European Works Councils
When writing about European Works Councils EWCs), it must be said at the outset what in fact the EWCs are and what are theirs legal basis. They are several existing definitions of EWCs but in fact they mean the same thing. One of them says that European Works Councils are “ bodies representing employees of companies operating across borders in different (EU) Member States. Another states that “The institution of the European Works Council is one of the possible, and most frequently used in practice, forms and information system – the consultation on transnational company operating in the European Community” In the context of understanding what the EWCs are and what is their role, it is worth to quote Mr Vladimir Špidla (European Commissioner for Employment, Social Affairs and Equal Opportunities) who said in Brussels in February 2008 that ‘European Works Councils have a key role to play in anticipating and managing the social dimension of change in large enterprises Europe-wide. They also contribute to improving corporate governance – a key factor in sustaining competitiveness’
Setting / creating of EWCs is regulated by EuropeanWorks Councils Directive – (full name: COUNCIL DIRECTIVE 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups undertakings for the purposes of informing and consulting employees) The European Council of Ministers adopted the council Directive 94/45/EC on the establishment of European Works Councils on September 22nd 1994. The 95/45/EC directive now has been replaced/amended by the new European Works Councils Directive – 2009/38/EC ( full name: DIRECTIVE 2009/38/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees)
Work on the change and the introduction of a new EWC Directive lasted more than 8 years and were preceded by many meetings and negotiations periods. Finally, in the December 2008, the Council of Ministers of the European Union, the day after the European Parliament, had approved changes to the European Works Councils Directive. It happened at the end of the French EU presidency, which attached great importance to a successful finale of the introduction of a new EWCD. What is new in the recast EWCD? The most important changes in the recast directive 2009/38/EC relate to:
• Inclusion of a definition of information
• Improvement of the definition of consultation
• Inclusion of a definition of transnationality and clarification of the transnational competence of EWCs
• Link between various levels of employee information and consultation
• Employers’ obligation to provide EWC members with training
The 1994 directive allowed two years for Member States to transpose the provisions into national legislation, the same situation concerns the 2009 directive, Member States have two years to adapt the national legislation for the EWCD requirements, but currently provisions based on the 1994 Directive will continue to apply during the transposition period. Member states have the time to transpose the EWCD provisions into national law from 5th June 2009 to 5th June 2011. The directive also formally recognized the role of European trade federations in the negotiation process.
Establishing of the EWCs:
According to the EWCD, the European Works Councils can be created in Community-scale undertakings, and thus employing at least 1,000 workers in the Member States, including at least 150 employees in at least two or more Member States. European Works Council shall be appointed on a proposal that may make the central management or a group of workers with at least two Member States. Then there is a need to establish so-called “special negotiating body”. The special negotiating body shall be established through an elective or appointment procedure determined by the member state. The role of the special negotiating body is to determine, with the central management of undertaking, the scope, the function, the composition and time framework of the EWCs activity or the arrangements for implementing a procedure for information and consultation. Introduction of EWCs in a company is not an automatic process but requires either an initiative from central management or ‘the written request of at least 100 employees or their representatives in at least two undertakings or establishments in at least two different Member States (article 5)
Objectives of the EWCs:
European Works Councils are primary aimed to transfer information to European employees representatives (information about all relevant aspects of companies activity), and to consult with the companies’ management multinational decisions on the situation of workers. These decisions often concern processes of organizational changes in the companies, relocation of production in the factories, protection workers against the negative effects of restructuring and many more. The potential conflict of interest between different employee groups has to be addressed by European Works Councils as well. The Council has also the right to information and consultation in matters relating to:
• the employment situation and possible developments in this area
• introducing important/significant organizational changes in the companies
• introducing new working methods or production processes.
• Changing of the company location or a location of a substantial part of company or the transferring of production to another company or companies
• mergers and divisions of companies
• production reduction
Generally the aim of the EWC is that workers, through their representatives chosen from amongst them, are to be given information and are consulted on the company’s future as well as any decision to be taken that would affect them.
EWCs in Malta:
At present there is an EU project entitled “Small Countries for European Works Councils – European Actions for the Promotion of European Works Councils among multinational undertakings in small European and new member states”. The main goal of this project is to promote European Works Councils as ideal tools for the promotion and facilitation of information dissemination, consultation and participation of representatives of companies. The project is especially addressed to new EU members and the smallest EU countries such as Estonia, Cyprus and Malta. In these countries the number of Community-scale undertaking is quite low. In Malta there are only a few multinational or transnational companies. The first meeting related to EWCs in Malta was held in 1996, 8 years before Malta became an EU member. The T & G (Transport & General Workers’ Union) in UK and the De La Rue company (a banknotes printing company) agreed that workers in the latter company’s subsidiary in Malta could elect representatives from amongst them. Other companies operating in Malta that established EWCs are:
• British American Tobacco (Malta) Ltd. (cigarettes manufacturing company)
• Trelleborg Sealing Solutions Ltd. (producer of automotive o’ring’s )
• Baxter (A pharmaceutical company)
• HSBC Bank Malta p.l.c.
