Transcript Slide 1

European
Labour Law
Lecture 10B
10.1. Industrial democracy – EWC - 1
• The European Works Council Directive
dates back to 1994 (Directive 94/45/EC),
but was “recast” in 2009 (Directive
2009/38/EC).
• The Directive is characterised by a large
amount of flexibility, attained by quite
original and interesting legal
constructions.
• It has managed to impose a culture of
information and consultation of workers’
representatives at enterprise level.
• Hendrickx, T, no. 8 and 9; C, p. 163-172.
10.1. Industrial democracy – EWC - 2
The Directive focusses especially on multinational
companies. The obligation for information and
consultation in multinational companies was seen
by the EU-legislator as a main target for EUlegislation, as it is notably within the scope of
multinationals that the national rules on this item
are defective.
10.1. Industrial democracy – EWC - 3
This brings us to the concept of multinational
companies.
Covered by the Directive are “community-scale
undertakings”, viz. companies with
- at least 1000 workers in MS (and EEA-countries)
- employed in subsidiaries with at least 150
employees
- in at least 2 MS (or EEA-countries).
(art. 2(1)(c)
Thresholds may be put on a lower level by MS
law or by agreements between management and
labour.
10.1. Industrial democracy – EWC - 4
Not only EU based multinationals are covered.
Also multinational companies which have their
headquarters outside the MS (and the EEA
countries) but which meet the threshold provisions
of the Directive are covered.
For the sake of the application of the Directive,
the central management of such companies must
appoint a representative agent.
Having failed to do so the Directive designates the
management of the establishment employing the
greatest number of employees in the MS as the
representative agent.
(art. 2(2).
10.2. Industrial democracy – EWC - 5
The concept of “employee” is largely left to MS
definitions, but the Directive provides that fixedtime contract workers are counted like permanent
workers. However, there is a special calculation
rule for part-time workers. It also is understood,
that leased (temporary agency) workers are not
counted as employees of user-firms.
10.2. Industrial democracy – EWC - 6
The Directive is not only covering single
community-scale undertakings, but also
Community-scale groups of undertakings. For that
purpose the concept of “group” (German:
Konzern) has received a EU-definition in art. 3.
However, this definition does not clarify whether
an enterprise dominated by two or more
companies in exactly the same amount (joint
ventures) is part of one of these groups and as
such subject to the Directive.
The Directive does not provide for the inclusion of
employees of subsidiaries outside the MS (and
EEA) in its information and consultation structure.
However, company agreements may do.
10.2. Industrial democracy – EWC - 7
MS may exclude the crews of the merchant navy
(art. 1(7)
There is a special position for enterprises which
had already concluded company agreements on
the issue before 22 September 1997.
Those companies can stick to their agreed system
and need not to renegotiate them as long as the
agreement lasts or is prolonged.
(This concerns ca. 700 of the estimated 2250
groups covered by the Directive).
The same applies to companies that concluded
an agreement between 1999 and 2011 (art. 14).
10.2. Industrial democracy – EWC - 8
Especially the recast Directive of 2009 has better
than the Directive of 1994 given definitions of
- Information (art. 2(1)(f)
- Consultation (art. 2(1)(g) and
- Transnational issues (art. 1(3) and 1(4).
For the concept of “workers’ representatives” the
Directive refers to national legislations (art.
2(1)(d).
10.2. Industrial democracy – EWC - 9
On the precise shape of the procedures to give
information and consultation to workers’
representatives the Directive has chosen a very
flexible approach: all this must be specified in an
agreement between management and labour at
the level of each multinational company (art. 5(3).
However, if such an agreement cannot be
concluded then automatically enters into force a
series of subsidiary requirements contained in the
Annex of the Directive (art. 7).
However, the employees may also decide to
renounce from a EWC (by 2/3 majority in the
SNB) and then the Annex does not enter into
force for that company (art. 5(5).
10.1. Industrial democracy – EWC - 10
This construction in reality has led to the situation
that most company agreements about the
establishment of the EWC are very similar with
the subsidiary requirements of the Annex on the
items of the size, the meeting-frequency and the
competences of the EWC.
The specific aspects of these agreements are
notably in the fields of the allocation of seats to
the various subsidiaries, to the elections of the
candidates and to the facilities.
10.1. Industrial democracy – EWC - 11
These subsidiary requirements in the Annex on
the items of the size, the meeting-frequency and
the competences of the EWC are:
- 1 seat in each MS per portion of employees
employed in that MS, amounting to 10%, or a
fraction thereof of all employees covered.
- The central management must meet the EWC
once a year and in exceptional circumstances.
- Information and consultation must contain a
several specific socio-economic data,
developments and proposed managerial
decisions.
10.1. Industrial democracy – EWC - 12
Despite its name the Directive does not exactly
require the Community-scale undertakings to set
up a genuine European Works Council. It may
also agree on just “a procedure for the purposes
of informing and consulting employees.” (art. 1(5).
However, most agreements seem to provide for a
body, the European Works Council.
10.2. Industrial democracy – EWC - 13
How is the EWC-agreement at company level
concluded?
This must happen in negotiations between the
central management of the multinational company
and a “special negotiating body” of workers’
representatives.
The Directive gives some provisions about the
composition of such an SNB (Art. 5 and 6) and
has charged the MS to specify them further.
The recast Directive has somewhat reinforced the
chances for trade unions to assist these SNBs.
(art. 5(4)
10.2. Industrial democracy – EWC – 14
An SNB must be established as soon as it is
initiated by the central management or requested
by at least 100 employees in the subsidiaries in at
least two MS (and EEA-countries).
The SNB must reach an agreement within 3
years. If not then the subsidiary provisions shall
enter into force (art. 7).
The agreements concluded in this respect should
be considered legally binding agreements. Labour
law specialist have already started to think about
technical questions such as the applicable law to
such agreements, the competent judge, the
possible sanctions on violations and so on.
10.2. Industrial democracy – EWC - 15
This question is all the more important as the
Directive does not have much to say about the
enforcement and sanctions!
This may at least partially explain the large
degree of disregard of the EWC-rules.
Although it has been calculated that 2250 groups
should be covered by an EWC, in reality only 800
of such EWC’s have been established.
This raises the question: why? Are employees not
really interested in the EWC as this is only a weak
construction?