Employee representation: new challenges from Europe

Developments at EU level have profound implications for employee representation arrangements in the UK. We review the issues and highlight the possible consequences for the new Labour Government's planned industrial relations reforms.

One of the biggest stumbling blocks for the effective implementation in the UK of successive EU industrial relations Directives has been the so-called "representation gap" - whereby a significant and growing proportion of the UK workforce lacks collective representation at work. Labour Force Survey data for 1996 show that only 45.8% of UK employees work in workplaces at which trade unions are recognised, and that the proportion of employees covered by collective bargaining is even lower at 36.5%. Joint consultation is also in decline: according to the Workplace Industrial Relations Survey, 29% of establishments had a joint consultative committee in 1990, down from 34% in 1984.

Traditionally, statutory collective employment rights in the UK have been applicable only where trade unions are recognised by employers. However, this policy was overturned by the 1994 European Court of Justice (ECJ) ruling that, by restricting the legal obligation to consult employee representatives on impending redundancies and transfers to employers which recognise unions, the UK was in breach of the EU Directives on collective redundancies and transfer of undertakings. This forced the previous Conservative UK Government to introduce new regulations in 1995 requiring consultation on these issues either with representatives of recognised unions or with other representatives elected by employees. Broadly parallel arrangements were subsequently introduced in respect of consultation over health and safety questions.

In the same vein, in its consultation document on implementing the EU working time Directive, the previous UK Government raised the possibility of introducing a further issue-specific employee representation mechanism to enable employers to conclude agreements derogating from the Directive's standard provisions with representative bodies or groups other than trade unions. Measures to implement the European Works Councils Directive in the UK will also need to take account of the "representation gap" when determining the procedures to be used for the selection of UK members of negotiating bodies and statutory EWC s.

The prospect of further EU intervention

The European Commission is reportedly of the view that the UK's 1995 amending regulations concerning consultation over redundancies and transfers do not meet the terms of the ECJ ruling. This could lead to the threat of renewed infraction proceedings against the UK if the current legislation is not further amended.

But potentially even more far-reaching is the recent Commission initiative targeting national employee information and consultation procedures more generally. On 4 June 1997, the European Commission launched a consultation exercise involving European-level employers' and trade union bodies on the "possible direction of Community action" concerning "information and consultation of workers within the national framework". The Commission's consultation document makes the case for an EU framework to ensure that Member States' national provisions oblige enterprises to have permanent arrangements for informing and consulting employee representatives on a wide range of issues. Topics for consultation would include business developments, reorganisation, training, environmental issues and "the forward management of employment". Under the terms of the Maastricht social policy Agreement, this consultation exercise constitutes the first step in a process which could culminate in further EU legislation in the information and consultation field.

Implications for the UK

The Commission's initiative highlights once again the tension between the traditional framework of employee representation in the UK based on the recognition of trade unions by employers and the universal information and consultation rights which are typical elsewhere in Europe and embodied in EU law. The UK and Ireland are the only EU Member States without a generally-applicable system of information and consultation through works councils or similar bodies established by law or by central collective agreement.

More particularly, the Commission initiative could have a significant bearing on the development of the new Labour Government's proposals for a statutory right to trade union recognition (see EIRObserver 2 p.9). Labour's election manifesto commits the new Government to obliging employers to recognise a trade union where this is supported in a ballot by employees. However, on the logic of the 1994 ECJ ruling, any EU legislation affecting national information and consultation rights would almost certainly entail extending such rights to non-union groups as well as those represented by recognised unions. A key issue for the UK Government would therefore be whether and how an approach combining both universal, EU-driven information and consultation rights and the designation of recognised trade unions with collective bargaining rights could be developed satisfactorily.

Commentary

The Commission's June proposal has been widely perceived, in the UK context, as implying the creation of works councils as the vehicle for the required information and consultation procedures (at least in the absence of recognised trade unions). Such a development would be highly controversial:

• it is likely to be opposed by many employers, particularly those who see no need for any mechanism to give a collective "voice" to employees;

• many trade unionists are likely to be concerned that works councils would undermine the long-standing tradition of "single-channel" representation through trade unions and that, in the light of the UK's highly decentralised system of collective bargaining, works councils might inhibit the further recognition of unions and even lead to the withdrawal or narrowing of recognition where it exists;

• others, however, think that provision for works councils would offer trade unions more fruitful organising opportunities than a legal framework based solely on the mechanism of recognition - enabling union members to become elected workplace representatives armed with statutory rights even though an employer refuses to recognise the union.

UK government ministers are said to be sceptical about the Commission's proposals. Moreover, the outcome of the Commission initiative is far from certain, notwithstanding the scope for EU legislation on information and consultation to be adopted by qualified majority voting within the Council. Nevertheless, it seems inevitable that UK law and practice will increasingly be influenced by the predominant European model of universal employee representation rights - a process that is likely to have a significant impact on the structures of employee representation in the UK and the role played by trade unions. (Mark Hall, IRRU)