DG Internal Market and Worker Involvement: Where’s the beef?
Sigurt Vitols, Head of the Project Group Modes of Economic Governance, Social Science Research Center Berlin, and Associate Researcher ETUI
With the halftime of the “new” European Commission rapidly approaching, more and more observers are asking “where’s the beef?” with regard to DG Markt’s approach to worker involvement. The expression “where’s the beef?” first became popular in the US in the 1980s in a TV commercial made by the fast food chain Wendy’s, where a fictional competitor “Home of the Big Bun” is lampooned for offering a tiny hamburger patty which can hardly be found within an enormous bun. The expression is now widely used in North America to criticize policies which appear to be quite substantial, but below the surface do not live up to expectations.
European Company (Societas Europaea (SE))/SCE
1,286 SEs registered in 25 countries – Latest ECDB news
As of 1 June 2012, a total of 1,286 registered SEs were listed in the ETUI’s European Company Database (ECDB), 173 more since 1 March 2012. In terms of current distribution, the situation has not changed a lot: fewer than one-sixth of the SEs today have been identified by the ECDB as having more than five employees. In practice, however, the number of normal SEs may be significantly higher as a consequence of the persisting gap in employment information caused by the inadequate publication rules in the SE legislation.
Implementation gap – Information and consultation procedures in SEs
ECDB data show that a special negotiating body (SNB) has not been set up nor an agreement reached on worker involvement in the overwhelming majority of currently registered SEs. One explanation is that many SEs were originally set up as employee-free companies (usually as a subsidiary). If we look only at the companies identified as having employees (213 SEs) the setting-up of an SNB is known to have taken place in 97 cases.
Cross-border mobility – 66 SEs have already transferred their seat
By 1 June 2012, 66 SEs have moved their seat into another country. From NL, LU and DE relatively many companies moved to another EU member state. The real reason behind the transfer is rarely known (for example, tax optimisation). Most companies officially refer to international reorganisation. The need to have the registered office in the same member state as its head office apparently represents no obstacle in practice. More of the latest SE facts and figures can be found on the ETUI website.
EP report on European Cooperative Society (SCE)
The European Parliament adopted a resolution approving an own-initiative report on the SCE on 13 March 2012. The resolution amongst other things criticises the slowness of some member states in implementing articles in the SCE legislation regarding employee involvement.
European Works Councils (EWC)
Four still missing – Transposition of EWC recast directive delayed
So far, out of the 30 EEA member states all but four countries have transposed the directive 2009/38/EC: the hold-outs are Iceland, Italy, Liechtenstein and Luxembourg. In Italy, the government is expected to reply to social partners’ common advice of April 2011 on the transposition. In the meantime, in Luxembourg draft legislation was submitted to the Parliament. The opinion of the Chamber of Commerce (dated 07-04-2012) on the draft act can be found here.
More than 1,000 active EWCs – News from the EWC Database
The ETUI’s database of EWCs currently records 1,007 active EWCs in 937 multinational companies. After the entry into force of the recast directive 2009/38/EC the pace of establishment of new EWCs seems to be increasing with at least 52 registered negotiations ongoing, and more being reported by the sectoral European trade union federations. It is expected that this will result in a further increase in the compliance rate, which has been growing since 2007 (36 per cent) and currently stands at 41.3 per cent.
European company law and corporate governance
EP resolution on the 14th company law directive
On 2 February, the European Parliament adopted its third resolution containing recommendations to the Commission for the adoption of a 14th company law directive on the cross-border transfer of company seats. Already in 2006 and 2009, MEPs called on the Commission to issue a legislative proposal which would help regulate company mobility in Europe by respecting EU freedom of establishment while preventing the use of transfer of seat to circumvent employees’ involvement rights.
ETUC Resolution on the Future of European Company Law
At its meeting on 6/7 March 2012, the Executive Committee of the European Trade Union Confederation (ETUC) adopted a resolution on the Future of European Company Law: toward sustainable governance. This was passed in the context of DG Internal Market's consultation on future priorities in this area.
