Don’t Undermine the EU’s Simplification Efforts – Rethink the EWC Directive Revision

France, Germany and Sweden have a strong commitment to the European social model which promotes social dialogue. They are the three EU Member States with the highest number of multinational companies that have set up a European Works Council, in some cases for decades. At the same time, the European Union is taking crucial steps to strengthen competitiveness and reduce unnecessary regulatory burdens.

– The Draghi Report and the Competitiveness Compass provide clear guidance for simplifying regulations. With that in mind, it’s vital that any new legislative measures don’t undermine the progress we’ve already made, says Malin Nilsson, General Counsel at the Confederation of Swedish Enterprise.

The proposed revision of the EWC Directive poses several serious concerns:

• Extensive legal and financial risks for companies: Allowing preliminary injunctions to suspend company decisions creates legal uncertainty and risks delaying critical business processes. It also shifts EWCs towards codetermination rather than consultation.
• Overburdening definition of transnational matters: The broadened definition creates confusion and legal uncertainty. Reintroducing “substantially” in Article 1 is necessary to avoid overreach and ensure clarity at company level.
• Unfulfillable complexity in information and consultation procedures: Overly detailed procedures, including the requirement for a written reasoned response, risk slowing down decision-making and contradict the goal of efficient social dialogue.
• Extensive disclosure of confidential information: The proposal to allow EWC members to pass on confidential information to members of national information and consultation bodies will lead to unwanted disclosure of information. The companies’ management must maintain control over sensitive information at all times, which even can be market sensitive information. Unlawful disclosure and leakage of such information can lead to severe and intrusive consequences, including sanctions, for both companies and individuals.

Additional elements—such as mandatory funding of legal experts and the inclusion of franchise and license-based companies—would further increase the burden on companies without strengthening social dialogue.

The Confederation of Swedish Enterprise, together with its French and German counterparts, urges policymakers to ensure that the revised directive remains a tool for meaningful and balanced dialogue between employers and employees—without compromising Europe’s competitiveness.