By Werner Altmeyer
Dr Altmeyer is an advisor and trainer in the field of European Works Councils and transnational industrial relations at the Federation for Research and Education in Europe (FREE) e.V. in Hamburg. He completed his doctoral thesis with a grant from the Hans Böckler Foundation.
w.altmeyer@gmx.deThe story so farSeptember 1994: the EU Council of Ministers passed its Directive on European Works Councils. Prior to that there had only been a small number of pilot projects (49 in total), especially in French companies. In Germany, Volkswagen was a pioneer in the field.
EU member states had until September 1996 to transpose the Directive into na-tional legislation. During this two-year transitional period some 400 EWC agreements were signed on the basis of Article 13 of the Directive - the majority of them during the last few days before the deadline expired.
Since September 1996 the formal procedure for setting up EWCs has been more complex: under Article 6 of the Directive a "special negotiating body" has to be set up for the purpose. There has now been a distinct decline in the initial enthusiasm to set up European Works Councils.
Nine years ago the EU Council of Ministers passed a Directive on European Works Councils - thereby creating a unique legal basis for setting up transna-tional bodies to represent employees' interests. What has the impact of these new institutions been?
By the end of 2002 a total of 772 European Works Councils had been set up in 709 different companies - despite the fact that no fewer than 1,870 companies are actu-ally covered by the scope of the Directive. Of these, 1,426 have production facilities or branches in Germany - more even than in Britain (1,200 companies), despite Britain's strong international connections. France comes next with 1,164 and then the Nether-lands where 802 companies potentially affected by the directive have a presence.
More European Works Councils have been set up in German companies than anywhere else. By the summer of 2002, some 100 of the 398 corporations with head-quarters in Germany had a European Works Council. Roughly the same number (101) of US corporations have also set up European Works Councils. (Their European opera-tions are subject to the Directive.) Then comes Britain with 93, France with 65 and the Netherlands with 47.
However, the impressive total of 100 German European Works Councils only translates into 25 per cent of the potential number. Almost 300 companies with head-quarters in Germany have not yet set up EWCs. By contrast, almost half of the potential 57 EWCs in Belgium have already been established. Companies based in Luxembourg and Norway also moved quickly in setting up EWCs, whereas Portugal, Spain and Ire-land lag furthest behind.
The impact of the parent company
The European Trade Union Institute (ETUI) in Brussels recently published an evaluation of 739 company agreements that reveals that the strongest influence on the actual structure of an EWC is exercised by the corporate/participatory culture in the parent company (see bibliography). If a company's headquarters are in Germany, the structure and working methods of the German Works Council are usually transferred to the EWC. The same applies in reverse to companies in France. The French model has been copied for 63 per cent of all EWCs - even by many British, American and Japa-nese companies. Under French (and Belgian) law, a Works Council is a mixed body that includes representatives of the employers - who even chair its meetings.
One feature that both models have in common is the fact that the rights of the EWC are usually confined to information and consultation. For EWCs set up on the French model, one crucial question is what role is given to the EWC secretariat and who draws up the agenda. The answer to this question reveals the degree of influence ex-erted by the employers.
More than four out of five (81 per cent) of all EWCs only meet once a year. This is in line with the minimum standards laid down by the Directive but is unlikely to guar-antee continuity and independent co-operation amongst workforce representatives. Ad-ditional meetings are only provided for if, for example, there is threat of large-scale re-dundancies or plant closures. Very often part of the work is delegated to a select com-mittee - a smaller body that can meet more frequently. Although the Directive provides for such committees, they only exist in 62 per cent of all cases.
The EWC does not have a national "substructure" in all countries. For example, in Britain, Belgium, Spain and Italy there are no structures for national workforce repre-sentation at a supra-plant level. If the company has several plants in one of these coun-tries, co-ordination at national level becomes problematic.
In addition to this, companies operating on a pan-European basis have complex structures that often consist of a large number of divisions and subsidiaries. Corporate decisions are usually made in relation to individual product lines or market segments and not according to the formal internal structures of the company. Unfortunately the EWC Directive does not cater for this, as the minimum standards only provide for one single EWC at the top level within the company. Only in 55 companies has the work-force succeeded in negotiating an EWC structure based on the divisional structure of the company concerned. A further complication is the fact that mergers and take-overs are constantly changing the composition of many bodies.
