Opinion of the European Economic and Social Committee on European Works Councils: a new role in promoting European integration
Date: 2006-09-13
Institutions: European Economic and Social Committee
Subjects: European undertaking, corporate social responsibility, economic and social cohesion, worker consultation, worker information, works council

23.12.2006

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Official Journal of the European Union

C 318/137

Opinion of the European Economic and Social Committee on European Works Councils: a new role
in promoting European integration

(2006/C 318/25)

On 12 July 2005 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of
Procedure, decided to draw up an opinion on European Works Councils: a new role in promoting European inte-
gration.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the
Committee's work on the subject, adopted its opinion on 6 September 2006. The rapporteur was Mr Iozia.

At its 429th plenary session, held on 13 and 14 September 2006 (meeting of 13 September), the European
Economic and Social Committee adopted the following opinion by 144 votes to 76 with 15 abstentions.

1. Conclusions and recommendations

1.1
The European Economic and Social Committee recog-
nises the essential role of European Works Councils (EWC) in
stimulating and upholding social cohesion, and as a means of
integrating European workers, with mutual knowledge and
understanding helping European citizens
to gain a clearer
picture. The more than 10 000 EWC delegates working in
Europe are directly and actively committed to creating a new
society.

The European social model, based on consensus-seeking
1.2
and social dialogue, respect for personal
identity and dignity,
conciliation of different interests, the ability to combine devel-
opment with care for individuals and the environment, advo-
cates creating a forum for meeting and discussion within trans-
national companies. The EESC believes that Directive 94/45 has
played an important part in achieving these objectives.

The Commission was

1.3
than
22 September 1999, to review its operation ‘in consultation
with the Member States and with management and labour at
European level’, with a view to proposing ‘suitable amendments
to the Council, where necessary’.

required,

later

not

1.7
The EWC experience has also revealed a number of areas
of concern: the most prominent of these is the persistently low
percentage of EWCs set up compared to the number of compa-
nies covered by obligations under the directive, which allows for
the possibility of setting up EWCs at the initiative of undertak-
ings or workers in at least two Member States. The lack of
workers'
the reasons for the incomplete
implementation of the directive, although this might itself be
due in some countries to the absence of legislation protecting
trade union rights in enterprises.

initiative is one of

1.8
In the years since Directive 94/45 came into force, the
Community legal framework on information and consultation
rights has been strengthened, in particular by Directives 2001/
86, 2002/14 and 2003/72, which provide a more advanced
view of information and consultation than under Directive 94/
45, together with employee involvement procedures designed to
ensure that they take place prior to any decisions. These proce-
dures help to make European businesses more competitive on a
global scale.

1.9
The EESC has identified three main points which it feels
should be taken into consideration for a rapid updating of
Directive 94/45:

1.4
The Commission has begun consulting the social part-
ners. UNICE and CEEP have said they are opposed to a revision
of
the directive. The European Trade Union Confederation
(ETUC), in contrast, has repeatedly called for an urgent revision.

— coordination of the information and consultation provisions
of Directive 94/45 with those dealing with the same ques-
tion in the above-mentioned directives;

1.5
The EESC has closely examined the present situation, in
part by means of a hearing with labour, employers' and civil
society representatives.

Experience to date presents many positive aspects. As
1.6
pointed out by several studies on the question, and as recalled
by the EESC, the social partners have also reached voluntary
agreements on work organisation, employment, working condi-
tions and further training, based on a partnership for change.
Their successful implementation is also entirely dependent on
the will of the parties concerned.

— an adjustment to the number of worker representatives on
the Special Negotiating Bodies (SNBs) and EWCs to reflect
EU enlargement and the right of representatives of each
country concerned to belong to the former; the directive
had set a maximum membership of 17, which at the time
corresponded to the number of countries covered by the
directive;

— recognition of

the right of national and European trade
unions to belong to SNBs and EWCs, and to make use of
their own experts, not only during the scheduled meetings.

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The EESC proposes that, following a reasonable period
1.10
of integration for the new Member States and in the light of
whatever the social partners may highlight from the lessons
learned on EWCs, currently being discussed in various seminars,
the directive should be subject to a review which takes account
of these experiences and of those indications which can already
be made.

1.11
The EESC upholds the social dimension of businesses in
the European Union, and the role played by EWCs. In discussing
sustainable development and the European social model, the
European debate has focused on the Union's unique features.
Corporate social responsibility in a global economy represents
one of Europe's responses to the problems raised by globalisa-
tion, the negative effects of which could be mitigated by the
adherence of all WTO members to basic ILO standards. Busi-
nesses are seen as a major player on the social scene, able to
make a vital contribution to enhancing the quality of life of all
stakeholders and of the regions. It should be noted that, as with
EWCs
level,
and particularly at
progress made through social dialogue is all the greater for
being legislation-based.

transnational

themselves,

that

In the communication,
‘social dialogue, especially at

The EESC takes note of the Commission's comments, in
1.12
its Communication on corporate social responsibility, regarding
the important role of employees and their trade unions in
implementing CSR practices (1).
the
the
Commission argues
sectoral level, has been an effective means for promoting CSR
initiatives, and European Works Councils have also played a
constructive role in the development of best practice on CSR.
Nevertheless, the uptake, implementation and strategic integra-
should be further
tion of CSR by European enterprises
improved. The role of employees, their representatives and their
trade unions in the development and implementation of CSR
practices should be further enhanced. External stakeholders,
including NGOs, consumers and investors,
should play a
stronger role in encouraging and rewarding responsible business
conduct’.

