Non-union forms of employee representation

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Trade unions are the main channel of representation of workers' interests in Polish companies. However, the unions' increasing marginalisation and declining membership tends to hamper such representation. This feature examines the non-union forms of company-level employee representation in place in some types of enterprises in 2002, concluding that such channels - mainly workers' councils and employee representation on supervisory boards - are limited in scope and largely ineffective. Meanwhile, Poland has recently adopted legislation to implement the EU Directive on European Works Councils.

Trade unions in Poland have lost members and influence and become increasingly marginalised in recent years, with trade union density having fallen to as low as 14% of the workforce (PL0208105F). This hampers the unions' ability to provide effective representation of workers' interests in companies. Polish labour legislation, however, also provides for various forms of non-union employee representation at company level, and these are examined below.

Workers' councils

Workers' 'self-government' has a long tradition in Poland. In state-owned enterprises, this is currently governed by the 1981 Act on workers' self-government (since amended), which provides for workers' councils with a representative function, separate from trade unions, in such enterprises (though in no other types of organisation). According to the legislation, workers' councils have the following rights:

  • approving and amending the enterprise's annual plan;
  • making proposals for investments;
  • adopting the enterprise's annual report and approving its balance sheet;
  • approving merging and divestment decisions;
  • approving changes in the direction of the development of the enterprise;
  • deciding, on the recommendation of the management, on the enterprise's works regulations; and
  • adopting resolutions on the appointment or dismissal of company directors and other persons with managerial functions in the enterprise.

Currently, the significance of this form of representation of workers' interests is very small. The reasons for this state of affairs include the following:

  • the increasing importance of trade unions at the beginning of 1990s, in particular in large state enterprises. As a result, workers' councils most frequently merely voice the opinions of the strongest trade union organisation in the enterprise;
  • workers' self-government has been severely affected by the process of economic transformation. Although the idea that workers' councils hinder the privatisation process in companies is a misleading generalisation (in many cases, the contrary is the case), the majority of councils have adopted an attitude of passive approval of any changes within companies, and their activity has been limited to deciding about the details of changes of ownership; and
  • a major fall in the number of workers' councils. Given the direction of economic restructuring adopted in Poland, there is a tendency for state enterprises to disappear through 'commercialisation' or privatisation, and where ownership changes hands from the state, workers' councils are automatically abolished. According to estimates from the Ministry of the Treasury (Ministerstwo Skarbu Panstwa, MSP), there were 2,054 state enterprises in 2001 (compared with 2,382 in 2000 and 8,453 in 1990).

Representation on supervisory boards

In former state enterprises whose ownership has changed, workers' interests are represented by the appointment of workforce representatives to the supervisory board. According to the 1996 Act on the privatisation and commercialisation of state enterprises, in companies subject to the process of commercialisation (ie transformation of an enterprise into a partnership) two-fifths of the members of the supervisory board should be selected by the workforce, provided that the State Treasury is the only shareholder of the partnership (according Ministry of the Treasury data, in 2001 there were nearly 600 such companies). After the State Treasury cedes over a half of its shares in such an enterprises, workers retain the right to choose:

  • two members of supervisory boards consisting of up to six persons;
  • three members of supervisory boards consisting of seven to 10 persons; and
  • four members of supervisory boards consisting of 11 or more persons.

Moreover, in such companies established in the course of commercialisation and employing over 500 workers annually, one member of the management board is chosen by all employees entitled to vote. Up until the end of 2001, the Treasury ceded its shares in over 950 enterprises.

It is widely believed that the representation of workers on supervisory boards is merely symbolic, a view supported by research conducted towards the end of 1990s among workforce representatives on supervisory boards. The representatives' attitude towards their role in these boards was particularly surprising. Over half of the representatives surveyed thought that they should represent the interests of the whole company or its owner. One fifth of respondents believed that the interests of the company and the owner were equally important. Only one fifth placed the workers' interests first.

New forms of representation?

