Transcript European Works Councils and The Glaxo Wellcome Experience

uropean Works Council
Human Resource Management Conference,
Estonia - 3/4 April, 2003
“Valuable Organisation”
European Works Councils
- the advantages of
employer/employee dialogue
John Raywood
Secretary, GlaxoSmithKline
European Employee Consultation Forum
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European Works Councils
‘A talk in five parts’
Part 1
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What are they?
Who has to have one?
How are they set up?
When do they meet - and what for?
How is ‘consultation’ defined?
What about ‘National Information &
Consultation’?
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European Works Councils
Part Two
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Intended to promote dialogue
Serve as a rein on Management
Should be an aid to Management
Assist communication with employees
Part Three
– Expansion of the European Union
• the implications for ‘EWCs’
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European Works Councils
Part Four
– Are they effective?
– What next?
Part Five
– Effects of mergers on ‘EWCs’
• a case study [GlaxoSmithKline]
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What are ‘EWCs’?
Joint bodies comprising Management
and Employee representatives
- set up under EU Council Directive
94/45, 22 September 1994
Purpose
– “…to improve the right to information and
to consultation of employees in
Community-scale undertakings and
Community-scale groups of
undertakings.”
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Who needs to have one?

Any “undertaking” with
– at least 1000* employees within the
Member States
and
– at least 150* employees in each of at
least two of the 17 Member States
[*Based on the average number of employees, including
part time employees, during the previous two years]

Does not apply to merchant navy crews
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What were Companies’ initial
options in implementing the
EU Directive?

Agree a procedure with a
“Special Negotiating Body”, comprising
Employee Representatives from each
Country included (Article 6)
OR

Negotiate a voluntary agreement
(Article 13)
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What approach was adopted?
Many companies initially chose the
voluntary route, largely to maintain
their current arrangements and reduce
the degree of bureaucracy
 Others chose the ‘SNB’ route

– greater legal clarity
– less risk of Court challenge
– often supported the businesses’
strategies
– usually favoured by employees
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What about the UK ‘opt out’?
At the time, UK employees were not
legally bound to be included
(this changed in December 1999)
 But an ‘EWC’ or equivalent body was
still required to cater for employees in
the other Member States
 So, it was sensible to include any UK
employees - and most companies did!

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‘EWCs’ - when do they meet - and
what for?
EWC meets at least once a year or ‘in
special circumstances’
 Sub-Committee usually meets more
frequently or ‘in special circumstances’
 To share information and to consult
with elected representatives on the
Company’s transnational operations
as they affect the interests of
employees in at least two Countries
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What do ‘EWCs’ discuss?

Strategy - the structure and strategy
of the Company, including substantial
changes in the organisation;
mergers; cut-backs or closures

Finance - the financial and economic
situation; Company investments
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What do ‘EWCs’ discuss? . . .
Continued

Development - the expected
development of production, R&D and Sales;
the introduction of new working methods or
production processes; transfers of
production


Human Resources - the situation and
trend of employment; collective
redundancies
Issues for Information & Consultation
NOT NEGOTIATION
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Consultation
What does this mean?
 European definition
an “ exchange of views and dialogue”
 Understanding ‘local’ expectations and
what are local issues
 Takes place at a time when it is still
meaningful, i.e. when the opinion of
Employee Representatives can be
taken into consideration before final
decision
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Typical format/programme of
(Annual) ‘EWC’ meetings*

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Employee Representatives’ separate
preparatory meeting
Keynote Address - from a senior Company
executive in Europe
Presentations - on behalf of the major
businesses or in relation to an
important/current topic
Educational/Training sessions for employee
representatives - to help them to understand
and appreciate the business environment
*(with Interpreters)
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EU Directive on National
Information & Consultation*
Purpose [similar to ‘EWCs’]
to establish a general framework
setting out minimum requirements for
the right to information and
consultation of employees
To be achieved
by arrangements which ‘management
and labour’ consider to be best suited
to their needs and wishes
* (2002/14/EC)
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National Information &
Consultation
Scope
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the recent and probable development of
the undertaking’s or the establishment’s
activities and economic situation
situation, structure and probable
development of employment…and…any
anticipatory measures envisaged, in
particular where there is a threat to
employment
decisions likely to lead to substantial
changes in work organisation or in
contractual relations
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National Information &
Consultation
Arrangements
 appropriate timing, method and content
... at the relevant level of management

on the basis of information supplied by
the employer...and the opinion which the
employees’ representatives are entitled
to formulate
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National Information &
Consultation
Arrangements (continued)
 in such a way as to enable employees’
representatives to meet the employer
and obtain a response, and the reasons
for that response, to any opinion they
might formulate
 with a view to reaching agreement on
decisions within the scope of the
employer’s powers
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National Information &
Consultation
The Company’s Options
Subject to the provisions of National legislation (to
be in place by 23 March, 2005)
reach agreement with employee
representatives on the basis of the
framework laid down in the Directive
or
 negotiate arrangements with employee
representatives which are different from
those laid down, provided that they respect
the principles set out in the Directive

