As reported the European Commission has submitted a proposal with changes to the Directive for EWCs. This proposal is a response to the proposal submitted by the European Parliament (EP) a year ago. In a series of blogs the EOR Service team discusses the main changes.
Confidentiality
The ease with which companies label information as ‘confidential’ poses problems for many EWCs. Confidentiality can either mean that the company ‘can’t’ say anything at all, or that the EWC receives information but is not allowed to share it. In the latter case, the EWC finds it very difficult to fulfill its role as representative of employees in Europe. And in the first case the EWC can do nothing at all.
The old directive: Article 8
In Article 8 the old directive gave companies almost unlimited rights to impose a duty of confidentiality. The only limitation is the possibility for the EWC to go to court and have this obligation lifted (Art. 11.3). The right of companies not to provide information to the EWC, although the EWC would have been entitled to it, was at least subject to a condition. This condition stated that there must be objective grounds why this information could seriously harm or hinder the companies.
The Dutch EWC Act
The Dutch EWC Act at least stipulates when imposing a duty of confidentiality, this must be communicated as much as possible in advance. The company must also indicate what grounds exist for imposing confidentiality, exactly what information falls under confidentiality, how long this obligation lasts and whether exceptions can be made with regard to certain persons. But these provisions are only mandatory for companies that have not negotiated an EWC agreement and fall under the safety net model of the subsidiary requirements.
Proposal for a new EWC Directive
In its proposal for a new EWC Directive, the European Parliament tried to tackle the problem of the abundant use of the confidentiality clause. Their proposal obliged companies to henceforth explain to the EWC what the objective criteria are for imposing confidentiality. The company must also indicate for how long the confidentiality will last.
For the right of companies not to have to provide information to the EWC, the EP now wanted to demand that national EWC laws clearly indicate the conditions and limitations under which companies can exercise that right. And companies should obtain prior permission from a competent authority not to have to comply with their obligations to the EWC on this point. Finally, the EP proposal also contained a provision that the duty of confidentiality from the EWC does not apply to national or local works councils if they represent employees who may be affected.
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The Commission proposal
What remains of this in the Commission proposal? In any case, the obligation to provide the reasons for imposing confidentiality when imposing confidentiality. If those reasons lapse, the obligation of confidentiality also lapses. However, both parties must agree that those reasons have ceased to exist.
New is the addition in the Commission proposal that management can set up facilities for the transfer and storage of confidential information to help ensure the confidentiality of that information.
The provisions in the old Article 8 of the Directive are now split into two articles. The old Article 8 dealt with both the right to impose confidentiality on the EWC and the right for companies not to provide information. The latter has now been placed in a separate Article 8a. In the past it was always difficult to tell the two apart, so hopefully this will clarify matters in practice.
The new Article 8a
The new Article 8a repeats 8’s obligation to also provide an explanation for failure to provide information. That can get complicated. Imagine that the company has to tell the EWC ‘We are involved in secret merger talks, but we cannot tell anything about that…’.
Companies can only be exempt from their duty to inform, if that information could seriously harm the company. In the previous version of the Directive it read ‘seriously harm or hinder’ the company.
What the committee proposal mainly lacks in comparison to the EP-proposal is a provision that the duty of confidentiality from the EWC does not apply to national or local works councils that represent employees who may be affected.
Next time: what will change regarding the rules for information and consultation?
Written by Sjef Stoop and Arend Hamstra, trainers/advisors EWC Service
