Works Council: Špidla raises pressure on unions

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In a statement to the European Parliament on 8 May 2008, Employment and Social Affairs Commissioner Vladimír Špidla said that Brussels will go ahead with the revision of the European Works Council (EWC) directive even if the European Trade Union Confederation continues to block social partners’ negotiations on the matter. 

Trade unions and the Commission agree that there are numerous problems with EWC under the present directive: 

  • Failures to transpose the directive (see ‘Background’); 
  • a lack of legal certainty on companies’ obligations;
  • a lack of cross-border dialogue, and;
  • the weak position of EWC as compared to national-level works councils. 

Most of these problems were already mentioned in the Commission’s first report on the application of the directive, in 2000. The European Trade Union Confederation (ETUC) has been pressing since 2004 for a review of the EWC Directive. However, ETUC recently said it was unwilling to continue negotiations on EWC with social partners, arguing that, given the differences with BusinessEurope, the schedule proposed by the Commission did not leave enough time. 

BusinessEurope, which represents most transnational entreprises in Europe, had rejected talks with social partners on a revision for a long time before it finally gave in and decided to co-operate after the Commission took the intitiative – announcing a review with a social partners consultation, which started on 20 February 2008.

In spite of its resistance to social partner talks on EWC at this point in time, ETUC started a campaign in favour of stronger European Works Councils. In particular, the trade union confederation asks for: 

  • A clearer definition of information and consultation;
  • a redefinition of the notion of confidentiality to ensure for example that EWC members are not prevented from communicating with their trade unions;
  • a reduction of the period allowed for negotiating agreements, from three years to one year;
  • a framework of sanctions for companies that breach their obligations with respect to EWC; 
  • a legal right for workers’ representatives to challenge breaches of agreements;
  • the right to training for EWC members – covering languages and economic, financial and social affairs;
  • better access to expert advice;
  • the right to hold preparatory and follow-up meetings, and;
  • the right for EWC members to enter company sites.

While most of these concerns are reflected in the Commission’s proposals, ETUC insists that the time left for negotiations would make a substantial agreement with BusinessEurope impossible. 

Addressing the Parliament on 8 May 2008, Social Affairs Commissioner Špidla said that "European Works Councils need a new filling," adding: "There needs to be genuine supranational dialogue. And they must be in a position to fulfill their role in times of change and flux. They must be more effective, they need to be stronger and they need to work better. This is a prioritiy issue for the European Commission for the year 2008." 

Špidla made it clear that "the consultation precedes a legislative proposal from the Commission". He said that the consultation "gave the social partners an opportunity to debate the issue in question," repeating former statements of his that "the social partners are best placed to make sure that the recasting of the directive takes place as smoothly as possible". 

He deplored that "at the end of the process, the ETUC announced that it was not able to open negotiations on EWC with the employer side," adding that he "called upon them, on behalf of the Commission, to do their best to improve the framework which governs their activities".

The commissioner declared: "The Commission is currently reviewing the options for community action taking into account contributions from the social partners. If the Commission concludes that the best way of resolving existing problems is a recasting of the directive, and assuming the social partners do not respond to the final call, then I will put to the college of commissioners the suggestion that we adopt a balanced proposal taking into account the interest of both sides and the views that they have expressed."

Špidla was reacting to ETUC General Secretary John Monks, who wrote in a letter to the commissioner on 11 April: "I welcome [BusinessEurope's] change of heart, but it causes problems with the timetable necessary to see the revision of the directive by the end of the year as scheduled in the legal work programme of the Commission. In our view, the period available is too short for social dialogue talks conducted on the usual basis." ETUC therefore neglected to enter into negotiations with employers' organsiations on a common position on EWC. 

In a press release issued on the same day, Monks added: "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."

BusinessEurope welcomed, on 7 May, "the Commission's approach to the legislative review" and expressed hope "that the European Trade Union Confederation would agree to start negotiations".

Socialist MEP Stephen Hughes said: "The unions have made it clear that employers are not serious about revising the so-called European Works Council directive. That is why the Commission needs to legislate. We want the Commission to act now. In 1994, employers sabotaged an agreement between social partners and the Commission acted immediately. In the interest of balance, the Commission needs to do the same now. We need urgent steps to strengthen the framework of European law governing workers information and consultation. In recent years, there have been many cases of companies carrying out major restructuring without proper consultation of workers and without any penalties."

Francis Wurtz, chairman of the left-wing GUE/NGL group in the European Parliament, hinted at a potential cross-party alliance in favour of a review in the Parliament: "The ball is now in Parliament's court - which is not starting from scratch. In 2001, a report was adopted on the subject by our EPP colleague, Mr Menrad. Among other demands, he listed the need to strengthen the directive with 'the introduction of sanctions in case of non-respect' of the text - specific and weighty sanctions - such as the right to suspend the management's decision at the request of worker representatives or the strengthening of the role of trade unions. Our group will come out in favour of these majority proposals."

The 1994 European Works Council Directive applies to all companies with 1,000 or more workers, and at least 150 employees in each of two or more EU member states. It obliges firms to set up a European Works Council (EWC) with workers' representatives from all member states in which the company operates. 

However, twelve years after the directive's entry into force, only about a third of companies which are legally obliged to set up an EWC have done so. Medium-sized companies of up to 5,000 workers in particular have failed to set up EWCs. 

  • 9-10 June 2008: ETUC conference on Eruopean Works Councils (Brussels).
  • 25 June 2008: Commission to present social package, which is expected to include a proposal on European Works Councils.

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