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 Welcome to issue no. 1 / 2013 of EWC News. 12th March 2013
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The
Academy for European Works Councils (EWC Academy)
EWC
News appears four times a year.
You can find past issues in the newsletter archives.
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1.
Minimum standards for restructuring in the EU
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On 15th January 2013 the European Parliament in Strasbourg voted a resolution, with an overwhelming majority of 503 MP’s (with 107 votes against and 72 abstentions), in favor of a legislative initiative on the regulation of company restructuring. It is certainly the most important legislative initiative for works councils on the European level since 2008 when the EWC Directive was revised (see report in EWC News 4/2008).
The European Parliament’s employment and social affairs commission had already voted favorably on a report from the Spanish socialist, Alejandro Cercas, on 19th November 2012, describing in detail the draft legislation (see report in EWC News 4/2012). On this basis, the European Commission is now obliged either to submit a draft European Directive within three months, to justify their lack of action or to start official consultation with the social partners. Employer confederations refuse however any initiative for legislation on the subject.
Contents of Cercas report
According to the European Parliament the draft legislation should cover 14 points, which are to represent minimum standards for companies in all EU-countries. The most important are:
Since legal provisions for long-term workforce planning, social plans and compensation agreements already exist in many EU-countries, the effects of the planned EU Directive will vary greatly from country to country. Substantial improvements are certainly to be expected in Eastern Europe, the Mediterranean countries or in the UK, whereas in Germany, Austria or Scandinavia employees already benefit today from good basic conditions. Amendments to national legislation may be expected however, even for countries with high standards such as to the German Works Constitution Act. The European Trade Union Confederation (ETUC) requested urgent action in an open letter addressed to José Manuel Barroso, President of the European Commission, on 8th March 2013. |
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2.
Practical tip: What is a transnational matter?
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European works councils are not responsible for matters involving only one country. They only come into play if a planned measure has a "transnational" character. According to article 1 paragraph 4 of the new EWC Directive the competency of the EWC is clearly defined as follows:
Matters shall be considered to be transnational where they concern the Community-scale undertaking ... as a whole, or at least two undertakings or establishments of the undertaking or group situated in two different Member States. The question becomes somewhat more complicated in the following circumstances:
1. Measures which are implemented in different countries not at the same time, but are nevertheless connected economically (the so-called "salami-tactic"). In such cases central management could argue that these are individually independent matters which do not have a transnational character and therefore do not fall under the responsibility of the EWC.
2. Sometimes central management argues that the EWC is to be involved only when there are negative effects in at least two countries. In the case of a relocation from country A to country B, the negative effects would be limited to only one country and therefore the EWC would not be competent.
3. Restructuring which has been decided by central management abroad is implemented locally. In such a case, local management acts merely as an implementing body and the local works council does not have the real decision maker as partner. In this case, if the EWC is not involved, then there will be no serious discussion at any level on the justification for the measures.
What possibilities does the new EWC Directive offer?
At first hand the actual text of the Directive does not contain any clear definition. There is however in the so-called recital No. 16 of the Directive’s preamble, a clear explanation:
The transnational character of a matter should be determined by taking account of both the scope of its potential effects, and the level of management and representation that it involves. For this purpose, matters … are considered to be transnational … which, regardless of the number of Member States involved, are of importance for the European workforce in terms of the scope of their potential effects or which involve transfers of activities between Member States.
Clarification of this question is crucially important for a strong EWC
During renegotiation of EWC agreements it is advisable to clearly refer to the recital No. 16 or to literally copy the formulation. Even then it cannot be guaranteed that participation rights will always be sufficiently respected. There is likely to be a multitude of court decisions on the matter.
Upcoming event: EWC legal seminar
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3. Current legal proceedings
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Injunction order confirmed for unsatisfactory consultation
In the lawsuit the CGT wanted also to file for unsatisfactory consultation of the PSA Peugeot Citroën European works council for the closure of the car manufacturing plant in Aulnay near Paris. The court decided however that such a complaint could only be filed by the EWC. Since Faurecia is a subsidiary of PSA Peugeot Citroën, the Faurecia works councils can wait for the opinion of the EWC, before rendering its own opinion. The closure of the Aulnay plant is therefore only possible once the consultation procedures have been correctly terminated in all parts of the company.