2. The socio-economic and legislative context in which

European Works Councils operate

The EESC wishes firstly to highlight the positive aspects
2.1
emerging from ten years'
implementation of Directive 94/45,
without however overlooking the difficulties and areas of
concern which have marked the European Works Council
(EWC) experience. To this end, it plans to ask all the relevant
stakeholders, both Community institutions and bodies, and the
social partners at the various organisational levels, to cooperate
in improving this democratic instrument of
representation
which, it is now clear, is essential if the European social model
is to be consolidated. The EESC confirms its support for the
stable development and reinforcement of this instrument.

2.2
The purpose of the EESC's present own-initiative opinion
is to help make the role of EWCs more incisive, by means of
updating Directive 94/45 so as to facilitate integration and
social cohesion. This is an objective of increasing political signif-
icance, especially in the current climate in which the impetus
towards a socially stronger and more united European Union is
diminishing.

2.3 Much has changed in the European Union in the twelve
years since the directive was adopted. The enlargement process,
supported by the EESC, resulted in the accession of ten coun-
tries in May 2004, and two more, Bulgaria and Romania, are
about to enter.
In spite of the considerable efforts to bring
national legislation into line with the acquis communautaire and
the substantial progress made in protecting working conditions,
there is no doubt that in some of these countries, workers' and
employers' organisations still experience difficulties in consoli-
dating their level of representation.

2.4
The EESC hopes that the social dialogue will be rein-
forced and is convinced that EWCs are crucial to achieving this
aim, since they introduce structures for contact and mutual
understanding which can promote a culture of social dialogue
in the Member States.

1.13
The European social model is marked by the respect it
shows for the rights on which human dignity is based, as well
as by the protection it provides for the most vulnerable through
welfare systems. In today's Europe, it should be indeed possible
to exercise citizenship rights everywhere, including in the work-
place and,
in particular, within cross-border companies. The
EESC urges the Commission to recognise those new elements
which have emerged since Directive 94/45 was adopted, and to
identify the measures most likely to strengthen the feeling of
belonging to the Union.

(1) COM(2006) 136 final.

2.5
The adoption by the Council of Ministers, on 22
September 1994, of Directive 94/45 on The establishment of a
European Works Council or a procedure for the purposes of informing
and consulting employees and its extension to the United Kingdom
by Council Directive 97/74/EC of 17 December 1997 marked a
crucial step forward in the development of a European social
dialogue at company level, matching the transnational structure
of companies and groups of companies. This new transnational
instrument, has made a very important contribution to devel-
oping the European dimension of industrial relations (2).

(2) EESC opinion on the Practical application of the European Works Council
Directive (94/45/EC) and on any aspects of the directive that might need to be
revised (rapporteur: Mr Piette), OJ C 10 of 14.1.2004, p. 11.

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Under Article 15 of Directive 94/45, the Commission
2.6
was required, not later than 22 September 1999, to review its
operation ‘in consultation with the Member States and with
management and labour at European level’,
‘with a view to
proposing suitable amendments to the Council, where neces-
sary’. The review was to concentrate on how the directive's
operation and, consequently, all aspects relating to the establish-
ment and operation of European Works Councils, and particu-
larly the suitability of the workforce size thresholds.

2.7 While recognising that the process involved was certainly
innovative, the Commission felt that by 22 September 1999 the
negotiations and other work conducted by the EWCs should
have provided enough information and practical experience to
permit a review of the directive.

2.8
On 4 April 2000 the Commission presented its report
on the application of the directive to the Parliament and the
Council. While focusing essentially on an assessment of the
transposition measures adopted by the Member States,
the
report also examined the application of the directive itself. The
Commission underlined that, regardless of the quality of the
implementing measures, some of the points they contained still
needed further interpretation. It also pointed out that it was
usually either the parties concerned or the courts who settled
these issues. The Commission did not
therefore consider it
necessary to propose any amendments at that stage.

The EP took an interest in the review of the directive. In
2.9
its resolution on the application of the directive and the need
for it to be revised, adopted on 4 September 2001, the Euro-
pean Parliament highlighted the role of
transnational bodies
representing employees and assessed the limits of, and opportu-
nities arising from, exercise of the rights to information and
consultation (3). The EP therefore urged the Commission to put
forward a proposal for a revision at an early date, to include a
series of improvements: as well as enabling workers to influence
management decision-making processes, and providing for
appropriate sanctions, the EP considered that the definition of
‘Community-scale undertakings’ should be re-examined with
reference to the thresholds. According to the EP, the threshold
for the directive's scope should have been lowered from compa-
nies with 1 000 employees to those with 500, and from 150 to
100 for those operating in at least two Member States (as is
known, throughout the course of the directive's adoption proce-
dure, the Parliament and Commission had both suggested a
lower threshold than was eventually laid down in Directive 94/
45) (4).

