly and ensure more efficient information and consultation, delivering time and
potential cost savings for undertakings. Particularly the requirement of a reasoned response prior to
the adoption of a decision on transnational matters is expected to promote the trustful relationship
between the parties, and thus enable them to exploit better the potential of EWCs to facilitate
smooth structural changes in the context of the challenges linked to the digital and green transition.
As regards the common elements under options 3b and 3c the described benefits would also apply
under option 3c, but due to the risk of frictions and overlaps between information and consultation
requirements at different levels of representation (due to broadening of the concept of transnational
matters), as well as the potential delays and indirect costs described above (e.g. prior authorisation
requirement), option 3c is not expected to overall increase the benefits of EWCs for undertakings
compared to the baseline, and potentially to create negative consequence compared with
undertakings without EWCs.
Impacts on competitiveness: Considering that the costs for the renegotiation and operation of
EWCs are negligible in relation to the turnover of undertakings with EWCs it is not expected that
the options in this policy area would substantially affect undertakings’ competitiveness (see above
‘Costs for Union-scale undertakings’ and Annex 12). In particular, option 3b does not contain far-
reaching enforcement measures of the kind that were mainly opposed by business organisations and
management in the social partner consultation and other evidence-gathering activities. Conversely,
while option 3b is expected to have significant positive impacts on social dialogue, potential
positive effects on the competitiveness of companies cannot be estimated with any degree of
certainty. As the ability to take decisions quickly and flexibly are key competitiveness factors for
companies, the identified indirect costs under option 3c could have a moderate negative impact in
this regard, due to possible inefficiencies and delays in the decision-making process (linked to the
requirement of a mandatory prior authorisation when withholding potentially harmful information)
as well as frictions with information and consultation procedures at national level (due to the
broadened concept of transnational matters). Moreover, exempting information-sharing between
EWCs and employee representatives at national or local level from confidentiality restrictions
would lower the protection of undertakings.
Costs for Member States: Under option 3c, Member States would be required to ensure the
availability of procedures for the prior authorisation of the non-disclosure of transnational
information that could harm the respective undertaking. Although Member States are expected to
recoup procedural costs from undertakings through fees, they are likely to incur some additional
adjudication costs due to the urgent and novel nature of such procedures, which none of the
Member States has thus far established in national law.
6.3.2. Social impacts
Benefits for employees and companies (quality of social dialogue): Option 3a is expected to bring
limited positive impacts. While it would contribute to better application of information and
consultation rights of EWCs, the non-binding status of this option would make its effects uneven.
Option 3b would create significant positive impacts on the information and consultation process of
EWCs. By introducing binding clarifications regarding the concept of transnational matters in the
enacting terms of the Directive, it would clarify the scope of EWCs’ information and consultation
rights, potentially reducing disputes. Since about 40% of stakeholders (43,3 % of employees and
28,3 % of managers) report problems interpreting this concept, this would have a positive impact
for a high number of employees and their representatives. Under option 3b, the requirement for
management to provide a reasoned response to EWC opinions prior to the adoption of a decision on
40
transnational matters, and the limitation of confidentiality to justified cases154
, would also positively
impact the quality of the dialogue at company level. It would namely allow for a timely information
exercise and a possibility for the employee representatives on EWCs to share their views and
contribute to the decisions of management. For undertakings with EWCs operating on the basis of
subsidiary requirements (20), the requirement of at least two plenary meetings per year would lead
to a more regular information and consultation on transnational matters, which would positively
impact the quality of the social dialogue. There would also be an unquantifiable spill-over effect on
undertakings with EWCs operating on the basis of agreements (of which ca. 50 % currently require
only one annual plenary meeting). The requirement under option 3b for the parties to agree on
appropriate resourcing, including on coverage of legal costs, of the EWCs could also lead to higher
quality information and consultation processes and decision-making, with potential benefits leading
to a more involved workforce, improved working conditions across the Union-scale undertaking
and alternative solutions or mitigating measures to prevent job losses and promote better adaption
to change. Option 3c would bring moderate benefits. Some measures under this policy option
would clearly be beneficial for employees. For example, broadening the scope of transnational
matters would allow for a higher number of issues to be discussed as part of the information and
consultation at EU level. However, as the elements of transnationality considered under this option
are defined in very broad terms, they could also lead to additional legal uncertainty compared to the
baseline155
. Although these impacts cannot be quantified, it can be assumed that this extension of
the definition of transnational matters would be overall negative, leading to conflict with national
and local levels of information and consultation. The obligation for management to justify that a
matter is not transnational could lead to EWCs’ members receiving more information. However,
this is rather an indirect impact. On balance, the social impact of broadening the concept of
transnational matters under option 3c is likely to be limited. A general right to assistance from
experts under option 3c could optimise the information and consultation process, with efficiency
gains. This is corroborated by the 2018 ETUI survey, which indicates that, in case of restructuring,
the support of a trade union coordinator or expert contributed to better decision making. In relation
to information and consultation process, option 3c would exempt from the confidentiality
obligation EWC members when sharing information protected by confidentiality with national or
local representatives. This could facilitate the coordination between employees’ representatives at
different levels with potential benefits for the effective presentation of employees’ interests in the
consultation procedure. However, the facilitation of cross-border exchange of confidential
information could also lead to difficulties in practice (including legal risks for the employee
representatives) due to the differences of national legal regimes on protection of confidential
information.
Impacts on fundamental rights: Policy options under Area 3 would promote employees’ right to
information and consultation within the undertaking (Article 27 CFR) and indirectly also the right
to an effective remedy (Article 47 CFR). While benefits under option 3a would be limited due to
its non-binding nature, option 3b, by significantly improving conditions for a genuine dialogue on
154
This measure would entail changes to the legal situation for EWCs and management subject to the national laws of
Member States which have taken over the wording of Article 8 of the Directive into their national laws without
requiring further justification of the imposition of confidentiality (CY, ES, IE, LU, LV, MT, NL, PL, RO, SI, SK). (See
Annex 8).
155
The evidence gathering by ICF(2023), Section 5.1.2.3., shows that while a great majority of employees’
representatives are in favour of including such elements as “matters that affect directly or indirectly more than one
Member State”, “decisions taken by the headquarters affecting employees in another Member State than the one where
the headquarters is located”, employers’ views have mostly neutral to negative views on the first and mostly negative
on the latter.
41
transnational matters, as described in detail in the section on ‘social impacts’ above, is expected to
have a significant positive impact on the effectiveness of the fundamental right set out in Article 27
CFR. The requirement under that option for the parties to agree how to cover EWCs’ legal costs
(and in the case of EWCs operating on the basis of subsidiary requirements for management to
cover such expenses as far as they are reasonable) would also positively contribute to the capacity
of employee representatives to access legal advice and justice. Such benefits would be moderate
under option 3c. While that option would significantly strengthen EWCs’ right to involve external
experts (including legal experts) and improve EWCs’ access to relevant information by limiting the
possibility of management to impose confidentiality or withhold information, the broader concept
of transnational matters risks creating new issues of delineation between information and
consultation requirements at different levels of representation, possibly legal uncertainty and
disputes, and frictions with procedures at national/local level.
6.4. Impacts of policy options under Policy Area 4
6.4.1. Economic impacts
Costs for undertakings: Option 4a is expected to entail only very limited additional enforcement
costs for undertakings. While no certain assumptions can be made about the implementation rate,
there is a plausible risk that those Member States which have thus far not ensured effective
sanctions and remedies will be least inclined to follow the Commission recommendations. In such a
case, there would be limited impact on undertakings’ enforcement costs compared to the baseline.
Option 4b could create significant enforcement costs for sanctioned undertakings, as the
requirement to ensure dissuasive and effective sanctions, and in particular to take into account their
annual turnover when determining pecuniary sanctions , could lead to a substantial increase in the
amounts of fines imposed in all Member States, considering that penalties are generally negligible
under the baseline scenario.156
However, it is important to note that the national authorities and
courts must, when determining the level of sanction, observe the principle of proportionality in
relation to the gravity, scope, impacts, duration and other relevant factors characterising the
offence. Moreover, these costs would materialise only in a small number of cases: although some
policy measures such as the clarified coverage of legal costs (options 2b and 3b) and the improved
access to justice under option 4b might facilitate legal actions, the incidence of legal disputes and
sanctions in this policy area is expected to remain low, as the prospect of the possible imposition of
dissuasive and effective sanctions by Member States’ authorities is expected to have rather a
deterrent effect which could reduce the number of offences giving rise to legal actions. Moreover,
while option 4b cannot entirely overcome the existing fragmentation of national provisions on
sanctions, given that the relevant Treaty legal basis only allows for the establishment of minimum
requirements, it is expected to decrease fragmentation and improve legal certainty compared to the
baseline scenario, as Member States would be provided with significantly more specific guardrails
than under the current Directive. Under option 4c, sanctioned undertakings would face very
significant costs in the form of pecuniary sanctions, which based on average turnover of
undertakings with an EWC, could be up to 4000 times higher than the highest administrative
sanctions currently available in any Member State.157
Moreover, the possibility of suspending
management decisions in the case of a claimed violation of information and consultation
156
Current administrative sanctions, although varying greatly between Member States, would not exceed € 190.000,
representing 0.0008% of the average undertaking with an EWC’s worldwide average turnover. Most Member States
have however much lower caps on administrative penalties, e.g., € 15.000 in Germany. See Annex 8.
157
In Spain, an upper limit of € 187.500 applies.
42
requirements could lead to substantial economic losses in the form of foregone business
opportunities.
Impacts on competitiveness: Option 4a is unlikely to lead to significant changes in Member States’
enforcement practice, and any possible impacts on undertakings’ competitiveness (cost and price
competitiveness or undertakings’ capacity to innovate) would therefore be null or negligible. Such
impacts, if any, are also expected to be negligible or very limited under option 4b, considering the
low incidence of legal action in this policy area and the principle of proportionality that has to be
observed when determining the level of sanctions. For sanctioned undertakings, the drastic
sanctions and remedies envisaged under option 4c are likely to have a moderate to significant
impact on competitiveness. While the fines approaching the ceiling of 4% of global turnover are
unlikely to be imposed in any but in the most extreme cases, the suspension of management
decisions could affect undertakings’ ability to seize business opportunities quickly. In the targeted
survey158
, a strong majority of management representatives considered that the sanctions envisaged
under option 4c would have a negative or very negative impact on the international competitiveness
of EU-based companies. Considering that effective and agile decision-making is a key factor for
undertakings’ competitiveness, it is expected that option 4c would have tangible negative effects on
competitiveness.
Impacts on consumer prices: Despite the described implications of option 4c for the
competitiveness of sanctioned undertakings, noticeable consumer price effects are considered
unlikely even under this most far-reaching option. Firstly, sanctions and remedies will apply only in
a small number of individual cases and are thus unlikely to feed into the pricing considerations of
Union-scale undertakings. Secondly, it is expected that competitive pressures on sanctioned
undertakings will disincentivise them from passing enforcement costs on to consumers.
Costs for Member States: The one-time notification obligation under options 4b and 4c would
entail limited administrative costs for Member States which would need to collect and send to
the Commission information on how EWCs, SNBs and employees’ representatives can bring
judicial proceedings in respect of all their rights under the Directive. This obligation could be
discharged as a part of the standard process of notifying transposition measures via the available IT
systems, thus creating only negligible added costs.
By promoting a more effective access to courts, the recommendations under option 4a could entail
limited adjudication costs for Member States choosing to facilitate actions, considering in
particular that EWCs are exempted from court fees in eight Member States.159
The evidence
remains inconclusive to what extent option 3b would lead to an increase in the number of legal
actions brought by rightsholders under the Directive, and thus adjudication costs. Social partners in
undertakings usually consider such actions as a last resort and the risk of higher sanctions could
also contribute to a better compliance rate. Moreover, the expected higher pecuniary sanctions
imposed under this option could offset additional adjudication costs, as such penalties are assumed
to accrue to Member States’ budgets. This effect would be more pronounced under option 4c,
which involves the imposition of very significant fines. The drastic sanctions under this option,
including also the suspension of management decisions, are also expected to have a strong
dissuasive effect and therefore to lead to an overall decrease of infringements, and consequently,
legal actions.
158
ICF(2023), Section 5.1.2.7.
159
AT, LT, ES, BG, FR, DE, RO, SE, NL. Cf. ETUC report by Jagodziński / Stoop (2023) Access to Justice for
European Works Councils, p. 31.
43
6.4.2. Social impacts
Benefits for employees and undertakings: As a general rule, strengthened enforcement promotes
compliance with information and consultation requirements and thus has a positive impact on
application of employees’ rights and social dialogue on transnational matters. Under option 4a, this
benefit is expected to materialise to a limited extent, owing to the non-binding nature and possibly
limited take-up of the Commission recommendations. Option 4b is expected to significantly
improve the implementation of the Directive, and thus social dialogue on transnational matters, as it
would ensure improved access to justice for an estimated 4.3 million employees160
and facilitate
compliance oversight by the Commission. The requirement to determine pecuniary sanctions taking
account of undertakings’ annual turnover is also expected to provide an effective incentive to
respect employees’ information and consultation rights. While option 4b does not lead to a full
harmonisation of national enforcement provisions as it leaves autonomy to Member States to
determine the types of sanctions for specific infringements and the methodology for determining
their level, the explicit requirement that account must be also taken of the sanctioned undertakings’
turnover, in addition to other aggravating or mitigating factors (eg. duration, seriousness, impacts of
offence), would significantly improve the implementation compared to the baseline. Option 4c
would create very far-reaching sanctions and remedies, thus ensuring strong deterrence of
violations of rights under the Directive. On the other hand, although they remain highly uncertain,
potential negative impacts on employment under option 4c, which could significantly affect the
financial situation of the sanctioned undertakings, cannot be ruled out given the competitiveness
implications described above.
Impacts on fundamental rights: For the reasons set out under ‘social impacts’, option 4a is expected
to promote the fundamental rights to an effective remedy and to information and consultation to a
limited extent. As mentioned, option 4b would deliver better access to justice for a large number of
employees and further the quality of social dialogue by ensuring more dissuasive penalties. These
effects could amount to moderate to significant benefits in terms of upholding said fundamental
rights. The same is true for option 4c.
7. HOW DO THE OPTIONS COMPARE?
Having regard to the assessment of impacts of the policy options described in Section 6 and Annex
12, the options are compared per Policy Area based on the criteria of effectiveness, efficiency,
coherence and proportionality. A table at the end of this section provides an overview of the
comparative scoring of the options against the baseline, in accordance with the considerations in
Sections 7.1. to 7.4.
7.1.Effectiveness
Indicators of effectiveness for comparing options under Policy Areas 1, 2, 3 and 4
Policy
area
1
- increased number of employees in Union-scale undertakings who can rely on information and consultation
rights under Directive 2009/38;
- improved clarity and simplicity of the legal framework;
- a more consistent and simplified legal framework for Union-scale undertakings
160
Evidence gathering suggest that between 13-14 % of employees and their representatives do not have access to
enforce their rights under the EWC Directive in the Member States (see Annex 12 Section 5).
44
Policy
area
2
- legal clarity and certainty of the process for setting up EWCs;
- reduce delays and eliminate obstacles in the setting-up of EWCs;
- ensure that special negotiating bodies have necessary means and resources;
- a gender-balanced composition of EWCs and select committees
Policy
area
3
- improved timeliness and quality of information and consultation on transnational matters;
- consistency with management’s ability to take decisions effectively
- reduce disputes (e.g. concerning transnationality, confidentiality, timing and nature of consultation);
- ensure EWCs have necessary means and resources;
Policy
area
4
- access of rightsholders to adequate redress and removal of procedural obstacles to legal action;
- sufficient deterrence of breaches of the rights under the Directive in all Member States;
- consistency with management’s ability to take decisions effectively.
Policy area 1: Option 1a can effectively expand minimum transnational information and
consultation rights to employees of all Union-scale undertakings, overcome the complexity created
by the co-existence of multiple legal regimes and achieve a simplified and more coherent legal
framework for those undertakings. Option 1a could further improve the quality of transnational
social dialogue as it would provide social partners in currently exempted undertakings with an
opportunity to establish an EWC, subject to the complete set of rights of the Directive.
Policy area 2: While interpretative guidance (option 2a) is expected to facilitate the process of
setting up EWCs, its take up is likely to be uneven so it is unlikely to deliver legal clarity and
certainty to a large extent. The clarifications of the binding requirements under options 2b and 2c,
in conjunction with the accompanying measures, significantly reduce the risk of disputes and delays
following a request to set up an EWC and ensure that SNBs have the means to secure necessary
legal support during the negotiations. Option 2c scores highest because it also contributes to
achieving a gender-balanced composition of EWCs.
Policy area 3: All options would contribute to increasing legal clarity regarding the operation of
EWCs and to promoting a genuine exchange of views. Options 3b and 3c are likely to be effective
in this regard, while the take-up rate of non-binding interpretative guidance (option 3a) is
uncertain. Specifically, the requirement for a reasoned response to EWCs’ opinion prior to the
adoption of a decision on transnational matters, common to options 3b and 3c, is an effective tool
to improve the timeliness and quality of social dialogue on transnational matters. Option 3b is also
expected to pre-empt disputes and divergent interpretations by clarifying the concept of
transnational matters and management’s right to impose confidentiality or withhold information.
Option 3c would be moderately effective in that regard, as it would increase overlaps between
transnational matters and matters reserved to information and consultation at national/local level
and create frictions and disputes. The far-reaching measures concerning confidentiality envisaged
by option 3c could unbalance the relationship between management and EWCs.
As regards the coverage of EWCs’ expenses, all options could contribute to increased clarity, but
only options 3b and 3c, including their accompanying measures, would ensure enforceable rights.
However, insofar as option 3c confers a broad right on EWCs to involve any experts at the cost of
undertakings, it overshoots what is appropriate in the context of this instrument, under which
modalities of EWCs’ operation, including resources, are to be determined by the parties in their
agreement. In this respect, option 3c is therefore less targeted and effective.
Policy area 4: Option 4a scores lowest in terms of effectiveness, primarily because the Member
States which have thus far not ensured sufficient enforcement of transnational information and
consultation rights are least likely to implement non-binding recommendations in this area. Option
4b would incrementally strengthen existing general rights to adequate redress, increase the
deterrent effect of pecuniary sanctions and facilitate monitoring by the Commission. Its
effectiveness would be reinforced also by the accompanying measure. Option 4c would introduce
45
the most powerful sanctions and remedies, including the possibility to suspend the effect of
management decisions. On the other hand, option 4c might impinge on undertakings’ decision-
making prerogative, safeguarded under the Directive. This raises doubts as to its effectiveness.
7.2.Efficiency
Indicators of efficiency for comparing options under Policy Areas 1, 2, 3 and 4
Policy
area
1
- Compliance costs for undertakings (incl. renegotiation costs, possible opportunity costs, expertise costs)
- Social costs: effects on quality of social dialogue
- Compliance and enforcement costs to the public sector
Policy
area
2
- Compliance costs for undertakings
- Legal costs of disputes between SNB / employees’ representatives and management
- Enforcement costs to the public sector (of judicial or other dispute resolution proceedings)
Policy
area
3
- Cost of renegotiating EWC agreements with new requirements
- Cost of provision by management of expertise and resources for EWCs
- Other compliance costs for undertakings (e.g. costs of providing a written response to EWC opinion,
justification of absence of transnational issues, criteria for imposition of confidentiality restrictions)
- Legal costs of disputes between EWC and management
- Opportunity costs / foregone revenue linked to impediments to decision-making of companies (e.g., due to
delays caused by I+C procedure)
- Overlaps with information and consultation at national level
- Enforcement costs to the public sector (of judicial or other dispute resolution proceedings, prior authorisation
of non-disclosure of information)
Policy
area
4
- Compliance, administrative and enforcement costs to the public sector (of judicial or other dispute resolution
proceedings, notification of how to access redress)
- Enforcement costs linked to pecuniary sanctions for undertakings
- Revenue to public sector (fines)
- Potential to halt or delay decision-making of undertakings
- Opportunity costs (lost revenue)
Policy Area 1: The deletion of the exemptions under option 1a is an efficient way to achieve the
social benefits linked to the application of the Directive to all Union-scale undertakings and to their
EU employees. The possible one-off adjustment costs and marginal opportunity costs due to the
establishment of new EWCs in some of the 323 undertakings with voluntary agreements161
and the
renegotiation of some of the 28 Article 14 agreements represent a negligible share of undertakings’
turnover.162
While the economic and internal market benefits of creating a simplified and more
coherent legal framework are expected to be negligible, the identified negligible economic costs are
expected to be outweighed by the social benefits of giving all employees the same right to request
the establishment of an EWC. The efficiency of option 1a is amplified, for instance, by the fact that
the inclusion of currently exempted undertakings in the scope of the Directive ensures justiciability
under EU law, in line with the fundamental right to an effective remedy.
Policy Area 2: Option 2a is moderately more efficient compared to the baseline, as it is expected to
deliver limited positive impacts on the functioning of SNBs while creating only negligible
compliance costs for undertakings. Although under option 2b undertakings are more likely to incur
limited adjustment costs due to SNBs’ possibly more frequent recourse to legal advice and
remedies, this option performs well against the criterion of efficiency because it promotes a
smoother process of negotiating and renegotiating EWC agreements as well as the quality of those
161
As mentioned in Section 6.1., it is not possible to estimate the incidence of requests to establish an EWC in currently
exempted undertakings with voluntary agreements.
162
See Section 6.1.1. for the estimated average costs of negotiating new EWC agreements and estimated average costs
of renegotiation.
46
agreements. The costs are expected to be negligible considering the turnover of the relevant
undertakings. Option 2c is highly efficient as it, in addition, promotes a more gender-balanced
composition of EWCs without imposing additional costs on undertakings. Costs linked to legal
uncertainty or procedural frictions are minimised by the envisaged flexible approach, which
consists in allowing parties to agree on arrangements towards achieving the gender balance
objective without imposing a hard quota. The risk of tensions with the CJEU case law on positive
action or the various national rules and practices governing the selection of employees’
representatives is thus avoided. Improved gender balance is expected to be conducive to a better
quality of EWCs’ opinions, which can in turn positively impact management decisions on
transnational matters and thus contribute indirectly to improved working conditions.
Policy Area 3: As option 3a could deliver limited social benefits, in terms of a smoother
information and consultation process and prevention of disputes due to improved legal clarity,
while creating only negligible adjustment costs for undertakings, it is considered moderately
efficient. Although option 3b would entail certain one-off and recurrent adjustment costs for
undertakings with an EWC, those costs should be outweighed notably by the expected social
benefits. For instance, option 3b is expected to significantly improve legal clarity and the smooth
functioning of the transnational information and consultation process. Consequently, undertakings
stand to benefit from the opportunity to better exploit EWCs’ potential to facilitate sustainable
management choices. Employees, on the other hand, could benefit from a more effective
representation of their interests, potentially resulting in better working conditions. In contrast,
option 3c, while likely to achieve certain social benefits by strengthening the resourcing and
information of EWCs, performs worse than the baseline in terms of efficiency as undertakings
could incur significant indirect costs linked to slower decision-making if a broadened concept of
transnational matters entails frictions, overlaps and unclear delineation between information and
consultation procedures at different levels of representation, as well as potentially higher direct
costs for companied due to an increased need for capacity and resources of EWCs. Similarly, the
need for management to obtain a prior authorisation to withhold potentially harmful information
could entail delays in decision-making and hamper the efficiency of the information and
consultation process overall.
Policy Area 4: Although option 4a would entail only very limited enforcement costs for
undertakings and adjudication costs for Member States, it is expected to strengthen the enforcement
of rights under the Directive only to a limited extent. In contrast, option 4b is considered highly
efficient, as it is expected to improve compliance with information and consultation requirements
significantly, by facilitating monitoring by the Commission, requiring pecuniary sanctions to be set
at a meaningful level, and promoting access to justice for an estimated 4.3 million employees at an
overall moderate cost. Considering the associated social benefit of an improved social dialogue on
transnational matters, the fact that option 4b could entail significant enforcement costs for
sanctioned undertakings does not negate its efficiency, because this measure is mainly expected to
have a deterrent effect, and the incidence of legal actions and pecuniary sanctions is likely to
remain low. The requirement to consider turnover when determining pecuniary sanctions is not
expected to create disproportionate costs even for non-compliant undertakings, because Member
States would be legally required to levy sanctions in proportion to the gravity, scope, impacts,
duration and other relevant factors characterising the respective offence. Consequently, option 4b is
expected to affect competitiveness only to a negligible extent, if at all. In contrast, under option 4c,
sanctioned undertakings would face the risk of – possibly costly – delays in decision-making and
pecuniary sanctions representing a significant share of their global turnover, since the upper limit of
2% or 4% risks acting as an indicator of the very substantial level of pecuniary sanction expected.
Although such drastic sanctions are likely to be rare in practice and to nevertheless deliver a strong
dissuasive effect and associated social benefits in terms of compliance with information and
47
consultation requirements, their ability to affect the international competitiveness of sanctioned
undertakings prevents a positive efficiency score compared to the baseline.
7.3.Coherence
Indicators of coherence for comparison of options under Policy Areas 1, 2, 3 and 4
Policy
area
1
- EWC Directive objective and principles163
- Art 27 CFR (workers’ right to information and consultation within the undertaking)
- Principles of the European Pillar of Social Rights (Principle 8 - protection of social dialogue, recognition of
social partners)
Policy
area
2
- EWC Directive objective and principles
- Principle of effectiveness of EU law
- Articles 23 (equality between women and men) and 27 CFR
- Principles of the European Pillar of Social Rights, Principle 8
- EU Gender Equality Strategy
Policy
area
3
- EWC Directive objective and principles, including the legal basis
- Objectives & principle of effectiveness of EU law
- Articles 16 (freedom to conduct a business) and 27 CFR
- European Pillar of Social Rights, Principle 8
- EU acquis on informing and consulting workers at national / local level164
- Enforcement costs to the public sector
- National rules on confidentiality
Policy
area
4
- EWC Directive objective and principles
- Principle of effectiveness of EU law and effective sanctions and remedies
- Articles 27 and 47 (right to an effective remedy and to a fair trial) CFR
- European Pillar of Social Rights, principle 8
- EU acquis on information and consultation workers at national / local level
- National enforcement systems
Policy Area 1: Option 1a is coherent with the general principles of legal clarity and equal
treatment, and employees’ right to information and consultation expressed in Article 27 CFR and
Principle 8 of the Pillar. By removing the exemptions from the scope, employees of all Union-scale
undertakings would be entitled to request the establishment of an EWC, in line with the revised
Directive, while having the choice to continue with the voluntary agreement. This approach is
consistent with the legislator’s choice not to make EWCs mandatory in all Union-scale
undertakings.
Policy Area 2: All options in this policy area are coherent with Article 27 CFR and Principle 8 of
the Pillar. Option 2c is most conducive to increasing balanced representation of men and women in
the EWC context, and thus most coherent with Article 23 CFR, Article 6(2)(b) of the Directive and
the Commission’s Gender Equality Strategy165
, which aims to mainstream the gender perspective
into different policy areas. Therefore, option 2c is most coherent overall.
Policy Area 3: All options in this policy area are coherent with Article 27 CFR and Principle 8 of
the Pillar. They aim to address the lack of clarity of the concept of transnational matters and limit
the scope for dispute. Both options 3b and 3c require a reasoned response by management to the
EWC’s opinion, reinforcing an effective dialogue, so giving expression to Article 27 CFR and
163
The internal coherence with the objectives and basic principles of the Directive is assessed, because in line with the
generally positive evaluation of the Directive in 2018, the initiative is intended to address specific shortcomings of the
existing framework in a targeted manner, without changing its fundamental nature.
164
Directives 98/59/EC, 2001/23/EC and 2002/14/EC.
165
COM(2020) 152 final.
48
Principle 8 of the Pillar. On the other hand, option 3c, which substantially expands this concept, is
less coherent with the relevant EU acquis, which requires that employees and their representatives
be guaranteed information and consultation at the relevant level of management and representation,
according to the subject under discussion. To achieve this, the competence and scope of action of
EWCs must be distinct from that of national representative bodies – contrary to them, EWCs are
not bodies for negotiating with the management166
– and must be limited to transnational matters.167
Concerning resources, option 3b is coherent with the principle of party autonomy enshrined in the
Directive, by leaving the necessary flexibility to design solutions corresponding to the specific
needs and situation of each EWC and Union-scale undertaking. In contrast, option 3c sets binding
requirements regarding EWCs’ resources and thus is not coherent with this principle.
The existing provisions of the Directive on confidentiality are generally consistent with the
corresponding provisions in other relevant EU Directives168
. By limiting management’s right to
require confidentiality to cases of legitimate interest, options 3b and 3c would further align the
Directive with the wording of Directive 2002/14/EC. Unlike the other options. option 3c imposes a
new mandatory requirement of prior authorisation where management withholds potentially
harmful information. This requirement could lead to significant delays in companies’ decision
making, which would also not be coherent with Article 1(2) of the Directive and may interfere with
the freedom to conduct a business enshrined in Article 16 CFR. It is also not coherent with the
existing national laws on the matter, as none of the Member States has thus far used the option to
impose such a requirement. Likewise, under option 3c, exempting information-sharing between
EWCs and national or local employee representatives from confidentiality restrictions creates
issues of coherence as it falls within the competence of each Member State to determine the criteria
and conditions for imposing confidentiality. National laws could be breached if EWCs were
authorised to share information with employee representatives in another Member State where the
same information is not subject to an equivalent obligation of confidentiality.
Policy area 4: Options 4a and 4b would be coherent with the existing provisions of the Directive
and relevant general EU law principles concerning sanctions, remedies and access to justice. They
are also aligned with the principle of effective company decision-making (Article 1(2) of the
Directive) and the freedom to conduct a business (Article 16 CFR), as they do not introduce
specific binding enforcement measures that could interfere with companies’ ability to implement
the necessary management decisions quickly. However, insofar as a recommendation on
enforcement matters in the field of information and consultation (option 4a) and the determination
of pecuniary sanctions in proportion to company turnover (option 4b) would represent novel
approaches in the EU’s legislative framework on information and consultation, these options are
not entirely aligned with other legislation in this field. The high maximum levels of pecuniary
sanctions and the possibility to suspend management decisions under option 4c are less coherent
with those principles and with other EU labour law directives, none of which provides for a
concrete set of sanctions, leaving their determination to Member States’ procedural autonomy. This
autonomy is subject to the general requirement for penalties to be ‘effective, dissuasive and
proportionate’.
166
The information and consultation procedures established in Directives 98/59/EC, 2001/23/EC and 2002/14/EC
oblige management to inform and consult the national workers’ representatives on the topics specified in the directives
‘with a view to reaching agreement’, whereas such requirement is not included in the recast Directive.
167
Article 1(3) in connection with recital 15 of the recast Directive.
168
Directive 2002/14/EC (Article 6), Directive 2001/86/EC (Article 8), Directive 2003/72/EC (Article 10).
49
7.4. Proportionality169
Policy Area 1: Option 1a promotes the objective without going beyond what is necessary to
achieve it, while allowing for the possibility to continue transnational social dialogue based on
voluntary agreements if neither employees nor management choose to initiate the establishment of
an EWC. This option would preserve the principle of social partner autonomy regarding the choice
between setting up an EWC or following a different approach with regard to employee involvement
on transnational matters. This approach is expected to lead to an expansion of the application of the
Directive only to those previously exempted undertakings in which, in the eyes of employees
representatives or management, a pre-existing ‘voluntary’ agreement did not ensure a sufficiently
effective framework, compared to the Directive, for transnational information and consultation.
Policy Area 2: Option 2a, being the least intrusive, appears rather weak in relation to the
challenges in the set-up phase, and thus scores low on proportionality. Option 2b is suitable to
increase legal clarity regarding the setting-up of SNBs and their resources but does not address
gender-balance. Option 2c would also improve gender balance, without going beyond what is
necessary or imposing an excessive burden on undertakings or employees’ representatives.
Accordingly, Option 2c performs best in terms of proportionality. In particular, it would allow for
sufficient flexibility to implement the envisaged gender-balance objective without compromising
the functioning of EWCs, and to take full account of the case-law of the CJEU on positive action as
well as the established national rules and practices for the nomination of employees’
representatives.
Policy Area 3: While option 3a entails the least costs and no binding new requirements, it is also
less likely to ensure the appropriate resourcing of all EWCs and a more effective information and
consultation process. Option 3b strikes the most proportionate balance between promoting that
policy objective and avoiding excessive burden or restrictions on undertakings, whereas several
elements of option 3c go beyond what is necessary and appropriate. Specifically, option 3b
clarifies the concept of ‘transnational matters’ without encroaching on subject-matters of purely
national relevance for which EWCs are not the appropriate level of employee involvement. Option
3b also does not curtail the autonomy of the parties to the EWC agreement to negotiate tailor-made
solutions (e.g. regarding access to experts and training, and coverage of costs). It leaves broad
discretion to Member States in implementing the revised minimum requirements, allowing them to
integrate those requirements into their respective rules and traditions on the involvement of
employees, which vary widely, and where appropriate to complement them. Regarding
confidentiality, the compatibility of option 3c with the proportionality principle is doubtful insofar
as it would require management to seek prior judicial or administrative authorisation to withhold
information from an EWC to prevent serious harm to the undertaking. Such a burdensome
requirement was thus far not considered appropriate by any Member State.
In light of these considerations, option 3b is assessed most positively in terms of proportionality,
followed by option 3a.
Policy area 4: Option 4b would set out Member States’ general obligation to ensure an adequate
enforcement of the Directive in a binding manner and facilitate a more effective supervision by the
Commission of the relevant implementing provisions. Due to their more targeted and effective
nature, these measures are more proportionate than the non-binding recommendations under option
4a. Specifically, the requirement to take into account turnover when determining pecuniary
169
Assessed in accordance with Better Regulation Tool #5.
50
sanctions ensures that sanctions are proportionate to the financial capacity of non-compliant
undertakings, and thus dissuasive and effective, while national authorities and courts must at the
same time ensure that the percentage of turnover levied as a sanction is fully proportionate in
relation to the gravity, scope, impacts, duration and other relevant factors characterising the
offence. In contrast, Option 4c clearly does not pass the proportionality test. Potentially vast
pecuniary sanctions and the possibility to suspend the effects of undertakings’ decisions represent
excessive burdens, given the limited purview of the Directive to lay down minimum information
and consultation requirements leading to non-binding opinions without prejudice to undertakings’
decision-making ability.
7.5. Comparative scoring of the options – multi-criteria analysis
Based on the above considerations, policy options are scored from “0” to “+++” (“---”) depending
on the direction of the impact. “+” (“-“) represents a very small positive (negative) effect and
“+++” (“---") a very large positive (negative) effect compared to the baseline. 0 means that the
option would not constitute a significant deviation from the baseline scenario. The baseline scenario
is rated 0. Based on this assessment, a preferred option is identified for all policy areas and then
described in Section 8. As regards the criteria of coherence and proportionality, the highest score
was not awarded to any policy options including those assessed most positively because, firstly, the
Commission’s 2018 evaluation established that the Directive is to a large extent already coherent
and proportionate as it stands, so there is no scope for drastic improvements against these criteria.
Secondly, certain caveats were identified as regards the proportionality and coherence even of the
preferred policy options.
Multi-criteria analysis – Overview table
Policy area Policy option Scoring of policy options against the baseline (scale: --- to +++);
baseline = 0
1 Effectiveness Efficiency Coherence Proportionality
1a ++ ++ ++ +
Preferred option for area 1 1a
2
2a + + ++ +
2b ++ ++ ++ ++
2c +++ +++ +++ +++
Preferred option for area 2 2c
3
3a + + ++ +
3b +++ ++ ++ ++
3c ++ - - -
Preferred option for area 3 3b
4
4a + + ++ +
4b ++ ++ ++ ++
4c ++ 0 - --
Preferred option for area 4 4b
Combined preferred option 1a + 2c + 3b + 4b
8. PREFERRED OPTION
8.1. Selection of the preferred policy option and analysis of combined impacts
Policy
area
Preferred policy option Accompanying measures
1 1a: End exemptions after a transitional period (1a) n/a
2 2c: Clarify resourcing of SNBs (specifically for legal costs); lay down gender
balance objectives to be reflected in EWC agreements
Clarify obligation to set up an
SNB; clarify coverage of
training costs
51
3 3b: Clarify concept of transnational matters, EWC resourcing (legal costs,
experts) and conditions for imposing confidentiality / withholding information;
require response to EWC opinions prior to the adoption of a decision on
transnational matters; require at least 2 annual plenary meetings under
subsidiary requirements
Clarify coverage of training
costs, incl. necessary
expenses, format of EWC
meetings
4 4b: require Member States to provide information on access to justice /
effective remedies regarding all rights under the Directive; penalties (including
pecuniary sanctions) to be effective, dissuasive and proportionate; pecuniary
sanctions to take account of company’s turnover to have a dissuasive effect, as
well as of other relevant aggravating or mitigating factors
Clarify obligation to ensure
access to justice and sanctions
In light of the comparison in Section 7, options 1a, 2c, 3b and 4b, including their respective
accompanying measures, present the most appropriate approach to address the problem drivers in
light of the initiative’s objective. In their combination, they therefore form the preferred overall
policy option for this initiative.
The preferred option will in principle lead to a cumulation of the impacts of options 1a, 2c, 3b and
4b, as presented in Section 6 for each area and in more detail in Annex 12. The potential cumulative
costs would thus account only for a very small part of the turnover of the affected undertakings and
are not – unlike some of the non-preferred options - expected to affect market efficiency or
undertakings’ competitiveness. Moreover, these costs may be offset by efficiencies generated
through increased legal clarity and certainty, although this effect cannot be quantified. The
preferred option is in strict compliance with the proportionality principle and ensures the continued
internal and external coherence of the Directive, while delivering a simplified and more coherent
legal framework for Union-scale undertakings and necessary improvements to the process for the
creation, information, and consultation of EWCs as well as the enforcement of the rights under the
Directive.
The options forming the preferred overall policy option follow a consistent logic across all policy
areas, as they are all designed to improve the effectiveness of the framework for transnational
information and consultation while preserving undertakings’ ability to take decisions effectively.
Therefore, when combined, the options are expected to mutually reinforce one another and achieve
synergies, so the overall preferred option surpasses the sum of its parts. These effects are
subsequently summarised in qualitative terms:
(i) By creating legal certainty about the coverage of legal costs, options 2c and 3b facilitate the
exercise of the right to access to justice (option 4b). These options are thus synergetic.
(ii) Conversely, by strengthening access to justice and the enforceability of EWCs’ rights, option
4b bolsters the social benefits under options 1a, 2c and 3b. The case for making minimum
transnational information and consultation rights available to employees of all Union-scale
undertakings (options 1a) is stronger if those rights can be enforced effectively. Likewise,
improving the processes for setting-up and operating EWCs (options 2c and 3b) depends on
effective enforcement. At the same time, option 4b respects the subsidiarity principle by not
intruding on Member States’ procedural autonomy and the proportionality principle by avoiding
imposing disruptive remedies or sanctions liable to unbalance the relations of the parties, which
could significantly increase costs for undertakings and threaten the constructive dialogue necessary
to put options 1a, 2c and 3b into practice.
(iii) In the same vein, the clarifications to the legal framework under options 2c and 3b (e.g.,
regarding the concept of transnational matters, conditions for imposing confidentiality, coverage of
legal and training costs, access to experts, format of meetings) are expected to reduce the risk of
disputes and thus limit the potential enforcement costs under option 4b.
52
(iv) As option 3b, in particular the new requirement for a reasoned response to EWCs’ opinions
prior to the adoption of a decision on transnational matters, may give rise to a renegotiation of
existing agreements, it could speed up the implementation of gender objectives (option 2c) to some
extent, although this effect is likely to be limited as EWC agreements are in any case subject to
regular renegotiations.
(v) Where several policy options require adaptations to existing EWC agreements, the parties can
address them in a single round of renegotiations, so possible additional renegotiation costs would
accrue only once for the overall preferred policy option.
vi) Given that the preferred package is expected to increase the effectiveness of the Directive,
notably by improving the process for setting-up and operating EWCs (options 2 and 3), allowing
the employees in the exempted undertaking to request an EWC (option 1), and improving the
enforcement of the rights under the Directive (option 4), it is plausible that the take-up rate of
EWCs could increase as a result of this initiative. However, there is insufficient evidence to support
or estimate this assumption.
As regards the choice of policy instrument, due to the need to amend the Directive, the preferred
option can only be implemented by means of a Directive under the same legal basis.170
8.2.REFIT (simplification and improved efficiency)
The 2018 evaluation confirmed that the minimum requirements set out in the Directive do not
impose any obligations that would constitute an unreasonable burden for companies. By setting a
procedural framework for transnational information and consultation, the Directive allows social
partners the autonomy to agree on appropriate solutions in light of their specific needs and
circumstances. For example, the Directive does not restrict the use of ICT technologies for
information and consultation purposes. Parties may thus choose, for instance, to use online meeting
software or automatic translation tools to save costs and achieve efficiencies. They are also free to
agree on simplified language regimes for EWC meetings to lower the costs of simultaneous
interpretation. Indeed, the Directive does not impose any specific budget to cover EWCs’ expenses,
including for expert advice or training. Against this baseline, the scope for burden reduction by this
initiative is limited. Nevertheless, the need to keep costs for undertakings to the necessary
minimum and avoid administrative burdens is taken into account, in accordance with concerns
raised by business organisations in the consultation of social partners, throughout the design and
assessment of the proposed measures.
8.3.Application of the ‘one in, one out’ approach
The initiative does not impose any administrative burden171
on businesses or citizens and therefore
does not require offsetting. The adjustment costs created by the preferred option are limited to
possible incremental increases of the baseline costs of running EWCs (costs of meetings, training,
expertise, legal advice), as well as in certain cases the costs of negotiating new EWC agreements.
No reporting or other administrative requirements are imposed on undertakings, and the Directive’s
flexible approach is maintained by the preferred option, which focuses on ensuring legal certainty
and effectiveness and minimising the risk of disputes or delays. Policy options that might have
negatively affected undertakings’ ability to take decisions effectively were not retained, in strict
170
Article 153(1)(e) and Article 153(2)(b) TFEU.
171
As defined in Better Regulation Tool # 58. EU Standard Cost Model.
53
compliance with the proportionality principle and priorities stressed by business organisations
during the consultation of social partners.
9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?
Progress towards achieving the objectives of the initiative will be monitored by a series of core
indicators related to the policy objectives. These and the related data sources are summarised in
Annex 13. The monitoring framework will be subject to further adjustment according to the final
legal and implementation requirements and timeline. Taking into account a two-year transposition
period and another transitional regime for the adaptation of existing agreements by the parties, the
initiative could be evaluated 7 years after it enters into force. This would allow sufficient time for
the effects on the setting up and operation of EWCs to materialise and for the evaluation of those
effects, with a particular focus on previously exempted undertakings.
54
ANNEX 1: PROCEDURAL INFORMATION
1. LEAD DG, DECIDE PLANNING/CWP REFERENCES
The lead DG is DG EMPL, DG Employment, Social Affairs and Inclusion.
Agenda planning: PLAN/2023/664
Work Programme reference: Commission work programme 2024 (Annex 1, initiative no. 9)
The initiative is prepared by the Commission in response to the European Parliament’s 2023
resolution under Article 225 of the Treaty on the Functioning of the European Union.
2. ORGANISATION AND TIMING
An Interservice Steering Group (ISSG) was established to accompany the work on the initiative.
The following DGs participated in the ISSG: SG, SJ, EMPL, BUDG, COMP, EAC, ECFIN,
ESTAT, GROW, JRC, JUST, REGIO, TRADE.
The Impact Assessment was discussed in the ISSG on 11 October 2023 (present DGs: SG, EMPL,
ECFIN, JUST, ESTAT, SJ, BUDG, COMP).
The Analytical Document accompanying the second phase consultation of social partners on which
the Impact Assessment is based, together with the second stage consultation document, was
assessed by the ISSG on 14 June 2023 (present DGs: SG, EMPL, BUDG, ECFIN, ENV, ESTAT,
JRC, JUST, LS) and adopted following ISC (DGs consulted: SG, SJ, ECFIN, JUST, BUDG,
CLIMA, CNECT, COMM, COMP; ENV, ESTAT, FISMA, GROW, JRC, REGIO, TRADE).
The first stage consultation document was assessed by the ISSG on 6 March 2023 (present DGs:
SG, EMPL, COMM, ECFIN, ENV, ESTAT, GROW, JUST) and adopted following ISC (DGs
consulted: SG, SJ, ECFIN, JUST, DGT, FISMA, TRADE, COMM, GROW, REGIO, ENV,
COMP, CNECT, CLIMA, ESTAT, BUDG, JRC).
3. CONSULTATION OF THE RSB
The draft Impact Assessment was assessed by the Regulatory Scrutiny Board (RSB). The RSB
meeting was held on 29 November 2023 and the RSB delivered a positive opinion with reservations
on 30 November 2023. The revisions made to address the RSB opinion are summarised in the table
below.
55
RSB requests for improvements Changes made in the IA
(1) The report should assess the effectiveness of the
voluntary measures in force and clearly identify the
remaining problems that this initiative seeks to
address. It should explain the role, prerogatives, and
interplay between national laws, national workers’
representative bodies and the EWCs in the social
dialogue and consultation on transnational matters.
Additional information was provided on the overall
information and consultation framework, the
interplay between different levels of employee
involvement and the specific nature and principles
of the Directive (Sections 1 and 2 of the report).
(2) The report should be clear, upfront, on the
nature and limited scope of the proposed measures.
