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 Welcome to issue no. 2/2007 of EWC News. |
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The training and consultancy network "euro-workscouncil.net" is there to inform you about the activities of European Works Councils and related subjects.
EWC News appears four times a year.
You can find past issues in the newsletter archives.
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1. The restructuring
wave rolls -
what does the legislator do?
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European Parliament demands revision of the EWC Directive
Shortly
before the debate in the European Parliament and for the day
exactly three years after the beginning of the revision
procedure the European Trade Union Confederation (ETUC) convened
about 200 European works council members for a meeting
in Brussels on April 20th, 2007. In the presence of Commissioner Špidla
and the European employers' confederation Business Europe they
stressed the demand for a revision of the EWC Directive. At this
meeting a documentation on action forms of European works
councils in the course of restructuring was presented, which
covers General Motors, InBev, RWE Energy and Dim Branded
Apparel. The
ETUC congress, which met in Seville (Spain) from May 21st to
24th, 2007 also asked for strengthening the European works
councils. It named the key activities in a manifesto: "fight
delocalisation, stimulate negotiations on restructuring and
provide a stronger framework of
information, consultation and involvement, including involving
independent experts on restructuring."
The
new person in charge of EWCs at the ETUC The
education department of the European trade union institute
(ETUI-REHS) in Brussels has got personnel reinforcements on July
1st, 2007. A long-standing member and chairman of the European
works council of the Dutch Fortis bank, Bruno Demaître, will
organize EWC seminars.
Survey of IG Metall: The practice is further than the legislator
The lived practice is of a decisive importance against the background of a blocked legislation procedure. Besides the Europe-wide survey of Prof. Waddington from the year 2005 (see report in the EWC News 4/2005) IG Metall has also carried out two surveys in Germany. Results of the first survey were already in November 2005 presented at a conference in Hanover (see report in the EWC New 4/2005). The key finding was that out of 85 interviewed EWC bodies 70 were confronted with cross border restructering.
At the second survey of IG Metall in 2006 28 European works councils were examined more exactly, which conducted a special meeting on the occasion of restructering – either with the complete EWC body or with the Select Committe. In the opinion of Dr Aline Hoffmann, leader of the EWC team in the national office of IG Metall (see interview in the EWC New 3/2005), the lived practice overtakes the regulations laid down in the EWC agreements. As she explained to EWC News, “the initiative of the EWC members is rather decisive”. In most of the cases a special session was possible at short notice and opened new chances to get locally active. However some weak points became apparent. In some cases there were no internal preliminary meetings of the employees' side, not all locations concerned were included, or there were no interpreters.
European works councils don't wait for the legislator
To improve their work opportunities, European works committees negotiate often a new EWC agreement. Some of them were listed in the magazine “Arbeitsrecht im Betrieb” in January 2007.
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The
European Parliament in Strasbourg demanded in a resolution on
May 10th, 2007 to update the legal provisions for information
and consultation and
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2. Participation
rights after the merger
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3.
Reports from the courtroom
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On April 24th, 2007 the Federal Labour Court (BAG) in Erfurt clarified: Collective agreements negociated by unions have priority before works council agreements. The core of the decision was dealing with the issue whether the peace clause as laid down in the Works Constitution Act (a German feature to be explained abroad only with difficulty) basically applies during restructering or whether the freedom of association including the right to strike applies. This BAG decision brings the collective labour law in Germany closer to the European normality (see report in the EWC New 1/2006). The following texts are only available in German language:
A court in Paris defined on April 27th, 2007, which information the employer must disclose to the European works council in case of Europe-wide restructuring. The European Committee for Information and Dialogue (ECID) of the telecommunications supplier Alcatel-Lucent where after the merger several thousand jobs are to be eliminated had gone to court. The central management of the enterprise had not justified this reduction and pointed out to "synergy effects" only generally (see report in the EWC New 1/2007).
The employer argued in front of court that the ECID is merely a committee of the social dialog and not a full European works council. As such it would not be entitled to the rights of information and consultation in accordance with the EWC Directive because the committee had been founded 1996 on a "voluntary" basis before the national EWC laws came into force. Until present such agreements enjoy the right of continuance according to article 13 of the EWC Directive. The court followed this position, the workers' representatives also cannot refer to the EU Directive on information and consultation from the year 2002.
