Opinion of the European Economic and Social Committee on democracy at work (exploratory opinion requested by the Spanish Presidency)
Date: 2023-04-27
Institutions: European Economic and Social Committee
Subjects: business policy, collective bargaining, labour law, social dialogue, worker participation








C_2023228EN.01004301.xml










29.6.2023   


EN


Official Journal of the European Union


C 228/43






Opinion of the European Economic and Social Committee on democracy at work
(exploratory opinion requested by the Spanish Presidency)
(2023/C 228/06)






Rapporteur:



Reiner HOFFMANN





Co-rapporteur:



Krzysztof BALON











Request from the Spanish Presidency of the Council of the European Union


Letter of 27.7.2022




Legal basis


Article 304 of the Treaty on the Functioning of the European Union
Exploratory opinion




Section responsible


Section for Employment, Social Affairs and Citizenship




Adopted in section


3.4.2023




Adopted at plenary


27.4.2023




Plenary session No


578




Outcome of vote
(for/against/abstentions)


175/69/13




1.   Conclusions and recommendations









1.1.


Over decades, European legislation has developed a robust system of worker participation in the workplace, based on the law and practices of the Member States and EU fundamental freedoms. A democratic world of work is a building block for further developing the European social model in a sustainable and competitive environment.












1.2.


Recent crises have shown that active citizens’ and workers’ rights are mutually reinforcing. Social cohesion is strengthened, the democratic fabric of our societies is more stable and society is less vulnerable to populistic and authoritarian positions.












1.3.


Mechanisms and legal instruments serving the purpose of democracy at work make companies more resilient, more economically successful and at the same time better able to deliver on employment and decent work. Democracy at work as a guiding concept should cover all workers and types of work as well as all workplaces, be they private, public or social in nature, irrespective of size, sector or other organisational aspects. The circumstances of SMEs should be considered. Empirical evidence shows that workers’ voices offer the flexibility and room for manoeuvre necessary at workplace level in order to adapt to structural changes.












1.4.


The fast-changing world of work is also an opportunity for more democracy. Employee participation and social dialogue need to feature more prominently in the public consciousness and be strengthened also across borders to make this possible. A reliable European legal framework guiding and making more effective national information, consultation and participation systems and supported by action programmes with predictable repercussions at national level are essential for this.












1.5.


The European Economic and Social Committee (EESC) welcomes the European Commission’s recent Communication on strengthening social dialogue as a basis for more democracy at work, as well as the statement that social dialogue is based on a vibrant culture of trust based on the specific role of social partners, while civil dialogue, recognised as a separated process, involves organised civil society organisations in a wider range of topics, shaping processes of transformation. However, it should be recognised that the labour market is changing, e.g. many workers are employed in small and micro enterprises, and at the same time in the European Union about 13,6 million (1) people are employed in social economy entities. All these workers and their employers should be fully covered by the institutional social dialogue.












1.6.


Over decades, European Works Councils (EWCs) have made a positive contribution to companies’ long-term economic, social and environmental objectives. To increase their potential and effectiveness their participation rights and resources need to be substantially improved: e.g. any circumvention or infringement of EWC participation rights should be sanctioned effectively and access to justice should be facilitated. In this context, the EESC welcomes the European Parliament’s recent resolution on the revision of the EWC Directive and calls on the Commission to take legal measures in a timely manner.












1.7.


Complementary to democracy at work based on law or social dialogue, there are other successful forms of democratic participation of workers that are much alive in the social economy, mainly in cooperatives.












1.8.


Technological innovations have led to new business models in the platform economy, which often involve precarious employment, especially for people in entry-level jobs and migrant workers. Access to collective representation is mostly non-existent or else insufficiently used. The EESC considers purposeful the aim of the current draft EU Directive on platform work to prevent bogus self-employment, in particular the definition of employers and employees, the reversal of the burden of proof. This would also strengthen the basis for giving workers a voice in the platform economy when adequate criteria for employment status are fulfilled. The EESC notes the Commission’s Guidelines on the application of Union competition law to collective agreements regarding the working conditions of solo self-employed persons. The EESC encourages the Spanish Presidency of the Council of the EU to highlight this aspect, in particular when adopting the Directive, and also to address these workers’ potential access to collective coverage in line with the Minimum Wage Directive.












1.9.


