Law on European Works Councils adopted

In June 2002, the Slovene parliament passed a Law on European Works Councils (LEWC), aimed at transposing the EU Directive on EWCs into national legislation in advance of EU accession. The LEWC can be seen as a natural extension of existing Slovene legislation on employee information, consultation and co-determination, which does not take into account supranational company decision-making. In practical terms, the impact of EWCs in Slovenia is still at an early stage.

On 20 June 2002, the Slovene parliament passed the Law on European Works Councils (LEWC) (Zakon o Evropskih svetih delavcev). The purpose of the LEWC is primarily to transpose the requirements of the EU 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 into Slovene legislation. Because the Directive is a part of the EU legal order, it was necessary to transpose it before the accession of Slovenia to membership of the Union. It was transposed by law (rather than agreement between the social partners), as was the case in most EU Member States (TN9807201S). The LEWC came into force on 20 July 2002. It will come into use on the day that Slovenia joins the EU. The exception is where EU multinational companies decide to include in their European Works Council (EWC) or information and consultation procedure employee representatives from subsidiaries in Slovenia.

In Slovenia, the information and consultation of employees directly and through works councils or workers' representatives is regulated by the 1993 Law on the Participation of Workers in Management. This law regulates information, consultation and also co-determination for workers. This law put into effect Article 75 of the Constitution of the Republic of Slovenia, which states that 'employees shall participate in the management of commercial organisations and institutions in a manner and under conditions provided by law'. However this law - as is often the case with the relevant legislation or practice in the current EU Member States - does not take into account supranational company structures, which may take away from national-level management responsibility for decisions that have consequences for employees' working and social situation . As the EWCs Directive states, 'this may lead to the unequal treatment of employees affected by decisions within one and the same undertaking or group of undertakings'. Therefore the LEWC can be considered as a natural extension of existing Slovene legislation in this field.

Contents of the LEWC

The LEWC follows the Directive to a great extent. Therefore the description below focuses on areas which leave scope for national-level 'customisation'. These are especially: 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); the method for determining the number of supplementary members of SNBs and statutory EWCs (on top of the basic allocation of one member for each country covered by the Directive where the multinational concerned has an operation); the protection of employees' representatives; and enforcement procedures.

The LEWC covers:

  1. general provisions;
  2. the special negotiating body;
  3. agreements on the establishment of an EWC;
  4. the establishment of statutory EWCs based on the law;
  5. principles of cooperation and protection of representatives;
  6. resolution of disputes;
  7. penalties; and
  8. final provisions.

General provisions

Among other matters, the general provisions contain the various definitions applicable to the law. All these are in line with the Directive's provisions, though the LEWC uses the term 'business company' (gospodarska druzba) in accordance with Slovene Law on Business Companies (Zakon o Gospodarskih Druzbah).

Special negotiating body

The Directive provides that the Member States should determine the method to be used for the election or appointment of the members of the SNB from their territory. Furthermore, the number of supplementary members (in addition to the basic allocation of one per relevant country) is to governed by the legislation of the Member State where the central management of the multinational concerned is located.

The LEWC provides that workers' representatives from the Republic of Slovenia on SNBs are to be elected by the workers' assembly in a secret ballot. The right to propose candidates for election as SNB members is granted to works councils and representative trade unions in the company or subsidiary concerned, or to a group of at least 50 workers in the company or subsidiary.

Regarding supplementary SNB members, the LEWC provides that each Member State with at least 25% of the multinational's total workforce in the countries covered by the Directive is entitled to one extra representative, rising to two extra representatives for Member States with at least 50% of the total workforce and three for Member States with at least 75% of the workforce.

EWC agreements

The chapter of the EWC on agreements to establish EWCs based on the Directive (ie 'Article 6' agreements) regulates the selection of EWC members from Slovenia. If not otherwise determined by the agreement, the selection method is the same as for SNB members (see above) and members of statutory EWCs (see below) - ie, the EWC members are elected by the workers' assembly in a secret ballot. The right to propose candidates for election as EWC members is again granted to works councils and representative trade unions in the company or subsidiary concerned, or to a group of at least 50 workers in the company or subsidiary.

Statutory EWCs

A statutory EWC is to established on the basis of the law itself where central management refuses to commence negotiations, negotiations are unsuccessful, or the parties so decide (Article 7 of the Directive and Article 18 of the LEWC). The LEWC provides that a statutory EWC must have at least three and at the most 30 members. Substitute members can also be appointed.