"The management of Alcatel-Lucent was sentenced!"
The court nevertheless came to the opinion that the central management has not complied with its duties of information and consultation sufficiently. The verdict was immediately published by the French trade unions in a common handbill (click on the picture on the right for extending). The employer must present the following:
This information must be "complete and precise enough, to explain the development of the employment on an European level to the EWC and to allow for an exchange of views and dialog with the management in view of full knowledge of the facts". At the earliest 15 days after disclosure of all information mentioned above a special session of the EWC can take place to decide on a statement. According to this verdict the central management of Alcatel-Lucent is not obliged, however, to present a redundancy scheme to the EWC, because firstly this is not a component of the EWC agreement and secondly, results from the participation rights of the works councils in single countries. The EWC does not enjoy any priority compared to the national works councils. In the opinion of the court participation and consultation rights in countries concerned may not be put off on the grounds, the EWC must be informed completely first.
Only restricted expert support
After it had come to protests again at the general meeting of the enterprise in Paris on June 1st, 2007, the central management finally presented the information demanded by the court in the middle of June 2007. The ECID does not have any claim to an expert of one's own, however. It can only count on experts who advise the French group works council. A sound evaluation of the presented economic data is only restrictedly possible with that. The ECID handed in a statement about the restructurings on July 4th, 2007.
The European Metalworkers' Federation (EMF) explains some judgements in EWC matters in the "newsletter on company policy".
The highest French court of justice ("Cour de cassation") condemned the Finnish electronic enterprise Aspocomp to bear redundancy scheme costs in the amount of 11 m. € for its former factory Évreux in the Normandy on June 19th, 2007. The dismissals had been justified with economical reasons in 2002, been carried out in opinion of the court, however, improperly. The central management in Helsinki must pay now for costs which would have had to be borne by the meanwhile insolvent French subsidiary.
The verdict is based on EU law and was only possible because the enterprise has its headquarters in the European single market. In comparable cases of insolvency, e.g. the glass plant of LG.Philips Displays in Aachen (see report in the EWC New 1/2006) or the German locations of the mobile telephone manufacturer BenQ, the top managements of a group could abscond from their responsibility in Asia. This shows which significance the EU legislation has as an example to socialy arrange globalisation.
For the first time a court in the UK adjudicated on the basis of the EU Directive on information and consultation on July 24th, 2007. The Employment appeal tribunal in London decided on application of the trade union Amicus against the newspaper publishing house Macmillan, a subsidiary of the German Holtzbrinck group. The British management has refused insistently to recognize an employee representation and to disclose economic information for years (see report in the EWC New 2/2006). Since it came neither at the completion of a company agreement nor to the compliance with the legal minimum regulations then being valid, Amicus started legal steps in March 2006. Macmillan ignored, however, the ruling of the Central Arbitration Committee, an independent arbitration board which in actuality proceeds as the first instance concerning industrial law in such matters. Therefore the London court condemned the publishing house to the payment of a punishment of £ 55,000 (€ 81,400), maximum penalty would have been £ 75,000. The judges wanted to set an example and to deter other enterprises from seeing violations against EU employee rights as peccadillos. |
Information
rights of the EWC: Judges draw up criterias
A
British verdict strengthens rights of information|
4.
Recently formed EWCs
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On December 14th, 2006, an EWC agreement was signed according to Italian law in the Italian media group of Mediaset in which the finance holding Fininvest of the former prime minister Berlusconi is involved substantially. Six members from Italy and two from Spain which meet once a year belong to the EWC. One delegate each per country coordinates the cooperation between the meetings, they form a kind of "mini-committee". Germany is not affected by this agreement because the take-over of the TV station chain ProSiebenSat.1 Media by Mediaset had failed in November 2006. In May 2007 Mediaset bought a share in the Dutch TV producer Endemol ("Big Brother"), what could possibly lead to an expansion of the scope of the EWC agreement. Endemol is represented in five European countries, among them in Germany.