ETUC response to online consultation on European Company Law
The ETUC has submitted a response to the European Commission's online consultation on the Future of European Company Law. The response outlines the ETUC's general approach to the purposes and goals of company law, as well as positions on specific issues. A noticeable weakness in the consultation was the lack of questions specifically on the role of worker involvement in European companies.
European Commission Proposes European Foundation Statute
The Commission presented on 8 February a proposal for a European Foundation Statute. The goal of the proposal is to make it easier for foundations to operate across national borders in the EU. On worker involvement issues, the channel of worker involvement foreseen would be a European Works Council, which could be set up under specific conditions. No specific provision is included for worker board level employee representation.
European Commission proposal on “say on pay”
EU Internal Market Commissioner Barnier submitted a proposal to the European Commission on giving shareholders a right to vote on the remuneration of board members (“say on pay”). Although the proposal is not publicly available, press reports and statements by Barnier suggest that the proposal includes two main items upon which shareholders should have a right to vote: 1) the maximum ratio of variable to fixed pay of directors and 2) the maximum ratio of the highest to the lowest paid workers in a company.
Consultation on the future of insolvency law
DG Justice has opened a public consultation on the future of insolvency law, which will be running until 21 June 2012. This is a technical consultation on the operation of Council Regulation (EC) No. 1346/2000, which covers cross-border insolvencies. A number of questions in the consultation deal with issues which have relevance for worker rights and jobs.
Reports from conferences and workshops
“EU company law putting workers’ rights under threat?” – An S&D event at the European Parliament – Brussels (11/04/12)
With the European Commission preparing, on the basis of public consultations, a new action plan on corporate governance and company law, the S&D group at the European Parliament considered that it was time to review the impact of EU company law on workers’ rights. On 11 April 2012, the S&D thus invited experts, trade union representatives and Commission officials to debate the opportunities and challenges of employee involvement in the context of existing and lacking company law regulations. (You-tube video).
Conference "Co-operative contributions to the EU 2020 strategy" – Brussels (23/04/12)
The conference – organised by Cooperatives Europe – officially opened European Cooperative Week. One issue discussed was the European Cooperative Society (SCE). Costas Andropoulos of the EU Commission presented the results of a report on SCE implementation, according to which the most important benefit of setting up an SCE is to have a European profile, because it allows people to stress their affiliation to the cooperative movement (more information and material can be found here).
GoodCorp meeting – Berlin (31/5 – 1/06/2012)
The GoodCorp Network of trade union and academic experts on European corporate law met on 30 May/1 June in Berlin. This meeting took place in conjunction with a conference of the Committee on Workers Capital (CWC), which was sponsored by the DGB. Members of the GoodCorp network presented results of the Sustainable Company project, particularly those bearing on sustainable investing policies, to the CWC delegates.
European conference "Le dialogue social dans les instances transnationales d’entreprises européennes" – Bordeaux, (01/06/2012)
The Centre for Comparative Labour and Social Security Law (COMPTRASEC), founded in 1982 at Bordeaux IV University, organised a conference devoted to social dialogue at the transnational company level. Contributions were focused on issues related to worker representation in EWCs (implementation of the recast directive 2009/38/EC in selected countries) and SEs.
Retail sector: sustainable working conditions – Brussels (5/06/12)
A joint workshop of the ETUI and UNI-Europa focusing on sustainable working conditions in the retail sector took place on 5 June 2012 in Brussels. More than 30 worker representatives from the European retail sector participated in this workshop, which focused on new instruments for improving working conditions. Sustainability reporting practices, the methodology of rating agencies, the use of global framework agreements and the potential role of European Works Councils were discussed as potential tools for monitoring and improving working conditions in retail. The preliminary results of a study on reporting practices in the 50 largest European retailers were also presented.
“Corporate governance: basics for a minimum fit”– Conference at the EU Parliament – Brussels (06/06/12)
On 6 June, the European Confederation of Institutes of Internal Auditing (ECIIA) and the Parliament magazine organised an event devoted to corporate governance issues and hosted by MEP Evelyn Regner. Particular attention was paid to speaker Ugo Bassi, Director at DG Internal Market. Increased transparency and information disclosure (on board diversity, executive remuneration and the comply-or-explain principle) is seen as the key element, which could imply that the forthcoming new Action Plan, slated to be adopted this autumn, would favour soft law rather than hard law measures.