In 2004, at the end of a lengthy implementation period
2.10
for Directive 94/45, the Commission considered that a further

(3) EP document (A5-0282/2001).
(4) European Parliament Report A5-0282/2001 FINAL of 17 July 2001
on the Commission report on the application of Directive 94/45/EC,
Committee on Employment and Social Affairs.

examination of the directive's application should be carried out,
particularly since the issue was included on the Social Agenda
adopted at Nice in December 2000.

3. The procedure for reviewing Directive 94/45

3.1
On 20 April 2004 the Commission commenced the first
stage of consultation of the social partners on a possible revi-
sion of Directive 94/45, asking them to comment on:

— how best to ensure that the potential of EWCs to promote
constructive and fruitful transnational social dialogue at the
level of the undertaking is fully realised in the years ahead;

— the possible direction of Community action in this regard,

including the review of the EWC directive;

— the role the social partners intend to play in addressing
issues connected with managing a context of rapid and
radical change, and its social consequences.

3.2
In opening the consultation procedure, the Commission
noted that the institutional landscape has changed considerably
since it was examined in its report of 4 April 2000. The report
did not reflect new developments such as the Lisbon Agenda or
Union enlargement. Regarding this second aspect more specifi-
cally, the Commission pointed out that ‘the inclusion of activ-
ities in the new Member States will swell the number of under-
takings or groups falling within the scope of the directive’, and
that ‘where undertakings or groups with subsidiaries in the new
Member States already have European works councils, these will
need to be extended to ensure representation of
the newly
included subsidiaries’. Application of the EWC directive after
1 May 2004 will entail more, and new, representatives from the
new Member States with a different economic environment,
social traditions, languages and cultures, compounded by greater
complexity and higher cost.

3.3
The European Economic and Social Committee adopted
an opinion on 24 September 2003 in which it drew the
Commission's attention to a number of aspects to take into
account in any revision of the directive (5).

3.4
UNICE has replied to the Commission that it is strongly
opposed to a revision of the EWC directive (6). The best way of
developing worker
information and consultation in Com-
munity-scale undertakings is through dialogue at the level of the
companies affected by the directive.
Intervention by the EU
legislator would be counterproductive, as it could undermine
the dynamic for gradual progress in EWC functioning. For its
part, the CEEP has declared its opposition to a revision of the
It does not agree with a revision of
directive at this stage.

(5) Cf. footnote 2.
(6) See document of 1.6.2004.

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Directive 94/45, but calls for better use of existing tools, espe-
cially the information and consultation procedure. The Euro-
pean social partners could play a key role in this process, espe-
cially in the new Member States. Furthermore, the case studies
underpinning the basic guidelines for managing change and its
social consequences highlight the importance of effective infor-
mation and consultation and point to further social partner
activities, particularly in the new Member States (7).

growing number of EWCs are functioning effectively, and are
enhancing social dialogue. As pointed out by several studies on
the question, as indicated by the social partners in a number of
joint seminars, and as recalled by the EESC in particular, volun-
tary agreements on work organisation, employment, working
conditions and further training, based on a partnership for
change, have also been reached (11).

The ETUC,

3.4.1
responded favourably,
in contrast, has
confirming a number of comments already made in a previous
resolution from 1999 (8): basing its thinking on established
agreements and practices so far,
the
restrictions and shortcomings attributable to the legislation
cannot be redressed purely through negotiations, or voluntarily,
while perhaps continuing to monitor the positive results of best
practice, but that a revision of the directive itself is ‘urgently
necessary’ (9).

the ETUC argues that

3.5
The Commission has moved on to the second stage of
consultation of the European social partners on the review of
the EWC directive, albeit in conjunction with the consultation
on restructuring. The EESC welcomed the launch of the second
stage, while expressing its reservations about the fact that the
procedure was taking place at the same time as, and in conjunc-
tion with, another subject:
‘European Works Councils do,
indeed, play an important role in the issue of restructuring.
Quite apart from this fact, however, the improvement of
the European Works Council Directive is long overdue’ (10).

4. The EWC experience. A question of method: high-
lighting positive aspects and thinking about negative
results

4.1.1
All these proposals have analysed the major problems
which have emerged from the monitoring of the work of the
EWCs, carried out on several occasions. One of the most recent
studies (12) revealed that almost 75 % of EWCs do not at
present comply with the directive's requirements for the provi-
sion in good time of information in the event of restructuring.
Another very important point emerging from an examination
of the replies from 409 delegates belonging to 196 EWCs is
that 104 delegates reported that joint texts had been negotiated
and finalised within their respective EWCs. Given that in 2001,
according to a major study by the European Foundation for the
Conditions (13),
Improvement
14 agreements were signed directly or indirectly by EWCs, a
clear, albeit partial, view emerges of how the role of EWCs is
subject to constant change, and that they are gradually building
up a real negotiating power.

and Working

Living

of

for

4.2
The EWC experience has also revealed a number of areas
of concern which must be examined carefully in order to
representation and
improve this democratic instrument
involvement of workers, which has now become an essential
component of the European social model. The most prominent
these is the low percentage of EWCs compared to the
of
them up at workers'
number of companies obliged to set
request, in accordance with the directive. In December 2004,
out of over 2 000 undertakings covered by the directive, some
800 EWCs had been set up (14), representing approximately
70 % of the workforce employed in companies covered by the
directive. One of the reasons for the incomplete application of
the directive is lack of initiative on the part of workers. This,
however, in the case of several countries, is due to poor worker
representation in the workplace, which might be caused in turn
by the insufficient protection provided by national legislation.
This aspect merits closer examination with a view to identifying
possible remedies.