Coty employee representatives have withdrawn their planned court action in Vienna. During the plenary session of the Donata Holding SE works council, held from 7th to 11th January 2013 near Chartres (France), central management conceded to revise the SE participation agreement. Whereas the revision of EWC agreements occurs quite frequently, it is rather exceptional for the sensitive elements of SE agreements. Discussions will begin on 25th March 2013 in Paris.
The Donata Holding SE is the parent company of the Coty cosmetics group. The SE works council filed a complaint in February 2012 concerning its rights to consultation in transnational restructuring (see report in EWC News 1/2012). However the Ludwigshafen labour court rejected the filing in October 2012 on grounds of lack of jurisdiction, since, in the meantime, the SE had relocated its headquarters to Vienna.
Out of court settlement in Oslo
Through the lawsuit, the EWC was trying to prevent any dismissals in Speyer, until the consultation procedure was concluded. This failed however in exactly the same way as for Visteon, the automobile supplier in September 2011 (see report in EWC News 3/2011). The arbitration board in Oslo had repeatedly delayed its decision, until measures were finally implemented in Germany at the end of February 2013. This proves once again that effective legal protection for European works councils only exists, at present, in France and Belgium. |
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4. Individual country reports
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Unemployment has been on a continual rise in France for 21 months and is in the meantime twice as high as in Germany. As a counter-measure, employers' confederations, the majority of the trade unions and the socialist government agreed on 11th January 2013 to a reform of the labour market. The agreement is presented under the motto of "flexible security" and is considered as the most important for 30 years.
As a result companies may, in the future, dismiss their employees in periods of crisis more rapidly, resort more easily to short-time work or relocate jobs. They must however come to the negotiation table with employee representatives and reach an agreement – not at all obvious in the French business culture. Another component of the reform is also a penalty tax for companies who abuse short time contracts with a view to reducing full-time employment. The whole package includes also German style co-determination rights: in the future all companies with more than 5,000 employees are to have employee representatives on the board of directors or supervisory board, which up to now was only the case in (former) state-owned companies.
This "success of social dialogue" is not supported by two trade union confederations, CGT and CGT-FO, who mobilized tens of thousands of people on the streets on 5th March 2013 in demonstrations. Luxembourg reforms workplace representation   The government of the Grand-Duchy, which has been
debating on measures to reinforce social dialogue on the company level
since 1999, finally submitted draft legislation on 6th February 2013.
Social partners have agreed to it and it is to be rapidly adopted, so
that works council elections, due on 13th November 2013, can take place
under the new conditions. The heart of the reform aims at developing
employee representation into a fully-fledged works council based on the
German model and which will also have co-determination rights. There
are also provisions for the introduction of an arbitration board for
conflict resolution. Works council members have a right to training and
to experts. The previous Belgian works council model, existing since
1974 - a parity based committee of employer and employee
representatives - in companies with more than 150 employees, is to be
scrapped. Swedish right to strike under
criticismThe International Labour Organization (ILO) in Geneva published an expert report on 25th February 2013 on the violation of fundamental labour standards. It claims that Swedish strike regulations violate the ILO convention 87 on the freedom of coalition. The questionable legislation had come into force on 15th April 2010 as a reaction to a European Court of Justice ruling from December 2007 in the case concerning strikes at the Latvian company, Laval (see report in EWC News 4/2007). The ILO is now demanding that the Swedish government withdraw this restriction to the right to strike. The question is highly explosive and was recently part of a legislative initiative from the European Commission in Brussels in March 2012, who wanted to introduce a transnational mechanism for strike monitoring (see report in EWC News 2/2012). Even though this draft legislation has in the meantime failed, the question of the right to strike by cross-border employee posting is still unclear. |
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5. Leap forward in
quality
following merger
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Innovative
solution for employee
participation in the board of directors An SE participation agreement
was concluded on 14th December 2012 for Atos, the French IT company.
