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European Works Council

European Works Council

Outline of the Community (European Union) legislation about European Works Council

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Social dialogue and employee participation

European Works Council

The Directive imposes a works council or an information and consultation procedure in Community-scale undertakings and Community-scale groups of undertakings on the basis of an agreement negotiated between employees’ representatives forming a special negotiating body and the central management of the undertaking. It also defines the procedures for the operation of this body. In the cases identified by the Directive in which an agreement cannot be reached, it stipulates the provisions which subsidiary requirements to be established by the Member States must satisfy.

Document or Iniciative

Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Communityscale undertakings and Communityscale groups of undertakings for the purposes of informing and consulting employees [See amending acts].

Summary

The main provisions of the Directives are as follows:

  • Establishment of a European Works Council or a procedure for informing and consulting employees * in every Community-scale undertaking * and every Community-scale group of undertakings *, on the basis of an agreement between the central management and a special negotiating body.

The central management:

  • will be responsible for creating the conditions and means necessary for the setting up of a European Works Council or an information and consultation procedure;
  • will initiate negotiations on its own initiative or at the written request of at least 100 employees or their representatives in at least two undertakings or establishments in at least two Member States.

Special negotiating body

This body, comprising a minimum of three and a maximum of the number of Member States:

  • will have the task of determining, with the central management, by written agreement, the scope, composition, competence and term of office of the European Works Council(s) or the arrangements for implementing a procedure for the information and consultation of employees;
  • may decide, by at least two-thirds of the votes, not to open negotiations or to terminate the negotiations already opened; such a decision would stop the procedure to conclude the agreement and would nullify the provisions of the Annex.

The members of the special negotiating body and of the European Works Council, and any experts who assist them, will not be authorised to reveal any information which has expressly been provided to them in confidence.

Exemptions from the Directive

Community-scale undertakings and Community-scale groups of undertakings in which there is already an agreement covering the entire workforce, providing for the transnational information and consultation of employees, will not be subject to the obligations arising from the Directives. When these agreements expire, the parties involved may decide jointly to renew them. Where this is not the case, the provisions of the Directives will apply.

Subsidiary requirements

Subsidiary requirements laid down by the legislation of the Member State in which the central management is situated will apply:

  • where the central management and the special negotiating body so decide, or;
  • where the central management refuses to commence negotiations within six months of the initial request to convene the special negotiating body, or;
  • where, after three years from the date of this request, they are unable to conclude an agreement to establish a European Works Council or an information and consultation procedure, and the special negotiating body has not taken the decision not to open negotiations or to terminate the negotiations.

These subsidiary requirements must satisfy the provisions set out in the Annex, whereby:

  • the competence of the European Works Council will be limited to information and consultation on matters which concern the Community-scale undertaking as a whole or at least two establishments or group undertakings situated in different Member States;
  • the European Works Council is to have a minimum of three and a maximum of 30 members and, where its size so warrants, is to elect a select committee from among its members, comprising at most three members;
  • four years after the European Works Council is established, it is to consider whether to open negotiations for the conclusion of the agreement on the arrangements for implementing the information and consultation of employees, or to continue to apply the subsidiary requirements adopted in accordance with the Annex;
  • the European Works Council will have the right to meet with the central management once a year in order to be informed and consulted, on the basis of a report drawn up by the central management, on the progress of the business of the Community-scale undertaking or Community-scale group of undertakings and its prospects;
  • where there are exceptional circumstances affecting the employees’ interests to a considerable extent, particularly in the event of relocation, closure or collective redundancy, the select committee or, where no such committee exists, the European Works Council will have the right to be informed;
  • the members of the European Works Council are to inform the employees’ representatives of the content and outcome of the information and consultation procedure;
  • the operating expenses of the European Works Council are to be borne by the central management; in compliance with this principle, the Member States may lay down budgetary rules regarding the operation of the European Works Council.

Background

The purpose of this Directive is to improve the right of employees in Community-scale undertakings and Community-scale groups of undertakings to be informed and consulted.

Directive 97/74/EC extends the scope of this Directive to the United Kingdom.

This Directive shall be repealed by Directive 2009/38/EC (FR) with effect from 6 June 2011 when the latter enters into force. The modernisation of the legislation carried out by this new Directive has many objectives. It aims to ensure the effectiveness of employees’ transnational information and consultation rights, to increase the number of European Works Councils and to enable the continuing functioning of their constituent agreements. These provisions also aim to strengthen legal certainty for the establishment and functioning of European Works Councils.

