European Works Councils (EWCs) and transnational restructuring

1. EWCs and transnational restructuringEWCs and transnational restructuring
Brussels Week in European Labour LawBrussels Week in European Labour Law
23 February 2009 – 26 February 200923 February 2009 – 26 February 2009
Jean Monnet Chair in European Labour Law (UvTilburg)Jean Monnet Chair in European Labour Law (UvTilburg)
Dr. Christian WelzDr. Christian Welz
European Foundation, DublinEuropean Foundation, Dublin

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OutlineOutline
I. Existing evidence
II. Content of agreements
III. Joint texts
IV. Evidence from practice
V. Conclusions

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I.I. existing evidenceexisting evidence

content of agreements establishing
EWCs

joint texts signed by EWCs and
management

academic literature on role of EWCs in
restructuring

evidence on practice from case studies
and reporting

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II.II. EWC agreementsEWC agreements

80% of agreements provide for I&C at regular
meetings on topics relevant to restructuring

specific restructuring-related topics also on
agendas of regular EWC meetings

in exceptional circumstances, management
usually obliged to inform EWC/select committee,
which can then request meeting
 these circumstances refer essentially to transnational
company restructuring

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0
50
100
150
200
250
300
350
400
450
massred.
closure
merger
delocal.
% no.
II.II. EWC agreements/SDA databaseEWC agreements/SDA database
(total of 710 agreements)(total of 710 agreements)

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II. Provisions that may hinder I&CII. Provisions that may hinder I&C

clauses defining ‘transnational’ nature of matters
falling within EWC’s remit
 excluding matters dealt with by national-
level processes

frequent absence of requirement for I&C to
occur in good time

role given to EWCs is in most cases I&C, defined
as ‘dialogue’ or ‘exchange of views’

only small minority of agreements provide for
in-depth consultation or negotiation

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III.III. EWC joint textsEWC joint texts

some EWCs have developed a negotiating
role and signed joint texts

joint texts on restructuring:
 constitute negotiated responses to a specific
Europe-wide restructuring exercise
 lay down rules and guidelines to apply generally
to restructuring, or
 touch on restructuring briefly or in general
terms, as part of wider CSR initiative

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III.III. EWC joint textsEWC joint texts

a total of 19 joint texts (2006) make
reference to corporate restructuring:
 Axa, Danone (3), Deutsche Bank,
Dexia, Diageo, EADS, Ford (2),
GM (4), PSA, Renault,
Suez Lyonnaise des Eaux,
Total, Unilever

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III.III. Joint texts – general rulesJoint texts – general rules

lay down principles to govern handling of
restructuring

lay down guarantees for employees affected by
restructuring
 e.g. job security, avoidance of compulsory
redundancies, maintenance of pay and
employment conditions

set out accompanying measures such as
retraining or redeployment

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III.III. Joint texts – general rulesJoint texts – general rules

avoid future employment problems through
forward-looking training/employability policies

focus on reducing negative employment effects
 redeployment and retraining
 cutting compulsory redundancies

include rules on information, consultation and
negotiation - generally implemented by national-
level bargaining

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III.III. Joint texts – ‘IFAs’Joint texts – ‘IFAs’

of the 53 IFAs – 13 have been co-signed by EWCs
(April 2007)
 Hochtief, VW, DaimlerChrysler, Leoni, GEA,
Rheinmetall, Bosch, SCA, Prym, Renault,
Röchling, BMW, EADS
 30 IFAs make references to restructuring

e.g., EADS, Renault, PSA, Suez

commitments to try to maintain employment
and avoid or mitigate job losses

plus information and consultation over
restructuring

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Global Union Federation Number of signed IFAs Number of IFAs co-signed
by the EWC
International Metalworkers’ Federation (IMF) 15 11
Building and Wood Workers’ International (BWI) 12 1
International Federation of Chemical, Energy,
and Mining Workers (ICEM)
11 1
Union Network International (UNI) 11 0
International Union of Food, Agriculture, Hotel,
Restaurant, Catering, Tobacco and Allied
Workers (IUF)
4 0
TOTAL 53 13
III.III. IFAs – ‘GUFs/EWCs’IFAs – ‘GUFs/EWCs’

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III.III. EWCs and IFAs’EWCs and IFAs’

EWCs can support IFAs
 important role in initiating an IFA and its installation
 signatory role varies and is connected to an unclear legal
position
 therefore EWCs might see IFAs as stepping stones
towards global forms of dialogue/negotiation/IR

two important impacts:
 IFAs might strengthen the position of EWCs as partners
of dialogue and (potentially) negotiations
 IFAs will lead to a closer link between EWC and Global
Union Federations / EIFs/ Networks

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IV. Evidence from practiceIV. Evidence from practice

European Foundation _41 cases
 information provided by management generally
good
 consultation took place at the point at which, or
after strategic decisions were taken
 in the minority of cases, where employees reps
influenced transnational decisions, it was over the
implementation

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IV. Evidence from practice - generalIV. Evidence from practice - general

most EWC discuss specific restructuring moves
at both regular and extraordinary meetings
 EWC’s role is communication, or ‘consultation’ in
directive’s sense

only minority of EWCs exert any influence on
company restructuring
 helping ensure that employment/social aspects are
taken into account
 clearest expression is joint texts

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IV. Evidence from practice – factorsIV. Evidence from practice – factors
influencing EWC involvement - 1influencing EWC involvement - 1

type of restructuring

content of EWC agreement

timing of I&C

facility for extraordinary meetings, or ongoing
communication between management and
employee representatives

active select committee especially important

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IV. Evidence from practice – factorsIV. Evidence from practice – factors
influencing EWC involvement - 2influencing EWC involvement - 2

management views on EWC and its role

organisation and coordination of the
employee side outside the EWC

organisation and integration of company

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IV. Evidence from practice – complicatingIV. Evidence from practice – complicating
or hindering factorsor hindering factors

definition of restructuring as ‘transnational’

tension betweens national/local and EU levels

strong channels of communication, negotiation etc. at
national level (esp. in home country)

network of relationships between management, unions
and employee representatives,
 with real employee influence away from the EWC, often at
national level

restructuring where national operations are in
competition, weakening employee-side ability to influence
– ‘playing off’

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IV. Evidence from practice - EWCs’IV. Evidence from practice - EWCs’
general capacity to act and influencegeneral capacity to act and influence

many EWCs largely ‘symbolic’,

some have more active and influential role

key factors:
 nature of business operations and degree to
which integrated and internationalised
 management structure and policy
 nature of pre-existing of employee
representation structures

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V. ConclusionsV. Conclusions

active EWC involvement in transnational
corporate restructuring with influence on
decisions
 seems to be a minority practice
 determined by combined factors relating to

the company concerned

its management

the organisation and coordination of the
employee side

the EWC’s constitution and operation