4.1
Experience to date presents many positive aspects. The
studies show how a growing number of EWCs are functioning
effectively under the new conditions. As underlined in the
April 2005 Joint Statement by the social partners,
‘Lessons
learned on European Works Councils’, EWCs have, among other
things, helped workers' representatives and workers themselves
to understand the internal market and a transnational corporate
that a
culture in a market economy. Research indicates

(7) See CEEP document of 18.6.2004: CEEP answer to the first-stage
consultation of the European Social Partners on the review of the Euro-
pean Work Councils Directive.

(8) See document of 1.6.2004.
(9) Trade Union Memorandum to the Luxembourg Presidency of the Euro-

pean Union — ETUC, March 2005.

(10) EESC opinion on the Communication from the Commission on the
Social Agenda (rapporteur: Ms Engelen-Kefer), OJ C 294 of
25.11.2005, p. 14.

4.3
The new and broader territorial scope of Directive 94/
45/EC clearly means that there must be a process for considera-
tion and study, enabling all stakeholders,
in both the longer-
standing and the recently-entered EU Member States to take on
board facts and figures from different cultures, methods and
situations, and to overcome the obstacles presented by social,
economic and cultural differences, so as to strengthen the Euro-
pean system of industrial relations as a whole.

(11) Idem.
(12) Jeremy Waddington, University of Manchester: The views of EWC

representatives, for ETUI, November 2005.

(13) Mark Carley, Bargaining at European level, Joint texts negotiated by

EWC, Dublin 2001.

(14) Kerckhofs and Pas EWC Database ETUI (December 2004).

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Enlargement-related issues are however only one aspect
4.3.1
of the broader changes throughout the EU's labour market and
business sector. The quickening pace of cross-border restruc-
turing, now a permanent feature of company life, and the new
forms which businesses are taking, present European Works
Councils with challenges far greater than envisaged by the Com-
munity legislator in Directive 94/45, as reflected in subsequent
enactments of legislation on worker involvement.

4.4
The legislative environment has indeed changed substan-
tially. New Community legislation has been introduced on the
information and consultation of workers both across borders,
such as Directive 2001/86/EC of 8 October 2001 on the invol-
vement of employees in the European company and the direc-
tives on the European company and on mergers, and at national
level, such as Directive 2002/14/EC of 11 March 2002 estab-
informing and consulting
lishing a general
employees in the European Community.

framework for

4.5
The new and more robust role to be played by EWCs is
also set out in the Commission's communication on restruc-
turing in cross-border companies (15).

However, as the data on the application of the directive
5.2
illustrate,
its dynamic contribution to building an integrated
industrial relations model and consolidating the European social
model seems to have been running out of steam in recent years.
A number of structural factors, regarding changes in the labour
market and business organisation, have contributed to this fall-
off. The EESC has previously discussed these factors in its
opinions on the Commission's Social Agenda and on restruc-
turing. Other reasons for the diminishing impact of EWCs lie in
the fact that the EWCs' information and consultation rights fail
‘to make appropriate action’ on the definition and implementa-
tion of company industrial policy ‘feasible’. In other cases, the
role of the EWCs has been recognised.

5.3
On the contrary, as the EESC pointed out in a recent
opinion, ‘European industrial policy needs to be defined in
business, sectoral and intervocational terms, and put into
practice with input from the social partners, whose expert
knowledge, as the main stakeholders affected, will be vital.
This requires that companies make their intentions clear at
an early enough stage to make appropriate action by the
other stakeholders feasible’ (17).

In a series of opinions,

the EESC has stated that

4.6
it
favours developing and strengthening EWCs (16), in connection
they have to play in cross-border
with the important part
restructuring. In the mechanical engineering sector, the role of
EWCs has been vital in many cases of restructuring, helping to
achieve agreements aimed at maintaining production sites and
safeguarding jobs.

5. The role of Directive 94/45 in the evolution of European

industrial relations

Directive 94/45 is one of the most significant pieces of
5.1
industrial relations legislation adopted at European level. In spite
of certain loopholes and shortcomings, pointed out
from
several quarters, it has certainly made a substantial contribution
to launching the process of creating new transnational industrial
solidarity
relations practices,
between workers from different countries and for constructive
discussion between representatives of employees and transna-
tional companies. It also, for the first time, establishes joint
means for representing and safeguarding some fundamental
rights of workers regardless of national borders.

combining new models

for

(15) COM(2005) 120 final.
(16) EESC opinion on Social dialogue and employee participation, essential for
anticipating and managing industrial
change, 29 September 2005
(CESE 1073/2005), rapporteur: Mr Zöhrer. OJ C 24 of 31.1.2006, p.
90.

