Most EU Member States have a regulatory framework, which may be the result of legislation or collective bargaining, providing for channels for information and consultation at various levels; The fundamental right to information and consultation is not always guaranteed; In some Member States, workers' representatives are only informed once strategic or economic decisions have already been taken by an enterprise. There are three main models for the representation of workers at company level in Europe: Representation through an in-house body such as a works council; Trade union representation Participation in senior management bodies of an enterprise.

In addition, representation may take one of two forms in the EU:

-         One representative body

This is the case where the channels for representation have developed through collective bargaining throughout a sector in such a manner that trade unions are the only or preferred interlocutor .

-         Parallel representation

i.e. where all the staff of a company are represented through an elected body which is not a the same as the trade union.  This representative body, usually known as the works council, constitutes a second means of representation over and above the trade union right to wage negotiations.

Worker representation in senior management bodies may be found in join-stock companies.  There are two types of join-stock companies in the EU i.e.:

• Companies in which the decision making powers rest solely with the management board (single body structure) such as in France, Belgium, Great Britain, Italy and Spain, and
• Companies which in addition to the board of management also have a supervisory board (dual body structure) as is usually the case in Germany and the Netherlands. This structure has a significant influence on worker representation since workers may belong to the supervisory board and influence its make-up although they may not participate in the management of the company.

Workers' representatives may participate in various ways:

• They may be informed, as is common practice concerning economic issues except in some companies in the UK and Ireland;
• They may be consulted. This is quite common as regards socio-political issues but rare with regard to economic matters.

Negotiation and corresponding rights are particularly pronounced in countries in which the single representative body is the norm, though economic matters are hardly covered by this.

Co-decision, including its weaker form of the right to assent to or contest a decision: Workers' representatives may participate in the entrepreneurial decision making and economic management of a company through participation in the supervisory board and co-decision rights in the works council.

Information and consultation can be seen as weak forms of participation of workers' representatives.

The principles of information and consultation are established at Community level in:

Directive 75/129 on the approximation of the laws of the Member States relating to collective redundancies
 

The Directive provides that where an employer is contemplating collective redundancies, he must consult the workers' representatives in good time with a view to reaching an agreement. These consultations shall, at least, cover ways and means of avoiding collective redundancies or reducing the number of workers affected, and mitigating the consequences. To enable the workers concerned or the workers' representatives to make constructive proposals the employer shall supply them with all relevant information and shall in any event give in writing the reasons for the redundancies, the number and groups of workers to be made redundant, the selection procedure, the period over which the redundancies are to be effected, the manner in which redundancy payments are to be calculated and any social provisions (re-deployment, retraining, reincorporation).

"Collective redundancies" means dismissals effected by an employer for reasons not related to the individual workers concerned where at least 20 workers are dismissed over a period of 90 days or, over a period of 30 days,  10 workers in companies usually employing 20 to 100 workers or 10% in companies with 100 to 300 workers or 30 in  companies with 300 workers or more.

Directive 77/187 on the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses

This directive governs the safeguarding of employees' rights by providing that

• The transferor's rights and obligations arising from a contract of employment, including any conditions agreed in any collective agreement are transferred to the transferee;
• The transfer of an undertaking shall not in itself constitute grounds for dismissal;
• The legal situation and function of workers' representatives shall remain unchanged. Moreover, the transferor and transferee are obliged to inform the affected workers' representatives in good time, and certainly before the workers are directly affected by the transfer as to the following:

• The reason for the transfer 
• Any legal, economic and social consequences for the workers; 
• Any measures adopted on behalf of the employees.

Directive 94/45 on the establishment of a European Works Council
 

The directive is applicable to any undertaking with at least 1 000 employees within the Member States and at least 150 employees in each of at least two Member States.

The initiative to establish a European works council or a procedure for the information and consultation of workers is to be negotiated and agreed upon between the company management and a special negotiating body comprising workers' representatives from the various member states.

