Worker consultation is sticking point

Date: 27/02/1997

By Michael Mann

AGREEMENT on the Works Council Directive in 1994 seemed to offer the Commission a glimmer of hope in its attempts to break the deadlock over its proposal for a European Company Statute.

The biggest sticking point remains the degree to which workers should be consulted within the new 'European companies', regarded as so crucial to the competitiveness of EU businesses.

Countries such as Germany fear their long tradition of Mitbestimmung could be watered down by EU-wide rules. On the other side of the fence sit the UK and Ireland, with no apparent desire to embrace a more 'continental' model of industrial relations.

Despite official UK resistance to the establishment of works councils, Social Affairs Commissioner Pádraig Flynn was unable to hide his satisfaction that much of British business saw no problem in offering at least some worker consultation.

Desperate to wrestle the company statute past ministers, Flynn suggested a new strategy based on the works council arrangements. Controversially - and much to the chagrin of the UK - one option considered was to prevent the establishment of a European company in any country which had not transposed the directive.

“Unfortunately, our consultation in November 1995 did not work, so we asked Davignon to try to come up with a formula,” said a Commission official.

Davignon's task is far from easy. His group is looking at the situation in different countries in order to “evaluate the risk of circumventing national systems as a result of using the European company” and advise on whether the Commission should propose new legislation or look to a negotiated settlement.

German firms in particular are concerned that EU-wide rules could water down their long-established system of worker involvement, and are anxious that firms all over the continent should be subject to the same standards.

“We think Mitbestimmung is one of the strengths of the German system and within our group. At least it is in the minds of employers that they should have a look at the interests of their workers,” said a spokesman for Daimler-Benz.

Meanwhile, the Commission is keeping its 1995 ideas on the back burner, in case it is required to launch a formal consultation with the unions and employers under the social dialogue.