New UK employment regulations implementing the 2009 EU European Works Council (EWC) Directive come into force this Sunday, 5 June. The 2009 Directive stemmed from concerns raised by European trade unions that, under existing EWC legislation, EWCs were being sidelined by management at times of cross-border restructuring and redundancies. The UK Regulations, which implement the 2009 Directive, are very complex and will challenge affected employers, particularly given ongoing European downsizing in the current economic crisis.
Thomas Player, Partner at law firm Eversheds, commented: “Multi-national employers with EWCs must inform and consult worker representatives at a pan-European level on significant transnational matters involving cross-border restructuring, downsizing, mergers, transfers and other issues affecting workers’ interests.
“While many employers with operations across the EU recognise the benefit of informing and consulting with their staff through EWCs, these Regulations add a new layer of complexity and increase the cost of compliance. This is a particular issue given that they contain greater powers for EWCs, stricter duties on employers and a risk of a £100,000 penalty for getting it wrong. The application of the new Regulations remain uncertain in key aspects and create potential complications for organisations that already have EWCs in place. This unsatisfactory state of play reflects a rushed and ill-considered European Directive which has caused difficulties when it comes to national implementation.
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“What’s more, Government figures suggest that 57 per cent of employers falling within the scope of the regulations still do not have an EWC and these organisations remain vulnerable to a request to create an EWC. These organisations need to be aware that trade unions will be working hard to increase the number of EWCs, given their new rights, and vulnerable employers must be prepared. A request for an EWC needs to be taken seriously, with time invested in negotiating an EWC agreement that reduces the risk to the business. Failing which, there is a real risk that the new and demanding information and consultation procedure contained in the regulations could jeopardise commercial decision-making by injecting unacceptable delay during cross-border mergers, acquisitions and other organisational change.”