• Hilton Hotel
• ST Microelectronics
The first national works council (not EWC) established in a Maltese company was works council in Air Malta.
Air Malta does not fall under the scope of the EWCD, because it is quite small, from the European point of view, company with the limited geographic distribution of its workers. However, the works council was set up in Air Malta. The council was established on the basis
of 2004 collective agreement, so called “rescue plan agreement”. The aim of the plan was to avoid the financial loses, return the national airline to viability and to protect the jobs. The first meeting of the council was held in January 2005. The main goal of the council is to increase the communication between the management and the workers and to ensure that the agreements objectives are being reached. The council consist of company’s management and so called CRC (central representative council), which incorporates representatives of various
categories of Air Malta workers: the CRC is composed of four representatives from the General Workers’ Union (GWU), one representative each form of the Union of Cabin Crew (UCC), the Airline Pilots Association (ALPA), and the Association of Airline Engineers (AEE), and a representative of staff at outstations.
European Works Councils in Poland:
In Poland the EWCD was transposed into the national law by the 2002 “European Works Councils Act” (EWCA) In the same year other EU candidates countries such as for example Slovakia, Slovenia or Cyprus passed the similar Acts. Some of them had transposed it even earlier, for example the Czech Republic. EWCA came into force in 29004, when Poland became a member of the EU. Introducing of EWCA in Poland was one of the stages/steps of introducing and strengthening social dialogue, after many years, when in fact the social dialogue (between government and workers in this case) did not exist, due to the communist government for many years in Poland. Other steps were for example: legalizing of Independent Self-Governing Trade Union “Solidarity” in 1980 (banned in 1982, re-legalized in 1989 after Round Table Agreements) or introducing in 1994 so called trilateral commission dealing with social and economic issues.
So far there was no establishment of EWCs in strictly Polish (with a headquarters in Poland and Polish management ) undertakings, although some Polish companies, such as PKN Orlen (fuel industry) or PZU (insurance company) are becoming transnational. But representatives of the Polish workers were invited to participate in EWCs long before the Polish accession to the European Union, together with the first foreign investments in Poland, and emergence of transnational corporation subsidiaries. In the beginning Polish representatives were just observers but later they became normal participants of EWCs meetings. Currently Polish representatives participate in the work of more than a hundred EWCs. In 2007 the first Polish representative, from Solidarity, became a chairman of EWC, in a brewing company Heineken. Polish representatives are participating in many other companies and undertakings, such as: Danone, Internationale Nederlanden Groep NV (ING), Nestle, Volkswagen AG, Bahlsen, Bosch and many more. Generally, in March 2008 there were 946 companies in Poland covered by the EWCD.
Figures and statistics:
Currently the EWCs are operating in more than 800 European companies and groups of companies from about 2200 that are covered by a legislation. It means that about 35% of companies have their EWCs in place. Some of the companies have established more than one EWC in their structures. The number of EWCs in the EU is still increasing, doubling since 1996. After EU enlargement in 2004 there are more than 300 new companies covered by the EWCD, with more than 30 of them with headquarters in the new Member States. All new EU Member States had already transposed the directive into national law. Currently all EU Members are working on the transposition the new EWCD into theirs national law (the deadline until 05.06.2011). The most important challenge in the context of EU enlargement for the functioning of EWCs is the growing significance of European wide intra-company competition for jobs and investment.
Interesting facts about EWCs
• The majority of companies covered by the Directive employ less than 5,000 workers – only 23% have EWCs.
• Among multinationals employing 10,000 people or more, 61% have EWCs.
• Of the 1,142 companies covered by the EWC Directive that operate in new Member States, 32% have EWCs
• The majority of European Works Councils meet once a year, with an extra meeting as required.
• The full list of the companies which have established theirs EWCs can be found here: http://www.ewcdb.eu/search_results_ewc.php
European Works Councils are important element of social dialogue between social partners such as employers – employees (company workers-company management). They help to reach better and deeper understanding between the social partners and a better understanding of problems and important issues of both sides of the dialogue. Their further development will certainly help to improve economic relations on the national and international (European) level. This is also one of the main goals of the new EWCD adoption.
EWC contribute to improving the quality of the individual companies activity, what resulting in economic development of both large counties of the “old EU” such as Germany, France and large, such as Poland and small, such as Malta countries which joined the EU in 2004. This is also important from the viewpoint of strengthening and developing the EU Members economy after several years of economic crisis. For this reason the initiative of EWC activities should be assessed very positively, because their activity contributes to improve the dialogue between the social and economic partners what contributes to EU economic development.
Mr Krzysztof Zielinksi is a Polish law graduate who worked with the Malta Union of Bank Employees between the months of February and May 2011 as part of a Leonardo Da Vinci Life Long Learning Programme funded by the EU Commission