Key substantive changes introduced by the revised EWC Directive
The reform is not limited to renegotiation mechanics. It also strengthens the substantive rights of EWCs and clarifies the obligations of central management.
Expanded scope of “transnational matters”
The revised EWC Directive clarifies and broadens the notion of “transnational matters”, which determines when information and consultation at EWC level is required.
A matter qualifies as transnational where it affects employees in more than one Member State, or where a decision taken in one Member State is likely to have a substantial impact on employees in at least one other Member State.
The revised EWC Directive places greater emphasis on the cross-border effects of management decisions, rather than solely on where a decision is formally taken. As a result, measures such as reorganizations, relocations of activities, site closures, or centralization of functions may more readily qualify as transnational where they have consequences for employees in multiple Member States.
Revised assessment of “dominant influence”
The revised EWC Directive broadens the concept of dominant influence, which now may be established through decision-making authority alone, including contractual arrangements such as franchises or licenses, even without ownership or financial participation. This means that a parent company can bring a subsidiary under EWC scope if it effectively controls key business decisions.
The aim is to prevent circumvention of EWC obligations through complex corporate structures and ensure that all entities under genuine central management influence are properly consulted on transnational matters.
Gender balance obligations
The revised EWC Directive requires EWC agreements to aim for at least 40% representation of each gender, including in any select committee. Where this objective is not met, the EWC must provide written justification. Employers should therefore consider gender balance when establishing or revising EWC agreements to ensure fair representation and demonstrate compliance with the Directive’s equality objectives.
Strengthened information and consultation rights
The revised EWC Directive reinforces both information and consultation obligations. Central management must provide employee representatives with information in a timely manner, in a suitable format, and with sufficient content to allow them to understand and assess the planned measures and their likely effects.
Consultation must take place before any final decision is taken.
Where the EWC issues an opinion within a reasonable timeframe, central management must provide a reasoned response and must do so before the decision is finalized. This obligation requires genuine engagement and cannot be satisfied by a mere acknowledgement.
Strict limitations on confidentiality
Information may only be classified as confidential where its disclosure would seriously harm the undertaking or group. Any confidentiality restriction must be objectively justified.
By limiting the use of confidentiality, the Directive aims to enhance transparency and strengthen the EWC’s role in meaningful consultation.
Access to justice and sanctions
Member States must ensure that EWCs are able to initiate judicial (and, where appropriate, administrative) proceedings to enforce their rights.
Sanctions must be effective, proportionate and dissuasive, considering the gravity, duration, consequences, and intentional or negligent nature of the infringement.
Mandatory cost coverage
Central management must bear all costs relating to the establishment and operation of the EWC, including costs relating to training, expert assistance, interpretation, and legal representation.