TRILOGUE CONSENSUS MARKS TURNING POINT IN THE LEGISLATIVE PROCESS
1. POLITICAL BREAKTHROUGH: (ALMOST) FINAL TEXT OF THE DRAFT REVISED DIRECTIVE ON EUROPEAN WORKS COUNCILS
On 28 May 2025, the European Parliament, Council and Commission reached a political agreement on the long-anticipated revision of Directive 2009/38/EC (the Current Directive) on European Works Councils (EWCs). The compromise text, published in Council document ST 9565/2025 INIT on 2 June 2025 (Draft 2025 Directive), reflects the outcome of interinstitutional negotiations. This agreement is widely expected to mark the final stage of the content of the legislative draft, with only minor amendments likely during the formal adoption. Confirming the political agreement, the European Parliament's Employment and Social Affairs Committee voted in favour of the proposal on 5 June 2025, followed by approval of the Council (EPSCO) on 19 June 2025. The European Parliament's first reading is scheduled for 8 September 2025, and the revised directive is anticipated to enter into force by the end of 2025 or early 2026.
The EWC directive, originally enacted in 1994 and revised in 2009, establishes transnational information and consultation rights for employees in multinational undertakings. It applies to (groups of) undertakings with at least 1,000 employees in the EU/EEA and at least 150 employees in each of at least two Member States.
The revision process was initiated following a request by the European Parliament which called on the Commission to address concerns regarding the Current Directive's enforcement mechanisms and ambiguous definitions. In response, and following the consultation with the European social partners, the Commission published a proposal in January 2024. Subsequently, the Parliament's Committee on Employment and Social Affairs (EMPL) signalled the need for further amendments, but a final position was postponed until after the June 2024 European elections. Meanwhile, the Belgian Presidency of the Council introduced its own compromise proposal in June 2024 (see also the comparison of the three positions). The political agreement now reached reflects the convergence of these positions.
2. KEY FEATURES OF THE REVISED DIRECTIVE (BASED ON THE INTERINSTITUTIONAL AGREEMENT)
The Draft 2025 Directive includes a proposal for a series of significant reforms. These aim to improve the enforceability of EWCs rights, while maintaining the Current Directive's focus on genuinely transnational matters.
a) Definition of "controlling undertaking"
A new criterion for establishing "dominant influence" when identifying a group of undertakings will be introduced. Under the Draft 2025 Directive, the existence of "decisions" that govern the relationship between companies – such as those found in franchise or licence agreements in the case of the application of uniform business methods under a common business name – might be enough to constitute a "group". This means that it is no longer necessary to rely solely on formal rules or financial participation; the presence of decision-making authority alone may be sufficient.
b) End of exemptions for "grandfathered" Article 13 EWC Agreements
So-called "grandfathered" agreements – i.e. EWC agreements concluded prior to the date of application of Directive 94/45/EC (22 September 1996) – will lose their exempt status currently granted under Article 14 of the Current Directive giving the employees of (groups of) undertakings the right to initiate negotiations for a (new) EWC.
- Where such negotiations pursuant to Article 5 of the Current Directive are initiated, the subsidiary requirements apply after two years, rather than three, if no agreement is reached between the (group of) undertaking(s) and the special negotiation body (SNB).
- Importantly, the initiation of negotiations does not affect the validity of the existing agreement during the negotiation period.
c) Adaptation of (other) existing EWC agreements
Where existing EWC agreements fail to address the newly inserted minimum content requirements (see below, Article 6 of the Draft 2025 Directive), they must be adapted on the basis of a two-year renegotiation procedure at the request of:
- the EWC,
- the central management of the (group of) undertaking(s), or
- 100 employees or their representatives from at least two Member States.
Where the EWC agreement contains procedural arrangements for its adaptation or renegotiation, the adaptation is negotiated pursuant to those arrangements. Furthermore, such negotiations may be limited to addressing in the agreement those elements and requirements for EWC Agreements – including those that were inserted with the Draft 2025 Directive. When negotiations fail, the subsidiary requirements apply.
d) Transnational Matters, Enhanced Consultation, and New Support Measures
- Revised Definition of "Transnational
Matters":The requirement for transnational relevance
remains, but is interpreted more generously:
- Firstly, the draft reflects a shift in focus: rather than requiring an actual impact in multiple Member States, it is now sufficient that such an impact "can reasonably be expected". This introduces a forward-looking, anticipatory element, meaning that even if the impact has not yet materialised, the potential for such an impact is sufficient to trigger the definition.
- Secondly, the operative definition in Article 1 (4) of the Current Directive is expanded to include not only direct but also indirect crossborder effects: a presumption of transnationality now applies where a measure can reasonably be expected to affect workers in one Member State, and workers in at least one other Member State can reasonably be expected to be affected by the consequences of those measures.
- Even though this new definition is in line with Recital 16 of the Current Directive, the reference to indirect effects will make it difficult for companies to determine when and if the scope of the EWCs rights is triggered.
- Enhanced Information and Consultation Rights:
The definitions of "information" and
"consultation" are also broadened:
- Information must be given at such time, in such fashion and with such content as are appropriate to allow an "in-depth assessment of their possible impact" and, where applicable, timely preparation for consultation.