Atos had doubled its workforce after the acquisition of the
Siemens’ IT Service division in July 2011 and is today the
second largest IT service provider in Europe. After this merger plans
began for the transformation of the French public listed company (S.A.)
into a European Company (SE). The European works council, established
in 2007, was informed of this in May 2012 (see report in
EWC News 2/2012).Whereas SE transformations in Germany often pursue the goal of limiting employee participation in the supervisory board, either by reducing the number of seats or by freezing them for the future, France has little experience with SE transformations. The only example, where this question played so far a role, was for the reinsurer Scor in 2007 (see report in EWC News 2/2007). Since there were, up to now, no employee representatives on the board of directors of Atos and with Germany representing a mere 20% of the European workforce the German participation model could not be applied to Atos. The solution negotiated by the special negotiation body is nevertheless completely innovative and can be used as a model for other SE transformations. SE works council establishes a "Board Committee" In the first place, the SE agreement provides for the establishment of an SE works council, whose powers extend far beyond those of the previous European works council. The number of plenary sessions has consequently been increased from one to three per year. Representatives have a right to 16 days of training during their four year term of office. The SE works council is chaired by the employer according to the French model, and employee representatives elect a seven member steering committee including a secretary. An annual budget of 150,000 € has been allotted for experts which can be supplemented in case of exceptional circumstances by 50,000 € per case. Although central management has not accepted direct employee participation on the board, it was however prepared to make concessions. As a result, the SE works council establishes its own "Board Committee" of four employee representatives, which meets with the members of the board of directors before or after their meetings. These four representatives can participate once annually in a consultative capacity to normal board meetings. Following texts are available only in German:  British EWC agreement with
Swedish flavorA new EWC agreement was concluded for DS Smith at a meeting held in London on 4th March 2013. The renewal became necessary after the British recycling company acquired the packaging division of the Swedish group, SCA (see report in EWC News 1/2012). Both companies have their own EWC structures, whereby SCA even has European divisional works councils. On the one hand the agreement maintains its status of a "voluntary" Article-13-agreement and is therefore not subject to the new EWC Directive. On the other, the improved EU-standards have been integrated; the definitions for consultation and for the transnational responsibility of the EWC go even further. The agreement adopts from SCA the concept of European divisional works councils (paper, packaging, plastics and recycling), which hold twice annually their own meetings and each have a right to a whole weeks’ in-house training per year. The steering committees of these four divisional works councils form then the EWC. A comparable structure can also be found in EADS, the aeronautics company (see report in EWC News 1/2012). Regulations on restructuring The commitment to avoid layoffs whenever possible during restructuring is particularly unusual for British EWC agreements. Alternative measures are even mentioned. There are therefore provisions, actually within the agreement, which other companies – particularly the French – make in special amendment agreements ("Anticipation of change"). Occupational health and safety, further education, non-discrimination and environmental standards for production are not only mentioned, but are detailed in separate sections. The EWC can involve several experts, e.g. for health and safety, pension questions, working condition as well as a lawyer. The EWC chairman holds the position of "EWC development co-ordinator" and has a full time-off work release.
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6. Newly
established European works councils
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First EWC for Dutch meat producer
Concerning the definition of transnational responsibility the agreement goes beyond the minimum standards of the new EWC Directive. It is one of the few agreements which has adopted the regulations of the new French EWC legislation on the consultation of the EWC in hostile takeovers. This particularity exists only in France (see report in EWC News 3/2011). The day-to-day work is coordinated by a steering committee of five members, who each have an annual time-off work allowance of 120 hours to carry out their duties (meeting time excluded). The EWC secretary has a 320 hour allowance and an annual budget of 8,000 € for small expenses.
EWC split-up in the middle of its establishment  The EWC of Cookson, the British
technology group can look back on a period of turmoil. It was first
established in 2005. It was dissolved however again in 2009 and a
special negotiating body established, since employee representatives
had given notice to terminate the EWC agreement and subsequent
negotiations were unsuccessful. The SNB reached a new agreement on 7th
June 2012 with central management based on the new British EWC
legislation.The signing ceremony on 11th October 2012 could not have taken place at a more unfavorable moment, since on 19th December 2012, after more than 300 years of existence as service provider to the materials industry, Cookson was split up into three independent units. The largest part, Engineered Ceramics, now operates under the name, Vesuvius, and has formally adopted the EWC agreement. The smaller part, Performance Materials, has since been operating under the name, Alent, and will establish a network of employee representatives, based on the spirit of this EWC agreement. The allocation of seats is to be completely re-balanced in both companies. |
French
state railways establish Holding EWC|
7.