It should set out clearly, with examples, the existing
process for the creation of EWCs, the relationship
with voluntary agreements and exactly what will
change under the initiative. The problem definition
should be underpinned with solid evidence on what
has worked/ not worked so far. The
acknowledgement of a lack of evidence should not
be presented as proof of the existence of such
evidence. The report should clarify why the
Commission has not made use more frequently of
infringement procedures.
Additional explanations and examples were inserted
regarding the practical operation of the provisions
of the Directive (Section 2.1. of the report). The
findings in the evaluation of the Directive and the
measures taken to address the issues identified in
that evaluation have been set out in more detail
(Section 2.2. of the report). The available evidence
underpinning the problem definition has been
further described, and data limitations clearly
acknowledged (Section 2.3.). The reasons
preventing a more frequent use of infringement
procedures have been mentioned (Section 5.2.1.).
(3) The aims of the initiative should be presented
much more clearly upfront. The report should make
clear from the outset that level playing field issues,
an increase in the uptake of EWCs or a change of
the procedural character of the Directive do not
motivate the initiative. The lack of a level playing
field should not be used as a justification in the
selection of the preferred option, given that it is
neither identified as a problem nor defined as a
specific objective. The report should ensure full
coherence and consistency on this point.
These points have been clarified throughout the
report. Specifically, references to a “level playing
field” have been adapted to account for the fact that
the Directive does not impose the creation of an
EWC unless employees’ representatives make a
request to that effect based on their right under the
Directive. It has also been explicitly clarified that
the policy objectives do not include an increased
rate of creation of EWCs, although a more effective
transnational information framework could provide
employees’ representatives with an additional
incentive to request the establishment of an EWC.
(4) Given the identified problem of enforcement,
the report should explore all relevant options to
address it beside the choice of the global turnover
as a basis for imposing penalties. It should explain
how option 4c (maximum intervention) is plausible
and realistic and how fines levied on a percentage
of global turnover as part of the preferred option are
justified. It should explain the risk of uncertainty
and fragmentation given that the determination of
the level of such fines would be left to individual
Member States. It should explain to what extent the
increased administrative burden and risk of
penalties levied as a proportion of global turnover
The description of the policy options in area 4 was
further developed to clarify the rationale supporting
the design of measures and the packaging into
options.
As regards options 4b and 4c specifically, additional
explanations were provided regarding
proportionality. In particular, it has been explicitly
clarified that option 4b, providing that Member
States must ensure that account is taken of the
undertakings’ turnover when determining the level
of pecuniary sanctions, at the same time requires
that the sanctions remain fully proportionate in
relation to the gravity, scope, impacts, duration and
56
will affect the take-up of EWCs. other relevant factors characterising the offence. On
the other hand, by setting a maximum limit at 2% or
4% of undertakings’ global annual turnover, policy
option 4c creates a risk that sanctions for breaching
rights under the Directive would be set by Member
States at disproportionately high level. (Sections 5,
6 and 7).
(5) The report should better substantiate the
proportionality of the proposed measure to end
exemptions of voluntary agreements, given that
they are considered by the management and EWCs
representatives as overall effective. It should
explore whether soft law measures such as a
Recommendation on penalties might prove more
effective than a binding but unquantified reference
to a percentage of global turnover.
The rationale of policy option 1a has been better
explained, clarifying that it does not create an
obligation to renegotiate existing 'voluntary
agreements’ and allows for the continuation of their
agreements if social partners in the respective
undertakings agree (Section 5.2.1.).
Regarding enforcement (policy area 4), it has been
clarified that in addition to turnover, any other
relevant aggravating and mitigating factors are to be
taken into account to ensure the proportionality,
effectiveness and dissuasiveness of penalties
(Section 5.2.4.). As the Commission’s efforts to
address the lack of dissuasive sanctions – identified
as a key issue in the evaluation – through non-
binding measures have proved insufficient, it is not
expected that the combination of a recommendation
on enforcement and an obligation on Member States
to inform the Commission how they ensure access
to justice would yield better results than
strengthened binding requirements in this policy
area.
(6) The report should clarify whether it had
considered alternative packages of measures,
including different combinations of legislative and
non-legislative measures. If not, the report should
justify why such alternative packages were
considered as not relevant for decision taking. The
report should explain to what extent the preferred
option package is 3 overall proportionate given the
uncertainty on the magnitude of the problems and
the ambition of some of the measures.
Explanations have been inserted in Section 5.2.,
why it was considered more relevant and consistent
to package targeted legislative amendments to
improve effectiveness of the Directive and to
strengthen its enforcement. It was also considered
that key non-legislative measures form part of the
baseline scenario (in particular continuation of
activities already undertaken by the Commission to
foster transnational information and consultation of
employees) and that a legislative initiative would
provide significantly more added-value, compared
to the baseline, than further non-binding measures.
(7) The report should more thoroughly assess costs
and benefits, including recurrent costs of EWCs
functioning. The analysis should take into account
the voluntary character of EWCs when assessing
the estimated changes in the take up rate of EWCs
and account for any uncertainties through a
sensitivity analysis. On that basis, it should provide
The assessment of costs and benefit was
strengthened in Section 6 and Annexes 3 and 4 of
the impact assessment.
Regarding the ‘voluntary nature’ of EWCs, it was
clearly explained that the launch of negotiations
towards establishment of an EWC in accordance
57
the range of total cost estimates (including in Annex
3 and when discussing administrative and
adjustment costs under the OI:OO approach).
with the minimum requirements of the Directive
becomes a legal obligation if the requisite number
of employees makes a request to that effect, and that
any outcome not involving setting up an EWC must
be agreed by both parties. While the principle of
social partner autonomy remains a core tenet of the
Directive, there is no opt-out from that obligation if
employees wish to set up an EWC (Section 2.1.).
Concerning cost quantification, estimates of
aggregated costs of the preferred option over the
baseline period have been elaborated in Annex 4
and integrated in Annex 3.
(8) The report should better substantiate the claim
of a zero impact on competitiveness. It should
revisit the argument of a negligible impact on
international competitiveness, given that most
employer organisations consistently expressed
negative views on the impacts of option packages 3
and 4 on companies’ competitiveness and the
uncertainty of future litigation (incidence of legal
actions and pecuniary sanctions).
The discussion of competitiveness impacts has been
developed in Annexes 5 and 12 to account in a more
consistent manner for possible positive impacts of
effective transnational information and consultation
on companies’ competitiveness.
(9) The report should acknowledge upfront the
considerable data limitations and uncertainties and
explain, in the main text, their impact on the
robustness of the analysis.
Data limitations and uncertainties have been
acknowledged in the problem definition (Section 2)
and assessment of the impacts (Section 6), in
addition to the Section 2 of Annex 4.
4. EVIDENCE, SOURCES AND QUALITY
The following Commission reports have fed into the Impact Assessment:
• Report on the implementation by Member States of Directive 2009/38/EC on the
establishment of a European Works Council or a procedure in Community-scale
undertakings and Community-scale groups of undertakings for the purposes of informing
and consulting employees (Recast) COM(2018) 292 final and accompanying Staff Working
Document SWD(2018) 187 final.
The following expert advice has fed into the Impact Assessment:
1) External studies commissioned from external experts:
• ICF(2023) Study exploring issues and possible solutions in relation to the Recast Directive
2009/38/EC on European Works Council. Available . online HYPERLINK
"https://op.europa.eu/en/web/general-publications/publications"
• ICF(2016) Evaluation study on the implementation of Directive 2009/38/EC on the
establishment of a European Works Council, p. 96. Available online.
• Reviews by the European Centre of Expertise in the field of labour law, employment and
labour market policies (ECE):
58
Review of national provisions transposing Directive 2009/38 on European Works Councils
on confidentiality, non-disclosure of information and gender balance (2023, unpublished
analysis)
Review of national rules on enforcement of rights and obligations arising from Directive
2009/38/EC on European Works Councils (2019, unpublished analysis)
2) The European Parliament reports:
• 2021 resolution on Democracy at Work.
• 2023 resolution on revision of European Works Councils Directive
3) Ad-hoc data collections:
• Eurostat, ad-hoc extraction from the EuroGroups Register (2023)
• Data extractions from ETUI EWC Database and ETUI survey of EWC and SEWC
representatives (2018) (Overview published online)
4) Eurofound research:
Turlan, F., Teissier, C., Weber, T., Kerckhofs, P., & Rodriguez Contreras, R. (Eurofound)
(2022) Challenges and solutions: Case studies on European Works Councils. Available online.
Relevant academic literature, as referred to in footnotes.
59
ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT)
1. RESULTS OF THE FIRST PHASE SOCIAL PARTNERS’ CONSULTATION
In line with Article 154 of the Treaty on the Functioning of the European Union (TFEU), the
Commission carried out the first phase consultation of European social partners to seek their
views on the need for, and possible direction of, EU action to address the challenges related to the
operation of EWCs. This first phase consultation was launched on 11 April and ended on 25 May
2023.
1.1 Overview of responses
Twelve recognised social partners sent replies during the first-phase consultation.
Four trade union organisations contributed to the consultation: European Trade Union
Confederation (ETUC), European Confederation of Independent Trade Unions (CESI), European
Managers (CEC), Eurocadres.
Eight employer organisations sent replies: Business Europe, SGI Europe, SMEunited, European
Chemical Employers Group (ECEG), Council of European Employers of the Metal, Engineering
and Technology-Based Industries (CEEMET), European Cleaning and Facility Services Industry
(EFCI), Hotels, Restaurants and Cafés in Europe (HOTREC), European Confederation of
Woodworking Industries (CEI–Bois)
1.2 Social partners’ views on the completeness of the issues identified and the general
need for a revision of Directive 2009/38/EC
Trade unions see a need for a legally binding revision of the recast Directive. ETUC and
Eurocadres expressly endorse the Parliament’s recommendations for such a revision and stresses
that the information and consultation process at transnational level can be regulated only by an EU
legal act guaranteeing a level playing field by means of minimum requirements. ETUC submits that
a right for trade union experts to participate in all SNB, EWC and select committee meetings and to
have access to all sites is a necessary condition for supporting and coordinating EWCs’ work more
effectively. It therefore calls to lay down such rights in the Directive. ETUC queries that the
Commission’s consultation paper does not address the issue of concretising the definition of
‘controlling undertaking’ to clarify the inclusion in the scope of the directive of companies
operating through management, franchise systems and 50:50 joint ventures. In addition, ETUC
states that the consultation paper is missing an opportunity to draw links between due diligence and
EWCs. According to ETUC, EWCs must be fully involved in all steps of companies’ due diligence
plans and policies, including the mapping of potential risks on human rights and the environment
across the company operations as well as its supply and subcontracting chains.
The large majority of employer organisations argue against a revision of the Directive,
considering it fit for purpose. Business Europe stresses the need to give the social partners at
enterprise level the space to negotiate agreements that suit their circumstances. According to
ECEG, the heterogeneous landscape of EWCs is an accurate reflection of the original intention of
the European co-legislators and should be preserved as a key element of the European system of
information and consultation of workers in multinational companies. CEI-Bois considers that
EWCs’ practices need to remain flexible to be applied effectively to different sectors and
companies across the Member States and that the Commission should refrain from adding
additional regulatory burden on companies that have already opted for the creation of EWCs.
60
CEEMET cautions that a revision of the EWC Directive would be another setback in the
competitiveness of European businesses. If the Directive was nevertheless to be revised, CEEMET
urges to propose specific measures alleviating companies from administrative and financial burden
and adapting to the new reality of online meetings. EFCI thinks that a legislative intervention
increasing companies’ responsibilities would weaken EWC’s prospects to serve as a shared and
constructive solution for all parties involved. HOTREC and CEI-Bois call on the Commission to
present a Commission Recommendation and a code of practice / handbook on the matter instead of
revising the Directive. CEI-Bois argues that the Commission should refrain from adding additional
regulatory burden on those companies who have already opted for the creation of an EWC. Rather,
it should aim at simplifying the implementation of the existing rules. BusinessEurope also
maintains that a code of practice could be a good basis to help social partners at company level to
identify ways of improving their own practice.
Among employer organisations, SGI’s members recognise that it may be justified to revise the
Directive in order to provide greater clarity of the rules and to organise regular genuine ex ante
consultations of workers representatives in EWCs on transnational matters. SMEunited recognises
the existence of a certain justification to amend the directive without ignoring the current general
good functioning of it.
1.3 Willigness to enter into negotiations
The vast majority of responding social partners replied that they were open to negotiations in
accordance with Article 154(4) TFEU in principle. ETUC reaffirmed its full commitment to social
dialogue and Article 155 TFEU and all responding trade union organisations were open to
negotiations. Nevertheless, Eurocadres believed that in the case of EWCs strong legislation is the
only way to improve the Directive. Business Europe confirmed that it would look constructively
into the possibility of offering negotiations to ETUC with a view to revising the EWCs recast
directive under the procedure set out in Article 155 TFEU, if the Commission’s second stage
consultation of social partners provides a balanced basis for social partners to negotiate. This
position was seconded by ECEG, SMEunited, CEI-Bois, HOTREC, and EFCI.
1.4 Social partners’ views regarding specific issues and policy options
Regarding the scope of the recast Directive, trade unions support ending the exemption of
undertakings with pre-existing information and consultation agreements at transnational level.
ETUC argues that the provisions of the Directive must apply to all undertakings to ensure a level
playing field and stresses the need for a comprehensive definition of the concept of ‘controlling
undertaking’ to clarify the inclusion in the scope of companies operating through contract
management, franchise systems and 50:50 joint ventures. While CESI does not refer to specific
policy option, it submits in general terms that the scope could be widened to cover more workers.
Among responding employer organisations 5 out of 8 argue in favour of keeping the existing
exemptions. EFCI stresses that the grandfathering rules have proven themselves in practice, as the
longstanding information and consultation bodies in exempted undertakings are often particularly
effective and characterised by a deep level of trust and cooperation between workers’
representatives and central management. ECEG does not support an automatic
transformation/adaptation of the different types of EWCs into one single model. Instead, ECEG
would favour a reflection on how Article 13 of the recast Directive could serve to modernise those
agreements. CEI-Bois states that no additional regulatory burden should be added on companies
who already have opted for the creation of an EWC.
61
None of the responding employer organisations elaborated specifically on the idea of including
undertakings linked through contractual arrangements into the concept of controlling and controlled
undertakings, and thus into the scope of the recast Directive, but SMEunited underlines generally
that a possible initiative should not expand the scope of the Directive.
Regarding the procedure on the setting up of EWCs, among trade unions, ETUC states that it
is not uncommon for central management to delay the establishment of the SNB, and calls for a
requirement to constitute and organise a first meeting of the SNB meeting within 6 months of the
request, or the subsidiary requirements would automatically apply. While CESI and CEC support
the Parliament’s recommendation to shorten the three-year deadline for negotiations, ETUC
disagrees because that proper coordination, training and agreement on common demands take time.
In contrast, according to CESI, practical experience appears to suggest that negotiations can be
concluded in a shorter timeframe if both sides are willing and engage constructively. ETUC also
calls for objective criteria to determine the location of the “representative agent” and “central
management” to avoid regime shopping and use of letterbox companies."
None of the responding employer organisations argue in favour of adapting the framework for
setting up EWCs. Business Europe takes the view that the challenges identified in the setting up
and functioning of EWCs are practical rather than legal and would not be tackled by a revision of
the directive. ECEG explains that in the European chemical industry, the establishment of EWCs
can easily be arranged in most cases, and that the existing rules are sufficient to fulfil the
objectives. CEEMET argues that it is best not to rush the negotiations by reducing the timeframe.
HOTREC states that a shorter negotiation deadline could be considered, as long as proportionate
and relevant. HOTREC also cautions that some topics require long discussions and that subsidiary
requirements should apply only when strictly necessary.
On the concept of transnational matters, all responding trade union organisations agree that the
concept should be clarified and/or broadened, as recommended by the European Parliament.
According to ETUC, the relevant recitals of the recast Directive are not sufficiently taken into
account in practice for the determination of the transnational nature of a matter under national law.
The responding employer organisations are, for the most part, opposed to a revision of the concept
of transnational matters. SGI’s members express great concern over the possibility of including in
this concept potential effects indirectly concerning employees in more than one country, as this
could lead to almost every decision or choice of the enterprise to end up on the table of EWCs.
CEEMET echos these concerns, fearing that the broad definition recommended by the Parliament
could distort the division of competences between national works councils and their European
counterparts. HOTREC recalls that transnational issues should not include decision-making bodies
in a single state. ECEG considers that the existing concept of transnational matters has proven itself
in practice and does not cause any disputes beyond what can reasonably be expected in any
corporate setting. In a similar vein, Business Europe refers to a 2016 study of the University of
Leuven172
, which underlined that managers and their employees found ways to overcome
operational difficulties related, amongst others, to the definition of a transnational scope. EFCI and
SMEunited declare openness to a clearer definition of the transnational nature of issues.
With regard to the consultation procedure, among trade unions, CESI considers that it should
be specified that consultations must necessarily be taken into account by management, and this in a
172
Pulignano V., Turk J. (KU Leuven)(2016) European Works Councils on the move: management perspectives on the
development of a transnational institution for social dialogue.
62
meaningful way. CESI argues that, in the longer-term, ways could be envisaged to turn EWCs more
into negotiating bodies, where their opinions could have even more weight and are not only ‘taken
into consideration’. ETUC generally supports recommendations of the Parliament, stressing that
transnational information and consultation process must be properly conducted and completed
before management takes a final decision. According to ETUC, in order for the consultation to be
meaningful, EWCs must have sufficient time to carry out an in-depth assessment of the information
provided, included when needed with the support of experts, as well as to consult national and
regional workers’ representatives.
In contrast, among employer organisations, Business Europe argues against a ‘one-size-fits-all'
approach to consultation, suggesting that many EWC agreements either already provide for specific
timeframes for information and consultation procedures and a formal response by management to
EWC opinions, or the parties to agreements tend to work out the timeframes according to the issue
which is being addressed. This view is seconded by ECEG, which advises that neither the existing
legal concept of consultation nor its implementation are liable to create any hindrance for the
proper functioning of the EWC Directive, workers’ representatives usually having sufficient time to
review the facts and produce a written opinion. According to CEEMET, the Parliament’s
recommendations would put employees’ representatives in a position to delay important decisions
by central management indefinitely, which would reduce management’s agility needed in a fast-
changing economic world. EFCI recognises that a discussion could take place on the issue of
timing, but cautions that the role and function of EWCs should not evolve in the direction of de
facto parallel collective bargaining or co-determination powers.
All the responding trade unions submit that EWCs are not assured necessary resources (covering
e.g. expert advice, training or legal costs). ETUC stresses in particular the importance of
guaranteeing access to recognised trade union organisation expertise and suggests that trade union
experts should have a right to participate in all SNB, EWC and select committee meetings and have
access to all sites. CEC refers to the need to fund training of EWC members as well as EWCs
administrative and logistical costs.
These views are not shared by the responding employer organisations, who stress the importance
of reducing the financial strain on companies rather than increasing EWCs’ entitlements. CEEMET
considers that the existing obligations to reimburse the trips, accommodation, paid leave for
employee representatives, and translation/interpretation costs already puts a heavy financial burden
on companies.
The trade unions see a need to set out specific criteria circumscribing the possibility for
management to impose the confidentiality of information or to withhold certain information
from EWCs. ETUC calls for clear provisions on criteria for withholding of information, and on the
grounds based on which EWC members’ right to share information with relevant stakeholders (in
particular workers’ representatives) can be restricted. CESI refers to the risk of companies using
‘confidentiality restrictions’ in an abusive way.
In contrast, the responding employer organisations reject potential amendments to the Directive’s
provisions on confidentiality and non-disclosure of information. ECEG stresses that the effective
protection of confidential information given to EWC members is a basic prerequisite for successful
cooperation between management and workers representatives. CEEMET explains that listed
companies have to comply with strict rules on when and to whom price sensitive information can
be given before public disclosure. CEEMET states that limiting the scope of confidentiality
provisions endangers the competitiveness of companies with the consequence of weakening Europe
as an innovative and forward-looking industrial and business location. EFCI would also not support
63
a revision of the text that would limit the autonomy of the management when deciding about the
confidential nature of the issue being discussed. While SMEunited recognises that some work on
confidentiality might be necessary, it also emphasises that trade secrets must be protected and
adding red tape must be avoided. HOTREC argues against reducing the scope of the existing
confidentiality provisions, pointing out that consultations take place on sensitive decisions such as
mergers or acquisitions.
Concerning enforcement, all responding trade unions consider that the remedies and sanctions for
the enforcement of the rights guaranteed by the Directive are not sufficiently effective. ETUC and
CEC specifically endorse introducing provisions on pecuniary sanctions, as recommended by the
European Parliament. ETUC supports introducing a right to injunctive relief, enabling EWCs to
request the suspension of management decisions taken in violation of their information and
consultation rights. In this respect, ETUC requests that administrative or judicial systems are put in
place to allow for swift decisions on EWCs’ requests for the suspension or nullification of
management decisions ‘24/7 in a few hours’. ETUC further calls for recognising the legal
personality of EWCs and requiring central management to provide the necessary financial support
for legal proceedings. CESI suggests that the Commission should first further assess why Member
States have not been ensuring provision of effective sanctions.
Among employer organisations, Business Europe points out that there have been only a limited
number of court cases and argues that this is not because EWCs lack the means to go to court but
because most EWCs work satisfactorily. Whilst ECEG recognises difficulties in the effective
enforcement of EWC rights in some jurisdictions, it does not see them as an expression of a
weakness of the Directive but of its flawed transposition at the national level. SGI, CEEMET,
HOTREC and EFCI consider the recommendation of the European Parliament for increased
pecuniary sanctions disproportionate and unrealistic, arguing that the determination of the level of
penalties is a prerogative of the Member States. Regarding the idea of introducing a right to
injunctive relief into the Directive, Business Europe submits that this would create significant risks
of imposing on companies to freeze or delay decision making, leading to disproportionate penalties,
an undermining of the trust and confidence of companies in EWCs and undermining the role of
social partners at company level. CEEMET argues that a temporary suspension of the
implementation of management decisions would hamper the decision-making process in companies
and be a serious intrusion in the corporate governance. CEEMET stresses that the legal framework
must not hinder appropriately flexible and responsible entrepreneurial action and must avoid
creating a hostile culture where employee representatives may use the tool of preliminary
injunction as a threat in the consultations forcing the company to undesired decisions.
In the first stage consultation, on the issue of gender representation on EWCs and special
committees, CEC and ECEG supported the objective of achieving a gender-balanced composition
of those bodies.
2. RESULTS OF THE SECOND PHASE SOCIAL PARTNERS’ CONSULTATION
The second stage social partners’ consultation was open from 26 July to 4 October 2023. In total,
12 replies from recognised social partners were received. 4 trade union organisations and 8
employers’ organisations sent their replies.
2.1 Overview of responses
4 trade union organisations contributed to the consultation: European Trade Union Confederation
(ETUC), European Confederation of Independent Trade Unions (CESI), European Managers
(CEC), Eurocadres
64
8 employers’ organisations sent replies: Business Europe, SGI Europe, SMEunited, European
Chemical Employers Group (ECEG), Council of European Employers of the Metal, Engineering
and Technology-Based Industries (CEEMET), EuroCommerce, Hotels, Restaurants and Cafés in
Europe (HOTREC), European Confederation of Woodworking Industries (CEI–Bois).
Business Europe, Hotrec, Ceemet, ECEG and SGI Europe do not provide responses to the questions
in the consultation document but state their willingness to enter into negotiations with ETUC with a
view to concluding an agreement under Article 155 TFEU to improve Directive 2009/38/EC.
2.2 Objectives of a possible EU action
Trade unions and ETUC in particular, support the overall objective to improve the effectiveness of
information and consultation of workers at transnational level, as well as the specific objectives of
the initiative. ETUC believes that the first specific objective should be ‘to ensure that every worker
in the EU enjoys the same effective minimum transnational information and consultation rights
defined at a high uniform level’.
Employers’ organisations believe that an EU initiative should not overly regulate details such as
the number of meetings, the manner in which meetings should be conducted, or requirements for a
specific type of experts at the European level. EuroCommerce would prefer making use of digital
communications. SMEunited considers that the objective to avoid unjustified differences in
workers’ information and consultation rights at transnational level is too far-reaching. Setting one-
fits-all solutions to all companies could be counterproductive for companies.
Trade unions see a need to ensure more effective enforcement and access to justice, fully
supporting the measures proposed by the European Parliament to strengthen sanctions. This view is
not shared by employers’ organisations.
2.3 Possible avenues for EU action
Regarding the scope and coverage of the rules, ETUC argues that legal uncertainty and regulatory
complexity should be reduced by ending exemptions from the scope of the Directive of
undertakings with pre-existing agreements. ETUC also demands that franchising and contract
management arrangements be brought within the calculation thresholds of community-scale
undertakings and within the definition of controlling undertaking. CEC proposes extending the
scope of eligible companies to joint ventures.
Among employers, SMEunited, EuroCommerce and CEI-Bois argue for keeping exemptions from
the scope of undertakings with pre-existing agreements. EuroCommerce and SMEunited argue that
the definition of a controlling undertaking and its application to structurally independent
undertakings can be ambiguous and complex. Expanding the scope of the Directive to include such
entities requires a clear and evidence-based definition to avoid unnecessary compliance burdens
and further complexities. SMEunited states that imposing a ‘one-size fits all’ uniform information
and consultation right disregards the diverse nature of businesses and the variations in their
employees’ structures
With regard to the process of setting-up of EWCs, CESI and CEC agree with the proposal to set a
maximum period of 18 months instead of three years for concluding an agreement. In contrast,
employer organisations EuroCommerce, SMEUnited, CEI Bois but also, from among trade unions,
ETUC, affirm that reducing the negotiation period to less than three years may impose undue
pressure on the parties. ETUC also states that clarifications are needed to ensure that the resources
to which the SNB is entitled must also clearly include the costs of legal assistance and legal
65
representation as well as assistance by experts and training. ETUC points to the existing legal
uncertainty in the directive regarding the management’s obligation to convene the first SNB
meeting and to carry out negotiations in regular intervals. Further, ETUC reiterates its call to
strengthen the position of the trade union representative as a permanent expert assisting the work of
the SNB and EWC. CEC and ETUC support achieving a gender-balanced composition of EWCs
and their select committees. Among employers, EuroCommerce and SMEunited believe that
imposing a gender quota could pose practical challenges given that employees should be free to
nominate their representatives.
Regarding the consultation framework, trade unions reiterate their call made during the first stage
consultation to clarify key notions of transnational matters, confidentiality and the information and
consultation procedure. ETUC reiterates that the end of the information and consultation process
must precede the date on which the management takes the final decision. ETUC and Eurocadres
support the sharing of information between the EWC representatives and national or local trade
union representatives. Among employers, SMEunited considers that a clearer definition of
transnational matters would be desirable. They consider the current definition very broad, lacking
specific thresholds of employees affected by the matter. CEI Bois and SMEunited believe that the
regulation concerning confidentiality is a matter of national concern, and that the consultation
process does not require any further definition at EU level. SGI Europe opposes widening the
concept of transnational issues.
ETUC asks the Commission to develop the minimum list of issues on which EWCs operating based
on subsidiary requirements are to be informed and consulted.173
Trade unions support at least two
plenary meetings per year under subsidiary requirements. ETUC stresses that plenary meetings
should not be held online.
ETUC, CEC and Eurocadres agree that companies should provide for appropriate resourcing of
EWCs. All responding trade unions endorse strengthening the position of the trade union
representatives in EWCs. Among employers, EuroCommerce states that the allocation of resources
for EWCs should be left to the discretion of employee representatives and central management.
SMEunited states that no additional costs should be imposed on companies.
With regard to enforcement, ETUC proposes to establish a permanent Monitoring Committee
(consisting of Member States’ representatives, EU-level social partners and the Commission) to
ensure the correct application of the Directive through regular exchanges and, in particular, to
address and resolve practical problems arising from its implementation. Trade unions generally
reiterate their support for the European Parliament’s recommendation for pecuniary sanctions at the
GDPR level, considering them dissuasive, and for guaranteed access to injunctive relief. They state
that all EWCs should have a status ensuring that they have access to judicial remedies. Employers’
organisations consider that sanctions involving injunctive relief whereby a company’s decision may
be suspended if information and consultation requirements were alleged to have been infringed or
pecuniary sanctions up to EUR 20 million or 4% of annual turnover for breaches of EWC rights,
are neither proportionate nor necessary.
173
Such as: the decarbonisation strategy of the company; the introduction of artificial intelligence at the workplace and
in work processes, the respect of human rights and environmental standards in the supply chain (Due Diligence
strategies).
66
2.4 Views on the possible legal instruments
Trade unions share the Commission's view that the issues and deficits identified can only be
addressed with a legally binding instrument and urge the Commission to present a legislative
proposal. Those employers’ organisations which did not limit their response to offering
negotiations with ETUC disagree and express preference for a non-binding instrument, such as non-
binding guidelines or a Code of Practice drafted with the active participation of EU-level social
partners, or a Commission recommendation.
2.5 Willingness to enter into negotiations
Employers’ organisations express their willingness to enter into negotiations, believing that only a
social partner negotiation could reach optimal results when it comes to the revision of the recast
Directive. Trade unions, while reaffirming their full commitment to social dialogue, do not intend
to negotiate with employer organisations, apart from CEC which favours negotiations. ETUC,
CESI and Eurocadres consider that it is urgent to act through a legally binding instrument and that a
legislative initiative of the Commission is the most suitable for substantial improvements of the
rights of EWCs in this legislature period.
3. OTHER CONSULTATIONS OF STAKEHOLDERS
3.1 Views of EU institutions
The European Parliament adopted, in 2021 and 2023, two resolutions on workers’ involvement at
company level as a way to support democracy at work, and particularly to reinforce the operation
of EWCs. The 2021 resolution on Democracy at Work covers areas of worker information,
consultation and participation, trade unions, works councils as well as some aspects of company
law and corporate governance. It calls for a revision of the recast Directive.
The 2023 resolution on revision of European Works Councils Directive aims at ‘strengthening
EWCs and their ability to exercise their information and consultation rights, as well as to increase
the number of EWCs, while taking into account the different industrial relations systems in the
Member States’. It contains an annex setting out proposals for legislative amendments to the recast
Directive, including:
- a wider concept of ‘transnational matters’ on which information and consultation of the
EWC should take place;
- an amended definition of ‘consultation’, i.e. requiring that EWCs receive a reasoned
response to their opinion prior to management adopting the decision, and providing that that
opinion must be taken into account by management;
- an obligation on Member States to provide for injunctive relief whereby a company’s
decision may be suspended if information and consultation requirements were infringed,
and for pecuniary sanctions of up to EUR 20 million or 4% of annual turnover, and
exclusion from public procurement and subsidies;
- an obligation on companies to provide EWCs with objective criteria for determining if a
matter is confidential and for which duration, and requiring companies to secure prior
judicial authorisation before restricting access to information which they consider could
seriously hamper the company’s activities;
- stricter deadlines for setting up an EWC;
- an end to the exemption of undertakings with pre-Directive agreements from the scope of
the Directive and subjecting undertakings with all types of existing information and
consultation agreements to the revised rules.
67
The European Economic and Social Committee (EESC) has issued a number of opinions, in
which it stresses the need for an enhanced role of European Works Councils in the event of large
company transformationsand in transnational restructuring processes in the context of the twin
transitions.174
In April 2023, the EESC has adopted an exploratory opinion on Democracy at
Work, which points to the need to substantially improve effectiveness and resources of EWCs:
“e.g. any circumvention or infringement of EWC participation rights should be sanctioned
effectively and access to justice should be facilitated. In this context, the EESC welcomes the
European Parliament's recent resolution on the revision of the EWC Directive and calls on the
Commission to take legal measures in a timely manner.”
3.2 Stakeholders’ consultation activities
In parallel with the Treaty-based formal consultation of the social partners described in Sections 1
and 2 of this annex, extensive consultation activities were conducted in the context of the
supporting study175, gathering insights from a diverse pool of stakeholders including workers’
organisations, employers’ organisations, policy makers, EWC representatives, management of the
Union-scale undertakings, legal and academic experts.
These activities consisted of:
• Semi-structured stakeholder interviews
• Online survey of companies with EWCs176
’ – management and employee representatives
• Evidence gathering workshops with management and employee representatives
A public consultation on this initiative was not conducted.
Semi-structured interviews were conducted from mid-April to August 2023 with the following
stakeholders:
Figure 1: Overview of targeted interviews of stakeholders
Stakeholder category Type and number of stakeholders
targeted
Sampling / selection method Number of
interviews
Multinational companies
(MNCs) with an
established EWC/ pre-
Directive information
and consultation body
management board representatives Random selection of MNCs with an EWC
from ETUI EWC database
12
EWC employee representatives 12
EU and national social
partners
European Trade Union Federations
(ETUFs)
Self-selection – identification of relevant
contacts
7
national social partners – employer
organisations and trade unions
10
Experts legal experts or professionals in advisory Contacts from previous research 16
174
Opinion of the European Economic and Social Committee of 17 October 2018 on the package on European
company law. Opinion of 2 December 2020 ‘Industrial transition towards a green and digital European economy:
regulatory requirements and the role of social partners and civil society’. Opinion of 9 June 2021 ‘No Green Deal
without a Social Deal’.
175
ICF(2023), see summary of results in Section 5.1 of the study.
176
Unless indicated otherwise, for the purpose of this summary of results of the stakeholders’ consultation, EWCs
include different types of EWCs and information and consultation bodies, including pre-Directive bodies.
68
Stakeholder category Type and number of stakeholders
targeted
Sampling / selection method Number of
interviews
services
National authorities (i.e.,
ministries or ministerial
agencies)
Representatives of national authorities in
the following Member States (i.e., BE,
CZ, DE, ES, FI, FR, IE, IT, PL, SE)
Member States selected based on:
• high number of EWCs
headquartered in them
• geographical balance
10
Source: ICF(2023), Section 5.2.1.
The on-line survey was launched on 18 April and closed on 26 May. It targeted management
representatives and employee representatives in identified multinational companies with an EWC.
With the aim for answers to be representative of EWCs / companies rather than of individual
employee or employer representatives, where there was more than one respondent per company on
the management or the employee/EWC side, only the response from the most highly placed
representative (e.g., EWC Chair over EWC member) was kept in the sample of responses.
A total of 233 responses were included in the final sample: 180 responses from employee/EWC
representatives (77% of responses) and 53 responses from management representatives (23%
of responses).
The table below provides a breakdown of the sample of responses by EWC type.
Figure 2: Overview of survey respondents by EWC type
Type of EWC / information and
consultation body
Total no. of
responses
% Employee/ EWC
responses
% Management
responses
%
Information and consultation
bodies created before the first
EWC Directive came into effect
(before 22 September 1996)
41 18% 27 15% 14 27%
EWC created under the 1994 or
2009 EWC Directives (after 22
September 1996)
160 69% 126 70% 34 65%
Unsure 32 13% 27 15% 5 8%
Source: ICF(2023), Section 5.1.
The sample also reflected the landscape of existing EWCs in terms of the national legislation
governing them, with 42% of respondents indicating that the governing legislation of their EWC is
either German (26%) or French (16%). Additionally, a sizeable share of respondents (14%)
indicated that their EWC is governed under Irish legislation. The chart below provides an overview
of the EWCs represented in the sample according to the national legislation governing them.
Figure 3: Overview of survey respondents by the legislation applicable
69
Source: ICF(2023), Section 5.1.2.1.
Two evidence gathering workshops held on 22 June 2023 complemented the information
generated from the online survey by gathering further (qualitative) evidence.
The workshops gathered representatives from the management and employee representatives across
different multinational companies with an EWC. First workshop gathered EWC representatives of
different multinational companies (21 participants), second workshop gathered management
representatives of different multinational companies (27 participants). Both workshops had a
common agenda, structure and duration (2.5 hours online meeting).
The selection of participants aimed to:
• achieve a balanced representation of different types of EWC / information and consultation
body
• achieve geographical balance
• strike a balance between EWCs which have recently experienced problems (e.g., legal
disputes with the management) and EWCs that have been well-functioning.
Main findings from these three consultation activities are summarised below:
1. Policy area 1
Targeted interviews
EWCs support removal of existing exemptions from the scope of the recast Directive. However, if
management show reluctance to negotiate, concerns arise about a potential gap in the existence of
an EWC (e.g. voluntary agreement not replaced with an EWC).
Management of Union-scale undertakings believe ending of exemptions is unnecessary, as flexible
renegotiation occurs naturally. Rigid procedures are unhelpful.
70
EU and national employers’ associations express general opposition to the abolition of exemptions.
Existing tailored agreements are deemed effective, and a one-size-fits-all approach is unsuitable.
EU and national trade unions generally support removing of exemptions and renegotiating existing
agreements to harmonise EWCs functioning. In addition, such renegotiations would facilitate the
integration of structural changes or updates in the workplace that impact on working conditions,
especially addressing those that are key concerns for trade unions such as digitalisation.
Legal experts are overall in favour of removing of exemptions as this would guarantee equal access
to justice across all EWCs, regardless of the company or the signature date of the agreement.
National authorities generally support removing of exemptions. This is clear in the FR position,
which highlights the inconsistencies in the agreements in force and proposes allowing sufficient
time for multinational companies to revise their existing EWC agreements. The other countries (ES,
NL, PL) report a small number of pre-Directive EWC agreements and as such do not see the ending
of exemptions as having significant impacts.
In the online survey, on the possibility of removing of exemptions employee/EWC
representatives were overwhelmingly in favour (81.7%; 147 out of 180 respondents) compared to
only 13.2% of respondents on behalf of management (7 out of 53 respondents). Respondents
(combining both employees and management) of information and consultation bodies created
before the first EWC Directive were less in favour of removing the exemptions (53.7 %) than those
with EWCs created under EU rules (69.2%).
Figure 4: Replies to the survey question “Are you in favour of ending exemptions of companies
with agreements signed before the first Directive entered into application?”
Source: ICF(2023), Section 5.1.2.8. N=233
In the workshops with EWC and management representatives, management representatives
agreed that voluntary agreements tend to be effective and cost-efficient, as long as both parties
acted in good faith. Participants expressed concern about imposing more rules and structures
especially where there is already a well-established social dialogue.
Among employee representatives, a variety of experiences were reported depending on corporate
culture, on the sector of activity and on the governing legislation. There was the perception that
voluntary agreements offer flexibility for addressing transnational issues. Participants agreed that
while renegotiations of EWC agreements can improve functionality, success in the renegotiation
71
process varies. No comments were expressed on the possibility of ending exemptions under Article
14.
2. Policy area 2
Targeted interviews
EWCs emphasise access to training, expert support, and trade union assistance for better
negotiation outcomes. While gender balance is endorsed in theory, issues are raised about the
practicality of imposing gender quotas that may also be detrimental to the nomination of suitable
representatives based on experience and competence.
Management of Union-scale undertakings on the whole support gender balance as a principle but
consider that gender quotas would be too difficult to enforce legally.
EU and national employers’ associations raise concerns with regard to the coverage and definition
of "reasonable" legal costs. There is opposition to resorting to legal action in EWC negotiations.
The complexity in establishing SNBs and the unnecessary involvement of outside experts are also
highlighted. They consider the issue of gender balance as issue for employee representatives to deal
with, but caution that that gender quotas would be difficult to implement.
EU and national trade unions are in favour of the inclusion of provisions guaranteeing expert
support, in particular trade union involvement, fair election processes and adequate resources to
ensure effective SNB establishment. Implementing quotas for gender balance would be complex
due to variations in workforce composition across sectors. Rather, achieving gender balance could
feature as an intention in EWC agreements – a trend that is currently being observed.
Legal experts overall agree on clearer timeframe for the establishment of the SNB. While legal
experts representing employees emphasise the importance of SNB's access to resources, training
and legal support and recognise the role of trade unions in facilitating effective social dialogue,
legal experts representing employers highlight the need for clear guidelines on legal costs to ensure
that these do not become disproportionate. Overall, experts are sceptical about introducing gender
balance quotas in the EWC Directive.
National authorities overall support clearer timeframes for the setting up of SNBs. As regards
resources, FR proposes evaluating "reasonable costs" based on expertise relevance, number of
requests, and quality, cautioning against rigid themes and advocating EWC choice of experts with
cost considerations. ES questions the need for SNBs to cover legal costs, as ES law already covers
these expenses. BE considers the provision on access to expertise unnecessary due to their existing
tradition of union experts and trade union support in BE. National authorities are cautious of
introducing an obligation for gender quotas in the composition of EWCs as they may not be
reflective of the gender composition in the workforce of multinational companies. While gender
balance in representation is welcome in principle, it may not be practical to implement.
In the online survey, 55.6% of responding employee/EWC representatives (100 out of 180
respondents) indicated having experienced problems in the process of setting up of an EWC
compared to 3.8 % of respondents among managers (2 out of 53 respondents). The only problem
mentioned by the managers related to the length of the negotiations. By comparison, around three
quarters of employee/EWC representatives who have experience problems reported: no effective
72
access to justice or remedies in the case of breaches of obligations by the company (79%); lack of
expertise for setting up the EWC (76%); delays in setting up of the SNB (74%).177
Figure 5: Replies to the survey question: “Have you experienced any problems/issues related
to the procedure for setting up your EWC?”
ICF(2023), Section 5.1.2.4. N=233
On the possibility of including a provision to ensure gender balance in the composition of the
EWC, both stakeholder groups had similar views. 36.1 % of respondents on behalf of management
and 35.8 % on behalf of employee/EWC representatives were in favour (84 out of 233 respondents
in total). Conversely, 47% of respondents on behalf of management (25 out of 53) and 38% of
responding employee/EWC representatives (65 out of 180) were not in favour of such measure.178
In the workshops with EWC and management representatives, management representatives
overall favoured flexible timeframes and encouraging gender balance, but without enforcing
quotas. Challenges were discussed regarding gender representation, particularly in male-dominated
industries like manufacturing. The EWC representatives emphasised the importance of ensuring a
smooth set-up procedure, usually requiring appropriate trade union support and training. Balanced
gender representation is a positive goal but faces challenges in sectors with low female workforce
percentages and diverse nominations or selection systems of employee representatives in Member
States. Sector and country-specific considerations in this regard would be necessary.
3. Policy area 3
Targeted interviews
EWCs generally support revising the definition of transnationality but differ on specifics. Some
want to insert examples, while others fear that examples would narrow the scope. EWCs overall
favour a need for management to justify when a matter is not transnational. Training for EWCs on
transnationality is recommended to ensure effective advocacy of workers' interests. EWCs report on
ineffectiveness of the consultation procedure and support provisions ensuring employee
consultation and reasoned responses from management before the management decision is taken.
177
Respondents (consisting of both employees and management) for EWCs created under the 1994 or 2009 Directive
indicated having experienced problems in setting up their EWC more frequently compared to respondents for
information and consultation bodies created before the first Directive came into effect (43.4% vs. 36.6%; 69
respondents out of 160 vs.15 respondents out of 41).
178
Remaining respondents preferred not to answer.
73
Some EWCs mentioned shortcomings in accessing free training and external expertise. EWCs
overall favour the options proposed to revise rules around confidentiality and non-disclosure for the
sake of improving transparency. They however acknowledge the challenges of defining objective
criteria and varying national laws regarding confidentiality. Awareness-raising and training are
suggested for handling confidentiality matters between EWC members and local committees.
Management of Union-scale undertakings oppose broadening the transnationality definition, citing
concerns of increased EWC interference, and believe that further specifying the definition would
have to contend with different perspectives on what constitutes transnational matters. Regarding
procedures and resources, management representatives find current procedures for consultation of
EWCs effective. Many highlight that consultations with the EWC already takes place before
decisions are made. Some management representatives support the obligation to provide reasoned
responses to EWCs' opinions. Overall, management representatives show goodwill in providing
free training to EWCs to perform their duties even if the costs borne by employers can be high.
Management representatives oppose revising confidentiality arrangements due to concerns over
information leaks and control. They all find that making the non-disclosure of information to the
EWC subject to prior or judicial authorisation is unnecessary.
EU and national employers’ associations express concerns over the lack of clarity in defining
transnational matters, highlighting potential excessive consultations and delays in time-sensitive
projects. They criticise proposed changes as vague and urge a practical approach, emphasising the
need for clear boundaries, legal certainty, and differentiation between local and transnational issues.
They oppose any measures which would potentially transform the EWC into a decision-making
body and shift focus away from consultation and information. They support practical rules for
making consultation more efficient while preserving trust and flexibility. They consider that a
requirement to provide a written response would delay the decision-making process and not
necessarily mean better outcomes from the EWC's perspective. Employers’ associations highlight a
need for confidentiality provisions that strike a balance between protecting sensitive information
and facilitating effective information and consultation processes.
EU and national trade unions are in favour of a broader definition of transnational matters to ensure
a thorough examination of company proposals and recognise supply chain interconnections. They
stress the need for clarity, inclusion of relevant elements, and updated frameworks to address
challenges such as proving transnational impact and handling restructuring plans. Transnational
issues encompass not only job losses but also changes in working methods and job quality. Trade
unions support changes that improve transparency and effective communication, that guarantee
appropriate resourcing for training and expertise. The consider that all recommendation of the
European Parliament would improve inclusion of workers' perspectives in the consultation process
to ensure meaningful engagement and decision-making. They argue for stricter rules for applying
confidentiality provisions and emphasise the importance of striking a balance between
confidentiality and transparency to ensure effective consultation and representation of workers'
interests.
