PREVIOUS
SPEAKERS:
Brian
Bercusson
King's College, University
of London
Back to list of
speakers
ILS ANNUAL CONFERENCE
14-16 September 2001
Title:
Works Councils and Empoyment/Protection
The theme of the conference centres on "the question of the possible over-regulation of the labour market: whether labour laws assist in the quest for full employment". The subject assigned to me is "Works Councils".
The subject of works councils is currently linked with the draft directive on information and consultation. I will look briefly at the draft directive. But mainly I want to look at the issue of works councils and information and consultation as they link up with the double and related functions of "employment" and "protection" in the specific context of the EU. This is not to address the question of the functions of works councils in the abstract, but in the specific context of Europe: what are the functions of works councils and information and consultation in the context of EU law?
Four themes will be addressed:
1. The specific EU context of information and consultation: EU competences.
2. The draft directive.
3. The micro-level: information and consultation in the EU Charter Article 27.
4. The macro level: information and consultation and the European Employment Strategy.
1. The specific EU context of information and consultation: EU competences
The purposes for which the EU enacts legislation on information and consultation/works councils is linked to the objectives of such a measure. The legal basis of an EC measure concerning works councils requires a connection to an area of EC competence. The purpose of the measure is to achieve an objective of the EC.
Initially, the objectives of the EC which could be linked to worker representation in works councils and information and consultation were quite limited. The position has changed over time and, in particular, dramatically with the changing nature of European economic and political integration.
The foundations of the post-1945 settlements in the Member States included the overlapping elements of basic labour standards, full employment and a welfare state. The regulation of labour markets in the context of these settlements was undertaken by political authorities and the social partners, organisations of employers and trade unions, to varying degrees in different Member States. The transnational political and economic integration of Europe is unlikely to deviate wildly from these foundations.
Turning to the specific subject of works councils, information and consultation, the question is: how are these perceived in the emerging polity and economy of the EU? What is their function in European political and economic integration?
I want to address this question on two levels: the micro-level and the macro-level. At the micro-level, I will focus on the role of works councils/ information and consultation in protection of workers, looking at the EU Charter, Article 27, and the draft directive on information and consultation. I suggest that in the EU there is a dominant consensus that works councils are to be informed and consulted in order to protect the interests of workers. At the macro level, I will look at the role of: information and consultation in employment policy, specifically, the European Employment Strategy embodied in the new Employment Title inserted into the Treaty by the Treaty of Amsterdam (Articles 125-130). I suggest that in the EU there is an emerging consensus that representatives of labour should be involved in macro-economic management.
2. The draft directive
On 11 November 1998, the European Commission published a Proposal for a Council Directive establishing a general framework for informing and consulting employees in the European Community. The objective was "to make the essential changes to the existing legal framework... appropriate for the new European context". As such, the proposed directive is a major step on the road to a European social model.
Unfortunately, the United Kingdom's New Labour government has been the most actively hostile opponent of the proposal. Although the proposal could be approved by a qualified majority vote, for over two years the United Kingdom successfully mobilised a blocking minority of Member States. However, the persistence of the Swedish Presidency of the Council finally led to a political agreement on a draft directive on 11 June 2001, the UK abstaining.
The European Parliament proposed a series of amendments to the Commission's draft of 1998. The Commission adopted a number of these amendments in a revised draft proposal of 23 May 2001. The next step in the procedure is for an attempt, through a Conciliation Committee, to reach agreement on a compromise text which can be approved by both the Council and the Parliament. If so, it will become the new directive.
These are two potentially serious defects in the Council draft agreed on 11 June 2001.
One of the most important and innovative aspects of the original Commission proposal of 1998 concerns the need for information and consultation prior to a decision being made. The negotiations in the Conciliation Committee will determine the outcome of this central question: are employees' representatives to be informed and consulted prior to decisions being made, or only to react to decisions already made. The resolution of this issue in EU law will have fundamental implications for trade union policy in the UK and Europe.
A second important issue is the need for sanctions when management violates the requirement of information and consultation. The Commission, in the 1998 draft, proposed special sanctions for "serious breach" by the employer (Article 7(3)). This did not survive the onslaught on the Commission’s proposal led by, among others, the UK government. The Council's approved draft of 11 June 2001 proposes to delete the whole of this provision for a special sanction for serious breach. It is significant that the Commission has not (yet) backed down.
The final directive will inevitably include compromise provisions raising questions of interpretation. A careful strategy of targeted litigation can identify cases which may produce interpretations from the European Court of Justice, as in earlier cases on the Working Time Directive, which are more sympathetic to the objectives of the EU directive than to the domestic policies of the UK government.
