Key EU industrial relations initiatives in prospect

A number of important EU-level industrial relations initiatives are scheduled for 2006. These include the European Commission’s response to consultations with the social partners over handling restructuring and developing the role of EWCs, as well as new proposals on labour law reform, transnational collective bargaining and consolidating the EU’s information and consultation provisions

The coming year is likely to see important developments at EU level affecting industrial relations - in particular on European Works Councils (EWCs), labour law reform, transnational collective bargaining and information and consultation - a number of them stemming from the European Commission’s broader restructuring agenda. This feature highlights a range of forthcoming initiatives and the likely reaction from the EU-level social partners.

EWCs and restructuring

There is considerable uncertainty over what is likely to result from the second phase of consultations with EU employer and trade union organisations launched by the Commission in 2005 on anticipating and managing corporate restructuring and enhancing the role and effectiveness of EWCs. The Commission’s April 2005 Communication, Restructuring and employment (EU0504202F) called on the social partners to continue their work on these issues by agreeing mechanisms to apply shared principles already identified in the existing social partner texts Orientations for reference in managing change and its social consequences (EU0307203F) and Lessons learnt on European Works Councils (EU0505204F). The Commission has said it will evaluate the progress made by the social partners in this area by the time of the spring 2006 tripartite social summit.

Although there has been little sign of the social partners actively responding to the Commission’s call to date, their draft 2006-8 work programme does include a commitment to 'promote and assess' the two existing joint texts. More broadly, however, it is clear that the objectives of the European private sector employers’ body, the Union of Industrial and Employers' Confederations of Europe (UNICE), and the European Trade Union Confederation (ETUC) in respect of EWCs and restructuring remain sharply divergent.

The ETUC is continuing to campaign for the EWCs Directive to be strengthened, while on restructuring it wants to see a range of new measures, including the development of support mechanisms for workers hit by restructuring, compulsory social audits to allow workers’ representatives to assess the full impact of restructuring decisions, and enabling the representatives of workers affected by mergers to have a voice in Commission merger control procedures.

For its part, UNICE strongly opposes a revision of the EWCs Directive, and favours a voluntary approach on both EWCs and restructuring based on promoting good practice across the EU via the two existing joint texts. UNICE has, for example, been drawing up a report on national social partners’ actions to promote the Orientations for reference in managing change and its social consequences.

Meanwhile, the European Parliament’s response to the Commission’s April 2005 communication Restructuring and employment looks set to call for extensive EU intervention. A draft report, drawn up by French socialist MEP Jean Louis Cottigny and considered by the employment and social affairs committee in January 2006, calls for greater coherence between the Directives on EWCs, collective redundancies and information and consultation, and for the Commission to submit a proposal for the amendment of the EWCs Directive 'in the interests of strengthening employees’ rights'. The draft report seeks the establishment of an EU framework for the protection of workers’ rights in the event of restructuring and argues that, 'in the absence of a satisfactory reaction from the social partners', the Commission should 'submit a proposal for a Directive'.

Other initiatives

Beyond the outcome of the second phase of consultations with the social partners on restructuring and EWCs, the Commission is due to launch a range of other, related initiatives during 2006.

Green paper on labour law

The publication of a green paper on the development of labour law, announced in the Commission’s Restructuring and employment Communication, is scheduled for the spring of 2006 (EU0512201N). The green paper is expected to look at developments concerning new models of work organisation and the role of the law in coping with these changes and easing labour market transition. This initiative has close links with the restructuring/adaptation to change agenda. Commission officials see it as constituting an important step in building a regulatory framework more favourable to change - an objective likely to be supported by UNICE - while safeguarding the traditional protective functions of labour law. The ETUC, though favouring the concept of 'flexicurity', is concerned that this exercise should not result in deregulation or the reduction of workers’ rights.

Transnational collective bargaining

Moves towards the development of an optional framework for transnational collective bargaining, a proposal included in the Commission’s February 2005 Social agenda 2005-10 (EU0502205F), are also expected during 2006. An academic study of the issue is due to be published in March, which Commission officials hope will prompt a wide discussion. Formal consultation of the social partners is thought likely to follow in 2007.

This is likely to prove a sensitive issue for both European employers and trade unions. UNICE secretary-general Philippe de Buck has stated that European employers do not favour 'centralising collective bargaining at EU level', and that the proposed transnational framework is 'neither necessary nor desirable' (European Works Councils Bulletin 61, January/February 2006, p.7). The ETUC supports the Commission’s initiative, but a resolution adopted by its executive committee in December 2005 highlights a number of concerns, including that the right to sign transnational agreements should be confined to trade unions and that EWCs 'are not appropriate bodies for negotiations given the current state of the legislation'.

Consolidation of information and consultation provisions

Also in the pipeline is a Commission initiative, included in its February 2005 social agenda, to 'consolidate' the various existing information and consultation provisions in EU legislation. This is expected to address the relationship between the national and transnational aspects of the legislation and between its general and specific provisions. Again, there are significant differences between the social partners over the aims and objectives of this exercise. UNICE says it will oppose any moves going beyond a 'genuine codification' of existing legislation, whereas the ETUC will be pressing for its 'harmonisation', signalling trade union hopes that the EWCs Directive’s definition of information and consultation will be brought into line with the stronger provisions in the more recent information and consultation Directive (EU0204207F) and the employee involvement Directives linked to the European Company Statute (EU0206202F) and the European Cooperative Society Statute.

Commentary

Without any tangible moves by the social partners on EWCs and restructuring, the Commission seems likely to be left in a politically sensitive position. While the Commission would have to be seen to make some sort of response in the absence of further action by the social partners, few observers expect it to come forward with extensive amendments to the EWCs Directive, though the alignment of the Directive’s information and consultation provisions with those in more recent measures - for which a 'technocratic' case could be made - would represent a significant improvement in itself. In terms of the handling of restructuring more generally, the Commission can be expected to favour a non-legislative approach. Discussion of the scope for a code of practice or guidelines, perhaps involving the recently-established Restructuring Forum (EU0507202N), may be one option here. Nevertheless, as has happened before, it is possible that the political climate and the Commission’s scope to act could be influenced by events such as controversial, high-profile restructuring cases.

Elsewhere, the Commission’s planned initiatives in respect of labour law reform and transnational collective bargaining represent the initial steps in what could be lengthy - but potentially highly significant - policy development processes. (Mark Hall, IRRU)

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