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The UK leaves the EU – impact on EWC Agreements

The UK leaves the EU – impact on EWC Agreements

In our Newsflash last week, we asked questions regarding the impact of a possible Brexit on European Works Councils.

The UK has now decided to leave the EU. This means that EWC Agreements covering UK employee representatives, and EWC Agreements operating under UK law must deal with this new reality.

Mr Cameron, the UK Prime Minister, said that in the event of a leave vote, he would activate Article 50 of the 2009 Lisbon Treaty without undue delay, setting in motion the process of withdrawing from the European Union. Once Article 50 is triggered, there is no way back into the EU unless by unanimous consent from all other member states.  But quitting the EU is not an automatic process – it has to be negotiated with the remaining members. These negotiations are meant to be completed within two years but the European Parliament has a veto over any new agreement formalising the relationship between the UK and the EU.

So, depending on when the prime minister triggers Article 50, perhaps in late summer, or early autumn 2016, negotiations will begin in Brussels on the terms of its exit and the nature of the UK’s subsequent relationship with the EU.This would involve not only rescinding the European Communities Act, which gives primacy to EU law in the UK, but also sifting through an estimated 80,000 pages of EU agreements, which have been enacted over the past five decades, to decide which will be repealed, amended or retained – a process which Parliament will want to oversee.

It is estimated that after a period of two years of negotiations, the UK would no longer be bound by existing EU Treaties, unless both the UK itself and the other 27 states agree unanimously to extend the process of negotiations.

So, the question remains if and when the Directive 2009/38/EC will no longer apply to the UK. Taking into account the above, a possible answer is autumn 2018.

That leaves ample time for the two parties to EWC Agreements to find solutions to ensure inclusion of UK employee representatives in EWCs. This could be done, for instance, by adding the UK in the geographical scope of the Agreement.  In addition, in cases where EWCs operate under UK law, Central Management can, for instance, appoint a Representative Agent in a country within the EU.  UK companies would thus operate as US and other non-EU companies do as regards to EWCs.

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