The Development of Direct Employee Participation and its Impact on Industrial Relations at Company Level (DIRECT) (VS/2016/0305) Stage 3 – the Bulgarian case studies Nicosia, 15 January 2018 BG project team The project is implemented with the financial support of the European Commission – Employment, Social Affairs and Inclusion DG, Budget Heading 04.03 01 06

Content Case studies: sources of information Case –study –Carlsberg - Main characteristics of the subsidiaries - Labour, industrial relations and employee involvement - Direct participation - general features, main forms and subject - Impact of DP on the enterprise management and industrial relations Case study-Coca cola HBC - Main characteristics of the subsidiaries - Labour, Industrial relations and employee involvement - Direct participation- general features, main forms and subject Comparison between the case–studies (Carlsberg and Coca Cola HBC) Some preliminary conclusions

Case–study Carlsberg: main characteristics of the subsidiaries The Carlsberg subsidiary in Bulgaria has two production units –in Shumen (North-East region) and in Blagoevgrad (South-West region) and administration and commercial office in Sofia; Main activity - production of beer and other low alcohol drinks; The market share of Carlsberg is above 25 % from Bulgarian market Total number of employees – 509; 99% of the personnel is employed with permanents contracts, 1% with temporary (seasonal contracts); Carlsberg has established network of suppliers, which caused new jobs creation, especially in the districts and regions of production units

labour, industrial relations and employee involvement Case–study Carlsberg labour, industrial relations and employee involvement Carlsberg subsidiary in Bulgaria implemented lean production and a system of vocational training, related to the “lean philosophy”; The rules of wage formation in the subsidiary requires increasing of wages in relation to the increase of the annual sales and increase of inflation rate; Carlsberg implemented policies of gender equality, work-life balance and social benefits; Carlsberg has its’ own corporate social responsibility policy, including both promotion of organisation/team cohesion and activities, addressed to the society.

labour, industrial relations and employee involvement Case–study Carlsberg labour, industrial relations and employee involvement There are trade unions in the two production units of Carlsberg in Bulgaria, involving 35-40% of the work-force; In the Carlsberg subsidiary the sectoral collective agreement for brewery is implemented and there are also collective agreements at enterprise level in both production units; The information and consultation is implemented, but mainly via trade unions (or representatives appointed exceptionally by trade unions) and via annual meetings of the assembly of proxies; Since 2014 there is a Bulgarian representative in the EWC of Carlsberg; There also exists the so-called “board in shadow”, which involves one employee from every department to discuss the management issues.

Case–study Carlsberg Direct participation- general features, main forms and subject Consultative participation: Main forms of direct participation: meetings with the supervisors; individual consultations and consultations with working teams; study of workers views; workers’ suggestions schemes; Main subject : health and safety at work; vocational training and development of workers; workers’ initiatives for improvement of production process; new technologies (group consultations).

Delegation of responsibilities Case–study Carlsberg Direct participation- general features, main forms and subject Delegation of responsibilities A) Individual: - Time schedule of working tasks and deadlines; improvement of work; B) Working groups/teams: the management has leading role; - Main issues: work distribution; improvement of work; time schedule; C) Special groups: quality circles

Direct participation- general features, main forms and subject Case–study Carlsberg Direct participation- general features, main forms and subject Some peculiarities: there are some small differences between the responses of the manager and the trade union representative: - The manager mentioned that there are no leaders in the working groups, but the trade union representative indicated that there are such elected by the workers in the groups; - The manager indicated that the participation in the delegation of functions to the groups is compulsory and the trade union representative replied that both participation in the working groups consultations and in the delegation of functions to the groups are voluntary; - The trade union representative indicated that DP could be implemented via trade union meetings as well

Impact of DP on the enterprise management and industrial relations Case–study Carlsberg Impact of DP on the enterprise management and industrial relations According to the manager, the trade unions are involved in the negotiations, concerning work organisation and group consultation and delegation; According to the manager, the IC representatives (appointed by trade unions) are consulted concerning the direct participation Note: the trade union representatives didn’t reply exactly on this question

