EWC Legislation Update Dr Werner Altmeyer Sinaia, 14.09.2009

Agenda Some figures: Multinationals with EWC Intercultural Experiences EWC in Practice – the problems so far Information and Consultation provision to EWC’s – was it timely and genuine? Legislation update: New EWC Directive

Multinationals with EWC [1.089] 908 431 49 Art.13 Art.6 1994 2009 1996 ~ 2.300 EWC Directive 1994 EU Directive 1996 national laws 1999 Art. 15  Revision 2004 initiative 2009 new EU Directive 2011 new national laws

Delegates from new Member states 908 EWC bodies currently active, more than 20,000 delegates 210 EWC bodies including one or more representatives from a new EU member state (2004) 41 EWC bodies including one or more representatives from a new EU member state (2007) - Bulgaria and Romania 24 EWC bodies including one or more representatives from EU applicant countries (Croatia, Macedonia, Turkey) Data source: European Trade Union Institute, EWC database, July 2009

A “ typical “ EWC today 23 members, increasing number from 9 countries, one third from host country 5 management representatives involved Select committee of 5 members 2 plenary meetings a year (ordinary + extraordinary) over two days 3 select committee one–day meetings a year 3 out of 10 EWCs have mixed working groups on specific issues Source: Evelyne Pichot, European Commission

EWC Intercultural Experiences Gewerkschaften Trade unions Syndicats Betriebsrat Works council Comité d´entreprise Betriebsrat + Gewerkschaften Works council + trade unions Comité d´entreprise + syndicats

Scandinavian model Anglo-Saxon model „Germanic“ model Mediterranean model Transformation model

The Problems so far 50% of all European works councils not consulted before a transnational restructuring decision is made public Legal uncertainties, e. g.: Mergers What means „consultation“ ? Link between national and European works councils

Information and Consultation provision to EWC -- what it timely and genuine? Financial reporting to the EWC: Alcatel-Lucent Social guarantees after merger: Gaz de France Negotiations about site selection: General Motors Legal proceedings in the UK: P & O

Alcatel-Lucent December 2006: merger Alcatel (F) and Lucent Technologies (USA) Consequence: 12,500 jobs are on the list of cuts March 2007: European protest day April 2007: French jugdes draw up criterias

Alcatel-Lucent The employer must present to the EWC the following: a precise, figured report on the reasons for closure, shift and merger of business activities a precise, figured exposition of the calculation method and the elements which were used for the calculation of the alleged staff overhang the number of planned job cuts, and to be more precise for every division and for every country, separated into employee categories exact and figured grounds for this distribution and the time schedule for the planned downsizing 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“.

Gaz de France November 2006: EWC stops the merger with the Suez group by interim injunction January 2008: the highest French court confirms the decision → Supervisory and administrative boards of multinational companies can not decide to merge with other companies until the consultation of the EWC has taken place in due form and wasn't completed correctly in all details. A financial analysis is also part of the procedure by consultancy firms which the EWC selects itself. The judges give an independent participation right to the EWC, independently of participation rights in individual countries. Highlight of a number of verdicts in France which strengthen the meaning of transnational employee representations

Manufacturing of the new Astra General Motors Manufacturing of the new Astra and Zafira models Five locations should compete against each other („beauty contest“) 20,000 workers concerned Central management: „only three plants can survive“ Central management spread rumours about concessions to local plants Rumours about new industrial capacities in Russia

General Motors December 2005 „European solidarity promise“ with an accompanying scientific project supported by EU funding April 2008 Europe-wide framework agreement: Location guarantees for Ellesmere Port (UK), Bochum (Germany), Trollhättan (Sweden) and Gliwice (Poland) until 2016, Antwerp is protected by another product line Exclusion of dismissals for operational reasons Participation at outsourcing in all European locations Social protection at staff transfer (5 years) Local works agreements become part of this agreement

P & O 2002 No proper EWC information and consultation over the plan to close the ferry routes into Zeebrugge Complaint to the Employment Appeal Tribunal in London in April 2002 Has the employee side, as opposed to the full EWC, the legal standing to be able to pursue a complaint? Due to the fact that management is also part of the EWC an enforcement is not possible because “you can not take a legal act against yourself” Employee side of the P&O EWC had no resources of its own and it proved impossible to raise the necessary funding Complaint was withdrawn by the TUC in June 2002 without judgement

Main demands of trade unions for the new EWC Directive Better information and consultation rights Better working conditions for EWC bodies and delegates More meetings Clear legal standing for EWC bodies Recognition of trade unions Training of EWC delegates Link between national delegates and the European level

Result: the new EWC Directive Consolidation of definitions for information and consultation EWC Members be entitled “to time off for training without loss of wages” (costs of training?) Obligation to inform the workers’ represented about EWC activities No right to visit local plants, no more meetings No extension of the scope (thresholds, abolition of exemptions, issue of joint ventures, relation vis-à-vis subcontractors etc) No broadening of the competences towards co-decision and bargaining No improvement of the enforcement issues

What means “information”? The Directive 1994 doesn't define information at all The Directive 2009 describes as follows: Information means transmission of data by the employer to the employees’ representatives in order to enable them to acquaint themselves with the subject matter and to examine it at such time, in such fashion and with such content as are appropriate to enable employees’ representatives to undertake an in-depth assessment of the possible impact and, where appropriate, prepare for consultations with the competent organ of the group

The following questions must be answered: Examination: How fast can EWC members check financial data thoroughly? Time: When is the adequate moment? Method: What is adequate to the purpose? Assessment: How can EWC members judge the possible consequences thoroughly? Preparation for consultations: How does one prepare for it? Which tools and framework conditions to be fulfilled? When will a measure have significant consequences? (Example Wabco, October 2008: "if by an alteration at least 50 jobs are concerned in two countries")

What means “consultation”? The Directive 1994 defines as “exchange of views and dialogue” The Directive 2009 defines consultation more exactly: at such time, in such fashion and with such content as enables employees’ representatives to express an opinion on the basis of the information provided within a reasonable time, which may be taken into account within the group

The following questions must be answered: At which moment does a statement still have influence on the decision making of the central management? Adequate period: How fast can EWC members work out a statement which takes into account all relevant financial data? What does “statement” mean at all? (in France this is an alternative restructuring plan, worked out with the assistance of consultancy firms) A missing statement leads automatically to a prohibitory injunction against central management (see example of Gaz de France)

Customization of old EWC agreements Renegotiation is necessary, otherwise the existing EWC agreement will remain valid New legal provision: right to terminate article 13 agreements in case of extensive structural changes of the company Contestation of article 13 agreements in France already legally confirmed (Bouygues case, October 2006) Current lawsuit in Germany (Valora case)