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Worker interest representation in Europe – Towards a better understanding of the pieces of a still unfinished jigsaw

European labour relations are becoming more and more like pieces of a jigsaw fitting together specific features of national labour relations (which continue to exist) with cross-border elements of interest representation provided by EU legislation, such as the EWC directive and the European Company (SE) directive. The latter are increasingly driving the dynamics of development towards a more comprehensive model of European labour relations by providing tailor-made arrangements for trans-border operating companies. The links between different pieces of the jigsaw are becoming more obvious and visible. The webportal www.worker-participation.eu supports such a holistic view by providing continuously updated empirical and conceptual information on the subject.

Jigsaw

European provisions on information, consultation and participation in cross-border operating companies (applicable for setting up a European Works Council) and in European Companies (SE/SCE) have further advanced the trans-national character of labour relations. The dynamics which have evolved from the practical application of these new institutions demonstrate that the trans-border interest representation of workers has not remained merely a paper tiger or an opportunity for travel. But the ongoing process of Europeanisation can be understood properly only by looking at it as an interlinked composition of different elements from both national and EU levels.

From a European perspective the elements of labour relations in Europe today represent a patchwork which is being further extended, not least through increasing European legislation on workers’ involvement. In a more constructive sense one could interpret the current situation as a jigsaw which is still unfinished but which could be completed with the use of practices evolving from the application of European directives.

Nevertheless, this does not mean a simple shift of competences from the national to the trans-national level. Particular national features are not simply disappearing because of Europeanisation, but new European elements – such as the European Works Councils (EWC) or workers’ involvement in enterprise decision-making within the administrative or supervisory boards of European Companies (SE) – are being added. The potential impact of one element cannot be assessed properly without linking it to the other pieces making up the whole picture. For example, the effectiveness of an EWC will be assessed insufficiently without considering its links to the basic levels of interest representation at local and national level. Also, the importance of the relationship between an EWC and the trade unions (at different levels) should not be underestimated. The same is true with regard to assessing the importance of employee board-level representation (EBLR). Without strong links to interest representation bodies at the workplace – be it a works council and/or a trade union delegation – it would remain a loose ‘head without legs’, unable to exert any influence on company policies.

The future of the Europeanisation of work relations

It is not theoretical considerations but rather empirical evidence from current processes of structural change fundamentally affecting the world of labour which clearly indicate the interrelations between different channels of interest representation in industrial relations.

It is not merely an academic exercise to take such a holistic view of the different elements of labour relations and interest representation channels. More than ever, particularly in cross-border perspective, the dynamics of economic change require a view of the division of work between different national and European channels, while at the same time accepting ongoing differences in this respect at national levels. As the EU Commission’s report on Industrial Relations in Europe 2006 states: ‘accumulating evidence from north-western Europe shows that well-functioning employee representation can play an important role in the modernisation and performance of a workplace’ (EU-Commission 2006: 77), even if some managers still regard employee involvement as an unnecessary burden.

Prospectively, interest representation at EU level will no longer serve merely to extend national structures to the European sphere (in the sense of using European structures to serve particular national interests), but will develop its own function which is to become a platform for balancing national and/or local interests and developing joint strategies. Nevertheless, the European level will not replace local and national institutions which also in future will be the main actors in defining a common European approach and afterwards will have to interpret and implement the strategies developed at transnational level.

As the first experiences with SEs – but also management practices in multinational companies in general – show, company decisions are becoming increasingly centralised, leaving little space for autonomous management action at local or national level. The SE directive on employee involvement opens the door for labour to be able to have an organised and serious voice at this level. Sitting in the boardrooms of cross-border national companies or European Companies gives workers a substantial voice in the running of a company and its businesses: social interests have to be considered in management decisions, not only the interests of shareholders and investors.

The web service www.worker-participation.eu provided by ETUI is intended to underline the importance of workers’ participation by means of comprehensive compilation of information and by providing empirical evidence on how workers’ participation anchors social Europe at workplace level and contributes qualitatively to better economic performance and sound corporate governance. This differs from the currently dominant approach that focuses solely on transparency, to the benefit of only one stakeholder group, the shareholders.

But more empirical investigation of the practice of workers’ involvement in cross-border enterprises will certainly be necessary if satisfactory answers are to be found to this question. If an internally coordinated and effective system of European industrial relations is to emerge from these individual and partly contradictory developments it is advisable to understand the pieces as parts of a puzzle and to examine how they may be fitted together.

At the European level an additional reference system for a Europeanisation of labour relations involving the active inclusion of employees has been added to social dialogue in the past ten years with the three directives explicitly concerning workers’ involvement (Weiss 2002). These directives concern the establishment of European Works Councils (94/45/EC, entry into force: 1996), workers’ involvement in the European Company (2001/86/EC, 2004) and the setting up of a framework for information and consultation of employees (2002/14/EC, 2005). These directives set Europe-wide standards for the involvement of employees in company decision-making. They codify a European standard on information and consultation rights – in some countries having a significant impact on national labour relations systems – and additional participation schemes for cross-border companies and cooperatives. This doubtless represents an achievement for Social Europe.

The effects of these directives in practice are difficult to assess, not least because they are rather new compared to the national industrial relations systems which have evolved over many decades. But given that their specific implementation is strongly influenced by the origin and corporate culture of the enterprises concerned, it appears that they are certain to have an impact on national practices, too.

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