Verbatim report of proceedings

Wednesday, 25 April 2007 - Strasbourg

21. Strengthening European legislation in the field of information and consultation of workers (debate)

  President. – The next item is the Commission statement: Strengthening European legislation in the field of information and consultation of workers.

  Vladimír Špidla, Member of the Commission. (CS) Mr President, honourable Members, keeping workers informed and consulting with them is a significant element of the European Social Model’s response to the challenges posed by globalisation, economic competition and technological change. Included in that response is change management, the anticipation of change and social dialogue.

I do not have to remind the House of the importance the Commission attaches to European Works Councils. They enable us to reduce the imbalance arising from inadequate representation, in other words due to the fact that a growing number of decisions are taken at supranational level, whereas the law on informing employees and problem resolution is implemented mainly at national level.

They provide support for the social partners in each country and facilitate general understanding of the strategic problems of businesses and the search for solutions. In particular they allow for the anticipation and management of change. In the era of globalisation, Europe must address a number of economic and social problems.

We are well aware that business restructuring is something feared not only by the employees affected but also by other citizens. We also know that when it comes to addressing this phenomenon there is only one possible approach, and that is to be decisive, proactive and dynamic. The EU must contribute towards preparing for the changes brought about by restructuring and towards managing them in a responsible way – whether by means of the structural funds, in particular the European Social Fund or through political dialogue in the context of the restructuring forums introduced by the Commission – and towards the implementation of the Community’s regulatory framework for the information and consultation of workers.

The recent situation in the VW car works demonstrated in particular the need to inform and consult with workers in the decision-making process at the earliest opportunity, so that they are prepared for restructuring and so that this is carried out in everyone’s best interests. European Works Councils must be capable of carrying out this function in the context of supranational operations. How to achieve this goal? First and foremost, is essential to ensure compliance with Community legislation when it comes to informing and consulting with employees. I would emphasise, though, that the task of upholding Community legislation falls primarily to the Member States.

Questions should also be asked about the review of the Directive on European Works Councils. I am well aware of how sensitive this issue is. As you know, the Commission initiated the process of reviewing the Directive on European Works Councils in 2004. In the context of the 2005 communication on restructuring and employment the Commission encouraged the European social partners to enter negotiations on this issue. The social partners have incorporated support and evaluation of the joint texts relating to European Works Councils and restructuring into their working programmes for 2006 to 2008. We await the results of this work with great interest.

I know that the social partners have different approaches to the issue of European Works Councils. Everyone agrees that there is an increasing need for social dialogue at a national level, and many are aware that the work of the European Works Councils is often overlooked or underestimated. The question is whether a review of the European legal framework will improve the way they function or whether it would be enough to step up the exchange of tried and tested approaches between the social partners. We welcome all proposals contributing to the development of the legal framework. It appears that this development will prove useful in guaranteeing greater cohesion and effectiveness when it comes to informing and consulting with workers, reducing legal uncertainty in cases involving major changes to the size of businesses, and clarifying the extent of the process of informing and consulting with employees at European and national level and the role it has to play.

It is clear that the Commission’s initiative takes account of actions initiated by the social partners with a view to supporting the use of proven approaches. It also takes account of the requirements of the Economic and Social Committee. The Commission will support the search for solutions arising from the partnership and linking up the economic, social and environmental aspects. This approach is also backed in the 2005 Commission communication on restructuring and employment and the 2006 communication on corporate responsibility. The Commission awaits with interest Parliament’s resolution on the issue, which will play an important role regarding the Commission’s next steps. The Commission is ready to discuss the issue of informing and consulting with workers with Parliament. Thank you.

  Gabriele Stauner, on behalf of the PPE-DE Group. – (DE) Mr President, Commissioner, ladies and gentlemen, let me begin with a special word of thanks to Commissioner Špidla for his remarks on the subject of information and consultation of workers. We all know how much importance attaches to workers’ participatory rights as a source of good industrial relations and as the basis of a contented and motivated workforce. That is why these rights are also, and indeed particularly, in the interests of companies and employers.