Updated EWC agreements
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Irish packaging company integrates new EWC Directive
Smurfit Kappa is headquartered in Dublin and has 40,000 employees world-wide in 32 countries, with alone 5,000 in Germany. The EWC agreement was concluded at the central European headquarters in Paris in June 2006 following the merger of the two forerunning companies and was considered, at that time already, to exceed the usual minimum standards. Occupational health and safety is one of its major topics. Besides Smurfit Kappa, there are only six other EWC bodies under Irish jurisdiction (see country report on Ireland in EWC News 3/2007).
A EWC agreement was signed for Prysmian on 30th November 2012 in Milan. Since the acquisition of the Dutch cable manufacturer Draka in February 2011 there had been two EWC bodies working together in close cooperation. The new agreement now replaces the two previous councils and provides for 28 members representing 22,000 employees to meet twice annually. The seven member steering committee also meets twice annually. The agreement ensures that sites having no seat on the EWC are also well represented and it is for Italian standards exceptional. Following Buzzi Unicem, the cement manufacturer, this is the second EWC agreement to be signed since the new Italian EWC legislation has come into force (see report in EWC News 3/2012).
Swedish healthcare group strengthens EWC rights
 Upcoming event on the subjectScandinavian EWC working practice will be on the agenda of a seminar to be held in Oslo from 23rd to 25th April 2013. We have arranged a selection of EWC agreements on a website for download.
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8. Transnational company agreements
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Several Italian European MP’s brought possible violations to the mass redundancies and the EWC Directive to the attention of the European Commission in a parliamentary question on 11th December 2012. In his response from 21st February 2013 the social Commissioner, Andor, indicated that such cases should be referred to the courts. The announced plant closure took however a new turn in Italy. A meeting took place in the Ministry for economic development in Rome on 8th February 2013, where Schneider Electric’s management promised to look for economically viable alternatives to the closure.
French
utility company regulates
occupational health and safety
 On
13th December 2012, central management of Veolia Environnement gave a
clear commitment on occupational health and safety to the EWC. Although
legally speaking, the agreement is only a one-sided declaration of the
company, the text was nevertheless previously elaborated within a
working group between central management and the EWC. It could later
evolve to become a real European company collective agreement. In
October 2010 the company’s EWC agreement was substantially
improved (see report
in EWC News 1/2011).
 European equal treatmentOn
15th February 2013, Groupama, the French insurance and banking group,
concluded a pan-European agreement on quality of working life and for
the prevention of discrimination. The EWC, established in 2000, is
responsible for monitoring the extensive company agreement. Their EWC
agreement was last updated on 22nd November 2012. |
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9. From
framework agreement
to World works council
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| Norwegian energy group with
lasting world-wide minimum standards
Norwegian telephone operator assumes social responsibility
While other formerly nationalized telephone operators also follow the same path, Deutsche Telekom continues to stand apart and even violates the basic principles of responsible business conduct, e.g. in the USA (see report in EWC News 2/2011). France Télécom had already established a world works council in 2010 (see report in EWC News 2/2010). Swedish commercial car manufacturer establishes world works council
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10.
Interesting websites
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ArcelorMittal European works council
On the ArcelorMittal works council and IG-Metall Bremen website are to be found not only the local employee representation but also the structures in Germany and Europe. Separate pages are devoted to the EWC of the Luxembourg steel group - established in its current form after the merger in July 2007 (see report in EWC News 2/2007). An article in BR-News, the Bremen works council journal, under the title "cold shower for employees" describes the current situation in Liège, Belgium (see report in EWC News 3/2011). Following texts are available only in German: Do
cooperative labour relations stimulate innovation?
 A research project of the
Institute for the promotion of employees in Bolzano analyses labour
relations in southern Tyrol for their contribution to innovation. The
website presents the results of the project. In includes a handbook on
"best practices" in company level collective bargaining and an analysis
on the development of organizational innovations in companies in south
Tyrol. Following texts are in German (Italian is also
available):
Working conditions in Apple supply chain
We have arranged numerous further interesting websites into a collection of links.
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11.