Language barriers and other misunderstandings
Many of those involved regard one of the weaknesses of the EWC Directive as being its exclusion of the trade unions. As they are not explicitly mentioned by the law, full-time trade union officials may only take part in EWC meetings if this has been laid down in the agreement. In some cases they will be there as experts; in others, less common, they will be there as full members. It has to be said that in some countries many local full-time trade union officers regard involvement with an EWC as an addi-tional burden that comes low on their list of priorities because of lack of time and training.
One difficulty faced both by trade union officials and members of the EWC is the question of language. The official meetings are provided with simultaneous interpreta-tion, but unless those involved have foreign language skills it is difficult for them to con-verse during the evening meal or to take up informal contacts with one another. Unfor-tunately the EWC Directive does not provide any rights to language training for such cases. Only 17 percent of the EWC agreements evaluated expressly granted a right to attend language courses - but the number has been increasing recently. Despite the diversity of languages involved, only one specific language version is regarded as bind-ing for written documents. In 43 per cent of all companies, English is the only authorised language within the EWC; in 28 per cent of cases it is German and in only 15 per cent French.
In addition to language barriers there are also problems of intercultural under-standing: What are the duties of workforce representatives in Germany, France, Britain and other countries? What are the systems of employee representation in these coun-tries? What attitudes do employers have to workforce representatives in individual coun-tries? Without an understanding of the labour law and various different cultures in-volved, discussions can soon end in misunderstandings - despite simultaneous interpre-tation.
Promised revision of the Directive
Many members of EWCs are well aware of the Directive's weak points. The key demands for improvements include: better information and consultation procedures; the introduction of a right to training; extended facilities for EWC members; and more regu-lar meetings. There have been resolutions, petitions and days of action calling for a re-vision of the Directive.
The Directive passed in 1994 envisaged a revision being carried out in 1999. But despite this commitment, the European Commission has already delayed this for four years. A representative of the Commission recently announced that the revision process would start in autumn 2003. However it is clear that there will not be any concrete pro-posals for change in the foreseeable future. The Commission has called on the social partners at European level - in other words the European Trade Union Confederation (ETUC) and European employers' associations to negotiate an agreed revision of the EWC Directive, but the ultimate outcome of this process is uncertain. A similar request was not taken up in 1994 because the employers' associations regarded an EWC Direc-tive as being superfluous. Equally today, they have already indicated that they see no need to amend the existing Directive. Thus even the most optimistic scenario does not envisage a revised Directive affecting company negotiations before 2007.
Enhanced rights through court decisions
EWCs are subjects to legal decisions by the courts and in several cases these have strengthened the rights of EWCs to receive information. The most significant deci-sion so far was made in May 1997 affecting automotive manufacturers Renault. A local French labour court at the company's headquarters supported a petition from the Euro-pean Works Council to block closure of the Vilvoorde plant in Belgium because the EWC had not been properly consulted. Another success came when the EWC at Otis persuaded a French labour court that worldwide restructuring of the company called for a special meeting of the EWC in conjunction with a hearing.
The first decision of the European Court of Justice in Luxembourg concerning an EWC was made in March 2001. The German Works Council at the company Bofrost had appealed to the court because the employer refused to supply it with information about company structures outside Germany. The decision granted the Works Council far-reaching rights of information so that it could launch negotiations on the setting up of an EWC.
On the other hand, the European Works Council at Ford managed, without re-course to the courts, to achieve agreement on the hiving off of supplier plants (Ford-Visteon Agreement). And several European framework agreements were signed by the European Works Council and General Motors, which includes Opel and Vauxhall, in the period July 2000 to October 2001 following three major confrontations with the com-pany. These examples show that despite the slow progress on the legislative front, it is still possible to expand the areas in which EWCs can operate effectively.
Just as important is the adaptation and improvement of existing EWC agree-ments through negotiation. In line with the terms under which they were initially set up many older agreements are now at a stage where they can be terminated or extended. Already more than 40 per cent of all EWC agreements signed in 2002 were not setting up new EWCs but rather revising and improving the terms of existing ones.
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New publications from Brussels
Peter Kerckhofs/Luc Triangle, European Works Council Developments in 2002, in: Emilio Gabaglio/Reiner Hoffmann, European Trade Union Yearbook 2002, Brussels 2003
Peter Kerckhofs, European Works Councils. Facts and Figures, Brussels 2003, 107 pages, price: 20 euro. This can be ordered via email from: kvergeyl@etuc.org
Newsletter for European Works Councils
About four times a year FREE e.V. distributes a free electronic newsletter in German containing information concerning the work of European Works Coun-cils. To register, contact: info@euro-betriebsrat.de
Website: www.euro-workscouncil.org
