New law on informing workers in transnational companies

The Bulgarian government in conjunction with the social partners has drafted and presented to the parliament a bill on the information and consultation of employees in transnational undertakings, groups of undertakings and companies. The draft bill sets out the industrial relations system in transnational companies, by providing for the establishment of European Works Councils or other information and consultation procedures for employees. It also determines employees’ participation in the activities of a European company.

Proposed legislation on information and consultation of employees in transnational companies has been drafted, aimed at implementing the recommendations of the European Commission in the field of labour legislation. A bill amending and supplementing the Labour Code concerning the regulation of employment relations with respect to information and consultation already came into effect in July 2006 (BG0604039I). However, the Comprehensive Monitoring Report 2005 recommended the transposition of the latest acquis communautaire (entire body of EU law).

The draft bill supplements the Labour Code specifically in the field of information and consultation of employees in transnational undertakings. It fully transposes a number of regulations as stipulated by relevant EU directives related to information and consultation procedures for employees of these companies, namely:

• the establishment of European Works Councils or a procedure in community-scale undertakings and community-scale groups of undertakings for the purposes of informing and consulting employees (1994/45/EC);

• supplementing the Statute for a European company with regard to the involvement of employees (2001/86/EC);

• supplementing the Statute for a European Cooperative Society with regard to the involvement of employees (2003/72/EC).

Information procedures for workers

The draft bill adopts the definition of the European directive for transnational undertakings. The thresholds for an enterprise to be considered as a community-scale undertaking are at least 1,000 employees within the Member States and at least 150 employees in each of at least two Member States.

According to the draft bill, the central management of the transnational undertaking shall instigate negotiations for the establishment of a European Works Council (EWC) or another information and consultation procedure. It may do so on its own initiative or at the written request of at least 100 employees or their representatives in at least two undertakings in a minimum of two different Member States.

Workers and employees in transnational undertakings with headquarters in Bulgaria or in branches of such undertakings shall elect representatives of the EWC at their general meeting, regardless of whether the EWC is being established in Bulgaria or in another Member State. These functions may be assigned to representatives elected by trade union organisations.

The draft bill also stipulates that a special negotiating body (SNB) consisting of at least three members shall represent the workers and employees. The central management shall determine the number of members of the SNB so that each Member State, where a transnational undertaking has one or more branches, is represented by at least one member. The SNB shall have the task of determining – with the central management – by written agreement, the scope, composition, functions and term of office of the EWC, or the arrangements for implementing another procedure for the information and consultation of employees.

The central management and the SNB must negotiate with a view to reaching an agreement on the detailed arrangements for informing and consulting employees.

Rules on establishment of European Works Councils

The draft bill outlines the standard rules for establishing EWCs in transnational undertakings according to European Council Directive 1994/45/EC.

EWCs shall have a minimum of three and a maximum of 30 representatives of the employees of a transnational undertaking. They shall provide information and consultation on matters that concern the transnational undertaking or at least two of its establishments situated in different Member States.

Moreover, EWCs shall have the right to be informed and consulted on the progress of the business of the undertakings. This includes, for example, the organisational structure, economic and financial situation, trends, investments and substantial changes concerning organisation, transfers of production, mergers, cutbacks or closures of undertakings, and collective redundancies. Subsequently, the members of the EWC shall inform the workers and employees of the undertaking.

Participation in European companies and cooperatives

The draft bill also regulates for the information and consultation of employees in cases of the establishment of a European company and a European Cooperative Society, as well as the participation of employees in decision-making processes of the undertakings. It also sets out the obligations concerning providing information and electing worker representatives to the special negotiating body, as well as the rules of procedure.

A separate chapter of the draft bill concerns the procedures related to the provision of information and its dissemination that could harm the legal interests of the undertaking. It also underlines the confidentiality requirement for the members of the European Works Council, as well as for the members of the representative body of a European company and European Cooperative Society.

Commentary

The social partners discussed and adopted the draft bill in the National Tripartite Cooperation Council. The draft bill is expected to be discussed in parliament during its autumn session this year.

In its closing provisions, the draft bill stipulates that the date for the law to come into force will be the effective date of Bulgaria’s accession to the European Union.

Zlatka Gospodinova, Balkan Institute for Labour and Social Policy (BILSP)