IR Notes

On 14 May, almost two years behind schedule, the European Commission delivered its evaluation report on Directive 2009/38 on European Works Councils and a more detailed Commission Staff Working Document, which succinctly analyses the question of national transpositions and offers a summary of the report commissioned from consultants ICF to evaluate the directive’s effectiveness, efficiency, coherence, relevance and added value (see the Commission’s press release). The evaluation report is disappointing in three ways: 1) Its late publication prevents any significant initiatives being taken by a European Commission and Parliament that are reaching the end of their term, thereby emphasising, as noted by Peter Scherrer, Deputy Secretary General of the European Trade Union Confederation (ETUC), the fact that European Works Councils “are clearly not a priority for the Commission”. 2) Despite a long adoption process, in the end the recast directive has made little impact: it “has provided some impetus” for setting up EWCs and for the renegotiation of existing agreements, “but without stopping the declining trend in the creation” of EWCs. Overall, the main objectives of the recast directive, as set out in recital 7 (*) of the directive, have not been achieved. The objective of creating more EWCs has not been met, with only around 20 EWCs per year being set up since 2011. One half of the eligible companies have still not set up an EWC. The desired level of legal certainty is not necessarily guaranteed by this text, which remains complex and still contains a number of provisions that are subject to interpretation. Thus the definition of transnational issues continues to pose many problems for EWC practitioners who have to “interpret it in concrete cases”. Lastly, the directive has “proved less effective as regards the consultation right”, as “EWC members seem to have little influence on the decision-making process in their companies, particularly the case of restructuring”. Moreover, the evaluation revealed “weaknesses in the dedicated means for the EWCs to enforce their rights, and significant differences in the levels and scope of sanctions”. 3) The Commission does not draw any conclusions from this failure: it does not suggest reducing the thresholds for establishing an EWC; or strengthening the consultation process so that the opinion of employee representatives can be properly taken into account upstream of decision-making; or reviewing the sanctions provided for in the event of a breach of the consultation right; or granting the EWC the means to enforce its rights. It simply proposes three remedies: a practical guide, using the EU’s financial instruments and support for Member States to improve the application of the directive (see article below). It remains to be seen whether these initiatives will succeed where Directive 2009/38 has failed, i.e. assisting with the establishment of EWCs in groups that still do not have such a body and injecting new life into EWCs, so that they become a key player in transnational restructuring plans.

(*) It is necessary to modernise Community legislation on transnational information and consultation of employees with a view to ensuring the effectiveness of employees’ transnational information and consultation rights, increasing the proportion of European Works Councils established while enabling the continuous functioning of existing agreements, resolving the problems encountered in the practical application of Directive 94/45/EC and remedying the lack of legal certainty resulting from some of its provisions or the absence of certain provisions, and ensuring that Community legislative instruments on information and consultation of employees are better linked.

Greenhouse gases: On 14 May, the Council adopted a regulation on greenhouse gas emission reductions. The regulation aims to ensure that the target of reducing greenhouse gas emissions by 30% in 2030, compared to 2005 levels, is reached in sectors such as buildings, agriculture, waste management and transport (see Council press release). On 15 May, to assist with the upheavals created by these targets, the European Trade Union Confederation published a guide for a just transition to a low carbon economy (see ETUC press release), which will be available in several languages over the next few weeks.

Serious divisions in the Council over the “mobility package”: Member States are openly divided on the issue of the “mobility package”, which includes a series of proposals for regulation to cover road transport and sector-specific social legislation. These proposals are currently being discussed in the Council. During a meeting with her German counterpart on 11 May, the French Minister for Transport, Élisabeth Borne, explained that the two countries had no intention of “botching rules that will apply for at least a decade” (see joint press release). Immediately afterwards, on 14 May, Transport Ministers representing the “Road Alliance” (a body made up of 11 Western European countries including Germany and France) took a strong stand on this matter. The alliance is resolutely opposed to the liberalisation options promoted by the Bulgarian presidency, with the support of the other Central and Eastern European countries (see Alliance press release). On 15 May, the Bulgarian Minister for Transport responded by calling on the governments of these countries to present a united front against the “mobility package” which “is particularly detrimental to the countries on the periphery of Europe: Bulgaria and Romania”.

The Commission’s proposals to improve the application of Directive 2009/38 on European Works Councils: In its evaluation report on Directive 2009/38 (see Lead story), the Commission envisages the publication of a handbook to facilitate implementation of the directive. The handbook would aim to: 1. increase the take-up of European Works Councils; 2. further improve the effectiveness of European Works Councils; 3. spread good practice. The document will be further developed this year, in cooperation with the social partners and with the support of experts. The Commission also plans to earmark 7 million euros for the call for proposals that will be launched after the guide’s publication, to provide financial support for social partners who launch projects to publicise and support the use of this guide, or to raise awareness of the potential benefits of European Works Councils for companies and employee representatives, and improve the establishment and functioning of European Works Councils. Lastly, the Commission has announced that it will support Member States’ work to improve implementation of the Directive’s provisions, and will facilitate exchanges between them, “notably on the design of ‘effective, proportionate and dissuasive’ sanctions in the event of infringement of the Directive’s provisions”. N.B. The Commission’s staff working document includes, in the form of appendices, an overview of the national provisions adopted with respect to the settlement of disputes (Appendix 5) and sanctions (Appendix 6).