Legal experts overall highlight the challenges in defining transnational matters and call for some
clarity to avoid disputes. Experts who work with EWC employee representatives argue that the
definition should be broadened to any phenomenon that has effects on working conditions within a
company as a whole rather than being limited to developments affecting a given number of
countries. With regard to the information and consultation procedure, legal experts highlight the
importance of clear guidelines, especially on timeliness. For legal experts representing employees,
adequate resourcing, and free training for EWCs would improve their effectiveness in the
consultation process. The also stress the need for clear and objective criteria for applying
74
confidentiality, the importance of transparency in explaining the reasons and duration of
confidentiality, and the necessity of facilitating coordination and exchange between different levels
of employee representation while ensuring adequate safeguards for sensitive information.
National authorities have diverse views on the concept of transnational matters. BE and SE support
clarification of the term to address differing interpretations of transnationality. However, SE has
reservations about widening the scope of the definition. PL welcomes proposals that provide more
specific information on transnational matters, despite potential consultation procedure prolongation.
NL believes the current definition is sufficient. FR proposes integrating environmental issues into
the definition but opposes obligation on management to justify non-transnational matters. DE
supports incorporating Recital 16 into the legal provision and introducing a provision for
management to justify non-transnational matters. ES supports clarifying the concept of
transnational matters and favours a provision that requires written justifications from management.
CZ maintains a neutral stance and prefers non-binding guidance to enhance the current directive.
Addressing the issue of timeliness and obliging a reasoned response from management to the EWC
opinion was overall supported by the national authorities. ES would be in favour of a requirement
on the management to provide a reasoned response to the EWC opinion prior to the decision being
implemented or adopted. NL states that such a requirement would be aligned with Dutch Works
Council practices. SE emphasises the importance of respecting national labour laws while allowing
reasonable timeframes for consultation.
National authorities’ support for amending provisions on confidentiality and non-disclosure of
information is overall limited. SE emphasises the need for balance and practicality in implementing
confidentiality rules. BE sees no need for involving the court in determining confidentiality. PL
finds its transposition of confidentiality rules satisfactory and views the proposed amendments as
unnecessary. NL has well-established rules on confidentiality and does not support exempting
EWC members from confidentiality obligations when sharing information with national or local
works councils. ES suggests striking a balance between transparency and confidentiality, defining
objective criteria, and avoiding administrative or judicial authorisation requirements.
In the online survey, as regard the concept transnational matters, 43.3% of responding
employee/EWC representatives (78 out of 180) indicated having experienced problems in their
EWC compared to 28.3% of respondents among managers (15 out of 53 respondents).
Figure 6: Replies to the survey question: “Have you experienced any problems/issues relating
to the definition of the concept of 'transnational matters' in your EWC?”
ICF survey(2023), Section 5.1.2.3 -. N=233
75
The results show disparity of views between management representatives and employee/EWC
representatives relating to the possibility of broadening the definition of transnational matters. A
majority of respondents on behalf of management consistently expressed mostly negative or very
negative views on impacts of policy option 3 on effectiveness of the EWC, efficiency of the
functioning of the EWC, on legal certainty and clarity, as well as mostly negative views on the
impact of a broadened definition on companies’ competitiveness. Conversely, a majority of
employee/EWC representatives viewed this policy option positively or very positively with regard
to the same types of impacts.
The below figure provides illustrates views of both stakeholder groups on option 3c’s impact on
legal certainty and clarity:
Figure 7: Replies to the survey question: “What would be the impact on legal certainty and
clarity if the definition of transnational matters included also the following elements”
Matters directly or indirectly affecting more than one Member State
Decision taken by the headquarters affecting employees in another Member State than the one where the headquarters is located
Decision affecting only one Member State but with potential impact on the whole group or in (an)other Member State(s)
ICF(2023), Section 5.1.2.3. N=233
Regarding consultation procedures, 70% of responding employee/EWC representatives (126 out
of 180 respondents) indicated having experienced problems in their EWC while 73.6% of
respondents on behalf of management (39 out of 53 respondents) indicated having never
experienced any problems in that respect.179
179
A greater share of respondents for EWCs created under the 1994 or 2009 Directive indicated having experienced
problems in relation to the consultation procedure than respondents for bodies created before the first Directive came
into effect (61% vs. 51.3%; 98 respondents out of 160 vs. 21 respondents out of 41).
76
Figure 8: Replies to the survey question: “Have you experienced any problems/issues related
to the consultation procedure in your EWC?”
ICF(2023), Section 5.1.2.3. N=233
Timeliness of the consultation procedure was the most frequent problem identified among the
responding employee/EWC representatives who have experienced problems (91%). For
management representatives, the most frequent problem identified related to the risk that
confidential company information would be disclosed in the consultation procedure (62% of
respondents).
On the policy option (3b and 3c) to provide a reasoned response on the EWC’s opinion, a majority
respondents among management have a neutral or negatives views on the impact of such a
requirement on effectiveness, efficiency of the EWC and legal certainty. 43.3 % consider that such
option would have a negative impact on competitiveness of EU companies. Conversely, a vast
majority of employee/EWC representatives believe that these would generate positive or very
positive impacts on legal certainty and clarity (88.4 %), efficiency of the EWC (81.2 %) and
effectiveness of the EWC (85,5 %), as well as that the measure would have positive impacts on
companies’ competitiveness (75.5 %).
The figure below shows the difference of views of management and EWC/employee
representatives on the perceived impacts on legal certainty and clarity of the policy measure
requiring a reasoned response to the EWC opinion.
Figure 9: Replies to the survey question: “What would be the impact on legal certainty and
clarity of laying down an obligation on management to provide a reasoned response on the
EWC’s opinion?”
ICF(2023), Section 5.1.2.3. N=233
In the workshops with EWC and management representatives, management representatives
raised potential conflicts between EWCs and local legislation, with worries that broadening the
concept of transnational matters covered by EWCs could disrupt their own functioning.
77
Multinational companies emphasised stressed the importance of fast decision-making at the local
level. Some companies took a broader interpretation of transnationality in their agreements,
emphasizing the importance of sharing information and maintaining transparency. EWC
representatives identified challenges related to confidentiality, the definition of transnational
matters, and access to external expertise and resources. The participants agreed that clear guidelines
for defining transnational matters are needed, taking into account their impact on European
employees and their potential magnitude. Different experiences were reported regarding the use of
confidentiality clauses: some participants find them unnecessary and advocate for transparency,
while others acknowledge the importance of confidentiality but want to strike a balance with the
need for information sharing and consultation. There was agreement overall that decision-making
processes should allow sufficient time for EWCs to provide input and opinions before final
decisions are made. Participants also agreed that access to external experts is important, and EWC
agreements should specify such rights. The participants overall expressed the view that limited
resources and budget constraints hinder the ability of EWC to engage effectively in information and
consultation processes.
4. Policy area 4
Targeted interviews
EWCs unanimously support a requirement on Member States' to grant EWCs and SNBs access to
courts. Pecuniary sanctions linked to company turnover and introducing a right to an injunction
allowing temporary suspension of management decision are seen as useful in incentivising
compliance by management, but some EWC representatives point out that such sanctions would
potentially harm companies and result in detrimental repercussions for employees.
Management of Union-scale undertakings consider that guaranteeing EWC and SNB access to
justice and introducing the right of injunction for EWCs to suspend the implementation of
management decisions until the information and consultation procedure has been duly conducted
will encourage more court cases and goes against the importance of promoting cooperation between
the company and the EWC. Management representatives unanimously reject very high pecuniary
sanctions recommended by the Parliament as this would create competitive disadvantages for
companies and be counterproductive for employees too.
EU and national employers’ associations express concerns about the considered options for revising
the enforcement provisions of the EWC Directive, highlighting potential negative impacts on
decision-making, corporate governance, and employer-employee relationships. They call for a
balanced and pragmatic approach that takes into account the specific needs of companies and
Member States.
EU and national trade unions state that there is a necessity to harmonise the national legal
frameworks on access to justice for achieving a level playing field for EWCs, and to strengthen the
dissuasive nature of sanctions to enhance the effectiveness of EWCs.
Legal experts underline the need for standardised processes for EWCs to access justice, and for the
inclusion of dissuasive sanctions. Experts working with management representatives however view
fines for non-compliant companies as counterproductive when tied to annual turnover percentages.
Among national authorities, DE and SE express concerns about conflicts over official
representation, asking for further clarity. BE has well-established courts for employment conditions
and finds the existing system effective, with high potential sanctions acting as a deterrent and
incentivising the formation of EWCs. PL supports possible amendments relating to EWC resources
78
and legal capacity but cautions against complex administrative and judicial procedures and
disproportionate fines. FR suggests specifying resources allocated to EWCs but does not support
the right to seek a preliminary injunction. Introducing pecuniary sanctions in the directive would be
problematic and not aligned with NL law on local works councils. FI sees challenges with
preliminary injunctions and considers pecuniary sanctions counterproductive.
In the online survey, majority of respondents among employee/EWC representatives (65.6 %)
stated to have experienced problems related to enforcement of their EWC rights and obligations,
compared to 1.9% of management representatives.
Figure 10: Replies to the survey question: “Have you experienced problems/issues related
to enforcement of your EWC rights and obligations provided by the existing rules?”
ICF(2023), Section 5.1.2.7. N=233
The policy option involving far-reaching sanctions (option 4c) could, according to management
representatives, have unintended consequences. Increased penalties may harm competitiveness,
result in job cuts, and deter investment. Stricter legal processes would undermine trust and hamper
constructive social dialogue, while injunctions could disrupt business decisions and upset the
balance of power between EWC and management. On the other hand, a majority of employee/EWC
representatives saw the same option having the potential to generate positive impacts on
compliance with rights and obligations under the Directive (85%; 153 out of 180 respondents) and
on effectiveness and efficiency of the EWC (87.2%; 157 respondents). They were however less
likely to find the impact of these sanctions as positive from the perspective of the company's
competitiveness (69.4%; 152 respondents).
Employee/EWC representatives consider that sterner sanctions would encourage effective
communication between workers and management, providing the EWC with greater leverage.
However, according to them, sanctioning methods that lead to job losses would defeat their
purpose.
In the workshops with EWC and management representatives, management representatives
raised concerns about the potential competitive disadvantage European companies could face if
heavily sanctioned obligations regarding consultation were imposed. This could also negatively
impact cooperation between management and employees. The effectiveness of the current
framework was highlighted, with minimal disputes over the past 25 years. Concerns were expressed
about enforcement rules disrupting the EU market. The potential impact of GDPR-sized fines was
discussed, which could lead to reduced interactions with the EWC due to increased legal risk. The
79
EWC representatives highlighted the importance of access to justice for EWCs. Timely access and
coverage of legal costs, along with stricter sanctions, were identified as crucial. Stricter sanctions
with real impact, including alternative solutions like delayed implementation of decision or loss of
operating rights, were proposed. Publicity and transparency could also address non-compliance, but
potential negative effects on employees were recognised.
80
ANNEX 3: WHO IS AFFECTED AND HOW?
1. PRACTICAL IMPLICATIONS OF THE INITIATIVE
For employees of Union-scale undertakings and their representatives, the initiative mainly
introduces rights, improves their entitlements in relation to transnational information and
consultation, increases legal certainty, and gives better access to justice. The ca. 5.4 million
EU/EEA employees (and their representatives) of the currently exempted undertakings with
‘voluntary agreements’ (323) would gain the right to request the establishment of an EWC in order
to benefit from an equal application of minimum rights and obligations enforceable under EU law.
Together with management, they can also opt to preserve well-functioning voluntary agreements.
EWCs in undertakings with ‘Article 14 agreements’, which remained subject to the legislation
transposing the 1994 EWC Directive, will be able to rely on the revised requirements of the
Directive, as all other EWCs. In the context of requests to establish a new EWC, employee
representatives in the large majority of Member States would gain a clear entitlement to the
coverage of their reasonable legal costs and more legal certainty regarding management’s
obligation to initiate negotiations within six months. The workforce of Union-scale undertakings
would also benefit from the objective to ensure a balanced gender composition of EWCs, which is
to be reflected in newly concluded or renegotiated EWC agreements. During the information and
consultation process, EWCs which are not yet entitled to a reasoned response from management to
their opinion, prior to the adoption of a decision on transnational matters, would gain such a right.
This will help them to engage in a genuine dialogue with central management on transnational
matters. This dialogue is also facilitated by clarifications of the essential concept of transnational
matters, defining the scope of the information and consultation activities of EWCs, and by the
limitation of confidentiality obligation to justified cases. For EWCs operating on the basis of
subsidiary requirements (20), the requirement of at least two plenary meetings per year would lead
to a more regular information and consultation on transnational matters. For EWCs, SNBs and
employees’ representatives who currently do not have effective remedies to enforce all their rights
under the Directive, the initiative would improve access to justice.
For union-scale undertakings and their central management, the initiative imposes certain new
obligations and costs, while also delivering benefits relating to a simplified and more coherent legal
framework and better employee involvement on transnational matters. In the currently exempted
undertakings with ‘voluntary agreements’ (323), central management would have to initiate
negotiations of a new EWC, if requested by employees (or their representatives) in accordance with
the Directive. This will entail costs for those undertakings estimated at ca. EUR 148 000 per
negotiation. Generally, during negotiations or renegotiations involving an SNB, undertakings will
be legally required to cover - in addition to other costs incurred in the setting-up phase - also the
SNB’s reasonable legal costs, which is currently not explicitly required in the large majority of
Member States. Where necessary to align existing EWC agreements with the revised requirements
– e.g., to address the coverage of EWCs’ expenses for legal or expert advice and training – central
management must engage in renegotiations with EWCs or SNBs, including in the 28 undertakings
with ‘Article 14 agreements’ which are currently exempted from the application of the Directive.
Evidence suggests that a re-negotiation process is shorter than the process for setting up a new
EWC but may require multiple meetings in complex cases. Based on the available evidence, it was
possible to monetise certain costs linked to meetings (ca. EUR 18 400 per meeting180
) between
180
See Annex 4 ‘Analytical methods’ (Section 4.4).
81
management and EWC representatives for the renegotiation of existing agreements. This partial
monetisation can provide an indication of the order of magnitude of the overall costs related to
renegotiations, bearing in mind that it should, however, not be taken as an approximation of those
overall costs. In any case, the costs of renegotiation even if several meetings are needed should not
have any significant economic impact. Moreover, in a substantial number of cases, the necessary
adaptations of EWC agreements could be agreed as part of regular renegotiations, entailing no or
only very limited additional costs compared to the baseline.181
Undertakings could also face an
incremental increase in the costs of running an EWC, for instance in relation to the obligation to
provide a reasoned response to the EWC. Undertakings with EWCs based on subsidiary
requirements (20) would bear additional cost of ca. EUR 42 000 for the required second plenary
meeting per year.182
Finally, in cases of breaches of obligations, the undertakings would face a risk
of higher pecuniary sanctions. The occurrence of legal disputes and application of penalties is
however expected to remain low.
The initiative does not include any reporting requirements falling under the One-In:One-Out
approach. Specifically, as the Directive does not require but merely allows undertakings to restrict
the dissemination of confidential information or to withhold certain information, the requirement to
inform employees’ representatives, upon request, of the grounds justifying such restrictions does
not amount to a reporting requirement. Moreover, the requirement to provide a reasoned response
to EWC opinions is a core information and consultation activity rather than reporting.183
Related
costs are therefore considered as adjustment costs.
All Member States would have to amend their legislation implementing the Directive. They would
need to collect and notify to the Commission information on how EWCs, SNBs and employees’
representatives can bring judicial proceedings in respect of all their rights under the Directive. This
obligation would entail limited administrative costs although it could be further minimised as a part
of the standard process of notifying transposition measures via the available IT systems. By
promoting a more effective access to courts, the preferred option could potentially entail additional
limited adjudication costs for Member States, considering in particular that EWCs are exempted
from court fees in eight Member States.184
This will affect primarily Member States which have
thus far not guaranteed effective remedies for rightsholders under the Directive. The expected
higher pecuniary sanctions are assumed to accrue to Member States’ budgets.
181
EWC agreements are revised on average every 5 years.
182
This may affect also EWCs based on agreements, for which the subsidiary requirements can serve as a benchmark
during negotiations. Currently, ca. 50% of EWC agreements provide for only one annual plenary meeting. However,
such an effect would be a free choice of the parties.
183
Already in the baseline scenario, the existing text of Directive 2009/38/EC requires that a ‘dialogue’ and ‘exchange
of views’ be established between management and employees’ representatives on transnational matters (this is more
clearly reflected in point 1(a) of Annex I of the Directive for EWCs which do not operate on the basis of agreements).
This existing requirement implies that EWCs’ opinions cannot remain a ‘one-way-street’ but management must
respond to them to ensure a genuine dialogue. The envisaged explicit requirement of a reasoned response will clarify
this core feature of the consultation obligation. It implicitly requires management to take EWCs’ opinions into account,
because a reasoned response cannot be provided without having first considered those opinions on their merits. It will
clarify an implicit obligation in the information and consultation process.
159
AT, LT, ES, BG, FR, DE, RO, SE, NL. Cf. ETUC report by Jagodziński / Stoop (2023) Access to Justice for
European Works Councils, p. 31.
82
2. SUMMARY OF COSTS AND BENEFITS
The tables below provide an overview of the benefits and the costs of the preferred policy option.
As benefits are not quantifiable, a qualitative justification and an explanation is provided. Costs are
quantified whenever possible, and when this is not possible, a qualitative justification and an
explanation is provided.
I. Overview of Benefits (total for all provisions) – Preferred Option
Description Amount Comments
Direct benefits
Market efficiency from a
simplified and more
coherent legal framework
regarding transnational
information and
consultation rights
Not quantifiable, expected to
be negligible.
This benefit is relevant for the currently 3970 Union-scale
undertakings185
. By removing the exemptions from the scope
of the Directive, undertakings would have a less fragmented,
simpler legislative framework.
On the employees’ side, it would primarily be relevant for:
- the ca. 5.4 million EU/EEA employees of the 323
currently exempted undertakings with ‘voluntary
agreements’;186
- the ca. 465.000 employees of undertakings with EWC
agreements that currently remain subject to the 1994
EWC Directive (28).187
More (cost-)efficient and
expedient process for
negotiating and
renegotiating EWC
agreements
Not quantifiable and
marginal savings on
undertakings’ cost of setting
up a new EWC agreement or
renegotiating existing EWC
agreements.
By specifying the issues to be agreed by parties with respect to
EWCs’ resources, and by requiring coverage of special
negotiating bodies’ reasonable legal costs, some disputes and
potential legal actions would be pre-empted. As an
accompanying measure, the preferred option would clarify the
wording of the deadline for initiating negotiations, to improve
legal certainty and prevent delays in the setting-up process. In
their combination these measures could generate some cost
savings for undertakings.
Cost savings regarding the setting up a new EWC benefit the
ca. 20 undertakings establishing a new EWC per year. The
average overall costs of setting up one new EWC are estimated
at ca. EUR 148 000, whereas the potential savings on these
costs due to the preferred policy option cannot be quantified.
Cost saving regarding the renegotiation of existing EWC
agreements benefit the unknown share of the 678 undertakings
with an EWC188
which may face renegotiations involving an
SNB. Potential savings on these costs due to the preferred
policy option cannot be quantified. Nor could be reliably
quantified existing average costs of renegotiations. Evidence
suggests that a re-negotiation process is shorter than the
process for setting up a new EWC but may require multiple
185
Based on past trends, the number of Union-scale undertakings is expected to increase at a rate of close to 4% per
year over the baseline period, and the number of their employees at a rate of ca. 3,4%, cf. ICF(2023), Section 3.2.1.
186
Estimated average number of EU employees per undertakings with an EWC is 16.600. Cf. Annex 4.
187
See footnote 164 above.
188
EWCs or transnational information and consultation bodies exist in 1.001 undertakings. Of those, 323 are ‘voluntary
agreements’ concluded before the first EWC Directive entered into application. The number of EWCs is expected to
increase at a rate of 9/year, taking into account the conclusion of an estimated 20 new EWC agreements per year and
the termination of 11 such agreements.
83
meetings in complex cases. Based on the available evidence, it
was possible to monetise certain costs linked to meetings (ca.
EUR 18 400 per meeting189
) between management and EWC
representatives for the renegotiation of existing agreements.
This partial monetisation can provide an indication of the order
of magnitude of the overall costs related to renegotiations,
bearing in mind that it should not be taken as an approximation
of those overall costs.
Clearer and more
comprehensive EWC
agreements
Not quantifiable. This benefit is relevant for the currently 678 undertakings with
an EWC and their ca. 11.3 million employees190
, as well as
parties to future EWC agreements, including potentially the
parties to the currently 323 ‘voluntary agreements’.
By specifying the issues to be agreed by parties with respect to
EWCs’ resources, and by requiring coverage of special
negotiating bodies’ reasonable legal costs, the risk of gaps and
legal uncertainty would be reduced.
Improved gender balance on
EWCs
Not quantifiable. Given that in ca. 60% of existing EWCs women are
underrepresented, the more balanced gender representation of
interests would contribute to more equitable management
decisions and improved employment conditions.
Improved social dialogue in
Union-scale undertakings
Not quantifiable. This benefit is potentially relevant for the 3970 Union-scale
undertakings and their ca. 31.7 million EU/EEA employees
and directly relevant for those that have set up an EWC (678
undertakings and their ca. 11.3 million employees).
Employees of all Union-scale undertakings without an EWC
(including those with ‘voluntary agreements’) would be given
the equal right to request the establishment of an EWC, or to
rely on the minimum requirements of the revised Directive
where an EWC already exists.
For Union-scale undertakings with an EWC, the requirement
for a reasoned response to EWCs’ opinions prior to the
adoption of a decision on transnational matters is expected to
contribute significantly to ensuring a genuine dialogue
between management and EWCs where the respective EWC
agreement does not yet contain such a requirement. The
preferred option is likely to have a positive effect on the
quality of transnational social dialogue also by increasing legal
clarity and access to resources and ensuring a more effective
deterrence of non-compliance (see subsequent rows).
For undertakings with EWCs operating on the basis of
subsidiary requirements (20), the requirement of at least 2
plenary meetings per year would lead to a more regular
information and consultation on transnational matters, which
would positively impact the quality of the social dialogue.
There would also be an unquantifiable spill-over effect on
undertakings with EWCs operating on the basis of agreements
(of which ca. 50 % currently require only one annual plenary
meeting).
189
See Annex 4 ‘Analytical methods’ (Section 4.4).
190
Estimated average number of EU employees per undertakings with an EWC is 16.600. Cf. Annex 4.
84
Improved legal certainty Not quantifiable This benefit is potentially relevant for the 3970 Union-scale
undertakings and their ca. 31.7 million EU/EEA employees
and directly relevant for those that have set up an EWC (678
undertakings and their 11.3 million employees)
By clarifying the concept of ‘transnational matters’, the
requirement to initiate negotiations within 6 months following
a request to establish a new EWC, the issues to be addressed in
EWC agreements, and the conditions for imposing
confidentiality or withholding information from EWCs, the
preferred option is expected to increase legal certainty
significantly. Consequently, the risk of disputes, delays and
costs is likely to decrease.
More effective enforcement
through sanctions and
remedies (access to justice)
Not quantifiable. Generally, the preferred option would promote effective
compliance monitoring by the Commission, require
proportionate and dissuasive sanctions in the case of
infringements of rights under the Directive (including by
means of pecuniary sanctions based on undertakings’ turnover,
where applicable), and access to justice with respect to all of
those rights, in accordance with Article 47 CFR.
This benefit is relevant for the estimated 4.3 million EU/EEA
employees who currently do not have an effective remedy in
the case of non-compliance with their rights under the
Directive.
The 5.4 million employees of currently exempted undertakings
with ‘voluntary agreements’ (323) would benefit from
justiciability of minimum information and consultation rights
under EU law, where such agreements are replaced by EWC
agreements.
Marginally increased
revenue for Member States
Not quantifiable and
negligible.
The requirement to consider undertakings’ turnover when
determining pecuniary sanctions is likely to lead to higher
penalties. While pecuniary sanctions are assumed to accrue to
Member States’ budget, the increase in revenue is expected to
be negligible due to the low incidence of such penalties.
Indirect benefits
Indirect economic benefits
of improved transnational
social dialogue
Not quantifiable Improved transnational social dialogue can deliver indirect
benefits for undertakings with an EWC:
- better informed strategic decision-making and better-
targeted measures accompanying structural change;
- reinforced mutual trust between management and the
workforce.
Broader economic benefits
of increased gender balance
on EWCs
Not quantifiable By promoting gender balance in EWCs, the preferred option is
expected to contribute to delivering broader economic benefits
such as a higher level of employment and productivity.
(1) Estimates are gross values relative to the baseline for the preferred option as a whole (i.e. the impact of individual
actions/obligations of the preferred option are aggregated together); (2) Please indicate in the comments column which
stakeholder group is the main recipient of the benefit;(3) For reductions in regulatory costs, please describe in the
comments column the details as to how the saving arises (e.g. reductions in adjustment costs, administrative costs,
regulatory charges, enforcement costs, etc.;);.
II. Overview of costs – Preferred option
Citizens/Consumers Businesses Administrations
85
One-off Recurrent One-off Recurrent One-off Recurrent
Negotiatio
n of new
EWC
agreement
s
Direct adjustment
costs
N/A N/A.
Ca. € 148 000
(=0.0006% of
average global
turnover) per
negotiation of a
new EWC
agreement
(costs incurred
by an uncertain
share of the
currently 323
exempted
undertakings
with ‘voluntary
agreements’)
Based on
hypothetical
assumptions
regarding the
rate of creation
of new EWCs
in previously
exempted
undertakings,
aggregated
costs for all
such
undertakings
range from ca
€ 12m to ca.
€ 36m:
- ca € 12m if an
EWC would be
requested in
25% of those
undertakings;
- ca. € 24m
assuming a
creation rate of
50%;
- ca. € 36m
assuming 75%.
Incremental
increase in the
costs of
operating an
EWC
(currently on
average ca.
€ 300 000 per
year) due to
better coverage
of training
costs, legal
costs and
experts’ fees.
N/A N/A
Renegotia
ting EWC
agreement
s
Direct adjustment
costs
N/A N/A
Average costs
of renegotiation
could not be
reliably
quantified.191
Evidence
suggests that a
re-negotiation
N/A N/A N/A
191
Based on the available evidence, it was possible to monetise certain costs linked to meetings (ca. EUR 18 400 per
meeting) between management and EWC representatives for the renegotiation of existing agreements. This partial
monetisation can provide an indication of the order of magnitude of the overall costs related to renegotiations, bearing
in mind that it should not be taken as an approximation of those overall costs (see Annex 4 Section 4.4.).
86
process is
overall shorter
than the
process for
setting up a
new EWC but
may entail
several
meetings in
more complex
cases.
The
renegotiation
costs would be
incurred by an
– uncertain –
share of the
currently 678
undertakings
with an EWC
to adapt to the
revised
requirements of
the Directive.
Based on
hypothetical
assumptions
regarding the
share of EWC
agreements that
will need to be
renegotiated
and the number
of meetings
required for
that purpose,
these one-off
costs could fall
in the
following
ranges:
- if 25% of
existing EWC
agreements
were
renegotiated,
aggregated
costs would
range between
ca. € 3,1m (if
one meeting
would be
required per
renegotiation)
to ca. € 12,5m
(if four
meetings would
be needed)
- if 50% of
87
existing EWC
agreements
would be
renegotiated,
aggregated
costs would
range between
ca. € 6,2m (if
one meeting
would be
required per
renegotiation)
to ca. € 25m (if
four meetings
would be
needed);
- if 75% of
existing EWC
agreements
would be
renegotiated,
aggregated
costs would
range between
ca. € 9,4m (if
only one
meeting would
be required per
renegotiation)
to € 37,5m (if
four meetings
would be
needed)
Covering
reasonable
legal costs
of special
negotiatin
g bodies
Direct adjustment
costs
N/A N/A N/A
Possible
marginal
increase in the
costs of
negotiating or
renegotiating
EWC
agreements
with an SNB,
see above for
estimates of the
respective
estimates of
average overall
costs. EWC
agreements are
renegotiated on
average every 5
years, but not
all
renegotiations
involve an
SNB.
N/A N/A
Potentiall
y more
Direct adjustment
costs
N/A N/A N/A
Possible
incremental
N/A N/A
88
extensive
coverage
of EWCs’
expenses
for legal
and expert
advice
and
training;
reasoned
response
to EWC
opinions
increase in the
costs of
running an
EWC for
certain
undertakings,
depending on
the negotiated
content of the
relevant EWC
agreements.
The average
overall costs of
running an
EWC are
estimated at ca.
EUR 300 000 /
year.
Based on
hypothetical
assumptions
regarding the
possible
marginal
increase in
these costs, the
combined
effect of all
measures under
the preferred
option could
entail
aggregated
costs for all
EWCs (678
existing and 90
created in the
baseline
period) over
the baseline
period, in the
following
range:
- ca. € 55,1m
assuming a 5%
increase in
operating costs;
- ca. € 110,2m
assuming a
10% increase
in operating
costs;
- ca. € 165,3m
assuming a
15% increase
in operating
costs.
One
additional
Direct adjustment
costs
N/A N/A N/A
Ca. € 42 000
for an
N/A N/A
89
plenary
meeting
per year
additional
annual plenary
meeting
(applies for 20
undertakings
with an EWC
based on
subsidiary
requirements)
On this basis,
aggregated
costs for
undertakings
concerned (20)
over the
baseline period
would amount
to ca. € 4,2m
Notificati
on of
informatio
n on
judicial
proceedin
gs
available
to enforce
min.
rights of
the
Directive
Direct
administrative
costs
N/A N/A N/A N/A
Negligible,
because the
notification
obligation
could be
discharged
as a part of
the standard
process of
notifying
transpositio
n measures
via the
available IT
systems
N/A
Direct regulatory
fees and charges
N/A N/A N/A N/A N/A N/A
Payment
of higher
pecuniary
sanctions
Direct
enforcement costs
N/A N/A N/A
Higher
pecuniary
sanctions for
infringements,
but no specific
thresholds set
at EU level.
Such costs
would apply
only to
sanctioned
undertakings.
Their overall
scale would be
negligible,
given the low
incidence of
pecuniary
sanctions and
legal actions.
N/A
N/A
(Evidence
remains
inconclusive
as to whether
the preferred
option would
lead to a
higher
incidence of
legal
procedures,
and thereby
possible
higher
adjudication
costs for
Member
States. Even
if a small
90
increase
should
materialise,
costs are
expected to
be negligible
given the
very low
baseline.)
Indirect costs N/A N/A N/A N/A N/A N/A
(1) Estimates (gross values) to be provided with respect to the baseline; (2) costs are provided for each
identifiable action/obligation of the preferred option otherwise for all retained options when no preferred
option is specified; (3) If relevant and available, please present information on costs according to the
standard typology of costs (adjustment costs, administrative costs, regulatory charges, enforcement costs,
indirect costs;).
III. Application of the ‘one in, one out’ approach – Preferred option(s)
[M€]
One-off
(annualised total net present
value over the relevant period)
Recurrent
(nominal values per year)
Total
Businesses
New administrative
burdens (INs)
N/A N/A N/A
Removed administrative
burdens (OUTs)
N/A N/A N/A
Net administrative
burdens*
N/A N/A N/A
Adjustment costs**
Ca. € 148 000 (=0.0006% of
average global turnover) per
negotiation of a new EWC
agreement (costs incurred by
an uncertain share of the
currently 323 exempted
undertakings with ‘voluntary
agreements’)
Based on hypothetical
assumptions regarding the rate
of creation of new EWCs in
previously exempted
undertakings, aggregated costs
for all such undertakings range
from ca € 12m to ca. € 36m:
- ca € 12m if an EWC were
requested in 25% of those
undertakings;
- ca. € 24m assuming a
creation rate of 50%;
- ca. € 36m assuming 75%.
Costs incurred during
Incremental increase in the costs of
operating an EWC (currently on
average ca. € 300 000 per year) due
to better coverage of training costs,
legal costs and experts’ fees. The
scale depends on the results of
autonomous negotiations between
parties.
Based on hypothetical assumptions
regarding the possible marginal
increase in these costs, the
combined effect of all measures
under the preferred option could
entail aggregated costs for all EWCs
(678 existing and 90 created in the
baseline period) over the baseline
period, in the following range:
- ca. € 55,1m assuming a 5%
increase in operating costs;
- ca. € 110,2m assuming a 10%
increase in operating costs;
- ca. € 165,3m assuming a 15%
increase in operating costs.
91
renegotiation of an EWC
agreement. Average costs of
renegotiation could not be
reliably quantified.192
Evidence suggests that a re-
negotiation process is overall
shorter than the process for
setting up a new EWC but
may entail several meetings in
more complex cases. The
renegotiation costs would be
incurred by an – uncertain –
share of the currently 678
undertakings with an EWC to
adapt to the revised
requirements of the Directive.
Based on hypothetical
assumptions regarding the
share of EWC agreements that
will need to be renegotiated
and the number of meetings
required for that purpose,
these one-off costs could fall
in the following ranges:
- if 25% of existing EWC
agreements were renegotiated,
aggregated costs would range
between ca. € 3,1m (if one
meeting would be required per
renegotiation) to ca. € 12,5m
(if four meetings would be
needed)
- if 50% of existing EWC
agreements were renegotiated,
aggregated costs would range
between ca. € 6,2m (if one
meeting would be required per
renegotiation) to ca. € 25m (if
four meetings would be
needed);
- if 75% of existing EWC
agreements were renegotiated,
aggregated costs would range
between ca. € 9,4m (if only
one meeting would be required
per renegotiation) to € 37,5m
(if four meetings would be
needed)
€ 42 000 for an additional annual
plenary meeting (costs incurred by
the 20 undertakings with an EWC
based on subsidiary requirements).
On this basis, aggregated costs for
undertakings concerned (20) over
the baseline period would amount to
ca. € 4,2m.
Citizens
New administrative
burdens (INs)
N/A N/A N/A
Removed administrative
burdens (OUTs)
N/A N/A N/A
192
See footnote above.
92
Net administrative
burdens*
N/A N/A N/A
Adjustment costs** N/A N/A
Total administrative
burdens***
N/A N/A N/A
(*) Net administrative burdens = INs – OUTs;
(**) Adjustment costs falling under the scope of the OIOO approach are the same as reported in Table 2 above. Non-
annualised values;
(***) Total administrative burdens = Net administrative burdens for businesses + net administrative burdens for citizens
3. RELEVANT SUSTAINABLE DEVELOPMENT GOALS
IV. Overview of relevant Sustainable Development Goals – Preferred Option(s)
Relevant SDG Expected progress towards the Goal Comments
SDG no. 8 – decent work
and economic growth
By improving the quality of transnational
information and consultation and reinforcing
access to justice for employee representatives, the
preferred option will foster the social dimension
of the green and digital transitions. It is likely to
contribute to socially sustainable strategic
decision-making and mutual trust between
management and the workforce in Union-scale
undertakings, and thereby to more sustainable
and equitable working conditions.
The progress towards SDG no. 8 is not
quantifiable.
SDG no. 5 – achieve gender
equality and empower all
women and girls
By requiring parties to EWC agreements to agree
on the objective of achieving a gender-balanced
composition of EWCs (= underrepresented
gender to hold at least 40% of the seats), the
preferred option will contribute effectively to
SDG no. 5. Currently, women are
underrepresented on ca. 60% of EWCs.
A more balanced gender-composition of
EWCs is likely to contribute to broader
indirect economic and social benefits, as
well as more equitable working conditions,
by enabling better strategic decision-making
and more representative EWC opinions.
93
ANNEX 4: ANALYTICAL METHODS
This annex describes the analytical methods used for the purposes of this impact assessment. After
providing an overview of the analytical methods used (Section 1), general explanations are
provided regarding evidence / data limitations as well as remedial measures taken to address those
limitations (Section 2). Subsequently, detailed information is provided on the methodology for the
analysis of the baseline (Section 3) and impacts of policy options (Section 4).
1. Overview of analytical methods used
The following methods were used to develop this impact assessment:
- Economic analysis: To the extent possible given the available data, the consequences of
taking no EU-action (baseline) and the impacts of the policy options were monetised based
on quantified cost-analysis, as described in detail in Sections 3 and 4 below. Benefits are
analysed largely in qualitative terms, for the reasons explained in Section 2 below.
- Legal comparative analysis and case-law analysis: In order to complement the
information on Member States’ legislation on transnational information and consultation
gathered by the Commission when monitoring the transposition of the Directive and for the
2018 evaluation of that directive, legal comparative analyses were carried out by the
European Centre of Expertise in the field of labour law, employment and labour market
policies (ECE) on:
o national provisions transposing Directive 2009/38 on European Works Councils as
regards confidentiality, non-disclosure of information and gender balance;
o national provisions concerning the enforcement of rights and obligations arising
from Directive 2009/38/EC on European Works Councils.
See Annex 8 for an overview of the findings of these analyses.
In addition, case law of Member States’ courts was analysed to inform the problem
definition, see Annex 9 for the findings.
- Survey and interview methodology: In the context of the supporting study (ICF 2023),
evidence from key stakeholders (management and employees’ representatives in
undertakings with an existing EWC or transnational information and consultation body,
national social partners, Member State authorities) was collected by means of an online-
survey, workshops, and targeted interviews. The population, methodology and results of
these data-gathering approaches are described in Annex 2.
- Statistical analysis: ETUI’s EWC database and the large-scale survey of EWC
representatives done by ETUI in 2018 are key evidence sources. Experts from ETUI
provided the Commission services with new additional ad hoc data extractions to support
this impact assessment. Using data analysis software, views of EWC representatives on
different issues were cross-tabulated to complement primary survey data regarding the
setting-up of EWCs and functioning of transnational information and consultation.
Moreover, Eurostat provided an ad-hoc data extraction from the EuroGroups Register, to
determine the number of undertakings falling under the definition of ‘Community-scale
undertaking’ laid down in Directive 2009/38.
- Literature review: The supporting study (ICF 2023) and the Commission services carried
out a comprehensive desk research and analysis of literature on the issues of relevance for
94
this impact assessment. See ICF(2023), Annex – Section 1, for a list of relevant literature
and Annex 1 of this impact assessment for an overview of the key sources.
2. General remarks regarding data / evidence limitations and remedial measures
Certain challenges relate to the characteristics of the policy field of the initiative, and of the
stakeholders. The topic of transnational social dialogue within undertakings is the subject of often
polarised stakeholder views. For instance, as mentioned above, the large-scale survey of EWC
representatives done by ETUI in 2018 and ETUI’s EWC database are key evidence sources, but
clearly affected by selection-bias and the risk of inaccurate self-reporting by stakeholders.
Throughout the various evidence gathering activities, this was addressed by seeking the views of a
broad range of relevant stakeholders in addition to management and EWC representatives, such as
legal experts, representatives of relevant national authorities, European and national social partners.
Moreover, when presenting the results of the evidence gathering, the sources of the reported views
are systematically stated. Results are not aggregated across different stakeholder groups, in view of
the polarisation described above.
Furthermore, while it is expected that a better functioning social dialogue in Union-scale
undertakings will deliver both social and economic benefits – e.g., in the form of a more involved
workforce, better quality jobs, improved openness and adaption to change – the analysis of such
impacts is necessarily qualitative in nature (see Annex 12 for detailed explanations on those
benefits). Benefits of transnational information and consultation tend to be long-term and indirect in
nature and depend on intangible factors such as the engrained culture of employee involvement in
the respective undertaking. Moreover, the recast Directive sets a procedural framework on
transnational information and consultation that leaves broad freedom to parties to EWC agreements
to tailor the information and consultation process as well as accompanying provisions on resources,
training, etc. to their specific situation and needs. These factors make it fundamentally challenging
to establish a causal link between the regulatory framework defining the baseline, as well as policy
options seeking to develop or clarify that framework, and specific economic or social outcomes.
Nevertheless, efforts were made to quantify/monetise both the consequences of the problem under
the baseline scenario and the impacts of policy options to the extent possible, as described in detail
in Sections 3 and 4 below.
Due to the structure of the stakeholder population and the polarisation of their policy views, there is
a risk of bias also in the literature and other evidence sources on transnational information and
consultation. To mitigate the risk of a skewed evidence base, information from potentially biased
sources has been cross-checked with evidence from other sources to ensure robustness. Moreover,
the respective data sources are specified transparently to acknowledge possible biases. In the
framework of the supporting study, a set of quality criteria was applied for the purposes of
identifying and reviewing the key sources of literature.
Certain data derive from small samples or stem from the analyses carried out in 2016 for the
purposes of the evaluation of the Directive. While various avenues were explored in the framework
of the supporting study to provide more up-to-date quantified estimates of relevant costs (such as
negotiation costs and operating costs of EWCs), only partial estimates of certain cost elements
proved feasible, due to a lack sufficient information on all relevant cost factors. Nevertheless, the
new partial cost estimates usefully complement older overall estimates, as they allow to confirm the
latter's continued relevance through partial triangulation. Specific limitations regarding individual
data points are explained in Sections 3 and 4 below.
3. Methodology for the assessment of the baseline
95
The assessment of the baseline is carried out over a 10-year period. For this purpose, the following
trends were considered:
• Stationarity: based on the information gathered from consultation and other evidence
compiled, it was assumed that the extent and frequency of problems concerning the setting-
up and operation of EWCs will remain relatively stable over time. Therefore, the
stationarity of these values is assumed.
• Linear growth: building on the knowledge gathered through desk research and stakeholder
consultation, it emerged that the number of active EWCs per year, net of terminated/inactive
EWCs, is continuously growing at a roughly constant rate. To account for such growth over
time, for the variables considered dynamic, a hypothesis of linearity is assumed. External
factors are also considered where relevant.
3.1. Population affected
Number of eligible companies
According to the Eurostat data, in 2021, 3676 multinational companies operational in the EEA
constituted an undertaking or group of undertakings within the scope of the Directive, employing
close to 30 million workers in the EEA.193
Taking into account the annual growth rate194
, the
estimate for 2023 is 3,970 eligible companies with a total of 31.7 million employees.
For a multinational to be covered by the EWC Directive, it needs to employ over a thousand
employees in total and at least 150 in two EU Member States. Most EWCs are established in multi-
national companies (‘MNCs’) with more than 5,000 employees. In a sample of eligible companies
analysed by Eurofound195
, companies with more than 10,000 employees in the EU were twice as
likely to have established an EWC than companies with fewer than 5,000 employees.
Number and demographics of EWCs
Based on the ETUI database196
, EWCs or agreements on transnational information and
consultation197
are operating in around 1000 companies. Figure 1 provides an overview per type
of EWC or information and consultation agreement.
193
Source: Eurostat, ad-hoc extraction from the EuroGroups Register. For further information, please see: Employment
in large-scale multinational enterprise groups - Statistics Explained (europa.eu)
194
In the years for which this indicator was measured (i.e., 2019-2021), the number of eligible companies grew by
3.92% on a yearly basis.
195
Kerckhofs P. (Eurofound)(2015). European Works Council developments before, during and after the crisis.
Available online.
196
ETUI EWC database, 2023. Accessible at: https://www.ewcdb.eu
197
In the following section, where not specified, references to “EWCs” include pre-directive agreements on
transnational information and consultation (“voluntary agreements”).
96
Figure 1: EWC bodies by type of agreement
Source: ETUI (2023)
The number of EWCs has been relatively stable in the last decades, around 20 new EWCs being
created each year. The take up rate and the overall number has not changed significantly since the
adoption of the Directive, newly established EWCs taking the place of those dissolved, mainly due
to restructuring (mergers), the net annual growth rate is estimated at 9 additional EWCs.
The number of active EWCs is the net difference between:
• the annual growth rate of EWCs (based on the 2017-2022 average growth, excluding
2020198
as an outlier due to Covid-19 pandemic, as described above)199
; and
198
Due to the exceptional economic situation linked to the Covid-19 pandemic in 2020, the growth rate during that year
is a non-representative outlier. To ensure the relevance of growth estimates, that year is therefore discarded for the
purposes of calculating the average.
199
Limitation: external factors, such as the effects of the Russian War on Ukraine and other geopolitical turmoil may
influence the growth in the number of EWCs and potential EWCs. Yet, a robust trend was impossible to define, due to
diverging data and lack of conclusive studies. Hence, the growth of EWCs and their potential number is assumed to be
linear.
323 = 32%
28 = 3%
616 = 62%
20=2
% 9=
1%
EWC agreements in force
(1001 overall)
Pre-Directive I&C agreements (Art. 14(1)(a))
EWCs under 1994 Directive (Art. 14(1)(b)
EWCs under recast Directive
EWCs under subsidiary requirements (Annex I)
information and consultation agreements negotiated under the Directive but not
formally EWCs (Art. 6(3))
Unspecified
97
• the annual rate of EWCs becoming inactive (based on the 2017-2022 average growth,
excluding 2020 as an outlier due to Covid-19 pandemic).
Figure 2 shows the total number of EWCs established each year from 1985 to 2022. The portion in
green indicates the EWCs that are still in activity as of 2023, while the portion in red shows those
that are known to be inactive.
Figure 2: Trend in the establishment of EWCs
Source: EWC Database (ETUI, 2023)
EWCs represent the European employees of a multinational company, whether it is
headquartered within or outside the EU. If the companies’ headquarters are situated outside the
EU, the EWCs must be established under a jurisdiction of an EU/EEA Member State. The largest
number of EWCs are located in multinational companies headquartered200
in the US (170), DE
(124), FR (102), UK (92), SE (69), NL (58), CH (48), IT (38), FI (37), BE (36), JP (31). (Figure 3)
200
Headquarters are determined by the seat of the central management of the multinational company indicated in the
EWC agreement or, if not stated explicitly, the global ultimate owner (GUO) and the respective country of the central
administration/registered seat of the company are determined. (source: ETUI)
98
Figure 3: EWC bodies currently active, by country of headquarters
Source: EWC database (ETUI, 2023)
As stated above, EWCs must be established under the legislation of a Member State. The large
majority of EWCs have been established under legislations of DE, UK201
, FR, BE, SE, NL, IE, IT.
