chapter  1
27 Pages

Setting the Scene

On 22 September 1994 a Council directive 94/45/EC (henceforth referred to as the Directive) ‘on the establishment of a European Works Council (EWC) or a procedure in Community-scale undertakings or Communityscale groups of undertakings for the purposes of informing and consulting employees’ was adopted by the Council of Ministers (Council) of the European Union (EU). The Directive was subsequently adopted by Iceland, Lichtenstein, and Norway of the European Economic Area (EEA) in June 1995; by the United Kingdom (UK) in December 1997, following the reversal of the initial opt-out from the Social Protocol of the Maastricht Treaty at the Amsterdam European Council; and by the twelve states that joined the EU in 2004 and 2006. The Directive opened the way for the establishment of the fi rst transnational industrial relations institutions within multinational companies (MNCs) with EU-based operations. In essence, the Directive was aimed at securing the provision of information and consultation for employees in MNCs. EWCs, thus bring together senior managers and employee representatives from countries within which an MNC has operations for the purpose of information exchange and consultation.