European Works Councils after Brexit: Institutional Stability, Change and Demise in Transnational Employment Relations

• Applicant: Professor Dr. Markus Hertwig
• Subject Area: Empirical Social Research
• Term: since 2022
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 502825966

This research project examines how Brexit affects European Works Councils (EWCs). EWCs provide employees with consultation and information rights in multinational companies (MNCs) operating in the European Union (EU). The decision of the United Kingdom (UK) to leave the EU had implications for EWCs as it concerned two threshold conditions of the EWC legislation namely the existence of sites in at least two European countries with 150 employees and a required total European company size of 1,000 employees. Brexit meant that some MNCs with subsidiaries in the UK no longer met these conditions.The project uses the lens of institutional theory. An important notion of this literature is that institutions have regulatory, normative and cultural dimensions. The regulatory dimension refers to the EWC legislation that defines rights and obligations for employees and companies. Within this regulatory frame, actors develop practices, norms and ideas that are specific to their enactment of the EWC legislation on the company-level. A key puzzle of this research project is: What happens to an EWC after the regulatory dimension breaks away? One possibility is that an EWC ceases to exist, e.g. management might insist on the regulatory thresholds to be met. Another possibility is that the past work and experiences between EWCs and management shape norms, routines and ideas, enabling the continuation of an EWC.Past research in institutional theory had a key focus on institutional change. We go beyond this focus and inquire how institutions are transformed, maintained or abandoned, focussing on institutional change, stability and demise. A key task is to identify the drivers, factors and actors that explain these institutional processes in the wake of Brexit.We have done preliminary research on EWCs affected by Brexit for this application which showed that some EWCs and management have negotiated supplementary agreements as a substitute for EU legislation, while others were struggling to carry on. On this basis, the project will interrogate such adjustment processes across 16 in-depth case studies of EWCs (about 128 interviews) with employee representatives, unions, and management.The project makes several key contributions. First, no previous research has examined the impact of Brexit on EWCs and thus we break new empirical ground. Second, we contribute to the theoretical literature by explaining how institutions continue, change or demise when regulatory foundations disappear, reaching beyond the well-developed literature on change, and specify mechanisms that maintain institutions and explain their stability or demise. Third, the project has an engagement and impact dimension with workshops in France, Germany and the UK to provide advice for practitioners on how to deal with Brexit, which will feed back into adaptation processes on the company-level, impacting employment relations.

• DFG Programme: Research Grants
• International Connection: France, United Kingdom
• Cooperation Partners: Professor Kevin Guillas-Cavan; Professor Marco Hauptmeier, Ph.D.