We in Europe can be proud of our tradition of worker participation. These rights feature prominently among our economic success factors. Although consultation rights vary between Member States of the EU – in the country I come from, for instance, worker participation extends to a right of codetermination in the realm of business management – information and consultation rights are undoubtedly part of what we call the European social model.

The European Works Council Directive of 1994 is acknowledged as the pinnacle of Community legislation in this field.

By common accord, it has proved its worth too; one token of its necessity was the fact that some companies with operations in several countries had voluntarily established works councils even before the Directive entered into force.

I also believe that now, in 2007, the time has come to revise the Directive. The 1994 Directive had actually designated 1999 as the revision date. There have been many changes since the Directive was enacted. Corporate economic structures have changed, and globalisation has made further advances, but the expectations of employees and those who represent their interests have grown too.

As representatives of the people in Europe, we shall gladly play our part in adapting the rules to the changes in the world of business and employment, for we all know that the only successful employers of the future will be those who act responsibly and with due regard to the rights and welfare of their employees, while well-informed employees who are involved in corporate decision-making processes will give of their best and be committed to the success of their company.

  Stephen Hughes, on behalf of the PSE Group. – Mr President, Airbus, Alcatel, Lucent and Delphi Systems are just the latest in a never-ending stream of instances of major restructuring that have led delegations of workers to come to us complaining of breaches of EU information and consultation laws, not just the Works Council Directive, but others too: directives on collective redundancies and transfers dating from the 1970s, and the Directive establishing a General Framework for Information and Consultation of Workers.

We have quite a body of information on consultation laws, but the inconsistencies and contradictions between them and the loopholes in them mean that they are often avoided altogether. There is often no attempt at meaningful information or consultation in good time in avoiding or mitigating job losses.

We urgently need a clear definition of the concepts of information and consultation in EU law. We have different definitions in several different directives. The Works Council Directive does not define either notion clearly, while the later directives on a company statute and the general framework have different definitions. This is an open door to abuse and avoidance. The need for a revision to the Works Council Directive is now glaringly obvious: it was due for revision eight years ago.

The deficiencies and loopholes are well known: failure to provide timely information and consultation, to fully recognise the role of trade unions, to provide expert support, the inadequacy of sanctions, the misuse of confidentiality rules to withhold information and so on. These deficiencies must now be addressed to give workers the effective tools they need.

I know there is a view that a revision should not be launched because we might end up with a weaker, not a stronger, instrument. The view of my group is that the avoidance and abuse of this legislation is now of such scale and breadth that we have nothing to lose in insisting on a revision. I urge the Commissioner to bring that provision forward as a matter of urgency.

  Ilda Figueiredo, on behalf of the GUE/NGL Group. – (PT) At a time when we are celebrating the 33rd anniversary of the April Revolution in my country, Portugal, it is with particular pleasure that I am here in this Chamber talking about strengthening the legislation on the information and consultation of workers.

As we all know, the directives on the information and consultation of workers and the European Works Councils lay down that information should be made available regarding the development of economic and social aspects of the company and regarding decisions that cause substantial change as regards the organisation of work and work contracts. Experience has shown, however, that this is not enough and does not address the increasingly serious problems of company restructuring and relocations, which have serious economic and social repercussions.

Workers from various companies continue to report such problems in the hi-tech industry, in the cases of Alcatel-Lucent, Delphi and Yasak, footwear, for example Rodhe, the car industry and the textiles sector. Community legislation therefore needs to go much further.

Workers’ organisations must be kept fully informed and must play a central role throughout the process, in the European Works Councils, including the right of veto.

Flexi-insecurity, the liberalisation of redundancies and the unacceptable attack on the rights gained by the workers down the years must not be allowed to flourish.

I hope that you will be able to answer the questions you face, Commissioner.

  President. – If it means celebrating the Carnation Revolution, I am sure, Mrs Figueiredo, that he will reply to you.

