Employers and unions respond to review of EWCs

In October 2003, the Confederation of British Industry and the Trades Union Congress published divergent views on the case for revising the EU European Works Councils (EWCs) Directive, as part of a UK government consultation exercise on the issue.

During October 2003, both the Confederation of British Industry (CBI) and the Trades Union Congress (TUC) published their responses to a recent government discussion paper, The UK experience of European Works Councils ( UK0308102N). The paper aimed to gather information and views to help the government prepare for the EU-level consultations on revising the EU Directive ( 94/45/EC) on European Works Councils (EWCs) that are due to get underway shortly ( EU0310204F). Predictably, the two organisations put forward sharply divergent views. The CBI 'sees no reason for a substantial review of the Directive', and urges the government to take a 'minimal approach' to its revision. The TUC, on the other hand, argues that the EWCs Directive has 'serious shortcomings' and that the revision of the legislation is 'both necessary and urgent'.

In its response to the discussion paper, the CBI expresses 'concern' that the European Commission 'is likely to propose a substantial number of far-reaching amendments to the current Directive'. The CBI’s response emphasises that:

• 'management and employee commitment is key to ensuring that employee involvement mechanisms are substantive rather than symbolic. This can only be achieved by ensuring employers have the flexibility to introduce structures which are appropriate for their firm';

• there is 'little employee demand' for European-level information and consultation bodies, and 'no case' for reducing the Directive’s employment thresholds;

• there is a need for an 'effective fit' between the forthcoming UK Regulations ( UK0307106F) to implement the EU Directive (2002/14/EC) on national-level information and consultation ( EU0204207F), and legislation on consultation at European level; and

• 'ensuring employee commitment through effective consultation' is 'particularly important' in the area of collective redundancies, but the government should guard against 'simplistic calls to extend existing obligations'.

In response to specific questions raised by the discussion document, the CBI argues that:

• the information and consultation provisions should not be strengthened to require that 'agreement must be sought'. Consultation 'should remain as an exchange of views and dialogue';

• proposals to 'time-limit' existing Article 13 agreements (ie voluntary EWC agreements initially signed before the Directive came into force) would go against the spirit of the Directive;

• companies brought within the scope of the Directive for the first time, eg by merger or growth, should be able to reach voluntary Article 13 agreements;

• most employers already provide training for EWC members as a matter of good practice, but it must fit the needs of the business. Rights to time off 'must be reasonable and cover only core topics'. An 'alternative suggestion ... could be to extend the EWC meeting to include a relevant training session on issues current within the company'; and

• there should be no automatic seats for outside experts on EWCs.

The TUC’s submission to the government stresses that the 'key issue' raised by unions and employee representatives on EWCs is 'the nature and timing of consultation': 'Complaints range from notification of key decisions (such as restructuring plans, or changes in ownership) after the event, to inappropriate use of confidentiality provisions, to management reliance on tight definitions of what constitutes a 'transnational' issue to keep matters off EWC agendas.' The TUC calls for 'clearer definitions of what constitutes consultation in good time', based on those used in the national information and consultation Directive and the employee involvement Directive ( 2001/86/EC) accompanying the European Company Statute ( EU0206202F). According to the TUC, consultation 'should take place at a time which would permit an input from employee representatives into decisions while alternatives are still under consideration'.

Other points made by the TUC include the following:

• there should be provision for at least two EWC meetings per year;

• lowering the Directive’s employment thresholds 'would be of value in some cases', and would be unlikely to result in 'a rash of vexatious demands';

• the timescale permitted for negotiations over 'Article 6' agreements (ie those concluded on the basis of the rules on negotiations and agreements laid down in the Directive) should be reduced from three years to six months;

• Article 13 agreements should be 'enforceable';

• the grouping of smaller national workforces for the purposes representation on special negotiating bodies (SNBs), together with a minimum national employment threshold for representation, would reduce the 'distortion' of SNBs by the requirement that every European Economic Area (EEA) country is entitled to a seat irrespective of the number of employees;

• the Directive should make specific provision for the training of EWC representatives; and

• joint ventures should have representation on the EWCs of at least one partner company.

The TUC also proposes a number of amendments to the UK’s Transnational Information and Consultation of Employees Regulations 1999 ( UK0001146N), which implement the EWCs Directive, including a role for recognised trade unions in nominating representatives and enforcing the statutory requirements.

The deadline for responses to the discussion paper was 7 October 2003. The government says that the information and views submitted will provide 'a stronger evidence base from which to consider possible changes to the legislation'.