European Works Councils update: implications of the new EU Directive for employers in Ireland

Major changes to the European Works Council regime are on the horizon, with a new directive set to strengthen employee representation across multinational organisations.

A European Works Council (EWC) is a transnational information and consultation forum which can be set up at the request of employees, subject to the organisation meeting certain criteria. This is based on EU law which, over time, would be recognised by many practitioners as needing to be reformed.

As a result, there is an impending change to the current Directive 2009 / 38 / EC (the Directive), which is likely to be implemented soon. In this article, our Employment team in Ireland provides information on the background to these proposed changes, a recap on the criteria for EWCs, the purpose of the proposed changes and what they will mean for Irish employers.

Background to the changes

The provisional agreement on European Works Council was adopted by the European Parliament on 9 October 2025 and still needs to be formally adopted by the European Council. This means that it is likely to become an EU directive before the end of 2025 or in early 2026 at the latest. Once implemented, each EU member state will have two years to legislate the Directive at the national level.

The provisional agreement seeks to strengthen the representation of EU workers in large multinational companies and to make that representation more effective. It intends to make it easier for EWCs to be established, providing for better funding that will ensure that EWCs and their members are better protected.

When is an EWC triggered? 

By way of background, an organisation can be requested by its employees to set up a European Works Council when:

1. the company or group of companies has at least 1,000 employees in the EU and European Economic Area (EEA), which is made up of the European Union member states, plus Norway, Iceland and Liechtenstein 

2. there are at least 150 employees in each of two or more member states

When a company receives a request under the Directive to establish an EWC, they must negotiate with the employees to establish an EWC.

What is the status of EWCs in Ireland? 

The relevant legislation in Ireland for EWCs is the Transnational Information and Consultation of Employees Act 1996 (1996 Act), which implements the Directive and applies local Irish nuances to the running and establishment of an EWC in Ireland.

Changes to the law on EWCs has been long awaited and each EU member state has had differing local laws on the subject. It is accepted that the 1996 Act in Ireland requires reform to ensure the country is a more attractive jurisdiction for EWCs. In the wake of Brexit, Ireland saw an increase in EWCs being moved from the UK to Ireland. With this anticipated new directive, Ireland may implement more practical legislation on EWCs, paving the way for a further increase in EWCs being established or indeed moved to Ireland.

What will the proposed changes in the provisional agreement mean for Irish employers?

This provisional agreement aims to improve the current legislation in place and this in turn would bring changes for employers. Below are the key changes it proposes:

• Removal of exempted undertakings: under the existing directive, organisations that had a transnational information and consultation agreement which concluded before 23 September 1996, or before the Directive came into force, were excluded. The provisional agreement proposes to remove this exemption, meaning that organisations who were previously unable to request the establishment of a European Works Council will now be able to do so once a suitable request is put before the organisation

• Transnational approaches harmonised: the provisional agreement broadens the scope of transnational matters which has been unclear under the current directive. The provisional agreement will now include workers in an undertaking where they are not directly affected by the matter. This change aims to resolve the uncertainly and different approaches which have been adopted in the past by the various member states

• Gender representation: there is currently no accountability to ensure a balance of gender representation under an EWC. The provisional agreement proposes a target of 40% of seats being allocated to members of each gender on the EWC, the selected committee and special negotiating body. Where this target is not met, the establishment will have to explain why this quota has not been met

• Confidentiality: member states will implement objective criteria to ensure central management do not make excessive use of confidentiality restrictions to ensure that confidentiality is only permitted when it is legitimate and proportionate. Currently, powers of confidentiality are defined as overreaching and unnecessary

• Individual litigation: the provisional agreement recognises that the current directive makes it difficult for individuals to bring a claim enforcing their rights. It is the aim of the new scheme to rectify this

• Penalties: the provisional agreement proposes a new approach to penalties for non-compliance, noting that the current penalties provided under the Directive are ineffective. It is proposed that more dissuasive penalties will be implemented - with consideration being given to things like the gravity, duration, consequences and the intentional or negligent nature of the offence - in determining the extent of the financial penalty

How Ogier can help

While we await the implementation of this new directive and subsequent local law, employers in Ireland may want to consider the possible implications of these changes to European Works Councils and start looking at implementing incoming changes. This would include undertakings which are currently exempt but will soon become eligible under the new scheme.

For further assistance with EWCs and the proposed changes, contact Bláthnaid Evans via the details below.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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