5.4
One factor in the weakness of EWC action may be that
the information and consultation arrangements — aspects
covered by the review of Directive 94/45 — appear inconsistent
with both the new economic and structural environment and
the new Community legislative framework as established by
Directives 2001/86 and 2003/72, and Directive 2002/14. In
these directives,
information and consultation procedures are
not purely formal: they are not routine requirements which
companies can simply tick off ‘downstream’ of the decision-
making process, but are, in fact, procedures to be carried out
‘upstream’ of that process.

Under the directives supplementing the Statute for a
5.5
European Company and the European Cooperative Society, the
purpose of the information and consultation procedures is not
only to inform employees' representatives of final decisions that
the company has already made regarding important steps, such
as transformation or reorganisation on a transnational scale, but
above all to give them the right to ‘exercise an influence’ over
such decisions.

(17) EESC opinion on The scope and effects of company relocations (rapporteur:
Mr Rodríguez García-Caro), OJ C 294 of 25.11.2005, p. 9, point
4.5.10.

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6. Informing

employees,
and consulting
component of the European social model

an essential

incorporated into the Member States' public policies if it is to
have a positive effect on employment by means of an intensified
social dialogue, including at company level, in order to facilitate
change which is compatible with the continuing priority objec-
tive of employment.

6.1
The employee information and consultation procedures
(together with participation procedures in the strict meaning of
the word under the terms of Directives 2001/86 and 2003/72)
are crucial elements not only in the EU's industrial relations
systems, but also in the European social model itself, as can be
seen in the way these rights are expressed in the EU's primary
sources (18) and their continuing development in Community
secondary legislation. The rights in question are recognised and
safeguarded in an extensive series of directives (19), in a process
culminating in the signing of the Charter of Fundamental Rights
in December 2000, and its subsequent incorporation into the
Treaty establishing a Constitution for Europe (20).

6.3
The references to ‘employee involvement in the operation
and future of the undertaking’, partly to ‘increase its competi-
tiveness’ (22) assume their full meaning in this context. The legis-
lator specifies that such involvement is ‘a prerequisite for the
success of the restructuring and adaptation of undertakings to
the new conditions created by globalisation of the economy’ (23).

6.1.1
Under the Charter of fundamental rights, the provision
that the rights are to be exercised ‘in good time’ is of particular
in this way, an interpretation focusing on the
importance:
mostly anticipatory nature of these rights would be boosted, in
keeping with recent developments in legislation (cf. the above-
mentioned directives) and case-law (21).

This provision is particularly important in making infor-
6.4
mation and consultation procedures effective and,
therefore,
ensuring effective and substantial involvement of workers, parti-
cularly where it is stated (24) in the subsidiary applicable stand-
ard rules that if the company ‘decides not to act in accordance
with the opinion expressed by the representative body, this
body shall have the right to a further meeting with the compe-
tent organ of the SE (or SCE) with a view to seeking agreement’.

6.1.2
The progressive and continuous development of the
legislation on the rights of information and consultation since
the mid-1970s, within both the national and transnational legal
frameworks, can be explained by the Community legislator's
concern that the procedures in question should be more than
merely formal or routine. As is generally known, the decisive
impetus for strengthening these rights came from the events
the Renault works in Vilvoorde
surrounding the closure of
(February 1997), which also had significant judicial
implica-
tions.

6.2
A report drawn up by a group of experts (the Gyllen-
hammar Group) at the request of the Luxembourg European
Council (November 1997) highlighted the need for a new Com-
munity legislative framework to lay down minimum standards
which, as well as establishing common principles, rules and
methods in the Member States regarding information and
consultation, would be consistent with the European Employ-
ment Strategy. The strategy, based on the concepts of ‘anticipa-
tion’,
and ‘employability’, which subsequently
became features of the European employment strategy, must be

‘prevention’

(18) See Article 137 of the TEC, now Article III-210 of the new Treaty of

Rome.

(19) Including those on protecting workers in the event of collective redun-
dancies or transfers of undertakings (Directives 98/59 and 2001/23),
safety and health at work (Directive 89/391 and specific directives),
the involvement of employees in general (Directive 2002/14) and in
specific company matters (Directives 2001/86 on the involvement of
employees in the European company (SE) and 2003/72 on the involve-
ment of employees in the European cooperative society (SCE)).

(20) Article II-87, Workers' right to information and consultation within the
undertaking, which enshrines the substance of Article 21 of the Council
of Europe's European Social Charter, as amended in 1996, together
with points 17 and 18 of the 1989 Community Charter.

(21) (Court of Justice, Judgment of 29 March 2001 in case C‑62/99,
Bofrost, and the Judgment of 11 July 2002 in case C-440/00, Kühne).

6.5
European companies, especially those structured in large
groups, are engaged in increasingly radical and rapid restruc-
turing operations. In a recent opinion, the EESC pointed that
‘restructuring that is carried out only in response to change
usually has painful effects, especially for employment and
working conditions’. It concluded that ‘the inclusion and invol-
vement of workers and their representatives and trade unions is
therefore crucial to managing change in a socially acceptable
way at company level’, arguing that ‘European works councils
have a special role to play here. Transnational social dialogue at
company level is clearly forging ahead, as shown by the example
of agreements on restructuring measures reached by companies
with European works councils and/or European trade union
federations’ (25).

