Provisional agreement reached on the European Works Council Directive

On 21 May 2025, the Council and the European Parliament reached an agreement on the revision of the European Works Council Directive.

The Directive aims at making the representation of workers in large multinational companies more effective in the event of restructuring operations affecting employees. Here is the main outcome:

   1. Transnational matters:

• Recital 5: “The concept of transnational matters covers those measures which could affect employees in a substantial way, i.e. in a way which does not affect them in a trivial manner and does not only concern individual employees or ordinary operational decisions”
• Article 1 (4) and Recital 5: “matters shall be considered transnational where they can reasonably be expected to concern (…) at least two undertakings (…) in two Member States”
• The provisional agreement considered to some extent employers’ concerns on the definition, regarding the potential overlap between national and European information and consultation processes. It now clarifies that such processes should only apply when the consequences affect workers across national borders.

   2. Legal costs:

• Article 11 (4) and Recital 18a: all costs regarding court disputes (legal representation and participation in judicial or administrative proceedings and costs of participaton) shall be borne by the central management. This introduces a new legal order in several Member States.

   3. Role of mediation and conciliation:

• Article 11 (4) and Recital 17: priority given to Member States guaranteeing access to judicial and administrative proceedings
• Member States are not required to develop well-targeted alternative dispute resolution mechanisms, which should be the preferred mechanisms.

   4. Reinforced consultation procedure:

• Recital 15a: ensures that employers must be able to take decisions effectively, the information and consultation procedure should not result in undue delays in their decisions. It also mentions the principle that the procedure must take place within a reasonable time taking into account the degree of emergency of the matter, meaning that parties should be able to expedite the consultation process in urgent situations
• Article 9 (3): employees’ side is entitled to a reasoned opinion prior to the adoption of the decision, and within a reasonable time, taking into account the degree of urgency of the matter
• The right for employees to provide an opinion might delay procedures.

   5. Confidentiality:

• Article 8a and Recital 12: Member States provide the conditions and limits of the non-disclosure of confidential information ability
• Member States can impose prior judicial or administrative authorisation. This could prevent companies from keeping sensitive information related to the decision-making process confidential without facing delays.

   6. Transitional provisions for existing arrangements:

• Article 14a: the renegotiation of previous agreements can be initiated “at the request of the European Works Council or of at least 100 employees or their representatives in at least 2 undertakings or establishments in at least two different Member States”
• Additional point 4 states that agreements must comply with the Directive’s minimum requirements,
• Employers had called for renegotiations to be initiated either by the company’s social partners or by a majority of employees, to ensure adequate representation of workers across all Member States. However, the provisional agreement maintains the threshold at a request by only 100 employees.

   7. Franchise:

• Recital 3: clarifies that the Directive applies to companies based on franchise agreements falling under the definition of “Community-scale groups of undertakings”
• This definition applies when there is an established dominant influence between the controlling and the controlled undertakings forming the franchise.
• This provision is provided in a non-binding recital, which reflects a modest positive outcome.

Next steps:

• The text will need to be formally approved by the European Council and Parliament
• The text will be published in the European Union Journal

More information:

• Council PR