The Ministry of Employment is proposing a new Act on European Works Councils which will replace the current act from 6 June 2011.
The current Act on European Works Councils implemented the previous Council Directive 94/45/EC 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. All employees in Communityscale undertakings and Community-scale groups of undertakings which operate in different Member States are guaranteed the right to information and consultation with respect to transnational matters within the undertaking or the group. For this purpose, a European Works Council consisting of employee representatives or another procedure for informing and consulting employees is established in the undertakings or the groups covered by the act. The new Council Directive 2009/38 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 will replace the former directive from 6 June 2011.
The new act proposes that some terms (transnational matter, information and consultation) should be more specific: A transnational matter is a matter which concerns the entire undertaking or group or at least two of their businesses in two different Member States or, regardless of the number of Member States involved, which is of importance for the European workforce in terms of the scope of its potential effect or which involves transfers of activities between Member States. Information provided to the European Works Council should cover the undertaking's or group's structure, its economic and financial situation, the expected business development, its production and sales in particular. Information to be provided to and consultation with the European Works Council should deal in particular with the employment situation and its anticipated development, including investment and important organisational changes, introduction of new working methods or production procedures, production transfers, mergers, down-sizing and the winding-up of companies, businesses or important parts thereof as well as collective dismissals.
Several new provisions are also proposed: the undertaking, or the group's controlling undertaking will initiate negotiations with a view to establishing a European Works Council or an information and consultation procedure on its own initiative or at the request of the employees. New negotiations will be initiated in the event of substantial restructurings in the undertaking or the group of undertakings, unless a valid agreement stipulates how such a situation is to be handled. A substantial restructuring can be a merger, an acquisition or a division. During the negotiations of the new agreement where there is a substantial restructuring, the existing agreement on information and consultation will continue to apply with the possible adjustments which the parties have agreed upon.
Before and after any meeting with the central management, the special negotiating body will be entitled to meet alone, using any necessary means for communication. Members of the special negotiating body and the European Works Council will now also be entitled to any training that is necessary to enable them to fulfil their roles.
Just like in the current act, Community-scale undertakings and Community-scale groups of undertakings can impose confidentiality on employee representatives and experts if that is necessary and in the company's best interests. The confidentiality obligation under the new act will, however, continue to apply even after the expiry of the terms of office of those employee representatives and experts.
In the event that an undertaking or a group of undertakings has an agreement which expires without being revised or replaced by a new agreement, the act shall apply in its entirety to the undertaking or the group of undertakings. This means that the supplementary provisions of the act (on the composition of the European Works Council, its work, etc.) can apply after six months in the event that the undertaking refuses to commence negotiations, after three years if the parties are unable to conclude an agreement, or from the point in time when the parties jointly decide that the current provisions shall apply.
Under the proposed act, Community-scale undertakings and Community-scale groups of undertakings which already have certain agreements for transnational information and consultation of employees will be exempted from the main part of the act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