- Consultation must take place at such time, in such fashion and
with such content as enables the EWC to express their opinion prior
to the adoption of the management decision, and the EWC must
receive a "reasoned" written response.
These proposed changes – especially the need for a reasoned written response – might delay the taking and implementation of necessary business decisions in the future. Furthermore, it should be noted that the subsidiary requirements now also cover information and consultation on the following matters: "anticipation of change and management of restructuring processes including those linked to the green and digital transitions, substantial changes concerning working conditions, notably to work organization or contractual relations"
- Meeting Frequency: According to the draft, EWCs must now meet in person at least twice per year (as opposed to once, as was the case previously). Video conferences and/or hybrid formats can be used in "exceptional cases" for holding such ordinary meetings – however, only where agreed upon with the EWC.
- Financial and Material Support: EWC agreements
must explicitly address the reasonable costs for experts (i.e. the
limit of only one expert paid by the central management is
removed), including for legal experts, as well as training for EWC
members. According to the subsidiary requirements, the (group
of) undertaking(s) is expressly required to bear:
- training costs,
- reasonable costs of legal experts, and
- travel, accommodation, interpretation, and meeting organisation
expenses.
Furthermore, EWC members must not suffer any loss of pay due to their participation in EWC activities.
These obligations extend to pre-Directive agreements and may require formal amendment of existing EWC agreements to ensure compliance during the transposition period.
- Trade union representatives: The Draft 2025
Directive includes in the updated subsidiary requirements that
experts assisting the EWC and the select committee may
include
representatives of recognised Union-level trade union organisations (e.g. ETUC). At the request of the EWC, such experts shall have a right to be present at meetings of the EWC and meetings with the central management in an advisory capacity – and may no longer be excluded from such meetings.
- Stricter Confidentiality Rules: Management can
still classify information as confidential, but must now:
- justify such classification,
- define duration and scope, and
- inform the EWC of reasons for the treatment of information as confidential.
- Disclosure may only be withheld if it would seriously harm the functioning of the undertaking – removing the prior, vaguer standard of "prejudicial impact" (Article 8 (2) of the Current Directive). In the case of non-disclosure, the EWC must be informed of the fact that the information is being withheld and provided with the underlying justification. Composition and Gender Balance: A new provision introduces a 40% gender balance target for EWCs, the select committee, and SNBs. While not mandatory, the EWC / the SNB must justify in writing any failure to achieve this balance.
e) Legal Enforcement and Sanctions
The Draft 2025 Directive reinforces the enforcement regime:
- Member States must ensure effective, dissuasive and proportionate penalties, including pecuniary sanctions. In the case of financial sanctions, criteria must include the annual turnover of the sanctioned (group of) undertaking(s) or must ensure that the applicable sanctions have a similarly dissuasive nature.
- Access to judicial and/or administrative proceedings must be timely, with legal costs – including costs of legal representation and participation in such proceedings – borne by the (group of) undertaking(s) where reasonable. In some jurisdictions, this question has so far been unclear.
- Confidentiality and non-disclosure decisions are subject to judicial appeal, which must not undermine the effectiveness of information and consultation rights.
The Directive does not include an express right to suspend management decisions via preliminary injunctions, despite recommendations from the European Parliament. Some national Employers' Associations had argued that such a preliminary injunction would change the nature of EWCs to more closely resemble a body of codetermination rather than information and consultation.
3. IMPLEMENTATION TIMELINE AND PRACTICAL CONSEQUENCES
Once formally adopted – potentially by the end of 2025 or early 2026 – the Draft 2025 Directive will require Member States to transpose its provisions within two years. However, in theory, this does not automatically mean that companies will be required to comply immediately with all new obligations once the transposition deadline expires:
- In most cases, the new provisions will not apply until one additional year after the end of the transposition period. This means that, for most practical purposes, the new regime will not become applicable before late 2028, thereby giving employers and employee representatives sufficient time to review, renegotiate, or initiate new agreements in line with the revised minimum standards.
- An important exception applies to the abolition of the exemption for grandfathered agreements (Article 14 Current Directive). These provisions will already become applicable immediately after the end of the two-year transposition period – effectively giving (groups of) undertakings with grandfathered agreements only two years from formal adoption to adapt to the new rules. This shortened timeline makes early preparation particularly important for affected companies.
Although the initiative for revising or establishing an EWC still formally lies with employees or their representatives, companies should nevertheless begin assessing potential exposure and prepare internally. Depending on the situation, undertakings essentially face two options:
- maintain the current EWC agreement and await a formal request for renegotiation by the employee side; or
- proactively initiate a review and alignment of the current EWC agreement with the revised minimum standards.
The first option is often administratively easier, as no obligation to renegotiate arises automatically. However, proactive alignment may be preferable in certain cases – especially where there is a risk of parallel bodies (e.g. an existing EWC under the current regime and a new SNB). In particular, the existing EWC will not necessarily serve as the negotiating body under the revised Directive, which could lead to negotiation complexity and duplication of structures for up to two years.
For (groups of) undertakings currently negotiating new EWC agreements – or entering into such negotiations until the entry into force of the Draft 2025 Directive – it is strongly recommended to proactively align the content of these agreements with the future requirements – to avoid renegotiations in 2028.
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