At the same time, around 10 EU Member States have either no or only one EWC body established
under their rules.202
While reliable post-Brexit data are not available, the replies to the survey conducted by ICF in
the supporting study gives indications that the most frequent location of EWCs legislation
applicable after the Brexit are DE, FR, and IE. The sample of respondents to the survey was
however not representative.
Figure 4: Governing legislation of the EWCs (pre-Brexit)
201
The UK’s withdrawal from the EU had the consequence that the EWCs based in the UK had to be established in
another EU Member State. Based on available information, about half of the EWCs (70) formerly based in the UK have
moved to IE.
202
Source: ETUI database.
99
Source: EWC database (ETUI, 2023, data does not take into account the post-Brexit situation)
By sector of activity, the majority of EWCs are concentrated in large metal, services or chemical
multinational companies.
Figure 5: EWC bodies per sector of activity (ETUI, 2021)
Source: EWC database (ETUI, 2023)
100
Overall, EWCs are not equally spread across all sectors. According to ETUI (2015),203
the main
reason for the variation in the number of EWCs between sectors lies in the differing characteristics
of companies according to sector, namely as regards:
• company size;
• companies that operate on sites with a high concentration of employees (factories or
production facilities) facilitate worker organisation;
• companies in sectors where the workforce is spread across different States (e.g. building or
transport industries) tend to establish EWCs
Number of employees
Two main relevant populations of employees are considered as part of this impact assessment:
(a) EU employees working in companies that currently have an EWC or information and
consultation agreement on transnational matters: population of employees = 1001 *
average number of employees per undertakings with an EWC, with the assumption that
there is one EWC per company.
(b) EU employees that would potentially fall under the scope of the Directive, as they work
for eligible undertakings (i.e., irrespective of whether these undertakings have an EWC at
present).
Figure 6. Employees with an EWC or under the scope of the Directive, EU/EEA, 2023,
estimates
Source Average
number of
EU/EEA
employees
per
undertaking
that currently
has an EWC
Employees in undertakings
that currently have an EWC
(2023)
Employees potentially under
the scope of the Directive / in
eligible undertakings (2023)
Eurostat,
EuroGroups
Register,
2023
n/a* n/a* 31.7 Mn
ICF study,
2016
16,612 16.6 Mn n/a*
ICF 2023,
(targeted
survey)
34,321** 34.4 Mn** n/a*
203
De Spiegelaere S.; Jadodzinski R. (ETUI) (2015) European Works Councils and SE Works Councils in 2015. Facts
& Figures.
101
* A reliable estimate cannot be provided based on this data source. Mostly large or very large multinational
undertakings have established an EWC, whereas the Directive applies to multinational undertakings with at least
1.000 EU employees and more. As the survey responses to the surveys referred to undertakings with an established
EWC, they cannot, therefore, be assumed to be representative of the overall population of eligible companies.
Conversely, the average number of employees across all eligible undertakings, calculated based on the available
Eurostat data, would not be relevant for undertakings with an EWC as the latter are significantly larger than the
average.
** The 2023 ICF survey led to higher estimates of EU employees per company with an EWC (34.321) based on 31
responses (not representative and not consistent with other data sources). This number is likely to be over-estimated.
Figure 6 summarises the available estimates for these two populations, based on the most recent
sources available:
• ICF 2016 study204
reported an estimate of average of 16,612 (EU/EEA) employees per
company with an EWC. The study also noted that the declining trend (down from estimated
29,000 EU employees per company with an EWC in an impact assessment before the
Recast205
) was due to smaller companies setting up EWCs after the Recast.
• ICF 2023 targeted survey206 of companies with EWCs, carried out to support this impact
assessment, reports an average of 34,321 (EU) employees per company (based on 31
responses). The targeted survey also delivers a median value of 13,000 EU employees per
company with an EWC, which is more in line with results from other sources. The
excessively high mean value is likely to be due to a number of factors, including self-
selection of respondents, small sample size, self-report bias, and outliers skewing the
average.
• Eurostat data207
indicates that 29.6 million EU employees are eligible to be covered by an
EWC as of 2021, which would correspond to 31.7 million EU employees in 2023 assuming
a constant growth of 3.42%, based on the growth rate in the years for which this indicator
was measured (i.e., 2019-2021). No Eurostat data is available on the distribution of EWCs
by company size. The 2021 Eurostat estimate of the overall population of EU employees
within the scope of the Directive cannot deliver a reliable estimate of the average number of
EU employees per undertaking that currently has an EWC. As mostly large or very large
multinational undertakings have established an EWC, applying the average number of
employees across all eligible undertakings to those with an EWC would likely lead to a
significant underestimation for the latter. Indeed, the Eurostat estimate of the population of
EU employees within the scope of the Directive also includes Union-scale undertakings that
do not currently have an EWC, which are likely to be smaller than those that already have
one, given the trend observed in the ICF 2016 study and the Commission 2018 evaluation.
For the same reasons, the inverse process (i.e., using the number of EU employees in
companies that currently have an EWC, based on the available sources, to calculate the
average number of EU employees per eligible company) would lead to an overestimation of
the 'eligible' workforce.
From the three data sources, two estimates that appear to be consistent are the Eurostat figures for
employees covered by the Directive and the ICF 2016 study estimate for employees in companies
204
ICF(2016), p. 61.
205
COM(2008) 419 final. SEC(2008) 2167.
206
ICF(2023), Section 5.1.2.1.
207
Eurostat, ad-hoc extraction from the EuroGroups Register.
102
that currently have an EWC. These two are therefore the preferred estimates for the respective
population of EU employees concerned, while the data from the 2023 ICF targeted survey are not
considered for the reasons explained above. Due to the overall stable number of EWCs over the last
decade, the 2016 estimate of the number of EU employees in companies with EWCs remains valid.
For estimating impacts, the following numbers of employees affected have therefore been relied on:
(a) EU employees working in companies that currently have an EWC or an information
and consultation agreement on transnational matters: 16.6 million EU employees (ICF,
2016).
(b) EU employees that would potentially fall under the scope of the Directive: 31.7 million
EU employees (Eurostat, 2023).
Temporal scope
Following common practice in impact assessments, the costs and benefits are assessed over a
period of 10 years (2023-2033). Therefore, the development of the baseline starts from the year
2023 (year 0 of the exercise). There is no indication of substantial variance in the real costs over the
baseline period. In any case, given that costs related to the setting-up and operation of EWC
account for only a negligible share of the average turnover of the relevant undertakings, significant
monetary costs can be ruled out with certainty for all of the policy measures forming part of the
preferred option. With a view to focusing the analysis on the elements that are relevant for the
necessary policy choices, in accordance with the principle of proportionality, it is appropriate to
assume that the real costs will remain stable over the baseline period, without the need to develop
separate estimations beyond the status quo.
For the purposes of the assessment, it is considered that the revised Directive will enter into force in
year 2, and that Member States will have two years for transposition (year 4), while the
transposition measures will enter into effect as of year 6.
Inflation
In consideration of the presence of some comparatively old sources (from 2016 and 2018), it was
considered important to include in the analysis also the trends on the inflation rates within the EU.
The inflation rate is applied to ‘old’ data to conform them to 2022 prices based on the IMF’s World
Economic Outlook (WEO) database208
.
The approach is applied to the staff costs for businesses and to other monetary amounts.
208
IMF WEO database, op.cit.
103
3.2. Overview of data indicators
Figure 7 provides an overview of available main data indicators defining the baseline in 2023.
Figure 7. Overview of data indicators
209
The ETUI Database also includes five “body type to be specified”, and nine “information and consultation procedure”, in addition to the EWCs of a specified type listed in this table.
Data information Methodological approach
Indicator Value(s) Sample size Data limitations Source(s) Key assumptions Rationale Comments
N. of EWCs
(total)
1001209
All EWCs Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (2023
extraction)
Fixed annual net growth in
absolute terms: +9.
The number of EWCs could
grow with more companies
relocating to Europe, yet a
trend cannot be established
with the current data.
Net annual growth
(absolute terms) = total
new annual EWCs –
annual inactive EWCs.
The figure is based on the
2009-2022 average.
Average
creations of
EWC EWCs per
year
+19.9 All EWCs (2009-
2022)
Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (2023
extraction)
Fixed annual number of new
active EWCs
The figure is based on the
2009-2022 average.
Average
dissolutions of
EWCs per year
-10.9 All EWCs (2009-
2022)
Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (2023
extraction)
Fixed annual number of new
inactive EWCs
The figure is based on the
2009-2022 average.
N. of art. 6
EWCs (recast
616 (62 %) All EWCs Non-exhaustive
database (dependent
ETUI EWC
Database (2023
Fixed annual net (linear)
growth: +8.72 (96.9% of new
New EWCs to be Article 6
EWCs, progressively
Incorporating decimal
values in the
104
210
This includes 41 UK pre-directive agreements recorded in the ETUI EWC database.
Directive EWCs) on information
received from
stakeholders)
extraction) EWCs) increase as a share of the
total and replace pre-
directive agreements.
Assumed fixed ratio
between new art. 6 EWCs
and new EWCs under
subsidiary requirements.
calculation of annual
net creation of EWCs,
(e.g., 8.72 yearly net
increase in art. 6
EWCs) facilitates the
incorporation of the
small share of EWCs
with subsidiary
requirements in the
analysis, with resulting
figures rounded for
optimal presentation.
N. voluntary
agreements (pre-
directive)210
323 (32 %) All EWCs Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (2023
extraction)
No new pre-directive
agreements. Projected
decrease as a share of the
total and possibly in
absolute terms.
Replacement by Art. 6
EWCs (cf. above).
N. of art. 14
EWCs
28 (2.8%) All EWCs Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (2023
extraction)
No new art. 14 EWCs.
Projected decrease as a
share of the total and
possibly in absolute terms.
Replacement by Art. 6
EWCs
16 of these bodies
report already applying
requirements of the
Directive.
N. of EWCs with
subsidiary
requirements
20 (2.0%) All EWCs Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (2023
extraction)
Fixed annual net (linear)
growth: +0.28 (3.1% of new
EWCs)
New EWCs with
subsidiary requirements
are possible, but their
overall limited share to the
total is likely to remain
stable.
Assumed fixed ratio
between new art. 6 EWCs
See comment on
rounding under "N. of
art. 6 EWCs"
105
and new EWCs under sub.
req.
N. of eligible
companies
3,676 potentially eligible
companies (2021)
N/A Eurostat
EuroGroups
Register (2023
extraction)
To grow linearly at 3.9%
annually
→ 3,970 eligible companies
(2023)
Baseline value is the 2021
one. The growth rate is
based on the average
annual growth rate
between 2019 and 2021).
The number of eligible
companies could be
growing with more
companies relocating to
Europe.
No other reliable data
or estimate is
available.
N. of EU
employees within
the scope of the
Directive
29,649,200 (2021) N/A Eurostat
EuroGroups
Register (2023
extraction)
To grow linearly at 3.4%
annually
→ 31.7 million EU
employees (2023)
Starting value is the 2021
one. The growth rate is
based on the average
annual growth rate
between 2019 and 2021).
The number of employees
within the scope of the
Directive would grow
roughly in line with the
growth in eligible
companies.
No other reliable data
or estimate is
available.
N. of EWCs by
country of HQ
See Figure 3 of this annex All EWCs Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (2023
extraction)
Linear growth in absolute
terms.
Fixed proportions.
No evidence suggesting
the distribution across
countries will change over
time in the baseline.
N. of EWCs by
EU applicable
law
See Figure 4 of this annex All EWCs Non-exhaustive
database (dependent
on information
received from
stakeholders)
Reliable post-Brexit
data are not
available
ETUI EWC
Database (2023
extraction)
Linear growth in absolute
terms.
Fixed proportions.
Except for the impact of
the UK’s withdrawal from
the EU, there is no
evidence of substantial
changes to distribution
across applicable laws in
the baseline. EWCs
previously based in the
UK (135 as per the latest
count) have relocated to
The replies to the ICF
2023 targeted survey
indicate that the most
frequent location of
EWCs legislation
applicable after the
Brexit (DE, FR, IE). The
sample of respondents to
the survey was however
not representative.
106
another EU Member State
(often to IE), but reliable
statistics on their
relocation per country is
not yet available as of
date.
N. of EWCs by
sector of activity
See Figure 5 of this annex All EWCs Data not up-to-date,
does not follow
NACE rev 2
Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (latest
published data)
Linear growth in absolute
terms.
Fixed proportions.
No evidence suggesting
the distribution across
sectors will change over
time in the baseline.
The respondents to the
ICF 2023 targeted
survey correspond the
proportion of
distribution of EWCs
across sectors as
recorded by ETUI
across sectors. The
sample of respondents
to the survey was
however not
representative.
Gender
composition in
the EWC
24% of respondents reports
equally represented, 2% >60%
women, 62% >60% men.
233 respondents
(180 employees,
53 management)
Not representative
sample
ICF Targeted
survey (2023)
Fixed proportions over time. Evidence is not
conclusive as to
whether the overall
gender composition of
industries/
companies/EWCs
might change
significantly in a 10-
year span.
Number of
representatives
per EWC
Average: 27 All EWCs Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (2023
extraction)
To remain unchanged on
average.
No evidence suggesting
this indicator will change
over time in the baseline.
107
Average n. of EU
employees of
companies with
EWCs
16,612 per company with an
EWC
See Figure 6 of this annex
37 employer and
employee
representatives
Small sample size ICF 2016
evaluation study
To remain unchanged on
average.
No evidence suggesting
this indicator will change
over time in the baseline.
The 2023 ICF survey led
to higher estimates of
EU employees per
company with an EWC
(34.321) based on 31
responses (not
representative and not
consistent with other
data sources).
The ICF 2016 study
provides lower average
figures for number.
Since there is no
evidence of an upward
trend and since the 2016
ICF estimate
corresponds more
closely with the overall
population estimate by
Eurostat , this data
indicator is used.
Turnover (EU)
of companies
with EWCs (€
bn)
EUR ca. 14 bn 11 respondents Not representative,
small sample
ICF Targeted
survey (2023)
To remain unchanged on
average. Projected figures
adjusted for inflation.
No evidence suggesting
this indicator will change
over time in the baseline.
Turnover
(global) of
companies with
EWCs (€ bn)
EUR ca. 24 bn 33 overall
respondents
Not representative,
limited sample
ICF Targeted
survey (2023)
To remain unchanged on
average. Projected figures
adjusted for inflation.
No evidence suggesting
this indicator will change
over time in the baseline.
See sensitivity analysis in
section 6 of this annex.
Average costs for
setting-up of an
€119,207 for Recast EWCs 37 employer and
employee
Small sample size,
potential bias
ICF 2016
evaluation
Point estimate based on 2014
prices, adjusted for inflation.
The estimate does not
include potential costs
108
EWC representatives
→ € 148.000
of fees/expenses for
experts’ services.
Average annual
cost of running
EWC)
Average fixed costs: €165,00
Min: €45,000
Max: €500,000
Estimated overall annual costs
(including employees time): €
240.000
20
Potential bias,small
sample size ICF 2016
evaluation
Overall costs based on 2014
prices adjusted for inflation
→ € 298.000
Given the flexibility
provided by the directive
and the differences
between the size and
operation of multinational
undertakings, the large
difference between the
individual values
corresponds to the trend
observed during the
Commission 2008 impact
assessment
(SEC(2008)2166) and
previous studies (e.g.
Pulignano V., Turk J. (KU
Leuven) (2016)).
The estimate of
average overall costs
of operation of EWCs
of 240.000 € (taking
into account not only
fixed costs but also
expenditure related to
the time spent by
employees on EWC-
related activities) was
recognised in the 2018
Commission
evaluation
(SWD(2018) 187 final,
p. 37)
Average annual costs: €288.000
Min: € 50.000
Max: € 900.000
12 interviews (6
provided
information on
overall costs)
Potential bias, small
sample size
Interviews with
management of
Union-scale
undertakings
with EWCs in
the context of
ICF 2023 study
Stability of real costs in
relation to the overall average
turnover.
The average value is
close to the 2016
estimate adjusted for
inflation (cf. above).
Number of
plenary meetings
per year
79.36% (646) have one, 26.29%
(214) have two, the rest (29)
have three to six
889 Non-exhaustive
database (dependent
on information
received from
stakeholders)
ETUI EWC
Database (2023
extraction)
Fixed shares over time. No evidence suggesting
this indicator will change
over time in the baseline.
0.87% say <1 meeting per year;
ca. 50% say one; 38% say two;
ca. 10% say 3 or more
1496 EWC
representatives
Potential Bias ETUI 2018
survey of EWC
and SEWC
representatives
109
Unitary cost of
plenary meetings
35% <25k, 15% 25-50k, 30%
50-70k, 10% 75-100k, 10% 100-
200k, 0% >200k
20 employer
representatives
Small sample size,
potential bias
ICF 2016
evaluation
No evidence suggesting
this indicator will change
over time in the baseline.
Number of court
cases in Member
States
160 court cases recorded since
1997 and until the beginning of
2023
All MS ETUI collection
of case-law
Court cases are
concentrated in
jurisdictions with
higher numbers of
multinationals with
EWCs.
No cases have been
brought before the
Court of Justice on the
recast Directive so far.
110
4. Methodology for the monetisation of costs
4.1. Introductory remarks regarding types of impacts and affected stakeholders
This section outlines the methodology used to monetise costs for the purposes of the
baseline scenario and the assessment of certain impacts, in particular economic impacts
and impact on competitiveness. The methodology is in line with the relevant Better
Regulation Tools211
.
Impacts have been assessed in relation to the stakeholder groups affected:
• Union-scale undertakings or groups of undertakings and their central management
(‘undertakings’);
• employees of Union-scale undertakings or group of undertakings and their
representatives (‘employees’);
• Member States (National authorities), i.e., public administrations in charge of
implementing and monitoring the application of EWCs requirements (‘national
authorities’).
In line with Better Regulation rules, the possibility of impacts on SMEs, consumers, the
broader economy, and the environment have also been considered. However, for the
reasons explained in Annex 12 Section 1, any relevant foreseeable effects of the initiative
can be ruled out in those respects. These types of impact are therefore not discussed in
detail for each policy option, in accordance with the principle of proportionality of
impact assessments.
The following section describes the methodological approach with regard to the
monetisable impacts. Non-monetisable impacts, in particular social costs and benefits
and broader economic impacts, have been assessed qualitatively in terms of trends, using
the methodological approaches outlined in Section 1 of this Annex. For an overview of
all identified impacts per policy area and per stakeholder group see Annex 12.
4.2. Categorisation of monetisable economic costs
Given the limited available evidence and the nature of social impacts related to
transnational information and consultation, as outlined in Section 2 of this Annex,
monetisation was possible for certain economic impacts only. The monetization exercise
mostly focuses on the estimation and quantification of direct costs associated with
existing and potential new requirements regarding EWCs. These costs were assumed to
comprise both:
• one-off costs, i.e., costs that arise only once; and,
• recurring costs, i.e., costs that are incurred by the affected parties on a
continuous basis.
As far as possible, monetisable costs and benefits were estimated for undertakings and
national authorities, whereas no monetisable costs and benefits have been identified
under the policy areas in relation to employees.
211
Better Regulation Tools #56, #57, #59.
111
Certain costs have not been quantified where it is not possible to do so meaningfully,
such as the costs resulting from clarification in Article 6 that the element of the EWC
agreement on resourcing should include legal and training costs (policy options 3b and
3c). Given that such aspects would be negotiated between the parties to the agreement,
and indeed may already be covered in the existing EWC agreement, and the costs that
could be incurred in the case of legal action or in respect of training cannot be predicted,
we conclude that it is not possible to arrive at a meaningful quantification. Such
considerations also apply to enforcement costs (policy options 4b and 4c), as it cannot be
predicted whether an undertaking would be sanctioned in the future for non-compliance
with the obligations under the Directive and, if so, what the level of the sanction would
be applied in a concrete situation. In this respect, indications can be given only in relation
to the theoretically possible maximum level of sanctions under policy area 4c (see
Section 4.1.2 below).
4.3. One-off costs for undertakings – unit costs
In this section, available quantification regarding one-off costs are presented per
undertaking potentially affected. Estimates of aggregated total one-off costs are presented
under the subsequent heading 4.4.
Setting up of an EWC (‘Negotiation costs’)
Negotiation costs for setting up an EWC are considered one-off adjustment costs for
undertakings. The average overall costs per newly established EWC were estimated at ca.
EUR 148.000. This estimate is based on the evidence gathered for the 2016 study
supporting the evaluation of the Directive, adjusted for inflation.212
It does not include
the fees of experts consulted by either negotiating party, which depend on too many
unknown – in particular behavioural – variables to be monetised. It nevertheless
represents the most comprehensive available approximation of overall costs linked to the
setting-up of new EWCs.
In order to verify the continued relevance of this estimate and the robustness of
monetisation for this impact assessment, cost components linked to the setting-up of new
EWCs were disaggregated, and to the extent possible, newly monetised based on a partly
different methodology, described below. The results of the two separate sets of estimates
are consistent, as the elements for which no new calculation was possible (e.g.,
employees’ time dedicated to the preparation of meetings, training fees and expenses,
legal costs) plausibly account for the difference.
It is important to stress that none of the policy options would oblige undertakings to
establish an EWC in the absence of a request to that effect by employees (or employees’
representatives), as specified in the Directive. Therefore, the costs of setting up an EWC
can be linked only to policy option 1a as regards the 323 previously exempted
undertakings with ‘voluntary agreements’, which could face requests for the
establishment of an EWC when the exemptions of those undertakings are removed. The
available evidence does not allow reliably to estimate in how many cases such requests
might be made, as this depends on unknown behavioural and situational factors specific
to the existing social dialogue processes in each undertaking. The estimates of total costs
212
See ICF(2016), Section 7.1.1., for details.
112
related to the establishment of EWCs in previously exempted undertakings (see Section
4.4. below) are based on very broad hypothetical ranges to account for that uncertainty.
(a) Assumptions for the monetisation of certain cost factors linked to the setting-
up of new EWCs, developed for this impact assessment
The following assumptions were made for the calculation of certain cost components
linked to the setting-up of new EWCs:
• Time cost: labour cost has been chosen as a suitable metric to estimate the costs
of negotiation meetings, as it is supported by a robust methodology, and it is
easily comparable across different items. The labour costs for employees are
based on 2022 Eurostat figures for industry, construction and services213
and on
2018 Eurostat figures (adjusted with the EU labour cost index growth) for
managers in companies of 250 or more employees214
. The below table
summarises these EU average hourly labour costs.
Figure 8. Hourly wages for employees and managers, 2022 prices
EU-27 average hourly wages
Employees operating in industry,
construction and services
€30.5
Management €34.9
Based on the evidence gathered for the study supporting the 2018 evaluation of
the Directive, it was assumed that approximately 9 employee representatives and
3 management representatives take part in the negotiation process.215
The
assumption about time costs concerns only the time spent in meetings between
management and the SNB to negotiate the EWC agreement (for lack of
sufficiently robust evidence, it does not account for the set-up time of the SNB,
training time or time that is required to meet other SNB members from other
countries, pre-meeting prep time and debriefing, administration etc.). The 2016
ICF study assumed, based on stakeholder feedback, that a negotiation requires 3
full days on average, which remains valid for this analysis in the absence of any
contradicting evidence. The below table therefore includes estimates for three
one-day meetings of 8 hours.
• Other costs: Travel costs (based on Eurostat Tourism statistics) and
interpretation costs (i.e., labour costs of three interpreters per day216
) have been
added to the time costs identified. Mirroring the assumptions already applied in
the ICF 2016 study and previous IA study (2008), it is assumed that negotiation
meetings last one day (thus the translation costs have been calculated for one day
213
Eurostat figures for industry, construction and services, available at: Statistics | Eurostat (europa.eu)
214
2018 Eurostat figures (weighted average by size of company), available at: Statistics | Eurostat
(europa.eu). These figures were adjusted for the labour cost index, available at: Statistics | Eurostat
(europa.eu).
215
Cf. ICF (2016), p.107.
216
Eurostat figures for professional, scientific and technical activities, available at: Statistics | Eurostat
(europa.eu)
113
only). It is further assumed that all the employee and management representatives
involved in the negotiations require travel and three nights of accommodation, all
the meetings are provided with simultaneous translation, and the interpreters also
require travel and one night accommodation.
Finally, it is assumed that the below costs will follow the inflation rate and remain stable
in real terms over time. Despite the current situation characterised by high inflation, the
latter is expected to continue to decline and converge with the ECB target rate over the
baseline period217
.
(b) Calculations
Figure 9. Average costs for three SNB meetings of 1 day each, 2022 prices
Types of costs Costs, in €
Time costs
Employees (#9) €6 588
Management (#3) €2 514
Other costs
Travel and accommodation costs (#15) €43 155
Interpretation costs (#3) € 2 994
Total costs per EWC for three meetings
of negotiation
€55 251
(c) Limitations
The cost factors monetised based on the described methodology do not represent the total
costs of setting up an EWC. For instance, SNBs have the right to training without loss of
wages and to be assisted by an expert of their choice. However, a general paucity of data
on these costs and their frequency prevents a sufficiently robust monetisation, because
these items depend on various uncertain – in particular behavioural and situational –
variables. The partial monetisation of costs linked to SNB meetings is therefore used to
confirm the continued validity of the more complete estimate of setting-up costs
developed for the purposes of the 2018 evaluation, rather than as an approximation of the
overall costs.
Sanctions
(a) Preliminary clarifications
As stated above, enforcement costs for undertakings resulting from sanctions cannot be
estimated, since it cannot be predicted whether an undertaking would be sanctioned in
the future for non-compliance with the obligations under the Directive and, if so, what
would be the level of the sanction in a concrete case. Indeed, the evidence gathering218
did not yield comprehensive information about the frequency and amount of sanctions
applied by national authorities in proceedings on EWC-related matters. The procedural
217
European Commission, European Economic Forecast – Summer 2023.
218
ICF(2023), Sections 4.2.1.4. and 5.2.2.4.
114
and judicial landscape concerning the enforcement of EWCs rules is extremely
heterogeneous and court cases are not frequent (see Annexes 8 and 9). Generally,
pecuniary sanctions for administrative infractions are applied to EWC-related breaches.
In most cases, the sanctions under the national laws remain low, the average range being
around € 5.000-10.000 or even lower in some countries. Upper limits to sanctions are
quite common, the maximum scale ranging from a few hundred EUR to € 187.500 (ES)
for very serious offences. In DE, the country with highest number of EWCs, the
maximum possible administrative fine for EWC-related breaches is € 15.000, although
more severe criminal sanctions (pecuniary or custodial) are theoretically also available.
Likewise, in some other countries, more severe sanctions (e.g. up to € 800.000 in BE) or
prison sentences may theoretically be imposed in criminal law proceedings. Application
of such sanctions to EWC-related offences has not occurred in practice.
The information and data analysed suggests that undertakings are seldom fined for
violating the rules relating to EWCs, and even less frequently do they receive the
maximum sanction available in the national law. There is no evidence that the incidence
of legal disputes and sanctions in this policy area would increase if the policy options
lead to an increase in the level of sanctions. On the contrary, more dissuasive pecuniary
sanctions could also indirectly lead to a better rate of compliance with the obligations
laid down in the Directive. Hence, this item has been calculated as a one-off cost.
(b) Calculation
Monetised indications can be given only in relation to the theoretically possible
maximum level of sanction under policy option 4c. For that purpose, the 4% of average
global turnover of undertakings with EWCs (€24 bn219
) was estimated on the basis of
information provided by the respondents to the targeted survey done for the supporting
study. To this, we compared the maximum potential administrative sanction currently
available in a Member State (€ 187.500 (ES)) identified above. The turnover is assumed
to follow the inflation over time and should therefore remain stable in real terms. A
sensitivity analysis is provided at the end of this annex to consider different scenarios for
the evolution of companies’ average global turnover.
In contrast, it is not possible to quantify the impact of requiring Member States to take
into consideration the turnover of Union-scale undertakings when determining pecuniary
sanctions (policy option 4b). While it is plausible to assume that the level of sanctions
should increase under that option compared to the often disproportionately low baseline,
the determination of sanctions would remain a matter for national administrative and
judicial authorities. These authorities can take into account various other case-specific
factors, such as the gravity, duration and consequences of the relevant infringement,
aside from undertakings’ turnover. Therefore, it is not possible to make any sufficiently
robust assumptions about the scale of the expected increase in the level of pecuniary
sanctions.
(c) Limitations
Because of the paucity of cases available, the low likelihood of receiving a maximum
fine and the vast heterogeneity of national frameworks, the calculations provided above
219
ICF(2023), Section 5.1.2.1 and Section 3 of Annex (Data mapping).
115
should only be intended as an indication of the theoretical upper ceiling of costs linked to
pecuniary sanctions under the most far-reaching policy measure under consideration
(policy option 4c), as more accurate and precise estimates cannot be derived. While it is
theoretically possible that the same undertaking could be sanctioned several times over
the baseline period, the monetisation of pecuniary sanctions is discussed in terms of one-
off costs, given the very low incidence of such sanctions in the past. This low incidence
is not expected to increase substantially as a result of this initiative.
4.4. One-off costs for undertakings – estimates of total costs
In light of comments of the Regulatory Scrutiny Board, the available quantified cost
estimates were used as a basis to estimate total aggregated costs for the affected
population of undertakings.
Costs related to the establishment of new EWCs in currently exempted undertakings
with ‘voluntary’ agreements on transnational information and consultation
(a) Assumptions
As explained above, the envisaged amendments would not make the establishment of an
EWC automatic for currently exempted undertakings in which ‘voluntary’ agreements on
transnational information and consultation were concluded before the first EWC
Directive was transposed in 1996. The estimated average costs of ca. EUR 148.000 for
the negotiation of a new EWC agreement would arise only where the requisite number of
employees or employees’ representatives makes a request to that effect, or management
initiates such negotiations on its own initiative. Given the available evidence, no reliable
assumptions can be made of how many of the concerned undertakings would be
requested to establish an EWC. In order to nevertheless give an indication of the possible
total one-off costs linked the negotiation of new EWC agreements in those undertakings,
broad hypothetical ranges are provided assuming that requests to that effect would be
made in 25%, 50% or 75% of those undertakings. In theory, the lower bound could even
by 0%, if no valid request to launch negotiations towards an EWC is made in any of the
undertakings currently with voluntary agreements.
(b) Calculations
The number of currently exempted undertakings with ‘voluntary’ agreements (323) is
multiplied by the unit costs linked to the negotiation of new EWC agreements of EUR
148.000 and the assumed proportion of cases in which employees or their representatives
would request such negotiations, ranging between 25% and 75%. The theoretical cost if
the establishment of a new EWC were requested in all of those undertakings is also
provided for information, although it does not represent a realistic scenario.
Population: voluntary agreements (323) Scenario 1 Scenario 2 Scenario 3 Scenario 4
Rate of creation of EWCs in previously
exempted undertakings
25% 50% 75% 100%
Total costs of setting up new EWCs as a
result of removing the exemptions of pre-
1996 voluntary agreements (one-off)
11.951.000
€
23.902.000
€
35.853.000
€
47.804.000
(c) Limitations
116
Due to the lack of robust evidence, only a very broad range of possible one-off costs
linked to the negotiation of new EWC agreements in previously exempted undertakings
can be provided. These estimates can provide a rough approximation and order of
magnitude, depending on the hypothesis in how many of the previously exempted
undertakings negotiations for an EWCs would be launched. The real costs depend on
various unknown – often behavioural – factors, such as the perceived well-functioning
and culture of social dialogue between employees’ representatives and management in
the respective undertaking.
Costs related to the renegotiation of existing EWC agreements
(a) Assumptions
The amendments envisaged under the preferred policy option will apply also to pre-
existing EWCs. It is therefore assumed that certain revisions will be necessary to align
those agreements with the revised minimum requirements. The impacts depend crucially
on the arrangements agreed between the social partners and the content of their existing
agreements, which will determine for instance whether a renegotiation is needed and if
so, to what extent. However, no database of the detailed content of existing agreements
exists. In the absence of comprehensive or systematic information about the content of
existing EWC agreements, different scenarios are assumed to obtain ranges of possible
costs linked to the renegotiation of those agreements. For the purposes of this calculation,
a hypothetical range is established assuming that 25%, 50%, or 75% of EWC agreements
need to be adapted. The lower bound of this range accounts also for the fact that EWC
agreements are renegotiated on average every five years under the baseline scenario,220
and many of the changes needed to align with the revised minimum requirements could
in practice likely be made in the framework of such regular renegotiations, without
additional meetings.
As explained above, no comprehensive quantified data on the costs of renegotiating an
EWC agreement is available. Monetised estimates have however been developed of
certain cost factors linked to meetings held for the purposes of such renegotiation. These
estimates are presented under Section 4.5 below as recurrent costs for the baseline
scenario, because EWC agreements are renegotiated on average every five years. In
terms of impacts of the policy options, renegotiation costs are one-off costs as they
pertain only to the possible initial need to align existing agreements to the revised
minimum requirements once those requirements have been transposed.
Based on the available evidence, renegotiations may require only a single such meeting,
buy may also require two, and in complex cases even four meetings. Therefore, the total
costs are estimated as hypothetical ranges corresponding to the varying number of
renegotiation meetings.
(b) Calculations
220
According to the ETUI data, 91% of the companies in their sample underwent a restructuring process
over the past three years. Hence, accounting for delays in starting the renegotiation process, it is assumed
that on average, a renegotiation happens every 5 years.
117
In order to provide an approximate range of the possible total costs linked to the
renegotiation of existing EWC agreements, the different shares of undertakings with such
agreements (25%, 50%, 75% of a total of 678) were multiplied by the available
quantified cost elements linked to renegotiation meetings (€18 417), assuming, in three
hypothetical scenarios, that either one, two or four such meetings would be required,
depending on the scope of necessary adaptations and the complexity of the negotiations.
Population: proportion of existing EWC
agreements (in total 678) requiring
renegotiation as a result of the initiative
Scenario 1: one
meeting
Scenario 2: two
meetings
Scenario 3: 4
meetings
Total costs of renegotiation (one-off)
assuming that 25% of EWC agreements are
renegotiated
3.121.681 € 6.243.363 € 12.486.726 €
Total costs of renegotiation (one-off)
assuming that 50% of EWC agreements are
renegotiated
6.243.363 € 12.486.726 € 24.973.452 €
Total costs of renegotiation (one-off)
assuming that 75% of EWC agreements are
renegotiated
9.365.044 € 18.730.089 € 37.460.178 €
(c) Limitations
The ranges of total costs are hypothetical, as no reliable indicator is available allowing to
estimate an average number of meetings per renegotiation, or the proportion of EWC
agreements that will require renegotiations. For limitations regarding the estimation of
costs of renegotiation meetings see next Section 4.5.
4.5. Recurrent costs for undertakings – Unit costs
Costs related to the operation of EWCs (annual average costs per undertaking with an
EWC)
As EWCs do not have own revenue sources, they depend on resources provided by
undertakings. The latter are therefore assumed to cover all relevant cost items linked to
the running of EWCs (e.g., meeting costs, travel costs, training fees and expenses, costs
of external expertise, employees’ time dedicated to EWC-related tasks, etc.). Only some
of these items could be estimated individually in monetised terms, as explained in the
subsequent headings of this section.
The available evidence nevertheless allows for an approximate quantification of
undertakings’ average overall costs linked to the operation of an EWC. These overall unit
costs are estimated at EUR 297.500 per year. The starting point for this estimation is the
monetisation developed in the 2016 study supporting the evaluation of the Directive,
which was recognised by the Commission in that evaluation.221
That estimate of
EUR 240.000 was adjusted for inflation for the purposes of this impact assessment. It
notably took into account not only fixed costs but also expenditure related to the time
spent by employees on EWC-related activities.
221
Cf. SWD(2018) 187 final, p. 37.
118
As the abovementioned estimate was based on stakeholder feedback regarding a
relatively small sample of 20 undertakings, further evidence on the operating costs for
EWCs was collected during the interviews with management for the 2023 supporting
study222
to verify the continued relevance of that estimate and ensure the robustness of
the cost monetisation. The collected feedback validated the assumption that undertakings
in principle bear all costs linked to the operation of EWCs in practice.
The 2023 estimates result in a very similar average of close to EUR 300.000, confirming
that the previous monetisation represents a realistic estimate.
In both evidence gathering exercises, individual stakeholder estimates of undertakings’
annual costs linked to the operation of EWCs varied widely, ranging from around
EUR 50.000 to ca. EUR 900.000. This broad range is linked to the high degree of
flexibility afforded by the directive and the differences between the size and operation of
multinational undertakings. It corresponds to a trend observed already in the Commission
2008 impact assessment223
and previous studies224
.
As undertakings would bear EWCs’ operating costs also in the baseline scenario, these
costs are not as such impacts of this initiative. Certain policy measures may lead to an
incremental cost increase, e.g., in relation to legal costs or the time required by
management for preparing a reasoned response to EWC opinions. Under Section 4.6
below, an approximation of the total costs linked to increased operational costs is
provided in terms of a range to account for uncertainty, as they depend on various
uncertain – often behavioural – factors. Given that EWCs’ overall operating costs under
the baseline represent only a very small share of the average turnover of Union-scale
undertakings (cf. the overview tables at the end of this annex), it can be assumed with a
high degree of certainty that the possible increases due to the policy options would
likewise remain at a negligible level regarding this cost factor.
Costs of plenary meetings of EWCs based on subsidiary requirements (average cost for
one plenary meeting)
(a) Assumptions
Those EWCs operating under subsidiary requirements (20) have one plenary meeting per
year.225
For EWCs operating on the basis of agreements, the frequency of plenary
meetings is determined in the agreement concluded with the SNB.226
The organisation of
one additional plenary meeting as provided under policy options 3b and 3c would entail
the following additional costs for undertakings with EWCs operating under subsidiary
requirements:
222
ICF(2023), Section 5.2.2.1.
223
SEC(2008)2166.
224
e.g. Pulignano V., Turk J. (KU Leuven) (2016), op.cit.
225
In addition to the annual plenary meetings of EWCs based on subsidiary requirements, the select
committee of such EWCs may have several extraordinary meetings with central management. However, as
none of the problem drivers or policy options pertains to such extraordinary meetings, no separate cost
monetisation was undertaken in that respect.
226
Cf. Figure 7 above for estimates of frequency of these meetings in the existing agreements.
119
• Time costs: It is assumed that an EWC is composed on average of 27
members227
, and in addition to the EWC members 3 managers or their experts
representing the central management participate in the plenary meeting. Hence
the labour costs were calculated for 27 EWCs members and 3 managers, for a full
day. The data on labour costs for employees and managers are identical to those
explained above in relation to the negotiation costs.
• Travel and accommodation costs: based on the evidence gathered, the average
travel and accommodation costs are calculated for all 27 employee
representatives, 3 management representatives and 3 interpreters, as it emerged
that EWCs’ plenary meetings are often held in different venues. According to
Eurostat data (Expenditure by duration, purpose, main destination of the trip and
expenditure category), the average EU cost of a business trip, including
transportation and accommodation, was €876 (accommodation for one night and
the return flight) in 2022.228
This cost is expressed in real terms and assumed to
follow the inflation over time.
• Interpretation costs: The labour costs for interpreters are expressed in real
terms229
, based on 2022 figures from Eurostat for professional, scientific and
technical activities.230
In the absence of evidence to the contrary, it was assumed
that 3 interpreters on average would participate in the EWC meetings.
• Expert costs: 68% of respondents to the 2018 ETUI survey reported having
involved 1 expert for the preparation of and support during plenary meetings,
while 27% of the respondents indicated having the support of 2 experts. In the
absence of robust evidence and given the high heterogeneity characterising the
use of experts, it was assumed that each expert would work 5 full days (8 working
hours/day) for the preparation of and support during one plenary meeting. This
assumption is supported by the information gathered from the ETUI data
extraction231
and survey232
, which suggest that the experts, when involved, also
help the members to prepare for the discussions in the meeting agendas. The
below estimates for the expert costs are based on the EU average labour cost level
for people working in professional, scientific and technical activities.233
This
covers activities requiring a high degree of training and making specialised
knowledge and skills available to users.234
The real labour costs are assumed to
remain stable over time.
• Hence the overall labour cost has been calculated for a plenary meeting of an
EWC operating under subsidiary requirements, involving 27 EWC members (i.e.,
227
ETUI EWC database (2023 extraction).
228
2021 Eurostat figures, adjusted for inflation.
229
Adjusted for inflation.
230
Eurostat figures for professional, scientific and technical activities, available at: Statistics | Eurostat
(europa.eu)
231
ETUI EWC database (2023 extraction)
232
Eurostat figures for industry, construction and services, available at: Statistics | Eurostat (europa.eu)
233
Eurostat figures for professional, scientific and technical activities, available at: Statistics | Eurostat
(europa.eu)
234
Eurostat (2008), NACE Rev. 2 – Statistical classification of economic activities in the European
Community.
120
average number of members), 3 management representatives and 3 interpreters,
for a full day. In addition, costs of experts taking part in plenary meetings and
supporting their preparation have been calculated. It is assumed that the costs set
out below will follow the inflation and remain stable in real terms over time.
(b) Calculations
Figure 10. Costs for access to experts per plenary, 2022 prices
Costs of experts / plenary
meeting
0 expert (5% of EWCs) €0
1 expert (68% of EWCs) €1 664
2 experts (27% of EWCs) €3 328
Weighted average expert costs € 2 030
Each expert is assumed to work 5 full days for the preparation and support
during one plenary meeting
Figure 11. Costs for one additional EWC plenary meeting per year, 2022 prices
Types of costs Costs, in €
Time costs
Employees (#27) €6 588
Management (#3) €838
Other costs
Travel and accommodation costs (#33) €31 647
Experts (cf. figure 10 above) €2 030
Interpretation costs (#3) €998
Total costs per one plenary meeting €42 101
(c) Limitations
In the absence of sufficient evidence, the above estimates do not include certain costs,
such as the time invested by EWC members or management for the preparation of the
plenary meetings, the preparatory meetings prior to the plenary, and some possible
overhead costs. Therefore, it is likely that the overall costs of plenary meetings are
underestimated.
It must be recognised that the costs for one plenary meeting can vary greatly between the
undertakings, similarly to the operating costs, depending on the size of the company, the
number Member States involved and the language regime of the meetings. As an
illustration of the divergent costs, in the 2016 ICF study235
the following approximate
costs of one plenary meeting were reported by a sample 20 respondents (2014 prices not
adjusted for inflation):
• Less than €25 000 by 35 %
• €25 000 - € 50 000 by 15 %
235
ICF(2016), p. 126.
121
• € 50 000 - € 70 000 by 30 %
• € 75 000 - € 100 000 by 10 %
• € 100 000 - € 150 000 by 5 %
• € 150 000 - € 200 000 by 5 %
Costs for access to training
(a) Assumptions
62% of the respondents to the 2018 ETUI survey indicated that they participated in
training on average once every three years, for a mean duration of 2.2 days. This result
was used to calculate the labour costs236
of participation in training.
In addition to the labour costs, an average fixed cost of €12,000, based on the 2016 ICF
study and adjusted for inflation237
, was assumed to cover the annual training needs of one
EWC (trainers and possible venues).
The below costs are assumed to track inflation and therefore to remain stable in real
terms over the baseline period.
(b) Calculations
Figure 12. Annual costs for access to training per EWC, 2022 prices
Type of costs Costs, 2022 prices
Time costs €2 995
Fixed costs €14 875
Total costs €17 870
(c) Limitations
The fixed cost estimates rely on a very limited sample of respondents to the 2016 ICF
study. Therefore, they should be treated with caution.
Re-negotiation costs
Based on the available evidence, it was possible to monetise certain costs linked to
meetings between management and EWC representatives for the renegotiation of existing
agreements. This partial monetisation can provide an indication of the order of magnitude
of the overall costs related to renegotiations, bearing in mind the caveats set out below,
but should not be taken as an approximation of those overall costs.
As mentioned above, it emerged from the stakeholders’ consultations, especially the
interviews and the data-gathering workshops, that EWC agreements are renegotiated at
236
The labour costs for employees are based on 2022 Eurostat figures for industry, construction and
services, see the above explanations on these costs, in the section concerning the setting-up of new EWCs.
237
International Monetary Fund, World Economic Outlook Database, April 2023 (Inflation, end of period
consumer prices).
122
different times during their life cycle, especially in cases of restructuring and mergers.
According to data from the 2018 ETUI survey, 91% of the companies in their sample
underwent a restructuring process over the previous three years. On this basis, accounting
for delays in starting the renegotiation process, it is assumed that on average, a
renegotiation happens every five years. Therefore, the costs described below are expected
to apply at that rate under the baseline scenario.
It is likely that the initiative will entail additional or anticipated renegotiations. As
explained under Section 5.4 above, the share of agreements for which this will be the
case cannot be quantified reliably, as it depends on uncertain variables – such as the
content of the agreement and the respective frequency of renegotiations under the
baseline – characterising each case.
(a) Assumptions
The following assumptions were made to estimate certain costs linked to renegotiation
meetings:
• Frequency: renegotiation costs have been categorised as recurrent adjustment
costs for management.
• Time costs: according to available information, the renegotiation process takes in
most cases less time than the setting-up of an EWC (sometimes only one meeting
is required for renegotiations, but in complex cases this process can become
lengthier and involve multiple meetings). However, data on the duration of the
process are fragmented and considered unreliable. Therefore, it was decided to
calculate the time cost per meeting only. In the absence of clear evidence on the
number of representatives participating in a renegotiation, it was assumed that a
third of the average number of EWC members (9) and 3 management
representatives would take part. The hourly labour costs for employees and
management are those used to calculate the negotiations costs, see above.
