The revised EWC Directive: the story of a shifted Overton window?

The revision of the EWC Directive 2009/38 has come to a close with an agreement reached on 21 May as a result of the trilogue (between European Parliament, Commission and Council). The draft agreement for a revised Directive (‘the Revision’ or ‘the Revised Directive’) was published on 28 May 2025; it is in the process of being formally approved by the Council and the Parliament and no further changes are expected.

1.  Many commentators appear to be relieved with the result. At the outset, in February 2023 with the Radtke Report of the European Parliament, the business community was horrified by the prospect of a revised Directive with remedies and sanctions mechanisms which would fundamentally change the existing model of cross-border EU level information/consultation towards a bargaining forum with threats of injunctive relief, draconic penalties and harsh sanctions.   The Parliament held on to those concepts throughout the trilogue, but did not prevail. 

Does this mean that the Revision is like the elephant having given birth to a mouse? We do not necessarily believe so, with a closer look at the changes it brings to the current legal framework. These changes require attention and in some cases action as they affect - sometimes quite fundamentally - both existing EWC agreements (any of the current about 1,200 agreements) as well as new to be negotiated EWC agreements. 

2. The most important change for those companies which operate an ‘old’ EWC is the fate reserved for the so-called legacy agreements (the ‘Article 13’ pre-Directive agreements concluded before end September 1996[1]), which still account for over 30% of currently active EWC agreements.   Under the Revision, a process for negotiation of a proper EWC agreement can be launched any time (under the basic rules of a central management initiative or the formal request from over 100 employees from two member states), but the deadline to complete the negotiation is limited to two years (instead of 3 years) from the launch date onwards.  So, there is no automatic abolishment of such legacy agreements as the Parliament advocated. Failure to reach agreement within the above deadline leads to the application of the (new) subsidiary requirements (see below).

On the face of it, businesses with such legacy agreements thus appear to have 3 possible courses of action, i.e. (i) wait for the Revised Directive to come into effect and await the request for negotiation of a proper EWC agreement (to be concluded by end 2029, see below), or (ii) pro-actively start negotiations for an update of the existing pre-Directive agreement to accommodate the rules of the Revised Directive and preserve absolute continuity in cross-border EU level I/C (without strict deadline), or (ii) most likely the least obvious option, give termination on the current agreement and subsequently start negotiations for a proper EWC agreement (with the 3-year deadline), most probably then applying the new rules of the Revised Directive (see below).    

3. Similarly, for current EWC agreements (governed by Directive 94/45 or Directive 2009/38), the Revision requires that these agreements be amended on several points, not automatically, but through negotiation at the request of the EWC or of at least 100 employees from at least two EU jurisdictions, also within a time limit of two years (as for the legacy agreements).  These amendments are only required to the extent the points at stake are not yet covered contractually, notably:

• the linkage between the procedure of and arrangements for I/C at EWC level and with national representative bodies,
• the financial resources to be allocated to the EWC, incl the participation (and cost) of legal experts and representatives of recognised Union level trade unions, training costs etc. (see below),
• the date of entry into force, duration, extension, arrangements and procedure for termination and renegotiation,
• the arrangements for attaining the objective of a better gender balance (in employee representation) of at least 40% women. 

Obviously, the limited scope for negotiation which the Revision sets as a minimum requirement would not stop the contracting parties from broadening these negotiations to other new rules under the Revision (see below). 

4. The major new rules amending the 2009 Directive, as reflected in the Revision, can be summarised as follows:

• A new determining factor of ‘dominant influence’ for identifying a group of undertakings: the existence of rules and decisions - rather than ownership or financial participation - governing the relationship between companies (e.g. in franchise or distributorship arrangements) can be sufficient to have a ‘group’ for these purposes, subject to evidence brought by the party claiming dominant influence on that account, 
• The notion of ‘transnationality’ is extended to situations where measures contemplated have direct effect in one member state and workers in another member state can be expected to be affected by the consequences of such measures,
• The notion of ‘consultation’ is extended in that it not only requires an opinion from the employee representatives to be completed, but also a reasoned response from management to that opinion (unless the opinion itself is issued outside of a reasonable time frame)
• Full cost allocation to management, the Revised Directive confirming and detailing management’s liability for all costs involved in the set-up and operation of an EWC, incl all expenses in connection with the operation of the SNB; reasonable fees and cost of technical and legal experts assisting the SNB, the EWC and the select committee in all of their workings; accommodation, travel, meeting, interpretation facilities, and training expenses for SNB and EWC representatives; the cost of legal representation in case of proceedings against management;  all of these costs and expenses just to be reported to management (without any prior approval nor agreement from management)
• Restrictions to confidentiality of data and information: the communication of confidential information to SNB and EWC members must specify the objective criteria justifying the confidential nature of the information, and the duration of their confidential nature; for business sensitive information which management is allowed not to communicate, the reasons for non-transmission must be given. 

