Since 1 January 2021, the UK is finally no longer a member of the European Economic Area.

This has consequences for European Works Councils (EWCs).

 

1) Position of UK employees

Most EWCs define their scope as the countries of the European Economic Area (EEA).  If your EWC has not adapted that definition to today’s reality of an EEA without the UK, it means that the UK EWC members are no longer a part of your EWC.

However, as the European Commission mentioned in their notice to stakeholders:

Withdrawal of the United Kingdom and EU rules on European Works Councils:
Directive 2009/38/EC allows for the participation of representatives from third countries in European Works Councils. Therefore, representatives from the United Kingdom will be able to take part in European Works Councils, where the relevant agreement referred to in Article 6 of Directive 2009/38/EC so provides.
 

If you want to have the UK employees represented in your EWC, have you provided for the necessary adaptation of your EWC Agreement? 

 

2) Applicable law in case a EWC Agreement has UK law as its applicable law

Unfortunately, if companies have not yet voluntarily made the choice for a Representative Agent within one of the EEA countries where the company has employees, the following applies as mentioned in the Joint European Trade Union Federations’ Recommendations to EWC/SE Coordinators and worker representatives in SNBs, EWCs and SEs on Managing the impact of Brexit on multinational companies - January 2021:

"As of 1 January 2021, in accordance with guidance from the European Commission, those EWCs that previously had their central management (or designated representative agent) located in the UK will be transferred to another Member State of the Europe Union. In the event that central management had not designated the new EU Member State where their representative agent will be located as from 1 January 2021, in accordance with guidance from the European Commission, the role will be assumed by the Member State with the largest number of employees."

 

3) Thresholds

If a company no longer meets the threshold of 1000 employees in the EEA when the UK employee numbers are no longer counted, the European Commission says:

As a consequence, should the relevant thresholds no longer be met at the end of the transition period, a European Works Council, even if already established, will no longer be subject to the rights and obligations stemming from the application of Directive 2009/38/EC. That works council may continue to function under the relevant national law.

The end of the transition period may also impact the duty on the part of the central management to initiate negotiations for the establishment of a European Works Council or an information and consultation procedure which presupposes a written request of at least 100 employees or their representatives in at least two undertakings or establishments in at least two different Member States (Article 5(1) of Directive 2009/38/EC).

The European Trade Union Federations confirm that : “In some instances, the mere existence of the EWC might be called into question as a consequence of the UK leaving the EU. Should the UK headcount no longer be taken into account, some multinational companies will fall below the threshold for establishing an EWC (at least 1,000 employees in the EU/EEA; in at least two undertakings in two different countries with at least 150 employees each). Uncertainty prevails as to the concrete consequences this may have.”

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