The European Works Councils (EWC) Directive sets out requirements for informing and consulting employees at the European level, in undertakings (which may include partnerships or other forms of organisation as well as companies) or groups with at least 1000 employees across the member states and at least 150 employees in each of two or more of those member states. It was adopted by the other EU member states on 22 September 1994, under Article 2(2) of the Agreement on Social Policy (the "Social Chapter") and was later extended to cover the rest of the European Economic Area (Norway, Liechtenstein and Iceland). The deadline for national implementation in these member states was 22 September 1996. The original Directive was extended to cover the UK by directive 97/74/EC in December 1997. Implementation of the second directive means that employees in the UK must be included in present and future EWC agreements. In many cases UK employees in both UK-based and non-UK undertakings had already been voluntarily included in EWC arrangements concluded by undertakings subject to the original directive.

The directive is implemented in the UK by the Transnational Information and Consultation of Employees Regulations 1999 which came into force on 15 January 2000. They set out the procedures for negotiating a European Works Council agreement (or other European-level information and consultation procedure), the enforcement mechanisms, provisions on confidential information, transitional provisions and exemptions, and statutory protections for employees.

An EWC agreement normally follows negotiations between management and the employees. The process is triggered either on management’s own initiative or after a written request from at least 100 employees or their representatives in two or more Member States (no obligation exists if no request is received). The employees are represented in the negotiations by a "special negotiating body" (SNB) which consists of representatives of employees from all the EEA member states in which the undertaking has operations. The number of representatives for each member state is determined by a formula in the legislation in the State where the undertaking’s central management is located (or representative agent where the central management is outside the EEA). The UK Regulations prescribe one representative from each of the EEA countries in which the undertaking operates plus additional ones where 25% or more, 50% or more and 75% or more of the European workforce is located in a member state, up to a total maximum of four. The way in which the SNB members are selected is determined by the legislation of the member state where they are employed. UK members are selected by a ballot of the UK workforce unless there exists a consultative committee whose members were elected by a ballot of all the UK employees and which performs an information and consultation function on their behalf. Where such a consultative committee does exist, it may appoint from within its members the UK representatives on the SNB.

The Regulations are largely concerned with the initial establishment of the SNB: the subsequent negotiations and the details of the EWC agreements are for the most part left for agreement between the parties concerned.

If management refuses to negotiate within six months of receiving a request for an EWC, or if the parties fail to conclude an agreement on transnational information and consultation procedures within three years, an EWC must be set up in accordance with the "statutory model" set out in the Schedule to the Regulations. This sets out requirements concerning the size, establishment and operation of a European Works Council. In particular, the Schedule lists topics on which the European Works Council has the right to be informed and consulted (e.g. the economic and financial situation of the business; its likely development; probable employment trends; the introduction of new working methods; and substantial organisational changes).

Enforcement will be through the Central Arbitration Committee (CAC) and Employment Appeal tribunal (EAT) in Great Britain and the Industrial Court in Northern Ireland (the Regulations apply on a UK-wide basis). In general, the CAC hears disputes as to whether an undertaking is subject to the directive and about the procedures leading to the establishment of an EWC. The EAT hears disputes about the operation of an EWC or its non-establishment. The EAT also hears appeals on points of law from the CAC and can impose civil financial penalties up to £75,000 where management acts in breach of its main obligations. Both the CAC and EAT may refer cases to ACAS if conciliation is considered useful.

The Regulations provide that management may withhold information, or require the EWC to hold it in confidence, where "according to objective criteria it would seriously harm the functioning of the undertaking or be prejudicial to it" if it were revealed. EWC members can appeal to the CAC if they believe the management is withholding information or imposing confidentiality beyond what is permitted in the Regulations, and the CAC would then make a ruling on a case by case basis.

The employees and SNB/EWC members are given statutory protections when asserting their rights or performing duties under the Regulations. Employment Tribunals (the Industrial Tribunals in N. Ireland) hear any claims relating to victimisation or unfair dismissal.

The Regulations do not apply to undertakings which had already concluded voluntary agreements providing for the transnational information and consultation of the employees, and which covered the entire workforce in the EEA. Such agreements had to have been concluded by 22 September 1996 or 15 December 1999, depending on whether the undertaking was subject to the original directive or not. Undertakings which consider they have a valid voluntary agreement but which receive a request to establish an EWC, may apply to the CAC for a declaration that the Regulations do not apply to them. The Regulations also contain exceptions in respect of certain merchant navy crew members.

The Regulations contain transitional provisions in respect of those UK-based undertakings which had started negotiations under the law of another member state before the entry into force of the UK Regulations. In such cases the negotiations are subject to the UK Regulations but continue on the same timetable. UK representatives will have to be elected if the UK employees are under-represented on the SNB compared with the formula for the allocation of seats. Where a UK-based undertaking concluded an EWC agreement in another member state before the entry into force of the UK Regulations, it may be made subject to the UK Regulations with the consent of the parties to the agreement.

A note setting out the outcome of the public consultation  (24Kb) on the UK implementation of the European Works Council Directive gives the Government’s position on the issues raised and, where these resulted in amendments to the draft Regulations, the details of the modifications. Interested parties may also wish to refer to the original DTI consultation document  (104Kb).

Employment Relations home page  |  Search  |  Crown Copyright  |  Disclaimer
  Top of page

Last updated 29 August 2002