6.6
The nature and intensity of these restructuring processes
have served to highlight the inadequacy of the legislative and
negotiating instruments currently available to workers' and the
social partners' representatives at the various levels and have
pointed to the need for broader and deeper involvement of the
trade unions at the various levels. The aim therefore is not only
to complete the formal application phase of the directive on

(22) C.f. the seventh recital of the preamble of Directive 2002/14.
(23) C.f. the ninth recital of the same directive.
(24) See Directive 2001/86, and also Directive 2003/72, Part 2 of the

Standard Rules.

(25) EESC opinion on Social dialogue and employee participation, essential for
change, 29 September 2005

anticipating and managing industrial
(rapporteur: Mr Zöhrer). OJ C 24 of 31.1.2006, p. 90.

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EWCs, but also, firstly, to ensure the full efficacy of agreements
and national transposition standards and, secondly, to bring the
information and consultation procedures and EWC rights into
line with the changed market conditions and more active
management policies.

The second reason for change derives from EU enlarge-
7.1.2
ment, which logically necessitates a change in the number of
SNB and EWC representatives, increasing their number propor-
tionately.

6.7
A more careful and receptive attitude to negotiations,
although it is, of course, to be encouraged, would not seem to
be enough for this purpose; targeted action is needed on those
parts of the directive which,
if not subjected to appropriate
amendment, could make the role of the EWC meaningless and,
more generally, undermine the good practices so far introduced.
There is, moreover, a danger that
the spread of essentially
routine procedures at supranational level — which is crucial for
many company decisions which would not otherwise by subject
to trade union scrutiny — or the replacement of existing good
information and consultation practice with ‘bad practice’, could
have a harmful
influence on the effectiveness of information
and consultation rights at national level. This is in addition to
the counterproductive effect,
legitimacy and
authority, that it could have on relations between employees
and local company managements, with damaging repercussions
on the culture of binding information and consultation rights,
as recently set out in the Nice Charter and Directives 2001/86,
2003/72 and 2002/14 (this could be summed up, to paraphrase
Gresham's Law, as ‘bad information drives out the good’).

in terms of

The third reason concerns recognition of the right of
7.1.3
national and European trade unions to take part in negotiations
and to be EWC members (in the same way as under the direc-
tives on the involvement of employees in the SE and SCE), with
the opportunity to make use of their own experts, not only for
scheduled meetings.

7.1.4
In addition, an assessment of current EWC practice
suggests that Directive 94/45 should be reviewed in the light of
the potential prospects in the area of corporate social responsi-
bility and the new role that civil society organisations could play
with European- and world-scale companies, as well as the
efforts those companies need to make to uphold fundamental
social and trade union rights within their field of activity.

A crucial element

is the formal recognition of

6.8
trade
union organisations. The directives on the involvement of
workers in the SE and SCE mention, for the first time, workers'
organisations as entities who may be members of the Special
Negotiating Body. The earlier directives (on information and
consultation rights) did not grant a direct (or supporting) role in
negotiations
such. These
to trade union organisations as
elements as well as national specificities must be taken into
account with a view to any review of the directive, together
with others to be indicated below.

7. Why the directive should be re-examined before nego-

tiations begin on its revision

It is agreed in many quarters that there are three main

7.1
sets of reasons for a re-examination of the directive.

7.1.1
The first reason concerns the need to bring the 1994
Directive into line with the changes occurring in subsequent
directives dealing with this issue. There is a need for simplifica-
tion and coordination, in order to eliminate the discrepancies
that exist in the definitions of information and consultation in
the various directives.

The lessons learned on EWCs (26), as expressed by the
7.2
social partners, are worthy of a more in-depth examination and
should lead to an improvement in EWC practices and to better
and further development of the agreements. This should not
however serve to prevent efforts getting under way regarding
how EWCs function in order to define the basis for a revision,
the new
following a reasonable period of
Member States into the EWC process. As part of the future
discussions and negotiations, the following points should be
taken into account:

integration for

a) Making the current text clearer regarding the methods and
quality of the information and consultation: a clearer state-
the
ment regarding the prior (or anticipatory) nature of
information and consultation procedures is required, espe-
cially on issues ‘on the agenda’ or raised by employees' repre-
sentatives. Failure to accept the prior nature of the proce-
dures themselves, as set out in the Community legislation on
EWCs would lead to a serious imbalance between the proce-
dures under Directive 94/45 on the one hand, and those in
the involvement of employees (in the Directives on the Euro-
pean company and the European cooperative society) on the
other, with the risk of weakening the latter. Moreover, the
spread of ineffective information and consultation procedures
in Community-scale undertakings (such procedures being
compulsory under Directive 94/45) could have a negative,
‘copy-cat’ effect on information and consultation procedures
which must be carried out by national undertaking in
accordance with several Community directives (27).

(26) Lessons learned on European Works Councils, 7 April 2005, ETUC,

UNICE, UEAPME and CEEP.

(27) Safeguarding of employees' rights in the event of collective redundan-

cies or transfers of undertakings, and Directive 2002/14.

