European Works Councils restructuring to boost unions’ power

Trade union power in Europe could be boosted by the European Commission’s plans for European Works Councils.

The commission has unveiled plans to overhaul laws on European Works Councils (EWCs), which could force many companies to renegotiate the agreements they operate under.

The current directive requires multinational companies operating in Europe with at least 1,000 employees to set up a works council if requested by employees or trade unions. There are more than 800 such councils operating in Europe, with about 100 in UK-based firms.

Clauses in the new directive give unions extra rights to act as ‘expert’ advisers to employees and to attend meetings between employers and employees, even when a company does not recognise a union.

Another provision will force companies with EWCs to renegotiate their agreements when a significant restructuring occurs.

Trade unions have been lobbying the commission to boost the powers of EWCs after mobile phone giant Nokia announced the closure of a major plant in Germany without any prior consultation.

Philip Sack, director of policy at employee consultation specialist ESG, said: “The commission is bowing to the trade union agenda again. Unions see European Works Council as an opportunity to challenge corporate restructuring, and slow down decision-making. EWCs also give unions an opportunity to get a foot in the door at companies where they are not active.

“Many companies will be thinking, why invest and employ people in Europe when the cost of doing so is so much higher than in the rest of the world?”

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