The rapid development of artificial intelligence (AI) is posing unfamiliar challenges to democratic standards in the world of work. Algorithmic data management has a huge impact on work organisation, working conditions and data security. The European social partners agree that it is critical that digital technology is introduced in timely consultation with the workforce and their representatives, in the framework of industrial relations systems, notably social dialogue and collective bargaining, so that trust in the process can be built. The EESC supports strengthening employees’ data protection rights in a way that secures workers’ collective rights and wants to see an adequate digital access to companies and their employees for trade unions in order to establish and to foster an effective social dialogue in the field of AI application in the workplaces.












1.10.


Good corporate governance means respecting human and labour rights as well as environmental objectives throughout the supply chain. Employers have to show that they view due diligence as an obligatory part of the management board’s risk management. Creating decent work worldwide should become an objective of sustainable corporate governance. The EESC therefore advocates defining the need for sustainable corporate governance within the European legal framework. Workers and their representatives, as well as civil society (environmental, human rights and consumer organisations), should participate systematically in this process.












1.11.


However, the EESC regrets that employee participation at company board level is not recognised as a key element of sustainable corporate governance. Therefore, the EESC supports appropriate efforts to establish a harmonised framework for employee participation on boards, taking into consideration differences between Member States, and to ensure that European company law does not result in avoidance or erosion of corporate participation in the Member States.












1.12.


More democracy in the world of work depends not only on having the necessary and appropriate legal bases, but also on the knowledge-based cooperation of all stakeholders, especially in the context of the challenge of the green and digital transitions. Civil Society Organisations (CSOs) working regionally or locally in the field of information, education and empowerment, and academic institutions and experts from the liberal professions can also support such cooperation through targeted measures adapted to local circumstances, in concertation with the social partners and local authorities. Such activities should also be supported by European Structural Funds.












1.13.


The educative role of workplace participation could support democratic practice in a wider political and societal meaning. In this sense it is crucial to raise awareness and educate young people for democracy at work even before starting employment. Along with social partners, CSOs working in the field of education can play a complementary role and should be supported.




2.   Democracy at work: socio-political relevance in Europe









2.1.


Exogenous crises and transformative challenges have become a permanent state. The EU institutions and the Member States must constantly put in place new effective response mechanisms that combine economic efficiency with social, environmental and political objectives.












2.2.


There are many normative and empirical justifications for more democracy in the world of work (2). The EESC has therefore long advocated for a balanced implementation of the concept of democracy at work and its key components such as vibrant social dialogue and a fair balance of rights and responsibilities in the workplace, which also includes the promotion of a culture of trust and cooperation between employers and workers, including workers’ participation. These components should be supported by a legal framework and social dialogue at all levels and good company practice.












2.3.


Democracy at work not only contributes to a resilient democracy, but is also key to sustainable economic competitiveness and prosperity. Workplace participation contributes to educating and training citizens in democratic practices, values and political culture. Those who feel taken into account in the workplace and who can participate in decision-making also do this in society and have a more positive attitude towards democracy.












2.4.


The EESC has consistently stressed that having a robust European framework and good worker participation practices (workers’ voice) (3) as a basis for trustful dialogue between management and workers at all levels (cross-border, national, local) is part of the basic legal framework of European democracy and is an important guide for a competitive, social market economy. This should apply to all workers and all forms of work at all workplaces, be they private, public or social in nature, irrespective of size, sector or other organisational aspects.












2.5.


A political consensus between governments, the social partners and civil society has anchored the workers’ voice in many pieces of European legislation over decades (4). This efficient resource must be fully implemented as a valuable component in all countries and companies, further strengthened and improved in the interests of economic success and social cohesion in Europe, also strengthened in cases where there are gaps in law or implementation, and should be further developed in line with changes in the world of work. Against this background, the EESC encourages Member States to evaluate at national level the state of play and develop initiatives for robust information and consultation frameworks.












2.6.



Workers’ voice in EU countries is characterised by multiple institutions, sometime ‘functional equivalents’ based on different labour relations systems, such as strong job and company-related information, consultation and negotiation rights, employee participation on boards, collective agreements at company, sectoral and cross-industry levels, binding outcomes of social dialogue as well as company cultures and capacities to manage change.












2.7.


The incoming Spanish Presidency’s request for an EESC exploratory opinion on democracy at work continues the noticeable trend whereby EU institutions and governments in EU countries are increasingly formulating ‘more democracy at work’ as a political goal for the ‘Future of Europe’. This can be seen:






—


In the Social Commitment made at the 2021 Porto Social Summit, European governments and social partners reiterated their commitment to advancing and strengthening autonomous social dialogue at European, national, regional, sectoral and company level (5).










—


The recent European Parliament report on democracy at work highlights that major changes arising from the European Green Deal and digitalisation must be implemented fairly and encourages the promotion of legal opportunities for employees to participate (6). In the same spirit, the European Parliament recently called with a broad majority for a revision of the existing EU Directive on European Works Council (7).










