Newsletter - Next step in the revision process of the 2009 European works council Directive

In the legislative process for the revision of Directive 2009/38 on European works councils (‘EWC’), the most recent step so far was the EU Commission proposal for such revision, tabled on 24 January 2024 (see ‘Great expectations but limited outcome: on the EU Commission draft proposal for a revised EWC Directive’, Newsletter, 06 February 2024, and ‘The EWC Directive revision: the EU Parliament strikes back?’, Newsletter, 21 February 2024).  That proposal was to be read in balance with the initial EU Parliament recommendation for a revised Directive, which resulted from the adoption of the so-called Radtke report of 3 February 2023 (see ‘An (un)expected revision of the EWC Directive underway?’, Newsletter, 30 January 2023).

On 20 June 2024, and quite unexpectedly for most observers, the EU Council for employment and social affairs managed to agree on a compromise text which reflects its negotiation position in the continuing tripartite discussions among the EU institutions on the subject matter. During its final meeting under the Belgian presidency, which ends on 30 June, the EU Council thus arrived at an agreement.

The text of the revised draft Directive as approved by the Council differs on only a few points from the proposal submitted by the EU Commission in January 2024.

The main points of difference (see the above Newsletter of 06 February 2024) are:

• Further clarification and refinement of the notion of ‘transnationality’, outlining in which circumstances the consequences of measures in a second member state may be considered to characterise the measures as being transnational,   
  
• Nuances to the required gender balance in the SNB and the EWC,  
  
• The transmission of data/information in confidence and the non-transmission of information is subject to stricter rules for justification of the management approach and the duration of such confidence/non-transmission,
  
• Legacy agreements shall only be abolished following a request and a process for renegotiation of existing agreements (in a 2-year timeframe), 
  
• The new rules on enforcement, remedies and penalties - the core elements of the EU Parliament’s recommendation and the focal point of attention of the business community – are being further tweaked by the Council, in that only general principles are set forth to secure the existence of adequate procedures of enforcement and the application of penalties which are effective, dissuasive and proportionate, without further substantiation or content,
  
• The timeframe for transposition of the revised Directive is lengthened to two years, with another two years for the (mandatory) amendment of current EWC agreements.    

Generally speaking, the compromise text appears to stay close to the EU Commission proposal and is not overly onerous for the business community.   

The next step now is for the EU Parliament to seek and obtain a mandate during the Summer for the final discussions and negotiations with the other EU institutions to finalise the draft revised Directive. Although the Hungarian presidency is not likely to give a high priority to this matter, it can reasonably be expected that the revised Directive shall be approved and promulgated before end 2024.