Legal position of European Works Councils to be significantly strengthened

On 12 May 2022, German MEP Dennis Radtke published the first draft of his report on the revision of the EWC Directive. The Christian Democrat from Bochum and former trade union secretary of IG BCE had been nominated as rapporteur for the report across all political groups. The report builds on a resolution from December 2021 under the title "Democracy at Work" in which the European Parliament called not only for the revision of the EWC Directive, but also for a framework directive on information, consultation and employee participation as well as a strengthening of co-determination in supervisory boards (see report in EWC News 4/2021).

The report addresses a number of issues already identified in a study by the European Commission in May 2018 (see report in EWC News 2/2018). Key demands of the European Trade Union Confederation presented in March 2017 are also taken into account (see report in EWC News 1/2017). Radtke proposes the following amendments to the directive:

• Recital 16 is to become an integral part of the text of the Directive as a new Article 7a. This would mean that the transnational competence of the EWC would also apply to such cases where only one country is affected but the measure has a major significance for the workforce throughout Europe.
• Consultation must always take place before the final decision is taken by central management and must be taken into consideration.
• The time for negotiating an EWC agreement is to be reduced from three years to one year.
• The confidentiality obligation will be based in the future on the EU directive on business secrets. Thus, information e.g., on staff reductions is no longer subject to confidentiality (see report in EWC News 4/2020).
• Companies should only classify documents vis-à-vis the EWC as confidential if this is authorised by legally precisely defined regulations of the respective country.
• In case of disagreement on the competence of the EWC, central management must justify precisely why information and consultation is not necessary.
• All EU countries must create administrative and judicial procedures so that the EWC is able to enforce its rights in a timely and effective manner. This includes injunctive relief.
• Court fees, legal fees and travel expenses of at least one EWC representative to attend a court hearing must be borne by central management.
• There are provisions for penalties of up to €10 million or 2% of total annual worldwide turnover, and double that in the case of intentional infringements. This largely corresponds to the provisions of the EU General Data Protection Regulation (see report in EWC News 4/2020).
• Voluntary EWC agreements will only be grandfathered if they fully comply with the standard of the EWC Directive.
• Plenary meetings of the EWC are to take place twice a year.

Forthcoming event

The contents of the draft legislation will be discussed in detail at the two EWC seminars in autumn 2022.

EWC seminar programmes

The Irish Conservative-Green government now coming under close scrutiny

On 19 May 2022, official infringement proceedings were opened against the Republic of Ireland. The European Commission has requested that the government submit a response within two months, since the European Works Council Directive has apparently not been transposed into national law in conformity with EU law. If this were to be confirmed, the Irish EWC Act (TICEA) would have to be amended immediately. Otherwise, the European Commission could refer the matter to the European Court of Justice for sanctions to be imposed on Ireland. This is the first legal case of its kind on the EWC Directive ever brought against a country.

The infringement proceedings stem from a complaint by the Irish trade union SIPTU against the building materials manufacturer Kingspan, which has refused for years to take steps to establish an EWC. The company has expanded in recent years through acquisitions, e.g., takeover of seven factories from the ThyssenKrupp Construction Group. Following a complaint to the Irish government which was unsuccessful, SIPTU turned to the European Commission, criticising the insufficient access to legal recourse and the low sanctions a company faces for breaking the law (see report in EWC News 1/2021).

The explosive nature of the case is also linked to Brexit, which has caused British and US companies to relocate their EWCs from the UK to Ireland on a massive scale. As a result, this has moved the country from 13th to third place in the EU, after Germany and France. The question of appropriate sanctions, which is also the subject of the case, has never been answered legally and could open a "Pandora's box" for the whole legal field of EWCs and SEs (see report in EWC News 4/2021).

SIPTU trade union press release

European Commission press release (see under point 10)

The process of infringement proceedings

Full text of Irish EWC law

Forthcoming event

The legal situation for European Works Councils under Irish law will be presented at our conference in Dublin from 19 to 21 October 2022.

The conference programme

Parliament debates EWC legislation

22 June 2022 was a historic day for EWC law in Ireland. In Parliament (photo), the Joint Committee on Enterprise, Trade and Employment discussed the issue "Engagement on the issue of European Works Councils and related Irish legislation" and the first instance in labour law, the Workplace Relations Commission (WRC), held a hearing for the first time in history on a complaint filed by a European Works Council.

Representatives of employers and trade unions were invited to the committee hearing, who unanimously reported that the legal process was inadequate and called for more accessible solutions for resolving disputes. The proceedings before the WRC were adjourned until 22 September 2022. First of all, it has to be clarified whether the WRC is competent to deal with such EWC claims at all. If it does not have jurisdiction, the legal action would immediately go before the Irish Labour Court. The plaintiff is the EWC of the US telecommunications company Verizon, which operates on the basis of the subsidiary requirements and is advised by the EWC Academy (see report in EWC News 2/2021).

Video of the committee meeting in Parliament

Discussion in the Senate (Upper House) on 29 June 2022 (see page 666)

Wage Transparency Directive clears another hurdle

On 5 April 2022, with 403 votes in favour, 166 against and 58 abstentions, the European Parliament voted to enter into negotiations with the governments of the EU countries on a proposal for a directive to increase wage transparency, which the European Commission had presented in March 2021 (see report in EWC News 1/2021). In future, companies with 50 or more employees are to eliminate wage differences between women and men and become fully transparent. The European Commission was seeking a threshold of 250 employees.