—


The Directive on adequate minimum wages in the EU requires all Member States to take measures to increase the coverage of collective bargaining, such as promoting the building and strengthening of the capacity of social partners.










—


In a recent proposal for a Council recommendation to strengthen social dialogue, the Commission stated that Member States should fully recognise and respect the specific role of social partner organisations in social dialogue structures and processes, while recognising civil dialogue as a separated process, involving a broader set of stakeholders on a wider range of topics (8).










—


The Social Economy Action Plan, adopted 2021, specifically commits to promoting social economy business models which have democratic and participatory governance as one of their key identifying features.
















2.8.


In the same vein the EESC considers that a reliable and effective workers’ voice can be an essential prerequisite for ‘sustainable’ and economically successful corporate governance in the EU.












2.9.


The EESC is pleased to respond to the questions raised by the Spanish Presidency, namely






—


what contribution the participation of workers and their representatives in business management can make to a just social and green transformation;










—


to what extent is it necessary to further develop the existing legal framework for employee participation and involvement in company decision-making, including in multinational companies;










—


how should employees’ participation rights be strengthened in the context of digitalisation, which also covers the platform economy and data protection issues;










—


what impact do new technologies have on fundamental democratic rights such as worker participation.
















2.10.


In addition, in this opinion, the EESC presents a reflection on other forms of democracy in the world of work.












2.11.


The EESC welcomes the Resolution on decent work and the social and solidarity economy adopted by the ILO at the June 2022 International Labour Conference, which highlights the fundamental role of social economy organisations in ‘consider the contribution of the social and solidarity economy to decent work, inclusive and sustainable economies, social justice, sustainable development and improving standards of living for all’, as well as the United Nations Resolution on promoting the social and solidarity economy for sustainable development of 18 April 2023 (9). These principal resolutions demonstrate that social economy organisations play an important role in developing democracy at work by an important contribution to more democracy and participation in the economy and the labour market; this should be reflected in order to cover the social economy organisations in the institutional social dialogue also at European level.




3.   The EESC’s position on democracy at work









3.1.


The EESC believes that the social inclusion of all stakeholders, in particular the workers’ voice, as a key pillar of a business and of the economy, should be recognised and encouraged as one of the prerequisites for making businesses more ‘social’, more environmentally sustainable, and more competitive.












3.2.


The EESC has already highlighted the benefits of statutory employee participation tools at national and European level in numerous opinions adopted by a sizeable majority, stressing that:






—


democratic structures at work should be seen as a core element of the European social model (10);










—


social and civil dialogue at national and EU level is key to ensuring an economic, labour and social policy that helps boost people’s living and working conditions and makes businesses more competitive (11);










—


countries with well-established social dialogue institutions and effective industrial relations systems are better placed to achieve positive economic, social and environmental objectives;










—


effective worker involvement in business-related decision-making contributes positively to business success and to the implementation of digital, environmental and climate-neutral transition projects;










—


exploiting the full potential of innovation requires the involvement and motivation of workers (12); in this context, the workers’ voice within companies contributes to positive change;










—


the world of work is also a place for learning about democracy, especially for young people and entry-level workers, with the potential to prevent this group being left behind in the transformation process (13);










—


social economy entities such as cooperatives which work towards long-term goals and directly serve their workers and communities should be supported;










—


restructuring in all forms can be better anticipated and managed through the early participation of organised employee representatives (14) where this is provided for, including on boards, without hindering the necessary room for manoeuvre in decision-making in the event of company changes or changes in work organisation;










—


transfers of enterprises without heirs or facing insolvency to employees under a cooperative form could also be a way to restructure them into sustainable and democratically managed enterprises (15);










—


especially in times of transformation and crisis, involving workers and civil society on the basis of a vibrant culture of mutual trust promotes the better implementation and acceptance of structural and organisational change (16) and thus also boosts security and stability.
















3.3.


The EESC stresses the value of involving workers in workplace innovation. Initiatives by the social partners to enhance the productivity and well-being of workers at workplace level should be promoted in a wider European context. The EESC welcomes the initiatives and research of Eurofound (17) and the European Workplace Innovation Network, and proposes that the EU take action to develop dialogue between the social partners and other stakeholders at all levels in the context of participatory approaches.












3.4.


The EESC has also demonstrated its conviction that sustainable economies require companies in which the various stakeholders work together and cooperate in seeking to achieve sustainable business opportunities, economic competitiveness, environmental sustainability, and social balance. Hence the EESC’s call for a corporate governance model that promotes the creation of long-term values as a duty of executive directors through the pursuit of the long-term interests of the company and its stakeholders (18).