Negotiations completed successfully in the Bauer publishing house
On the same day as in the case of Mediaset an EWC agreement was also signed for the Bauer publishing house group in Hamburg. The negotiations had been dragged and were indicated by a heavy blockade attitude of the employer for more than two years. So e.g. the chairwoman of the special negotiation body (SNB) received a official reprimand because of participating in a seminar for the EWC formation (see report in the EWC New 1/2005). The agreement became effective on February 1st, 2007 and foresees an eight-headed EWC with a three-headed steering committee. Besides Germany (three delegates) France, Spain, UK, Poland and Czechia are represented with one delegate each. The constituting meeting is planned for December 2007. The following documents are only available in German language:
On pressure of the European Commission the French electric facilities manufacturer Alstom had to hive off some lines of business (see report in the EWC News 2/2004). So was the production of power station turbines with 3,000 employees in Germany, France and Great Britain (formerly ALSTOM Power Conversion, now Converteam) sold to a British finance investor. Since January 24th, 2007, there has been an EWC agreement according to French law which provides two annual meetings for the nine EWC members in the enterprise with its seat in Massy near Paris. These choose a steering committee of three, which can initiate working groups within the EWC, comparable to the regulations of Stadtwerke Leipzig (see report in the EWC New 2/2005) and to the Italian bank UniCredit (see report in the EWC New 1/2007).
A training took place at Paris airport for the members and substitute members on May 22nd and 23rd, 2007 some weeks before the constituting meeting. On suggestion of the French trade union CFDT and the European Metalworkers' Federation (EMF) Dr Werner Altmeyer and Dr Heiner Köhnen of the training and consultancy network "euro-workscouncil.net" arranged an intercultural and communicative base for the work in the future EWC.
An agreement on the formation of an European works council for the 1,900 employees of the U.S. enterprise Cytec in Europe was signed on June 19th, 2007 in Graz. The wording is – typically of many Anglo-Saxon texts – pragmatically, the management showed itself definitely obliging at some points. So two meetings per annum take place, in unusual circumstances an additional special session is called on application within two weeks. Not only the twelve EWC members but also further workers' representatives from locations concerned take part in it.
Three delegates are sent by Belgium and Austria, two from Germany and one mandate each goes to Spain, Italy, Netherlands and Norway. France shall join at the end of 2007, the staff is increased there at the moment. Between the meetings the business is run by a three-headed steering committee whose members come from different countries. Furthermore the agreement provides training measures, expert support and a method to solve disagreements outside the court. It is subject to Belgian law.
IT service providers have difficulties with European works councils
Speed is regarded as an entrepreneurial necessity exspecially in the software industry. If the central management of a group negotiates, however, about the inclusion of its employees in cross-border restructurings, the processes turn out extremely tough. Just before the end of the legal negotiation deadline of three years an EWC agreement was signed for the French IT service provider Atos Origin in Brussels on June 28th, 2007. Two annual meetings as well as expert support are scheduled. Based on the French modell the EWC is a mixed committee to which employers’ and workers' representatives belong.
The three-year period was not enough in the U.S. software enterprise Oracle however to reach an EWC agreement. The negotiations failed between the central management and the special negotiation body (SNB) in May 2007. Thus Oracle is besides the engineering group Körber in Hamburg one of the few cases where an EWC is founded by virtue of law (see report in the EWC New 4/2005).
On July 4th, 2007 an EWC agreement was signed in Rome for one of the ten greatest Italian industrial enterprises. Italcementi is the fifth biggest cement manufacturer of the world with market leadership.in the Mediterranean region.
The 26 EWC members meet once a year, when required a second plenary session can take place. Eleven mandates are allotted to Italy, eight on France, two each on Belgium, Spain and Bulgaria and one on Greece. Aditionally one representative each of the three Italian trade union federations CGIL, CISL and UIL and the European Federation of Building and Woodworkers (EFBWW) takes part in the meetings. The EWC is chaired by an office composed of four members (Belgium, Italy, France, Spain), which meet twice every year. The chairmanship lies with an Italian trade unionist who is nominated jointly by the three confederations from Italy. When required an expert can be consulted, this one however only takes part in the preliminary meetings of the employees’ side but not in the meetings with the central management.
