European Works Councils – choosing a new home for your EWC

Out-Law News | 03 Nov 2020 | 3:01 pm |

Irish employment lawyer Ciara Ruane tells HRNews about the factors to consider when choosing a new home for a UK-based EWC. 
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  • Transcript

    Last week we explained the need for businesses to consider carefully the re-homing of their European Works Council with effect from the end of the transition period which is fast approaching. A reminder, EWCs are the mechanism for senior managers to provide information to and consult with employee representatives across Europe and, with so much going on right now, there has never been a more important time to have that mechanism working well. Ben Brown explained how UK laws have been amended in readiness for that 1st January deadline and the reason why, strategically, this is an important issue to address right now. The reason, he explained, is to avoid the default position, which will apply from 1 January if you do nothing, resulting in EU law dictating matters rather than the UK's friendlier regulations, and an outcome that most companies would find far less favourable. We said we would come back to this subject to look at the steps you need to take to find that new home before the end of the year – so deciding which Member State will best suit your business needs going forward into 2021 and beyond. Taking the step of nominating a representative agent is not possible just yet – so central managements which are located in the UK can't do that yet because EU law still applies since we're still in the transition period, however, what is possible, is making a conditional nomination that will take immediate effect at the end of the UK’s Brexit transition period. That is something we are currently helping a number of clients with now. So which country should you choose and what are the steps involved? One country that is proving to be a popular choice for the re-homing of EWCs is Ireland –the reason for that is it's an English speaking country and, like the UK, has a common law jurisdiction. So no surprise that our Dublin office has been busy helping clients on that front. Well placed, therefore, to help explain the steps necessary for that rehoming exercise, whether that be in Ireland or another Member State, is Irish lawyer Ciara Ruane. Ciara joined me earlier by video link from Dublin and I asked her what approach clients should take when choosing that new home:  

    Ciara Ruane: “So what I would suggest a client to do is to look at the Member States that currently has representation in on the European Works Council and understand which member state is going to work best for it going forwards. This will involve looking at the legislation in each jurisdiction to see how it has implemented the European Works Council Directive in their member state, and to understand how that legislation would impact on the operation of the European Works Council going forwards. So the first step I would say to clients is to understand what they want for the works council going forward and to look at the legislation in each member state that is currently operating in to see how that would work and impact on its European Works Council going forward. The second thing it will need to understand how, practically, it can appoint a representative agent in another member state. So if a client chooses a member state, that legislation of that member state may actually indicate how to designate a representative agent. For example, in Ireland, the legislation requires for that representative agent to be designated in writing. Thirdly, and this is going to be very important for the UK going forward, is that with effect from Brexit, it will no longer be a member state for the purposes of this legislation. As a result the client is going to need to look at whether or not the UK can continue participating in the European Works Council going forward and this will be determined by the legislation in the member state where it's going to appoint as representative agent. So it's important, again, to understand whether or not the UK is permitted to be a member of the European Works Council going forward pursuant to the member state legislation it is choosing to be its representative agent.”

    Aside from EWCs, there have been a number of employment law developments in Ireland in recent weeks and Ciara has commented on the main ones – an extension to Ireland's temporary redundancy laws and the changes to the rates of pandemic unemployment payments. You can find more details on both of those on Out-law.