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EWCs promote dialogue
EWCs are a legal requirement
 Their purpose is to improve the rights
of employees to information and
consultation
 To be achieved through dialogue
between senior company executives
and employee representatives
 Employers should welcome this
additional opportunity for discussion
and make it a virtue

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EWCs - a rein on Management
EWCs are a legal requirement
 Employers must respect the obligation
to inform & consult as appropriate
before implementation of proposals
 Time should be built-in to the project
schedule to allow for necessary
consultations
 Develop trust between management
and employee representatives

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EWCs - an aid to Management
The requirement to inform and
consult provides an opportunity to
seek an second opinion from those
likely to be directly affected
 Ensures that employees can be
involved in the eventual decision and
will be more likely to support the
change
 Avoids ‘unpleasant’ surprises and
gives time for ‘acceptance’

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EWCs assist communication
Employees become better informed
 Stimulate new/novel methods of
communication to employees (e.g. use
of IT and dedicated web sites)
 Creates an obligation to brief Line
Managers - so that they are not left out
of the loop!
 Keeps elected ‘Employee
Representatives” truly ‘representative’

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Expansion of the EU
What is proposed?
With effect from May, 2004, the
following ten Countries are due to
become members of the European
Union:
Estonia, Latvia, Lithuania,
Poland,
Czech Republic, Slovakia, Hungary,
Slovenia, Malta and Cyprus
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Expansion of the EU

Provided that the Country has adopted
the relevant EU Directives* (a
condition of entry to the EU), Company
employees will then become eligible to
be represented on the ‘EWC’

The way in which this will be achieved
will depend on the circumstances
within each Company
*some agreements do not make this a requirement
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Expansion of the EU
Issues to be determined
- new Agreement required?
- timing/commencement of
involvement - interim arrangements
- consultation with new Countries
- degree of representation
- election of employee representatives
- training of new representatives
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Expansion of the EU
EWCs - a new experience!
An additional forum - to promote
dialogue between employees and
management

Not intended to undermine or
supersede local processes or local
employee rights

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Test of EWC effectiveness
Discussions remain business focused
 Develops appropriate links at the
business level to local communication
and consultation processes
 Recognises that communication is a
joint responsibility for management
and employee representatives
 Encourages participation and
involvement through enhanced
dialogue
 Promotes a spirit of collaboration

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What next?

Promote greater understanding of the
role of the ‘EWC’ amongst staff and
managers

Actively involve ‘EWC’ in the
formulation of business plans
GENERALLY RECOGNISE THAT
‘EWCs’ ARE HERE TO STAY!
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Effects of mergers on EWCs GlaxoSmithKline approach (1)
How to merge two existing ‘EWCs’?
 Few precedents - none of which were
considered directly comparable
 Advised to agree everything with
employee representatives
 The options
begin again (‘Special
Negotiating Group’ etc.), or
build on existing arrangements

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Effects of mergers on EWCs GlaxoSmithKline approach (2)

Members of both ‘EWCs’ met together

Joint ‘Working Group’ created from
members of the GlaxoWellcome and
SmithKline Beecham ‘EWCs’

‘Working Group’ recommendations put
to a further joint gathering and to
separate meetings of both ‘EWCs’
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Effects of mergers on EWCs GlaxoSmithKline approach (3)
The recommendations:
 regard the members of both
existing ‘EWCs’ as an analogous
‘Special Negotiating Body’
 elect a formal ‘Working Group’ from
these ‘EWCs’ - to negotiate a new
agreement, subject to final
endorsement by each of the former
‘EWCs’
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Effects of mergers on EWCs GlaxoSmithKline approach (4)
The outcome
 New Agreement (under English law)
 Basically, followed the ‘subsidiary
requirements’ of the (by then) UK
Regulations
 ‘EWC’ - 31 employee representatives
(from all Countries previously included)
and a ‘standing sub-committee’ (jointly
chaired), comprising 5 employee and
up to 5 management representatives
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Effects of mergers on EWCs GlaxoSmithKline approach (5)
‘Working Group’ also authorised to act
as ‘interim’ Sub-Committee for all
purposes until new Country employee
representatives elected - met on two
occasions (once in ‘exceptional
circumstances’)
 Inaugural meeting held in January,
2002, with training for representatives
 First Annual Meeting in April, 2002