Key findings of “THE INFORMIA II PROJECT” – Sofia (07-08/06/12)
The project INFORMIA II looks at the “Role of Information and Consultation of Employees at the National and European Levels for the Improvement of Competitiveness, Employment Growth and Better Implementation of the European Social Model”. It builds on the findings of a previous survey by investigating the role of information and consultation of workers in the improvement of competitiveness and the creation of employment and as an integral part of the European Social Model. The findings of the survey and the outcomes from the workshops were brought together in a publication, which was launched at a European conference held in Sofia on 7–8 June 2012.
Manual for European Workers’ Representatives: 01 How to make your meetings more successful
The booklet was developed by the European Workers’ Participation Competence Centre (EWPCC). It is the first of a series of practical and helpfully illustrated manuals for workers’ representatives in transnational information and consultation bodies. The first manual offers some practical tips on how to make meetings of European bodies (such as EWCs or SE works councils) more useful, more efficient and more successful. The manual is currently available in eight languages and can be downloaded as a PDF (EN, FR, SW, ES, NL, DE, PL, GR). more
Worker involvement in the SE – A handbook for practitioners (German translation)
The handbook introduces the SE and its mechanism for employee involvement. It explains the negotiation procedures and provides ‘tips and tricks’ for proper preparation for negotiations. Based on the experience of several experts, it gives an overview of key aspects of an SE agreement and includes an extensive set of overviews, graphics and comparative tables. The Hans Böckler Foundation has translated the book into German. A French translation is currently being prepared by the ETUI.
Scenarios “Worker Participation 2030” – German translation
This publication sets itself an audacious task: casting a long look forward into the future, namely the year 2030. Four alternative scenarios explore the long-term prospects and changing contexts of worker participation, in its various forms, in Europe. The stories incorporate broad developments in society, as well as the strategies and actions of people and organisations, first and foremost the actors involved in worker participation. This publication is now also available in German.
worker-participation.eu – Translation of National Industrial Relations Update online
The updated reports on national industrial relations are now available in French and German. The section summarises key features of how industrial relations are arranged in the different member states, such as trade unions, collective bargaining, workplace representation and board-level representation.
ETUC leaflet (2012) Strengthening employee involvement
This leaflet summarises two ETUC Resolutions adopted by its Executive Committee in 2011 and 2012 and aims at presenting the ETUC’s positions on current EU priorities with regard to company law and worker involvement.
Bryson A., Forth J., George A. (2012) Workplace employee representation in Europe, Dublin: Eurofound
Eurofound has published a new report, based on data mining of the 2009 European Company Survey (ECS) results. Instead of being a mere mapping exercise of existing workplace employee representation in European countries (through trade unions and works councils), the report undertakes a contingent analysis aimed at revealing the various factors influencing the presence or nature of workplace employee representation institutions.
DG Employment, Social Affairs and Inclusion (2012) Social Europe Guide, Volume 2. Social dialogue, Luxembourg: Publications Office of the European Union
This European Commission publication is targeted at non-specialist audiences and represents an interesting beginners’ guide to social dialogue at European level. This volume summarises the history, rules and main achievements of both sectoral and cross-industry social dialogue, with interviews with key actors.
Seifert, A. (2012) European Works Council – Grand Duchy of Luxembourg, in: Blanpain, R. and Colucci, M. (ed.), The International Encyclopaedia of Labour Law and Industrial Relations, Den Haag 2012, Volume 2, pp. 1–126.
- 2–5 July 2012, Philadelphia (US) – 16th World ILERA Congress (International Labour Employment Relations Association)
- 5–7 September 2012, Lisbon (PT) – Industrial Relations in Europe Conference (IREC) with ESA RN 17
- 20–22 September 2012, Roccella Jonica (IT) – IVth Congress of the RLDWL, (Regional and Local Development of Work and Labour) European chapter with ISA RC 10
- 28–29 September 2012, Nicosia (CY) UN IYC Cyprus-Conference, Cooperative enterprises build a better world
- 25–27 October 2012, Montréal (CA) – CRIMT 2012 International Conference (Interuniversity research centre on globalization and work)
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