3.5.


The debate on further developing a European legal framework for sustainable corporate governance must take reference to resolutions, opinions and reports already adopted by the EESC, the European Parliament and other relevant sources such as social partner agreements. Consequently, the EESC calls on the Commission to consider in their further work programs a corporate governance framework which serves as a reference for more sustainable and democratic corporate governance which fundamentally provides an adequate expression of workers’ voice and for their representatives in company supervision and administration at all levels.












3.6.


The debate on further developing a European legal framework for sustainable corporate governance must make reference to resolutions, opinions and reports already adopted by the EESC and the European Parliament, and to other relevant sources such as social partner agreements.












3.7.


The starting point for European support for democratic participation in designing a forward-looking transformation must be existing skills, scientific and industrial infrastructure, and mobilising social economy cultures. In this way, local economies can be successfully connected to the global competitiveness of products and services.




4.   Specific comments on the democratic development of the world of work

4.1.   Ensuring and developing existing employee participation standards









4.1.1.


The promotion of democracy in the world of work must go beyond company-level participation rights to include sectoral and cross-sectoral collective bargaining and representation systems and social dialogue at all levels, as well as dialogue with civil society.












4.1.2.


The EESC has discussed the need to evaluate the current EU legal framework and how it should be implemented effectively in national law. This includes the intention to improve already existing provisions accordingly.












4.1.3.


For example, the EESC has discussed the need for an EU framework regarding workers’ participation when it comes to setting companies’ strategic course at board level, while respecting differences at national and business level (19).






—


The European Parliament report on democracy at work (20) sets out how such a European framework for workers’ rights to information, consultation and representation on boards could be designed.










—


Moreover, it is vital that the EU regulatory framework safeguards existing national participation rights, in particular the involvement of employees in company decision-making bodies. EU law, which regulates the cross-border transfer of a registered office or mergers and creates types of European company, must not bring about an avoidance or erosion of rights acquired at national level, such as board-level employee participation.
















4.1.4.


The EESC has also discussed the need to consolidate EU law provisions on mandatory employee participation, on the basis of standards already achieved, and for the definitions of information, consultation and participation to be standardised (21).












4.1.5.


The case-law of the Court of Justice of the EU has recently confirmed that existing elements of employee involvement at company level, such as board composition, must also be taken into account when companies are transformed into a European legal form, such as a European company (SE) (22). EU law should ensure that this element is functionally comparable in the law of the EU Member States. This would create a reliable and legally certain basis for action for all parties involved.












4.1.6.


In order to increase the effectiveness of the work of EWCs, the EESC has already discussed improvements, in particular concerning the right to participate, the provision of necessary resources, the strengthening of enforcement measures, the clarification of definitions to prevent circumvention, and effective sanctions for businesses that do not comply with the relevant provisions (23).












4.1.7.


These requests are also reflected in the European Parliament’s most recent resolution on the Directive on European Works Councils, which calls on the Commission to bring forward a proposal for a revision of the EWC Directive with a view to clarifying its objectives, definitions and procedures and to strengthening the right of workers’ representatives and trade unions to information and consultation, particularly during restructuring processes (24). The EESC considers useful the Parliament’s calls to improve the EWC Directive. It calls on the Commission to take legal measures in a timely manner, focusing on measures to promote the effective enforcement of European rights in business practice.




4.2.   Requirements for participation in the platform economy









4.2.1.


The platform economy represents opportunities, challenges and risks in relation to work, coupled with precariousness and inequality (25), posing challenges to democracy at work. This particularly applies to opportunities for collective representation and the protection of collective rights (26), which to date have been reserved to those employed directly. Platform economy workers — largely people in entry-level jobs and migrant workers — often face greater challenges than others when it comes to working conditions and salaries; given that adequate criteria are fulfilled workers’ rights should therefore be extended to them and their voices included as part of the workers’ voice.












4.2.2.


The EESC considers purposeful the aim of the current draft Directive on platform work to prevent bogus self-employment. This would shift the burden of proof from workers to platforms and make protection under labour and social law available to platform workers, including representation rights and easier access to justice. The EESC notes the Commission Guidelines on the application of Union competition law to collective agreements regarding the working conditions of solo self-employed persons.












4.2.3.


The EESC reiterates its earlier opinion that cooperatives in particular are able to ensure democracy at work in the digital platform context (27). Moreover, the EESC supports the position of the European Parliament that cooperatives could constitute an important instrument for the bottom-up organisation of platform work (28).