3. The micro-level: information and consultation in the EU Charter Article 27
ARTICLE 27
Workers’ right to information and consultation within the undertaking
Workers or their representatives must, at the appropriate levels, be guaranteed information and consultation in good time […] in the cases and under the conditions provided for by Community law and national laws and practices.
It is usually assumed that the model for the concept of works councils and rights to information and consultation is Germany. A brief look at German experience can be useful in understanding the potential of a fundamental right to information and consultation in the EU Charter. On this basis, two possible interpretations of Article 27's right of information and consultation may be advanced.
One is inspired by the objective of democratisation of the process of decision-making in the enterprise. Interpreted in this light, there are a number of questions to be answered: who are the actors in this process (and what are the implications for trade unions), and how are they involved (what precisely is the activity content of information and consultation in the process of enterprise decision-making), and what outcomes (evidence of influence on decision-making) are required?
A second is inspired by the objective of protecting the dignity of the worker from being regarded as an object of decision-making in the enterprise. The dignity of the worker requires information and consultation where the interests of the individual worker are affected. Interpreted in this light, there are a number of different questions to be answered; which enterprise decisions affect the interests of the worker so as to require information and consultation, and what actors, processes and outcomes are consistent with protection of the dignity of the worker; how can these be shaped so as to avoid the worker being treated as an object?
4. The macro-level: information and consultation and the European Employment Strategy
At the Lisbon European Council, employment was specified as one of the most important areas of concern of the EC, unemployment being perceived as one of the most serious problems facing the European economy. The European Employment Strategy is the policy response.
The institutional structure of the EES – the Luxembourg process – is encapsulated in Article 128 EC. The Council and Commission formulate an annual joint report put to the European Council, which adopts conclusions and draws up guidelines which the Member States ‘shall take into account in their employment policies’. Each Member State is to make an annual report on ‘the principal measures taken to implement its employment policy in the light of the guidelines for employment’ (the National Action Plan). This goes to the Council and Commission which prepare a joint report to the European Council of that year, which, on the basis of proposals by the Commission, may make (non-binding) recommendations to Member States concerning their employment policies.
The social partners are also called upon to play a major role in the Luxembourg process of the EES. But contrast their role in the social policy legislative process. This begins with the obligatory consultation of the social partners by the Commission in two stages, when the social policy is first being developed and at the stage of an actual proposal. There is then envisaged the possibility of the social partners undertaking a social dialogue which may produce an agreement to be put by the Commission to the Council for a decision (usually transforming the framework agreement into a directive).
The results of the social dialogue demonstrate the inescapable link between the activity of the social partners producing these framework agreements and the EES. The substantive content of agreements on parental leave, part-time and fixed-term work, and, until its failure, the social dialogue on agency workers, is closely related to the EES, with its concern, in particular, with job creation and the development of new forms of work.
The central question is: what are the actual and potential relationships between the legal and institutional structures of the European Employment Strategy, on the one hand, and EU social and labour policy on the other?
The shift of terrain to employment rather than social and labour policy is accompanied by a shift of institutional framework, from legislation and social dialogue to "open method of co-ordination". Social dialogue is a prominent feature of the EES. But, in contrast with the Maastricht legislative procedure for social and labour law, the social dialogue is not mentioned and the social partners are only marginally situated in the institutional structure under Article 128. In contrast to their invisibility in the institutional structure of the EES, the social dialogue and the social partners feature regularly in the political rhetoric accompanying the EES. The documents and declarations are full of exhortations to the social partners. What is not clear is how the demand for their active role is consistent with their lack of an institutional basis in the EES.
It is suggested that the EES offers an institutional framework that could reinforce EU social dialogue, which, in turn, would assist the success of the EES. The challenge is to develop an institutional design which would graft on to the Luxembourg process the social partners’ involvement in various forms (EU-level inter-sectoral and sectoral dialogue). Three suggestions will be put forward by way of illustration.
First, the institutional structure could easily accommodate the EU social partners’ involvement in the elaboration and implementation of Guidelines. Secondly, Member States’ elaboration and implementation of the National Action Plans envisaged by Article 128(3) do not refer at all to the social partners. Yet this would seem to be an obvious requirement, evident in the numerous tripartite social or employment pacts negotiated in Member States. By institutionally engaging the social partners in the formulation of National Action Plans, the EES could inspire social pacts on employment. The existing articulation between the social partners at national level with their EU-level organisations would greatly benefit the process of implementation of Guidelines formulated with the participation of the EU-level organisations and implemented with the participation of their affiliates in the Member States. Thirdly, the Employment Guidelines could go well beyond their existing modest remit in encouraging social partners’ involvement.