Social partners deliver their opinions on the Davignon report

Following the publication of the findings of the expert group on worker involvement in the European Company, and the subsequent initiative by the Luxembourg Presidency on a new legislative proposal, the European social partners at intersectoral level delivered their opinions on these recommendations in late 1997. These show a continuing divergence of views on the form and scope of worker involvement in the European Company.

In May 1997, the group of experts on "European systems of worker involvement", known as the Davignon group, after its chair, issued its report (EU9705128N). The group had been set up by the European Commission essentially to suggest ways of breaking the deadlock on worker involvement measures which had blocked the adoption of the European Company Statute for many years. The report set out recommendations for the information, consultation and board-level participation of employees in the European Company (SE), which were then largely taken up by the Luxembourg EU Presidency of the second half of 1997 in a new draft version of the Statute (EU9710158N).

In its comments on the Davignon report, published in November 1997, the Union of Industrial and Employers' Confederations of Europe (UNICE) stresses the importance of a European Company Statute for industrial cooperation, arguing that the availability of a legal form of this type would also help to facilitate cross-border mergers. However, UNICE stresses that such an instrument must remain flexible in order to be attractive to companies, and must therefore not impose any additional constraints on management. UNICE welcomes the emphasis placed by the authors of the Davignon report on the importance of autonomous negotiations on worker involvement between management and workers. However, UNICE argues that, having regard to the fact that most Member States do not provide for worker participation in corporate bodies, member organisations from those countries express strong opposition to the implementation of so-called "reference rules" (setting down fall-back minimum involvement provisions) in this area. UNICE therefore argues that some work remains to be done to ensure that a form of worker involvement can be devised which respects the relevant national traditions; any solutions devised would have to be optional in character. It is also argued that other provisions, which have in the past been among the bones of contention in the drafts for a European Company Statute (eg company law) would have to be revisited.

The Economic and Social Committee (ESC) adopted, at its plenary session on 15 December 1997, an Opinion on the European Company Statute. In it, the ESC echoes the support for a negotiated agreement to be reached on worker involvement. The ESC argues that there should be fall-back reference provisions, but that the Luxembourg Presidency's proposals on the negotiating procedures are insufficient. In order to reinforce the negotiation procedure, the Committee proposes that :

  • in accordance with national practices, not only workers' representatives from firms, but also the representative trade unions from the firms in question and the relevant European trade union associations should have the right to negotiate on behalf of workers; and
  • if negotiations threaten to break down, an arbitration procedure should be brought into play.

In a resolution on worker involvement in a European Company approved by its executive committee of 4/5 December, the European Trade Union Confederation (ETUC) argues that the Davignon report provides a good basis for further discussion on the status of the European Company and the involvement of workers and their representatives. ETUC supports the approach of the Davignon group in relation to initial negotiations and the application of reference rules, should such negotiations bear no fruit. It emphasises the important role played by European industry federations of trade unions in such transnational negotiations.

ETUC also welcomes the point made by the report which argues that the possibility of founding an SE by transforming a national company, if permitted, would give rise for serious concern, especially if this was done in order to avoid national regulations on participation. However, for the ETUC, even in the case of an SE being set up by way of merger of two or more different undertakings from different Member States, serious concerns still remain that this might lead to a flight from national provisions on participation. ETUC also approves of the group's recommendation that the right of individual workers' representatives to call upon experts of their choice should be recognised. The principle of equal status of workers' representatives is held to be of key importance, but ETUC questions whether the restriction of workers' representatives to 20% of the seats on the supervisory board of an undertaking (as recommended by the Davignon report) is sufficient, and demands a clear improvement of this quota.

ETUC argues that the proposal put forward by the Luxembourg Presidency is deficient in the following ways:

  • the role of European industry federations needs to be emphasised;
  • the definition of information and consultation is too limited;
  • negotiations on information and consultation should also take place where the SE is set up as a subsidiary company; and
  • the Regulation on the European Company Statute must establish the rights and competencies of the board-type bodies on which employees are represented, by including a list of business matters on which they are obliged to give their consent.
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