Regarding supplementary EWC members (ie on top of the basic allocation of one per relevant country) the LEWC determines that: one extra member is to be appointed from every Member State with at least 20% of the multinational's total workforce in the countries covered by the Directive; two extra members from Member States with at least 30% of workforce; three extra members from Member States with at least 40% of workforce; four extra members from Member States with at least 50% of the workforce; five extra members from Member States with at least 60% of the workforce; six extra members from Member States with at least 70% of the workforce; and seven extra members from Member States with at least 80% of the workforce.

The LEWC provides that statutory EWC members from the Republic of Slovenia are to be selected in the same way as SNB members (see above) and members of agreed EWCs (see above) - ie, the EWC members are elected by the workers' assembly in a secret ballot. The right to propose candidates for election as EWC members is once again granted to works councils and representative trade unions in the company or subsidiary concerned, or to a group of at least 50 workers in the company or subsidiary.

Protection of representatives

Article 35 of the LEWC, which governs the protection of employee representatives (Article 10 of the Directive), determines that EWC members employed in Slovenia are protected according to Article 67 of the Law on the Participation of Workers in Management and Article 113 of the Law on Labour Relations (SI0206101N). This protection also covers substitute EWC members, SNB members and workers' representatives in the framework of an information and consultation procedure.

Penalties

Article 37 of the LEWC, which governs penalties (Article 11 of the Directive), determines monetary fines for legal persons and responsible persons when they breach the LEWC. In addition, the Penal Code of the Republic of Slovenia provides for sanctions in the event of breaches of rights to participation in management.

Social partner involvement in Directive's transposition

The draft LEWC was discussed on 8 May 2002 at the continuation of the 100th session of the Economic and Social Council of Slovenia (Ekonomsko socialni svet Slovenije, ESSS) (SI0207103F). Both employers and trade unions made remarks, some of which were - after further consultations - taken into account by the government when it sent the final LEWC proposal to parliament.

Dusan Semolic, the president of the Union of Free Trade Unions of Slovenia (Zveza svobodnih sindikatov Slovenije, ZSSS), was of the opinion that the draft LEWC was basically sound, but that it did not take into account certain special circumstances in Slovenia. He proposed that:

  • the members of the SNB and the EWC should have substitutes;
  • the representative trade unions in the company should nominate their representatives on the SNB, with representatives nominated by the workers' assembly only if there are no such trade unions;
  • trade unions or workers should be able to take the initiative for the establishment of an EWC, because Slovene law includes such a provision; and
  • EWC members should be elected in secret ballots, in which all workers could participate, because Slovene law includes such a provision.

The representative of the Chamber of Commerce and Industry of Slovenia (Gospodarska zbornica Slovenije, GZS) on the ESSS stated that the draft LEWC adequately followed the Directive. Therefore, Mr Semolic's proposals were not well grounded and referred more to the organisation of the LEWC's implementation. GZS called attention to the provisions on dispute resolution and was of the opinion that these provisions should be changed.

Dusan Rebolj, the president of the Confederation of Trade Unions Pergam of Slovenia (Konfederacija sindikatov Pergam Slovenije, Pergam), agreed with GZS's remark that the resolution of collective disputes has not been regulated yet and remarked that he expected this question to be regulated in the forthcoming new Law on Collective Agreements.

At the end of the ESSS discussion, a heated debate took place about the role of trade unions.

Commentary

It can be expected that the main benefit for the Slovene social partners in terms of the impact of EWCs on industrial relations in Slovenia will be a better awareness and understanding of the internationalisation of company strategies, and of industrial relations and working conditions and arrangements in EU Member States. This is especially important because Slovenia will soon become a member of the EU. In Slovenia, the influence of EWCs and the related processes of 'Europeanisation' of industrial relations are at an early stage. EWC membership for Slovene employee representatives currently depends on the outcomes of negotiations over the establishment of an EWC in multinational companies operating in Slovenia. Slovene representatives are full EWC members in some multinationals (eg Danfoss), have observer status in some others (eg Renault-Revoz) and are awaiting representation in still others (eg Henkel). (Stefan Skledar, on behalf of the Institute for Labour Law, University of Ljublana)

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