• BusinessEurope issues its opinion on the forthcoming European Labour Authority: In a position paper adopted on 7 May, the employers’ organisation BusinessEurope issued its opinion on the European Commission’s decision to create a European Labour Authority. Among other things, it believes that the authority should not become involved in corporate restructuring plans.

CEC European Managers congress: On 24 and 25 May, the organisation CEC European Managers, which describes itself as the independent voice of executives, managers and professionals in Europe, is holding its congress in Mainz, Germany. On 24 May, the confederation, which is a European social partner recognised by the European Commission, will renew its committees and decide the policy platform for its future action. On the following day, there will be a seminar on the theme of “Managers in the age of artificial intelligence”. All resolutions and related documents will be published on the organisation’s website.

21st DGB congress: DGB, the German Trade Union Confederation, held its congress from 13 to 17 May, in Berlin. With just under 6 million members, it remains a powerful organisation but it is experiencing a downward trend in its membership. At the end of 2017, its eight affiliated federations had 52,000 fewer members than they had one year earlier. Ten years ago, it still had 6.5 million members. Germany’s population curve and the increase in precarious employment, which is unfavourable to trade union membership, are the main explanations put forward for this decline. The congress renewed the outgoing management team led by Reiner Hoffmann, aged 62, who was elected unopposed. However, he obtained a disappointing share of the votes (this year’s figure of 76.3% was far less than the 93.1% he secured in 2014), which was seen as a rebuke for his very public support for the formation of a CDU/CSU-SPD grand coalition to govern the country. The topics of digitisation and the future of work featured prominently in the discussions, as did the need to increase collective bargaining coverage and the number of works councils in Germany, both of which are vital elements in delivering “good work”, as Reiner Hoffmann restated.

DGB plans to support a social Europe: DGB took the opportunity to include the issue of a social Europe on its congress agenda (see above), holding a round table discussion devoted to “a strong social Europe for a fairer globalisation”. For the first time, the leader of a French trade union confederation was invited to address the congress: Laurent Berger, Secretary General of the CFDT, delivered a rousing plea for trade unions to leave behind their role as observers and commentators, and instead to come up with creative proposals in a context of technological and climate change. “Europe is an opportunity”, he repeated to applause from those present. The round table discussion also showed delegates how EWCs could help to create social standards at European level, as emphasised by Albert Kruft, secretary of the Solvay EWC, in relation to the recent charter recognising previous career experience gained by employee representatives (see IR Notes no. 96) and by Bianca Cuciniello, deputy secretary of the Groupama EWC, in relation to a charter on the subject of digitisation, due to be signed shortly by management and the EWC. The idea is that a social Europe can be constructed at various levels, including that of company level. Moreover, as Albert Kruft pointed out, social progress can also be made without having to adopt the German-style employee participation model and can stem from observation of developments in neighbouring countries. Peter Scherrer, Deputy Secretary General of ETUC, also urged those attending the congress to look upon the EWC as one of the tools needed to deliver employee participation and democratisation within companies.  Like Laurent Berger, he also called on the German and French governments to meet the challenge of strengthening the concept of a social Europe, “which is essential not only for Europe, but is important in global terms”, in the words of Sharan Burrow, General Secretary of the International Trade Union Confederation (see DGB press release and the website of the 21st congress).

• A works council set up for the first time at a food delivery company: On 12 April, the trade union Vida announced the creation of a works council at the food delivery company Foodora. The council now aims to negotiate a collective agreement with management for the purpose of improving working conditions, e.g. by placing a higher value on work performed under difficult conditions, such as outside in the rain or at night. Seemingly the council is also seeking to reduce the number of self-employed workers, and thus increase the size of the company’s workforce holding employee status.

> See also other member state information: in the latest Collective Bargaining newsletter published by the European Trade Union Institute (ETUI), and recent developments (Latest working life developments) noted during the first quarter of 2018 in each EU Member State by Eurofound correspondents (IR Share is a member of this organisation).

Kelvion: following the sale by Germany’s GEA group of its GEA Heat Exchangers manufacturing business to the investment fund Triton, the latter has reorganised this business into three companies: Kelvion, Enexio and DencoHappel. On 20 December 2017, the new company, known as Kelvion, established an EWC, (agreement recently published on line by the European Trade Union Institute). For the first time as far as we are aware, the transnational competence of an EWC encompasses subjects that concern a country outside the EU and might affect European companies. As part of the consultation process, in exceptional circumstances, members of the EWC select committee will be entitled to hold preliminary discussions with employee representatives at national level in the countries concerned, and with the experts involved in the information and consultation process.

• ArcelorMittal: On 7 May, the European Commission accepted the steelmaking group ArcelorMittal’s proposal to divest itself of several companies within Europe, to enable it to purchase the Italian steel producer Ilva. IndustriAll Europe has once again condemned the lack of information provided to employees and the failure to consult them regarding the disposal decisions dictated by the Commission within the framework of the merger control procedure (see IndustriAll press release).

• John Deere: Trade union officials from three continents representing workers employed at the production sites of the American agricultural and forestry machinery manufacturer John Deere held a meeting on 10 May, within the framework of the global union network set up in 2012. For the first time, representatives of the group’s management attended the network’s meeting (see IndustriAll press release).

• Toll: On 25 April, the management of the Australian transport and logistics group Toll (44,000 employees) signed a global framework agreement with the International Transport Workers’ Federation (ITF), to ensure safe and fair working standards for all its employees across its 1200 sites in 50 countries (see joint media release issued by Toll and the ITF).