Key terms used in the act
  • Community-scale undertaking: any undertaking with at least 1 000 employees within the Member States and at least 150 employees in each of at least two Member States.
  • Group of undertaking: a controlling undertaking and its controlled undertakings.
  • Community-scale group of undertakings: a group of undertakings with the following characteristics:
    • at least 1 000 employees within the Member States,
    • at least two group undertakings in different Member States, and
    • at least one group undertaking with at least 150 employees in one Member State and another group undertaking with at least 150 employees in another Member State.
  • Controlling undertaking: an undertaking which can exercise a dominant influence over another undertaking by virtue, for example, of ownership, financial participation or the rules which govern it.
  • Consultation: the exchange of views and establishment of dialogue between employees’ representatives and central management or any more appropriate level of management.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 94/45/EC

22.9.1996

22.9.1996

OJ L 254 of 30.9.1994

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Directive 97/74/EC

15.12.1997

15.12.1999

L 10, 16.1.1998

Directive 2006/109/EC

1.1.2007

1.1.2007

OJ L 363 of 20.12.2006

Related Acts

Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Recast) (Text with EEA relevance) [Official Journal L 122 of 16.5.2009].

Commission report of 4 April 2000 on the application of the Directive on the establishment of a European works council or a procedure in Communityscale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees [COM(2000) 188 final – not published in the Official Journal].


Another Normative about European Works Council

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic

Employment and social policy > Social dialogue and employee participation

European Works Council (from 2011)

Document or Iniciative

Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Recast) (Text with EEA relevance).

Summary

This Directive aims at guaranteeing employees’ transnational information * and consultation * rights. It provides for the establishment of a European Works Council or a procedure for informing and consulting employees in Community-scale undertakings * and groups of undertakings.

Matters dealt with by the European Works Council or the information and consultation procedure are of a transnational nature.

The powers of the European Works Council and the scope of the information and consultation procedure concern: all establishments of the undertaking or all establishments in a Community-scale group situated in the Member States.

Member States may provide that this Directive shall not apply to merchant navy crews.

The dominant influence of an undertaking

The Directive defines a “controlling undertaking” – i.e. which exercises a dominant influence over a “controlled undertaking”. This influence is established if an undertaking:

  • holds a majority of another undertaking’s subscribed capital;
  • controls a majority of the votes attached to that undertaking’s issued share capital; or
  • can appoint more than half of the members of that undertaking’s administrative, management or supervisory body (this last criterion is determining).

Creation of a European Works Council

The central management of the undertaking or the group is responsible for establishing a Council or an information and consultation procedure. If a representative is not appointed, where the management is not located in a Member State of the European Economic Area (EEA), it is the responsibility of the establishment or undertaking which employs the largest number of workers in one of the Member States.

The central management shall initiate negotiations to establish the European Works Council or the information and consultation procedure. It shall act:

  • on its own initiative; or
  • at the written request of at least 100 employees (or their representatives) in at least two undertakings (or establishments) in at least two different Member States.

A special negotiating body shall be formed by employees’ representatives. They may be elected or appointed, according to the number of employees in each Member State where the undertaking is present. The special group shall negotiate an agreement with the management in order to define the operation of the European Works Council and the arrangements for implementing a procedure for the information and consultation of employees.

The members of this group shall receive the same protection as employees’ representatives, as laid down by national legislation and/or practice in the country where they are employed.

Context

Directive 94/45/EC is repealed with effect from 6 June 2011, the date on which this Directive enters fully into force.

Key terms
  • Community-scale undertaking: which employs at least 1000 employees within the Member States, and at least 150 employees in two different States.
  • Information: transmission of data by the employer to the employees’ representatives in order to enable them to acquaint themselves with the subject matter and to examine it. Employees’ representatives may in particular undertake an in-depth assessment of the possible impact and, where appropriate, prepare for consultations.
  • Consultation: establishment of dialogue and exchange of views enabling representatives to express an opinion about the proposed measures. This opinion may be taken into account within the undertaking or group of undertakings.

Reference

Act Entry into force Deadline for transposition in the Member States Official Journal
Directive 2009/38/EC

5.6.2009 
6.6.2011 (Articles 1, 2, 3, 4, 5, 6, 7, 8, 9 and 11)
(Annexes I)

5.6.2011

OJ L 122 of 16.5.2009

Financial conglomerates

Financial conglomerates

Outline of the Community (European Union) legislation about Financial conglomerates

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: general framework

Financial conglomerates

Document or Iniciative

European Parliament and Council Directive 2002/87/EC of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC, 93/22/EEC, 98/78/EC and 2000/12/EC [See amending acts].