• Other costs: travel costs and interpretation costs have been added to the time
costs identified. Mirroring the assumptions already applied in the ICF 2016 study
and previous IA study (2008), it is assumed that all the meetings last one day
(thus the translation costs have been calculated for three days), that all the
employee representatives require travel and accommodation, and that all the
meetings are provided with translation. In the absence of evidence to the contrary,
it was assumed that 2 interpreters would participate in the renegotiation meetings.
They would also require travel and three nights of accommodation.
The below costs are assumed to track inflation and therefore to remain stable in real
terms over the baseline period.
(b) Calculations
Figure 13. Re-negotiations costs per meeting (2022 prices)
Types of costs Costs, in €
Time costs
Employees (#9) €2 196
Management (#3) €838
Other costs
Travel and accommodation costs (#15) €14 385
123
Interpretation costs (#3) €998
Total costs per EWC for one meeting of
renegotiation
€18 417
(c) Limitations
The above calculations are for one meeting only. Although evidence suggests that a re-
negotiation process lasts less long than the process for setting up a new EWC, re-
negotiations might require multiple meetings in complex cases.
Furthermore, the evidence gathered does not allow to determine with a high degree of
certainty the average number of participants (employee representatives, management and
interpreters) that would be involved in a re-negotiation. The assumption that re-
negotiations involve on average the same number of people as the negotiations for setting
up a new EWC (9 employee representatives, 3 managers and 3 interpreters) could lead to
an under- or over-estimation of the renegotiation costs.
Finally, and in the absence of sufficient evidence, the above estimates do not include
certain cost factors, such as the time invested for the preparation of the renegotiation
meetings, the costs of possible preparatory meetings prior to the renegotiation, some
possible overhead costs, and the use of expertise by the EWC and/or the management.
Therefore, the partial estimate of meeting costs is not an approximation of the overall re-
negotiation costs.
4.6. Recurrent costs for undertakings – estimates of total costs
Marginal increases in the costs of operating an EWCs resulting from amendments to
the Directive
(a) Assumptions
As mentioned above, it is assumed that the operation of an EWC costs undertakings EUR
€ 297.500 on average per year. Possible cost increases due to the amendments to the
Directive are uncertain but are expected to remain very limited as the changes are limited
to specific items, representing a fraction of overall costs.
In order to nevertheless provide a range of quantified estimates, it is assumed that such
increases might amount to 5%, 10% or 15% of average annual costs of operation of an
EWC. The expectation that any cost increases, compared to the baseline, will be marginal
is based on the following considerations:
- As regards the planned clarifications of the resourcing of EWCs, it needs to be
considered that many EWC agreements already contain provisions on the
coverage of costs linked to training and involvement of experts and that the recast
Directive already gives EWC members the right to training “without loss of
wages”. Moreover, the costs associated with training are, as a general rule,
already covered by undertakings.
- Likewise, while more explicit provisions on coverage of legal costs could
facilitate the launch of legal action in some cases, clearer provisions on the
EWCs’ entitlement to the coverage of resources is likely to reduce the incidence
of disputes related to EWC funding.
124
- There is no evidence suggesting that the requirements to provide a reasoned
response to EWC opinions prior to the adoption of a decision on transnational
matters or to specify, upon request, the grounds for declaring certain information
confidential or withholding it would entail significant recurrent adjustment costs
for undertakings. The former requirement already exists in relation to EWCs
operating on the basis of subsidiary requirements and management needs to
already fulfil a similar obligation during the consultation procedure of national
employee representatives, and no particular cost issues have become apparent in
those contexts. Moreover, during the two-stage consultation, employer
organisations responded that an obligation to provide a reasoned response to an
EWC opinion already exists in many agreements.
It is furthermore assumed that the amendments to the Directive would produce their
effects during the last five years of the baseline period, taking into account the likely
duration of the legislative procedure, the transposition period, and the envisaged two-year
period of deferred application to allow stakeholders to prepare for and adapt to the
revised requirements.
A net creation rate of 9 additional EWCs per year is assumed, as explained above for the
baseline scenario. There is insufficient evidence for making any assumptions about the
impact of the initiative on the take-up of EWCs.
(b) Calculations
In order to provide an estimated range of increases in the operational costs due to the
initiative, a 5%, 10% or 15% hypothetical increase is calculated, in a first step, for the
currently existing population of EWCs (678) over the relevant part of the baseline period,
i.e. over five years.
Range of possible increases in costs for operating the currently existing EWCs, due to the initiative
Population: existing EWCs (678) Scenario 1 Scenario 2 Scenario 3
% of additional costs compared to average
EWCs operating costs
5% 10% 15%
Annual costs of operation of EWCs resulting
from amendments to the Directive (recurrent)
10.085.250 € 20.170.500 € 30.255.750 €
Total costs of operation of EWCs resulting
from amendments to the Directive for
those existing in the year 2023 (recurrent)
50.426.250 € 100.852.500 € 151.278.750 €
In a second step, the cost increases, compared to the baseline, are calculated for the
overall 90 additional EWCs assumed to be created over the baseline period. For the
purposes of calculating the total costs over the relevant remaining part of the baseline
period, the newly created EWCs are grouped together by year of establishment. The
annual cost increase is then multiplied by the number of years during which the costs
would accrue for each of those groups.
Range of possible increases in costs for operating future EWCs to be created over the baseline period
Population: new EWCs (9/year) Scenario 1 Scenario 2 Scenario 3
% of additional costs compared to average EWCs
operating costs
5% 10% 15%
125
Total costs of operation of EWCs resulting from
amendments to the Directive for those created
within 2023 and 2027 (=45) under the baseline
(recurrent) (= annual operating cost increase for 5
EWCs, multiplied by 5 years)
3.346.875 € 6.693.750 € 10.040.625 €
Total costs of operation of EWCs resulting from
amendments to the Directive for those created in
2028 (= 9) under the baseline (recurrent) (= annual
operating cost increase for 9 EWCs, multiplied by 4
years)
535.500 € 1.071.000 € 1.606.500 €
Total costs of operation of EWCs resulting from
amendments to the Directive for those created in
2029 (=9) under the baseline (recurrent) (= annual
operating cost increase for 9 EWCs, multiplied by 3
years)
401.625 € 803.250 € 1.204.875 €
Total costs of operation of EWCs resulting from
amendments to the Directive for those created in
2030 (9) under the baseline (recurrent) (= annual
operating cost increase for 9 EWCs, multiplied by 2
years)
267.750 € 535.500 € 803.250 €
Total costs of operation of EWCs resulting from
amendments to the Directive for those created in
2031 (=9) under the baseline (recurrent) (= annual
operating cost increase for 9 EWCs
133.875 € 267.750 € 401.625 €
Total costs of operation of EWCs resulting from
amendments to the Directive for those created in
2032 under the baseline (recurrent)
0 € 0 € 0 €
Total costs of operation of EWCs resulting from
amendments to the Directive for those created
within the baseline (recurrent)
4.685.625 € 9.371.250 € 14.056.875 €
On the basis of these hypothetical assumptions, the overall aggregated increases in
operating costs due to the initiative, over the baseline period, for all EWCs (existing
EWCs (678) and EWCs created under the baseline (90)) would hence fall within the
following range:
- 55.111.875 €, assuming a 5% increase in operating costs;
- 110.223.750 €, assuming a 10% increase in operating costs;
- 165.335.625 €, assuming a 15% increase in operation.
(c) Limitations
The impact of the initiative on the recurrent costs of operating an EWC are highly
uncertain, as it would be up to the management and employees’ representatives to
negotiate and agree on the detailed arrangements for the coverage of costs (legal costs,
training costs, costs of expertise, etc.). The comparison to baseline costs is complicated
by the fact that there is no comprehensive or systematic data on the content of all EWC
agreements.
Moreover, it cannot be ruled out that the initiative might have an impact on the take-up of
EWCs. A more effective functioning and enforceability of transnational information and
126
consultation requirements could provide additional incentives for the creation of new
EWCs. If such a scenario materialises, the undertakings concerned would bear the costs
of operating EWCs under the revised minimum requirements However, as mentioned
above, there is insufficient evidence for making any assumptions about the impact of the
initiative on the take-up of EWCs.
Total costs linked to the requirement of one additional annual plenary meeting for
EWCs based on subsidiary requirements
(a) Assumptions
As explained above, it is assumed that undertakings with EWCs based on subsidiary
requirements bear a cost of EUR 42.101 for one plenary meeting. There are 20 such
EWCs, for which an additional annual plenary meeting will be required under the
preferred option. The costs linked to that requirement are assumed to materialise over the
last five years of the baseline period, as for the other recurrent costs.
(b) Calculations
In order to calculate the total aggregated costs linked to the requirement of one additional
annual plenary meeting with EWCs based on subsidiary requirements, the cost of one
such meeting is multiplied by the number of such EWCs (20) and by the number of years
during which those costs would accrue (five):
Population: EWCs operating on the basis of
subsidiary requirements (20)
Annual costs for one additional meeting/year 842.020 €
Total costs for one additional meeting/year 4.210.100 €
(c) Limitations
As explained above, the estimated costs per plenary meeting do not necessarily capture
all costs linked directly or indirectly to such meetings.
Moreover, the planned amendment of the subsidiary requirements in the Annex to the
Directive might prompt social partners in other undertakings to align their EWC
agreements. This benchmark effect of the subsidiary requirement is not reflected in the
cost estimates, because firstly, it is entirely dependent on social partners’ agreements and
hence difficult to quantify. Secondly, with respect to EWCs based on agreement, the
possible additional cost of holding two annual plenary meetings instead of one is not an
impact of a binding requirement but results from a voluntary choice of social partners.
5. Overview of monetised cost estimates in the study supporting the 2018
evaluation and costs monetised for this impact assessment
While the study supporting the 2018 evaluation of the Directive (ICF, 2016) sought to
provide estimates of overall costs pertaining to the setting-up and operation of EWCs, the
evidence gathered for this impact assessment allowed only for a partial monetisation of
certain disaggregated cost factors. This explains the large differences between certain
cost estimates. Such differences are therefore not evidence of inconsistency or
127
divergences, but to the contrary, the partial monetisation for this impact assessment is
considered consistent with the previous overall estimates, given that the cost factors
which could not be newly monetised plausibly account for the differences. The respective
monetisation exercises are thus complementary and considered to confirm the continued
relevance of the 2016 estimates, adjusted for inflation.
Figure 14. Overview of ICF 2016 cost estimates and 2023 cost estimates
Costs for recast EWC
ICF 2016 (2014
prices)
ICF 2016 (2022 prices1) 2023 estimates238 (2022
prices)
Setting-up €119 208
(estimate of overall
average costs, without
training of SNB members)
€147 750€ €55 251
(estimate for three SNB
meetings without costs of
training, expertise, preparatory
time and meetings, costs of pre-
SNB phase)
€ 18 417/ meeting
Annual
costs for
running an
EWC
€240 000
(estimate of overall average
annual costs)
€297 500 €42 101/plenary meeting
€288.000 / average annual
costs (estimate based on a
small number of interviews)
Re-
negotiation
costs
No data - €18 417/meeting
Legal
advice
€15 000/legal issue €18 600/legal issue No calculation
Training €12 9002
(estimate of annual budget
per EWC)
€15 500 €17 870
1
2014 estimates, adjusted for inflation (based on IMF inflation rates, end of period consumer prices)
6. Sensitivity analysis
The average global turnover of undertakings with an existing EWC is estimated to be
around €24 billion. This average global turnover estimate stems from 33 answers to the
2023 ICF targeted survey, which represents about 3% of the total number of existing
EWCs. Furthermore, this impact assessment assumes a stable average global turnover in
real terms, which should track the inflation rates in the countries where the undertakings
are established.
The low level of responses to the targeted survey and the assumption that the evolution of
average global turnover will track inflation creates uncertainty regarding this estimate
and its evolution in the future. For that reason, a sensitivity analysis is performed to
assess the costs/average global turnover ratio in case of lower estimates for turnover. The
following two scenarios were considered: an average global turnover lower by 25% and
50% compared to the retained estimate. This sensitivity analysis does not include
238
The calculations were made by the Commission services on basis of elements provided by the
supporting studies (ICF(2016) and ICF(2023)) and Eurostat data.
128
scenarios with higher estimates for turnover given the already very low ratios of cost
items to turnover.
Figure 15. Sensitivity analysis for the average global turnover of undertakings with
an existing EWC
Type of costs
per
undertaking
Costs,
2022
prices
Scenario 1:
costs/average
global turnover of
€24 bn
Scenario 2:
costs/average
global turnover of
€18 bn
Scenario 3:
costs/average
global turnover of
€12 bn
Setting-up €147
750€
0.00061% 0.00082% 0.00123%
Annual costs
for running an
EWC
€297
500
0.00124% 0.00165% 0.00248%
The table above shows that even in a conservative scenario where the present or future
average global turnover for undertakings with an EWC would be two times lower than
the estimate retained in this report, the monetised cost still represents a very small share
of the turnover. Moreover, it is worth reiterating that the costs related to the running of
EWCs, including the costs of training, renegotiations (about every five years), experts’
fees, annual and extraordinary meetings, employees’ time spent on EWC-related
activities, etc., apply under the baseline scenario. While some of the policy options may
lead to a certain increase in some of those costs factors, such possible increases cannot be
quantified as they depend on too many uncertain – often behavioural – variables.
Nevertheless, the fact that even the overall baseline costs of running an EWC account
only for a very small part of undertakings’ turnover, as confirmed by the sensitivity
analysis, allows the certain conclusion that any realistic cumulative increases due to the
policy options will also be insignificant for undertakings. Moreover, as regards one-off
costs, the costs of setting-up a new EWC can be attributed to this initiative only in cases
where currently exempted undertakings with ‘voluntary agreements’ (323) are requested
by their employees to establish an EWC, following the removal of their exemption from
the scope of the directive (policy option 1a). It is not possible to estimate in how many
cases such requests will be made in practice, as this depends on the specific situation and
choices made in each of those undertakings. As explained, should management and
employees agree to continue to operate based on a well-functioning voluntary agreement,
they could do so simply by not triggering the Directive’s procedures for the negotiation
of an EWC agreement. In any case, as confirmed by the sensitivity analysis, the costs of
setting up an EWC would be negligible in proportion to undertakings’ turnover.
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ANNEX 5: COMPETITIVENESS CHECK
1. OVERVIEW OF IMPACTS ON COMPETITIVENESS
Dimensions of
Competitiveness
Impact of the initiative
(++ / + / 0 / - / -- / n.a.)
References to sub-sections of the
main report or annexes
Cost and price competitiveness 0
Section 6 of the main report and
Annex 12
International competitiveness 0
Section 6 of the main report and
Annex 12
Capacity to innovate 0
Section 6 of the main report and
Annex 12
SME competitiveness n.a
Section 6 of the main report and
Annex 12
2. SYNTHETIC ASSESSMENT
The costs of the preferred option are expected to be negligible for undertakings, as they
account for less than 0.001% of their average global annual turnover. Specifically:
- Some of the 323 currently exempted Union-scale undertakings with ‘voluntary
agreements’ would incur one-off adjustment costs estimated at ca. € 148 000
linked to the setting-up of a new EWC, if requested by their employees. This
corresponds to approximately 0.0006% of the average global turnover of such
undertakings.
- Some of the currently 678 Union-scale undertakings with an EWC would incur
one-off adjustment costs linked to the renegotiation of their agreements. While it
is not possible to provide a reliable estimate of average overall costs of
renegotiation, evidence suggests that a re-negotiation process is shorter than the
process for setting up a new EWC. Based on the available evidence, it was
possible to monetise certain costs linked to meetings (ca. EUR 18 400 per
meeting239
) between management and EWC representatives for the renegotiation
of existing agreements. This partial monetisation can provide an indication of the
order of magnitude of the overall costs related to renegotiations, bearing in mind,
however, that it should not be taken as an approximation of those overall costs. In
complex cases, several renegotiation meetings can be needed. But even in that
scenario, these costs should not have any significant economic impact on Union-
scale companies.
- There could be an incremental increase in undertakings’ costs of operating an
EWC (currently on average ca. € 300 000 per year) due to a better coverage of
training costs, legal costs and experts’ fees. For instance, it cannot be excluded
that the incidence of legal actions might marginally increase due to the measures
relating to legal costs and improved access to justice. However, there is
239
See Annex 4 ‘Analytical methods’ (Section 4.4).
130
insufficient evidence for estimating the scope of such an increase but it is certain
to represent a negligible share of undertakings’ global annual turnover. In
particular, the fact that non-compliant undertakings’ turnover is to be taken into
account to determine sanctions is not expected to entail a substantial burden,
because any sanctions are required to be proportionate in relation to gravity,
impacts, scope, duration and other relevant criteria characterising the offence.
- Each of the 20 undertakings with an EWC based on subsidiary requirements is
expected to bear costs of € 42 000 for an additional annual plenary meeting.
The preferred option is not expected to negatively impact or delay decision-making of
companies. While the management representatives have considered that the requirement
of a reasoned response to EWCs’ opinions prior to the adoption of a decision on
transnational matters could lead to indirect recurrent costs due to delayed decision-
making,240
these concerns are not expected to materialise in practice. Under the preferred
option, EWCs would remain information and consultation bodies without substantive
powers over management decisions, and no such impacts have been substantiated with
respect to other types of worker representation bodies that are already entitled to a
reasoned response.241
The legal text would specifically allow for urgency to be taken into
account, and management would be free to expedite the reasoned response as necessary.
Furthermore, during the two-stage consultation, employer organisations responded that
an obligation to provide a reasoned response to an EWC opinion already exists in many
agreements (see Section 2.4.3. of the Impact Assessment).
Any negative effects on undertakings’ cost and price competitiveness, international
competitiveness and capacity to innovate can therefore be ruled out.
As the envisaged policy measures would not apply to SMEs and no indirect effects on
SMEs are foreseeable, the initiative is not relevant for SME competitiveness.
The initiative is expected to create certain economic benefits for undertakings. For
instance, more effective information and consultation on transnational matters is likely to
enable better strategic decision-making, promote a more trustful relationship between
management and the workforce, and bolster undertakings’ ability to manage necessary
structural changes in the context of the digital and green transition in a sustainable
manner. Moreover, a more balanced gender-composition of EWCs is expected to
contribute to a more equitable representation of employees’ interests, which can provide
a better basis for companies’ decisions. However, such an effect cannot be attributed to
the initiative with any degree of certainty, given the interplay between employee
involvement at national and transnational level and the non-binding nature of EWCs’
opinions. Therefore, while limited benefits can be assumed in terms of cost/price
competitiveness, international competitiveness and capacity to innovate, it should
however be stressed that the assumption of a causal link between the initiative and those
benefits is characterised by a high degree of uncertainty, because the outcomes of
transnational information and consultation depend to a large extent on external
240
ICF(2023), Section 5.1.2.3.
241
The requirement of a reasoned response by the central management already exists for EWCs operating
based on subsidiary requirements (Annex I point 1(a) of the Directive) and employee representation bodies
at national level.
131
behavioural factors, in line with the principle of social partner autonomy rather than the
procedural changes considered under this proposal.
Having regard to the above, the expected impacts of the initiative on competitiveness are
estimated to be null to positive. No negative impacts on competitiveness of the preferred
policy package have been identified. Potential positive impacts on competitiveness of the
preferred policy package may be achieved through improved effectiveness of the
information and consultation processes in the undertakings, as described above, but such
benefits cannot be reliably estimated or substantiated by a robust evidence.
132
ANNEX 6: DEVELOPMENT AND CONTENT OF THE RECAST
DIRECTIVE
The origins of today’s legislation on European Works Councils date back to the 1980s
with the very first proposal known as the ‘Vredeling directive’. While this proposal was
ultimately not adopted due to a lack of agreement between European social partners,
several multinational companies voluntarily started creating transnational bodies to
facilitate exchanges between management and worker representatives. Such experiences
were subsequently taken into consideration by the Commission when preparing the
proposal for the first Directive on European Works Councils, put forward following the
lack of agreement between social partners in this area. The first EWC Directive242
was
finally adopted in 1994 as a Council directive under the Agreement on social policy243
.
Several shortcomings became evident following the entry into effect of the 1994 EWC
Directive, such as the low number of new EWCs created244
and legal uncertainty
hampering the proper implementation of some provisions. Following the consultation of
social partners, the Commission adopted a legislative proposal for a recast of the 1994
Directive in July 2008.245
The European Parliament and the Council adopted Directive
2009/38/EC (‘recast Directive’) on 6 May 2009. Some amendments introduced by the co-
legislators reflected a joint position of the social partners put forward during the adoption
process in a joint letter to the Council Presidency in August 2008.246
The recast Directive aimed at addressing the implementation shortcomings of the original
instrument:
- ensuring the effectiveness of employees’ transnational information and
consultation rights,
- increasing the number of EWCs established while enabling the continuous
functioning of existing agreements,
- resolving the problems encountered in the practical application of Directive
94/45/EC and remedying the lack of legal certainty resulting from the formulation
of some of its provisions or the absence of certain provisions,
- and ensuring that Union legislative instruments on information and consultation
of employees are better linked.
242
Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council
or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the
purposes of informing and consulting employees, OJ L 254, 30.9.1994, p. 64–72.
243
Agreement on social policy annexed to Protocol 14 on social policy annexed to the Treaty establishing
the European Community.
244
SWD (2018) 187, p. 21-22
245
Commission proposal COM(2008) 419 final and Impact Assessment SEC(2008) 2166.
246
ETUC and BusinessEurope (2008), Joint advice by the social partners on the European Work Council
‘recast’ Directive. See key documents (http://www.worker-participation.eu/European-Works-
Councils/Recast-Directive/Chronology-of-the-EWC-Recast-review-Key-docs ), 29 August 2008.
133
In October 2015, the recast Directive was amended247
to include seafarers in its scope of
application.
The Directive includes the following main substantive provisions:
• General principles and concepts of information and consultation: Article 1
stipulates that its aim is to improve the right to information and consultation of
employees in multinational companies of certain size and that the arrangements
for informing and consulting employees must follow the general principle of
effectiveness while enabling the undertaking to take decisions effectively and that
the scope of the information and consultation under the Directive is to be limited
to transnational issues (the Directive contains criteria to determine the
transnational nature). Article 2 of the Directive adds definitions of information
and consultation, including the concepts of timing and content appropriate to the
information and consultation.
• Opening and process of negotiations: Article 1 stipulates that an EWC or a
procedure for informing and consulting employees is to be established where so
requested by the employees or when initiated by the central management.248
Article 5 sets out negotiation procedure for establishing an EWC; it also
introduces the obligation to inform the competent workers’ and employers’
organisations of the start of negotiations.
• Procedure to set up an EWC: Article 6 sets minimum requirements of the content
of EWC agreements (Article 6(2)) or information and consultation agreements
(Article 6(3)). However, specific modalities of functioning of each EWC is to be
defined by the parties to the agreement, i.e. ‘special negotiating body’249
and the
central management. The Directive does not prescribe what should be the content
of the agreement, but rather lists topics on which the SNB and the central
management should agree.250
Where parties are not able to reach such an
agreement within a time limit specified in the Directive, subsidiary requirements
set out in Annex I to the Directive apply.251
A vast majority of EWCs are
governed by an agreement signed between the parties.252
• Minimum rights and obligations: Articles 8 (Confidentiality), 9 (Operation of the
European Works Council and the information and consultation procedure for
workers) and 10 (Role and protection of employees’ representatives) include
rights and obligations that apply in relation to the EWCs based on agreements or
subsidiary requirements, regardless of whether they are specified in the EWC
agreement. Article 10 specifies that the members of an EWC must have the
247 Directive (EU) 2015/1794 of the European Parliament and of the Council of 6 October 2015 amending
Directives 2008/94/EC, 2009/38/EC and 2002/14/EC of the European Parliament and of the Council, and
Council Directives 98/59/EC and 2001/23/EC, as regards seafarers.
248
See further Article 5(1).
249
Special negotiating body is a temporary body of employees representatives established in accordance
with Article 5(2) of the Directive. In accordance with the principle of subsidiarity, Member States are free
to determine the method to be used for the election or appointment of the members of the employees’
representatives.
250
Article 6(2).
251
Article 7.
252
Only around 20 EWCs are governed by subsidiary requirements at present. Data source: ETUI (April
2023).
134
means required to apply the rights arising from the Directive to represent
collectively the interests of the employees. It also places an obligation on the
employees’ representatives to report to the employees they represent and gives
employees’ representatives the right to be provided with training without loss of
salary.
Article 8 sets the following rules on confidentiality and right to refuse disclosing
certain information:
“Member States shall provide that members of special negotiating bodies or of
EWCs and any experts who assist them are not authorised to reveal any
information which has expressly been provided to them in confidence. The same
shall apply to employees’ representatives in the framework of an information and
consultation procedure. That obligation shall continue to apply, wherever the
persons referred to in the first and second subparagraphs are, even after the expiry
of their terms of office.” (Article 8(1)).
“Member States shall provide, in specific cases and under the conditions and
limits laid down by national legislation, that the central management situated in
its territory is not obliged to transmit information when its nature is such that,
according to objective criteria, it would seriously harm the functioning of the
undertakings concerned or would be prejudicial to them. Member States may
make such dispensation subject to prior administrative or judicial authorisation.”
(Article 8(2)).
• Links between the levels of information and consultation of employees: Article 12
of the Directive establishes the principle of a link between the national and
transnational levels of information and consultation of employees, with due
regard for the representative bodies’ competences and areas of action. This link
may be specified in EWC agreements themselves, with due respect of the
provisions of national law and/or practice on information and consultation of
workers. If the agreement does not cover this interaction, the information and
consultation must be conducted both at national and European level in such a way
that it respects the competences and area of action of the employee representation
bodies.253
In any case, the information and consultation of an EWC shall be
without prejudice to rights and obligations under other EU information and
consultation instruments.254
• Adaptation clause: Article 13 provides a procedure for adaptation of agreements
in force to, where the structure of the undertaking or group of undertakings
changes significantly. The procedure can be initiated by the central management
or at least 100 of employees.
• Continuity: Under Article 14 undertakings with agreements concluded before the
1994 Directive entered into application are not subject to the obligations arising
from the Directive. Neither its predecessor nor Directive required systematic
renegotiations of already existing information and consultation agreements in the
eligible companies. The Directive also exempts from its scope undertakings with
253
Recital 37 indicates that the information and consultation of an EWC should take place either before or
at the same time as the national information and consultation process.
254
Directive 2002/14/EC, Directive 98/59/EC and Directive 2001/23/EC.
135
agreements negotiated or revised during the transition period between June 2009
and June 2011.255
• Subsidiary requirements: the Annex I to the Directive lays down the rules
applicable in the absence of agreement between the management and employees
representatives concerning an EWC’s establishment, composition and
competences.
• Enforcement provisions: In addition to the general requirements of the 1994
Directive for the Member States to provide for ‘appropriate measures in the event
of failure to comply with this Directive’, and more specifically, to ensure that
‘adequate administrative or judicial procedures are available to enable the
obligations deriving from this Directive to be enforced’, the Directive added two
elements on enforcement and sanctions:
Firstly, the addition of Article 10(1): ‘Without prejudice to the competence of
other bodies or organisations in this respect, the members of the European Works
Council shall have the means required to apply the rights arising from this
Directive, to represent collectively the interests of the employees of the
Community-scale undertaking or Community-scale group of undertakings.’
Secondly, two new recitals: ‘The Member States must take appropriate measures
in the event of failure to comply with the obligations laid down in this Directive.’
(recital 35) ‘In accordance with the general principles of Community law,
administrative or judicial procedures, as well as sanctions that are effective,
dissuasive and proportionate in relation to the seriousness of the offence, should
be applicable in cases of infringement of the obligations arising from this
Directive.’ (recital 36)
Recital 36 mirrors the general principle of effective remedy, enshrined in the first
paragraph of Article 47 of the Charter of Fundamental Rights, as interpreted by
the Court of Justice of the European Union.256
Under this principle, Member
States have the obligation to provide for effective remedies whenever rights
guaranteed under Union law are not respected, having regard to the procedural
autonomy of Member States, the principles of proportionality and subsidiarity and
EU competence under Article 153 TFEU (i.e. EU competence for 'minimum
requirements for gradual implementation’).
255
Consequently, the obligations arising from the recast Directive do not apply to undertakings with such
agreements. Indeed, the objective of the Directive was to increase the number of EWCs while ‘enabling the
continuity of existing agreements’ (Recital 7).
256
In the Impact Assessment for the recast Directive, the Commission considered that “a further
reinforcement or more detailed prescription of sanctions would not be in conformity with the subsidiarity
principle, as the responsibility for establishing appropriate, dissuasive and proportionate sanctions lies, as a
general principle, with the Member States” (Impact assessment SEC(2008)2166, p. 46).
136
ANNEX 7: COHERENCE OF THE RECAST DIRECTIVE WITH OTHER
UNION LEGISLATION AND POLICIES
The EU’s legal framework governing information and consultation at national level has
developed over several decades. Several directives set our rules on information and
consultation of workers’ representatives. Directive 98/59/EC257
does so in the context of
collective redundancies, Directive 2001/23/EC258
sets out rules on information and
consultation of workers’ representatives, or in their absence of workers themselves, in the
event of a transfer of an undertaking, while Directive 2002/14/EC259
establishes a general
framework for information and consultation of workers at national level. Article 12 of
the Directive provides that information and consultation of an EWC should be
linked to that of national employee representation bodies, with regard to the
competences of each.
With regard to the type companies, Directives 2001/86/EC and 2003/72/EC260
provide
for the establishment of representative bodies for information and consultation on
transnational issues in European companies (‘SE’) and European Cooperative Societies
(‘SCE’). The Directive does not apply to these companies that are, at the same time,
Union-scale undertakings or groups of undertakings, unless the negotiations on workers’
involvement in the SE or SCE have not been opened or have been terminated by the
special negotiation body.261
Other EU instruments relevant in case of restructuring require also information and
consultation of worker representatives at the national level which complements the
information at the transnational level, including Directive 2004/25/EC262
, Directive (EU)
2017/1132263
(as amended by Directive (EU) 2019/2121264
) and Directive (EU)
2019/1023265
.
257
Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States
relating to collective redundancies, OJ L 225, 12.8.1998, p. 16–21.
258
Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member
States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses
or parts of undertakings or businesses, OJ L 82, 22.3.2001, p. 16–20.
259
Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a
general framework for informing and consulting employees in the European Community, OJ L 80,
23.3.2002, p. 29–34.
260
Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company
with regard to the involvement of employees, OJ L 294, 10.11.2001, p. 22–32.
Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative
Society with regard to the involvement of employees, OJ L 207, 18.8.2003, p. 25–36
261
Article 13(1) of Directive 2001/86/EC and Article 15(1) of Directive 2003/72/EC.
262
Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids,
OJ L 142, 30.4.2004, p. 12–23.
263
Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to
certain aspects of company law (codification), OJ L 169, 30.6.2017, p. 46–127.
264
Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019
amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions, OJ L 321,
12.12.2019, p. 1–44.
265
Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on
preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to
137
For reasons of effectiveness, consistency and legal certainty, the EU acquis collectively
requires that workers and their representatives must be guaranteed information and
consultation at the relevant level of management and representation, according to the
subject under discussion. To achieve this, the competence and scope of action of
EWCs must be distinct from that of national representative bodies – contrary to
them, EWCs are not bodies for negotiating with the management266 - and must be
limited to transnational matters.267
A 2015 Eurofound study268
has identified a variety of situations in the Member States
how the process of information and consultation of the EWC is linked to local-level
information and consultation. This can also be influenced by the set up in national
industrial relations mechanisms. For example, the existence of co-determination rights,
the possibility to apply for injunctions or sanctions to enforce local-level information and
consultation rights may influence the way Member States and social partners at each
level perceive the issue of linking.269
Overall, the Directive is considered to be generally highly consistent with other EU
legislation addressing workers information and consultation rights.270 While the
obligation of information and consultation under the Directive is limited to transnational
matters, the content of such matters is not prescribed. Therefore, synergies can occur
between the Directive and any EU policy field that stands to benefit from the
involvement of EWCs, in particular in the context of the twin transitions.
increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and
amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency), OJ L 172, 26.6.2019, p.
18–55.
266
The information and consultation procedures established in Directives 98/59/EC, 2001/23/EC and
2002/14/EC oblige management to inform and consult the national workers’ representatives on the topics
specified in the directives ‘with a view to reaching agreement’, whereas such requirement is not included
in the recast Directive.
267
Article 1(3) in connection with recital 15.
268
Dorssemont F., Kerckhofs P. (2015) Linking information and consultation procedures at local and
European, page 1.
269
SWD(2018)187, p. 29.
270
SWD(2018)187, p. 43.
138
ANNEX 8: OVERVIEW OF MEMBER STATES’ TRANSPOSITIONS
OF THE RECAST DIRECTIVE IN RELATION TO RELEVANT POLICY
AREAS
This Annex presents an overview of the national regulatory frameworks on the policy
areas described in problem definition (Section 2.4. of the main report).
1. POLICY AREA 1
Exemption from the scope of the Directive:
All Member States have transposed Article 14 of the Directive and therefore provide for
exemptions from the scope of the EWC laws of undertakings with voluntary agreements
or with Article 14 agreements.
All Member States would have to amend existing legislations if exemptions were
removed in line with policy option 1a.
2. POLICY AREA 2
Deadline for commencing negotiations following a request:
National laws transposed deadlines under Article 7(1) of the Directive. In five Member
States (AT, HR, DK, LT, SK) the national provision can be interpreted in a way that a
meeting should have been held within the 6 months. In all other Member States, the
transposing provisions take over Article 7(1) in similar terms or verbatim. In NL, the
application of the deadline of 6 months is clearly limited to situations where management
has given evidence that it will not commence negotiations with the SNB.
22 Member States’ laws would need to be amended to implement the clarification of
Article 7(1), envisaged as an accompanying measure under policy options 2b and 2c.
Coverage of SNBs’ necessary resources:
Legal costs and legal representation costs: Only in NL are costs of legal costs or legal
representation costs (that qualify as ‘reasonably necessary costs’) explicitly mentioned in
the transposing provisions. In ten Member States (AT, BG, CY, HR, DK, EL, HU, LT,
LU, PT), the national provisions are formulated in a manner that makes coverage of legal
costs unlikely. In these cases, national provisions point to ‘establishment and operational’
costs, specifying examples. In all others, the national implementation measures do not
explicitly specify that legal costs would be covered and are formulated similarly to the
wording of Article 5(6) of the Directive (‘so as to enable the special negotiating body to
carry out its tasks in an appropriate manner’) which may be interpreted as including costs
linked to legal disputes. No relevant case law on this question has been identified in the
Member States.
All Member States, except for NL, would need to amend their laws to specify that
reasonable legal costs and costs of legal representations of SNBs are to be covered by the
management (policy options 2b and 2c).
139
Coverage of training expenses: As the same provision on the right to training applies to
SNB and EWC members, see below Section 3 of this annex.
Gender-balanced composition of EWCs and their select committees
Most Member States have transposed the Directive’s provision on the composition of
EWCs, including the criterion of gender, almost verbatim (AT, BE, CZ, DK, EE, EL, FR,
HR, IT, LT, LU, LV, MT, PT, RO, SE, SI), while eight (CY, DE, ES, FI, IE, NL, PL,
SK) have not included a reference to gender balanced representation in the EWCs into
their laws. Such measures are also not typically included in Member States laws271
on the
nomination of national employee representatives in most Member States.272
All Member States would have to amend their laws to lay down a quantitative objective
for a balanced gender representation in EWCs and select committees (policy option 2c).
3. POLICY AREA 3
Concept of ‘transnational matters’
Definitions of ‘transnational matters’ provided in laws of 19 Member States (BG, CY,
HR, EE, DE, FR, EL, IE, IT, LV, LT, LU, MT, NL, PL, PT, SK, SI, SE) fully correspond
to Article 1(4) of the Directive, without addition from recital 16. In AT, the transposition
considers Article 1(4) and recital 16 together. In BE and ES, recital 16 is reflected in the
non-binding legislative comments of each implementing measure. In five Member States
(CZ, DK, FI, HU, RO), the legislative text integrates elements of recital 16 in the
definition of ‘transnational matters’ such as 'scope of its potential effects' (e.g. CZ, DK).
In FI, the definition includes elements of recital 16: 'transnational issues are also issues
which, regardless of the number of Member States concerned, are of major consequence
for the situation of employees or involve transfers of activities between Member
States.'273
Clarification of the concept of transnational matters would entail the need for legislative
amendments at least 21 Member States that transposed the provision without integrating
additional criteria from recital 16 in the legal requirements (policy option 3b).
Broadening the concept of transnational matters and requiring central management to
justify in writing the absence of transnational issues would entail amendments to all
Member States’ transposing laws (policy option 3c).
Consultation procedure
Timing of the consultation: Member States transposed the definition of ‘consultation’ in
the Directive verbatim274
(EL, IE, IT, MT, RO, SI, SE), or refer to a “reasonable time”
(PT), “appropriate time” (HU), a “time when this information and consultation is still
271
Provisions on gender balanced composition of national employee representatives have been found in
national laws of AT, DE, FR, HR, PT.
272
Mapping of Member States’ laws done by European Centre of Expertise in the field of labour law,
employment and labour market policies (ECE)(2023), unpublished.
273
ICF(2023), Section 4.2.1.3.
274
Article 2(1)(g). (“at such time … as enables employees’ representatives to express an opinion on the
basis of the information provide about the proposed measures”)
140
meaningful” (BE), “timely manner” or “in time” (BG, CY, DE, HR), “as soon as
possible” (AT). DK and NL refer to consultation on ‘planned measures’ and ‘proposed
decision’ respectively.
CZ law stipulates that “the employer shall ensure that the consultation takes place
sufficiently in advance and in an appropriate manner so that the employees can express
their opinions on the basis of the data supplied to them and the employer can take these
opinions into account before a certain measure is implemented”. PL legislation specifies
that the EWC has a deadline of 14 days to deliver an opinion on the report submitted by
the central management, and that the management must examine the opinion prior to
taking any decision on the matter. In ES, the consultation of EWCs must be held in
sufficient time to enable the EWCs’ opinion to be taken into account in the adoption or
implementation of decisions.
Response to EWC opinions: Two Member States (HU, LU) require that management
provide a response to an EWC opinion as a part of the general definition of consultation
that applies to EWCs functioning on basis of agreements, and specifically in exceptional
circumstances.
A requirement to provide a reasoned response to EWC opinions prior to the adoption of a
decision on transnational matters would entail legislative amendments in at least 25
Member States (policy option 3b and 3c).
EWC resources
Coverage of legal costs and costs of expertise: The national rules on financial means and
the legal costs of proceedings are generally limited to the general provisions of Article
10(1) of the Directive. The right of all EWCs to receive assistance from an expert is
expressly provided for in three Member States (AT, CZ, DE). A general right of EWCs
to be supported by experts of their choice (policy option 3c), would entail amendments to
the national laws of at least 24 Member States.
No legislation lays down a dedicated budget for court fees in cases of potential litigation
between the EWCs and the businesses, although these costs could generally be part of the
operating expenses of EWCs.275
Some Member States have introduced statutory release
from court fees for EWCs (AT, LT, ES, BG, FR, DE, RO, SE, NL)276
and others have
introduced a general regulation concerning the operating costs of EWCs. The latter is the
case in most of the Member States.
For EWCs operating under subsidiary requirements, in EE, NL, EL the costs of the
operation of the EWC covered should be ‘reasonable’ or considered ‘necessary’. HU and
NL implementing laws specify that funding of EWCs extends to assistance from legal
experts and covers legal costs. Based on analysis of national transposing provisions of
the subsidiary requirements, there is indication that currently legal costs would not be
covered in at least four Member States (AT, IT, LU, SI).277
275
SWD(2018) 187 final, p. 34.
276
Jagodziński R., Stoop S. (ETUC)(2022) Access to justice for European Works Councils, p. 31.
277
ICF(2023), Section 4.2.1.3.
141
Access to training and coverage of costs of training: In the majority of Member States
the right to training under Article 10(14) has been transposed verbatim. Four Member
States (DE, FR, IE, PL) refer in general to ‘costs’ to be covered in addition to salary. HU
law provides for information about the types of training that can be taken and that once a
request is being made by EWC members explaining the reasons for the training,
management cannot refuse this request. In IT, the provisions specify that the content of
training is ‘jointly agreed’ with management.
Clarification that the existing right of SNB and EWC members to training requires that
management must cover the costs of necessary training and related expenses, would
require an adaptation of implementing legislation in the large majority of Member States.
Confidentiality and non-disclosure of information:
Obligation of confidentiality: The Directive leaves it to Member States to set conditions
for the application of the confidentiality obligation (Article 8(1)). Some Member States
limit the possibility of the confidentiality obligation to business and trade secrets (AT,
DE, FI, HR, HU, LT), to information on the financial position of the group or the
undertaking, which is publicly available (FI), information relating to the security and the
corresponding security system (FI).278
In PT, management can only classify information as confidential or refuse to provide
information under the terms of the agreement, or, in the absence of such terms, of the
law. The classification of information as confidential, the non-provision of information or
the failure to carry out a consultation shall be justified in writing, based on objective
criteria. In EE, central management is obliged to justify the confidentiality of the
information at the request of the employees’ representatives.
Some Member States apply the criterion of protecting the legitimate interest of the
undertaking for applying the confidentiality clause (BG, CZ, SE) or when the “interests
of the company so demand” (DK).
Certain Member States have transposed Article 8(1) without setting additional conditions
for a confidentiality obligation (CY, ES, IE, LU, LV, MT, NL, PL, RO, SI, SK).279
Introducing a condition that central management may declare information confidential
only in the legitimate interest of the undertaking (policy option 3b and 3c) would require
legislative amendments in about half of the Member States. Requirement the
management to inform, upon request, of the grounds justifying confidentiality would
need to be reflected in all national laws except in EE and PT (policy option 3b and 3c).
Non-disclosure of information: With regard to management’s capacity not to disclose
certain information when its nature is such that, according to objective criteria, it would
seriously harm the functioning of the undertakings concerned or would be prejudicial to
them (Article 8(2)), this provision was not transposed by AT, FR, HR, SE, SI. Indeed,
278
Mapping of Member States’ laws done by European Centre of Expertise in the field of labour law,
employment and labour market policies (ECE)(2023), unpublished.
279
Ibid.
142
Member States may choose not to apply this provision280
and, instead to apply the duty of
confidentiality to protect information, disclosure of which would seriously harm the
undertaking. The lack of an exemption from the obligation to disclose information is to
be considered as a more favourable regulation.
Around half of the Member States have transposed Article 8(2) referring to the
conditions as set in the Directive (“information when its nature is such that, according to
objective criteria, it would seriously harm the functioning of the undertakings concerned
or would be prejudicial to them”) (BG, CY, FI, HU, IE, LT, LU, LV, MT, NL, PL, RO,
SK).
In EE and PT, central management is required to give, based on objective criteria, a
justification as to why disclosure of the information would or may significantly harm the
undertaking. Similarly, in RO, central management must provide written reasons for
refusing to disclose information.
In six Member States, the employer is not obliged to disclose information classified as
confidential or protected under the statutory provisions (BE, CY, CZ, EL, DE, ES)281
.
No Member State requires that central management obtains prior authorisation from a
court or an administrative body before it withholds information under Article 8(2). A
dispute resolution mechanism through courts or arbitration is provided by national laws
on the basis of Article 11(3).282
A requirement on management to inform, upon request, of the grounds justifying non-
disclosure would need to be reflected in the 19 Member States which have transposed
Article 8(2) and do not yet provide for a similar obligation (policy option 3b and 3c). A
requirement of prior administrative or judicial authorisation if central management
refuses to disclose information which could seriously harm the undertaking would
require amendments to national laws of the 22 Member States which have transposed
Article 8(2).
4. POLICY AREA 4
Access to justice
In four Member States (AT, FR, RO, SE) EWCs have legal personality to initiate judicial
proceedings and to represent the EWC in relations with third parties within the limits of
their responsibilities. In CZ, FI, DE, LT, LV, NL, PL, SK, ES, HU, EWCs can be a party
280
See in this respect Article 11(3): “Where Member States apply Article 8, they shall make provision for
administrative or judicial appeal procedures which the employees’ representatives may initiate when the
central management requires confidentiality or does not give information in accordance with that Article.”
[emphasis added]
281
The Spanish legislation specifies that the non-disclosure clause can apply to industrial, financial and
commercial secrets. It cannot apply to information relating to the level of employment in the undertaking.
Similarly, the German legislation specifies that the duty of central management to inform exists insofar as
trade or business secrets of the enterprise or group of enterprises are not jeopardised thereby.
282
Mapping of Member States’ laws done by European Centre of Expertise in the field of labour law,
employment and labour market policies (ECE)(2023), unpublished.
143
in legal proceedings. In BE, IT, EE, LU, SI, SK, individual EWC members or trade
unions have the capacity to bring legal actions on EWC matters. 283
In several Member States, disputes for which judicial proceedings are available are
limited only to certain EWC-related matters. In HR judicial proceedings cover only cases
of employees’ discrimination, whereas in MT, LT, PL only disputes regarding the
confidentiality or disclosure of information. In PL, criminal proceedings may be initiated
by the Labour Inspectorate (acting in a capacity of a public prosecutor) if central
management makes it impossible to create or impedes the actions of an SNB, EWC, or
employee representative as provided by the agreement; or discriminates against a
member of an SNB, EWC, or an employee representative representing employees under
the agreement, in connection to a function performed by such a person.