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b) For very large EWCs, or in the light of the functions they are
required to perform, providing a permanent secretariat and a
smaller body to prepare meetings, arrange for supply of
documents relating to issues on the agenda, prior distribu-
tion of the agenda and relevant documents in the various
languages and, subsequently, of the minutes and other docu-
ments relating to the decisions taken (28). A further impor-
tant requirement is the need for coordination of different
experiences, e.g. according to the industry/services sectors
guideline.

c) Guaranteeing regular and smooth communication between
SNB members prior to the establishment of an EWC and,
interval
subsequently, between EWC members
between its meetings.

in the

d) Guaranteeing properly organised meetings of sufficient dura-
tion between EWC members in advance of meetings with
management representatives.

e) Recognising the right of national and European trade unions
— which, based on the planned re-examination of the direc-
tive, are SNB and EWC members — to make use of reliable
experts, not only for meetings.

f) Adjusting existing agreements in line with changes to the
scale of groups of companies. More specifically, explicit
provision should be made for a specific additional nego-
tiating stage in cases of cross-border concentrations or
mergers, tying in with existing directives in this field.

g) Support for initial and on-going training of EWC members.

h) Including CSR among the areas subject to information and
involving

consultation (as stipulated in the SCE directive),
business stakeholder organisations at European level.

i) Acknowledging the importance of the effects and dissemina-
tion of information related to the life, acts and positions of
the EWC regarding the representatives and workers of the
individual establishments of groups of companies in each of
the countries where company branches have been set up.

j) Ensuring proper representation of disabled people and an
effective balance between men and women on EWCs (in
keeping with Directive 2003/72).

(28) The April 2004 Infopoint study of agreements revealed that only 51 %
of EWCs had such a steering committee. This could constitute a
problem, since most EWCs — some 70 % — meet only once a year.
The lack of a small steering committee which can provide continuity in
contacts between employees' representatives in individual establish-
ments and countries and company management and European federa-
tions, could be a major handicap to the functioning and efficacy of
EWCs.

(29) NSZZ Solidarnosc research, A. Matla, 2004.

k) Providing incentives for companies which guarantee full
the directive and deterrents for those

implementation of
which hinder it.

l) Promoting, by making appropriate adjustments to the rele-
vant procedures, participation in EWCs by all categories of
employees,
and
executives
managerial staff.

and professional

including

8. The work of EWCs in a larger Union: their contribution

to boosting European social cohesion

Particular attention should certainly be paid to the issue
8.1
of how the labour market and social situation have changed
since enlargement.

8.2
In Poland alone, 425 companies have EWCs, and at
present EWCs have more than 100 delegates on the basis of
voluntary agreements (29); this gives some idea of how the EWC
instrument could become a powerful vehicle for integration and
for developing a European social model laying down minimum
benchmark standards.
In the EU-15, but particularly in the
enlarged Europe, EWCs are making a practical contribution to
building a European mindset, thanks to awareness and recogni-
tion flowing from the diversity of national systems.

8.3
There are numerous obstacles to the creation of EWCs in
both the older 15 and the new 10 Member States. Social
dialogue in some of the latter countries is weak. The laws trans-
posing the directive in the new Member States are theoretically
sound, but in practice ineffective. The Commission should iden-
tify the obstacles preventing the directive from being properly
applied.

8.4
EWCs have so far been an important means for workers
to gain a picture of how the companies that employ them
operate across borders. The process of European economic inte-
gration depends on the recognition of a new role for EWCs,
especially in an economic phase when cross-border mergers and
the establishment of a European company are constantly
increasing.

8.5

EWC presence in the new Member States

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Country

Potential number of EWCs
(companies
by
Directive 94/45/EC

covered

MT

56

CY

65

LV

LT

BG

SI

EE

TR

RO

SK

CZ

HU

PL

155

162

163

185

181

256

263

340

636

662

819

Number of EWCs set up

29

33

84

87

89

108

101

136

140

199

333

334

425

Observers

Delegates

5

2

8

9

5

3

13

10

3

5

2

5

2

24

8

73

2

58

5

80

The first line shows the number of possible EWCs, based on the
current distribution of employees; the second shows how many
EWCs have actually been set up; the third row shows how many
observers have been invited to participate in EWCs; line whereas
the fourth line indicates the number of delegates with full rights
that have been appointed to them.

If all EWCs were set up, there would be 3 943 delegates, and if
the presence of delegates from the new countries was guaran-
teed on those actually set up there would be 2 098. However,
only 322 have been elected, representing 8.17 % of the possible
total, and 15.35 % within those EWCs already set up (source:
ETUI, op.cit).

9. The social dimension of companies in the European
Union and the new role of the EWCs — corporate
social responsibility in a global economy

In a recent key opinion, the EESC discussed the role of
9.1
EWCs in connection with CSR strategies (30). The opinion high-
lighted the importance of dialogue with the main stakeholders
in pursuit of company objectives: workers, clients, suppliers,
local or regional representatives, and consumer and environ-
‘Voluntary commitment has to go
mental organisations:
hand-in-hand with a well-organised dialogue with the stake-
holders’;
‘Dialogue is particularly important for the stake-
holders forming part of the value chain’.