Summary

This Directive provides for supervision of the conglomerate and promotes closer coordination between the supervisory authorities for the individual sectors and the exchange of information between them.

Characteristic thresholds of a financial conglomerate

The Directive considers that the activities of a group occur mainly in the financial sector where the balance sheet total of the regulated and non-regulated financial sector entities in the group exceeds 40 % of the group’s balance sheet total.

The most important financial sector in a financial conglomerate is the sector with the highest average. The Directive regards the group as a conglomerate where it has significant activities in another financial sector.

Target entities for supplementary supervision at the level of a financial conglomerate

Supplementary supervision is to be applied to:

  • any regulated entity at the head of a financial conglomerate;
  • any regulated undertaking which has as its parent company a mixed financial holding company with its head office in the Union;
  • any regulated entity connected to another entity in the financial sector.

Solvency

Financial conglomerates must have adequate capital of their own. In particular, the multiple gearing of own funds must be abolished. The parent firm is no longer able to issue loans to finance its regulated subsidiaries («excessive leveraging»).

The proposal defines methods for calculating solvency ratios and capital adequacy at group level.

«Intra-group» transactions and risk concentration

Regulated entities and mixed financial holding companies are required to report:

  • any significant risk concentration at the level of the financial conglomerate;
  • any intra-group transaction.

An intra-group transaction is regarded as significant if it exceeds 5 % of the total amount of capital adequacy requirements of own funds at the level of a financial conglomerate.

Internal control mechanisms

Regulated entities at the level of a financial conglomerate are required to set internal control mechanisms which enable all the incurred risks to be measured.

Reporting procedures must also be implemented to identify, measure, monitor and control the intra-group transactions, as well as the risk concentration.

A mixed committee of European supervisory authorities is responsible for ensuring coherent cross-sector and cross-border supervision and compliance with EU legislation.

Supervision

The Directive provides for the appointment of a competent authority or coordinator responsible for the supplementary supervision of regulated entities of a financial conglomerate. It is responsible for:

  • coordinating and disseminating information;
  • ensuring supervisory overview and assessment of the financial situation;
  • assessing compliance with the rules on capital adequacy and of risk concentration and intra-group transactions;
  • assessing the financial conglomerate’s structure, organisation and internal control system;
  • planning and coordinating the supervisory activities.

The competent authorities responsible for supervising regulated entities belonging to a financial conglomerate and the coordinator for the financial conglomerate are required to cooperate closely with each other. In particular, they must cooperate in order to achieve harmonised supervisory practices.

Parent companies with their head office outside the European Union (EU)

Regulated entities whose head office is located outside the EU must be subject to supervision which is equivalent to that provided for by this Directive.

Role of the European Commission

The Commission is responsible for clarifying certain concepts, such as credit institutions, insurance undertakings and investment firms. It must also establish more precise methods for calculating capital adequacy in order to take account of developments on financial markets and prudential techniques.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2002/87/EC

11.2.2003

11.8.2004

OJ L 35, 11.2.2002

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Directive 2005/1/EC

13.4.2005

13.5.2005

OJ L 79, 24.3.2005

Directive 2008/25/EC

21.3.2008

OJ L 81, 20.3.2008

Directive 2010/78/EU

4.1.2011

OJ L 331, 15.12.2010

Successive amendments and corrections to Directive 2002/87/EC have been incorporated in the basic text. This consolidated version is for reference purpose only.


Another Normative about Financial conglomerates

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic

Internal market > Single market for services > Financial services: banking

Financial conglomerates

Document or Iniciative

European Parliament and Council Directive 2002/87/EC of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC, 93/22/EEC, 98/78/EC and 2000/12/EC [See amending acts].

Summary

This Directive provides for supervision of the conglomerate and promotes closer coordination between the supervisory authorities for the individual sectors and the exchange of information between them.

Characteristic thresholds of a financial conglomerate

The Directive considers that the activities of a group occur mainly in the financial sector where the balance sheet total of the regulated and non-regulated financial sector entities in the group exceeds 40 % of the group’s balance sheet total.

The most important financial sector in a financial conglomerate is the sector with the highest average. The Directive regards the group as a conglomerate where it has significant activities in another financial sector.

Target entities for supplementary supervision at the level of a financial conglomerate

Supplementary supervision is to be applied to:

  • any regulated entity at the head of a financial conglomerate;
  • any regulated undertaking which has as its parent company a mixed financial holding company with its head office in the Union;
  • any regulated entity connected to another entity in the financial sector.

