Worker Participation in Europe

Jo Carby-Hall

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351361071
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book, originally published in 1977, is a comparative study of worker participation in France, Belgium, Luxembourg and Britain. The first part of the book treats employee participation in general terms and examines its meaning and scope. The second part then examines the major themes of representative establishment councils and employee representation through an analysis of the relevant statutes and common law of the countries concerned, and by exploring the legal and other problems which have arisen in each. It also examines how these laws are applied in practice and the opinions of those concerned.

1 PERSPECTIVES

Before making an examination of (a) representative establishment councils¹ and (b) employee representatives, both of which form part of worker participation, it is important to survey worker participation in broad terms so as to put (a) and (b) above within their context. This chapter is therefore concerned with participation in its broadest term.

An extensive debate is taking place at the European² level (which in turn has provoked debate at national level) on the laws applicable to companies in the member states. An important aspect of this debate is the decision-making structure of companies and the role to be played by employees within that structure. The question might well be asked as to why it is necessary to have common legislation on inter alia³ employee participation. This research shows that the answer is twofold. The one relates to expediency emanating out of the European, economic idea, the other out of the emancipation of the modern employee. The first answer therefore lies in the varying company structures within the Community. Fundamental differences exist for example between French, Belgian, Luxembourg and British company law on such matters as the rights of employees and shareholders, the power of directors, the structure within the company etc. These differences form a barrier for both the company itself and its customers. Investment and trading with a company which is incorporated under a foreign law constitutes an obstacle, the main one being substantially higher costs than need be. Another obstacle is the lack of common legal standards. This is so in cases where the branch of a parent company incorporated in another member state does not necessarily offer its customers the same guarantees as a company incorporated in the state, and in cases where a company can only with difficulty take advantage of markets in other community states.⁴ A statute for European companies would overcome the problems mentioned briefly above, and commercial and industrial activity would achieve its full meaning by developing across national boundaries. The second answer lies in the emancipation of the employee. The modern employee wishes to have a say in the establishment in which he works,⁵ although it is also the case that only a minority of employees are in practice active in putting forward the views of their colleagues.⁶ An explanation for this phenomenon has been found to lie maily in the fact that employees are a great deal more educated and more aware than they have been. This education and awareness emanates from the mass media (rather than from school, further or higher education). Recent legislation giving the employee what is tantamount to a property right in his employment⁷ contributes to giving him a sense of belonging⁸ to the establishment. Another reason why there is an ever-increasing number of employees seeking participation rights is the great number of recent mergers and takeovers in companies, which create a growth in size with the result of depersonalising the individual employee in both his entity and his value. A desire for participation helps towards combating this depersonalisation. A further reason is found in publicity. In Britain the Labour Government in its manifesto did talk of industrial democracy as the third stage in its industrial relations programme, and the Bullock Committee of Inquiry on Industrial Democracy 1975–6 is currently examining this aspect.⁹ The European Commission has produced a ‘green paper’ as a discussion document on employee participation,¹⁰ and possible solutions are suggested as a basis for discussion on a European level. In France the comités d’Entreprise have been required by law in certain enterprises since the end of the Second World War, similarly in Belgium the Conseils d’Etablissement have existed since 1948¹¹ and in Luxembourg the comités mixtes were first required by a law passed in May 1974. From a historical aspect a number of converging influences were discernible in the occupied countries, e.g. France and Belgium. In these countries one of the reforms examined by the respective Conseil National de la Résistance was the participation of workers in the running, with the employers, of the establishment. During the Occupation and without legislative intervention the employees formed themselves into ‘comités du personnel’ and undertook to run the enterprise in cases where management was arrested by reason of being collaborators.¹² In Britain Mr E. Bevin introduced in 1940 mixed committees. These committees operated during the period of the war and contributed greatly towards improving productivity in establishments. In the United States President Roosevelt encouraged voluntary mixed committees in establishments. These spread throughout the country and played an important role in firms producing war equipment. In Germany works councils were required by law as from 4 February 1920. These had important functions as they not only provided opinions on technical matters but also had access to reports and other documents concerned with the running of the enterprise. The council members selected the delegates to the administrative council. A law in 1934 replaced the works councils with the ‘councils of confidence’, dependent on the then political party-socialism. The Works Constitutions Law of 1972 regulates the rights of employee participation in Germany and a works council (Betriebsrat) must be set up in every private industrial establishment employing five or more employees.¹³ All this international publicity creates awareness and causes additional pressure for the seeking of worker participation.

Work of a repetitive nature is found to be another important reason why employee participation is sought. Employees, especially in the motor car and agricultural manufacturing industries, feel that repetitive work impoverishes the quality of their working life. Worker participation will help towards improving their working life. One final reason was found to be the newly acquired freedom and leisure which the employee experiences and which generates within him a need of involvement and creativity in his work.¹⁴

