At its meeting on 6 February 2013, Luxembourg’s cabinet approved draft legislation to reform social dialogue within companies. The particular aims of the bill are to put the ‘staff delegation’ at the heart of social dialogue. This body will become the main representative of employees in negotiations at company level. The joint committee will be abolished, and its responsibilities for information, consultation and co-determination transferred to the staff delegation.
Reasons for reform
Draft legislation based on a consultative document prepared by Luxembourg’s Ministry of Work and Employment, Social dialogue within companies (in French, 288Kb PDF), is intended to reform social dialogue within businesses in the country. The Luxembourg Government has passed the draft of the new bill to its Chamber of Deputies, and a vote on the plans is expected before the summer.
The consultative document says:
Faced with the economic and technological changes that companies need to confront and which often have an impact on employment and employees’ skills, the quality of social dialogue needs to be reappraised.
It stresses that the intention is not to ‘subvert the structures of dialogue’, but to ‘adapt it to the new economic realities, to simplify its operation, increase transparency and integrate it fully in corporate life’. The quality of social dialogue must evolve through ‘simplifying the conditions’, as well as by eliminating duplication and strengthening the role of the staff delegation.
Single body created for workers’ representation
The reform abolishes the joint committee, one of the staff representative bodies. Until now, this body has been mandatory in companies with at least 150 employees, being composed in equal parts of employee representatives and members of the company management. Its powers and functions will be transferred to the staff delegation.
As a result of this change, the staff delegation, which is compulsory in enterprises having at least 15 employees, becomes the single body representing workers’ interests. The consultative document argues:
The aim of this modification is to strengthen a participatory approach within companies. We do not need to have one body focused on making demands, that is to say the delegation, and another body appointed as the venue for cooperation between the employer and the workforce.
The threshold for the delegation to exercise co-determination rights remains unchanged at 150 employees, the current trigger for establishing a joint committee.
Conciliation mechanism created
One of the bill’s innovations is the provision of mediation in the case of disputes. The bill proposes a range of mediation options. These include mediation introduced as part of a collective agreement (which already exists in certain cases), or by way of an interprofessional agreement, or recourse to an ad hoc mediator designated by joint agreement from a list of candidates. Mediation may come into play, for example, if agreement cannot be reached on a point coming under co-determination. In this case, the mediation replaces the National Conciliation Office (LU0211102F), which has the job of settling any disputes of this kind.
Simplification at delegation level
The bill also brings about a number of simplifications at staff delegation level. In companies with multiple establishments, the reform gets rid of ‘divisional delegations’ at the different establishments and maintains a single, central delegation which is to be the employer’s sole counterpart.
‘Establishment representatives’ will be retained only under certain conditions. These do not constitute a delegation as such, but are included in the delegation at company level.
The reform also removes young employees’ delegates. Their responsibilities will be transferred to the delegation. They still have the protection of Article 411–5 of the Labour Code which allows employees under the age of 21 to elect representatives from the same age group.
One new initiative of the reform is the creation of a delegation at the level of economic and social entities that are made up of several independent companies, but which come under the same management.
Greater resources for employee representatives
The bill strengthens the delegation’s right to refer to external advisors or an external expert. The government says:
...this is justified by the complexity of a certain number of questions which the delegation has to deal with. We cannot on the one hand approve greater employee participation, while on the other denying the resources that this requires.
For the first year of their term in office, the delegates will be granted the right to 16 hours of additional training. This will come on top of current provisions, which range from one week’s training per term in office in businesses with fewer than 50 employees to one week per year in companies with more than 150 employees.
According to the bill:
...a good dialogue between equal social partners presupposes, on the one hand, a level of information that is as complete as possible, as well as delegates who are well trained and familiar with legal methods and management techniques within the company.
As far as credited working hours are concerned, the draft bill lowers the threshold from which a delegate is entirely exempted from his normal duties, from 500 to 250 employees.
In addition, the powers and functions of the safety delegate have been extended to include health. The status of health and safety delegates has also been upgraded since, if they are not elected, they are allowed to attend delegation meetings in an advisory capacity. The delegates’ area of responsibility is increased to include questions of environmental protection that have an impact on working conditions and health. From now on these delegates will have a right to training.
One of the main changes is that the proposals make it possible for the staff delegation in companies employing at least 51 employees – instead of the previous figure of 150 – to be supported by external consultants as representatives of unions recognised as representative at national or sectoral level. This measure will reinforce the role of unions.
The rights and resources of the delegates are also extended, particularly as regards electronic communications. The same applies to contact with employees. The delegates will be given the right to move freely around the company.
Delegation’s powers and functions
The draft bill explains that the delegation’s powers and functions ‘have been clarified, reorganised and added to’. The purpose of delegations is defined as being ‘to prevent and to resolve’, in a spirit of cooperation, individual or collective disputes likely to arise between the employer and the paid staff.
In line with that spirit of cooperation, the draft bill obliges the employer to communicate to the staff delegation and the health and safety delegate all necessary information about absenteeism trends. In other respects, the right to information and consultation about the life of the company is extended to include additional areas, such as:
- basic vocational training;
- policies to prevent harassment and violence in the workplace;
- the organisation of working hours;
- continuing vocational training programmes;
- the establishment of an age management plan;
- the internal redeployment of staff;
- promotion of work–life balance.
The delegation also has the right to be informed and consulted about the use of temporary staff and fixed-term contracts.
Areas of co-determination
The draft bill increases the number of areas in which decisions must be taken by joint agreement between the employer and the staff delegation in companies having at least 150 employees. This includes the establishment and implementation of any continuing vocational training programme or measure.
The consultative document says:
This is an area that not only primarily concerns the employees and their skills, which must be regularly updated, but as a general rule the company also benefits in this connection from public subsidies which need to be allocated in the interests of the company, employment and the employees.
Negotiating procedure
When the parties are unable to reach agreement on a co-determination issue, the draft bill makes it possible for the staff delegation to mandate its executive committee to conduct negotiations and reach a decision with the employer. The executive committee can obtain assistance from up to a maximum of four experts. At least one expert must be nominated by each trade union that is representative at national, general or sectoral level and has obtained at least 20% of the votes in the most recent workplace elections (social elections).
Within a 48-hour period of concluding negotiations, the executive committee must communicate the joint decision to the staff delegation. The delegation, by a simple majority of its members, has 48 hours from the time of receiving this communication to draw up a duly substantiated request for the renegotiation of one or more unresolved issues.
Reaction of the social partners
Although the social partners have not released an official statement, the press has reported a certain reticence on the part of the employers.
According to PaperJam, the employers’ organisation, the Union of Luxembourg Companies (UEL), believes the bill ‘can only cause a delay in processes which require urgent decisions’. the UEL is said, however, to support better training for staff delegates. In a position paper (in French, 79KB PDF) dated 25 January 2006, the UEL declared its support for the abolition of divisional delegations, but did not call for the suspension of the joint committee.
According to PaperJam, the OGBL trade union said it was:
...in favour of the additional resources granted to the delegates within companies, so that they will have time to become involved in issues and help shape negotiated solutions.
Commentary
The reforms proposed by the draft bill are based on international comparisons which demonstrate that countries with a strong economy frequently have effective social dialogue. It is not surprising that the Luxembourg model closely mirrors that of industrial relations in Germany, with the introduction of a single body along the lines of the German works council. This council has information and consultation rights, as well as the right of co-determination. Likewise, the bill takes up the German Einigungsstelle conciliation, mediation and arbitration mechanism, which allows sticking points in co-determination issues to be overcome.
Frédéric Turlan, IR Share