Solvency

Financial conglomerates must have adequate capital of their own. In particular, the multiple gearing of own funds must be abolished. The parent firm is no longer able to issue loans to finance its regulated subsidiaries («excessive leveraging»).

The proposal defines methods for calculating solvency ratios and capital adequacy at group level.

«Intra-group» transactions and risk concentration

Regulated entities and mixed financial holding companies are required to report:

  • any significant risk concentration at the level of the financial conglomerate;
  • any intra-group transaction.

An intra-group transaction is regarded as significant if it exceeds 5 % of the total amount of capital adequacy requirements of own funds at the level of a financial conglomerate.

Internal control mechanisms

Regulated entities at the level of a financial conglomerate are required to set internal control mechanisms which enable all the incurred risks to be measured.

Reporting procedures must also be implemented to identify, measure, monitor and control the intra-group transactions, as well as the risk concentration.

A mixed committee of European supervisory authorities is responsible for ensuring coherent cross-sector and cross-border supervision and compliance with EU legislation.

Supervision

The Directive provides for the appointment of a competent authority or coordinator responsible for the supplementary supervision of regulated entities of a financial conglomerate. It is responsible for:

  • coordinating and disseminating information;
  • ensuring supervisory overview and assessment of the financial situation;
  • assessing compliance with the rules on capital adequacy and of risk concentration and intra-group transactions;
  • assessing the financial conglomerate’s structure, organisation and internal control system;
  • planning and coordinating the supervisory activities.

The competent authorities responsible for supervising regulated entities belonging to a financial conglomerate and the coordinator for the financial conglomerate are required to cooperate closely with each other. In particular, they must cooperate in order to achieve harmonised supervisory practices.

Parent companies with their head office outside the European Union (EU)

Regulated entities whose head office is located outside the EU must be subject to supervision which is equivalent to that provided for by this Directive.

Role of the European Commission

The Commission is responsible for clarifying certain concepts, such as credit institutions, insurance undertakings and investment firms. It must also establish more precise methods for calculating capital adequacy in order to take account of developments on financial markets and prudential techniques.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2002/87/EC

11.2.2003

11.8.2004

OJ L 35, 11.2.2002

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Directive 2005/1/EC

13.4.2005

13.5.2005

OJ L 79, 24.3.2005

Directive 2008/25/EC

21.3.2008

OJ L 81, 20.3.2008

Directive 2010/78/EU

4.1.2011

OJ L 331, 15.12.2010

Successive amendments and corrections to Directive 2002/87/EC have been incorporated in the basic text. This consolidated version is for reference purpose only.

Cooperation between customs authorities and business organisations of the Member States

Cooperation between customs authorities and business organisations of the Member States

Outline of the Community (European Union) legislation about Cooperation between customs authorities and business organisations of the Member States

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Combating drugs

Cooperation between customs authorities and business organisations of the Member States

To consolidate the already cooperative relationship between the customs authorities of the Member States and business organisations in combating drug trafficking.

2) Document or Iniciative

Joint Action 96/698/JHA of 29 November 1996, adopted by the Council on the basis of Article K.3 of the Treaty of the European Union, on cooperation between customs authorities and business organisations in combating drug trafficking [Official Journal L 322 of 12.12.1996].

3) Summary

In order to consolidate the already cooperative relationship between customs authorities of the business organisations operating in the European Union in combating drug trafficking, Member States will establish or further develop Memoranda of Understanding programmes at national level under the guidelines laid down in this joint action and will invite participation in such programmes.

Memoranda of Understanding between customs authorities and business organisations may contain, but need not be confined to, provisions in respect of the following:

  • the exchange of contact names in customs and in the signatory organisation;
  • the provision to customs, by the signatory, of advance cargo or passenger data as appropriate;
  • access by customs to the signatory’s information systems;
  • assessment by customs of the signatory’s security procedures;
  • development and implementation of plans to improve such security;
  • checking of newly recruited staff by the signatory;
  • provision by customs of training for the signatory’s staff.

Customs authorities will periodically review the operation of national Memoranda of Understanding programmes and will also review the implementation of individual Memoranda of Understanding and, in agreement with the signatories, adapt them as necessary to ensure maximum effectiveness.

Member States will notify the Council Secretariat of the measures they have taken to implement the provisions of this joint action one year after its entry into force and thereafter as requested by the Presidency.

Member States may at their discretion extend the scope of Memoranda of Understanding established under the programmes referred to at 1 to cover other offences for which the customs authorities are competent in addition to drug trafficking.

Act Date
of entry into force
Final date for implementation in the Member States
Joint action 96/698/JHA 12.12.1996

4) Implementing Measures

5) Follow-Up Work