Agreement on worker participation in European financial services company

In September 2006, the newly-formed European financial services company, Allianz SE, concluded an agreement on worker participation with the employee representatives and their trade unions. For the first time ever, a large company employing some 160,000 workers in virtually all EU Member States has expressly subscribed to a system of European management comprising significant mandatory worker participation.

Allianz, one of the largest financial services providers in Europe, with more than 160,000 employees in over 70 countries worldwide, adopted the legal form of a European company (Societas Europea/SE) by merging with its Italian subsidiary RAS (EU0511203N).

The process of integrating the two companies started in September 2005. On 13 October 2006, the Allianz-RAS merger was registered and Allianz became recognised as a European company (SE) under the 2001 Statute for a European company as set out in Council Regulation 2157/2001.

Agreement on worker participation

In March 2006, in accordance with Council Directive 2001/86/EC supplementing the statute for a European company with regard to the involvement of employees, the new company set up a special negotiating body (SNB) in order to negotiate an agreement on worker participation with employee representatives and their trade unions.

On 21 September 2006, an agreement concerning the participation of employees in Allianz SE (110Kb PDF) was signed. The agreement defines the co-determination rights at supervisory board level as well as the composition and competences of the future SE works council.

Co-determination at enterprise level

The new company has a dual board structure, comprising a management board and a supervisory board. The workers will have equal representation on the supervisory board of the SE. The size of the supervisory board has been reduced from 20 to 12 members. Thus, only six employee representatives have a seat on the supervisory board. The distribution of the seats is determined as follows: four seats for Germany, one seat for France and another one for the UK. The German delegation includes a representative from the European industry federation, UNI-Europa Finance.

European company works council

The 37 members of the SE works council include country representatives, company representatives and a regional representative for Scandinavian and Baltic States. Company representatives are appointed in case Allianz SE or a subsidiary company employs more than 2,000 employees. The employee representatives on the SE supervisory board as well as two representatives from the European-level trade unions represented within the Allianz Group are invited to participate in the SE works council’s meetings. According to the agreement, there will be regular meetings twice a year. The total number of meetings, including extraordinary meetings, should not exceed four meetings within one calendar year.

The agreement on worker participation extends the powers of the SE works council beyond those stipulated by law. Thus, the council will be entitled to inform employees in off-shore companies if they will be affected by any decisions taken by Allianz SE. Moreover, the works council can participate in defining guidelines in the areas of equal opportunities, work and health protection, data protection and training and education policies.

Promotion of social dialogue

In the preamble to the agreement, the company pledges to promote social dialogue at global level and to respect international norms such as the International Labour Organisation’s core labour standards, the principles underlying the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises.

According to the Chief Executive Officer (CEO) of Allianz SE, Michael Diekmann, ‘the SE is the latest evidence of broader cultural change at the Allianz Group. The governance and legal structure is catching up with the reality of Allianz today. Being an SE much better reflects what Allianz already is today – a truly international financial services provider with a European home market and German roots.’

The Deputy General Secretary, Reiner Hoffmann, of the European Trade Union Confederation (ETUC) stated that:

From the European viewpoint, the arrangement reached with Allianz SE regarding worker participation constitutes an important step towards a form of company management that is not geared solely towards shareholders’ interests. Mandatory worker participation is not a historically obsolete model, as many employer federations repeatedly claim! Moreover, it does not hamper companies in applying the European company statute directive. Under the European legislation on SEs, not fewer but more workers in Europe will benefit from effective participation rights.

Commentary

Allianz has changed its corporate governance structures to better reflect its international and European dimension and to further increase its efficiency. Moreover, the SE status is expected to ease cross-border mergers. According to the employee representatives, the participation rights might represent an important tool in facing the extensive restructuring that is taking place within Allianz and its subsidiaries.

Volker Telljohann and Maite Tapia, Institute for Labour Foundation, Bologna

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