Particular media attention was given to the enforcement section of the draft revision. In the final text, the rules are far less comprehensive, quite open, and vague, without any reference to injunctive relief or GDPR-like penalties, nor to exclusion from public tenders as a sanction. The text is leaving it to the member states to ensure that (i) adequate procedures to enable the enforcement of rights under the Directive are available (where ADR cannot exclude judicial proceedings) and that (ii) dissuasive, effective and proportionate financial penalties are applicable to sanction the infringement of the national laws transposing the Directive. In doing so, the gravity, duration, consequences and (intentional of negligent) nature of the offence shall be considered, as well the annual turnover of the sanctioned business. 

Finally, the Revision also impacts Annex 1 (subsidiary requirements), the default provisions which come into apply when negotiations fail (or as a reference and leverage base for the trade union movement in negotiations). In the subsidiary requirements, the following amendments appear to be the most important:

• the subject matter scope of I/C is extended to also encompass ‘anticipation of change and management of restructuring processes incl those linked to the green and digital transitions, substantial changes concerning working conditions…. and collective redundancies incl in controlled undertakings’:
• at least two in person meetings of the EWC per year, but subject to agreement, the possibility of having virtual meetings in exceptional cases,
• unlimited support by (technical, legal or other) experts to the EWC and the select committee, and the limit of a single expert paid for by management was removed.

5. The above rules will definitely apply to any new, to be established EWC, in theory after the entry into force of the Revised Directive and of its transposing national laws (so in theory only as from 2028 onwards). It can be expected though that the trade union movement will attempt to incorporate the above rules and principles in any new EWC agreement as of the date of the Revised Directive’s formal publication. 

Whether the above rules and principles will also apply by law to existing EWC agreements (beyond any negotiated inclusion in such agreements) is not that clear and will depend on the rule/principle at stake. For instance, the rules on remedies, sanctions and penalties will presumably by law apply to any EWC agreement as of the date of entry into force of the relevant transposing national legislation – but that is left to the national legislators.  On the other hand, since existing EWC agreements are not mandatorily to be amended on the notions of ‘transnational’ or ‘consultation’, these rules will not as such be applicable to existing agreements, unless they are amended on those issues.  More difficult is the question around restrictions on confidentiality. Currently, the law governing the EWC agreement sets out rules on confidentiality of information (its principles, restrictions, recourse, etc.). Quite often, EWC agreements themselves finetune, nuance or deviate from such regulations on confidentiality. The Revised Directive appears to leave less room for contractual nuances or deviation from the amended confidentiality rules.  

6. Going forward, the revised Directive is expected, after formal approval, to be published in the OJ in the Autumn of 2025, meaning that the new Directive needs to be transposed into the national laws of the member states roughly before end 2027. For legacy ‘Article 13’ agreements and for existing EWC agreements, as the case may be, (assuming a swift action by the trade union movement), renegotiations must therefore be concluded before end 2029 at the earliest. For newly to be established EWC’s, in principle, the new rules outlined above will come into effect by the end of 2027, depending on the swiftness of the national legislators of the country of the agreement’s governing law (chosen or imposed). 

7.  With the changes as outlined, key points for business attention in this context appear to be, inter alia,  

(i) the governing law of the EWC agreement: since some of the more regulated issues like enforcement, remedies and penalties as well as restrictions on confidentiality are governed by the law governing the agreement, the choice of such law (if and when permitted) will henceforth play an even more important role than in the past in setting up and operating an EWC,

(ii) the quality of the relationship with the trade union movement: the Revised Directive gives a more prominent role to recognised labour than before, and so developing or maintaining a decent working relationship with the trade union organisations is of direct relevance,

(iii) financial considerations, since the Revised Directive has considerably extended the financial liability for management to include, inter alia, all operating expenses of the SNB, EWC and the select committee, the cost of an unlimited number of experts assisting the SNB, EWC and select committee, and even the cost of legal representation in litigation against the business.     

8. Overall, the revision of the 2009 Directive is probably less dramatic than feared by most businesses after the 2023 positioning of the European Parliament. However, that initial bold parliamentary action allowed a thorough shift as to which scope of revision was deemed politically acceptable.

As we commented before, the entire quest for an overhauling revision was based on very doubtful and shaky premises advanced by the labor movement (an alleged multitude of disputes, an alleged wide failure to observe basic I/C principles, abuse of confidentiality restrictions by business, difficult access to justice and lack of enforcement, etc.).  The EU Commission did lend its ear to such claims and was left with no alternative but to accept a revision of the 2009 Directive, a totally different approach to the way it managed previous trade union complaints. Indeed, in 2018, the EU Commission responded by issuing a best practices handbook to counter the trade union position. 

We can easily call this a shift of the Overton window, named after the US political analyst, who gave his name to the concept of a spectrum (or a window) of politically acceptable or viable changes in policy. For EWCs, that window did until 2023 not include the abolition of legacy EWC agreements (the success factor of EU level cross-border I/C until now), nor the call for draconic penalties and sanctions, nor the change of the EWC forum to a bargaining forum (via the threat of injunctive relief). 

So, as a result of the European Parliament’s own initiative in 2023, the Revised Directive has in that sense shifted the Overton window by making stricter enforcement, the prospect of real financial penalties, and the disappearance of legacy agreements fully acceptable.
 

[1] And for the UK, agreements under Article 3 of Directive 97/74.