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After
the sale: Turbine manufacturer founds EWC
An
Italian cement manufacturer founds EWC|
5.
Company agreements on social standards
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Three
agreements alike in a French utility group
European
agreement on anticipation of change
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6.
Negotiated participation in the SE
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Fresenius
concludes an exemplary participation agreement
SE
negotiations at BASF started|
7. Case
studies: Aluminium and household appliances industry
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Gigantic merger wave at raw material
enterprises
Alcoa
and Alcan were world market leaders in the aluminium industry for years
but since the merger of two Russian groups recently they are not any
longer. Therefore the U.S. enterprise Alcoa tried in spring 2007 to take
over the Canadian competitor Alcan hostilely and to reconquer the
world's top position. When these take over plans were disclosed the EWC of
Alcan voiced against the merger at its meeting in Paris on May 29th and
30th, 2007. Such mega-mergers are not only a danger for the staff of the
taken enterprise but also for those of the buyer. The EWC fears that the
European aluminium industry will lose more and more competence centres and
research sites by doing so. On
June 1st, 2007, workers' representatives of Alcan and Alcoa met in
Brussels on invitation of the European Metalworkers' Federation (EMF) to
discuss the effects of such a merger on the jobs: the German EWC chairman
of Alcoa, the French EWC secretary (spokesman of the employees' side) of
Alcan as well as two trade union officers, which assist the EWCs on behalf
of the EMF. After the first conversation in the little circle further EWC
members of both groups came together in Brussels from seven countries on
June 21st, 2007 and agreed on a common procedure. They demanded the strict
observance of their participation rights, the inclusion in the process of
EU merger control and the immediate convening of a common special meeting
with central management of the two groups. "White
knight" prevents a hostile take-over It
actually came to an EWC special meeting in Zurich on July 25th, 2007 but
only for the EWC of Alcan. The CEO had arrived from Canada personally to
inform the workers' representatives in Europe about the merger with Rio
Tinto. The British Australian raw material group based in London had stood
in on July 12th, 2007 as a "white knight" to prevent the hostile
take-over by Alcoa. The deal will have the same dimension as the take-over
of Arcelor by Mittal Steel in June 2006. The
central management of Rio Tinto will explain to the EWC of Alcan its plans
more exactly in the middle of September 2007. The sale of the packing
division of Alcan, which makes up 23 per cent of the group’s turnover is
particularly scheduled. The EWC demanded an economical expert opinion to
be able to assess the effects on the jobs more exactly. For French shaped
European works councils such comprehensive advisory services are at the
agenda - differently than in British or German enterprises. Great anxiety
triggered the merger in Switzerland (texts available only in German): Alcan
emerged from numerous take-overs, particularly from the Swiss
Alusuisse-Lonza and the French Pechiney group and additionally disposes
over important production centres in Germany and the UK. Already since
1996 there were European works councils in these enterprises. After
conclusion of the mergers a new EWC agreement was concluded according to
French law in March 2006 (see report in the EWC News 2/2006). Rio Tinto
does not have any EWC yet since large parts of the locations are outside
Europe. In Australia the enterprise is confronted with heavy criticism of
trade unions and environmental groups because of violations of employee
rights and safety regulations. It remains to be seen how this anti trade
union attitude will become apparent in the European locations of Alcan. The
EWC of Alcan will well represent the European employees of Rio Tinto in
future.
The
hunter could now become the chased himself The
take-over of Alcan by Rio Tinto - Deutsche Bank functioned as an adviser
in the background - will fundamentally change the enterprise landscape of
the raw material industry. In stock exchange circles is speculated, the
inferior bidder Alcoa could himself become an aim of a hostile take-over,
possibly by ArcelorMittal (see report further above). Alcoa has an
EWC according to Dutch law since 2001 and is strongly represented in
Spain, Italy and Hungary.
