Great expectations but limited outcome: on the EU Commission draft proposal for a revised EWC Directive

Almost one year after the European Parliament (‘EP’) overwhelmingly called for a thorough revision of the 2009 EWC Directive (Newsletter, An (unexpected) revision of the EWC Directive underway?, 31 January 2023) and after the failure of social partner negotiations, the EU Commission has published its draft proposal for a revised EWC Directive on 24 January 2024 (the ‘Draft Revised Directive’).

Generally, some of the key points on the EP’s (and the trade union movement) agenda have by and large been considered (around the concepts of transnationality, confidentiality, and consultation) and the regulatory framework for operating an EWC becomes somewhat more cumbersome for the business community. Also, the financial obligations of business will be more onerous and agreements will need to encompass the budgetary aspects of running an EWC, incl management’s obligation to fund any legal action against it by the EWC and/or the employee delegates. The wide margin of contractual freedom which the signatory parties to any EWC agreement enjoyed so far is limited on various accounts.

In any event, the sharpest calls for change and most mediatized claims have not as such been retained in the Commission proposal. Indeed, on the most sensitive and long awaited section on enforcement, the Commission leaves much leeway to the individual Member States to introduce (i) adequate procedures to enable enforcement of the Directive’s rights in a timely and effective way (an abstract reference to injunctive relief measures?) as well as (ii) financial penalties - specifically in case of violation of the basic I/C obligations as set forth in transposing national legislation; these penalties are to be effective, dissuasive and proportionate, taking into account certain criteria (gravity, duration, consequences, intentional/negligent nature of the offence, size and financial situation of the group etc).

Legacy agreements are to be removed and thus the legal framework for setting up and running EWC’s will gradually become uniform. However, quite paradoxically, with individual Member States left in charge of setting up their own sanctions and remedies mechanisms, we can expect to see a wide set of 27 varying and diffuse rules on enforcement.

The next steps of the legislative process involve discussions or negotiations between the Commission, the EP and ultimately the Council to arrive at a consensus on a revised EWC Directive. Since the current Draft Revised Directive appears not to have taken most of the EP’s (and the trade unions’) requests and claims to heart, it remains to be seen whether this draft will prove to be a sufficient basis to come to such a consensus.

All in all, at first sight, the mountain appears to have brought forth a (big) mouse.

We have prepared an in-depth and critical analysis document on the proposal. If you wish to obtain a copy, please write to megan.jenkins@twobirds.com.