European works council agreement template

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5. European Works Council

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European Works Council

The Directive imposes a works council or an information and consultation procedure in Community-scale undertakings and Community-scale groups of undertakings on the basis of an agreement negotiated between employees’ representatives forming a special negotiating body and the central management of the undertaking. It also defines the procedures for the operation of this body. In the cases identified by the Directive in which an agreement cannot be reached, it stipulates the provisions which subsidiary requirements to be established by the Member States must satisfy.

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 [See amending acts].

The main provisions of the Directives are as follows:

• Establishment of a European Works Council or a procedure for informing and consulting employees * in every Community-scale undertaking * and every Community-scale group of undertakings *, on the basis of an agreement between the central management and a special negotiating body.

The central management:

• will be responsible for creating the conditions and means necessary for the setting up of a European Works Council or an information and consultation procedure;
• will initiate negotiations on its own initiative or at the written request of at least 100 employees or their representatives in at least two undertakings or establishments in at least two Member States.

Special negotiating body

This body, comprising a minimum of three and a maximum of the number of Member States:

• will have the task of determining, with the central management, by written agreement, the scope, composition, competence and term of office of the European Works Council(s) or the arrangements for implementing a procedure for the information and consultation of employees;
• may decide, by at least two-thirds of the votes, not to open negotiations or to terminate the negotiations already opened; such a decision would stop the procedure to conclude the agreement and would nullify the provisions of the Annex.

The members of the special negotiating body and of the European Works Council, and any experts who assist them, will not be authorised to reveal any information which has expressly been provided to them in confidence.

Exemptions from the Directive

Community-scale undertakings and Community-scale groups of undertakings in which there is already an agreement covering the entire workforce, providing for the transnational information and consultation of employees, will not be subject to the obligations arising from the Directives. When these agreements expire, the parties involved may decide jointly to renew them. Where this is not the case, the provisions of the Directives will apply.

Subsidiary requirements laid down by the legislation of the Member State in which the central management is situated will apply:

• where the central management and the special negotiating body so decide, or;
• where the central management refuses to commence negotiations within six months of the initial request to convene the special negotiating body, or;
• where, after three years from the date of this request, they are unable to conclude an agreement to establish a European Works Council or an information and consultation procedure, and the special negotiating body has not taken the decision not to open negotiations or to terminate the negotiations.

These subsidiary requirements must satisfy the provisions set out in the Annex, whereby:

• the competence of the European Works Council will be limited to information and consultation on matters which concern the Community-scale undertaking as a whole or at least two establishments or group undertakings situated in different Member States;
• the European Works Council is to have a minimum of three and a maximum of 30 members and, where its size so warrants, is to elect a select committee from among its members, comprising at most three members;
• four years after the European Works Council is established, it is to consider whether to open negotiations for the conclusion of the agreement on the arrangements for implementing the information and consultation of employees, or to continue to apply the subsidiary requirements adopted in accordance with the Annex;
• the European Works Council will have the right to meet with the central management once a year in order to be informed and consulted, on the basis of a report drawn up by the central management, on the progress of the business of the Community-scale undertaking or Community-scale group of undertakings and its prospects;
• where there are exceptional circumstances affecting the employees' interests to a considerable extent, particularly in the event of relocation, closure or collective redundancy, the select committee or, where no such committee exists, the European Works Council will have the right to be informed;
• the members of the European Works Council are to inform the employees' representatives of the content and outcome of the information and consultation procedure;
• the operating expenses of the European Works Council are to be borne by the central management; in compliance with this principle, the Member States may lay down budgetary rules regarding the operation of the European Works Council.

The purpose of this Directive is to improve the right of employees in Community-scale undertakings and Community-scale groups of undertakings to be informed and consulted.

Directive 97/74/EC extends the scope of this Directive to the United Kingdom.

This Directive shall be repealed by Directive 2009/38/EC (FR) with effect from 6 June 2011 when the latter enters into force. The modernisation of the legislation carried out by this new Directive has many objectives. It aims to ensure the effectiveness of employees’ transnational information and consultation rights, to increase the number of European Works Councils and to enable the continuing functioning of their constituent agreements. These provisions also aim to strengthen legal certainty for the establishment and functioning of European Works Councils.

Key terms used in the act

• Community-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.
• Group of undertaking: a controlling undertaking and its controlled undertakings.
• Community-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 another group undertaking with at least 150 employees in another Member State.