Member states urged to deliver on worker profit-share schemes

Date: 05/07/01

By John Shelley

SOCIAL affairs chief Anna Diamantopoulou is to turn up the heat on member states which do not do enough to make companies offer stock options and profit-share bonuses to their workers.

The Greek commissioner insists that giving workers a financial stake in the success of their company is vital to improving the efficiency of European enterprise, but says EU governments are not encouraging firms to offer these perks.

Portugal, Greece, Sweden, Luxembourg and Denmark come in for particular criticism for doing next to nothing to push "financial participation" schemes.

In a consultation paper due to be launched next week, Diamantopoulou says: "The promotion and development of methods of financial participation of employees seems to be highly desirable in Europe and could reinforce its competitiveness." In 1992, member states first threw themselves behind the principle that workers of all levels, and not just top managers, should be given the chance to share in the success of their company.

Employment ministers agreed then that profit-share schemes, where possible, should help employees to feel a sense of ownership of the company they work for, give them a direct interest in working well and also encourage transparency within companies. The initial pledge was backed up by a second commitment in 1997, when employment ministers agreed a set of common basic principles for these schemes.

These should, they said, be voluntary for employees and employers and be open to all workers. Also, payments should be directly and transparently linked to the financial success of the firm. But Diamantopoulou says member states have been slow to back up their words with action.

Several member states "have not really modified their national policies concerning financial participation". Of EU countries, the UK and France lead the way in encouraging profit-sharing. Ireland, the Netherlands and Finland have also, for several years, had laws which offer financial incentives for companies to run such schemes. Belgium, previously lagging behind, introduced similar rules in March.

Diamantopoulou wants all member states to introduce tax breaks and other incentives to encourage companies across Europe to fall in line. The consultation paper, due to be published next week, will ask governments, companies and non-governmental organisations to come up with more suggestions.

It is due to be followed later this year by a Commission communication outlining concrete action the Union can take to encourage companies to offer workers financial participation. Officials insist Diamantopoulou is not at this stage proposing legislation to force member states to take action. Nonetheless she is looking at ways of harmonising laws so multinational companies could offer a single profit-share scheme across the EU.

Social affairs chief Anna Diamantopoulou is to turn up the heat on Member States which do not do enough to make companies offer stock options and profit-share bonuses to their workers.