The concept of participation refers to mechanisms for the involvement of employees in management decision-making by means other than information and consultation.
‘Direct’ employee participation is practised face-to-face or individually between employees and managers.
‘Indirect’ participation occurs through employee representation.
Financial participation encompasses different schemes under which employees can benefit from the organisation’s economic performance.
Employee participation is referred to in Council Directive 2001/86/EC supplementing the European company Statute with regard to the involvement of employees. Article 2(k) defines participation in particular terms as ‘the influence of the body representative of the employees and/or the employees’ representatives in the affairs of a company by way of the right to elect or appoint some of the members of the company’s supervisory or administrative organ; or the right to recommend and/or oppose the appointment of some or all the members of the company’s supervisory or administrative organ’. This definition of participation is repeated in Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees.
In February 2011, a total of 745 European Companies (SEs) had been established. However, most SEs do not conform to the standard definition, as they are SEs without employees (‘empty SEs’) and/or those without a specific business purpose (‘shelf SEs’). Roughly one quarter of the total number of SEs are considered to be normal SEs, i.e.with employees and economic activites. As at January 2011, an agreement on worker involvement had been concluded in 68 SEs. The agreements of the larger SEs, in particular, are generally in line with good ‘EWC practice’ and, on certain points, go beyond the provisions of the 2001 SE Directive. In 33 SEs, the rights enshrined in the agreement include board-level participation, thereby adding an important dimension for workers’ voice in company decision-making. A European Foundation report from 2011 (Employee Involvement in Companies under the European Company Statute) concluded: ‘Employee participation at board level was an important aspect of the negotiations of employee involvement in all ten cases [studied in the report]. Company specific traditions, requirements and good practice experience were respected. In many cases the employee participation in board levels was adjusted according to new needs, efficiency criteria etc. No company switched from two-tier to one-tier corporate governance.’