New rules for European Work Councils have been adopted

The European Works Council Directive was first adopted back in 1994 and then revised in 2009. It established European Works Councils (EWCs), bodies representing the European employees of large multinational businesses on transnational matters. Through them, workers can be informed and consulted by management on the progress of the business and any significant decision at European level that could affect their employment or working conditions. The requirements under the Directive apply to multinational companies with at least 1,000 employees operating in at least two EU or EEA countries.   

Despite the attempt to reinforce the information and consultation obligations under the Directive in 2009, the European Parliament felt that further reform was required and so initiated a new process to revise the Directive in 2018.  

On 27 October 2025, the revised Directive was adopted by the EU, although it is considerably less ambitious than the original version (as proposed by European trade unions). For instance, the unions advocated for the right to block management decisions in court. Also, the possibility for judges to impose GDPR-size fines, up to EUR 20 million or 4% of global annual turnover, was ultimately not retained. Nevertheless, the new revised Directive does contain some key changes that employers need to be aware of.  

Previously, companies that had already concluded an agreement on transnational information and consultation at the time the original 1994 directive entered into force were not required to comply with the Directive’s rules. This was known as the ‘Article 13 exemption’ and under the new revised Directive, it will be abolished. Instead, all groups of undertakings that meet the requirements for establishing a EWC will be required to set one up in accordance with the rules of the Directive. This change is expected to impact approximately 350 groups of undertakings.  

That notwithstanding, the so-called Article 13 agreements may remain in effect, if no request to change them is raised. However, employees or employee representatives may request to conclude a new agreement in accordance with the new rules. The same applies to agreements that were concluded or amended between 5 June 2009 and 5 June 2011. 

• The consultation procedure is revised: It had become clear that consultation within EWCs is often ineffective. To resolve this, the consultation process must now enable employee representatives to express an opinion and the company’s central management must provide a reasoned written response to this opinion before any decision can be taken on a transnational matter. 

• Confidentiality must be justified: In the past, companies were found to impose excessively broad confidentiality obligations that hindered genuine consultation. Under the new revised Directive, invoking such obligations must be properly substantiated, particularly when sharing information, for example, with the local works councils and employees, would otherwise be restricted. 

• The definition of ‘transnational’ is revised: EWCs must be consulted on transnational matters. A new definition of ‘transnational’ clarifies that measures affecting employees in one Member State, which may reasonably be expected to have consequences for employees in at least one other Member State, also fall within the scope of consultation with the EWC. However, the concept remains unclear and is likely to give rise to endless discussions in practice. 

• More balanced gender composition: Women are underrepresented in most EWCs. When negotiating or re-negotiating an agreement, measures must now be taken to ensure a balanced representation of men and women within the EWC: 40% of the seats for women and 40% for men. 

• Necessary capacity: EWCs must be provided with the necessary resources to carry out their work. EWC agreements must specify the financial and material resources to be allocated to an EWC, at least with respect to the use of experts, legal costs, and training. 

• Improved access to legal remedies: Member States must notify the EU Commission how rights holders can initiate judicial and, where relevant, administrative proceedings concerning their rights under the Directive. Member States are also required to establish effective, dissuasive, and proportionate sanctions to enforce the Directive.  

During the transitional period between the new revised Directive being published (expected imminently) and becoming effective, new EWCs may need to be established, and existing EWC agreements may need to be re–negotiated. This is expected to be a complex process for many large multinational organisations that are covered by the Directive and so seeking legal advice is important.