New publications
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 Finnish
trade unions on a gradual decline
In an international comparison Scandinavian trade unions are still very strong: both from a membership and resources point of view, as well as from their reputation with the population. Their high membership is partly due to the unemployment funds, which are mostly closely tied to trade unions. Membership levels are however also declining in Northern Europe: in Finland they sank from the historical highest level of 80% in the middle of the 1990’s to 67% in 2009. This country study published in November 2012 gives the detailed history of Finnish trade unions and describes the current challenges.  Manual on responsible business
conduct for multinationalsIn 1976 the governments of the OECD countries first formulated the basic principles for responsible business conduct in multinational companies. In May 2011 these were revised. The obligation for companies to take due care of the social situation in the supply chain is new, as well as a reinforced complaints process. Such complaints are submitted over and over again also by trade unions, e.g. against Deutsche Telekom in July 2011 because of trade union-hostile behavior in branch officies in the US (see report in EWC News 2/2011). This trade union manual based on the revised principles has been available since December 2012.
In January 2013, the European Commission published a remarkable 476 page repository of statistics and evaluations on social conditions. Individual chapters examine unemployment figures, the social security systems, income taxes, the growth of income and wages as well as the imbalance of skills on the European job markets. From an evaluation of the figures and analysis it becomes rapidly clear how the situation of individual EU-regions is developing in different directions as a result of the debt crisis.
The Turin-based training center of the International Labour Organization (ILO) published this manual on social dialogue in January 2013. It is to support the relaying of trade union training work in Central and Eastern European countries. Apart from the original English version, the manual is available in Croatian, Hungarian, Polish and Romanian. Slovenian, Czech, Latvian and Bulgarian are soon to follow. The 90 page brochure presents the basic knowledge on social dialogue at individual country level as well as on the European level. One chapter is dedicated to the European works councils. Further chapters describe strategies for resolving conflict as well as techniques for conducting negotiations with the employer. Following texts are available in English: |
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12. The EWC Academy:
Examples of our work
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 5th Hamburg EWC and SE works
council ConferenceFor the fifth time running the annual conference for European and SE works councils took place in Hamburg on 28th and 29th January 2013. 30 participants from Germany, England, Sweden, Norway, Poland and the Netherlands from 20 companies discussed current trends. EWC members from the American IT-company, Hewlett-Packard, the German conglomerate, Freudenberg and the Belgian foam materials manufacturer, Recticel, reported on legal proceedings, corporate culture and bargaining practice. On the second day a visit to the Airbus works council in Hamburg was organized with a visit of the site. ZF renegotiates EWC agreement  With the support of the EWC Academy a working group
prepared, on 22nd January 2013 in Friedrichshafen, a list of main
points for an update of the EWC agreement during the next plenary
meeting. The Lake Constance based automobile supplier has not updated
the text since the establishment of the EWC in 2000. The provisions of
the new German EWC Act therefore apply directly to ZF which strengthens
the negotiating position of the works council substantially. The
company had first agreed in 2011 to world-wide principles for social
responsibility. Two employee representatives from Brazil participate
regularly in the EWC meetings (see report in
EWC News 4/2012).O2 renegotiates EWC agreement  A
EWC plenary meeting of the mobile telecommunications operator was held
in Windsor on 29th and 30th January 2013, where the EWC Academy
delivered training on the new EWC Directive. The EWC was created in
2004 under British jurisdiction before its acquisition by
Telefónica, the Spanish telecommunications company and the
agreement was last updated in September 2009. For British standards it
includes very extensive regulations.Telefónica had agreed to a world-wide code of conduct with the trade unions in the year 2000 (see report in EWC News 4/2007), but so far did not have its own EWC. This is why it is considering to expande the mobile telephone division’s EWC to cover the whole Telefónica group and to transfer it under Spanish jurisdiction. The EWC Academy provided an initial assessment for the transfer. Preparation for SE negotiations  A special negotiating body
(SNB) is to be established at the German Pharmaceutics company, Lohmann
Animal Health, in preparation for a SE participation agreement. The EWC
Academy delivered training to the German works council members on 18th
February 2013 in Cuxhaven. The poultry vaccine and feed additive
manufacturer has established a European Company (SE) holding with no
employees. Now negotiations have to be subsequently held for the
employee participation of subsidiaries.