4.2.4.


Since young people from vulnerable backgrounds make up 55 % of platform workers, it is crucial to educate them on democracy at work even before starting employment, so they can execute their rights and fight against discrimination. Along with social partners, CSOs working in the field of education can play an important role and corresponding projects should be supported.












4.2.5.


The EESC will further follow aspects of the workers’ voice in the platform economy and pay attention to the specific situation of self-employed platform workers and their coverage by collective bargaining.




4.3.   Workers’ voice and the use of artificial intelligence (AI), and data protection at work









4.3.1.


As AI can have a significant impact on fundamental rights, non-discrimination and working conditions, its use should be based on a solid foundation of enforceable rules to protect workers from negative impacts. It also poses new challenges to democratic standards at work. The protection of privacy and the enforcement of the relevant laws should be a main focus. In addition, the monitoring, tracing and control of AI algorithms used at work must be ensured. This raises the question, for example, of how data subjects’ access to information is to be designed, so as to understand the functioning and impact of the algorithm on work organisation and working conditions (29).












4.3.2.


Social partners should be involved in all stages of the deployment and use of AI. Among other things, the European Social Partners’ Framework Agreement on Digitalisation of June 2020 explicitly highlights the need for proper anticipation and timely involvement of workers and their representatives at a strategic level (30).












4.3.3.


Big data is a key element of AI. AI systems therefore also need to comply with the principles of the European Data Protection Regulation (GDPR). Article 88 of the GDPR imposes specific obligations on employers in order to protect employee data. In the EESC’s view, it should be examined whether, in view of the dynamic developments and increasing complexity of data processing, the existing provisions need to be improved in order to strengthen the necessary protection rights.












4.3.4.


The EESC wants to see an adequate digital access to companies and their employees for trade unions in order to establish and to foster an effective social dialogue in the field of AI application in the workplaces. It must be ensured that the EU GDPR is not used in practice as an obstacle to hinder the legitimate exercise of collective workers’ rights. Abuse must be prevented through appropriate sanctions (31).












4.3.5.


In addition to already adopted opinions the EESC will further deepen its view on the impact of AI in the world of work, and focus hereby also on the workers’ voice.




4.4.   Participation in corporate due diligence throughout the supply chain









4.4.1.


As a sustainable growth strategy for the EU, the European Green Deal means that not only economic success, but also social and environmental goals are essential for businesses. Therefore common rules that ensure that corporations and their owners adhere to ‘good corporate governance’ should incorporate in a balanced way the role of all relevant stakeholders, workers’ voice included.












4.4.2.


Compliance with human and labour rights as well as environmental objectives along the supply chain is an important part of sustainable corporate governance. Creating ‘decent work’ worldwide must become a recognised target for business decisions (32). The EESC has therefore already recognised the need for a single EU-level regulatory framework for businesses (33). Supply chains should constitute a bigger part of risk management, including in the context of respect for human rights. It is therefore logical to place responsibility for them at board level.












4.4.3.


The EESC notes that not only employees with their trade unions and representative bodies, but also civil society interests such as environmental organisations and human rights and consumer protection bodies, can play a key role in monitoring due diligence. It therefore welcomes the proposed introduction of mechanisms to assess and monitor compliance with corporate due diligence. However, it notes with concern that no provision is made for dialogue between the social partners.












4.4.4.


The EESC has already suggested a binding legal framework on due diligence and corporate responsibility, taking into account the workers’ voice, must play an important role (34). It calls on the Commission, as part of the ongoing decision-making process, to lay down in the proposed legal text provisions on the mandatory and effective participation of both workers and civil society stakeholders in the due diligence process in line with their interests.




4.5.   Further reflection on democracy in the world of work and direct forms of participation









4.5.1.


The participatory management approach is also of importance in areas with weakly developed forms of employee representation, such as start-ups, freelance businesses and many SMEs. This approach already plays a major role in social economy enterprises, especially in economically active CSOs and cooperatives. The EESC will promote the exchange of best practices in this field, particularly on the interaction between statutory and trade union employee participation and forms of direct participation as an element of participatory management.












4.5.2.


Complementary to democracy at work based on law and/or social dialogue, there are other successful forms of democratic participation of workers that are much alive in the social economy, mainly in cooperatives.












4.5.3.


In order to shape regional structural change and to create a green and social deal, the question arises as to how forms of democracy at work can dovetail with forms of participatory democracy beyond the company, involving society organisations such as environmental and social organisations in the regional and local context.












4.5.4.


