The obligation to set up a European Works Council (EWC) or to establish a transnational information and consultation procedure concerns Community-scale undertakings and groups of undertakings and has been implemented by Directive 2009/38/EC [which was then transposed into national legislations, notably French Legislation in Articles L. 2341-1 and seq. of the Labor Code].
Therefore, since the UK’s exit from the European Union, there are no more rules concerning the information-consultation of British employees working in European firms and groups as the country regains the status of a non-European country, except when the national legislation of a country expressly refers to the United Kingdom.
It is not the case of French Legislation as provisions of the French Labor Code relating to European Works Councils only refer to “Member States of the European Community or the European Economic Area", no specific mention being made regarding the UK which therefore does not benefit from any specific provision.
This has thus consequences regarding European Works Councils subject to French legislation.
Establishment of new European Works Councils since 1st January 2021
A European Works Council must be established where there are at least 1,000 employees in the European Union (EU) or the European Economic Area (EEA) and when at least two companies (or two establishments) in two different countries have at least 150 employees each (Articles L. 2341-1 and 2 of the French Labor Code).
As a consequence of Brexit since 1st January 2021, these rules apply without taking into account the British workforce which means that employees working in UK are therefore no longer taken into account as employees within the meaning of Directive 2009/38/EC relating to the establishment of European Works Councils and related Articles of the French Labor Code.
This interpretation has been confirmed by a communication made by the European Commission entitled "UK withdrawal and EU rules on European Works Councils" dated April 2020.
In addition, French Government’s website relating to the preparation for Brexit also makes it clear that the exclusion of UK employees from the calculation of the workforce applies in the context of the establishment of an EWC subject to the French Legislation.
This means that for certain groups the obligation to implement a European Works Council might no longer exist, due to the exclusion of UK employees.
Consequences for European Works Councils existing before Brexit
- Survival of the existing bodies
For existing European Works Councils, the application of the abovementioned rules should result in the immediate abolition of these bodies which, without taking into account the UK workforce, no longer meet the minimum thresholds. This solution should also apply as regard to British staff representatives sitting in existing EWC.
However, the abolition of a European Works Council is not automatic. Indeed, under French Legislation, it can only be done by agreement or by referring the matter to the Labor Administration, being specified that the abolition appears to be more of an option than an obligation. Directive 2009/38/EC does not contain any specific provision in this regard.
As a consequence, the abolition of existing EWCs appears to be a possibility left to the parties concerned.
- Fate of British representatives
Regarding British representatives sitting in existing EWCs, the communication of the European Commission distinguishes depending on whether these bodies have been established by a collective agreement or not:
- In the absence of an agreement (or without a specific provision or a possible renegotiation clause), the European Works Councils are still entitled to consider the exit of British representatives [being however specified that the question of the timing of this exit remains unclear (immediate exit from 1 January 2021 or at the end of their office…)]. In this regard, Article 13 of Directive 2009/38/EC indeed allows negotiations to be initiated, particularly at the request of employees, in the event of "significant changes in the structure of the Community-scale undertaking or Community-scale group of undertakings".
- If the EWC has been implemented by an agreement that expressly envisages Brexit (or similar situations) or the consequences of a change in its scope, it should be referred to this agreement. There are therefore as many possibilities as there are agreements, but it is likely that the majority of agreements will refer to negotiation. In this regard, the European Commission stated in its communication that: "Directive 2009/38/EC allows the participation of representatives from third countries in European Works Councils. Therefore, representatives from the UK will be able to participate in European Works Councils where the relevant agreement (…) so provides”.
Negotiations have already been launched in many EWCs, such as those of Total, Coca-Cola and Bombardier (Are European Works Council ready for Brexit, an inside look, ETUI Policy Brief, European Economic, Employment and Social Policy n° 6/2020).
It should be underlined that the European Industry Federations have stressed the need to retain UK representatives on the EWC (Managing the impact of Brexit on multinational companies, Recommendations from the European Industry Federations to coordinators and workers' representatives, January 2021).
- Role of the UK representatives within existing EWCs
If as a result of the negotiations, it is agreed that UK representatives remain, it will also be necessary to determine their actual role within this body (for example simple observers, voting rights or not…).
In this area, existing provisions are quite vague as the European Commission's communication refers to "participation" while Article L. 2344-1 of the French Labor Code provides for the “association” of non-EU representatives, without giving them voting right. Again, it seems that a negotiation will be necessary to clarify this point.