The European Parliament and the Council of the European Union have now adopted a new Directive to revise the European Works Councils Directive 2009/38/EC (the “Directive”). This step marks a significant step towards the EU’s stated intention of strengthening the role of European Works Councils (“EWCs”) within multinational corporations operating across EU and EEA Member States. Building on the European Commission’s 2024 proposals and shaped by extensive negotiations, the revised framework, once passed into law, will introduce a number of substantial reforms designed to reinforce workers’ rights to information and consultation at the transnational level.

Next steps in the legislative process

According to the Council of the European Union, the new Directive will “make the representation of workers in large multinational companies more effective […] make the rules clearer, notably as regards how EWCs are set up, their resources and the protection of their members.” The Directive will become law 20 days after it is entered in the EU Official Journal which is expected to happen in the coming weeks. Member States will be required to transpose the Directive into national law within two years of the publication of the revised Directive in the Official Journal. The new rules will apply one year after this.

Implications for EWCs in Ireland

In considering the implications of the changes on Irish legislation, the Transnational Information and Consultation of Employees Act 1996 (the “TICEA”) will need major revision within this two-year time limit. The TICEA transposed the first EWC Directive of 1994. There will be a lot of focus on Ireland’s adoption of this Directive as it will have a significant impact on the manner in which Irish EWCs operate, and on headquartered companies operating in Ireland that are involved with EWCs, as well as representatives from Ireland in EWCs across the EU. The High Court recently delivered judgment in an appeal from a Labour Court decision concerning EWCs – Verizon Ireland Limited v Jean-Philippe Charpentier – which case brought into focus the lacunae in the existing legislation around dispute resolution. A link to our briefing on the case is here: High Court overturns Labour Court findings in Verizon EWC Dispute

Overview of the EWC framework

EWCs are employee representative bodies that facilitate transnational information and consultation in companies operating in two or more EU/EEA countries and employing at least 1,000 employees. EWCs are subject to the laws of the Member State in which the “central management” is located. In cases of EWCs whose central management is located outside of the EU, then management can decide in which country to locate a “representative agent” who acts on behalf of the central management.

Established under the original 1994 Directive (Directive 94/45/EC) and recast in 2009 by the Directive, EWCs serve to ensure that employees are informed and consulted about significant decisions affecting the workforce across multiple Member States.

However, over the past decade, stakeholders have raised concerns regarding the limited scope, effectiveness, and enforceability of existing EWC rights. The 2025 revision responds to these concerns and aligns with broader EU objectives on social dialogue and worker participation. These amendments are welcome given the increased presence of EWCs based in Ireland. It has been estimated that up to 100 undertakings have their EWCs governed by Irish law.

Key elements of the 2025 revised Directive

The revisions brought about under the new Directive seek to make the representation of workers in large multinational companies more effective.

Clarifying the definition of transnational matters

The new Directive adopts a broader and more inclusive interpretation of “transnational” issues, capturing situations where a decision taken in one Member State will substantially affect workers in other Member States, triggering an obligation to inform and consult an EWC. This expanded definition is expected to increase the number of matters requiring consultation with EWCs, particularly in the context of corporate restructuring, digital transformation, and sustainability strategies.

Strengthened consultation rights

The new Directive will give EWCs the right to issue an opinion before a decision is adopted by a company. Following on from that, companies will be expressly required to provide EWCs with a written reasoned response to their opinions, before any final decision is made and within a reasonable time after a consultation meeting with employee representatives. This change underscores the EU’s intention to move consultation from a procedural formality to a substantive dialogue, ensuring that employee representatives have a meaningful opportunity to influence outcomes.

Legal remedies and sanctions

To ensure compliance, the new Directive mandates that Member States establish effective judicial and administrative procedures that allow EWCs to challenge infringements of their rights. It also introduces a requirement for “effective, dissuasive, and proportionate” sanctions, including financial penalties, bringing enforcement standards into closer alignment with other areas of EU social legislation. Financial penalties should take into account an organisation’s annual turnover or have a similarly dissuasive nature.

Confidentiality rules tightened

The new Directive tightens the criteria under which employers can withhold information on confidentiality grounds. Employers must now provide clear, objective justifications when claiming confidentiality, and such designations must be periodically reviewed and lifted when no longer warranted. This is intended to prevent misuse of confidentiality to avoid meaningful dialogue.

Gender balance targets

To promote diversity in employee representation, the new Directive introduces a non-binding target for gender balance: no more than 60% of EWC or Special Negotiating Body (SNB) members should be of the same gender. Member States and employers are encouraged to take proactive steps to meet this target, reflecting wider EU commitments to gender equality in corporate governance.

Increased frequency of meetings

EWCs will now be entitled to meet at least twice annually, up from the current requirement of one meeting per year. At least one of these meetings must be held in person. This measure aims to enhance the depth and regularity of consultations, particularly in light of the complex challenges facing multinational enterprises.

Disposal of pre-directive exemptions

Significantly, the new Directive proposes to remove the exemption for pre-existing transnational agreements concluded before the 1994 Directive came into effect or the so-called “Article 13” exemption. Approximately 300 companies currently benefit from this exemption and will now be required to align with the new Directive within the transitional period, extending these rights to 5.4 million workers.  As soon as the revised Directive is transposed into national law, the existence of such arrangements will no longer be a defence against requests for negotiations to establish an EWC. This is also expected to harmonise practices and reduce disparities across sectors. Undertakings with existing EWC agreements will have one year to bring them into line with the provisions of the revised Directive, otherwise they also will be open to formal requests to set up SNBs to negotiate new agreements. 

Additional resources for EWCs

The revision of the Directive is also likely to see the creation of annual budgets for legal costs incurred by EWCs in order to strengthen their “effective access to justice”. The Directive states that central management would bear the reasonable costs of judicial and/or administrative proceedings for EWCs and SNB (including their members or representatives). This would likely include the use of experts, for example legal advisors or other specialised consultants. The primary focus of this provision is to strengthen EWCs access to legal support, which is hoped to reaffirm the rights of EWCs outlined in the Directive. The Directive makes it clear that management must cover such costs provided they are necessary and reasonable.

In addition, representatives of European trade union organisations will be allowed to act as experts under subsidiary requirements. This will officially give experts the opportunity to partake in management meetings. The UK Central Arbitration Committee has already accepted experts’ right to attend meetings. Similarly, the Directive will express that employee representatives can also be trade union representatives for the purpose of EWC. Under Irish law, trade union representatives are allowed to be members of a SNB only. In the absence of a negotiated agreement, national governments must set “budgetary rules” in relation to such costs. These budgetary rules will influence how negotiated agreements provide for expert and legal costs.

The costs of training for EWC representatives will also be covered on a case-by-case basis, so long as the training is considered necessary for their representative duties in an international environment. Central management should be informed of the costs of the training and related expenses in advance.

What’s not in the 2025 revised Directive?

Importantly, a number of proposed changes sought by the European Parliament, which were strongly opposed by the Council and Commission, are not now included in the agreed text of the Directive. These proposals had included the possibility of EWCs seeking injunctive relief if a company failed to comply with the information and consultation requirements outlined under the Directive as well as the imposition of GDPR style financial sanctions. However, the fact that these proposals did not make it into the text of the Directive does not rule out the possibility of Member States allowing provisions such as injunctive relief as a form of dissuasive sanction.

We will keep you updated as this Directive progresses through the legislative process.

For more information on these changes or for help in assessing the implications for your organisation, please contact any member of the Employment Law Group.

The authors would like to thank Isobel Kenny and Alexandra Murphy for their contributions to this briefing.