Impact of DP on the enterprise management and industrial relations Case–study Carlsberg Impact of DP on the enterprise management and industrial relations According to the manager, there is an impact of direct participation on the wage formation, including: Implementation of better flexibility of wages, based on some new principles, as follows: - Recognition of additional skills, not certified with documents; - Bonuses, based on individual attendance; increase of the production volume on the base of team work; improvement of the quality;

Case–study Coca cola HBC Main characteristics of the subsidiaries Coca cola HBC has two production units in Bulgaria – one in Sofia (the suburb Bankya) and one in the district of Sofia – the town of Kostinbrod; also 7 distribution offices in various regions of the country and a central office in Sofia; There were also other production units in several cities which were closed; The volume of sales of the subsidiary has increased in recent years; There are systems of quality management, management of environmental protection and management of safety of foods in the subsidiary, based on the ISO 9001; OHSAS 18001; ISO 22000; Total number of employees -1300; There are also suppliers and some outsourced offices, which caused creation of new jobs;

Case–study Coca cola HBC Labour, industrial relations and employee involvement Coca cola has policies concerning health and safety at work, human rights, equal opportunities; The subsidiary, as well as the MNC in general requires from its supply chain enterprises to respect some principles like: avoiding child labour; following labour and social legislation; offering decent payment, etc. There exists a Code of conduct, where the main features of responsibilities of the company and its employees are formulated; much attention is paid on anti-corruption activities; The company has joined the Global Compact and participates in many CSR initiatives;

Case–study Coca cola HBC Labour, industrial relations and employee involvement There is a TCA, signed by Coca cola HBC central management and IUF in 2005, which covers the rights for organizing in trade unions, collective bargaining and prevention of discrimination; There is a trade union, affiliated to the Federation of workers in food industry of CL Podcrepa in the production unit in Kostinbrod and a small trade union affiliated to the Federation of workers in commerce, tourism, cooperatives and services of CITUB in the distribution office in Plovdiv; The trade union density in total is low (less then 15%)] There exists a collective agreement in the subsidiary (since 2016); There are elected I&C representatives and the assembly of proxies is also used; There are representatives from Bulgaria in the Coca Cola HBC EWC and a deputy member is elected;

Case–study Coca cola HBC Direct participation - general features, main forms and subject Consultative participation: individual and group consultations Main forms: meetings with supervisors, meetings with general management, individual and group consultations, study of workers’ views, quality circles and project teams; Main subject :quality of products and services, relations with clients, health and safety at work, vocational training and workers’ advancement, new technologies (group consultations); The participation in the group consultations is voluntary.

Case–study Coca cola HBC Impact of DP on the enterprise management and industrial relation According to the manager: Trade unions are informed about the direct participation forms, issues and results; I&C representatives are informed as well Note: There are no indication concerning the impact of direct participation on the management of labour issues, in particular on the wage formation As the team still didn’t get collected interview by the side of trade union representative from Coca-cola subsidiary, till the moment we don’t have fully reliable information to evaluate the possible involvement of trade unions in the policies of direct participation

Comparison between the trends in the case studies It seems Carlsberg subsidiary practices broader forms of direct participation compared to Coca cola HBC subsidiary, Carlsberg unit have a clear delegation of functions related to direct participation - both to individuals and working teams, There are some visible impacts on the management and organisation, in particular wage formation in Carlsberg units in Bulgaria, not mentioned in the responses received from Coca cola HBC HR team.

Some preliminary conclusions The direct participation could be observed in the selected companies for the aims of Stage 3 of the research in Bulgaria; The consultative participation is still dominating; Even in the case in which the delegation of functions is used the scope of the subject is still limited; The direct participation is better used in the company, where particular work organization (lean production) is implemented; The direct participation is more broad in the company, where better industrial relations exist (the case of Carlsberg).