Companies are to disclose information that enables employees to compare salaries and uncover a possible gender pay gap. The tools for assessing and comparing salary levels should be based on gender-neutral criteria. If pay reports show a pay gap of at least 2.5% (as opposed to the 5% proposed by the Commission), employers must carry out a pay assessment together with the works council and develop an action plan for equality. MEPs propose to ban confidentiality clauses that would prohibit workers from disclosing information about their pay or requesting information about the pay of others. In addition, the burden of proof should be reversed: the employer should have to prove that no discrimination has taken place.

European Parliament press release

Agreement on minimum wage directive

On 7 June 2022, representatives of the Parliament, the Commission and the Member States agreed on the contents of a directive on adequate minimum wages in the EU after an all-night meeting in Strasbourg. Preparatory consultations had already begun in January 2020 (see report in EWC News 3/2020). Nicolas Schmit (photo), Commissioner for Jobs and Social Rights, had then presented a directive in October 2020, which after amendments was adopted in the European Council on 16 June 2022. The European Parliament will vote on the agreement in July 2022, and the final signing is planned for September 2022. The member states subsequently have two years to transpose the directive into national law.
 

Minimum wages are to be fixed at 60% of the median wage or 50% of the average wage in a given country and are to be reviewed every two years, either by the legislator or by the collective bargaining parties of the respective country. However, the directive does not only prescribe minimum wages, but also aims to strengthen collective bargaining in general. All member states where less than 80% of the working population is covered by collective agreements must draw up national action plans to increase collective bargaining coverage (see report in EWC News 4/2021). While trade unions in most EU countries have been demanding this for a long time, the Scandinavian countries have expressed reservations. The Swedish trade union confederation LO stopped paying union dues to the European Trade Union Confederation in protest against the minimum wage directive (see report in EWC News 1/2022). However, the LO Executive Board has since announced that it will end the blockade and pay the dues in arrears.

Report on the Strasbourg agreement

Communication from the European Council with numerous links

Agreement on telework in preparation

On 28 June 2022, the European social partners (three employers' organisations and the European Trade Union Confederation) signed a historic declaration of intent: they commit to negotiate a legally binding EU agreement on "telework and the right to disconnect". The signing took place during the presentation of the 2022-2024 work programme in the presence of the European Commission. Such agreements emanating from the European Social Dialogue can be implemented as an EU directive if there is a joint request to do so from both social partners. This is an alternative legislative procedure. The planned EU agreement builds on the framework agreement on digitalisation concluded by the social partners in June 2020 (see report in EWC News 3/2020).

Press release on the work programme

Historic strike in Finland prevents escape from collective bargaining

On 23 April 2022, 3,000 Finnish workers from UPM, Europe's largest paper group, went back to work for the first time - after 112 days of strike action. Since 1 January 2022, they had brought all of UPM's production facilities in Finland to a standstill, resulting in a loss of €200 million to the company. The company was unable to meet delivery commitments, threatening a paper shortage throughout Europe. The European Printing Industry Federation therefore urged UPM to put an end to the strike. On 25 March 2022, international trade union federations wrote an open letter to the twenty largest shareholders warning of an investment risk. In solidarity with the strikers, EWC members also refused to cooperate with central management.

In October 2020, the Finnish Forest Industries Federation had declared that it would no longer conclude any new sectoral collective agreements. All existing agreements were to be replaced by company-level agreements before the beginning of 2022. Whereas other paper groups complied, UPM management refused to do so (see report in EWC News 2/2021). The dispute was resolved by both parties accepting the proposal of the national arbitrator. It provides for five separate collective agreements, one for each division of the company, with a duration of four years and a renegotiation of wages after two years according to standard industry conditions. UPM therefore did not succeed to raise working hours without an increase in wages nor to completely escape collective bargaining. Nevertheless, 500 employees have been reclassified as senior managers, so that they will not benefit from future collective agreements. They only retain the rights from the grandfathering provisions of previous collective agreements.

The letter to the shareholders

Report on the arbitration result

In the technology sector with companies such as Nokia, Fujitsu or Microsoft, the era of sectoral collective agreements was due to be brought to an end. The employers' association had announced this in March 2021. Nevertheless, a collective agreement was concluded at the last minute on 13 January 2022, because several days of strike action had been announced for the following day.

Report on the new collective agreement

Spanish Industry trade unions replace missing works councils

On 28 March 2022, the Supreme Court in Madrid ruled on the question of who is allowed to negotiate equal opportunity agreements in companies where there is neither a works council nor a trade union. The Spanish Confederation of Business Organisations (CEOE) had taken legal action against the government in order to invalidate parts of a legislative regulation. Since March 2019, companies with 50 or more employees are obliged to draw up an action plan for gender equality and the prevention of sexual harassment in the workplace. The works council or - if present - the central works council are to conduct the negotiation.

But who is to be the employer's negotiating partner if there is neither a works council nor a trade union in the company? The employers' associations were seeking to have an ad hoc committee elected at the workplace, while the government gave the negotiating mandate to the representative trade unions (i.e., to those with collective bargaining capacity in the sector concerned). The collective bargaining capacity of trade unions is not determined by membership figures but, depending on the sector and region, by the results of works council elections, which in Spain are as a consequence referred to as "trade union elections".

The Supreme Court upheld the government's position because an ad hoc committee is not able to replace a collective bargaining party. Although, the ruling was formally about gender equality agreements, the underlying key issue reaches far beyond. Legally speaking equal opportunity action plans are in-house collective agreements. As a result of this ruling, trade unions are now able to negotiate company agreements which are valid for all workers without having a single member within the company. The employers' associations also argued on the grounds of data protection, since personnel data for negotiating Equal Opportunity agreements should not be passed on to external trade unions.

Full text of the ruling

Full text of the regulation

CC.OO. trade union press release