A revised EWC Directive to be formally adopted

Significant changes to the functioning of EWCs expected 

Author: Sofia Pedersen, Partner & Head of Emplyment, MAQS Advokatbyrå

The revision of the European Works Council Directive, 2009/38/EC, is edging closer to completion after the European Parliament and Council reached a political agreement regarding proposed amendments. The revised directive will result in several important and practical changes to the establishment and functioning of European Work Councils (“EWCs”), as predicted at earlier stages of the legislative process [link to previous article].

Timeline for the revised EWC Directive 

The updated EWC Directive has not been formally adopted yet. However, a provisional agreement was reached between the European Parliament and Council on May 21, 2025. Once approved this autumn, the revised directive is anticipated to be published in the Official Journal of the European Union, and it will become effective two years from the date of publication. Many of the amendments will impact companies in late 2028, although certain provisions, like the employees' right to request modifications to existing EWC agreements, might be applicable as soon as 2027.

Action required for companies with an “old” EWC 

Companies that have already established a system for social dialogues before 1996 currently do not need to implement an EWC. The revised directive will enable a process for negotiation of an EWC agreement in accordance with the revised directive, removing the current exemption. This means that such pre-directive agreements might be overseen and, in most cases, revised.

Main changes

The term "dominant influence" is set to include a new criterion when defining a controlling undertaking, with determining factor being the existence of rules and decisions rather than ownership or financial participation.

Consultation within an EWC is limited to transnational matters, a term that is extended to have a bigger scope, from decisions with direct effect on employees in at least two member states to situations where decisions in one member state could have consequences (hence an indirect effect) on employees in another member state. This change is likely to create confusion, as indirect effects can be difficult to foresee. It may also result in increased administration, additional matters to consult with the EWC, and ultimately a risk of delaying the change process.

Other notable changes and obstacles include:

• New EWCs must aim for 40% representation of each gender, posing challenges due to varying national rules on employee representative elections that employers cannot impact.
• Strengthened provisions for employer-funded access to judicial proceedings may delay processes and increase legal risks.
• EWC agreements must detail financial and material resources, potentially raising operational costs.
• EWCs will require both employee representative opinions and management responses, potentially complicating and prolonging consultation processes. 

Risk of unwanted disclosure of information and other remaining concerns

New confidentiality rules will challenge companies in withholding information, as reasons for non-transmission must be disclosed. Navigating these requirements without compromising confidentiality may necessitate legal guidance. Similar complexities arise in determining transnational matters.

Stay informed 

The revised directive undoubtedly raises requirements for affected companies. Whether these increased demands will strengthen the social dialogue intended by the EWC Directive remains uncertain. The directive is likely to increase administrative burdens, delay decision-making, and elevate costs, potentially impacting European companies' competitiveness globally. We advise companies to proactively monitor updates, review current EWC agreements, and strategize to prepare for impending changes.

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Author: Sofia Pedersen, Partner & Head of Employment, MAQS Advokatbyrå
Former in-house lawyer with extensive experience working hands on with EWCs over the last nine years, including negotiating of new EWC agreements under Swedish law, leading EWC plenary meetings, responsible for the EWC dialogue on both a strategic and operational level as well as actively involved in both European and national legislative processes through business networks and associations.