Problems of access to justice are known to arise in two Member States, namely IE,
against which the Commission launched infringement proceedings in May 2022284
, and
FI. In Ireland, certain EWCs based on agreements can enforce some of their rights
through a private arbitration procedure, for which they bear their own costs. A potential
remedy would depend on the outcome of that arbitration. The arbitrator's determination is
binding on the parties.285
Certain breaches of the EWC legislation could lead to a
criminal prosecution. Courts however cannot be directly accessed by EWCs or SNBs
(nor by trade unions on their behalf) in IE.
In FI an EWC related dispute cannot be brought by a party to the dispute before a court.
The FI law designates a Cooperation Ombudsman286
and criminal courts for ensuring
compliance with the rights under national law transposing the EWC Directive. Access to
a criminal court is dependent on whether the prosecutor institutes the legal proceedings,
based on the violation of rights in question.287
Disputes over the establishment or functioning of EWCs can also be resolved in 15
Member States via alternative dispute mechanisms such as conciliation, mediation or
arbitration. Those alternative mechanisms are not specially designed for EWCs (they are
available for any private dispute), except in the case of IT, where a dedicated
Conciliation Committee was established to provide proposals to solve EWC-related
disputes within 20 days.
No Member State provides a comprehensive overview of the rules and procedures
available to enforce rights under the Directive.288
Under policy options 4b and 4c,
283
SWD (2018) 187 final, p. 34-36. See Annex 5 of the Staff Working document, providing overview of
the EWCs’ capacity to bring actions before the courts in the Member States.
284
Section 10 of the press notice: https://ec.europa.eu/commission/presscorner/detail/en/inf_22_2548.
285
An appeal could be made against an arbitrator’s decision on a point of law. The court's role in such
appeal is limited to considering whether the arbiter has reached a lawful decision, not to make its own
finding of facts.
286
The Cooperation Ombudsman has a right to carry out inspections, issue an improvement notice, take a
matter to a criminal court on suspicion that an act specified as punishable under the Finnish Act has
occurred, and to require that the court obliges the employer or enterprise to meet their obligations within a
time limit and that it imposes a conditional fine in order to encourage compliance.
287
A complaint against Finland on this matter was submitted to the Commission in November 2022.
288
Mapping of Member States’ laws done by European Centre of Expertise in the field of labour law,
employment and labour market policies (ECE)(2019), unpublished.
144
Member States would have to review the procedures in place for employee
representatives, SNB and EWC members to bring a legal action to enforce all rights
accorded to them under the Directive, including in the pre-SNB or SNB phases before the
EWC has been created. Member States would need to review their national procedures
and ensure that out of court dispute resolution mechanisms cannot block access to courts.
Sanctions and penalties
In most Member States, sanctions consist of fines imposed on the employer, the amount
of which is predetermined by law (e.g. 15.000 EUR for administrative sanctions in DE)
except in case of DK where courts are given full discretion.
Most national laws define penalties for most or all of the central EWC-related obligations
of the Union-scale undertaking in relation to its EWC. In NL and RO, judicial penalties
or obligations may not be applied for actions other than the disclosure of information. In
HU, the existing legislation implies that courts can only declare a breach of EWC-related
obligations, with no possibility to impose a sanction, nor to oblige the undertaking in
question to comply. In SE, HU and NL (apart from the above-mentioned situation), no
administrative or criminal law penalties are provided for, but rather exclusively civil law
sanctions in case of breach of related obligations.
Depending on the type of breach, a comparison between the upper thresholds for
pecuniary sanctions shows that these range from EUR 290 in MT or EUR 850 in RO to
EUR 190.000 in ES. In case of repeated violation, higher sanctions (usually up to twice
the basic threshold) are envisaged in AT, BG, LT and LU. Stricter sanctions may be
imposed in case of criminal rather than administrative proceedings (BE, DE, ES) or by
the (tripartite) Labour Dispute Commission in LT. In this case, sanctions may be as high
as EUR 800.000 (BE). The sanctions also vary according to the type and degree of
violation of the law. Only BE calculates the level of administrative and criminal fines per
number of employees concerned, the remaining countries’ sanctions constitute of lump
sums (per breach).
With regard to a right to injunctive relief allowing EWCs to request the suspension of
management decisions taken in alleged violation of the information and consultation
requirements under the Directive (policy option 4c), from information gathered by
experts in 2019, it appears that at least in seven Member States (AT, DE, HR, FR, NL,
ES, IE) it could be theoretically possible for a court to suspend a management decision
taken in violation of the information and consultation obligation.289
However, there is
uncertainty as to whether it would be possible to actually apply it to the situation of
EWCs in these Member States. In FR such a solution was applied in a case where a
national works council and EWCs applied jointly in court290
. In DE, the courts have
recognised an Unterlassungsanspruch (claim to injunctive relief) for national works
councils for severe cases of non-respect of codetermination rights. The injunctive relief
has not been granted to national works councils in cases of non-respect of information
Also in Jagodziński R., Stoop S. (ETUC)(2022) Access to justice for European Works Councils.
289
For Ireland and Spain – see country fiches of the ETUC (2022) Report on access to justice for European
Works Council, op.cit.: EWC Litigation Country fiches Ireland | ETUC (Ireland) and EWC Litigation
Country fiches Spain | ETUC (Spain).
290
Veolia-Engie v. SUEZ information and consultation bodies; RG n° 20/06549; 11/19/20; Court of
Appeal Paris.
145
and consultation rights. The DE law provides for a fine in such cases (Section 121
BetrVG). There is no generally recognised Unterlassungsanspruch for information and
consultation rights (this issue has been under legal debate since the 1990s291
). So far,
EWCs have not been granted injunctive relief by the DE courts (see Annex 9).292
The
possibility of interim measures and injunctions to enforce EWCs' rights is discussed in
the AT legal commentary293
in the context of planned restructurings, based on the general
rules on enforcement of rights (§ 381 Exekutionsordnung in conjunction with §§ 108 and
109 Arbeitsverfassungsgesetz). To date, there is no record of a court ordering such
measures in AT.
No Member State determines fines for EWC-related breaches in relation to the
company’s turnover. All national laws implementing the Directive would need to be
amended to align with the requirement under policy option 4b.
Regarding policy option 4c, which determines maximum shares of undertakings’ net
annual turnover that could be imposed by way of pecuniary sanctions (up to 4% where a
violation of rights and obligations under the Directive is found to be intentional, or else
up to 2% of annual net turnover), pecuniary sanctions of such proportions are
unprecedented in the field of information and consultation of employees, including at
national level. All Member States would therefore have to amend their legislation to
introduce such fines.
While injunctive relief for suspending the management decision may theoretically be
available to EWCs in some Member States through the practice of national courts, it is
likely that all national laws would have to be amended to implement a clear right of
EWCs to injunctive relief as referred to under policy option 4c.
291
Based on information collected Beck Community and DGB commentary, Blanke/Hayen/Kunz/Carlson,
Europäische Betriebsräte-Gesetz 3. Auflage 2019; See also ICF(2023), Section 5.2.1..
292
For example, decisions of first and second instance labour courts in Germany: Landesarbeitsgericht
Köln of 1 August 2018, case no 6 TaBVGa 3/18; 12.10.2015, Landesarbeitsgericht Baden-Wuerttemberg
of 12 October 2015, case no 9 TaBV 2/15; Arbeitsgericht Wiesbaden of 13 June 2018, case no 1 BVGa
5/18).
293
Kodek, ‘Einstweilige Verfügungen zur Sicherung des Informationsanspruchs nach §§ 108, 109 ArbVG
bei beabsichtigten Betriebsänderungen', DRdA 6/2011, p. 517-526.
146
ANNEX 9: EXAMPLES OF NATIONAL CASE-LAW IN RELATION TO
THE PROBLEM DRIVERS
No cases have been brought before the Court of Justice on the Directive so far. At
national level, court cases concerning EWC are not frequent and are concentrated to
jurisdictions with higher number of multinationals with EWCs. ETUI identified
altogether 160 EWC-related national court cases since 1997 and until the beginning of
2023. Some of these national cases point to existence of legal uncertainties, which may
compromise the correct implementation of the Directive.
1. PROBLEM DRIVER: ‘NOT SUFFICIENTLY EFFICIENT & EFFECTIVE SETTING-UP
OF EWCS AND GENDER IMBALANCE’ (SEE SECTION 2.4.2.)
- In 2016, the Arbeitsgericht Berlin (First instance) ruled that an EWC was
established after the management has not convened a constituent meeting
within 6 months of the request. According to the national court: “[a] refusal can
also exist if, due to delays on the part of the central management, the constituent
meeting of the special negotiating body has not taken place within six months of
the application being made or if the information required for the formation of a
special negotiating body is persistently refused in accordance with § 5 EBRG.”294
2. PROBLEM DRIVER ‘OBSTACLES TO THE EFFECTIVE OPERATION OF EWCS’ (SEE
SECTION 2.4.3.)
Legal uncertainty regarding the concept of transnational matters
- In a decision of 27 November 2018 in interim proceedings295
, the District Court
of Rotterdam (‘Rechtbank Rotterdam’) considered whether an EWC established
in the Netherlands had to be informed and consulted on the possible closure of
two establishments in Spain. Based on an interpretation of the concept of
transnational matters in conformity with Directive 2009/38/EC, the Dutch court
found that it was sufficiently plausible, for the purposes of the decision in the
interim proceedings, that the issue was to be considered transnational. The Court
took into account that the closures would make around 20% of the relevant
undertaking’s European workforce redundant, and might have knock-on effects
on the activities of its establishments in other Member States.
- In a French case296
, an EWC established in France queried the central
management’s failure to inform and consult on its decision to claim repayment of
a loan that had been granted to keep a loss-making French subsidiary afloat.
Although the EWC argued that the decision had to be considered in the wider
294
Germany, 15.07.2016, Groupon, Arbeitsgericht Berlin – 26 BV 4223/16 (First instance).
295
Netherlands, Rechtbank Rotterdam, judgment in interim proceedings of 27 November 2018, Case no
C/10/561635/KG ZA 18-1170.
296
France, Tribunal de Grande Instance de Nanterre, judgment of 26 November 2014, N° 14/02861;
confirmed on appeal by Cour d'appel de Versailles, judgment of 21 May 2015, N° 14/08628.
147
context of the undertaking's strategy involving the closure of various subsidiaries,
the national court held that all the facts of the matter were confined to the French
territory and thus did not trigger information and consultation requirements at
transnational level.
- The definition of ‘transnational matters’ in Article 1(4) of the Directive was also
interpreted, in light of recitals 15 and 16, in a recent judgment of the Court of
Appeal of England and Wales297
. The court was faced with the question whether
redundancies proposed in two separate Member States could be considered as a
transnational matter despite the fact that they had been separately formulated in
light of unrelated national circumstances. It held that in order for a matter to be
considered transnational, it was not sufficient that two matters / decisions occur
within the company in two countries at about the same time, but there must be
some objective factual nexus between them. Requiring an (extraordinary) EWC
meeting absent such a nexus would render meaningless the requirement for a
matter to be transnational, because no (potential) effects of any one matter on
undertakings in each of two different countries would be required. The Appeal
Court recalled the limitation of the the scope of the procedures guaranteeing
information and consultation with EWCs, in accordance with Article 1(3) and (4)
and recitals 15 and 16 of the Directive, which together ensure that information
and consultation occur at the correct level of management and representation,
according to the subject under discussion. To achieve this necessary demarcation,
the competence and scope of action of an EWC is different and distinct from
that of national representative bodies.
Insufficient resources of EWCs
- In a judgment concerning an EWC operating under subsidiary requirements in
Austria, the Oberlandesgericht Wien (Higher Regional Court) confirmed that
such an EWC can choose an independent expert of its choice and it is not
obliged to minimise the costs to be borne by central management by having
recourse as a priority to experts provided by trade unions or by a statutory
representative body, as long as the expert’s services and costs are legitimately
linked to the functions of the EWC.298
Moreover, the Higher Regional Court
found that fees for expert legal advice to be covered by central management are
not limited to the statutory scales of legal fees.
- In 2019, the UK Central Arbitration Committee (CAC) considered that the
employer should pay the legal fees incurred in relation to the proceedings.299
The decision was upheld by the Employment Appeals Tribunal, which stated that
the central management’s approach “inevitably had the effect of leaving either the
individual members of the EWC who were taking the reasonable step of bringing
CAC proceedings or their chosen experts at an unfair financial risk: that was not a
reasonable approach, particularly coming from a very substantial organisation
297
UK, Court of Appeal (civil division), judgment of 26 July 2023, Adecco, [2023] EWCA Civ 883.
298
Austria, Higher Regional Court (Oberlandesgericht) Wien, judgment of 23 February 2022, No. 8 Ra
49/22t, subject to appeal.
299
United Kingdom, 9 October 2019, Verizon, Central Arbitration Committee, EWC/22/2019. The CAC
has also considered the question of payment of legal representation in cases EWC/21/2019, EWC/13/2015.
148
which no doubt had access to and would itself make use of legal assistance in
connection with the CAC proceedings.”300
Confidentiality imposed disproportionately may create obstacles to effective information
and consultation
- In a decision of 12 February 2018301
, the UK’s Central Arbitration Committee
found that ”the default position of the employer was (a) not to disclose and (b) to
classify as confidential anything it feels it has to disclose in order to comply with
the minimum legal obligations. This stands in contrast to the thrust and intent of
the Directive and the (UK Transnational Information and Consultation of
Employees Regulations 1999) which is that relevant information should be
given to EWC, with protections available where it is objectively reasonable
for management to argue that it its disclosure would prejudice or seriously
harm the undertaking.”
3. PROBLEM DRIVER ‘SHORTCOMINGS IN ENFORCING OF THE DIRECTIVE’ (SEE
SECTION 2.4.4.)
Ineffective penalties / sanctions for non-compliance in some Member State
- In a 2020 judgment302
, the French Cour de Cassation upheld the suspension of
operations of undertakings on the grounds of a violation of EWCs’
information and consultation rights. Véolia Environnement and SA Engie
motioned for the Court of Appeal of Paris to squash interim measures in the form
of suspension of operations that had been imposed in previous proceedings until
the comité social et économique of multiple SUEZ establishments had been
informed and consulted about the acquisition of SUEZ company shares held by
Engie. The EWC of a SUEZ establishment intervened voluntarily. The court
rejected the appeal and declared the EWC’s voluntary intervention to be
admissible in order to establish the existence of a manifestly unlawful disturbance
and to prevent imminent damage.
- In the first and second instance 2018 legal proceedings303
, the German labour
courts rejected an EWCs’ request for injunction on grounds of a failure of the
management to comply with the consultation obligations. The courts reasoned
that neither the national law nor the Directive provides for an injunction. [...]
According to the predominant interpretation of the law, the rights of the European
Works Council are instead guaranteed by the provisions on administrative
sanctions of Paragraph 45 of the EBRG [...] and the possibility of enforcing the
rights to information and consultation by means of judicial remedies before the
Labour Court, including by way of an interim order. [...]. Moreover, according to
the court the legislative history of the EBRG militates against the granting of an
injunction, since a corresponding application for a prohibitory injunction was
expressly rejected in the legislative procedure in the case of non-participatory
300
Employment Appeals Tribunal, judgement of 1 October 2020, Appeal No. UKEAT/0053/20/DA.
301
United Kingdom, Central Arbitration Committee (UK), Oracle, No EWC/17/2017, para 87.
302
France, 19.11.2020, Veolia-Engie v. Suez, Cour de Cassation Paris, 20/06549 (Appeal)
303
Germany, 01.08.2018, DT Group, Arbeitsgericht Köln - 1BVGa 7/18 (first instance). Germany,
13.12.2018, DT Group, Landesarbeitsgericht Köln - 6 TaBVGa 3/18 (Appeal).
149
[i.e., non-codetermination] measures. There is therefore no legal loophole,
according to the court, which also noted that the parties to the proceedings have
also refrained from agreeing such an injunction, having been aware of the legal
situation at issue in national law and despite apparently several revisions of the
EWC agreement. That possibility would have been readily available. “The court
shares the prevailing view in rejecting a claim for an injunction in the event of a
breach by the undertaking concerned of the rights of the European Works
Council. Recognition of such a right would have the effect of conferring on the
EWC, in the absence of any express provision, a right which would be much
stronger than the rights expressly regulated. Moreover, he would be recognised as
having a right whose existence is contested even with regard to the [national]
works council under the BetrVG, which, by virtue of its participation rights, has a
significantly stronger legal position than the European Works Council.”
- In 2015 legal proceedings in Germany304
, a EWC asked for an injunctive relief to
prevent redundancies until the EWC had been properly informed. The court of
first instance dismissed the motion noting that such a right does not result from an
interpretation of § 30 EBRG. Since the Directive does not provide for any
specific sanctions in the event of a breach of the duty to inform, it is not
objectionable that the national legislature decided to introduce an administrative
offence subject to a fine as a sanction. The Court does not consider the European
Works Council and the national Works Councils to be comparable as the rights of
the former are weaker than the rights of the latter. The national Works Councils
“can enforce its right to information and consultation in a formalised conciliation
procedure and appeal to the conciliation board. In contrast, Directive 2009/38/EC,
through the right to information and consultation, only pursues the exchange of
views and the establishment of a dialogue between the central management and
the European Works Council.”
The right to instruction can be enforced by way of interim legal protection, a
violation can be punished with a fine. The small amount of the fine is
acknowledged by the court but is not considered relevant for the assumption of
injunctive relief. If the fine were to be regarded as inadequate and was not
meeting the requirement of the Directive, the will of the legislature could
nevertheless not be circumvented. The court substantiates the intention of the
legislator with several legislative documents.
In a 2011 case305
, the German court confirmed that interim judicial proceedings
before the labour courts are available to EWCs. However, this does not mean that
EWCs have a substantive right to injunctive relief. The court considered that
violation of EWC’s rights to information and consultation does not justify a claim
for injunctive relief with regard to the implementation of the intended plant
closure. The court makes it clear that even if the case law on injunctive relief for
national works councils could in principle be applied to the European Works
Council, the latter would not be entitled to any such relief in respect of its
obligations to give notice and information and consultation rights, because also in
304
Germany, 12.10.2015, Landesarbeitsgericht Baden-Wuerttemberg of 12 October 2015.
305
Germany, 08.09.2011, Visteon, Landesarbeitsgericht Köln - 13 Ta 267/11 (Appeal).
150
respect of national works councils, the right to injunctive relief relates only to
participation (=co-determination) rights.
151
ANNEX 10: EXTERNAL PROBLEM DRIVERS
Partially, the effectiveness of information and consultation of EWCs is influenced by
drivers which, while having an impact on the problem the EU initiative aims at tackling,
are ‘external’ to its scope and reach. The following external drivers to the problem have
been identified.
1. DIVERSITY OF INDUSTRIAL RELATIONS SYSTEMS IN THE MEMBER STATES
In the Social Policy field, the Union may adopt minimum requirements for gradual
implementation, having regard to the conditions and technical rules in each Member
States.306
The Union recognises the diversity of national industrial systems and practices,
which may be based on trade unions or works councils (or employees’ bodies), or
combining both. While Union law provides for minimum rights to information and
consultation of workers, the Member States determine the practical arrangements for
exercising this right at the appropriate level. Depending on national laws, the employee
representatives’ competences may go beyond consultation and may include a right to co-
determination. The available research has shown that in countries where there is a strong
tradition of social dialogue and corporate culture, EWCs function more effectively than
those in countries with a weak industrial relations culture.307
A study points out that
involvement in restructuring processes is in particular related to the quality of social
dialogue308
.
2. ECONOMIC AND CORPORATE DEVELOPMENTS AND SOCIETAL CHANGES
The frequency of transnational restructuring events and the importance of these impacts
on the work of EWCs. The world of work has been undergoing continuous changes
driven by broader economic developments (recessions, inflation, internationalisation of
companies), societal changes (demographic change, social inequalities), climate change
(resources, modes of production, health crisis) as well as geo-political developments (war
against terrorism, Syrian war, migrant flows, lately the Ukraine war and the UK exit from
the EU) and the digitalisation of activities and interactions. These external factors and
shocks may require quick reactions from companies, which may in turn affect the quality
of processes of information and consultation of employee representatives at the various
levels.
Consequences of certain events (e.g., the COVID-related restrictions in manufacturing
countries like China and the sanctions imposed on Russia) may lead to partial relocation
306
Article 153(1) provides the legal basis for the EU “to support and complement the activities of the
Member States” in a number of fields for people both inside and outside the labour market: workers,
jobseekers and unemployed. The directives based on Article 153 can 'set minimum requirements for
gradual implementation, having regard to the conditions and technical rules obtaining in each of the
Member States'. Such directives 'shall avoid imposing administrative, financial and legal constraints in a
way which would hold back the creation and development of small and medium-sized undertakings'. The
provisions adopted 'shall not prevent any Member State from maintaining or introducing more stringent
protective measures'.
307
Eurofound (2022) op.cit.
308
Voss.E, Warneck F., Schulze Marmeling, S. (2022) Coordination and interaction in European works
councils, a report for the ETUC, p. 26. Available online.
152
of supply chains, likely generating shifts within the EU industrial sector.309
In addition,
high inflation reduces employees' purchasing power, hence increasing the tensions
between companies facing increasing costs and a workforce demanding pay raises. Both
dynamics could generate issues and disputes with a 'transnational' scope, hence
increasing the need of the involvement of EWCs on financial and restructuring matters.
However, there is no systematic empirical evidence of the extent to which broader
economic and social changes have impacted the EWCs’ involvement in restructuring
decisions. A 2015 Eurofound study concluded that restructuring cases during the Great
Recession were challenging for EWCs, but they also presented an opportunity to change
and clarify information and consultation procedures.310
A 2020 Eurofound report found that “transnational restructurings account for a small
share of overall large-scale restructurings (around 6% of cases involving job loss) but by
virtue of their much larger size involve a much more significant share of associated job
loss. They also take longer to enact.” The report concludes that transnational restructuring
incidence is particularly cyclically sensitive. It is also generally a deliberate and planned
process of internal restructuring.311
Evidence on the effects of digitalisation on the functioning of EWCs is not conclusive.
The limited literature on this topic indicates that online meetings had become more
frequent post-pandemic. Employee organisations recognise the positive aspects of online
meetings and trainings and their increased quality312
, but maintain the importance face-
to-face meetings. Digitalisation of companies and industries is also increasingly a topic
tackled by EWCs.313
Demographic changes may also shift the priorities addressed by EWCs.314
For example,
the increasing participation of women in some industries where the majority of
workforce has traditionally been male (e.g., construction) would increase the incentives
to adopt company-wide policies on gender equality.
c. Company structure and relationship between the employee representatives and the
management
A 2016 KU Leuven study found that there is a wide range of managerial policy towards
EWCs that is influenced, inter alia, by the country of origin of the company, the
manager, the sector of operation, and the company size.315
For instance, as regards the
country of origin, the study concluded, based on interviews with managers responsible
for EWCs in multinational companies, that those from “coordinated market
309
Korn, T., & Stemmler, H. (2022). Russia’s war against Ukraine might persistently shift global supply
chains. VoxEU. org, 31. Available online.
310
Kerckhofs P. (Eurofound)(2015) European Works Council developments before, during and after the
crisis. Available online.
311
Eurofound (2020). ERM report 2020: Restructuring across borders, p. 26. Available online.
312
Eurofound (2022) op.cit.
313
The European Economic and Social Committee (2020). Study ‘An EU legal framework on safeguarding
and strengthening workers’ information, consultation and participation’. Available online.
314
EFBWW (2021). EWC guide on demographic change. Available online.
315
Pulignano V. et al. (KU Leuven) (2016) European Works Councils on the Move: Management
perspectives on the development of a transnational institution for social dialogue, p. 11. Available online.
153
economies”316
are much less likely to report a problem-free good quality debate with
their respective EWC than those from “liberal market economies”317
(15% v. 33%).318
Good managerial leadership was regarded by interviewees as enhancing the quality of
dialogue within transnational companies.319
Concerning the correlations between
company size and operational patterns of EWCs, the study found that smaller companies
have better employee engagement in the EWC.320
These findings suggest that such
factors have a relevant impact on the effectiveness of EWCs. However, as they cannot be
directly influenced by possible EU policy measures on EWCs, they are considered
external drivers for the purposes of this impact assessment.
316
For the purposes of the study: Austria, Belgium, Denmark, Finland, Germany, Japan, Luxembourg, the
Netherlands, Slovenia and Sweden.
317
For the purposes of the KU Leuven Study: Australia, Bulgaria, Croatia, China, Cyprus, Czech Republic,
Estonia, Hungary, Ireland, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, South Africa, United
Kingdom and the United States.
318
Pulignano V. et al. (2016), op.cit., p. 23.
319
Ibid., p. 27.
320
Ibid., p. 25.
154
ANNEX 11: REASONS FOR DISCARDING CERTAIN POLICY
MEASURES WITHOUT DETAILED ASSESSMENT OF IMPACTS
A number of policy measures that have either been considered at the early preparatory
stages of this initiative or were put forward by social partners during the consultation
process have been discarded without a detailed assessment of their impacts. This Annex
explains the reasons for discarding those measures, distinguishing between:
- measures designed to address a problem driver of which insufficient evidence
could be established by the Commission services;
- measures discarded because they were either unsuitable to achieve the policy
objectives, or clearly disproportionate or incoherent with the existing legal
framework.
1. MEASURES DISCARDED FOR LACK OF SUFFICIENT EVIDENCE OF A RELEVANT
PROBLEM DRIVER
1.1. Require transnational information and consultation for structurally independent
undertakings linked by contract
In resolution 2019/2183(INL), the European Parliament called on the Commission to
“explore the merits of including contracts which enable structurally independent
undertakings to influence one another's operation and business decisions (such as
franchising or management contracts) within the scope of Directive 2009/38/EC in order
to prevent possible gaps”. According to the Commission services’ assessment, this issue
is linked to the question whether an undertaking is considered to control another, so that
they form a group for the purposes of the Directive and hence fall within its scope
(provided they meet together the criteria for ‘Union-scale’). The determination of
whether an undertaking is a controlling undertaking is to be made on the basis of the
applicable national law, that is to say the law of the Member State governing the
(potentially) controlling undertaking.
The Directive currently neither requires nor excludes that influence exercised by means
of contracts such as those mentioned by the Parliament be considered “dominant
influence”, and hence control. It merely lists the – non-exhaustive – examples of
dominant influence exercised by virtue of “ownership, financial participation or the
governing rules”, and lays down a presumption of dominant influence in certain cases.
Nevertheless, none of the Member States has thus far considered it necessary or
appropriate to expressly consider structurally independent undertakings to form part of a
group of Union-scale undertakings, for the purposes of applying the information and
consultation requirements pursuant to Directive 2009/38. This choice of Member States
in implementing Article 3 of Directive 2009/38 is consistent with the context in which
Directive 2009/38 was adopted, namely the setting up of works councils in Union-scale
undertakings and Union-scale groups of undertakings, to be informed and consulted in
respect of a wide range of matters affecting the workforce generally.321
It is also an
expression of the fact that control, by means of contractual arrangements, over separate
321
Cf. the final opinion of Advocate General Sharpston in C-61/17, Bichat, ECLI:EU:C:2018:482, par. 46.
155
companies is difficult to ascertain. While the European Parliament has described the
concept of ‘management contract’ and referred also to ‘franchising contracts’, there are
no clear criteria or categories of contracts giving rise to a degree of control that warrants
the application of information and consultation processes vis-à-vis structurally
independent undertakings.
The Commission’s various evidence gathering activities remained inconclusive as
regards the existence of “gaps” in the scope of Directive 2009/38, as asserted by the
European Parliament. Trade unions and other employees’ representatives tend to stress
the need for a broad definition of “control”, including influence exercised by means of
contract management and franchise systems322
. Trade unions consider that the use of
such contracts deprives many employees of the right to information and consultation on
transnational matters, referring in particular to the hospitality sector, e.g. the fast food
and hotel industries.323
In contrast, employer representatives question whether
management can appropriately be required to consult representatives of employees of
structurally independent companies324
and point out that in certain sectors, such as the
chemical industry, such contracts are not used at all.325
In the light of the evidence gathering, the Commission is not aware of cases where the
Directive’s definition of control has led to a lack of information and consultation of
employees on transnational matters. Furthermore, the lack of any specific established
regulatory concepts for determining types of contracts that may give rise to dominant
influence between structurally independent companies makes it difficult to ascertain the
relevance of the alleged issue and identify the stakeholders affected by it.326
Moreover, the fact that the Directive does not force Member States to qualify mere
contractual links between undertakings as “control” or “dominant influence” could only
be considered a “gap” if the Directive’s procedural framework for the information and
consultation of employees would in principle be suitable to structurally independent
undertakings and could effectively and consistently apply where influence is exercised
only by means of contractual arrangements. However, the practical feasibility of applying
transnational information and consultation requirements in such a context is highly
doubtful. Where contractually linked companies are not integrated into the corporate
governance structure of a dominant undertaking, it is not clear how the latter could
ensure a balanced representation of the employees in its EWC or the adherence of its
various contractual partners with the internal procedural provisions for the information
and consultation of employees on transnational matters.327
For instance, it would be
difficult to establish a framework for EWC members to disseminate information on
transnational matters to employee representatives or the workforce in structurally
independent undertakings, as no internal channels exist in that relationship. National
authorities and legal experts have pointed out that applying the Directive’s requirements
322
See e.g. ETUC reply to the first phase of the Social Partner Consultation on a possible revision of the
European Works Council Directive (2009/38/EC), 22 May 2023, p. 5; results of the evidence gathering
workshops held with employees’ representatives for the study supporting this impact assessment in
ICF(2023), Section 5.3.2.1.
323
ICF(2023), Section 5.2.2.2.
324
Ibid.
325
Ibid.
326
Ibid
327
Ibid, Section 5.2.2.3.
156
to undertakings linked only by contract – rather than ownership of statutory control –
would not be coherent with the company law-based approach established e.g. in the BE,
DE, ES, FR, IE, PL, NL and SE laws, which do not provide for worker involvement
mechanisms between structurally independent companies.328
In addition, it stands to
reason that requiring information and consultation of employee representatives external
to the corporate structure of Union-scale undertakings would exacerbate management’s
confidentiality concerns and might prompt a more restrictive approach to informing
EWCs.
Accordingly, in the targeted interviews carried out for the supporting study, EU and
national employers’ organisations considered it impractical to extend EWC rules to
contractually linked businesses, such as franchises, as corporate structures vary
considerably according to each company and sector. Legal experts concurred that such an
extension of the scope would be very complex to legislate as it would need to take into
account the complexity of different corporate structures. National authorities interviewed
confirmed that this measure could cause legal problems, highlighting for instance the
separation of franchisers and franchisees in staff management. Likewise, in the
workshops held for the same study with EWC and management representatives, the
participants in both stakeholder groups indicated that extending the scope of the EWC
Directive to undertakings linked by contractual arrangements and franchising poses
practical challenges.
In light of these considerations, the fact that the Directive’s definition of control does not
refer specifically to influence exercised by means of contracts between structurally
independent companies, rather than being a “gap”, is consistent with the rules and
requirements laid down in that Directive.
1.2. Reduce the negotiation deadline
The recast Directive provides that where the central management and the SNB are unable
to conclude a European Works Council agreement within 3 years of the request, an ad
hoc European Works Council based on subsidiary requirements is created.329
According
to available data, there are currently 20 active EWCs based on subsidiary requirements,
representing 2% of the overall population of EWCs.330
The European Parliament proposed to shorten the time limit for negotiating EWC
agreements from three years to 18 months. However, stakeholder feedback gathered by
the Commission has not borne out the underlying assumption that “the three-year delay
following a request before the subsidiary requirements apply, in the event of a failure to
conclude an agreement, is excessive, is often not used effectively and is to the
disadvantage of workers”. On the contrary, in reply to the first stage consultation of
social partners, ETUC takes the view that the existing 3-year negotiation period is
appropriate, arguing that proper coordination, training and agreement on common
demands take time. CESI submitted a more nuanced view, suggesting that negotiations
can be concluded in a shorter timeframe “if both sides are willing and engage
constructively”. The latter condition implies that the 3-year period may indeed be needed
328
ICF(2023), Sections 5.2.2.3. and 5.2.2.4.
329
Article 7(1).
330
ETUI database, 2023.
157
if controversies arise during the negotiations. The employer organisations responding to
the first stage consultation also consider that negotiations of an EWC agreement can
legitimately take up the timespan available in accordance with the existing provisions of
Directive 2009/38/EC. For instance, CEEMET recalls that according to the
Commission’s implementation report of 2018, it takes on average 2 to 3 years from the
establishment of the special negotiating body to conclusion of the EWC agreement.
HOTREC cautions that some topics require long discussions and subsidiary requirements
should apply only when strictly necessary.
In the targeted interviews carried out for the supporting study, stakeholders ranging from
employee representatives to employer organisations and national authorities stressed the
importance of allowing sufficient time and flexibility for parties to negotiate agreements,
although in a workshop with EWC representatives, participants stated that it is unlikely
that a better agreement will be achieved after three years if the negotiations do not make
progress within a timeframe of 18 months.
Given that the Directive sets out minimum requirements and creates no obstacle to
negotiations concluding earlier than 3 years, and in view of the fact that negotiations
have legitimately taken 3 years in the past, it is not in the view of the Commission
services appropriate to reduce this timeframe.
1.3. Giving assistance of SNBs by trade union experts priority over other experts of
choice
Pursuant to the third subparagraph, 1st sentence, of Article 5(4) of Directive 2009/38/EC,
the SNB may request, for the purposes of the negotiations, assistance from experts of its
choice which can include representatives of competent recognised Union-level trade
union organisations. The European Parliament recommended to amend that provision to
entitle the SNB to “assistance from representatives of competent recognised Union-level
trade union organisations and, if needed, further experts of its choice”. Such an
amendment would effectively limit the SNB’s choice of experts that it can consult in a
first step. The current wording of the Directive does in no way prevent SNBs from
involving trade union experts, but it does not require them to prioritise trade union
representatives. The Commission’s evidence gathering activities have not yielded strong
indications that this existing solution leads to issues in practice. Indeed, the 2018
Commission evaluation reported that the use of experts in negotiations increased (to
nearly 70 %) under the recast rules and was considered helpful in providing advice on the
legislation also in sharing expertise encountered by other existing EWCs.331
The study
supporting this impact assessment reported evidence suggesting that at least in certain
cases, employee representatives prefer to consult independent experts instead of trade
union representatives for the purposes of negotiating EWC agreements.332
2. MEASURES DISCARDED FOR OTHER REASONS
2.1. Automatically treating Union-scale undertakings with ‘voluntary agreements’ as
undertakings with an EWC
331
SWD(2018) 187 final, p. 38.
332
ICF(2023), Section 5.2.2.3.
158
Pursuant to Article 14(1)(a) of Directive 2009/38/EC, the obligations arising from the
Directive currently do not apply to Union-scale undertakings or groups in which an
agreement covering the entire workforce and providing for the transnational information
and consultation of employees has been concluded, on a voluntary basis, “pursuant to
Article 13(1) of Directive 94/45/EC”, that is to say before the implementation deadline
for that latter Directive (22 September 1996). The Commission proposes to remove this
exemption of undertakings with ‘voluntary agreements’ (policy option 1a).
The European Parliament recommended that, following the removal of the exemption, all
such voluntary agreements “shall fall within the scope of [Directive 2009/38/EC] without
any obligation to renegotiate”. However, this solution is not legally feasible. Information
and consultation bodies based on voluntary agreements do not fall under the definition of
‘European Works Council’ in Article 2(1)(h) of the Directive, as they were not
established in accordance with Article 1(2) or requested in the manner laid down in
Article 5(1). The setting up of EWCs is not obligatory in Union-scale undertakings. If
there is no request to that effect by the required number of employees or employee
representatives, no negotiations take place. The Directive explicitly leaves the choice to
initiate negotiations for the establishment of an EWC to employees (or their
representatives) and central management. An automatic application of the requirements
of the Directive with respect to voluntary agreements, which were concluded outside the
scope of EU law, cannot be reconciled with the Directive’s definition of ‘European
Works Council’ and the parties’ autonomy to decide on the establishment of an EWC or
some other form of information and consultation procedure.
Following the removal of the exemption, the employees and management of
undertakings previously exempted by virtue of Article 14(1)(a) can, however, request and
initiate negotiations of an EWC agreement in accordance with Article 5(1), which would
replace the transnational information and consultation body based on the previous
voluntary agreement.
2.2. Requirement to consult EWCs before the end of the information and consultation
procedure at national or local level
Pursuant to Directive 2009/38/EC, information and consultation of EWCs is to be linked
to those of the national employee representation bodies, but not affect the responsibilities
of national employee representatives and the information and consultation procedures
applying to them.333
Arrangements to that effect are to be defined by agreement, in such a
way that they respect the competences and areas of action of the employee representation
bodies, in particular with regard to anticipating and managing change. Failing that,
consultations at both European and national levels have to be ensured in case of
restructuring.334
The European Parliament recommended to amend the Directive to introduce a
requirement for EWCs to be consulted before the end of the consultation procedure at
national/local level with respect to national matters forming part of a transnational issue,
“with the aim of delivering an opinion before the end of the consultation procedure at the
relevant level”. As confirmed by case law in the UK, the Directive is currently silent on
333
Article 12(4).
334
Articles 12 and 6(2)(c), recitals 29, 37-38.
159
the sequencing of information and consultation at different levels.335
This is consistent
with the recital 37 of Directive 2009/38/EC, which states that opinions expressed by the
EWC should be without prejudice to the competence of central management to carry out
the necessary consultations in accordance with the schedules provided for in national
legislation and/or practice. Recital 38 stresses that Directive 2009/38/EC should be
without prejudice to the information and consultation procedures referred to in Directives
2002/14/EC, 98/59/EC and 2001/23/EC. These recitals reflect the need for flexibility in
the Directive, to avoid incompatibilities with information and consultation requirements
at national/local level, which may arise by virtue of those directives. Indeed, a 2015
Eurofound study336
has identified a variety of situations in the Member States as to how
the process of information and consultation of the EWC is linked to local-level
information and consultation. For example, the existence of co-determination rights, the
possibility to apply for injunctions or sanctions to enforce local-level information and
consultation rights may influence the way Member States and social partners at each
level perceive the issue.337
Imposing a fixed sequencing of information and consultation at national and
transnational level could lead to incoherences and frictions between the respective
procedures. Where the consultation concerns an urgent matter, requiring that the EWC be
consulted before the end of the consultation at national/local level could lead to delays
and hamper the decision-making process.338
Indeed, in the targeted interviews carried out
for the supporting study339
, EU and national employers’ associations considered that
EWC consultations taking place simultaneously with national consultations could make
the whole procedure lengthier and more complex and even pose legal risks.
2.3. Penalise non-compliance with the Directive by exclusion from public contracts
and subsidies
Where an undertaking infringes Directive 2009/38/EC, the European Parliament
recommends providing for the exclusion of undertakings from public benefits, aid or
subsidies, including EU funds, and from participating in a public contract. While the
Commission has considered and assessed a number of other policy measures with a view
to strengthening the enforcement of the Directive, these specific penalties proposed by
the European Parliament were discarded as disproportionate and intruding
inappropriately on other fields of Union policy. Co-opting state aid and public
procurement law as an enforcement tool for unrelated policy requirements raises serious
issues of coherence. Conditionality requirements are always related to the purpose of the
instrument to which they give access.
2.4. Decision-making bodies capable of delivering decision 24/7
In reply to the social partner consultation, the ETUC called for a right to a nullification of
company decisions in the event of recurrent breaches of EWC rights. According to the
335
Central Arbitration Committee (UK), Oracle, No EWC/17/2017, para. 89 et seq.
336
Dorssemont F., Kerckhofs P. (2015) Linking information and consultation procedures at local and
European, p. 1.
337
SWD(2018)187, p. 29.
338
ICF(2023), Section 5.2.2.2.
339
Ibid
160
ETUC, such a system requires that an administrative or judicial system is in place that is
accessible 24/7 and allows for decisions on the matter within 48 hours. Accordingly, the
ETUC called on the Commission to integrate such a system in its proposal.
Although the initiative pursues the objective of improving the enforcement of Directive
2009/38/EC through effective remedies and penalties, these proposed procedural
requirements have been discarded without detailed assessment, because they involve a
level of detail and prescriptiveness that would be hard to reconcile with the Union’s
mandate under Article 153(2)(b) TFEU to adopt “minimum requirements for gradual
implementation”. Moreover, imposing an emergency adjudication system especially for
the nullification of company decisions taken in violation of Directive 2009/38/EC would
be disproportionate as it clearly goes beyond what is required to ensure an effective
enforcement of the Directive. Other, less intrusive, means of penalising infringements
can be sufficient.
2.5. Specify in Directive 2009/38/EC that one or two working languages can be
defined to reduce costs of translation and simultaneous interpretation)
In response to the social partner consultation, Ceemet urged the Commission to propose a
reduction of administrative burden on companies. For example, by avoiding that the
employer is responsible for arranging the interpretation facilities. Ceemet suggested to
provide for the possibility to hold EWC meetings in a group’s “official language”.
The Commission aims minimise costs and burdens for companies and to strike an
appropriate balance between their interests and those of employees’ representations.
Nevertheless, in accordance with the Directive’s objective to ensure an effective
information and consultation procedure, it is appropriate that the practical arrangements
for the information and consultation of employees be determined by the parties to the
EWC agreement in line with the specific needs and circumstances in each Union-scale
undertaking or group. In some cases, using a single language in EWC meetings may be
efficient and appropriate, while in others, it may make information and consultation
inaccessible and ineffective for parts of the employee representatives and the workforce.
Laying down a one-size-fits-all approach regarding language regimes would therefore
not be coherent with the purpose of the Directive.
2.6. Recognising the legal personality of EWCs
The European Parliament called on Member States to grant legal personality to EWCs
and SNBs and include such a measure in the Commission’s impact assessment. This call
was supported by the ETUC in response to the social partner consultation.
The Commission endorses the objective to ensure that rightsholders under the Directive
have effective access to justice and remedies. However, to achieve that objective, it is not
necessary to seek to amend Member States’ basic provisions on legal personality. It is
sufficient for employees’ representatives, EWCs and SNBs, or their members on their
behalf, to have the capacity to bring legal actions invoking the rights laid down in the
Directive. Granting them full legal personality would go far beyond providing for such
capacity, involving the ability to act in law in the same ways as natural persons, such as
holding ownership, entering into various kinds of contracts, etc. Such a measure would
therefore exceed the Union’s mandate to adopt “minimum requirements for gradual
implementation”, under Article 153(2)(b) TFEU.
161
ANNEX 12: IMPACTS OF THE POLICY OPTIONS
1. HORIZONTAL CLARIFICATIONS – FOR ALL POLICY AREAS – REGARDING CERTAIN IMPACT CATEGORIES
The following types of impacts are not discussed in the subsequent detailed overviews of impacts for each policy area (see Sections 2-5 of this
Annex), either because the initiative would not have any relevant or foreseeable effects regarding the respective type of impact, or because the same
considerations apply across all policy areas.
Type of impact and
relevant
stakeholder group
Baseline Horizontal considerations for all policy areas
Impacts on
consumers, in
particular price
effects
The cost of setting up and running EWCs represents a very
small share of multinational companies’ turnover.
The average overall costs per negotiation were estimated at
ca. EUR 148.000.340
The estimated set-up costs represent
approximately 0.0006 % of the average global turnover of
Union-scale undertakings with an EWC.341
The average overall costs linked to the operation of an EWC
are estimated at EUR 300.000,342
representing approximately
0.0012 % of the average global turnover of Union-scale
undertakings with an EWC. Of these average costs, costs of
one plenary meeting and an average annual training costs
No expected impacts. None of the potential policy measures considered by
the study is expected to generate a large increase in the costs of setting up or
running EWCs. Likewise, possible increases in efficiency and/or cost
savings would account only for small percentages of EWC-related costs in
the baseline. Given that these baseline costs represent themselves only a
very small share of turnover, and do not affect companies’ competitiveness,
it is highly unlikely that such costs would be passed on to consumers.
Moreover, even if 100% would be passed on through consumer prices, quod
non, changes in EWC-related costs would be too small to affect the
financial balance of multinational companies, and to be reflected in a
change of prices.
340
ICF, 2016, estimates adjusted to today’s prices. See Annex 4 ‘Analytical methods’ (Section 4.3.).
341
The estimated annual global turnover for undertakings with EWCs or voluntary agreement is € 24 billion (average) (ICF, 2023).
342
ICF, 2016, estimate adjusted to today’s prices. See Annex 4 ‘Analytical methods’ (Section 4.4.).
162
Type of impact and
relevant
stakeholder group
Baseline Horizontal considerations for all policy areas
(per company with an EWC) are estimated to account for ca.
EUR 60 000.343
Therefore, it can be ruled out with a sufficient degree of
certainty that these costs have noticeable effects on consumer
prices.
NB. In the case of policy option 4c, which involves pecuniary sanctions up
to 4% of global annual turnover and the possibility to suspend company
decisions, plausible impacts on undertakings’ competitiveness must be
considered (see under heading 5 below). The theoretical possibility that
such impacts entail also noticeable effects on consumer prices can therefore
not be ruled out categorically for that policy option. However, such price
effects appear unlikely even in the case of option 4c, because it is
reasonable to assume that fines would in practice remain far below the
maximum thresholds in most cases, and competitive pressures on
sanctioned undertakings would disincentivise them from passing
enforcement costs on to consumers.
Environmental
impacts
Evidence shows that EWCs do not have any noticeable
environmental impacts.
EWC meetings usually require representatives from different
Member States to gather in a central location, which can
involve air travel or long-distance commuting. This results in
greenhouse gas emissions contributes to climate change.