9.2
Against this backdrop, the EESC stated that ‘At Euro-
pean level, the voluntary and/or negotiated approach to
addressing the implications of CSR in all those multina-
tionals which have set up European enterprise committees
[European Works Councils] marks a decisive step. It also
makes it possible to involve the new Member States in this
dynamic process. European enterprise committees [EWCs]
should play a role in bringing about the incorporation of

(30) EESC opinion on Information and measurement instruments for corporate
in a globalised economy, OJ C 286 of

responsibility (CSR)

social
17.11.2005, p. 12.
(31) COM(2001) 264 final.

It

internal

forum for

stakeholders.

CSR into the policies pursued by enterprises. They are also
should,
the ideal
however, be borne in mind that a coherent policy on CSR
also has to take account of the views of external stake-
holders, in particular (a) all members of the overall work-
force involved (temporary workers, employees of subcon-
tractors working on the site, craftsmen and other self-
employed workers working for the enterprise) and (b) all
participants in the value chain (subcontractors, suppliers),
whose views should be heeded to the greatest possible
extent’.

9.3
In its Communication on a Strategy for Sustainable Devel-
opment (31) the Commission called on publicly quoted companies
to publish a ‘triple bottom line’ in their annual reports that
would measure their performance against economic, environ-
mental and social criteria. This information should also be
communicated to EWCs.

9.3.1
Part 2(b) of the Standard Rules of the recent directive
on the European cooperative society placed social responsibility
among the areas for consultation between businesses and
employees.

9.4
The EESC welcomes the fact that in keeping with this
approach, businesses are now more than just an economic
agent, but are seen as a major player on the social scene, able to
make a vital contribution to enhancing the quality of life of all
stakeholders and of the regions.

The EESC takes note of

9.5
the European Commission's
recent Communication of 22 March 2006 on corporate social
responsibility (CSR), in which it stressed the important role of
employees and their trade unions in implementing CSR prac-
tices (32):

(32) COM(2006) 136 final.

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and uptake of CSR have
‘Awareness, understanding
improved over the past few years, partly as a consequence
of
the CSR Forum and other actions supported by the
Commission. At the same time, initiatives by business and
other stakeholders have moved forward the development of
CSR in Europe and globally. Social dialogue, especially at
the sectoral level, has been an effective means for promoting
CSR initiatives, and European Works Councils have also
played a constructive role in the development of best prac-
tice on CSR. Nevertheless, the uptake, implementation and
strategic integration of CSR by European enterprises should
be further improved. The role of employees, their represen-
tatives and their trade unions in the development and
implementation of CSR practices
further
including NGOs, consu-
enhanced. External stakeholders,
mers and investors, should play a stronger role in encoura-
ging and rewarding responsible business conduct. Public
authorities at all levels should further improve the consis-
tency of their policies in support of sustainable develop-
ment, economic growth and job creation. The EU's vision of
long-term prosperity, solidarity and security also extends to
the international sphere. The Commission recognises the
linkages between the uptake of CSR in the EU and interna-
tionally, and believes
should
in accordance
behave responsibly wherever they operate,
with European values and internationally agreed norms and
standards.’.

that European companies

should be

9.6
In Directive 2003/51, which amends the directives on
annual and consolidated accounts, the EU specifically requests
that, where necessary for an understanding of the company's
development, performance or position, the analysis shall include
non-financial key performance indicators, including information
relating to environmental and employee matters. In such cases,
EWCs should receive all the information, both financial and
purposes.
non-financial,

relevant

CSR

that

for

is

Brussels, 13 September 2006.

The Directive recognises the relevance of environmental and
social issues in the context of corporate governance.

9.7
In its opinion on Corporate Social Responsibility (33), the
EESC advocated a co-regulation system at EU level: a ‘specific
EU context of CSR could be developed on the basis of joint
initiatives and voluntary agreements between the social part-
ners’.

Organised civil society can make a major contribution in
9.8
this direction, within a process of dialogue and cooperation, by
helping to define the objectives (human rights, social standards,
priority of health and environmental policy, etc.), and striving
for greater disclosure and transparency regarding company activ-
ities. The purpose is definitely not to blur the distinct roles of
employers, trade unions and NGOs, but to enrich each of the
players concerned through ways of comparing and thinking
about
items of common concern. This activity can only
strengthen their traditional roles and help derive additional
benefit from existing legislation, without impeding its progress.

9.9
The European social model is marked by the respect it
shows for human dignity at all times and places, as well as by
the protection it provides for the most vulnerable through
welfare systems. In today's Europe, it should be possible to exer-
cise citizenship rights everywhere, including in the workplace.
The great achievement of the above-mentioned directives on
is to have harmonised these
rights, and the EWC directive,
rights, affording — at least in formal terms — dignity to the
workers of all EU Member States. The process is not yet
complete, and must be stepped up. The Commission is urged to
recognise those new elements which have emerged over the last
12 years, and to make the choices most likely to strengthen a
feeling of belonging to the Union among the Member States.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

(33) EESC opinion on Corporate

social

responsibility

(rapporteur: Ms

Hornung-Draus), OJ C 125 of 27.5.2002.