With a year now passed since Brexit, you may be surprised to see a post on this topic. However, it would seem that Brexit is still causing havoc when it comes to European Works Councils (EWCs) which had their headquarters in the UK pre-Brexit.
As the scope of EWCs is limited to the European Economic Area, post Brexit, it was not possible for EWCs to keep their bases in the UK. Given that, following the end of the transition period, the UK was no longer an EU Member State, the UK automatically became a 'third country' with regards to the implementation and application of EU law. As such, any EWC based in the UK needed to move to a new EU Member State prior to this date. If active steps were not taken to relocate the EWC to another EU member state, the EWC automatically relocated to the EU Member State in which the company has the highest employee headcount (assuming the employer still had the required number of employees in EU Member States to remain subject to the EWC Directive, once the UK was taken out of the equation). This may not always be the EU Member State of choice for the employer. Many employers have found themselves in a position where the location of the central management of their EWC has defaulted to a country that they did not intend and as such, are now taking steps to transfer the location of the EWC from the default country, to a new host location. This involves taking local law advice in multiple jurisdictions.
It is worth remembering that it remains possible to have UK representatives on an EWC. The EWC Directive allow for third-country employees to participate in EWCs by agreement, and this should be documented in the EWC agreement if it is not already.
Originally published 28 February 2022
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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