Nevertheless, given the limited number of EWC plenary
meetings per year, and the increased use of digital channels
for some meetings (e.g. Select Committees meetings, ad hoc
meetings), carbon emissions related to the operation of
EWCs relevant to carbon emissions are negligible: the
estimated average number of cross-border air passengers
No expected impacts. Out of the policy measures considered for this
initiative, only one implies theoretical environmental effects compared to
the baseline: requiring 2 instead of 1 mandatory annual plenary meeting of
EWCs operating under subsidiary requirements. This measure could
potentially entail increased carbon emissions by EWC members and
management traveling to in-person meetings. However, the additional
business-related travel that this measure would generate is very low, given
the small number of EWCs subject to subsidiary requirements and the
possibility to hold such meetings remotely if parties agree to do so.
Therefore, it is unlikely that this policy measure would influence in any
noticeable way the number of plane rides within the EU, and thus have any
relevant environmental effect on carbon emissions. The other policy
measures considered clearly have no foreseeable effect on the environment.
343
See Annex 4 ‘Analytical methods’ for detailed explanations regarding these estimates. As the estimates of overall costs were based on a rather small sample, certain cost components
were calculated based on a different methodology for this impact assessment, to ensure that the conclusions drawn are sufficiently robust. The results of the two separate sets of
estimates are consistent, as the elements for which no new calculation was made (in particular, employees’ time dedicated to EWC work) plausibly account for the difference.
163
Type of impact and
relevant
stakeholder group
Baseline Horizontal considerations for all policy areas
related to EWC plenary meetings is about 40 500, which
corresponds approximately to 0.007% of the over 615 million
air passengers carried at EU level in the first nine months of
2023.
Moreover, as information and consultation bodies, EWCs do
not have co-determination powers allowing them to
decisively influence undertakings’ environmental policy,
there is no certain basis for assuming a causal link between
their opinions and the content of company decisions. While it
is plausible that EWCs’ opinions may in certain cases
reinforce or expedite measures to reduce undertakings’
carbon footprint, it is not possible to make any specific
assumptions about such effects.
Impacts on SMEs
(indirect economic
impacts)
Given the thresholds set out in the definition of ‘Community-
scale undertakings’ in the recast Directive, the requirements
under the Directive do not apply to SMEs.
The theoretical possibility cannot be ruled out that the
consultation of EWCs may in some cases alter the outcome
of company decisions on transnational matters, with indirect
implications for SMEs in the supply chain. However, given
that EWCs do not have co-determination powers and the
recast Directive specifically preserves’ management’s
autonomous decision-making prerogative, there is no
sufficient basis for making specific or general assumptions
about their impacts on SMEs.
No expected impacts. For similar reasons as set out in the baseline, the
policy options have no foreseeable impacts on SMEs.
Certain measures under consideration, such as the requirement for a
reasoned response by management prior to the adoption of a decision on
transnational matters, would improve the conditions for a genuine dialogue
with EWCs on transnational matters and may thereby increase the
likelihood that EWCs’ opinions have an influence on the content of
management decisions. However, there is no sufficient basis for assessing
this hypothetical possibility in terms of specific indirect economic impacts
of the policy options.
Transposition costs n/a While the non-legislative policy options 2a, 3a, 4a would not require
164
Type of impact and
relevant
stakeholder group
Baseline Horizontal considerations for all policy areas
for Member States mandatory transposition measures, some Member States may choose to
clarify their national legislation in light of the Commission’s interpretative
guidance or recommendations.344
This would entail the usual costs of the
respective national legislative procedure; there is no indication that the
envisaged clarifications of existing rules would pose particular
implementation challenges. However, there is no sufficient basis for making
assumptions about the take-up rate of the non-legislative options.
The other, legislative policy options all involve measures – considering
also the relevant accompanying measures – that would require adaptations
to the national legislation in all or most Member States. In the case of some
individual policy measures, certain Member States have already enacted
compliant provisions345
and would thus not have to adopt additional
provisions to implement those particular measures.346
However, despite
such differences regarding the need for legislative amendments in relation
to certain measures, there are no grounds for assuming that transposition
344
For example, interpretative guidance regarding Art. 7(1), second indent, of the recast Directive under option 2a (to the effect that management’s failure to commence negotiations
within six months is sufficient to trigger the application of the subsidiary requirements, even if there is no express refusal) might prompt at least some of the 22 Member States that
transposed the ambiguous wording of the Directive verbatim into their national laws to amend their legislation.
345
For example, certain Member States already limit the possibility of imposing confidentiality on EWCs to business and trade secrets (AT, DE, FI, HR, HU, LT), to information on the
financial position of the group or the undertaking, which is not publicly available (FI), information relating to the security and the corresponding security system (FI) and some Member
States already apply the criterion of a protecting the legitimate interest of the undertaking for applying the confidentiality clause (BG, CZ, SE) or when the “interests of the company so
demand” (DK). For these Member States, introducing the requirement of confidentiality being required to safeguard the undertaking’s legitimate interest (options 3b and 3c) would not
entail the need to amend the national law. In contrast, other Member States have transposed Article 8(1) without setting additional conditions for a confidentiality obligation (CY, ES,
IE, LU, LV, MT, NL, PL, RO, SI, SK). Accordingly, these Member States would have to amend their legislation to implement this element of options 3b and 3c.
346
For example, under NL law, SNBs are already entitled to the coverage of reasonable legal costs, so the clarification of the recast Directive in this respect (options 2b and 2c) would
likely not require an amendment of that national law. Such differences between national EWC legislations are linked to the fact that the recast Directive – in accordance with the
relevant legal basis – only sets minimum requirements for gradual implementation.
165
Type of impact and
relevant
stakeholder group
Baseline Horizontal considerations for all policy areas
costs would vary significantly between Member States for reasons linked to
the substantive content of the policy options.
To the extent that, in accordance with the relevant national law,
implementing measures in the social policy field require the consultation or
even agreement of social partners at national level (and taking into account
the opposing interests and views of social partners in this policy area), the
most far-reaching policy options could entail greater transposition
challenges. This would for example be the case for option 4c, introducing
high maximum pecuniary sanctions and potentially disruptive remedies
(injunctions against the implementation of management’s decisions).
The evidence gathering on transposition costs informing this impact
assessment involved interviews with national authorities and experts as well
as legal analyses of all national frameworks. It concluded that considering
the complexity of discussions, the large number of stakeholders involved,
and the need for consultations with social partners, the transposition could
be protracted. Nevertheless, given the difficulty to quantify the time costs
and the heterogeneity of legal frameworks, a sufficiently robust
monetisation of transposition costs proved impossible.
As the identified challenges are not extraordinary for legislative initiatives
in the social policy field, it appears reasonable to assume that the
transposition costs would consist in the usual costs of national legislative
procedures in this field.
166
2. IMPACTS OF POLICY OPTIONS IN POLICY AREA 1
Type of impact and
relevant stakeholder
group
Baseline Policy option 1a
(removal of exemptions)
Economic impacts
Compliance costs (one-off
and recurrent) for
undertakings with
voluntary agreements
323 undertakings are concerned.
Average annual costs (recurrent) for running an
EWC have been estimated at ca. 300 000
EUR,347
representing approximately 0.0012 % of
the average global turnover of Union-scale
undertakings with an EWC.348
Of these costs,
the costs of one plenary meeting, and annual
costs training (per company with an EWC) are
estimated to account for EUR 60.000 on
average.
The average annual costs (recurrent) of
operation EWCs or bodies established before the
recast were estimated in 2008 at €272.000 EUR
(including management and employee time).349
In today’s prices, this amount would be €
Negligible. While the option does not require obligatory renegotiation of voluntary
agreements, the removal of the exemptions can trigger requests for negotiations for
an EWC under the Directive. Per undertaking (323 undertakings are concerned),
potential incremental costs of new negotiation represent a negligible share of the
average global turnover for undertakings with an EWC: ca. EUR 148 000 (=0.0006
% of turnover).350
Furthermore, the re-negotiations could take place within the
framework of the regular re-negotiation, entailing no or limited costs compared to
the baseline. It is not possible to establish a reliable estimation of the number of
requests for an EWC, as a result of removing the exemptions. Given the overall
positive view of stakeholders on the functioning of voluntary agreements, new
negotiations are not expected in all cases. It is also not expected that average costs
of EWC’s operation under the recast would amount to higher or substantially higher
costs than those for voluntary agreements.
347
ICF(2016) estimate adjusted to today’s prices. See Annex 4 ‘Analytical methods’ (Section 4.3).
348
The estimated annual global turnover for undertakings with EWCs or voluntary agreement is € 24 billion (average) (ICF, 2023).
349
Impact Assessment 2008 (SEC(2008)2166). The estimate was based on a small number of interviews. No distinction was made between the voluntary (pre-Directive) information
and consultation bodies and EWCs based on the 1994 Directive. Given the considerable flexibility provided by the Directive, very large range of annual costs was reported by EWCs –
from as little as €7 500 to €2.3 million/year.
350
See above table 1. ‘Horizontal clarifications – for all policy areas – regarding certain impact categories’.
167
Type of impact and
relevant stakeholder
group
Baseline Policy option 1a
(removal of exemptions)
362.070.
Compliance costs (one-off
and recurrent) for
undertakings with Article
14 agreements
28 undertakings are concerned.
Average annual costs (recurrent) for EWCs and
information and consultation bodies established
before the recast Directive were estimated in
2008 €272.000 EUR including management and
employee time. In today’s prices, this amount
would be € 362.070.
Negligible. Renegotiations would be required of undertakings with Article 14
agreements (28) if they do not already comply with the new requirements. Average
costs of renegotiations as a result of policy option 1a could not be reliably
estimated. First, renegotiation costs would depend on length and number of
meetings needed. These incremental one-off costs are estimated to represent a
negligible share of the average global turnover for undertakings with an EWC.
Evidence suggests that a re-negotiation process is shorter than the process for
setting up a new EWC but may require multiple meetings in complex cases. Based
on the available evidence, it was possible to monetise certain costs linked to
meetings (ca. EUR 18 400 per meeting351
) between management and EWC
representatives for the renegotiation of existing agreements. This partial
monetisation can provide an indication of the order of magnitude of the overall
costs related to renegotiations, bearing in mind that it should not be taken as an
approximation of those overall costs. Second, the re-negotiation could take place
within the framework of the regular re-negotiation taking place on average every 5
years, entailing no or limited costs compared to the baseline.
Of the total of 28 undertakings with 14 Agreements, evidence suggests that most of
them (16 out of 28) are already aligned with the requirements of the recast under the
baseline scenario.
Impacts on the functioning
of the internal market
No clear obstacles to the effective functioning of
the internal market have been identified under
the baseline. However, the exemptions of certain
Union-scale undertakings from the common
Negligible. Ending the exemptions would lead to a simplified and less fragmented
legal framework at EU level. However, policy option 1a does not alter the voluntary
nature of EWCs. Therefore, take up of EWCs under the revised rules cannot be
reliably estimated. It is not expected that parties to all 323 undertakings with
351
See Annex 4 ‘Analytical methods’ (Section 4.3.). The calculation of estimate includes time costs of management and employees, travel and accommodation costs and interpretation
costs. It does not include do not include certain cost factors, such as the time invested for the preparation of the renegotiation meetings, the costs of possible preparatory meetings prior
to the renegotiation, some possible overhead costs, and the use of expertise by the EWC and/or the management.
168
Type of impact and
relevant stakeholder
group
Baseline Policy option 1a
(removal of exemptions)
minimum requirements on transnational
information and consultation have created a
complex and not entirely consistent legal
framework in this area, which would be
perpetuated in the baseline scenario.
voluntary agreements will opt for a new EWC. In any case, the available evidence
does not suggest large differences in overall functioning and operational costs of the
voluntary agreements and EWCs agreements.
Social impacts
Impacts on social dialogue
(affecting employees of
exempted undertakings)
There is no conclusive evidence that the
operation of voluntary agreement is ineffective.
The voluntary agreements are considered by the
management and EWC representatives as overall
effective, as long as efforts are made to build a
good working relationship between the
parties.352
Voluntary agreements are
nevertheless less likely to define key terms for
transnational information and consultation, such
as transnational matters.353
Positive. While there is no conclusive evidence that the operation of voluntary
agreements is less effective than of agreements under the recast Directive, ending
the exemptions would ensure the equal application of minimum rights and
obligations to Union scale undertakings and their EU employees. Contrary to
voluntary agreements, rights of EWCs subject to the Directive are enforceable
under EU law. Ca. 5.4 million employees354
could benefit from this alignment of the
minimum rights in case all undertakings with voluntary agreements (323) would
instead establish EWCs operating under the recast Directive. In the online survey,
employee/EWC representatives were overwhelmingly in favour of removing the
exemptions (81.7%) compared to only 13.2% of respondents on behalf of
management (see Annex 2).
Impacts on employment There is no evidence that the existing
exemptions have either positive or negative
effects on the levels of employment.
Inconclusive. Despite the general evidence that well-functioning EWCs can deliver
tangible economic benefits to undertakings, there is no sufficient basis for
concluding that the removal of the exemptions will affect employment. Such effects
depend on various uncertain factors external to this initiative, such as the dynamics
and functioning of social dialogue in the respective undertaking, and whether
parties choose to set up an EWC instead of a ‘voluntary agreement’ on transnational
352
ICF(2023), Section 4.2.1.1.
353
De Spiegelaere S. (ETUI) (2016) ‘Too little, too late? Evaluating the European Works Councils Recast Directive’, p. 58 and 64. Available online.
354
Estimated average number of EU employees per undertakings with an EWC is 16.600. Cf. Annex 4.
169
Type of impact and
relevant stakeholder
group
Baseline Policy option 1a
(removal of exemptions)
information and consultation.
Impacts on competitiveness
Impacts on cost and price
competitiveness (exempted
undertakings)
Impacts on international
competitiveness (exempted
undertakings)
Impacts on the capacity to
innovate
(exempted undertakings)
No such impacts identified under the baseline
The ratio between the average annual turnover
of companies with an information and
consultation body (EWC or voluntary
agreement) and the costs of setting up and
running the EWCs or information and
consultation body is extremely low.
Negligible. The possible compliance costs for businesses represent a small share of
the average turnover. The estimated average costs of setting up an EWC (one-off)
accounts for ca. 0.0006% of the average global turnover of undertakings with an
EWC, and the estimated average costs of operating an EWC (recurrent) account for
ca. 0.0012% of that turnover. There is no indication that replacing voluntary
agreements with EWC agreements would lead to substantial increases in the
operating costs. The time spent in the re-negotiations should also be limited.
There is no evidence that the procedure of establishment or an operation of an EWC
under the recast Directive would negatively impact competitiveness of companies.
On the other hand, studies have shown that a structured employee involvement is
linked to better establishment performance.355
Nevertheless, potential positive
impacts of the policy option 1a on competitiveness of companies cannot be
estimated with any degree of certainty.
Impacts on fundamental rights
Impact on the right to
information and
consultation / right to
access to justice and an
effective remedy
(employees in exempted
undertakings)
See description of baseline social impacts.
Potential challenges regarding access to justice
and effective remedies, due to a lack of a
binding minimum requirements
Potential better enforceability if agreements are renegotiated under Union rules.
355
Eurofound (2019) European Company Survey 2019, Workplace practices unlocking employee potential.
170
3. IMPACTS OF POLICY OPTIONS IN POLICY AREA 2
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
Economic impacts
Compliance costs for
undertakings setting
up an EWC (one-off)
The undertaking bears the
costs of setting-up of the
EWCs (setting up SNB, cost of
meetings, expertise, training
for employee representatives,
and any other necessary costs
related to the negotiations of
the EWC agreement.)
EWCs or transnational
information and consultation
bodies have been established
in 1001 Union-scale
undertakings (of those 644 are
EWCs under the recast or
previous 1994 Directive). It is
Possible negligible costs. Recourse
to an interpretative guidance could
lead to negligible additional costs, in
particular legal costs, compared to
the baseline. The option could at the
same time lead to reduction of
disputes. The lack of data does not
allow for precise estimations.
Possible negligible costs. Policy
option 2b could lead to higher
negotiation costs for the setting-up
of future EWCs compared to the
baseline, as well as possible partial
redistribution of certain costs
previously borne by other
stakeholders – in particular trade
unions – to undertakings. Indeed,
the legal clarification that central
management have to bear
reasonable costs of legal advice
only exists in NL and it is therefore
possible that such clarification at
EU-level would lead to additional
Possible negligible costs. For
access to legal expertise, the
impact is the same as under option
2b.
In addition under this option,
improving the gender equality in
the composition of the EWCs is
not expected to generate any
additional compliance costs. The
option avoids creating a binding
quota, as the latter could lead to
implementation challenges.360
360
A majority of EWC representatives and of management representatives is against setting binding gender quotas in the EU legal framework, as this could create implementation
challenges in certain sectors. Even in companies where the share of the workforce is more balanced, there might not be enough employees of the underrepresented gender interested in
being an EWC member. The composition of the EWC depends on the different systems for selecting EWC representatives at the national level.
171
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
estimated that, in 2023, 3.970
eligible companies with a total
of 31.7 million employees
operated in the EU/EEA.
It is estimated that new EWCs
will be created at a rate of ca.
20 per year over the baseline
period.356
Taking into account
dissolution of EWCs, mainly
due to restructuring (mergers),
net annual growth rate is
estimated 9 EWCs.
The average overall costs per
negotiation were estimated at
ca. EUR 148.000357
representing approximately
0.0006 % of the average global
turnover of Union-scale
undertakings with an EWC358
.
requests for legal advice from
employees’ representatives in the
future. The evidence suggests that
policy option 2b would ensure
some reduction of frequency of
issues associated with unclear
resourcing of SNBs to cover
reasonable legal costs359
. Although
the lack of data does not allow for a
precise estimation of these costs,
they should be limited given the
small average share of the
negotiation costs compared to the
global annual turnover. The costs of
setting up as a share of the average
global turnover are estimated at
0.0006 % (one-off).
356
ICF(2023), Annex – Section 3 (Data mapping).
357
ICF, 2016, estimates adjusted to today’s prices. See Annex 4 (Section 4.3.).
358
The estimated annual global turnover for undertakings with EWCs or voluntary agreement is € 24 billion (average) (ICF, 2023).
359
ICF(2023), Section 4.2.1.2.
172
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
43.8% (102 out of 233) of
survey respondents have
reported issues during the set-
up phase (majority of those
were employee
representatives; only 2
managers). Of employee
representatives who reported
issues, 76 % raised issue of
lack of expertise. No data is
available on coverage of legal
costs specifically.
Compliance cost
(adjustment costs) for
undertakings with an
existing EWC
(recurrent)
678 EWCs have been
established under the Directive
(including the recast Directive
and 1994 Directive).
They are renegotiated on
average every 5 years.361
Average costs of renegotiation
could not be reliably
quantified.362
Evidence
Negligible costs. Although policy
option 2a aims to apply to future
procedures for setting up of an EWC,
the guidance could potentially also
bring benefits for EWCs (613)364
renegotiating their agreements with
the involvement of an SNB.
According to the evidence
gathered365
, the EWC agreements are
Negligible costs. Although policy
option 2b would only apply to
future procedures for setting up of
an EWC, it will also apply to the
renegotiations of EWC agreements
(613), where such renegotiations
involve a setting up of an SNB. In
the absence of any data about the
number of SNBs having
Negligible costs. Although policy
option 2c would mainly apply to
future procedures for setting up of
an EWC, it will also apply to the
renegotiations involving a SNB.
For access to legal expertise, the
impact is the same under option
2b.
361
ICF(2023), Annex I – Section 3 (Data mapping).
362
Based on the available evidence, it was possible to monetise certain costs linked to meetings (ca. EUR 18 400 per meeting) between management and EWC representatives for the
renegotiation of existing agreements. This partial monetisation can provide an indication of the order of magnitude of the overall costs related to renegotiations, bearing in mind that it
should not be taken as an approximation of those overall costs (see Annex 4 Section 4.3.).
173
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
suggests that a re-negotiation
process is overall shorter than
the process for setting up a
new EWC but may entail
several meetings in more
complex cases.
Undertakings bear operating
expenses of EWCs. The EWC
agreements determine the
financial and material
resources to be allocated to the
EWC. (In absence of EWC
agreement, subsidiary
requirements provide
minimum requirements with
regard to coverage of costs by
the management). There is no
available evidence on potential
lack of resources of employee
representatives during
renegotiations.
renegotiated every five years on
average. However, it is likely that
only a small share of these
renegotiations involves an SNB.
Furthermore, the non-binding status
of this guidance could limit its
effects. In the absence of relevant
data (e.g. legal costs, share of
renegotiations not provided with the
necessary and required legal
expertise), it is not possible to
monetise the impact. However, it can
be reasonably assumed that those
incremental costs would only
represent a limited share of the
current re-negotiation costs, which
are assumed to be very limited
compared to the average global
annual turnover of Union-scale
undertakings and would concern a
very limited number of undertakings
due to the non-binding status of the
experienced issues due to a lack of
access to legal expertise, it is not
possible to monetise this impact.
However, it can be reasonably
assumed that those incremental
costs would only represent a limited
share of the current re-negotiation
costs, which are assumed to be very
limited compared to the average
global annual turnover.
In addition, under this option,
compliance with new
requirements for gender balance
will be part of the regular re-
negotiation of agreements (i.e. no
specific renegotiation would be
required), implying no additional
costs against the baseline.
364
While the total number of EWCs based on agreements is estimated at ca. 678, the legal requirement on central management to bear reasonable costs of legal advice exists in NL and
it is therefore expected that impacts would not occur in relation to undertakings with EWCs (ca. 65) established under the NL legislation.
365
ICF(2023), Annex – Section 3 (Data mapping).
174
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
Composition of EWCs is not
gender-balanced in most
EWCs. In the ICF survey,363
62 % of respondents indicated
that men account for more
than 60 % of their EWC
members. A mere 2 %
reported the same for women.
guidance.
Improved market
efficiency (direct
benefit) for
undertakings setting
up an EWC
The costs of setting up EWCs
are negligible in relation to the
turnover of the companies.
Negligible benefits. During the
setting up of a new EWC (20
undertakings/year) or renegotiations
of existing EWCs agreements, the
interpretative guidance could speed
up the negotiation process to some
extent and thereby reduce costs
slightly, as the number of meetings
or disputes could be marginally
reduced. However, the non-binding
nature of the guidance limits its
potential effects. Given the overall
negligible costs in comparison to
turnover, the potential benefits are
negligible.
Negligible benefits. During the
setting up of a new EWC (20
undertakings/year) or
renegotiations of existing EWCs
agreements, the undertakings would
benefit from the legal clarify
provided by policy option 2a
regarding the coverage of SNB’s
legal costs. Where SNBs
experience legal problem during the
negotiation, this legal clarity would
allow for ensuring the required
legal expertise and avoiding
discussions about the scope of the
SNB’s costs that are covered,
leading to a more efficient
Negligible benefits. Same
impacts as under option 2b.
No significant direct impacts on
market efficiency are expected as
a result of an objective of gender-
balanced composition of EWCs.
Overall, studies have found a
positive relationship between
female representation and
business performance.366
There
can be a potential indirect link
between a more gender-balanced
composition of information and
consultation bodies and the
363
ICF(2023), section 5.1.2.1.
366
European Parliament (2021). 'Women on Boards Policies in Member States and the Effects on Corporate Governance'.
175
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
negotiation. By its nature
(uncertainty about need for legal
assistance), the magnitude of this
positive impact cannot be
quantified. Given the overall
negligible costs in comparison to
turnover, the potential benefits are
expected to be also negligible.
performance of companies.
Social impacts
Establishment of social
dialogue (impacts on
workers and
undertakings)
EWCs or transnational
information and consultation
bodies have been established
in 1001 Union-scale
undertakings (of those 644 are
EWCs under the recast or
previous 1994 Directive). It is
estimated that, in 2023, 3.970
eligible companies with a total
of 31.7 million employees
operate in the EU/EEA.
It is estimated that new EWCs
will be created at a rate of ca.
Limited benefits. The interpretative
guidance under policy option 2a is
likely to reduce the time needed and
contribute to a smoother process of
setting up of EWCs, or of
renegotiating existing agreements. A
better informed, smoother
negotiating process could also benefit
companies / management. However,
the positive effects could be
hampered by the non-binding status
of policy option 2a. In addition,
given the overall low number of legal
disputes in this policy area, the
Moderate benefits. Policy option
2b would allow a better access for
workers’ representatives to legal
advice and expertise during the
negotiation or renegotiation phase.
Despite the binding nature of the
measure, the overall expected
impact is moderate (the scale of
issues with regard to coverage of
legal costs for SNBs is not known,
but legal disputes across the policy
area are not frequent368
). A better
informed, smoother negotiating
process could also benefit
Moderate benefits. Same impacts
as under option 2b as regards
access to legal expertise.
No substantial impacts on the
establishment of EWCs are
expected as a result of an
objective of gender-balanced
composition of EWCs. Where not
possible to reach the objective of
40 % for under-represented
gender (for example, due to the
lack of candidates for an EWC
function), the establishment of the
176
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
20 per year over the baseline
period.367
Taking into account
dissolution of EWCs, mainly
due to restructuring (mergers),
net annual growth rate is
estimated 9 EWCs.
43.8% (102 out of 233) of
survey respondents have
reported issues during the set-
up phase (majority of those
were employee
representatives; only 2
managers). Of employee
representatives who reported
issues, 76 % raised issue of
lack of expertise. No data is
available on coverage of legal
costs specifically.
impacts under this option are
expected to be limited.
companies / management (reduced
risk of disputes, reduced
opportunity costs).
EWC would not be prevented.
In light of research showing the
beneficial effects of gender
balance369
, option 2c could have a
positive effect on the quality of
EWCs’ non-binding opinions, and
thus indirectly on management
decisions on transnational matters,
potentially fostering working
conditions in some cases.
Quality of social
dialogue (impacts on
workers and
43.8% (102 out of 233) of
survey respondents have
reported issues during the set-
Moderate benefits. By its positive
impact on the negotiation or
renegotiation process, policy option
Moderate benefits. The better
access to legal expertise should
positively impact the quality of the
Significant benefits. Same
impacts as under option 2b as
368
National jurisprudence on EWC-related matters is limited (160 national cases since 1996) and fragmented per type of issue (some cases concern functioning of the agreement, some
the set-up phase, some concern individual rights of employee representatives or trade union rights).
367
ICF(2023), Annex I – Section 3 (Data mapping).
369
See e.g. the findings of the European Institute for Gender Equality (EIGE) in a large scale 2017 study on ‘Economic Benefits of Gender Equality in the European Union’.
177
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
undertakings) up phase (majority of those
were employee
representatives; only 2
managers). Of employee
representatives who reported
issues, 76 % raised issue of
lack of expertise. No data is
available on coverage of legal
costs specifically.
Most negotiations result in
EWC agreements (only 20
EWCs operate on the basis of
subsidiary requirements).
Despite the existing rules
requiring a balanced
representation of EWCs,
including with regard to
gender, the gender
composition of the EWCs is
strongly skewed in favour of
men.370
2a could indirectly improve the
quality of the future or renegotiated
EWC agreements. It could also lead a
better gender-equality within these
EWCs. However, the magnitude of
these effects would depend on to
what extend this guidance will be
taken into account by the
stakeholders.
future EWC agreements. Such
impacts cannot be quantified due to
the lack of data on coverage of
legal costs of SNBs, but are
expected to be moderate, as the
policy measure would increase the
balance of powers in the
(re)negotiation.
regards access to legal expertise.
Policy option 2c would also lead
to a better gender balance in
current371
and future EWCs and
their select committees, leading
also to a better representation of
workforce in terms of professions
represented in EWCs (women and
men may typically represent
different professions in some
sectors). Around 60 % of existing
EWCs could benefit from this
measure. Overall, it is estimated
that a more balanced
representation of EWCs would be
beneficial for the workforce of the
company as a whole and would
lead to indirect wider social
benefits.
370
In the 2023 ICF survey, 62 % of respondents indicated that men account for than 60 % of their EWC members. A mere 2 % reported the same for women. 24 % of respondents said
that each gender was equally represented in their EWC.
178
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
Impacts on
employment
Well-functioning EWCs can
have positive impacts not only
on workers’ well-being, but
also on labour productivity as
well as on firms’ profitability.
It is however difficult to
attribute specific outcomes in
terms of employment to the
rules governing the setting-up
of EWCs.
Inconclusive. There is insufficient
evidence to support any predictions
regarding impacts of option 2a on
employment.
Inconclusive. While increased
legal certainty regarding the
process for setting up EWCs could
deliver certain cost savings, there is
no indication that such economic
benefits would be sufficient to
translate into increased employment
levels.
Limited. It can be expected,
considering research
demonstrating economic benefits
of gender balance in relation to
various aspects of the economy372
,
that increased gender balance on
EWCs will contribute, in
conjunction with the general
benefits of a more effective
information and consultation
process described above, to
delivering benefits such as a
higher level of employment and
productivity. These benefits
however cannot be quantified.
Impacts on competitiveness
Impact on cost and
price competitiveness /
on international
competitiveness / on
the capacity to
No such impacts identified
under the baseline.
The ratio between the average
annual turnover of companies
with an information and
Null. Policy option 2a could entail
only negligible costs for undertakings
when setting up an EWC.
Null. Although policy option 2b
could possibly entail limited
additional negotiation costs in the
future, the expected impact remains
negligible in comparison to the
Limited. Given the evidence from
studies showing a positive
relationship between female
representation and business
performance, and the potential
371
The evidence gathered indicates that EWC agreements are renegotiated every 5 years. Based on this, each EWC agreements will comply with the gender balance requirements within
the reference period of 10 years.
372
See e.g. the findings of the European Institute for Gender Equality (EIGE) in a large scale 2017 study on ‘Economic Benefits of Gender Equality in the European Union’.
179
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
innovate for
undertakings setting
up an EWC
consultation body (EWC or
voluntary agreement) and the
costs of setting up of EWCs is
extremely low. The costs of
setting up as a share of the
average global turnover is
estimated at 0.0006 % (one-
off).
worldwide or EU turnover. These
limited additional costs would not
have any impacts on costs and price
competitiveness.
contribution of more gender-
balanced EWCs to the quality of
management decisions, it is
plausible that option 2c might
somewhat contribute to fostering
companies’ competitiveness.
Impact on cost and
price competitiveness /
on international
competitiveness / on
the capacity to
innovate for
undertakings with an
existing EWC
No such impacts identified
under the baseline.
The ratio between the average
annual turnover of companies
with an information and
consultation body (EWC or
voluntary agreement) and the
costs of renegotiation of
EWCs is extremely low (cf.
above ‘Compliance cost
(adjustment costs) for
undertakings with an existing
EWC (recurrent)’).
Null. Policy option 2a could entail
only negligible costs for undertakings
with an existing EWC during
renegotiation.
Null. Policy option 2b would entail
only negligible costs for
undertakings with an existing EWC
during renegotiations.
Limited. Given the evidence from
studies showing a positive
relationship between female
representation and business
performance, and the potential
contribution of more gender-
balanced EWCs to the quality of
management decisions, it is
plausible that option 2c might
somewhat contribute to fostering
companies’ competitiveness.
Impacts on fundamental rights
Impact on the principle
of workers’ right to
information and
consultation within the
undertaking / right to
See description of baseline
social impacts.
Potential challenges regarding
access to justice and effective
remedies during the set up or
Limited benefits. Policy option 2a
would further improve the quality of
the future setting-up of EWC and
their resulting agreements (including
during the renegotiations), by
Significant benefits. Policy option
2b would further improve the
quality of the future setting-up of
EWC and their resulting
agreements (including when they
Significant benefits. Same
impacts as under option 2b.
180
Type of impact and
relevant stakeholder
group
Baseline Policy option 2a
(Interpretative guidance, voluntary)
Policy option 2b
(resourcing of SNBs, legal costs)
Policy option 2c
(option 2b + objective of gender
balance)
access to justice and an
effective remedy
renegotiation phase can also
relate to a lack of resources to
cover legal costs of employee
representatives or SNBs.
facilitating SNBs’ or employees
representatives’ access to legal
advice. Given the non-binding nature
of the measure, the positive impact
on these is likely to be limited.
are renegotiated) by legally
ensuring the coverage of reasonable
legal costs incurred by the
employee representatives in the set
up or the renegotiation phases.
Such measure would positively
contribute to the quality of the
dialogue and of the resulting
agreements, and also to the capacity
of employee representatives to
access legal advice and justice.
Impact on the
principles of non-
discrimination and of
equality between men
and women
See description of baseline
social impacts. The existing
lack of gender-balanced
composition of most EWCs
would persist.
Negligible. Although the
interpretative guidance provides for
clarifications about how to achieve a
balanced gender composition of
EWCs, it will not be binding and
does not set a concrete objective.
Null. Policy option 2b does not
provide for any measure related to
achieving a balanced gender
composition of EWCs.
Moderate. While there is no
evidence of discrimination on
grounds of sex as such in EWCs,
the measure would recognise that
women may not be in the same
“starting position” as men,
especially in certain sectors where
EWCs mostly operate
(manufacturing, chemical,
construction). Setting gender
balance objectives would entail
positive impacts in favour of a
more equitable environment in
EWCs and contribute to better
equality between men and
women.
181
4. IMPACTS OF POLICY OPTIONS IN POLICY AREA 3
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
Economic impacts
Adjustment costs
(one-off) for
undertakings with
EWC:
renegotiation
costs
Under the baseline scenario,
EWC agreements are estimated
to be renegotiated on average
ca. every five years373
.
Average costs of renegotiation
could not be reliably
quantified.374
Evidence suggests
that a re-negotiation process is
overall shorter than the process
for setting up a new EWC but
may entail several meetings in
more complex cases.
Negligible. It is unlikely
that the non-binding
interpretative guidance
would prompt additional
rounds of renegotiation in
a significant number of
undertakings. Even in
cases where such
renegotiations would take
place, they would account
only for a negligible share
of undertakings’ global
turnover.
Negligible. Some of the measures
under policy option 3b would require
an adaptation of existing EWC
agreements in order align them with
the new requirements under the revised
recast Directive. For instance, the
requirement for these agreements to
address the question of access to
expertise, coverage of training costs
(including expenses) and legal costs
would necessitate renegotiations where
those issues are not already covered. In
the absence of detailed information
about the content of all existing EWC
agreements, it is however not possible
Negligible to moderate. Policy option
3c covers the same measures as policy
option 3b, except for:
- the concept of transnational matters
where policy option 3c provides for an
extension of the concept and a
requirement for management to justify
that a matter is not transnational if it
disputes the need to inform and consult
the EWC on that ground;
- a more far-reaching right of EWCs to
involve experts of their choice at the
cost of the undertakings;
- stricter limitations of undertakings’
right to impose confidentiality of
373
See Section 4.5. of Annex 4.
374
Based on the available evidence, it was possible to monetise certain costs linked to meetings (ca. EUR 18 400 per meeting) between management and EWC representatives for the
renegotiation of existing agreements. This partial monetisation can provide an indication of the order of magnitude of the overall costs related to renegotiations, bearing in mind that it
should not be taken as an approximation of those overall costs (see Annex 4 Section 4.3.).
182
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
to estimate with certainty the number
of undertakings that would have to set
up renegotiations.375
Given that EWC agreements are
revised on average every five years and
that there would be a period of
deferred application of the revised
requirements, it is likely that the
necessary adaptations of EWC
agreements to align with the changes
envisaged under policy option 3b could
in some cases be agreed as part of the
regular renegotiation process, entailing
information or withhold information
from EWCs.
According to the evidence gathered, it is
possible that these additional measures
would make renegotiations
incrementally more expensive as social
partners who seek to align their
agreements with the revised
requirements may require more time to
agree on how to reflect them in their
agreement.
On the other hand, and as for policy
375
Previous studies and available evidence provide some indications that a vast majority of agreements, including the voluntary (pre-Directive) agreements do include clauses on the
coverage of at least some types of expenses. For instance, according to the 2016 KU Leuven study, 95 % of EWC agreements provide that the company will cover the basic expenses of
EWC activity, such as travel and accommodation costs, administrative assistance and communication facilities linked to the operation of the EWC (see Pulignano V., Turk J. (KU
Leuven) (2016), op. cit., p. 53). Similarly, a 2015 ETUI study revealed that 74% agreements provide a general statement of cost coverage – complemented by some specific mentions of
various costs covered – while the remaining 26% have a limited list of expenses covered (see De Spiegelaere S., Jagodzinski R. (ETUI) (2015), op. cit., p. 40.). Provisions guaranteeing
independent financial resources have been introduced in some EWC agreements, but this seems to be very rare. In contrast, the EWC database of ETUI shows that most agreements
contain provisions on the EWC’s right to solicit expert advice (almost 70% of EWC agreements, with over 80% of these agreements providing for the choice of an independent external
expert, around 18% referring to an in-company and/or independent expert, and less than 2% allowing only for support by an in-company expert) and right to training (according to De
Spiegelaere S. (ETUI)(2016) op.cit., p. 54, the right to training was included in 58 % of the agreements signed.).
183
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
no or only very limited additional
renegotiation costs compared to the
baseline.
In any case, despite the fact that
renegotiations could be complex on
certain issues such as the coverage of
costs of expertise, the costs linked to
possible additional rounds of
renegotiations would in represent only
a negligible share of undertakings’
turnover, even if they should involve
several meetings: even in cases
involving several meetings
(monetisation of certain costs linked to
meetings resulted at ca. EUR 18 400
per meeting376
), the costs of
renegotiation costs are expected to be
very limited in comparison to the
global annual turnover.
option 3b, even with a high number of
meetings, the renegotiation costs would
represent a small share of the turnover
for companies. Furthermore, it cannot be
excluded that the renegotiation due to
policy option 3c would take place as
part of the regular renegotiation process,
entailing no or more limited costs.
376
See Annex 4 (Section 4.4.)
184
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
Adjustment costs
(recurrent) for
undertakings with
EWC: costs of
operating EWCs
According to the evidence
gathered377
, 43% of employees’
representatives indicated they
have already had problems
related to the definition of the
concept of transnational matters.
According to the 2016 ICF
study, 9 out of 22 consulted
companies sought legal advice
on the concept of transnational
matters, for average costs of
€15,000.
Similar issues and costs are
expected to continue to arise
over the baseline period.
The average overall costs linked
to the operation of an EWC are
estimated at ca EUR 300.000,378
representing approximately
Negligible. Policy option
3a would improve clarity
around the concept of
transnational matters and
ensure a better common
understanding between
management and
employees’
representatives. As a
result, the risks for
disputes and the need to
involve legal experts
should decrease, although
it is not possible to
monetise or quantify this
impact. Given that the
overall baseline costs
linked to legal uncertainty
regarding the concept of
transnational matters are
negligible compared to
Negligible to limited. Policy option 3b
would bring more clarity about the
concept of transnational matters by
amending the corresponding article in
the operative part of the recast
Directive. As a result, the risks for
disputes and the need to involve legal
experts should decrease, although it is
not possible to monetise or quantify
this impact.
Providing for two annual plenary
meetings instead of one in the
subsidiary requirements is estimated to
entail additional costs for companies
with an EWC operating on basis of
subsidiary requirements (20): the
additional plenary meeting implies
costs of € 42.000 per year per
undertaking (i.e. €420.000 over the
reference period of 10 years per
Limited to moderate. By substantially
broadening the concept of transnational
matters, policy option 3c could lead to
more information and consultations
procedures. As a result, longer or
additional meetings could be required,
which would entail additional costs for
operation of EWCs. In the supporting
study, EU and national employers’
associations have expressed concerns
over the lack of clarity of this option in
defining transnational matters,
highlighting potential excessive
consultations and delays in time-
sensitive projects.
Furthermore, the obligation for
management to justify that a matter is
not transnational would entail
adjustment costs for undertakings with
377
ICF(2023), Section 4.2.1.3.
378
Estimate in ICF(2016), in today’s prices. See Annex 4 (Section 4.4.).
185
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
0.0012 % of the average global
turnover of Union-scale
undertakings with an EWC.379
Of these average costs, costs of
one plenary meeting and
estimated annual average costs
of training per EWC are
estimated to account for
EUR 60 000 on average.380
For EWCs operating on the
basis of the subsidiary
requirements (20), central
management is required to hold
one annual plenary meeting.
The estimated average costs of
undertakings turnover, the
same is true for the
possible marginal cost
savings under option 3a.
Furthermore, policy
option 3a would also
clarify the recast
Directive’s requirements
regarding the resourcing
of EWCs. This could lead
to more resources
dedicated to employees’
representatives, in
particular in those EWCs
where the current
undertaking, without inflation). These
costs are negligible in relation to the
average turnover of Union-scale
undertakings. Furthermore, as the
subsidiary requirements sometimes
serve as a benchmark for negotiated
EWC agreements in practice, social
partners in some undertakings may
choose to add the requirement for a
second plenary meeting in existing
agreements that currently provide for
only one plenary meeting (ca. 50%
based on agreements384
) during future
renegotiations. The policy option itself
however does not create such an
obligation.
an EWC.
While a general right of EWCs to
involve experts of their choice at
undertakings’ cost could prompt a more
frequent and generalised recourse to
external experts, driving costs, these
costs are not expected to amount to a
significant share of undertakings’
turnover. These costs might moreover
vary significantly depending on the
nature of assistance provided. The
evidence gathered suggests that EWCs
are progressively recurring to more and
more expertise even under the baseline
scenario.388
379
The estimated annual global turnover for undertakings with EWCs or voluntary agreement is € 24 billion (average) (ICF, 2023, Section 5.1.2.1 and Section 3 of Annex).
380
See Annex 4 (Section 4.4.). As the 2016 estimates were based on a rather small sample, certain cost components were calculated based on a different methodology for this impact
assessment, to ensure that the conclusions drawn are sufficiently robust. The results of the two separate sets of estimates are consistent, as the elements for which no new calculation
was made (in particular, employees’ time dedicated to EWC work) plausibly account for the difference.
186
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
one plenary meeting are ca. €
42.000.381
The use of experts in support of
EWCs work is heterogenous
and therefore does not allow to
establish reliable estimates.
According to information
recorded in the ETUI’s EWC
database, almost 70% of EWC
agreements contain provisions
on the EWC’s right to solicit
expert advice, with over 80% of
these agreements providing for
the choice of an independent
resources are limited.
However, the magnitude
of the impact is expected
to be negligible due to the
non-binding status of this
interpretative guidance
and the small share that it
would represent compared
to undertakings’ turnover.
Similar considerations
apply with respect to other
clarifications that could be
provided by the
interpretative guidance
The exact impact of clarifying
resourcing of EWC as regards legal
costs and costs of and access to
expertise is not certain since it would
be up to the management and
employees’ representatives to negotiate
and agree on the details of the
coverage for such costs. In this respect,
it also needs to be considered that large
shares of EWC agreements already
contain provisions on the coverage of
costs linked to training and
involvement of experts, limiting the
prospect that option 3b could lead to
384
ETUI 2018 survey, op.cit.
388
According to 2022 Eurofound case-studies, three out of eleven case study companies (27.3%) provided the EWC an autonomous budget to cover EWC expenses, with reported
amount ranging from €3,000 to €6,000 per year. Turlan, F., Teissier, C., Weber, T., Kerckhofs, P., & Rodriguez Contreras, R. (Eurofound) (2022) Challenges and solutions: Case
studies on European Works Councils, op.cit.
381
Ibid.
187
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
external expert, around 18%
referring to an in-company
and/or independent expert, and
less than 2% allowing only for
support by an in-company
expert.
EWCs may have recourse to
several experts on various
occasions, depending on the
provisions of their respective
agreement. Evidence indicates
that in the context of
negotiations, SNBs require
expert assistance at a costs of €
20 000 to € 25 000, which
provides an indication of
experts’ fees incurred by EWCs
as well.
under option 3b, such as
on the issue of
confidentiality: while
increased legal clarity
could lead to a more
efficient operation of
EWCs and fewer disputes,
possible related cost-
savings are expected to be
negligible.
more far-reaching entitlements of
EWCs.385
Moreover, as the recast
Directive already gives EWC members
the right to training “without loss of
wages”, costs associated to training
are, as a general rule, already covered
by undertakings (cf. baseline).
Likewise, while a better coverage of
legal costs could facilitate legal actions
in some cases386
, clear agreements
regarding the EWCs’ entitlement to the
coverage of resources is likely to
reduce the incidence of legal disputes
related to EWC funding.
There is no evidence suggesting that
the requirements to provide a reasoned
response to EWC opinions prior to the
adoption of a decision on transnational
matters and to specify, upon request,
385
In the targeted survey for ICF(2023), Section 5.1.2.4., amongst respondents whose agreements contained provisions on financial and human resources, 77.1% said that the
agreements had provisions on trainings; 70.6% mentioned provisions on financial resources and budget and almost 60% of respondents referred to provisions on access to expertise.
386
ICF(2023), Section 5.1.2.5. Financial constraints and limited resources were mentioned by 14% of the ICF targeted survey respondents as reasons for not undertaking legal action.
188
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
It is estimated that around 25 %
of EWCs rely on support of
external experts, while other
EWCs may cooperate with in-
house (company), national or
European -level trade unions
experts, for which only
expenses need to be reimbursed.
The share of EWCs not
requiring costs for external
experts is uncertain382
.
As regards annual costs of
training, they are estimated on
average €17 870 per EWC (see
section 4.5 of Annex 4). The
evidence available suggests that
in almost all the cases, these
costs are not borne by
employees, as companies cover
travel, accommodation and cost
the grounds for declaring certain
information confidential or
withholding it would entail significant
recurrent adjustment costs for
undertakings. The former requirement
already exists in relation to EWCs
operating on basis of subsidiary
requirements and management needs to
already fulfil a similar obligation
during the consultation procedure of
national employee representatives, and
no particular cost issues have become
apparent in those contexts.387
Moreover, during the two-stage
consultation, employer organisations
responded that an obligation to provide
a reasoned response to an EWC
opinion already exists in many
agreements.