SE works council presents project results The SE works council of the Donata Holding SE carried out a EU-sponsored project during 2012 on the better utilization of information and consultation rights with support from the EWC Academy. An Internet-based reporting system for business data and key employment figures was developed (see report in EWC News 3/2012). |
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13.
Current training schedule
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The EWC Academy and its forerunner organization have been organizing and delivering conferences and seminars for the members of European works councils, SE works councils and special negotiation bodies since January 2009. So far 461 employee representatives from 189 companies have taken part including many of them for several times. This represents around 17% of all companies in Europe with an established EWC or SE works council. "Song and dance act" or fully-fledged European works council?  A seminar is being held in
Montabaur castle (photo) from the 2nd to 5th April 2013 which
highlights the new legal situation of information and consultation in
relation to restructuring. How can the EWC concretely put into practice
the consultation procedure and prepare a legally water-tight opinion?
The seminar is also suitable for SE works council members.EWC Initiation seminar An introductory seminar will
again take place in
parallel. It is directed to newly elected EWC members and to works
council members seeking information on the establishment of a EWC. It
is also suitable for SE works council members. Seminars in Montabaur
are only being held in German.
English-language event: how to
consult properly? / Initiation seminarThe same two seminars like in Montabaur will be run in English in Esher (near London) from 3rd to 5th September 2013. The agenda is currently in preparation.  EU legislation seminar in
StrasbourgCurrent developments in EU-labour legislation will be presented in a seminar being held from 15th to 19th April 2013 in Strasbourg. Besides a visit to the European Parliament (photo) there will also be a discussion with the Member of Parliament, Jutta Steinruck (SPD). The seminar is organized in co-operation with the Brussels branch office of the German trade union confederation DGB and is suitable not only for EWC members but for all employee representatives.
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Scandinavian model of employee representationOur first EWC conference in Oslo from 23rd to 25th April 2013 will offer employee representatives from Germany, Scandinavia and other European countries the opportunity to meet and to learn from each other’s system. Several speakers will present particularities of Nordic employee participation and the EWC work in Scandinavian companies.  Conference for works councils in
the finance industryWe are organizing an international conference for works council members on transnational restructuring in the finance industry on 29th and 30th April 2013 in Frankfurt. Reports will given by an employee representative from the Stakeholder group of the European Banking Authority and an economist will present solutions to overcome the financial market crisis for discussion. The Unicredit EWC is presented as "best practice" example.  Employee Representation in
Japanese companiesFor the first time we are organizing a seminar for works council members in Japanese companies on 16th and 17th May 2013. All speakers have a special experience on the subject.  Intercultural skills for employee
representativesTraining on multicultural skills for works council members is being held in a maritime atmosphere on the Rickmer Rickmers museum ship from 27th to 29th May 2013 in the port of Hamburg.
 Employee representatives in US
companiesA conference for US company works council members is being held on 5th and 6th June 2013 at the American Academy on Lake Wannsee, Berlin. Besides the presentations from experts there will be the possibility to exchange EWC working experience and to discuss US-American management culture. The conference is also suitable for works councils from European companies who have large sites in the USA. Klaus Franz, a former EWC chairman of General Motors, will moderate the conference. European works council conference in Bucharest (Note: new date)  On
12th and 13th June 2013, works council members from Germany and other
West-European companies with sites in Romania have the opportunity to
gain an on-the-spot insight into industrial relations and the economic
situation, to discuss with Romanian employee representatives and to
make contacts. The example of Nokia will be presented: after the
closure of the German factory Bochum, a plant was opened in Romania,
but nevertheless closed four years later (see report in
EWC News 3/2011).Language courses: Business English for German-speaking works council members The next language training course will take place from 2nd to 8th June 2013 in Eastbourne. In-house events Please find a summary of possible topics for in-house events here: |
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14. Imprint
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EWC News is published by:
EWC Academy GmbH Rödingsmarkt
52, D-20459 Hamburg
Authors collaborating on this issue: Werner Altmeyer, Manfred Bobke, Rita da Luz, Martin Roggenkamp Distributor of the German version: 18,851 readers Distributor of the English version: 2,881 readers Distributor of the French version: 2,894 readers
Newsletter archive: www.ewc-news.com
We are always pleased to receive comments and suggestions in relation to this newsletter as well as reports on your EWC activities. Please write us at: info@ewc-academy.eu
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