IR Notes

A milestone in the history of European Works Councils has been reached, with the creation of Daimler Truck’s European Works Council and World Employee Committee. For the first time, the information and consultation procedure provided for by the European Works Council Directive 2009/38 will also be applied within a company to transnational projects that involve an EU Member State and one or more countries outside the European Economic Area or to projects affecting only some of these countries (see IG Metall press release). In November, the Daimler Truck group (100,000 employees worldwide), which was created by the demerger of the Daimler group’s truck and bus manufacturing businesses in 2021, and its General Works Council, concluded the negotiation of an agreement that establishes an employee representation body covering not only countries making up the European Economic Area but also third countries. Ralf Götz, IG Metall’s negotiator, explains: “At Daimler, it was already common practice for both European and extra- European matters to be dealt with together, so when we launched the negotiations for setting up a European Works Council at the new Daimler Truck entity, our aim was to replace the previous agreement under Article 13 with an agreement to which the European Works Council Directive would apply in full. This was about strengthening EU law. It also involved formalising the existing procedure and including a broader scope of application in the EWC agreement, taking in countries outside the EU”.
Formally, the body is being established via a European Works Council agreement whose geographical scope includes third countries. It will be signed in the near future between management and the special negotiating body set up in accordance with Directive 2009/38.
This council includes a five-person select committee, which is responsible for coordinating European affairs, and an executive committee made up of six members (some of whom also sit on the select committee), which deals with global issues. Both committees are chaired by Michael Brecht (IG Metall), who also chairs the company’s General Works Council in Germany (see Global works council). “We’ve managed to extend the information and consultation rights enjoyed by Europeans, which are clearly regulated by law, to countries outside Europe”, says Ralf Götz with satisfaction. “As a result, countries outside the EU enjoy the same rights and obligations as those within the EU, to which the European Works Council directive is directly applicable. From our point of view, this is a template, an example to be followed at international level and one of vital importance for the purpose of applying human rights and trade-union rights at international level”. This reference to human rights and trade-union rights is highly topical, because on 9 December, Daimler Truck issued a Declaration of Principles on Social  Responsibility and Human Rights. It was signed by management and the General Works Council, in conjunction with the new expanded European Works Council and the IndustriAll Global Union federation (see press release). The Declaration follows the UN Guiding Principles on Business and Human Rights and takes account of new developments, such as the treatment of data protection and artificial intelligence. With the new expanded European Works Council, on which 23 countries are represented, in proportion to the size of their workforce, by a total of 38 members, “we have a global network of employee representatives”, explains Michael Brecht, “who can report breaches of the rules or grievances to the council, both within our own companies or at suppliers’ businesses” (see interview). Lastly, another important ‘first’ in the history of European Works Councils, is the fact that one of the 9 tabs at the top of the Daimler Truck corporate website is ‘Works Council’. It has the same ranking as the usual headings, such as ‘Company’, ‘Investors’, ‘Products’, etc., and links to a presentation) of the group’s international councils, including the European Works Council. This is something unique among DAX40 companies in Germany, and probably also among any companies in Germany and Europe.

> See also IndustriAll Global Union press release covering the Council meeting.

