Unions seek more influence for EWCs

In November 2002, a major conference on European Works Councils (EWCs) took place in Aarhus, Denmark, organised by the European Trade Union Confederation and the main Danish national trade union organisations. The conference focused on making EWCs more effective and securing amendments to the EWCs Directive.

On 25-26 November 2002, over 400 trade union representatives and employee-side members of European Works Councils (EWCs) took part in a major conference, entitled Towards more influence, which aimed to discuss improvements in EWC practice and highlight the trade union case for amendments to the EWCs Directive (94/45/EC). The conference, organised jointly by the European Trade Union Confederation (ETUC) and the main Danish national trade union organisations, with the support of the European Commission, was held in the Danish city of Aarhus as part of the programme of activities associated with Denmark’s Presidency of the EU during the second half of 2002. This feature reports on the main strands of the discussion.

View from the European Commission

Addressing the conference on behalf of the European Commission, Fernando Vasquez, deputy head of the labour law and work organisation unit within the employment and social affairs directorate-general, said that the Commission would be consulting the EU-level social partners in the autumn of 2003 about revising the EWCs Directive (EU0005248F). This timetable will enable the Commission to see what emerges from current discussions between the EU-level social partners on the key issue of restructuring (EU0204202N). He said that the Commission believed that improvements were needed to the Directive in a number of areas, and hoped that the social partners would able to reach agreement on revisions.

Dealing with restructuring

While examples were quoted of companies where EWCs had developed an influential role in the handling of restructuring (eg General Motors), more typically delegates reported that EWCs were not consulted effectively on such issues. Delegates called for stronger legal requirements on companies to consult EWCs about planned restructuring. Specific rights for EWCs in relation to mergers and acquisitions were also proposed. It was suggested that changes in the EU merger control process were necessary to enable employee representatives to intervene and to ensure that effective information and consultation and maintaining employment were key criteria in the approval of proposed mergers.

At the same time, it was recognised that stronger rules would not necessarily result in more effective intervention in restructuring by EWCs unless there was better liaison between EWCs and national and local employee representatives, and unless EWCs adopted more proactive strategies to influence management decisions.

Improving information and consultation practice

The absence or ineffectiveness of consultation was attributed not only to management unwillingness to consult and the complex structures and decision-making processes of many larger companies, but also the passive attitude of some EWCs and conflicts of interest between EWC members and between EWCs and national/local consultation processes.

Delegates called for stronger sanctions against defaulting employers, provision for time off and training for EWC members, and rules enabling the use of experts in meetings with management. However, EWCs themselves could do more to put pressure on management to inform and consult properly through means such as the submission of written opinions, the threat or use of legal action and media publicity. EWCs should also seek improved consultation procedures in renegotiated EWC agreements, as at Unilever.

It was emphasised that effective consultation also depended on: EWCs developing a common European viewpoint rather than focusing on national/local interests; better communications and networking with national/local employee representatives and trade unions; and ongoing EWC work between meetings.

Enforcing the rights of EWCs

Delegates heard contrasting examples of legal action against companies over failures to inform and consult EWCs about important restructuring decisions. In one case (Otis), litigation had successfully resulted in the courts ordering a further meeting of the EWC so that company restructuring proposals could be fully considered. In another (Panasonic), the EWC’s case had failed on technical grounds - because the representative bringing the case could not demonstrate the necessary legal authority to pursue the case on the EWC’s behalf. A third case (P&O) had been withdrawn because EWC members had been unable to secure financial support from national trade unions.

Delegates stressed the importance of ensuring that the employee sides of EWCs had the legal standing and financial means to pursue legal action against management if the need arose. This highlighted the need for effective strategies on the part of unions to ensure the necessary financial support. It was also suggested that the EWCs Directive should be amended to provide EWC employee representatives with an operating budget to enable them to uphold their rights in court where necessary.

The significance of the European Company Statute for EWCs

ETUC confederal secretary Willy Buschak emphasised that the Directive (2001/86/EC) on employee involvement accompanying the European Company Statute (ECS) (EU0206202F) was highly significant. As well as enabling employee representatives to participate in the administrative or supervisory board of European Companies (SEs) in certain circumstances, it included stronger provisions than those of the EWCs Directive, providing a precedent and a template for a range of amendments to the EWCs Directive which, if adopted, would go a long way towards securing the improvements unions wanted. For example, the ECS employee involvement Directive included the right of employee representatives, in urgent restructuring cases, to require a further meeting with management 'with a view to seeking agreement' where management decided not to act in accordance with the representative body’s opinion.

