Poor information and communication hinders functioning of works councils

In 2006, the Institute of Labour and Social Research carried out a study aiming to assess the practical application of the Law on Works Councils, adopted in 2004. The research findings reveal that on average only 4% of Lithuanian companies have elected works councils. However, this proportion increases with the size of the enterprise.

In 2006, at the request of the Ministry of Social Security and Labour (Socialinės apsaugos ir darbo ministerija, SADM), the Institute of Labour and Social Research (Darbo ir socialinių tyrimų institutas, DSTI) carried out a study entitled Analysis of the establishment of works councils in Lithuania and perspectives for future development. The research aimed to assess the practical application of the Law on Works Councils, adopted in 2004. A total of 1,000 companies were surveyed in order to gather information on the presence of works councils in the workplace. The results show that on average 4% of Lithuanian companies have elected a works council, and that this proportion increases with the size of the enterprise.

More detailed questioning was carried out in those companies with works councils: employees and works council members were interviewed in order to evaluate different aspects of the works council’s activities. A total of 147 respondents participated in the survey; 104 of these were employees in companies with a works council and 43 were members of a works council.

More works councils in larger companies

The interviews revealed that the probability of employee representation through a works council increases proportionately in accordance with the number of employees at the enterprise. The survey found that works councils and employee representatives were set up in 0.1% of micro-sized enterprises, in 10.6% of small-sized enterprises, in 26.9% of medium-sized enterprises and in 35.7% of large enterprises in Lithuania. In addition, works councils are more often set up in the public sector than in the private sector.

The survey respondents – including both employees and works council members – revealed that key factors encouraging companies to elect works councils included the need to sign a company collective agreement, as well as a willingness to share in the enterprise’s decision-making processes (see Figure 1).

Figure 1: Reasons for establishing a works council, according to employees and works council members (%)

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Source: DSTI, 2006

Overall, 40% of works councils meet once a month and another 40% meet less often than that. Some 46% of the meetings address various issues relating to economic, social and employment relations relevant to employees, while 43% consider matters pertaining to decisions adopted or offered by the employer. Meanwhile, 32% of the meetings discuss the company’s collective agreement. Of course, each meeting may consider more than one of these key areas.

Perceived positive and negative aspects of works councils

The survey found that, in general, employees look favourably on the emergence of works councils and related activities at their companies. More specifically:

  • 90% of the respondents considered that the election of the works council in their company was fair;
  • 82% of the respondents believe that a works council is essential;
  • almost 50% of the respondents whose employers have signed collective agreements stated that these agreements contained many employee-friendly provisions;
  • nearly 40% of the employees interviewed – not counting the works council members – agreed that the works council perfectly represented the interests of all employees in the company.

Nevertheless, some negative aspects in the assessment of the works council’s activities should also be noted:

  • almost a half of the employees interviewed could not tell whether the works council represented their interests well;
  • 30% of the employees interviewed considered that the works council’s activities were rather formal;
  • 10% of the employees interviewed were of the opinion that the works council usually took employer-friendly decisions.

Challenge of providing information and communication

The survey highlighted three basic aspects of the problem of insufficient information and communication among employers, employees and their representatives. First, there is a lack of information about works councils and about opportunities for employee representation in general. Secondly, employers and employees in enterprises where there is a need to establish works councils face a lack of specific information about the activities of works councils and opportunities to establish them. Thirdly, the survey revealed that elected works councils were unsure of their role and how to cooperate with the employer and how to exchange information with employees; this dilemma was frequently mentioned by the works council members interviewed.

Inadequate communication between employers and employee representatives, and between employee representative and employees, constitutes a serious bottleneck in works councils’ operations – in some cases, it may amount to a complete absence of communication. Both the works council members and the employees underlined this difficulty; the works council members emphasised the relationship between the employer and employee representatives, while the employees emphasised the relationship between employees and employee representatives.

Inga Blažienė, Institute of Labour and Social Research

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