  Ieke van den Burg (PSE). – (NL) Mr President, I shall try to make my statement in one minute; it mainly has to do with the financial markets and what is happening there at the moment in the area of private equity and hedge funds which, via shareholders’ rights, are gaining influence in businesses. It is very disappointing, in my view, that the present Commission has failed to table any proposals on employees’ rights, particularly in those large transnational businesses, while everything possible is being done to improve shareholders' rights. We adopted a report on this very subject in February last. There is clearly an enormous imbalance between what is being done for shareholders in order to gain more influence in businesses – which they can do purely from their financial perspective – while no consideration is being given to the repercussions on employment, on the quality of work or on employees’ rights. As I see it, the balance should be restored in that area at the earliest opportunity, and it may be advisable to revisit the fifth Company Law Directive and to ensure that, when monitoring businesses, a better balance is struck between the interests of shareholders and those of employees.

  Harald Ettl (PSE). – (DE) Mr President, Commissioner, recent events in the European Union have shown that information and consultation within the framework of the European Works Council function only in a highly inadequate manner. We are now at the stage where worker representation bodies in different countries – France, Germany and so on – are being played off one against the other, yet this is not some sort of international sports match. Consultation and information within the framework of the committee of the European Works Council simply no longer exist. For that reason there is a need for a change in this regard. I would point out that the first revision was supposed to have taken place back in 1999. The subject was brought up again in 2004 and now we are at the stage where we are recognising the need for revision.

I am very pleased that it was Mrs Stauner of the Group of the European People’s Party (Christian Democrats) and European Democrats who prepared this subject for us, as it was former German Chancellor Kohl who, when the European Works Council Directive came into the world, was first in line in the delivery room. At that time, though, our industries were still in a quite different condition to the one they are in today; there have been a lot of changes. Business organisations have got smaller, methods of communication have changed. There is much in this sector that has to be changed. All I can do is call on us to seize the opportunity currently before us to undertake this revision. Let us bring the European Works Council up to date! Let us update the regulations and bring them into line with reality! It is tremendously important, from the point of view of democratic politics, for this to work within companies, because if it does not work there is an enormous potential for conflict, and that is what has to be prevented.

All I can do, then, Commissioner, is to entreat you to get this under way quickly and to push the Council as necessary in order to make this happen.

  Kader Arif (PSE). – (FR) Mr President, Commissioner, ladies and gentlemen, 13 years after the adoption of the European Works Councils Directive, much remains to be done if this legislation is fully to achieve its objectives.

Over the last few months, many companies have carried out major restructuring projects, without consultation and regardless of this directive and of other European laws and without any of these companies having ever been punished. The crises that Airbus is going through now, that Alcatel and Volkswagen went through in the past and that Peugeot will perhaps go through in the future, are harsh examples of just what is lacking in European social dialogue.

In the case of Airbus, the trade unionists and workers that we met in Parliament or in our respective countries rightly deplored the absence of any prior consultation or true cooperation with regard to the Power 8 restructuring plan. Although we know that managerial errors are at the root of the current difficulties being experienced by Airbus and, at the same time, that it is the skills of its employees that have made it a success, the employees are the last to be informed but the first to be affected – and the most tragically affected – by this plan. As for the managers, they are shielded, because they are covered by the millions of euros of their gilded parachute. We can no longer tolerate a situation in which employees learn through the press that they are being made redundant. We need to act urgently if we are to ensure greater transparency.

For several years now, we in the Socialist Group in the European Parliament have been calling for these texts to be revised in a bid to ensure that information and consultation of workers early on, at regular intervals and at all levels of decision making will enable them genuinely to make their presence felt in the decision-making process. Thus, employee representatives ought to be able to sit on the management board of companies. This is a crucial element when it comes to workers being informed about, and monitoring, strategic decisions. This is what would make it possible, too, to ensure that these restructuring measures were really crucial to the business and not just linked to managerial errors or to the quest for immediate profit.