Revision of the European Works Council directive : On 30 November, the European Parliament’s Committee on Employment and Social Affairs adopted the report on Revision of European Works Councils Directive 2009/38. It is due to be adopted by Parliament at its plenary session in January. The European Commission is invited to submit a revised proposal of the directive by 31 January 2024. The report, which was adopted by a comfortable majority (33 votes in favour, 6 against and 8 abstentions), does not propose that the directive should be completely rewritten. Skilfully, it plans to remedy three main weaknesses: 1/ the transnational issue is set out in detail. Recital 16 of the directive is included in the definition of transnational issues that appears in the body of the directive, giving it binding force. It applies to cases “where it can be reasonably expected” that a matter affecting one site entails, or may entail in the foreseeable future, consequences for sites in other Member States, and decisions envisaged by a company that are taken in a Member State other than the one in which the effects are produced. 2/ Consultation is strengthened: it is to take place in such a way as to enable employees’ representatives to obtain a reasoned response in due time from the central management “prior to the adoption of the decision”. 3/ The revisions prevent abusive use of confidentiality rules that limit access to information. Another major contribution is the desire to ensure effective application of information and consultation rights. Thus Member States shall establish “effective judicial procedures, that can be accessed in a timely manner, to apply for and terminate including the possibility to request a preliminary injunction for the temporary suspension of decisions of the central management where such decisions are challenged (…)”. The text also calls for the introduction of sanctions that are genuinely dissuasive: a maximum financial penalty of 10 million euros or 2% of the undertaking’s total annual worldwide turnover in the preceding financial year, whichever is higher. And the penalty is doubled in the case of “intentional infringements”. This strong provision goes some way towards explaining the votes cast against this report by Renew MEPs. The report also seeks to do away with “opt-out agreements”: all existing agreements “shall fall under the scope of this Directive without any obligation to renegotiate”. Lastly, a gender balance objective is to be fixed whenever EWC agreements are negotiated or revised: members of the under-represented sex must hold at least 40% of EWC representative positions and 40% of select committee positions.

> See also: the extremely positive reactions of the European trade union movement (IndustriAll Europe or NSZZ Solidarność press releases). ETUC Confederal Secretary Isabelle Schömann said: “MEPs have sent a clear signal to the European Commission to act to strengthen European Works Councils and enforce their rightful role to be informed and consulted” (see press release).

• Collective labour agreements and invitations to tender : On 7 December, the government launched a public consultation with a view to passing legislation requiring companies that are awarded public procurement contracts by the federal  State, to abide by collective labour agreements. The government’s aim here is to limit unfair competition and strengthen collective bargaining (see press release).

A health and safety guide: : On 1 December, the UGT trade union confederation unveiled a guide to contractual clauses on occupational health and safety for negotiators. The aim is to insert into collective agreements provisions that strengthen and set out in detail the legislation applicable, concerning e.g. workplace risk assessments, psychosocial risks, returning to work after cancer, prevention of extreme climatic conditions, disconnection and teleworking. The guide also advocates taking the gender perspective into account when doing risk assessments, and increasing the time-credit granted to prevention representatives (see press release).

• Reindustrialisation: On 5 December, the government passed a major draft bill intended to strengthen the position of industry and adapt it to meet the challenges posed by digitalisation, environmental sustainability and the circular economy. The bill forms part of the recovery plan and includes a specific chapter on reindustrialisation processes. It establishes an obligation, in certain circumstances, for companies to anticipate closures or reductions in activity levels likely to lead to a significant cut in their workforce. The various actors involved will have a set period of time to seek a solution via a reindustrialisation committee in which the State is involved. The bill further stipulates that any companies receiving public funds will have to guarantee to maintain their workforce at its current level for a five-year period (three years in the case of SME) (see press release and presentation).

Flexible working extended and restrictions placed on exclusivity clauses : On 5 December, the government announced that it would be supporting a bill allowing all employees to request flexible working (working from home, flexitime, staggered or annualised hours, etc.), on day one of their employment, and removing the current 26-week qualifying period. If an employer is unable to agree to a request, they will have to discuss other options before rejecting it. Employees will be allowed to submit two flexible working requests in any 12‑month period and the employer will have two months to respond (instead of three, as at present). The government anticipates that this will have a positive effect on employees’ morale and productivity, and it plans to make flexible working the new norm. The legislation protecting workers whose weekly income is £123 or less against exclusivity clauses preventing them from working for several employers, also came into force on 5 December (see press release).

Restructuring in several countries : In a decision dated 13 December, the Employment Appeal Tribunal (EAT) rejected the appeal lodged by Adecco management against the decision pronounced by the Central Arbitration Committee (CAC) in favour of the Adecco European Works Council (AEWC) (see IR Notes 149), and confirms the CAC’s initial ruling, i.e. that: 1/ the European Works Council’s complaint is admissible; 2/ redundancies taking place in more than one country are a “transnational” matter, creating an obligation for central management to call an extraordinary meeting of the AEWC, in order to provide information and engage in a consultation process; 3/ decisions relating to redundancies declared in more than one country do not have to be based on a single reason. Redundancies taking place more or less at the same time constitute a transnational matter, even if they do not share a “common rationale”. This decision therefore opposes the “salami strategy” head-on: this strategy involves embarking on restructuring exercises in several countries, spaced a few months apart, and claiming that these matters do not require consultation with the European Works Council, as they are of national scope only. The judgment was accompanied by a financial penalty: the company was fined £25,000 (€29,088) for breaching the AEWC agreement. The complaint concerning redundancies accounts for £20,000 (€23,270) of this fine and the remaining £5,000 (€5,818) is for failing to provide sales data broken down by country, which the AEWC had requested (Decision [2022] EAT 183).