189
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
of training. This is also
supported by the evidence
gathered for the 2016 ICF
study.383
Indirect costs
(recurrent) for
undertakings with
EWC
There is no evidence that
transnational information and
consultation requirements entail
any significant indirect costs for
undertakings, such as delays in
decision-making.
Null. Insofar as
undertakings would
expect that by following
the non-binding
interpretative guidance
they would incur indirect
costs, they are highly
unlikely to agree
adaptations to the relevant
EWC agreements.
Limited to moderate. The obligation
of providing a reasoned response prior
to the adoption of a decision on
transnational matters may in certain
cases increase the length of the
consultation process, hence risking
delaying strategic company decisions.
As part of the external survey, about
35% of management’s representatives
expressed various concerns about
expanding the scope of information
and consultation procedures to require
Moderate to significant. Policy option
3c provides for expanding substantially
the scope of the concept of transnational
matters. While a majority of employees’
representatives expressed its support to
this measure392
, management’s
representatives caution that broadening
the existing definition would lead to
higher inefficiency in the decision-
making process of the company, with
the risk to generate economic losses393
.
Such costs could for instance occur due
387
Directive 2002/14/EC, Article 4(4).
383
Cf. p. 85 of the 2016 ICF study: “There has been a significant improvement in the ‘right’ to training without loss of salary. The occurrence of this ‘right’ in the agreements has
increased to 93% from less than a third of the original Article 13 agreements having such clause. Two-thirds of interviewed Recast EWCs employee representatives confirmed that
employees had made use of their right to training without loss of wages.”
392
ICF(2023), Section 5.1.2.3., Targeted survey.
393
ICF(2023), Sections 5.1.2.3., Targeted survey, and 5.3.3.3., evidence-gathering workshop with the management’s representatives.
190
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
management’s reasoned response prior
to decisions as this could lead potential
operational slowdowns.
However, given that EWCs would
remain information and consultation
bodies without substantive powers over
management decisions, the risk of such
indirect costs seems rather limited.
Moreover, as stated above, a
requirement on management to provide
a reasoned response already exists in
relation to EWCs operating on basis of
subsidiary requirements389
and there is
no strong evidence of problems of this
existing requirement on decision-
making of companies.390
Indeed, the
management needs to already fulfil a
similar obligation during the
to overlaps, uncertainty and frictions
between information and consultation
processes at national and transnational
level. Furthermore, the extension of the
definition of transnational matters could
increase the unclarity of the concept,
which might lead to an increasing
number of disputes.
The requirement of a mandatory prior
judicial authorisation if management
wants to withhold information which
could cause a serious harm to the
undertaking is likely to lead to delays in
decision-making in some cases,
depending on the length of the relevant
authorisation procedures.
389
Annex I of the recast Directive, point 1(a).
390
In the Targeted survey (ICF(2023), Section 5.1.2.3), the 3% employee representatives (4 out of 126) and 38 % of managers (5 out of 13) indicated the consultation requirements
could slow down management decisions and/or hamper management’s ability to take decisions effectively.
191
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
consultation procedure of national
employee representatives.391
Furthermore, during the two-stage
consultation, employer organisations
responded that an obligation to provide
a reasoned response to an EWC
opinion already exists in many
agreements.
Direct benefits
for undertakings
with an existing
EWC
Benefits from EWCs operating
under the recast Directive are
essentially non-quantifiable.
They relate to topics such as the
reinforcement of mutual trust on
both sides of the industrial
relationship, better informed
strategic decision-making, and
better targeted measures
accompanying structural
changes.394
It is expected that
Negligible. Clarifications
provided in the guidance
could save time and costs
(required expertise, legal
disputes, opportunity
costs) for undertakings
which have experienced
problems with the
application of the concept
of transnational matters
under the Directive (see
Limited. Option 3b would provide
more legal clarity regarding the
concept of transnational matters, the
consultation procedure, obligations of
the management and the content of
EWC agreements. This could result in
a reduction of disputes and time and
cost savings and thus compensate for
costs – at least partially – for the
recurrent adjustment costs (see above)
created under this policy option. In
Null. The measures common to options
3b and 3c are expected to contribute to
the quality of social dialogue (see also
social impacts below) and thus
contribute to the benefits of EWCs for
undertakings described under the
baseline. However, these potential
benefits are likely to be negated by
negative impacts on undertakings: the
broad definition of transnational matters
under option 3c is not expected to
391
Directive 2002/14/EC, Article 4(4).
394
Pulignano V., Turk J. (KU Leuven) (2016). European Works Councils on the move: management perspectives on the development of a transnational institution for social dialogue,
page 56-57.
192
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
these factors will become
increasingly important over the
baseline period, as undertakings
face competitive pressure to
adopt new automation
technologies395
However, due to the problem
drivers identified in area 3, the
potential of EWCs to generate
these benefits is not fully
realised in the baseline scenario.
For instance, about 40% of
respondents to the ICF 2023
report to have experienced
problems related to the
definition of the concept of
transnational matters396
(43,3 %
baseline).
However, and as indicated
above, the non-binding
status of an interpretative
guidance could undermine
its expected results.
particular, the requirement of a
reasoned response prior to the adoption
of a decision on transnational matters
is expected to promote the trustful
relationship between social partners
within undertakings, as it ensures a
meaningful and genuine dialogue on
transnational matters.
The requirement for the parties to
agree on the appropriate resourcing of
the EWCs could also contribute to
higher quality information and
consultation processes and decision-
making with potential benefits for
central management (more involved
workforce, creating quality jobs,
improving openness and adaption to
generate cost savings but, to the
contrary, could lead to disputes due to
frictions and overlaps with information
and consultation procedures at different
levels of representation. Also, the
requirement of a mandatory prior
judicial authorisation if management
wants to withhold information could
cause serious harm to the undertaking in
the form of indirect costs (delays, lost
profit / investment opportunities).
395
See, e.g., European Parliament (2021) Report on democracy at work: a European framework for employees' participation rights and the revision of the European Works Council
Directive. (2021/2005(INI)). According to a report by the European Economic and Social Committee of 2020 (‘An EU legal framework on safeguarding and strengthening workers’
information, consultation and participation’), digitalisation is already a topic increasingly tackled by EWCs.
396
ICF(2023), Section 4.2.1.3.
193
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
of employees and 28,3 % of
managers).
See the description of the
problem definition (Section
2.4.3. of the impact assessment)
with detailed information on the
problem drivers for further
analysis.
change).397
Indeed, employees’
representatives highlighted that
research shows that an investment in
employees’ participation leads to better
decisions and employee’s engagement,
with positive consequences on
businesses profitability. Such cost
benefits are however not possible to
estimate as EWCs may be consulted on
any type of transnational matter.
Social impacts
Impacts on the
quality of social
dialogue between
employees and
undertakings at
About 40% of respondents to
the ICF 2023 report to have
experienced problems related to
the definition of the concept of
transnational matters398
(43,3 %
Limited positive. The
interpretative guidance
could allow for a
reduction of the frequency
of problems associated
Significant positive. Policy option 3b
would introduce clarifications
regarding the concept of transnational
matters in the enacting terms of the
recast Directive. Such clarification
Moderate positive. Policy option 3c
would allow for a higher number of
issues to be discussed as part of the
information and consultation at EU
level. This should therefore have a
397
Cf. the European Added Value Assessment (EAVA) prepared by the European Parliament’s Research Service in 2021, which concluded that more systematic information and
consultation of workers at transnational level could lead to even greater economic benefits – by fostering job quality, reducing the rate at which people leave their jobs (’quit rate’),
reducing the number of redundancies, limiting the costs of structural adjustment, helping to eliminate distortions of competition within the single market and inequalities in treatment of
workers, and/or easing the burden on social welfare systems.
398
ICF(2023), Section 4.2.1.3.
194
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
EU level of employees and 28,3 % of
managers).
The majority of the respondents
(59.7% - 139 out of 233) also
experienced problems with the
consultation procedure, against
37.3% (87 out of 233) who
replied that they did not have
issues in this regard. Per
stakeholder category, whereas
70% of employee
representatives (126 out of 180)
said that there were problems
regarding the consultation
procedure, 73.6% of
management representatives (39
out of 53) answered the
with an unclear definition
of transnational matters.
Such clarification would
contribute to better
application of information
and consultation rights of
EWCs.
EWCs’ members which
have already experienced
problems with this
concept (see baseline)
would therefore have
more time to dedicate to
information and
consultation instead of
trying to settle disputes.
However, and as indicated
would contribute to better application
of information and consultation rights
of EWCs. This would also allow
EWCs members to avoid disputes on
this concept in the future and focus on
information and consultation. Since
about 40% of stakeholders are
experiencing problems with this
concept, this would have a positive
impact for a high number of employees
and their representatives.
The measures under this policy option
required from management to provide
a reasoned response to EWC opinions
prior to the adoption of a decision and
a requirement to apply confidentiality
only when justified404
would also
positive impact on social dialogue at this
level. However, this could also lead to
additional legal uncertainty compared to
the baseline, depending on the new
elements included in the concept405
.
Although these impacts cannot be
quantified, it cannot be excluded that the
overall impact of this extension of the
definition of transnational matters would
be overall negative. The obligation for
management to justify that a matter is
not transnational could improve the
social dialogue with EWCs’ members
benefiting from more information.
However, it is rather an indirect impact,
and its magnitude is therefore lower than
the measure related to the concept as
404
This measure would entail changes to the legal situation for EWCs and management subject to the national laws of Member States, which have taken over the wording of Article 8
of the Directive into their national laws without requiring further justification of the imposition of confidentiality (CY, ES, IE, LU, LV, MT, NL, PL, RO, SI, SK). In the other Member
States, the possibility of imposing confidentiality is already limited to cases where a legitimate justification exists, so a requirement to that effect would likely not change the situation
of undertakings and EWCs to which the respective national laws apply. Specifically, some Member States allow the imposition of confidentiality only with respect to business and trade
secrets (AT, DE, FI, HR, HU, LT), to information on the financial position of the group or the undertaking, which is not publicly available (FI), to information relating to the security
195
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
opposite.
Per type of problems
experienced, the most
frequently mentioned by the
employees was the lack of
timeliness of the consultation,
the fact that information
provided by management does
not enable the EWC to provide
an informed opinion and the fact
that no real dialogue is
established.399
Regarding the timing of the
consultation, 44% of the
employees’ representatives
above, the non-binding
status of an interpretative
guidance could undermine
its expected results.
positively impact the quality of the
dialogue at EU level. It would namely
allow for a timely information exercise
and a possibility for the employees to
share their views and contribute to the
decisions of management, which is not
always the case in the baseline
scenario, as explained there.
The introduction in the subsidiary
requirements of at least 2 plenary
meetings per year would also allow the
employees from those 20 undertakings
with a EWC based on subsidiary
requirements to have more regular
information and consultation, which
would positively impact the quality of
such. Overall, the impact of
transnational matter-related measures
can be seen as very limited.
The broad right to assistance from an
expert can optimise the information and
consultation process, with efficiency
gains. This is corroborated by the 2018
ETUI survey, which indicates that, in
case of restructuring, the support of
trade union coordinator or expert
contributed to better decision making.
Option 3c would exempt from
confidentiality obligation EWC
members when sharing information
protected by confidentiality with
and the corresponding security system (FI), based on terms and conditions specified in the agreement or legislation (PT), or in cases in which confidentiality is necessary to safeguard
the legitimate interest of the undertaking (BG, CZ, SE, DK).
405
ICF(2023), Section 5.1.2.3.. While a great majority of employees’ representatives are in favour of including such elements as “matters that affect directly or indirectly more than one
Member State”, “decisions taken by the headquarters affecting employees in another Member State than the one where the headquarters is located”, employers’ views have mostly
neutral to negative views on the first and mostly negative on the latter.
399
ICF(2023), Section 5.1.2.3.
196
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
indicate that the information
happens one the decision is
finalised, but before its
implementation; during
implementation. Close to 10%
of EWC representatives report
that they were informed and/or
consulted only after the
implementation of the relevant
decision.400
Regarding the use of the
confidentiality obligation, 49%
of employee representatives
(and 4% of managers) said that
the use of confidentiality
effectively limits or prevents
meaningful consultation, and
15% of managers (and 3% of
employee representatives)
believe that consultation
involves the risk of disclosure of
the social dialogue. Furthermore, it
cannot be excluded that this measure
would also lead to more regular
meetings of EWCs based on an
agreement, which may refer to the
subsidiary requirements as a
benchmark.
The requirement for the parties to
agree on appropriate resourcing,
including on coverage of legal costs, of
the EWCs could also lead to higher
quality information and consultation
processes and decision-making, with
potential benefits for central
management (see above) as well in
terms of a more involved workforce,
leading to better working conditions
across the Union-scale undertaking and
proposing alternative solutions or
mitigating measure to prevent job
national or local representatives. This
would contribute to coordination
between employees representatives at
different levels with potential benefits
for the effective presentation of
employees’ interests in the consultation
procedure. However, the facilitation of
cross-border exchange of confidential
information could lead to difficulties in
practice (including legal risks for the
employee representatives) due to the
differences of national legal regimes on
protection of confidential information.
400
ETUI survey of EWC and SEWC representatives (2018). Overview published online.
197
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
confidential company
information.401
The large majority of EWCs has
access to external support on a
continuous basis.402
Legal
uncertainty nevertheless exists
regarding the coverage of legal
costs (court fees or costs of a
legal representation in case of a
dispute), no national legislation
lays down a dedicated budget
for such costs, although these
costs are in principle part of the
operating expenses of EWCs.403
In the 2018 ETUI survey, out of
losses).
401
ICF(2023), Section 4.2.1.3.
402
According to information recorded in the ETUI’s EWC database, almost 70% of EWC agreements contain provisions on the EWC’s right to solicit expert advice, with over 80% of
these agreements providing for the choice of an independent external expert, around 18% referring to an in-company and/or independent expert, and less than 2% allowing only for
support by an in-company expert.
403
SWD(2018) 187 final, p. 34. Some Member States have introduced statutory release from court fees for EWCs and others have introduced a general regulation concerning the
operating costs of EWCs. The latter is the case in the vast majority of the Member States.
198
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
the EWC representatives who
said that they had not started
legal proceedings despite having
experienced a serious dispute,
around 17% said that this was
due to a lack of resources (e.g.
finance, expertise).
Impacts on
employment
Well-functioning EWCs can
have positive impacts not only
on workers’ well-being, but also
on labour productivity as well as
on firms’ profitability. It is
therefore plausible that the
identified shortcomings
regarding the effectiveness of
the existing transnational
information and consultation
represent untapped potential in
terms of potential benefits also
in terms of employment.
However, given that EWCs
complement mandatory
employee involvement at
national or local level, it is
difficult to attribute such
Inconclusive. Given the
limited economic benefits
described above, there is
no sufficient basis for
drawing any conclusions
regarding impacts of
option 3a on the level of
employment.
Inconclusive. It is not excluded that an
improved functioning of the
transnational information and
consultation process could contribute
to benefits in terms of employment.
However, such an effect cannot be
attributed to policy option 3b with any
degree of certainty, given the interplay
between employee involvement at
national and transnational level and the
non-binding nature of EWCs’
opinions.
Inconclusive. With respect to option 3c,
possible benefits in terms of
employment levels seem highly
unlikely, due to the possible frictions
with employee involvement at national /
local level and possible delays in
decision-making. There is no indication
that option 3c might contribute to lower
levels of employment either, as the
possible negative economic impacts of
this option are very limited in scope.
199
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
possible effects specifically to
the transnational information
and consultation framework.
Environmental impacts
Null. See Section 1 of this Annex for general clarifications, in particular regarding the requirement of an additional annual plenary meeting in the subsidiary
requirements, envisaged under options 3b and 3c.
Impacts on competitiveness
200
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
Impacts on cost
and price
competitiveness,
international
competitiveness
and capacity to
innovate of
undertakings with
an EWC
No such impacts identified
under the baseline.
The costs of operating an EWC
are very low compared to the
average annual turnover of the
relevant undertakings, see the
baseline for recurrent costs
above.
Null. Option 3a would at
most entail negligible
costs for undertakings and
is therefore not expected
to affect their
competitiveness.
Null. Although policy option 3b could
possibly entail limited to moderate
adjustment costs linked to the
renegotiation of EWC agreements and
the resourcing of EWCs, the scope of
these impacts remains very small in
comparison to undertakings turnover
(see analysis of economic impacts
above). These limited additional costs
would not have any impacts on costs
and price competitiveness, or the
capacity to innovate.
Negligible to moderate. While the one-
off and recurrent adjustment costs are
likely to remain moderate under option
3c (despite EWCs’ broad right to consult
external experts of choice), some
negative effects on undertakings’
competitiveness cannot be ruled out,
because of the indirect costs linked to
possible delays in decision-making (due
to the requirement of a mandatory prior
authorisation when withholding
potentially harmful information),
frictions with information and
consultation procedures at national level
(due to the broadened concept of
transnational matters). Moreover,
exempting information-sharing between
EWCs and employee representatives at
national or local level from
confidentiality restrictions would lower
the protection of undertakings subject to
national laws which ensure broad
protection under the baseline scenario.
201
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
Impacts on fundamental rights
Impact on the
principle of
workers’ right to
information and
consultation
within the
undertaking /
right to access to
justice and an
effective remedy
See description of baseline
social impacts.
The problem drivers identified
in area 3 hamper EWCs’ ability
to avail themselves effectively
of the right to information and
consultation on transnational
matters.
In some cases, potential
challenges regarding access of
EWCs to justice and effective
remedies can also relate to a
lack of resources to cover legal
costs of employee
representatives or EWCs (in
case of EWC agreements, due to
the lack of provisions agreed to
cover such expenses).
Limited benefits. Option
3a would promote the
quality of social dialogue
and thus the practical
implementation of the
fundamental right to
information and
consultation within
undertakings (Article 27
CFR) and the right to an
effective remedy (Article
47 CFR) to a limited
extent, see explanations
under social impacts
above.
Significant benefits. Option 3a would
improve the conditions for a genuine
dialogue on transnational matters
significantly, as described in detail in
the section on ‘social impacts’ above.
Overall, EWCs’ entitlement to a
reasoned response from management,
the increased legal clarity regarding the
concept of transnational matters,
resourcing and confidentiality
restrictions, and the strengthened
requirement for two annual meetings
under the subsidiary requirements are
expected to have a significant positive
impact on the effectiveness of the
fundamental right set out in Article 27
CFR.
The legal requirement for the parties to
define modalities for covering EWCs’
legal costs (and in case of EWCs
operating on the basis of subsidiary
requirements to cover such expenses as
far as they are reasonable) would
Moderate benefits. Option 3c would
significantly strengthen EWCs’ right to
involve external experts (including legal
experts) and improve EWCs’ access to
relevant information by limiting the
possibility of management to impose
confidentiality or withhold information.
These measures are expected to put
EWCs in a significantly better position
to avail themselves effectively of their
rights under the recast Directive,
including as regards access to justice.
On the other hand, a broader concept of
transnational matters risks creating new
issues of delineation between
information and consultation
requirements at different levels of
representation, possibly legal
uncertainty and disputes, and frictions
with procedures at national/local level.
Due to these caveats, it is likely that
option 3c would overall have only a
moderate positive effect on the effective
202
Impact Baseline Policy option 3a
(Interpretative guidance,
voluntary)
Policy option 3b
(binding clarifications regarding
transnationality, consultation process,
resourcing of EWCs, confidentiality
restrictions, subsidiary requirements)
Policy option 3c
(broad concept of transnationality,
reduced possibility to impose
confidentiality / withhold information,
broad right to consult experts at
undertakings’ cost)
positively contribute to the quality of
the dialogue and also to the capacity of
employee representatives to access
legal advice and justice.
application of the fundamental right to
information and consultation within
undertakings.
203
5. IMPACTS OF POLICY OPTIONS IN POLICY AREA 4
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
Economic impacts
Enforcement
costs for
sanctioned
undertakings
with an EWC
The current sanctions regimes
in Member States are
diverse.406
Overall, the
maximum levels of pecuniary
sanctions are considered low
and not dissuasive in
comparison to the turnover of
the Union-scale undertakings.
The evidence gathered407
indicates that current sanctions,
although varying greatly
between Member States, would
not exceed 190.000 EUR,
representing 0.0008% of the
Negligible. The effects of
policy option 4a on the
enforcement costs to be
borne by sanctioned
undertakings are unclear. The
evidence gathered does not
allow for robust assumptions
about the take-up rate of
Commission
recommendations regarding
the enforcement of rights
under the recast Directive.
However, there is a plausible
risk that those Member States
which have thus far not
Significant. The notification
obligation for Member States is not
expected to entail costs for
undertakings.
The requirement for Member States to
provide for pecuniary sanctions
determined in proportion to the annual
turnover of the sanctioned undertaking
could lead to a substantial increase in
the level of pecuniary sanctions, in
particular in Member States which do
not ensure dissuasive and
proportionate sanctions under the
Very significant. As under option 4b, the
notification obligation for Member States is not
expected to entail costs for undertakings.
Policy option 4c provides for pecuniary
sanctions up to 4% of the global annual
turnover where a violation of rights and
obligations is intentional, or else up to
2%. Although those percentages
represent the upper limit of sanctions,
the maximum limit under this option is,
based on average turnover of
undertakings with an EWC, be about
4000 times higher than the current
maximum administrative sanction in the
406
Generally, sanctions for administrative infractions are being applied to the EWC-related breaches. In most cases, the sanctions under the national laws remain low, the average range
being around € 5.000-10.000 or even lower in some countries. Upper limits to sanctions are quite common (the maximum scale ranging from a couple hundred EUR to € 187.500 (ES)
for very serious offences. In DE, the country with highest number of EWCs, a maximum possible administrative fine for EWC-related breaches is € 15.000, although more severe
criminal sanctions (pecuniary or custodial) are theoretically also available. Likewise, in some other countries, stricter sanctions (e.g. up to € 800.000 in BE) or prison sentences may
theoretically be imposed in criminal law proceedings. Application of such sanctions to EWC-related offences has not occurred in practice.
407
ICF(2023), Sections 4.2.1.4. and 5.2.2.4.
204
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
average undertaking with an
EWC’s average global
turnover.408
Taking as example
the maximum administrative
fine applied in Germany
(15.000 EUR), the ratio to the
global average turnover is
0.00006 %.
Sanctions are seldom applied in
practice (also due to a low
occurrence of legal disputes).
Where applied, they create only
negligible costs for companies.
More significant costs can be
created where a court’s
decision precludes
implementation of the
management’s decision until
the information and
consultation obligations have
been fulfilled.
Most conflicts within European
ensured effective sanctions
and remedies will be least
inclined to follow such
recommendations. If such a
pattern materialises, the
changes introduced at
national level to implement
option 4a would remain very
limited, and so would
sanctioned undertakings’
enforcement costs compared
to the baseline.
baseline.
Although policy option 4b does not
provide for a specific percentage that
could serve as a benchmark, it
specifies that the sanctions should be
determined in proportion to the
worldwide turnover of the sanctioned
undertaking or group of undertakings.
In a concrete situation, this would
require that not only the turnover of
the undertaking in question is
considered, but also the principles of
effectiveness, dissuasiveness and
proportionality, for example
considering factors such as the gravity,
duration and impacts of the relevant
infringement. Accordingly, the
expected impact on sanctioned
undertakings is significant.
EU (ES) and around 50.000 times higher
than maximum fine available in DE (a
Member States with highest number of
EWCs). The upper limits would define
the spectrum on which national
administrative and judicial authorities
would determine the level of penalties.
Even if these authorities would consider
the upper echelons of this spectrum only
for the most extreme infringements,
option 4c thus sets a high benchmark
also for less severe cases. Therefore, the
impact on the enforcement costs for
sanctioned undertakings with an EWC
would be very significant.
Finally, policy option 4c also provides
for a suspension of management
decisions in case of a violation of the
information and consultation obligation.
Depending on the length of the relevant
proceedings, this measure could
significantly reduce the efficiency and
effectiveness of the decision-making in
408
Average worldwide turnover of undertakings with EWCs has been estimated at 24 billion (ICF(2023), Annex – Section 3 (Data mapping).
205
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
Works Councils (EWCs) are
typically resolved without
resorting to legal action. Legal
action was taken in 16% of
these serious conflict cases.409
National jurisprudence on
EWC-related matters is
limited410
and does not allow
for a proper monetisation of
sanctions and their frequencies
but provides rather an
anecdotical view.
companies, possibly leading to
substantial economic losses.
In combination, the sanctions under
option 4c are likely to lead to very
significant impacts on the enforcement
costs for sanctioned companies, with
possible indirect consequences for their
competitiveness and business
operations.
Compliance
(administrative)
costs for
Member States
The recast Directive does not
entail any administrative costs
for Member States.
Null. Policy option 4a does
not include any measures that
would entail administrative
costs for Member States
Negligible. The notification obligation
provided in policy option 4b would
entail limited administrative costs for
Member States which would need to
collect and send to the Commission
information on the means by which
EWCs, SNBs and employees’
representatives can bring judicial
Negligible. See option 4b for
explanations regarding the notification
obligation. The other measures under
this option do not entail administrative
costs for Member States.
409
In a ETUI 2018 survey of EWC representatives, only 15.7% reported experiencing serious conflicts with management between 2015 and 2018.
410
160 national cases have been identified since 1996 on EWC-related matter. The subject of cases is diverse (concerning functioning of the agreement, the set-up phase, individual
rights of employee representatives or trade union rights, consultation procedure).
206
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
proceedings in respect of all their
rights under the recast Directive.
Although the evidence gathered does
not allow for a monetisation of this
incremental cost per Member States,
this task – which would form a part of
the standard process of notifying
transposition measures via the
available IT systems – should not
require an additional high number of
working days and the impact should be
negligible.
Adjudication
and litigation
costs for
Member States
Around 16% of EWCs
experienced a serious dispute in
a timeframe of three years411
and less than 20 % of these
disputes have been taken to
court. Court cases identified in
all Member States together
were less than 6 per year on
average (in all EU).412
It is
assumed that this would not
Limited. By supporting a
more effective access to
courts, policy option 4a
could entail additional costs
for Member States linked to
an increasing number of
administrative or judicial
procedures.
In contrast, policy option 4a
Inconclusive. Policy option 4b would
allow the Commission to effectively
monitor and ensure the requirement of
effective access to justice. Depending
on the outcome of this monitoring and
the follow up actions, the access to
justice could be further improved in
some Member States (around 13,7 %
of stakeholders reported a lack of
access to courts for EWC-related
Neutral to significantly lower. Policy
option 4c provides for a broad range of
sanctions which could lead to significant
or even very significant economic losses
for those sanctioned undertakings. On
the one hand, these new measures are
therefore likely to have a strong
deterrent effect and thus improve
compliance with the rights and
obligations laid down in the Directive,
411
Between 2015 – 2018 (cf. ETUI 2018 survey of EWC representatives).
412
160 national cases have been identified since 1996 on EWC-related matter.
207
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
change under the baseline due
to the identified issues of
access to courts in some
Member States, coverage of
legal costs and other dispute-
resolution.
It should also be noted that
court proceedings are by most
employee representatives
viewed as the last resort for
resolution of a conflict with
their management and only a
small fraction of conflicts is
taken to a court due to a lack of
access or resources (ca 17 %)
or due to low sanctions (ca 11
%).413
The national authorities may
obtain an economic benefit
from the sanctions collected,
assuming that they accrue to
also aims at ensuring
sanctions that are effective,
dissuasive and proportionate,
which could lead to a higher
compliance level and a
decrease of the number of
administrative or judicial
procedures in the future.
The twofold objective
pursued by policy option 4a
makes it difficult to assess its
overall effect on the
adjudication and litigation
costs for Member States
compared to the baseline.
Furthermore, the non-binding
status of a Commission
recommendation does not
allow for a clear assessment
of its expected effects, which
would nevertheless likely
remain limited. As
matters), which could lead to an
increasing number of administrative or
judicial procedures. However, it is not
possible to estimate these incremental
costs. It should also be recalled, as
mentioned under the baseline, that
court proceedings are by most
employee representatives viewed as
the last resort for resolution of a
conflict with their management and
only a small fraction of conflicts is
taken to a court.414
Policy option 4b also requires that
pecuniary sanctions be determined in
proportion to the annual turnover of
the sanctioned undertaking. The
evidence gathered does not allow for
estimating the level of sanctions that
would be applied under this option, but
it can be assumed that a requirement to
take into account the company’s
turnover when deciding the level of
which could in turn lead to a decreasing
number of legal and administrative
procedures. On the other hand, policy
option 4c could also improve access to
justice, which could lead to an
increasing number of administrative or
judicial procedures. It is therefore
difficult to estimate if overall, policy
option 4c would have an influence on
the number of administrative or judicial
procedures. As for option 4b, also here it
should be noted that that court
proceedings are by most employee
representatives viewed as the last resort
to resolve conflict with their
management.
Policy option 4c provides for high
ceilings for pecuniary sanctions.
Although the effective fines applied in
concrete cases would likely be lower,
the maximum percentage laid down in
policy option 4c would lead to very
413
ETUI 2018 survey data.
414
ETUI 2018 survey data.
208
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
the state budget. However,
considering the low likelihood
of tribunal cases involving
EWCs, and even lower
likelihood of sanctions (which
remain overall very low – see
baseline under economic
impacts above) – the expected
benefits for Member States are
low.
highlighted above, there is a
plausible risk that those
Member States which have
thus far not ensured effective
sanctions and remedies will
be least inclined to follow
such recommendations. The
changes introduced at
national level to implement
option 4a would therefore
likely remain very limited.
sanction would, together with the need
to apply principles of effectiveness,
proportionality and dissuasiveness,
lead to significantly higher sanctions
than under the baseline. In addition to
the turnover of the company, Member
States or national courts could apply
discretion to determine the appropriate
percentage on the basis of certain
criteria (such as the gravity, duration
and impact of the respective
infringement or a possible record of
prior non-compliances of the relevant
undertaking).
significantly higher fines compared to
the baseline. It is assumed that
pecuniary sanctions would accrue to
Member States’ budgets. Therefore,
depending on the amount applied in
concrete cases these fines could cover or
even exceed the incremental
adjudication and litigation costs of
Member States.
Social impacts
Improved
social dialogue
National laws do not fully
guarantee access of
rightsholders to justice. In the
evidence gathering, 13,7 % of
stakeholders have reported not
to have access to court in their
Limited. Policy option 4a
aims to ensure a better access
to justice for employees,
which is currently
insufficient in some Member
States as described in detail
Significant. With policy option 4b,
Member States will have to notify to
the Commission how access to justice
and effective remedies are ensured.
This will help the Commission to
effectively monitor and ensure the
Significant to very significant.
Regarding the notification obligation on
Member States, see explanations under
option 4b.
Policy option 4c would also allow for a
greater compliance with the rights and
209
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
Member States for EWC
related matters.415
As
mentioned above (cf. analysis
of economic impacts), the
current sanctions regimes in
Member States are diverse.
Overall, the maximum levels of
pecuniary sanctions are
considered low and not
dissuasive in comparison to the
turnover of the Union-scale
undertakings.
As enforceability is a crucial
condition for the effective
implementation of EWCs’
rights, the described issues are
likely to have a negative effect
on compliance with
information and consultation
requirements, and thus on the
social dialogue in Union-scale
in Annex 8. However, and
although the evidence
gathered does not allow for a
clear quantification, the non-
binding nature of the
Commission
recommendation will not
create any new legal
requirements, which could
undermine the expected
results.
This option would therefore
contribute only marginally to
improving enforcement of
EWCs’ rights and thereby the
social dialogue on
transnational matters.
requirement of effective access to
justice. Based on evidence gathered,
the measure would guarantee better
access to justice for population of ca.
4.3 million EU employees of
undertakings that fall within the scope
of the Directive.416
Policy option 4b would thus foster
greater compliance with the rights and
obligations laid down in the Directive.
By providing pecuniary sanctions
based on the annual turnover,
companies will indeed be given more
incentives to follow all the legal
requirements.
The combination of the measures will
therefore positively impact a high
number of employees and their
representatives by ensuring a better
access to justice and a better
compliance with the rules of the
obligations laid down in the Directive.
By providing pecuniary sanctions up to
4% of the global annual turnover,
companies will indeed have very strong
incentives to strictly follow all the legal
requirements. Similarly, the prospect of
the suspension of management decisions
is likely to be an effective deterrent of
non-compliance.
The combination of the measures will
therefore positively impact a high
number of employees and their
representatives by ensuring a better
access to justice and a better compliance
with the rules of the Directive.
However, in interviews for the
supporting study, some EWC
representatives pointed out that very
harsh sanctions could be
counterproductive for on employees. In
particular, sanctioning methods that lead
415
This also corresponds to the estimated share of EWCs based in IE and FI (ca. 14 %), where systemic limitations in access to courts have been identified.
416
14 % of 31 million EU employees of Union-scale undertakings.
210
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
undertakings. Directive. The positive impact on the
quality of the information and
consultation at the EU level should
therefore be significant and benefits a
high number of employees and their
representatives.
to job losses would defeat their purpose.
Impacts on
employment
Null to negligible. As
explained under economic
impacts policy option 4a
could entail additional
enforcement costs to
companies. These would
however be negligible.
Therefore, the impact should
be limited and not affect
business operations nor
employment in the
undertakings.
Null to negligible. As described under
economic impacts, policy option 4b
could lead to moderate or even
significant enforcement costs for
sanctioned businesses.
The evidence indicates that managers
believe that heavy sanctions would put
EU-based companies at a competitive
disadvantage. In theory, heavy
sanctions could negatively affect
business operations and entail job
losses. However, the impact on
employment is very uncertain and
cannot be quantified. It would in any
case apply only to the – likely small –
fraction of sanctioned undertakings
amongst the overall population of
undertakings with an EWC.
Furthermore, the measures provided
under policy option 4b could also
Negligible to moderate. As described
under economic impacts, policy option
4c could lead to significant or even very
significant enforcement costs for
businesses. Owing to the high level of
maximum level of sanctions, impacts of
option 4c on employment in
undertakings would likely be higher
than under option 4b. However, such
impact cannot be quantified.
The evidence gathered indicates that
managers believe that heavily
sanctioned obligations could put EU-
based companies at a competitive
disadvantage. In theory, this could
negatively affect business operations
and entail job losses in the undertakings
/ EU. However, same as for option 4b,
the impact on employment is very
211
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
indirectly lead to a better rate of
compliance with the obligations laid
down in the Directive. This would
reduce the incidence of pecuniary
sanctions, and thereby mitigate
possible negative impacts on
companies’ financial stability and
related redundancy risks.
uncertain and cannot be quantified.
Due to their deterrent effect, the
measures under option 4c could also
indirectly contribute to a better rate of
compliance with the rights and
obligations laid down in the Directive,
which should mitigate those risks.
Impacts on competitiveness
Impact on cost
and price
competitiveness
for EU
businesses
No such impacts identified
under the baseline.
See baseline under economic
impacts.
Null to negligible. The
impact of a Commission
recommendation on the
effectiveness of sanctions
and on an increasing access
to courts is uncertain. Its
non-binding status would
lead to limited changes
compared to the baseline.
Accordingly, expected
impacts on price
competitiveness are null to
negligible.
Null to limited. Policy option 4b could
entail moderate to significant costs to
those undertakings that would get a
pecuniary sanction (see above
assessment of economic impacts). The
rare occurrence of legal disputes and
application of sanctions is unlikely to
change with the increase of ceiling of
sanctions. Moreover, sanctions would
have to be determined in accordance
with the principle of proportionality,
and national courts are expected to
take into account criteria such as the
severity, duration and consequences of
the infringement. Therefore, it is likely
that penalties amounting to a
significant share of companies’
Moderate to significant. As described
above, policy option 4c provides for
pecuniary sanctions based on the annual
turnover with a maximum level of 4 %
of the global annual turnover, and
suspension of management’s decision.
These sanctions, in particular where
combined, could lead to very significant
direct (fines) and indirect costs
(economic losses) (see above assessment
of economic impacts).
Though it is not expected that the rare
occurrence of legal disputes and
application of sanctions would change
with the definition of a high ceiling for
pecuniary sanctions, expected impacts
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Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
turnover would be imposed only in
very rare cases. Accordingly, the
impact of option 4b on cost
competitiveness would range from null
to limited and no noticeable impact on
consumer prices is expected.
on competitiveness would range from
moderate to significant due to the risk
that companies could be prevented from
implementing decisions, which could
lead to significant economic losses, and
to the potentially very high impact of the
sanctions.
Noticeable consumer price effects are
considered unlikely even under this
most far-reaching option. Firstly,
sanctions and remedies apply only in a
likely small number of individual cases
and are thus unlikely to feed into the
pricing considerations of Union-scale
undertakings. Secondly, it is expected
that competitive pressures on sanctioned
undertakings will disincentivise them
from passing enforcement costs on to
consumers.
Impact on
international
competitiveness
for EU
businesses and
their capacity to
No such impacts identified
under the baseline.
See baseline under economic
impacts
Null to negligible. The
impact of a Commission
recommendation on the
effectiveness of sanctions
and on an increasing access
to courts is uncertain. Its
non-binding status would
Null to limited. As described above,
policy option 4b could lead to
moderate or even significant direct
(fines) for those sanctioned
undertakings (see above assessment of
economic impacts). The higher the
sanctions to be imposed in practice, the
Moderate to significant. As described
above, policy option 4c could lead to
significant or even very significant
direct (fines) and indirect costs
(economic losses) for those sanctioned
undertakings (see above assessment of
economic impacts). The more often
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Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
innovate lead to limited changes
compared to the baseline.
In any case, expected impacts
on international
competitiveness of EU
business and their capacity to
innovate are null to
negligible.
more the impact on international
competitiveness for those sanctioned
undertaking.
As part of the survey417
, more than
80% of management representatives
indicated that imposing pecuniary
sanctions linked to company turnover
would be negative or even very
negative for the competitivity of EU
businesses.
Any such impact would however be
limited to the sanctioned undertakings
only. Considering the rare occurrence
of legal disputes and sanctions in this
policy area, which is not expected to
increase with the higher ceiling of
sanctions, the expected impacts on
competitiveness of EU businesses and
their capacity to innovate is null to
limited.
national administrative or judicial
authorities would use the upper echelons
of the spectrum of penalties defined by
the 2% resp. 4% ceilings, the more the
impact on international competitiveness
for those sanctioned undertaking.
As part of the survey418
, a strong
majority of the management’s
representatives indicated that the
envisaged sanctions under policy option
4c would have a negative or very
negative impact on the competitiveness
of EU-based companies vs non-EU-
based companies. The impact on
international competitiveness would be
limited to the sanctioned undertakings
only. Though it is not expected that the
rare occurrence of legal disputes and
application of sanctions would change
with the increase with the definition of a
high ceiling for pecuniary sanctions,
expected impacts on competitiveness
417
ICF(2023), Section 5.1.2.7.
418
Ibid.
214
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
would range from moderate to
significant due to the risk that
companies could be prevented from
implementing decisions, which could
lead to significant economic losses, and
to the potentially very high impact of the
sanctions. It is also likely that the
undertakings sanctioned would have to
reduce some of their expenditures,
which could negatively impact their
capacity to innovate.
Impacts on fundamental rights
Impact on the
fundamental
right to an
effective
remedy and to a
fair trial
See baseline under social
impacts
Limited. As explained
above, there is a plausible
risk that Member States
which have far not ensured
effective sanctions and
remedies will be least
inclined to follow the
recommendations of the
Commission. Therefore, it is
likely that policy option 4a
would have only a limited
positive impact on the right
to an affective remedy and to
a fair trial compared to the
Moderate to significant. Policy
option 4b would ensure a more
effective monitoring by the
Commission of how access to justice
and effective remedies are ensured in
the different Member States.
Depending on the outcome of this
monitoring, the impact on the right to
an effective remedy and to a fair trial
would be moderate to significant.
Based on evidence gathered, the
measure would guarantee better access
Moderate to significant. The positive
impacts discussed under policy option
4b are valid for policy option 4c.
215
Impact /
affected
stakeholders
Baseline Policy option 4a
(Commission
recommendation)
Policy option 4b
(Facilitating supervision by COM,
clarifying MSs’ obligation to ensure
effective sanctions & remedies)
Policy option 4c
(Suspension of management decisions;
pecuniary sanctions up to 2% resp. 4%
of undertakings global turnover)
baseline. to justice for population of ca. 4.3
million EU employees of undertakings
that fall within the scope of the
Directive.419
Impact on
workers’
fundamental
right to
information and
consultation
within the
undertaking
See baseline under social
impacts
Limited. More dissuasive
sanctions and effective
remedies should presumably
improve the level of
compliance with the existing
requirements under the recast
Directive. However, and as
explained above, policy
measure 4a is not expected to
entail great changes
compared to the baseline.
Therefore, the impact on
workers’ right to information
and consultation within the
undertaking would be
negligible.
Moderate to significant. Policy
option 4b also provides for more
effective pecuniary sanctions, which
are currently too limited compared to
the annual turnover of undertakings
with an EWC. Such reinforced
sanctions could contribute to more
effective transnational information and
consultation rights by ensuring a better
compliance with the requirements laid
down in the recast Directive.
Moderate to significant. The measures
under policy option 4c provide for
reinforced sanctions and remedies that
could entail significant or even very
significant costs to companies that
would be sanctioned. This is likely to
encourage all undertakings to strictly
comply with the existing requirements
under the EWC Directive.
419
14 % of 31 million of EU employees of Union-scale undertakings.
216
ANNEX 13: MONITORING AND EVALUATION
Specific objective Operational objectives Indicators / results / success criteria v. baseline Sources of data
1. Avoid unjustified
differences in
workers’ minimum
information and
consultation rights at
transnational level
Simplified and coherent legislative
framework: applicability of the recast
Directive to all Union-scale
undertakings
- Deletion out of exemptions / legacy legal regimes under
national law (= success criterion)
- Number of EWCs newly established in previously
exempted undertakings (Success: smooth transition to EWC
regime; absence of disputes)
- Transposition checks/implementation
report
- Information notified by Member States
in accordance with option 4a
- ETUI database of EWCs
Potential survey / study
Facilitate enforcement of information
and consultation rights in currently
exempted undertakings
See indicators for area 4.
2. Ensure an efficient
and effective setting-
up of EWCs
Prevent delays in the setting up of SNBs
- Clear deadlines and obligations set out in national law (=
success criterion)
- % of cases where negotiations start >6 months after the
request to set up an EWC (Success: decrease of cases
exceeding 6 months)
- Number of new EWCs with subsidiary requirements
(Success: lower portion than under baseline)
- Potential ad hoc survey/study
- Transposition checks/implementation
report
- ETUI database of EWCs and national
case-law
- Desk research
- Complaints to the Commission
Avoid legal uncertainty and disputes
regarding the coverage of legal costs
and expenses related to training of SNB
members
- Number of disputes on the setting up of SNB (Success:
decrease)
- Number of disputes on the coverage of SNBs’ resources
(Success: decrease)
Improve gender balance on EWCs and
select committees
Percentage of women in EWCs and select committees
under new or re-negotiated agreements (Success: increase
compared to baseline EWCs)
3. Ensure the
Increase legal certainty and avoid
disputes regarding the concept of
transnational matters
- Clear criteria for transnationality laid down in national laws
(= success criterion)
- Number of disputes about whether a certain matter falls
217
appropriate
resourcing of EWCs
and an effective
process for their
information and
consultation
under transnational information and consultation
requirements (Success: decrease)
- Potential ad hoc survey/study
- Transposition checks/implementation
report
- ETUI database of EWCs and national
case-law
- Desk research
- Complaints to the Commission
Ensure a timely and genuine dialogue
with EWCs on transnational matters
- Number of disputes on timing of consultation (Success:
decrease)
- Number of disputes on the lack of a reasoned response by
management (Success: decrease)
- Clear requirement for reasoned response laid down in
national laws (= success criterion)
Reduce the risk of excessive imposition
of confidentiality or withholding of
information by central management
Number of disputes on confidentiality or withholding of
information (Success: decrease)
Increase legal certainty and prevent
disputes regarding the coverage of legal
costs, expertise and expenses related to
training of EWC members
- % of EWC agreements with clauses on the access to /
financing of experts (Success: increase)
- % of EWC agreements with clauses on the coverage of
legal and training costs / expenses (Success: increase)
- Number of disputes on the resourcing of EWCs (Success:
decrease)
4. Promote a more
effective
enforcement of the
recast Directive
Facilitate and effective enforcement
monitoring by the Commission
- % of Member States that notified comprehensive
information about measures ensuring access to justice and
effective remedies with respect to all the rights set out in the
recast Directive (Success: all Member States)
- Number of EU-Pilot / infringement procedures launched
against Member States (after transpositions checks
completed) to ensure effective enforcement regime (Success:
zero/decrease )
- Information notified by Member States
in accordance with option 4a
- Transposition checks
- Complaints to the Commission
- Potential ad hoc survey / study covering
218
Ensure effective remedies and sanctions
for infringements of rights under the
recast Directive
- % of Member States whose notified measures are assessed
as sufficiently effective to ensure proper access to justice,
effective remedies and deterrent sanctions (Success: all
Member States)
- Number of cases where access to justice is denied to EWCs
/ SNBs (Success: zero unjustified cases)
- Number of judicial actions in Member States to enforce
rights under the Directive (Success: to be determined based
on qualitative assessment of each case)
enforcement
- Desk research
- ETUI database of national case-law