Mr Buschak stressed that, in companies considering becoming SEs, existing EWCs would have an important role in terms of agreeing a common employee-side strategy at the beginning of the negotiations and coordinating the special negotiating body process. In particular, EWCs had to be wary of management negotiating strategies based on keeping the existing EWC: as well as pressing hard for board-level participation, the aim should be to negotiate agreements which at least matched the stronger information and consultation rights accorded to the statutory representative body by the ECS employee involvement Directive.

Extending EWCs eastwards

Andrzej Matla from the Polish Independent and Self-Governing Trade Union Solidarnosc (NSZZ Solidarnosc) said that the inclusion of employee representatives from central and eastern European countries (CEECs) in EWCs represented the first practical steps in the EU’s enlargement. The scale of voluntary CEEC involvement in EWCs was already considerable, and candidate countries for EU accession had already begun to transpose the EWCs Directive into national law.

He said that inclusion in EWCs was 'the most effective and sometimes nearly the only way [for CEEC employee representatives] to obtain information on multinational companies’ operations at the European and global level'. As well as the 'symbolic value' of EWC involvement, the benefits for CEEC employees and trade unions of being associated with EWCs included:

  • the access it provided to central management:
  • being able to exchange information with employee representatives from other countries and establish bilateral trade union contacts;
  • acquiring information for use in local bargaining; and
  • improving employees’ understanding of the reasons for management decisions.

Problems encountered by employee representatives from CEECs were similar to those often experienced by their western counterparts, including:

  • the language barrier;
  • poor communication between EWC meetings and lack of continuity; and
  • the need to develop national representation structures to ensure a link between transnational information and consultation and employees’ concerns at workplace level.

Panel discussion

The conference concluded with a panel discussion involving leading employer, trade union, Commission and EWC representatives.

Jørgen Rønnest of the Danish Employers’ Confederation (Dansk Arbejdsgiverforening, DA), representing the Union of Industrial and Employers' Confederations of Europe (UNICE), said that whether EWCs could play a more active role vis-à-vis restructuring depended on how far they could contribute to solving the problems companies faced and on good relations with management. He said that the social partners’ discussion of restructuring issues would be made more difficult by the Commission’s intention to initiate the process of revising the EWCs Directive in autumn 2003.

Hans Jensen, president of the Confederation of Danish Trade Unions (Landsorganisationen i Danmark, LO), said that unions should establish a dialogue with the European Commission to achieve an 'effective revision' of the EWCs Directive, including reducing the threshold for setting up an EWC from 1,000 employees to 500. Jean Lapeyre, deputy general secretary of ETUC, said that it was unlikely that revisions to the Directive could be negotiated with employers, and that European unions were looking to the Commission to 'do its job' and drive the revision process forward.

Odile Quintin, director-general of the European Commission’s employment and social affairs directorate-general, said that a number of elements would be important in the revision of the EWCs Directive, including the outcome of the social partners’ discussion of restructuring and the opinion the Commission had sought from the European Economic and Social Committee. She agreed there was room for improvement in the Directive’s provisions, but reaching a consensus would be difficult. The Commission would be fully engaged in the revision process, but she hoped that the social partners would not rule out working together on this.

Viviane van Wijngaerden, an EWC member from the Dutch company TPG, said that a vital element in developing EWCs’ influence was better communication - between management and employee representatives and between EWC members themselves. Management representatives were sometimes 'experts in non-communication', and in treating Europe-wide restructuring as local issues outside EWCs’ remit.

In further discussion, Mr Rønnest argued that instances of poor practice which fell short of the Directive’s standards were not a reason to revise the Directive but to improve its implementation. Companies were already faced with having to implement the new national information and consultation Directive (2002/14/EC) (EU0204207F), and to integrate the accession countries into EWCs, and it would be a 'risky business' to impose another layer of reform. Mr Lapeyre said that, while there were 'negotiating possibilities', he doubted whether the employers would be willing to enter negotiations over improvements to the Directive. Ms Quintin emphasised that the Commission needed time to develop the political basis for discussions between the social partners, and that negotiations over changes to the Directive involving the Member States were also likely to be difficult.

Commentary

The conference provided Europe’s trade unions with a platform from which to press their case for strengthening the EWCs Directive’s requirements. Many delegates expressed anger and frustration at what they saw as an unreasonable delay on the part of the European Commission in initiating the process of revising the Directive, although Commission representatives pointed to some of the political constraints on progressing the issue. Delegates put forward a range of potential amendments to the Directive, for the most part reinforcing ETUC’s existing list of revisions, but also focussed on what strategies trade unions and employee EWC members could themselves develop to strengthen the role and effectiveness of EWCs and their influence on managerial decision-making. Summing up the key messages to emerge from the conference, Willy Buschak commented: 'EWCs need to be more proactive, but crucially need more rights.' (Mark Hall, IRRU)

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