4.8.6.   Social dialogue. Information, consultation and participation of workers

A. INDUSTRIAL RELATIONS

LEGAL BASIS

Articles 136-140 (117-118c) EC.

OBJECTIVES

The Community's objective is to promote dialogue between labour and management which may lead to contractual relations or agreements at Community level.

ACHIEVEMENTS

1. General evolution

At Community level, the trend has been towards increasing influence for labour and management over social policy.

a.     Treaty of Rome. Under the original Article 138 (118), one of the Commission's tasks was to promote close cooperation between Member States in regard to the right of association and collective bargaining between employers and workers.

b.     Val Duchesse social dialogue. Initiated in 1985, the Val Duchesse social dialogue process aimed to involve the social partners represented by the European Trade Union Confederation (ETUC), the Union of Industries of the European Community (UNICE) and the European Centre of Public Enterprises (CEEP) in the internal market process. The Council is not represented. These meetings of the Social Dialogue Committee have resulted in a number of joint statements on employment, education and training and other issues. According to the Commission the importance of this Committee will increase.

c.     Single European Act. Article 139 (118b), which was inserted by the Single European Act in 1986, extended the scope of Article 138 and created a specific basis in the Treaty for establishing 'social dialogue'. The promotion of the social dialogue became one of the Commission's official tasks and collective agreements at Community level were made possible.

d.     Agreement on Social Policy. In October 1991, UNICE, ETUC and CEEP adopted a joint agreement which called for mandatory consultation of the social partners on Commission proposals in the area of social affairs, and an option for negotiation between social partners to lead to framework agreements. This agreement became enshrined in the Agreement on Social Policy (ASP) which was adopted by all Member States, with the exception of the United Kingdom and annexed to the Maastricht Treaty on European Union.

e.     At the national level, the two sides of industry are given the opportunity of implementing directives by way of agreement. At Community level, specific rules are laid down in the Agreement. The Commission must consult management and labour before taking any action in the social policy field. An initial consultation should take place concerning the possible direction of Community action. If, after such consultation, the Commission considers Community action advisable, it will consult management and labour on the content of the envisaged proposal. Management and labour will forward to the Commission an opinion or, where appropriate, a recommendation. Alternatively, they may also inform the Commission of their wish to initiate, independently, a process of negotiation which could lead to the establishment of a direct agreement between the parties. The negotiation process may take up to nine months, and the social partners have the following possibilities: they may conclude an agreement and jointly request the Commission to propose that the Council adopt a decision on implementation, or, having concluded an agreement between themselves, they may prefer to implement it in accordance with the procedures and practices specific to management and labour and to the Member States, or they may be unable to reach an agreement. In the last case, the Commission will resume work on the proposal in question and will forward the result of its deliberations to the Council. The first practical results of these powers are the adoption of a framework agreement on parental leave (Dir. 96/34), on part-time work (Dir. 97/81) and on fixed-term work (Dir. 99/70).

f.     Amsterdam Treaty. The incorporation of the Maastricht ASP into the EC Treaty following the Amsterdam Treaty means that the EC Treaty forms a single coherent framework for all 15 Member States.

2. Bodies at Community level

a.     It was considered essential from the very outset of EEC cooperation to involve various economic and social groups in drawing up Community legislation. The Economic and Social Committee (* 1.3.11) testifies to this.

b.     Since the 1960s a number of advisory committees have existed whose role is to advise the Commission on the formulation of specific policies. In general, these committees, like the Committee on Social Security for Migrant Workers, the Committee on the European Social Fund and the Committee on Equal opportunities for Women and Men, are made up of representatives of national employer and trade union organisations as well as governments. There also exists a number of other consultative structures which involve the social partners, for example the Leonardo Committee.

c.     Some of the earliest social dialogue structures were established in the main sectors. The sectoral social dialogue is organised either as joint committees (23 have been established so far), appointed by the Commission usually in sectors corresponding to one of the common policies, or informal working parties, organised in response to a joint request of the social partners. In addition, there are non-structured discussion groups.

d.     Since 1970, the key tripartite body at European level concerning discussion on employment has been the Standing Committee on Employment. The continuous consultation between the Council of Ministers, the Commission and the two sides of industry aims at facilitating cooperation on employment policies. The Standing Committee on Employment was reformed in 1999. The Committee's work is now integrated into the coordinated employment strategy. The size of the Committee was reduced to make it more effective. The Standing Committee comprises 20 representatives of the social partners, divided between trade union and employer organisations. The social partners' delegations should cover the whole economy.

e.     In the autumn of 1995, the European Centre for Industrial Relations (CERI) was opened. This was the result of an initiative taken by management and labour with the aid of the Community (COM(95)0445). The aim of the centre is to promote an understanding of the European dimension in industrial relations through educating leaders and representatives of employers' and workers' organisations.

3. Future outlook

After the enforcement of the Amsterdam Treaty the consultation process is now even more important since it covers all proposals within the scope of Art. 137 and by all 15 Member States.

ROLE OF THE EUROPEAN PARLIAMENT

The EP has always supported the development of 'social dialogue' and has made a practical contribution by often inviting labour and management at EU level to present their views before the Committee on Employment and Social Affairs delivers a report on any proposal which affects them. In the Resolution of 18 November 1998 on social dialogue at Community level, the EP considered it necessary to promote and ensure the broadest possible participation by organisations representing the two sides of industry, especially SMEs. Genuine social dialogue can only take place between independent partners who have themselves elected to negotiate with one another.