Successfully implementing various forms of democracy in the world of work depends also on the knowledge-based cooperation of all stakeholders. CSOs working regionally or locally in the field of information, education and empowerment can support such cooperation through targeted measures adapted to local circumstances, in concertation with the social partners and local authorities. In this context, in some Member States’ CSOs, among them consumer and human rights organisations, can play a complementary role in empowering workers and push employers to exercise corporate social responsibility. Such activities should also be supported by European funds.





Brussels, 27 April 2023.


The President of the European Economic and Social Committee

Oliver RÖPKE




(1)  Commission presents Action Plan to boost the social economy and create jobs — 9.12.2021

(2)  Benchmarking Working Europe 2019, Chapter 4.

(3)  Taking into account different means and processes for involving workers and their representatives in the Member States, this opinion uses the umbrella term ‘workers’ voice’ where appropriate.

(4)  With the involvement of social partners a body of almost 40 directives have been added to European secondary legislation, establishing a broad legal framework for informing and consulting workers and enabling them to participate; ETUI Facts & Figures.

(5)  Porto Social Commitment 2021.

(6)  European Parliament report A9-0331/2021.

(7)  European Parliament resolution P9_TA/2023, 0028.

(8)  Proposal for a Council Recommendation on strengthening social dialogue in the European Union COM(2023) 38 final, p. 14.

(9)  Resolution which is ‘recognizing the contribution of the social and solidarity economy to decent work and inclusive and sustainable economies, to the promotion of international labour standards, including fundamental rights at work, to the improvement of the standard of living for all and to social innovation, including in the field of reskilling and upskilling’

(10)  OJ C 229, 31.7.2012, p. 77.

(11)  OJ C 10, 11.1.2021, p. 14.

(12)  OJ C 159, 10.5.2019, p. 1, point 1.1.

(13)  EESC resolution on the European Year of Youth, adopted on 8.12.2021, points 2.13 and 2.14 (OJ C 100, 16.3.2023, p. 1).

(14)  OJ C 229, 31.7.2012, p. 77, point 1.4 and OJ C 10, 11.1.2021, p. 14, point 5.5.

(15)  OJ C 286, 16.7.2021, p. 13, point 1.6.

(16)  OJ C 341, 24.8.2021, p. 23, point 2.6.

(17)  European Company Survey 2019.

(18)  OJ C 229, 31.7.2012, p. 77, point 4.1, OJ C 341, 24.8.2021, p. 23, point 1.11, OJ C 10, 11.1.2021, p. 14, point 5.1, OJ C 106, 31.3.2020, p. 1.

(19)  OJ C 341, 24.8.2021, p. 23, point 1.14 and point 3, OJ C 10, 11.1.2021, p. 14, OJ C 161, 6.6.2013, p. 35, point 4.2.2 and point 4.4.2.

(20)  European Parliament report, A9-0331/2021.

(21)  Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (OJ L 122, 16.5.2009, p. 28) and Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community (OJ L 80, 23.3.2002, p. 29) should be taken as a benchmark;; see OJ C 161, 6.6.2013, p. 35, points 1.6 and 4.4.2.

(22)  CJEU judgment of 18 October 2022, ref. C-677/20 (SAP), CJEU judgment of 18 July 2017, ref. C-566/15 (TUI).

(23)  OJ C 10, 11.1.2021, p. 14, point 1.10.

(24)  European Parliament resolution P9_TA(2023)0028.

(25)  The platform economy and the disruption of the employment relationship.

(26)  OJ C 290, 29.7.2022, p. 95.

(27)  OJ C 152, 6.4.2022, p. 38.

(28)  EP-report: Platform Work Directive Report, recital (new) 39a.

(29)  Labour in the age of AI: why regulation is needed to protect workers.

(30)  European Social Partners Agreement on Digitalisation.

(31)  ECA study (2021), Data Protection Law and the Exercise or Collective Labour Rights.

(32)  OJ C 486, 21.12.2022, p. 149, point 1.8 and point 1.9.

(33)  OJ C 486, 21.12.2022, p. 149, point 1.11.

(34)  OJ C 443, 22.11.2022, p. 81, point 1.7 and OJ C 341, 24.8.2021, p. 23, point 3.10.




ANNEX
The following amendments, which received at least a quarter of the votes cast, were rejected during the discussion (Rule 74(3) of the Rules of Procedure):

AMENDMENT 3


SOC/746


Democracy at work


Point 4.1.3


Amend as follows







Section opinion


Amendment




For example, the EESC has discussed the need for an EU framework regarding workers’ participation when it comes to setting companies’ strategic course at board level, while respecting differences at national and business level (1).






