Staff apathy stalls spread of new works councils

Date: 03/09/1998

By Simon Coss

ONLY one-quarter of the companies covered by the EU's Works Council Directive have actually set up the staff-management consultative bodies provided for by the legislation.

But it is workers themselves who are largely responsible for the poor implementation, rather than any intransigence on the part of firms covered by the directive, which sets out formal rules for talks between employers and their staff.

The directive was adopted by EU governments in 1994. Experts at the European Trade Union Confederation (ETUC) say that theoretically some 1,600 firms across the Union fall within its scope.

Yet, up to now, only around 450 companies have set up the sort of management-employee committees, or works councils, which are required by the legislation.

“There are a huge number of agreements which still have to be concluded,” admitted ETUC labour law expert Willy Buschak.

Until September 1996, workers and employers had the option of concluding voluntary agreements and most of the existing 450 works councils were set up in this way.

Since then, however, employers have been obliged to begin negotiations on setting up works councils if employees ask for them. But very few workers appear to be exercising their right to initiate talks.

Bushak feels that there are a number of explanations for the workforce's apparent apathy towards the Works Council Directive.

“Now we are entering into an area where companies are structured in a different way so setting up works councils could be more complicated,” he said, pointing to the example of fast-food giant McDonald's which operates on a franchise basis. “Maybe here and there the national workers' representatives don't feel the need to have European works councils, which is a bit confusing.”

Bushak also suggests that many trade unions may be waiting to see how the first 450 works councils operate in practice before deciding whether to demand negotiations on new committees.

The problems are compounded in three member states (Italy, Luxembourg and Portugal) because national parliaments have not passed the legislation necessary to transpose the Works Council Directive into national law.

By September 1999, at the latest, the European Commission must launch a review of the directive in order to see how it could be improved.

When it does, the trade unions are likely to call for the law to include stronger references to the principles of 'information and consultation'.

This issue came to the fore in the wake of the Renault car company's decision to close its profitable factory in Vilvoorde, Belgium, last year. In essence, it means that the workforce should be told when its employer is planning major restructuring operations and given the chance to have a say in how that restructuring should be carried out.

The Works Council Directive only applies to large multinationals in the EU, although Social Affairs Commissioner Pádraig Flynn is planning to put forward plans for similar rules to cover national firms.