The following subsidiary provisions apply, should no agreement have been reached within 3 years or should the management refuse to enter into negotiations:

The European works council may meet at least once a year with management for the purposes of information and consultation, notably as regards:

• company structure 
• economic and financial situation 
• the situation as regards the business, production and sales 
• employment situation and any foreseeable developments 
• investments 
• organisational changes
• any new working methods or production processes 
• transfers of production 
• mergers, cut-backs or closures of undertakings, establishments or important parts thereof, 
• collective redundancies

The European works council is to be informed without delay of any measures which may significantly affect employees' interests such as transfers of production, closures, mass redundancies etc., by means of a report with regard to which the European works council may deliver its opinion.

PROPOSAL FOR A DIRECTIVE ON A EUROPEAN COMPANY STATUTE

A European company may be established:
 

• by the merger of at least two companies which are subject to the law of different Member States;

• as a holding company of joint stock and limited liability companies from various Member States (the essential difference between this and establishment through merger is that the founding companies continue to exist);

• as a joint subsidiary of companies within the meaning of Article 48(2);

• through the transformation of a company established under the law of a Member State and which has had a subsidiary for at least two years which is subject to the law of another Member State.

The organs of the European company are the shareholders' general meeting and the supervisory and management body in the dual system or the administrative body in the monolithic system; the negotiating partners may opt for either system.

The directive supplementing the regulation governs both the information and consultation of workers' representatives on matters concerning the European company itself, its subsidiaries or establishments - essentially the provisions of the European Works Council have been taken over - and employee participation in the supervisory or administrative body of the European company.

The scale of employee participation will be decided through free negotiations between the companies concerned and the workers represented by a special negotiating body.  In principle this negotiating body shall take decisions by an absolute majority of its members, provided that such a majority also represents an absolute majority of the employees.  However, should the result of the negotiations lead to a reduction of participation rights, the majority required for a decision to approve such an agreement shall be the votes of two thirds of the members of the special negotiating body representing at least two thirds of the employees, including the votes of members representing employees employed in at least two Member States.  Reduction of participation rights means a proportion of employees' representatives of organs of the SE which is lower than the highest proportion existing within the participating companies.  However, a qualified majority is only necessary where certain limit values are attained concerning the proportion of employees with participation rights compared to the overall number of employees.  These are:

• in the case of merger: 25%
• in the case of a holding company: 50%; and
• in the case of the formation of a subsidiary: 50%.

In the event of a breakdown of negotiations a safety clause is provided to protect participation rights and applies where:

• the parties agree on such a measure;
• no agreement has been reached within half a year or, in the case of an extension, one year and the negotiating body has not decided to allow national provisions to apply, providing the competent organ of each of the companies concerned has agreed to a continuation of the procedure. The same limit values also apply here, i.e. the minimum level of participation under the safety clause in the annex to the directive applies automatically when these values are attained.

The following provisions apply to employee participation:

• In the case of an SE established by transformation, if the rules of a Member State relating to employee participation in the administrative or supervisory body applied before registration, all aspects of employee participation shall continue to apply to the SE.

• In other cases of the establishing of an SE, the employees of the SE, its subsidiaries and establishments and/or their representative body shall have the right to elect, appoint, recommend or oppose the appointment of a number of members of the administrative or supervisory body of the SE equal to the highest appropriate proportion in force in the participating companies concerned before registration of the SE.

PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ESTABLISHING A GENERAL FRAMEWORK FOR IMPROVING INFORMATION AND CONSULTATION RIGHTS OF EMPLOYEES IN THE EUROPEAN COMMUNITY

The purpose of this Directive is to establish a general framework laying down minimum requirements concerning employees' rights to information and consultation in undertakings within the European Community.  In this connection, "information" means transmission of details by the employer to the employees' representatives so that they can take note of them and consider the subject in question and "consultation" means the exchange of views and establishing of a dialogue between the employees' representatives and the employer.

This includes:

• information on the recent as well as the probable development of the undertaking's activities and its economic and financial situation
• information and consultation on the situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged, especially in the event of a threat to employment;
• information and consultation on decisions likely to lead to significant changes in work organisation or in contractual relations.

These employees' rights shall apply, at the Member States' choice, to undertakings with at least 50 employees or to establishments with at least 20 employees in a Member State.

Klaus Kellersmann

Source of illustrations: European Commission