Neither workers' councils not employee representation on supervisory boards exist in former state enterprises which have been directly privatised, or in private enterprises newly established during and since the 1990s. The employees of such companies must rely for representation solely on trade unions, whose influence, as mentioned above, is limited, while non-union employers are not willing to recognise unions. Recent research (PL0206102F), indicates that private employers view much more favourably the idea of an employee delegate or representative directly selected by the workforce, who would be responsible for contacts with the company's owner or management. However, this idea is criticised by trade unions, which wish to remain the only form of representation of workers' interests at company level in private enterprises.

European Works Councils

It is likely that the trade unions' 'monopoly' of employee representation will be challenged in some private companies by the development of European Works Councils (EWCs). In April 2002, Poland's Act on European Works Councils (Europejskie Rdy Zakladowe) was adopted, aimed at implementing European Union Directive (94/45/EC) of 22 September 1994 on the establishment of an European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees. The Act, which will come into force on the date of Poland's accession to the EU, regulates the establishment of EWCs in multinational companies based in Poland (or multinationals based outside the European countries covered by the Directive and choosing Poland's legal regime as the basis for their EWC), as well as many aspects relating to Polish involvement in the establishment and operation of EWCs in multinationals based elsewhere but with operations in Poland.

The Polish legislation largely follows the terms of the Directive. However, in certain areas the Directive leaves scope for national-level 'customisation'- notably the method for the election or appointment of the members of the special negotiating body (SNB) which negotiates with management over EWC agreements based on the Directive, and of statutory EWCs based on the Directive's subsidiary requirements (ie essentially where no agreement is reached). On the selection of such Polish employee representatives, the new Act distinguishes between cases where there the multinational concerned has only one Polish operation and cases where it has more than one operation.

In the first case, the Polish SNB or EWC representatives are appointed by the representative company-level trade union organisation. If there is no such organisation, representatives are elected by at least 100 employees or their representatives. If there is more than one trade union organisation in the enterprise, the representatives are appointed jointly by all these unions. If they cannot agree, the representatives are elected by employees from candidates nominated by the unions.

In the second case, three representatives are appointed or elected in the above fashion in each enterprise concerned. These representatives then elect from among their number the Polish representative(s) on the SNB or EWC.

Although Poland is not yet covered by the Directive, Polish representatives have already been included on the EWCs of between 10 and 20 multinationals operating there - for example, Polish representatives have been included in the Benckiser EWC since 1995 and the ABB EWC since 1998. According to research conducted by Stanislaw Rudolf of the University of Lodz, in all but a few cases the Polish representatives are trade union members. The majority belong to the Independent and Self-Governing Trade Union (Niezale?ny Samorz?dny Zwi?zek Zawodowy Solidarno??, NSZZ Solidarno??). Nearly all are senior officials in company-level union organisations, and some are also members of the governing bodies of sectoral trade unions or even of the central organisations of NSZZ 'Solidarno??' or the All-Poland Alliance of Trade Unions (Ogólnopolskie Porozumienie Zwi?zków Zawodowych, OPZZ).

According to the research, Polish EWC members point to a number of advantages related to their participation in the EWCs' activity - advantages for the Polish subsidiaries, their workforce and the trade unions. The great majority of respondents claimed that participation in the EWC increases the role and prestige of the Polish subsidiary as part of the overall multinational, while the information provided to EWC members constitutes a source of advantage for the Polish subsidiaries.

Commentary

Unfortunately, the forms of representation of workers' interests described above can be found only in a small number of companies. A much greater proportion of workers have neither trade union nor non-union representation of their interests. Most employers try by all means to avoid the establishment of a trade union organisation within their company, a fact which constitutes a serious hindrance to the introduction of new structures at this level level. At the same time, any attempts to institutionalise workers' representation outside trade unions meet with strong objections on the part of the latter. (Rafal Towalski, Warsaw School of Economics [Szko?a G?ówna Handlowa, SGH] and Institute of Public Affairs [Instytut Spraw Publicznych, ISP]

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