The EP welcomes the central measures to reform the Standing Committee on Employment. The Committee should not only discuss the employment guidelines but also the economic policy guidelines. The results of the consultations should also be forwarded to the Ecofin Council before the latter definitively adopts its position.

In the Resolution of 19 November 1997, the EP criticised the framework agreement on part-time work, concluded by UNICE, CEEP and ETUC (see above), by saying that the agreement does not cover all forms of atypical employment and basically excludes all questions of social security. The EP therefore calls on the Commission to submit proposals for directives on atypical work not covered by the agreement. The EP finally repeats its call for an interinstitutional agreement on joint arrangements for the practical application of the ASP and urges the Commission and Council to engage in a serious dialogue with the EP with a view to reaching a satisfactory solution.

B. INFORMATION, CONSULTATION AND PARTICIPATION OF WORKERS

LEGAL BASIS

Articles 44, 94, 95 and 137 (54, 100, 100a and 118) EC.

OBJECTIVES

Art. 137 EC states that the Community's objective is to support the Member States' action relating to the information and consultation of workers.

ACHIEVEMENTS

The information, consultation and participation of workers has been a key theme in European debate since the first social action programme was adopted by the Council in 1974. The Social Charter stressed the desirability of promoting worker participation in the activities of their companies. The Commission's proposals in this area, however, have often encountered resistance in the Council and a number of proposals have therefore not yet been adopted. This should be seen in the light of the fact that Community legal acts in this field could only be adopted by a unanimous vote until the advent of the Maastricht and Amsterdam Treaties. By the Amsterdam Treaty the EP's influence was increased. The procedure is now co-decision with qualified majority in the Council.

1.    Present legislation

Most of the directives adopted by the Council deal with the right of workers to be informed and consulted on a number of important issues concerning the running of the company or their interests. However, the directives do not contain provisions which actually give them the right to participate in decision-making:

• Council Directive 75/129 of 17 February 1975 on the approximation of the laws of the Member States concerning collective redundancies, as amended by Council Directive 98/59 of 20 July 1998. Under this directive, employers must enter into negotiations with workers in the event of mass redundancy.
• Council Directive 77/187 of 14 February 1977 on the approximation of the laws of the Member States on the safeguarding of workers' rights in conjunction with the transfer of undertakings, pursuant to which workers must be informed of the reasons for the transfer and the consequences. This directive was amended by Directive 98/50 of 29 June 1998.
• Council Directive of 9 October 1978 on mergers of limited companies, pursuant to which workers in companies which merge are protected to the same extent laid down in the directive on the transfer of undertakings.
• Council Directive 94/45 of 22 September 1994 on the introduction of European Works Councils. The adoption of this directive was an innovation in that unlike previously adopted directives in this area, it does not address specific situations. It does lay down general rules to ensure that workers in big multinational companies and consortia are informed and consulted. It is also the first directive adopted under the Agreement on Social Policy. Workers have also acquired certain rights to information and consultation in regard to the working environment. This directive has been extended to the United Kingdom of Great Britain and Northern Ireland by Council Directive 97/74.
• In a recommendation of 27 July 1992 (92/443), the Council urged the Member States to promote profit-sharing in companies for the benefit of workers.

2. Future Outlook

Other proposals have long been pending in the Council without it being possible to reach a decision. Unlike the directives that have been adopted, most of these proposals are based on a model which goes beyond information and consultation procedures and contains rules on worker participation on company boards or management. These are:

• Proposals for Council regulations on a 'European company statute' (COM(91)0174/I and II), a 'European association', ' European cooperatives' and a 'European mutual society' together with the associated proposals for Council directives containing supplementary provisions on the position of workers (COM(93)0252);
• The proposal for a fifth directive on company law, as amended by a third proposal (COM(91)0372), containing a number of alternative models for participation in decision-making applicable to companies employing more than 1000 workers.
• A proposal for a directive for information and consultation of workers at national level (COM(98)0612). The proposal is a result of the unwillingness of the social partners to negotiate an agreement in this area. The legislative framework should be applied to public and private undertakings carrying out an economic activity, whether or not operating for gain, and have at least 60 employees. The proposal for a directive will not affect other European or national employee information and consultation rights. The EP approved the proposal on 14 April 1999.
• Finally, the ' Vredeling proposal' on information and consultation of workers in multinational companies with complex structures has still not been adopted.

Following the European Council meeting in Nice (December 2000), the proposal on the European company should quickly be adopted (* 3.4.2.).

ROLE OF THE EUROPEAN PARLIAMENT

Parliament has adopted several resolutions calling for workers to have the right to be involved in company decision-making (e.g. the resolutions of 13 September 1990, 3 May 1994, 19 January 1995, 17 January 1997 and 19 November 1997). Parliament's position is that workers should not only be entitled to be informed and consulted but that they should also have the right to participate in decision-making. The right to information, consultation and participation in decision-making should apply in multinational and national companies and the right should apply to all companies irrespective of legal status. Parliament believes that workers should be involved in company decision-making concerning the introduction of new technology, changes in the organisation of the work, production and economic planning (resolution of 13 September 1990). In its Resolution of 19 November 1997, the EP supported the basic ideas put forward in the Davignon Report and the Luxembourg Compromise, although it notes that there are still important questions to be answered, particularly regarding the role of European Works Council. The EP hopes that the rules on worker involvement in the European Community could also be applied to the 'European Association', the 'European Co-operative' and the 'European Mutual Society'.

In a resolution of 15 January 1998 on the Pepper II Report (COM(96)0697), the EP confirms its support for promotion of participation of employees in profits and enterprise results.