IR Notes

Working together to build a social Europe

An independent, reliable and impartial source of information on industrial relations and labour law in Europe.

IR Notes 98 – Directive 2009/38 on European Works Councils has not achieved very much

  IR Notes 98 – 23 May 2018
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  Interview
Michael Bach, IG Metall trade union secretary responsible for ArcelorMittal’s German sites

You’re managing a network of works councils in the European steelmaking sector. It’s the first time that works councils from various companies in a particular sector have set up a network of this kind. What’s the thinking behind it?
Europe’s iron and steel industry is currently undergoing a reorganisation that will have significant effects on its workers. ArcelorMittal (AM) is planning to acquire Ilva. And at the same time, ThyssenKrupp (TK) and Tata are planning to merge their steelmaking businesses. This means that Europe’s largest producer (AM) will be merging with its 4th-largest steelmaker (Ilva) and the continent’s no. 2 manufacturer (Tata) will merge with the no. 3 (TK). The end result will be the birth of two steelmaking giants that will clearly result in a further upheaval in the balance of power within the industry. Two steelmaking giants will come into being, and will stand head and shoulders above the rest of Europe’s steel producers. Many workers will pay the price for this development, as their jobs will either disappear due to restructuring or will move to new companies. At least 4,000 jobs will disappear as part of the merger between Thyssen and Tata. At AM/Ilva, only around 10,000 jobs are guaranteed on Ilva’s Taranto site, meaning that almost 5,000 employees will lose their job. As part of the conditions imposed by the European Commission’s DG Competition, to prevent ArcelorMittal establishing a monopoly in Europe in the wake of the Ilva acquisition, the proposed disposals will see 15,000 employees cease to work for ArcelorMittal. Their jobs will be transferred to companies that will have a new owner. The long-term security of these jobs will depend primarily on the motivations of the new owners.


What benefits does a European network of works councils offer compared to a network made up of European works councils or trade unions?
We’ve created a network of works councils whose task is to keep one another informed regarding developments affecting the industry. We want to inform each other and learn from one another. Our aim is to share important information as soon as possible, so that we can save time on our activities. Mergers taking place in multinationals influence the work undertaken in every company. However, none of these companies is able to influence, alter or prevent these processes in any significant way. That’s why it’s meaningful to have a dialogue between works councils at European level. The existing structures, such as the European Works Council, are limited to works councils that form part of a single group. And European networks of trade union representatives, for their part, do not have enough contact with works councils. Until now, there had been no coordinated dialogue between works councils from one particular sector. However this network can now be used to exchange information directly, and to discuss the options available for taking action, and their ongoing development can then be pursued with other bodies. As the businesses activities of groups are now taking on an increasingly global nature, we also have to create different networks, so that employees’ interests can be defended as necessary. Our network only makes a modest contribution to meeting this challenge, but maybe it will gather its own momentum in the future, and give rise to other contributions. Pursuing a Europeanisation process of trade union activities would be something that is entirely conceivable and desirable.


How are you financing it all?
We launched the works councils’ network a year ago. We organise our meetings on a very frugal basis. We stay in low-cost hotels and arrange translations at company level. Here, we benefit from charitable support provided by multilingual colleagues. Any unavoidable costs are paid by the companies within which the works councils operate. Group management teams are earmarking substantial sums of money for the development and implementation of group strategies. It goes without saying that costs incurred in connection with providing information to works councils and the discussions between them should also be included in these budgets. However, we haven’t yet had any discussions with management on this subject.

 
  Diary

24 May
Cologne
The European Aviation Safety Agency (EASA) is organising a workshop on flight time limitations (FTL) and fatigue risk management. The workshop will be dedicated to FTL and rest requirements for commercial air transport (CAT) operators.


5 to 8 June
Bordeaux
11th International Conference on Workplace Bullying and Harassment: Bullying2018 – Mieux comprendre le harcèlement au travail dans un monde en mutation [‘Better Understanding of Workplace Bullying and Harassment in a Changing World’], organised by Comptrasec and IAWBH.


18 and 19 June
Paris
“Revisiting solidarities in Europe” symposium, organised by Professor Alain Supiot of the Collège de France, Chair in The Welfare State and Globalisation: A Legal Analysis of Forms of Solidarity.”


19 June
Paris

Dares and the ILO are organising an international conference on the theme of “polarisation(s)” in the employment market.


21 and 22 June
Luxembourg
Employment and Social Policy Council


27 and 29 June
Brussels
Annual conference of the European Trade Union Confederation (ETUC) and the European Trade Union Institute (ETUI), entitled “The World(s) of Work in Transition“, seeking to analyse the impact on employment of various current global transitions (environmental, energy-related, demographic, etc.), with a view to presenting a more global vision of the changes taking place.


2 July
Bordeaux
Multidisciplinary international summer school on the theme of: Employment and Technological Innovation.

 

IR Notes is a fortnightly newsletter produced by
IR Share and its network of experts, and is available in several European languages. It offers Europe-wide monitoring of employment law, labour relations and employment policy. It is available by subscription for 15 euros per month (excluding tax), via the IR Share website. IR Share is a privately- owned, independent, apolitical company whose aim is to inform and assist all players involved in social dialogue within and outside Europe. It has been the correspondent organisation for France of the Dublin Foundation since 2009.

 

Lead story
Directive 2009/38 on European Works Councils has not achieved very much

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.


1. European Union
Legislation

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.


Project

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”.


Social update

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.


Trade unionism

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.


2. Member States
Germany

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).


Austria

  • 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).


3. Companies
European Works Councils

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.


Restructuring

  • 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).


Trade unionism

  • 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).


Transnational agreements

  • 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).

 

IR Notes

An introduction

IR Notes is an independent, reliable and balanced briefing note on industrial relations and labour law in Europe.

Published in 6 languages and sold by subscription, this newsletter gives you access to concise, targeted and practical information on the major themes of both social Europe and transnational social dialogue.

With our experts and national correspondents, we adopt a dynamic, practical and useful approach to European social monitoring.

As a result, we select the most relevant topics, which are a source of cross-disciplinary and inspiring ideas.

Each issue includes:

  • An interview with someone working in the field of industrial relations who offers their unique take on a current social issue, an agreement, or an example of best practice.
  • Updates on EU legislative and case law developments.
  • Monitoring of labour law developments in EU Member States.
  • Updates on the latest developments concerning European Works Councils and SE Works Councils.
  • Lastly, IR Notes keeps you informed about the main studies and research carried out on the world of work.

IR Notes
Building a social Europe together

The IR Notes newsletter gives everyone in Europe access to an independent, reliable and impartial source of information on topics involving industrial relations

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