TUC calls for revision of European Works Councils Directive

THE REVISION OF THE EWC DIRECTIVE

Background

The EWC Directive (94/45/EC) says that these European Works Councils have to be established on the basis of negotiations between worker representatives and top management.

When first enacted the UK had opted out of its provisions. One of the first acts of the incoming labour government in 1997 was to opt back into the provisions of this directive transposing it by 1999.Prior to 1999 British Trades Union were however already familiar with EWCs because where employers were obliged to set up EWCs and had a UK workforce, then they often included the British workers on a voluntary basis

The Directive sets out which companies are covered[1], how negotiations should be conducted, the minimum standards for negotiated agreements and the fall-back rules (subsidiary requirements) on what sort of EWC must be set up if workers' representatives and management cannot reach an agreement (after three years).

European Works Councils (EWCs) were set up to address these problems. They were designed to give representatives of all European workers a direct line of communication to the top managers no matter what country they were from;

• to make sure that workers in different countries were all told the same thing at the same time about transnational policies and plans;
• to give workers' representatives in unions and national works councils the opportunity to consult with each other and to develop a common European response to their employers' European plans, which they could then present to management before those plans were implemented.

There are three sorts of EWCs

Those founded under the subsidiary requirements

Those negotiated under article 6 of the directive which laid down an obligatory frame work including that a duration for the agreement should be specified

Article 13 agreements needed to be negotiated before the Directive was first transposed and allowed the parties to the agreement to ignore and of the specific provisions of the Directive including the duration of the agreement

Progress so far

In many ways the EWC Directive can be judged as a success. There are now more than 800 multinational companies with EWCs and they cover more than 14 million European workers - around 40% of all the transnational companies which meet the current threshold. Almost all these EWCs are based on negotiated agreements and so they are all a bit different from each other. Some of them work well and provide for real and effective information and consultation at the European level, just as they are supposed to. However, others have never really got off the ground. In many cases where EWCs are not working as they should, it is due to shortcomings in the directive.

As the graph below shows the distribution of EWCs is far from even across different sectors of the economy.

Why did the ETUC 'abandon' the negotiated route to revising the Directive?

The European Trade Union Confederation (ETUC) concluded, after intensive contacts with both BusinessEurope and the European Commission on the question of the revision of the European Works Council Directive, that it was not practical for negotiations to commence within the framework of the social dialogue.

They arrived at this conclusion because there would be insufficient time for both negotiations and for the issue to be dealt with in the lifetime of this Commission and Parliament. Furthermore, it had not been possible to identify a realistic basis for agreement on certain key issues on which there have been, and are, fundamental differences with BusinessEurope. For these reasons, social dialogue talks in the current circumstances are impracticable.

ETUC General Secretary made it plain that is was a position was arrived at reluctantly 'The ETUC prefers to try to resolve problems through the social dialogue, but given the time constraints and the depth of differences with the employers over European Works Councils, it is not practical to expect talks to succeed in a short period. We are therefore calling on the Commission to follow up its consultation document and act decisively both to strengthen European Works Councils and worker and union participation. We are also calling on the European Parliament and the Council of Ministers to support our position.'

That being said the original EWC Directive was not a product of social dialogue as the employers had refused to negotiate.

The revision is much overdue with the EWC Directive assuming a review would take place in 1999.

What needs to be changed? Reasons for the revision of the EWC Directive

1. Perhaps the most important problem is that many EWCs are not getting proper information and consultation. We believe that this is partly because the directive does not properly define what 'information' and 'consultation' should be at the European level. We want the directive changed so that it adopts the clearer definitions of European information and consultation from the 2001 Directive on European Companies (the SE Directive). In line with the SE Directive information should be given to EWCs 'in a manner and with a content which allows the employees' representatives to undertake an in depth assessment of the possible impact' and that consultation will take place 'at a time, in a manner and with a content which allows the employees' representatives, on the basis of the information provided, toexpress an opinion on measures envisaged' so that they can be taken into account in the decision-making process.

This contrasts with many EWC's experiences who are informed about major management decisions sometimes minutes before they are announced e.g. on the London Stock Exchange.

In addition, the ETUC wants to see the definition of what is meant by a transnational issue in the SE Directive applied in a revised EWC Directive. Under the current EWC Directive it's a decision which impacts in more than one country where as under the SE Directive essentially it's a decision taken by corporate management.

2. Another important ETUC demand is the elimination (or at least the reduction) of the barriers to setting up EWCs themselves. There is particular concern that currently the EWC Directive only applies to companies with over 1,000 employees in Europe, and 150 or more in at least two EU countries. This conflicts with the right to be informed and consulted as expressed in Article 27 of the European Union's Charter of Fundamental Rights. The ETUC argue that if such thresholds are not to be entirely removed, then at least they should be reduced so as to include companies with over 500 employees in Europe and 100 or more in two different Member States.

3. A further key issue is the recognition of the role of trade unions and the entitlement of EWCs to have a trade union officer to assist them in all aspects of their work. One of themost important demands we have is that trade union members in EWCs and negotiating bodies should have the right to work with a trade union officer who can participate in meetings and give assistance when members want it. This already happens and works well in most EWCs, but there are still a significant number of companies where management refuses to let trade union officers take part in EWC meetings.

The recognition of the role of trade unions in the directive is essential to ensure a better representation of workers. The current situation unnecessarily complicates the dialogue with the management. The freedom of association is recognised by the Nice Charter of fundamental rights and therefore the Directive should recognise the unions as a key player for European social dialogue at company level as well.

4. There are a lot of improvements needed to ensure that EWCs and the bodies that negotiate EWC agreements (SNBs) are given the working tools and conditions they need to carry out their tasks. Especially important here is the fact that, at present, many EWCs have no entitlement to training (57%). The ETUC also want EWCs to have the chance to deal with more topics, such as group policies on health and safety, and gender equality. Other problems arise from getting only one EWC meeting a year (this is the minimum in normal circumstances[2] and accounts for some 70% of EWC agreements), and having no right to follow-up meetings without management. There are also insufficient rights regarding experts, interpretation, translation of documents and access to workplaces.

5. Finally, there are a large number of more technical/legal issues that need to be resolved. For example, the current directive doesn't give satisfactory solutions to workers in joint ventures and franchises and it sets down no clear procedure for renegotiating agreements. The ETUC also want to ensure that the new directive is drafted so that it can be applied to all existing EWC agreements, that there are fairer rules for negotiating bodies including shorter negotiation times (1 year like the SE Directive rather than the current 3 years under the EWC Directive), and that there are proper enforcement mechanisms in place when Employers fail to abide by their EWC agreements (under the UK transposition the ultimate sanction for non-compliance is £75,000).

For further updates on the revision of the EWC Directive visit the ETUC campaign website ' On the offensive for stronger European Works Councils at:

http://www.etuc.org/a/4949

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[1] The employer had to have at least 1,000 workers in EU countries with at least 150 in two EU countries