We also think it crucial to ensure that companies within the Union assume their social and financial responsibilities and act in accordance with a method of governance that is responsible and fair towards all of the parties involved – workers, trade unions, local and regional authorities and communities in the area in which they are based. The Commission must make a commitment to induce companies to act responsibly, including by considering legislation on their social responsibility.

It seems to me that, in a globalised setting and in an ever-changing economic situation, it is our duty today, as it was 13 years ago, to ensure that the existing directives are applied in full, including by means of sanctions against irresponsible companies but, even more so, to ensure that the existing directives are revised so that they go further with regard to information and consultation of workers, and to works councils. By doing so, we will make it clear that we are strongly attached to a socially responsible Europe.

  Inés Ayala Sender (PSE). – (ES) I would like to thank the Commissioner for his fine words, although we would like more details on the timetable and the measures to increase the transparency and good governance of companies.

The participation of workers is required if we are to maintain the competitiveness and quality of European industry in flagship projects such as Airbus and others that are less well-known, but crucial if we are to turn Europe into the competitive economy that we want to see. Delphi is a painful wound in my country in this regard.

It is not right to attribute the problems we are experiencing exclusively to globalisation, since if we look carefully, we will see that the books of both Airbus and Boeing are full of orders, and therefore more workers are needed rather than fewer, both here in Europe and in other places.

I would like to call upon the Commission, in addition to the worker participation that we are demanding, now to consider new measures to ensure transparency in the activities and decisions of executives who, with their armour-plated contracts and exorbitant salaries, allow negligence, lack of transparency and criminal errors to take place for which the European Community does not currently have a sufficient instrument.

Commissioner, does the Commission intend to create instruments to restrict this irresponsible power within the context of the so-called social responsibility of companies and their codes of conduct, which so far are not obligatory? Could measures be implemented to oblige executives to manage in a more transparent way, firstly for the sake of the workers and also for the sake of society? If we are talking about good European governance in companies, we cannot continue to resign ourselves to this situation.

  Matthias Groote (PSE). – (DE) Mr President, Commissioner, ladies and gentlemen, it seems that something bad must always happen before the Commission advances an opinion on a subject as important as strengthening the rights of workers in the area of information and consultation.

Airbus’s Power8 restructuring programme and the consequent threat of job losses and sales of factories shook European Airbus employees to the core. In the discussion with the works councils of the areas affected, Varel and Nordenham, and at a meeting of trade union representatives from all over Europe that took place in Brussels recently, the workers pointed out time and again the inadequate supply of information to and consultation with Airbus employees. For this reason, the rights of European works councils must, first of all, at long last be fully implemented and then extended and given greater depth.

It is indefensible for workers not to be provided with comprehensive information and consultation if their companies are being restructured or if there are possible job losses. This indefensible situation can be remedied only by finally getting the long-overdue revision of the European Works Council Directive under way. So far, I have not heard of a single company anywhere in Europe that has got into difficulties because of its works council. On the contrary, in fact, consultation and providing early information to workers could definitely have saved large numbers of companies and jobs in Europe and fixed management mistakes.

After 13 years it is time for this legislation to be fully brought to bear in order to ensure social peace in Europe.

  Alejandro Cercas (PSE). – (ES) Mr President, Commissioner, it is true, thirteen years ago now, on reading the texts, it was pointed out that, in our primary law, we had to incorporate social dialogue as the European social model’s distinguishing mark. That was why the Directive was drawn up.

It was pointed out thirteen years ago that the internal market had a transnational dimension and that that could lead to problems amongst workers in companies of a transnational nature, since they should take decisions in consultation with everybody without prejudicing a few or prejudicing everybody. Given what we have seen in Delphi, in Renault and in Airbus, we are now much more acutely aware of the need to improve these mechanisms.

Europe is in danger of appearing to lack legitimacy amongst the workers, because they are seeing two very dangerous things simultaneously, Commissioner. Firstly, they see that we do not have any instruments, but at the same time they hear us in Europe saying that we are with them, that we are not going to abandon them in the face of globalisation and restructuring.

