In order to set up a European Works Council (EWC), the central management of a company has to initiate negotiations with its employees’ representatives. This can happen at central management’s own initiative, or at the written request of at least 100 employees or their representatives in at least two of the company’s establishments, in at least two different Member States. Once the intention of setting up an EWC has been formulated, the EWC Directive (2009/38/EC) stipulates that a Special Negotiating Body is to be set up to negotiate the agreement that will serve as the basis for the future EWC’s work. The EWC Directive also provides a number of guidelines with regards to how the members of an SNB are to be elected or appointed.
In this article, I will give a short overview of the main elements that the Directive mentions with regards to the composition, the purpose and the working method of an SNB. Near the end, I will make some remarks on the intervention of external experts in the negotiation process and on what happens when central management and the SNB fail to reach an agreement.
The basic idea is that whoever becomes a member to the SNB, has the competence and skills to represent the employees from their establishment or country during the negotiation of the EWC agreement. The Directive leaves it up to Member States to elect or appoint SNB members according to their own labour laws and employee representation traditions. Whereas in some countries SNB members are elected through a ballot amongst the whole workforce, in others it may be that the trade union appoints one of their members, or that a representative from a local or central works council is invited to negotiate at the European level. On the number of SNB Members, the EWC Directive only says that it should be ‘in proportion to’ the number of employees of the company in each Member State. In any case, at the beginning of the negotiation process, both management and the competent European workers’ and employers’ organisations are to be informed of the composition of the SNB.
The main purpose of the SNB is to negotiate with central management on the scope, the composition, the functions and the term of office of the future European Works Council. These should be configured so as to put in place a structure and procedure for the information and consultation of Europe-based employees.
Central management has to convene at least one meeting with the SNB to discuss and negotiate the establishment of an EWC agreement. It is common for SNBs to meet on several occasions in the three years’ time slot that they have to come to an agreement. The Directive stipulates that SNB members should be given the opportunity and the necessary means of communication (e.g. interpreters, training) to meet without representatives of central management before and after any meeting. The expenses related to the negotiations are to be borne by Central Management.
The Directive states that the Special Negotiating Body may request assistance from experts of its choice, and makes reference to representatives from Community-level (i.e. European) trade union organisations, who –when they are needed- intervene in an advisory capacity. The Member States may lay down budgetary rules that limit the funding to cover one expert only.
No agreement – other scenarios
There are 4 scenarios in which the working method differs from what is described above:
- Central management convenes a meeting with the Special Negotiating Body, and the latter decides by two thirds of the votes not to open negotiations. This effectively stops the whole procedure and means that, unless both parties agree on a shorter period, no new requests to convene an SNB may be made in the two years following the refusal to start negotiations.
- Central management and the SNB decide that they’d rather adopt the subsidiary requirements laid down in the legislation of the Member State where central management is based. These requirements are general provisions that are not company-specific.
- Central management refuses to commence negotiations in spite of the written request by its employees. If the former fail to start negotiations within six months of the written request, the subsidiary requirements of the legislation of the Member State where central management is based, apply.
- No agreement is concluded in the 3 years following the date of the written request. The subsidiary requirements laid down in the legislation of the Member State where central management is based, apply.
These are the basic elements that concern the SNB. If you would like to read the full text of the Directive, download it here.