European Parliament debates employee consultation measures

At its plenary session of 16 January 1997, the European Parliament debated the future of the European Company Statute and adopted a revised draft of the Transfer of Undertakings Directive

At its plenary session of 13-17 January 1997, the European Parliament debated two important measures relating to employee consultation in European companies. After the European Works Councils (EWCs) Directive was passed in 1994, the Commission published a Communication on the future of employee consultation in November 1995, in order to revive a legislative issue which has been under discussion in various forms for over 15 years. Its aim was to explore whether the model used for determining the structure and operation of EWCs could be used in a wider context as a basis for making progress with the long-delayed European Company Statute.

The debate in the European Parliament was based on a report by Winifried Menrad (Germany, European People's Party), in which he expressed his support for the Commission's efforts to try and resolve the current debate on worker participation in European companies in the context of a new European Company Statute. In the debate, he also underlined his hopes that provisions for further workers' participation would be flexible enough to permit the establishment of procedure and participation rules, and welcomed the involvement of experts in the consultation process. Support for a new legislative instrument to ensure worker representation in European companies was echoed by a majority of MEP s, including many from the UK who claimed that EWCs were now supported by an increasing number of British companies.

Replying for the Commission, Padraig Flynn explained that the Commission's approach was to embark on a consultative exercise with a view to breaking the deadlock over the European Company Statute. He reminded MEPs of the recent establishment of a high-level group of independent experts, chaired by Etienne D'Avignon, which looks at the issue of employee participation. He reiterated that the Commission Communication supports the idea of a general European legal framework for worker consultation at a national level to support the EWCs Directive, and pressed for urgency, with economies converging as Economic and Monetary Union (EMU) was coming into force, as well as the need to ensure flexibility. To this end, he would, in the next few months, present the Commission with a proposal to initiate the procedure for consultation with the social partners at European level. Mr Flynn expressed his hope that the social partners would be willing to identify the content of rules which should apply in this area and how these should be implemented.

The second debate concerned Commission proposals to amend the 1977 Transfer of Undertakings Directive. While there is general agreement that some of its provisions are now outdated, the Commission's initial proposals for revision, published in September 1994, were rejected by the European Parliament and the European trade union movement, as they were seen to restrict the protection enjoyed by certain workers in the event of a transfer. After two years of deadlock, the Commission agreed to withdraw these aspects of the proposal, and the plenary session of the European Parliament approved the revised draft with a number of amendments. However, as the proposal is being considered under the "consultation procedure", the Council of Ministers is not bound to accept these amendments.

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