Two further questions should then be asked. The first one is why have any legislation on employee participation?¹⁵ The second, what does participation comprise? Having answered these two preliminary questions, which will give the breadth of the meaning of participation, it will then be necessary to analyse two aspects of employee participation, namely ‘works councils’ and the equivalent in the other countries under examination, where the employees are represented collectively, and the shop steward and his near-equivalent in the other countries where individual representation takes place. Furthermore, (a) the laws of each of the countries under examination will, where appropriate, be examined and analysed; (b) the problems which have arisen in each will be exposed; (c) a comparison will, where appropriate, take place between both the laws and the problems; (d) an examination will be made based on how the laws are applied in practice and what opinions have been ascertained by the persons most directly involved, (e) submissions will then be made for reform in Britain. (d) above will require this writer to go into the realm of industrial relations. This, it is considered, is essential to a fuller understanding and to a better appreciation of the legal background, both in terms of already existing statute and case law, as well as in terms of the proposals made for law reform in the ‘employee representation’ field and the ‘representative establishment council’ field. Thus, this research will be restricted within its terms of reference. Then through a process of the convergent and divergent elements in each of the laws of the countries examined, it is proposed to reach some conclusions and make objective proposals. The European Communities’ proposed draft legislation on European works councils will also be considered where appropriate.

Why have any legislation on employee participation? A number of British companies already provide participation rights for their employees in the shape of works councils and other representative institutions,¹⁶ and in France, Belgium and Luxembourg worker participation is taking place to a larger or smaller extent.¹⁷ The practice is therefore recognised and accepted in the countries examined, and in Britain existing arrangements for negotiation and consultation, though varied, are in some cases highly developed. It is submitted that the reason why legislation is required is to enable all companies to have a reasonable minimum standard on participation. Whether this legislation should be compulsory or not will be discussed later. The point which must be made is that some form of ‘norm’ (whether a statue or a code of practice)¹⁸ which will develop worker participation in line with the other European countries, is required in Britain. The reasons for that have already been considered above.¹⁹ This research shows that there is an increasing desire on the part of employees to take part in the decision-making process and thus to be assured that their reasonable views are considered at all levels. Furthermore, the pressure for some ‘norm’ in Britian is even greater now, especially since the matter is currently being considered by the Commission of the European Communities.²⁰

These developments and current ideas which have been gathering momentum both in Britain and the Common Market countries indicate that it is time for the reform of certain social institutions to take place. It is clear from this research that there now exists an increasing recognition of democratisation, in that employees who are substantially affected by decisions made by their establishments want to be involved in the influencing and the making of those decisions.²¹ The interest of the employee in the functioning of the establishment can be as substantial as that of the shareholders, in that employees spend a great part of their working lives in, and devote considerable thought to, the establishment for which they work. For the great majority of employees their employment is their only source of income. The policy of the establishment therefore affects them as much, if not more, than shareholders and customers, not only in their immediate and longer term economic prospects, but also in their terms and conditions of employment, health, safety, welfare and job satisfaction.

Then of course there is the industrial relations problem. It is not suggested that this formula will be the deus ex machina which will once and for all times solve the industrial relations problems within the establishment, but there is little doubt that such problems will be more readily solved. Employee participation provides the framework for the finding of effective solutions and the avoidance of serious confrontation by ensuring a reasonable degree of understanding and some level of acceptance.

Looking at the problem in a European dimension, and in order to ensure a harmonisation of the European economic idea discussed above,²² employee participation must not be so divergent in the different member states as to create a barrier in the development of this economic idea. Too great a divergence in the laws which concern employees from a decision-making structure aspect constitutes a denial of the idea of a community as far as employees are concerned. Thus if one aspect of the European Community, namely for employees, is to become a reality, then the laws governing employees cannot be allowed to remain at variance. Some sort of harmonisation is therefore necessary in the law which will ensure that the employee, in whichever country he might be employed, enjoys parity with employees in another country. It therefore follows that the laws of the member states on employee participation should develop within a Community legal framework. Consequently it becomes apparent that no action should be taken at national level which does not take account of the European economic idea. This does not mean instance changes in national laws, but it does mean that any developments, whether current or future, made in one member state must take into account the structures and policies of other member states. It is towards this aim that this research is directed.

Having given reasons as to why some form of ‘norm’ is required on employee participation both in Britain as elsewhere, the next question to be answered is, what forms does actual participation take? Employee participation has a number of facets. These facets are not constant and within them there exist great variations. There also exist variations between the systems of each of the countries examined. There exists therefore a complex system within a complex system which calls for examination.

Employee participation may take the form of share and profit participation schemes. In France there is a legal requirement for companies over a certain size to have such a scheme,²³ and participation by employees in the capital and profits of the company may be found in isolated cases in the countries examined.²⁴ These however are the exception rather than the rule and employees in all countries examined do not have decision-making powers in the enterprise. All they have are saving schemes, incentive schemes and bonus schemes resulting from collective agreements, management initiative and, in the case of France, legislation.²⁵

Employee participation in the establishment’s decision-making body is another form of participation. In the countries examined only France and Luxembourg have legislation stating that employee representatives must be appointed on the establishment’s decision-making bodies. These representatives might either be appointed by the employees or at least be approved by them. Britain and Belgium have no such legislation. In France, legislation provides that in all ‘sociétés anonymes’ with fifty or more employees, members of the ‘comité d’entreprise’ must attend in a consultative capacity all meetings of the ‘conseil d’administration’ or the ‘conseil de surveillance’.²⁶ The Sudreau commission was appointed in 1975 in order to examine company reform. Its recommendations, apart from ‘co-surveillance’ (joint supervision) by employee representatives on the ‘conseil d’administration’ or ‘conseil de surveillance’ have been overtaken by events....