The revision of the Directive, therefore, though not sufficient, is nevertheless necessary, because it is an instrument that is showing itself to be neither used nor useful in dealing with the extremely serious problems that we are seeing on the ground and which are turning a very significant proportion of the European population against each other and against Brussels.

This is urgent, Commissioner. We must continue to move forward. We shall support you fully if you tackle such a difficult and risky situation.

  Karin Jöns (PSE). – (DE) Mr President, Commissioner, ladies and gentlemen, uncertainty is always a bad thing, especially when it relates to the future of jobs. The sword of Damocles that being laid off represents has been hanging over the heads of thousands of Airbus employees since January. That is an intolerable situation. It is no way to treat human beings. In my constituency there was talk, with the advent of Power8, first of 1 200 job losses, then of 700, then of job losses solely amongst temporary workers and now we hear that Airbus actually wants to start hiring again! All of this cannot fail to make one dizzy.

The approach taken by the top management at EADS is, as we all know, no longer an isolated incident. We have heard this a number of times today. The fact that something like this occurs despite the European Works Council Directive is simply scandalous and makes it glaringly evident that action is needed. For that reason, there is an urgent need to introduce specific measures to provide a stronger reminder to employers of their obligations in terms of informing and consulting with their employees. We must ensure, above all, that sanctions against contravention of the directive are rigorously enforced right across the EU and also that employees and their representatives are represented on the supervisory boards.

Commissioner Špidla, I genuinely expect the Commission finally to get on with the long overdue task of updating this directive, for, as is well known, the EU’s competitiveness and productivity stand and fall by good, safe jobs.

  Vladimír Špidla, Member of the Commission. (CS) Mr President, honourable Members, firstly, a number of cases were mentioned in which the directive on information and consultation of workers was not applied appropriately. This did indeed happen, the Commission took action in each case and in some cases there was a clear improvement in the situation.

I should like to emphasise, however, that the directive is not as weak as would appear from some of the opinions expressed. How it is applied is ultimately a matter of national discretion. I should like to point out that a number of companies have been brought before the French and Belgian courts recently for not upholding the directive and that in some cases, for example British Airways, the restructuring process has been put on hold until the law on consultation and information has been implemented in full. There are therefore possibilities for a relatively effective approach, which is something that in my opinion we should bear in mind.

The second question mentioned was that of the prospective review of the directive. I would point out that the Commission has launched a review of this directive and that our aim is in any event to contribute to a solution leading to stable, effective social dialogue and consultation and the right to consultation with workers and for them to be informed. This is the Commission’s goal and I am sure that we will achieve it during this legislative period.

  President. – Thank you very much, Commissioner.

The debate is closed.

The vote on the motions for resolutions tabled at the end of the debate⁽¹⁾ will take place during the next part-session, in Brussels, on Thursday 10 May.

Written statements (Rule 142)

  Glyn Ford (PSE), in writing. – The reason for this statement and next month’s resolution is the appalling situation regarding Airbus in Europe. A combination of mismanagement, unfair competition and poor judgement has threatened the success of this most vital of European industries. I find it inconceivable that the US with Boeing should totally dominate the world market for medium- and larger-scale aircraft. Boeing has its civilian sales and R&D underpinned by military contracts and military R&D: a sad indictment of Europe’s lack of a common defence and security policy.

Nevertheless, the key problem here is that despite massive EU and national governments loans to Airbus, it was run like some kind of Edwardian corner shop with minimum consultation with the workforce. Workers possess one of the most important resources for any industrial enterprise – craft knowledge and experience. It may well be that by focusing on that, management could have avoided some of its worst mistakes. Now a minimum of 10 000 families face the prospect of suffering job losses.

If this company in the vanguard of European industry pays so little attention to its most important asset, its workforce, it can only be time for the Commission to strengthen and reinforce legislation that is clearly not strong enough.

(1) See Minutes