—


The European Parliament report on democracy at work (2) sets out how such a European framework for workers’ rights to information, consultation and representation on boards could be designed.










—


Moreover, it is vital that the EU regulatory framework safeguards existing national participation rights, in particular the involvement of employees in company decision-making bodies. 
EU law, which regulates the cross-border transfer of a registered office or mergers and creates types of European company, must not bring about an avoidance or erosion of rights acquired at national level, such as board-level employee participation.








For example, the EESC has discussed the need for an EU framework regarding workers’ participation when it comes to setting companies’ strategic course at board level, while respecting differences at national and business level (1).






—


The European Parliament report on democracy at work (2) sets out how such a European framework for workers’ rights to information, consultation and representation on boards could be designed.










—


Moreover, it is vital that the EU regulatory framework safeguards existing national participation rights, in particular the involvement of employees in company decision-making bodies.









Reason

As any form of corporate participation is based on national legislation or practices, European company law should in itself have no impact on participation systems. In any case no new EU-level regulation is needed to solve possible problems.

Outcome of the vote:







In favour:


98




Against:


130




Abstention:


20





AMENDMENT 4


SOC/746


Democracy at work


Point 4.1.5


Delete point







Section opinion


Amendment






The case-law of the Court of Justice of the EU has recently confirmed that existing elements of employee involvement at company level, such as board composition, must also be taken into account when companies are transformed into a European legal form, such as a European company (SE)

 (1)

. EU law should ensure that this element is functionally comparable in the law of the EU Member States. This would create a reliable and legally certain basis for action for all parties involved.




 





Reason

This issue was not properly addressed in the Study Group since it is a highly complex legal question with a number of country-specific aspects. In this regard it is not for the EESC to draw conclusions from the CJEU judgment.

Outcome of the vote:







In favour:


100




Against:


136




Abstention:


15





AMENDMENT 5


SOC/746


Democracy at work


Point 4.1.7


Amend as follows







Section opinion


Amendment




These requests are also reflected in the European Parliament’s most recent resolution on the Directive on European Works Councils, which calls on the Commission to bring forward a proposal for a revision of the EWC Directive with a view to clarifying its objectives, definitions and procedures and to strengthening the right of workers’ representatives and trade unions to information and consultation, particularly during restructuring processes (1). The EESC 
considers useful
 the Parliament’s calls to improve the EWC Directive. It calls on the Commission to take 
legal
 measures in a timely manner, focusing on measures to promote the effective enforcement of European rights in business practice.


These requests are also reflected in the European Parliament’s most recent resolution on the Directive on European Works Councils, which calls on the Commission to bring forward a proposal for a revision of the EWC Directive with a view to clarifying its objectives, definitions and procedures and to strengthening the right of workers’ representatives and trade unions to information and consultation, particularly during restructuring processes (1). The EESC 
notes
 the Parliament’s calls to improve the EWC Directive. It calls on the Commission to take measures in a timely manner, focusing on measures to promote the effective enforcement of European rights in business practice
. The EESC also notes that on 11 April the Commission launched the first-stage consultation of European social partners on a possible revision of the EWC Directive in order to gather the views of European social partners on the need for and overall direction of possible EU action on improving the EWC Directive. The consultation will be open for six weeks

 (2).





Reason

There are clearly divergent views on the support for and usefulness of the resolution of the European Parliament. Therefore and for the sake of compromise the EP resolution could be taken note of. It should also be noted that on 11 April the Commission launched the first-stage consultation of European social partners on a possible revision of the EWC Directive in order to gather the views of European social partners on the need for and overall direction of possible EU action on improving the EWC Directive. The consultation will be open for six weeks.

Outcome of the vote:







In favour:


86




Against:


139




Abstention:


18





AMENDMENT 6


SOC/746


Democracy at work


Point 4.4.4


Amend as follows







Section opinion


Amendment




The EESC has already suggested a binding legal framework on due diligence and corporate responsibility, taking into account the workers’ voice, 
must
 play an important role (1)

. It calls on the Commission, as part of the ongoing decision-making process, to lay down in the proposed legal text provisions on the mandatory and effective participation of both workers and civil society stakeholders in the due diligence process in line with their interests
.


The EESC has already suggested a binding legal framework on due diligence and corporate responsibility, taking into account the workers’ voice, 
will
 play an important role (1).





Reason

The amendment justifies more precisely the aim of EESC opinions as regards corporate sustainable due diligence.
Regarding the fact that the Commission proposal on due diligence is pending in the legislative process reactions from the EESC are not useful. As regards the substance of the sentence the request for legal text provisions on mandatory participation cannot be supported because it would undermine the responsibilities of the management and owners of the company.

