Worker consultation should take many forms

Date: 05/11/1998

By Simon Coss

THE European Commission should trust national businesses within the EU to work out their own methods for communicating with their employees, according to Richard Hume-Rothery.

Since 1990, Hume-Rothery, a leading light in British industry circles, has been involved in the European Works Council Study Group (EWCSG), of which he is now vice-president. He is concerned that Commission plans to lay down formal rules on how workers in firms operating in only one EU member state should be consulted when their employers plan major restructuring operations such as mass redundancies will damage, rather than encourage, competitiveness and job creation in Europe.

"We do not see this sort of rigid model as something which will add value and enhance job creation in a Community with 18 million unemployed," he explains.

"The question is really the extent to which you go towards some sort of central model or not; the extent to which you recognise the fact that there are different cultures and approaches in different member states and that one model is not necessarily going to be successful for everyone."

The EWCSG was set up when the Commission was first drafting its rules on worker consultation in multinational firms operating in the EU.

That process finally culminated in the adoption of the 1994 Works Council Directive, which stipulates that all multinationals which fulfil a certain basic set of criteria must set up committees or works councils made up of management and employee representatives. These bodies should meet regularly to discuss how the company is developing.

Hume-Rothery says experience to date suggests that this directive has not been particularly successful, and he is concerned that the Commission's new proposals will amount simply to a 'national' works council directive.

This would be a mistake, he argues, not least because it appears to run counter to the guiding EU principle of subsidiarity, which states that all decisions should be taken at the most devolved level possible. Hume-Rothery says he can see little logic in trying to draft legislation at EU level which will only cover national companies, and adds that his views have received some very high-level support in the UK.

"Mr Blair has been quoted as saying that he considers this proposal to be ridiculous, and I think by and large we agree with him," he says of the British prime minister.

But despite his fighting talk, the EWCSG vice-president appears to be resigned to the fact that some sort of EU law on national worker consultation will eventually be adopted.

With this in mind, he suggests an alternative approach to the sort of 'central model' he feels the Commission is currently suggesting. He points to the example of the so-called 'Investors In People' (IIP) scheme currently operating in the UK as a more fruitful way forward.

Under this system, employees are selected to take part in training courses designed to improve the performance of their companies.

After they have completed their studies, they return to their firms where they pass on the skills they have learned to colleagues.

In this way, companies are able to strive for what Hume-Rothery terms "levels of excellence" while at the same time developing training systems which suit the particular needs of their workplace.

Companies which are particularly successful receive a government-backed award which is becoming recognised as a sort of quality mark.

The EWCSG vice-president argues that such an approach is vital because of the widely differing ways in which modern companies operate.

He cites the examples of a bank, which has a 'pyramidal' management hierarchy with the boss at the top of the pyramid "pulling all the strings", and a modern information technology company, which is a very "flat" organisation where workers need to be given a large amount of individual freedom if their employers want to exploit their creative potential to the full.

"It is pretty obvious to see that if you had a pre-set model of how you should communicate then it's very, very unlikely that it would be genuinely successful if it was going to be the same approach for the bank and the IT company," he argues.

Hume-Rothery maintains that it should be perfectly possible to set up a worker information and consultation system based on the flexible IIP approach.

This, he claims, would be far more positive than what the Commission is currently proposing. "There has got to be a better answer and we believe that we have touched on something," he insists.

Interview with Richard Hume-Rothery, vice-president of the European Works Council Study Group.