Background
to the merger wave in the raw material sector (in German language) From
June 27th to 29th, 2007 representative of trade unions, enterprises and
science from the new and old EU countries met in Arezzo (Italy) to discuss
alternatives to the current restructurings in the household appliances
industry (see report in the EWC News 4/2005). A survey done by the
Istituto per il Lavoro in Bologna shows the dramatic extent of the shift
in low wage countries and the loss of workplaces. The shutdown of the AEG
plant at Nuremberg (see report in the EWC News 1/2006) had caused special
attention in Germany. Measured in terms of the employee numbers this
industry sector still takes second place in Italy, Spain and some Central
European countries after the motor industry. Originally
the "white goods" was mainly produced in Germany, Sweden and
Italy. But already in the middle of the eighties a shift took place to
Southern Europe. While small equipment like iron, coffee machines or
vacuum cleaner is almost only produced today in Southeast Asia, the
production of the big equipment (washing machines and dishwashers, dryers,
ovens) drifted towards Middle and Eastern Europe including Russia and
Turkey where the market steadily grows and the wages are still low.
How shall trade unions and European works councils behave at such
restructurings? At
the conference different approaches were discussed using case studies and
the challenges also judged for the new EU countries. Already some product
lines shall be shifted from Eastern Europe to China. Which role did the
European works councils of Electrolux, Whirlpool, BSH
and Indesit play in the production shifts dated back? In all these
cases a considerable lack of a cross-border coordination was noticed. How
have employee representatives behaved locally? Also about this there were
two case studies: the enterprises Arctic from Romania and De' Longhi from
Italy. At the end of the meeting Prof. Bierbaum from the INFO-Institut in
Saarbrücken introduced a suggestion for a better coordination of the EWC
work in this sector. All presentations and documents of the meeting are
available in the Internet on a special website. Further
industry-specific reports in earlier editions of EWC News
(most in German): Motor
industry (July 2006)
Chemical
industry (October 2006) Service
sector
(April 2007, in English) Electronics
industry
(September 2005) Metal
industry (December 2006) Transport
sector (December 2006) EWC
work at ver.di (December 2004) |
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8.
Turkey: a topic for the EWC?
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From the 20 m. employees only about 14% are organized in a trade union (what corresponds to the standard of Spain), the majority in the confederation Türk-Is. The legislator has set the trade unions high hurdles: they can conduct wage negotiations only if they organize more than 50% of the employees of a company whereas every single membership must be verified notarially. The majority of the employees in Turkey therefore is not covered by collective agreements. The working week is generally 45 hours. There are not any works councils, however, the formation of a plant trade union representation is possible by recognition agreement like in the UK. Turkey ratified the social charter of the Council of Europe in September 2006, what is regarded as an important signal in the context of the EU joining negotiations. After calculations of the European Trade Union Institute any eighth enterprise which falls under the scope of the EWC Directive had a branch office in Turkey in 2006 (altogether 270 enterprises). If, today, Turkey were already a member of the EU, Turkish delegates could move in into 152 European works councils already existing. At present, five delegates and three observers from Turkey are involved on a voluntary basis in some few EWC bodies.
On April 24th and 25th, 2007 the European Metalworkers' Federation (EMF) carried out a meeting in Istanbul "social dialog and social corporate responsibility in South-east Europe" which was thought also in response to numerous cases of hindrance of trade union activities in Turkey. According to the EMF the Turkish labour law does not comply yet with internatinally valid rules, which apply everywhere in the EU. 600 participants of a May demonstration were arrested in Istanbul few days later on May 1st, 2007.
The DGB Bildungswerk together with IG Metall published in 2005 a booklet worth reading on the history, the economy and the social system of Turkey as well as on the current problems of the Turkish society with regard joining to the EU. DGB-Bildungswerk/IG Metall: Länderprofil: Türkei Tradition und Wandel Düsseldorf/Frankfurt am Main 2005, 52 pages, € 3,50 The euro zone will be enlarged
In future the euro zone will thus cover 15 of the 27 EU member states with about 320 m. inhabitants. But already in 2009 Slovakia could join, in 2011 the three Baltic states and Bulgaria. On the other hand, the economically most important countries in Middle and Eastern Europe (Poland, Hungary and Czechia) will satisfy the criteria for the monetary union at the earliest in 2012, Romania only 2014. Previous focuses on countries in EWC News (mostly in German language): |