Outcome of the vote:







In favour:


89




Against:


148




Abstention:


11





AMENDMENT 1


SOC/746


Democracy at work


Point 1.6


Amend as follows







Section opinion


Amendment




Over decades, European Works Councils (EWCs) have made a positive contribution to companies’ long-term economic, social and environmental objectives. To increase their potential and effectiveness 
their participation rights and resources
 need to 
be substantially improved: e.g. any circumvention or infringement
 of 
EWC participation rights should be sanctioned effectively
 and 
access to justice should be facilitated
. In this context, the EESC 
welcomes
 the European Parliament’s recent resolution on the revision of the EWC Directive and calls on the Commission to take 
legal
 measures in a timely manner.


Over decades, European Works Councils (EWCs) have made a positive contribution to companies’ long-term economic, social and environmental objectives. To increase their potential and effectiveness 
the EESC considers that there is
 need to 
further promotion
 of 
proper enforcement
 and 
guidance based on practical tools such as benchmarking with best practices
. In this context, the EESC 
notes
 the European Parliament’s recent resolution on the revision of the EWC Directive and calls on the Commission to take 
appropriate
 measures 
to promote the proper enforcement of the Directive
 in a timely manner
.


The EESC also notes that on 11 April the Commission launched the first-stage consultation of European social partners on a possible revision of the EWC Directive in order to gather the views of European social partners on the need for and overall direction of possible EU action on improving the EWC Directive. The consultation will be open for six weeks (1)

.









Reason

The European Works Councils Directive as recast in 2009 is fit for the purpose and there is no need to enter into a lengthy and cumbersome legal revision exercise. Instead, in the spirit of good cooperation, the enforcement of the Directive could be enhanced by joint efforts of social partners such as developing a code of practice. It should also be noted that on 11 April the Commission launched the first-stage consultation of European social partners on a possible revision of the EWC Directive in order to gather the views of European social partners on the need for and overall direction of possible EU action on improving the EWC Directive. The consultation will be open for six weeks.

Outcome of the vote: linked to amendment 5


AMENDMENT 2


SOC/746


Democracy at work


Point 1.11


Amend as follows







Section opinion


Amendment




However, the EESC regrets that employee participation at company board level is not recognised as a key element of sustainable corporate governance. Therefore, the EESC supports appropriate efforts to 
establish a harmonised framework for
 employee participation on boards, taking into consideration differences between 
Member States, and to ensure that European company law does not result in avoidance or erosion of corporate participation in the
 Member States.


However, the EESC regrets that employee participation at company board level is not recognised as a key element of sustainable corporate governance. Therefore, the EESC supports appropriate efforts to 
support
 employee participation on boards, taking into consideration differences between Member States.





Reason

While at the EU- level there is a comprehensive legal framework for information and consultation of workers, the participation systems are based on national legal frameworks and deeply rooted traditions. EU level regulation would undermine and stifle the national developments and interfere in national company law systems. This is an area where the best way forward also in the context of corporate governance is other than regulation, such as exchange of best practices and other means of spreading information.
As any form of corporate participation is based on national legislation or practices European company law should in itself have no impact on participation systems. In any case no new EU-level regulation is needed to solve possible problems.

Outcome of the vote: linked to amendment 3



(1)  OJ C 341, 24.8.2021, p. 23, point 1.14 and point 3, OJ C 10, 11.1.2021, p. 14, OJ C 161, 6.6.2013, p. 35, point 4.2.2 and point 4.4.2.

(2)  European Parliament report, A9-0331/2021.

(1)  OJ C 341, 24.8.2021, p. 23, point 1.14 and point 3, OJ C 10, 11.1.2021, p. 14, OJ C 161, 6.6.2013, p. 35, point 4.2.2 and point 4.4.2.

(2)  European Parliament report A9-0331/2021.

(1)  
CJEU judgment of 18 October 2022, ref. C-677/20 (SAP), CJEU judgment of 18 July 2017, ref. C-566/15 (TUI).



(1)  European Parliament resolution, P9_TA(2023)0028.

(1)  European Parliament resolution P9_TA/2023, 0028.

(2)  
First-stage consultation of social partners (europa
.
eu)



(1)  OJ C 443, 22.11.2022, p. 81, point 1.7 and OJ C 341, 24.8.2021, p. 23, point 3.10.

(1)  OJ C 443, 22.11.2022, p. 81, point 1.7. and OJ C 341, 24.8.2021, p. 23, point 3.10.

(1)  
First-stage consultation of social partners (europa
.
eu)