Unfavourable opinion : On 9 November, the Safran group’s European Works Council issued an unfavourable opinion regarding an industrial reorganisation plan for Safran Cabin’s European sites in Germany and Czechia. Following a number of site visits, numerous exchanges with management and consultation with experts, the EWC expressed doubt “that Safran Cabin’s sole objective was to improve its economic and financial situation”. The negative opinion is based primarily on “the total absence of guarantees” regarding the sustainability of the German site in Herborn and maintaining good working conditions for employees at the Czech sites, who will have to take on the production transferred from the German site (see press release).

Negotiations break down : Within the framework of its transformation into a European company (SE), the JCDecaux group, which is the largest outdoor advertising corporation in the world, failed to reach an agreement on setting up a SE Works Council. This means it will have to establish a council based on the French Employment Code, transposing the subsidiary provisions of the directive on worker participation in the SE. According to the expert appointed by the European trade-union federation UNI Graphical, Frédéric Touboul (of the French trade union CGT), the proposals put forward by management did not meet the requirements laid down by the French Employment Code, which explains why the negotiations broke down in September this year. Although its workforce (5,883 employees in Europe, including 2,740 in France) is large enough to bring it within the directive’s scope of application, the group does not have its own European Works Council. Frédéric Touboul explains: “UNI Graphical suspects that the group does not really want to create an EWC, so the federation has called for one to be set up quickly, failing which it will take legal action to challenge the group’s conversion into a SE”. For its part, management says that “the council is in the process of being created”.

On 1 December, the management of the Teleperformance group (440,000 employees), which is the world’s largest provider of call centres, signed a global agreement  with the UNI Global Union federation, which had been pressing for this agreement  for years (see UNI Global Union press release. Note: the text of the agreement is confidential). The agreement, which covers 88 countries, contains the usual provisions covering freedom of association and occupational health and safety, plus an undertaking to introduce health and safety committees with equal representation of management and employees. These committees will carry out risk assessments and take account of the heightened risks faced by remote workers, employees who moderate social media content or suffer harassment from customers or prospects and the impacts of workplace monitoring on employees’ health and safety. In a FAQ document sent to IR Notes, the signatories explain that those provisions of the agreement that exceed the legal requirements laid down in some countries, will apply immediately in Poland, Jamaica, El Salvador, Colombia and Romania. In the event of a dispute, the matter will first be referred to a “neutral mediator”, and subsequently to arbitration, if it cannot be resolved through mediation, so that a “final and binding resolution” can be reached, in accordance with the International Labour Arbitration and Conciliation Rules. The agreement also recognises the trade union federation as a stakeholder in terms of the duty of vigilance, as provided for by French law. After denouncing the group’s anti-trade union stance at regular intervals, as well as the occupational health and safety risks faced by its employees, Christy Hoffman says she is now eager “to build trust and pursue a constructive relationship with Teleperformance in the coming years.”

Violence at work : On 5 December, the ILO unveiled its experiences of violence and harassment at work: a global first survey. More than one in five persons in employment (22.8%) has fallen victim to acts of violence and harassment at work, whether physical, psychological or sexual. The survey was conducted in 2021, and involved 75,000 participants in 121 countries. The ILO is calling for the rapid implementation of its Convention 190 (press release). While no region of the world is spared, significant differences are apparent in terms of geographical zones, gender and income levels. For example, the rate is 16.2% for the low income group, 24% for the intermediate income group and 32% for the highest income group. Women with a high income are the group most exposed to these acts (38.7%).