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The European Commission has adopted a proposal for a Directive on informing and consulting employees. The draft directive, published in mid-November seeks to 'ensure [the] existence of the right to regular information and consultation of employees on economic and strategic developments ... promote employee involvement in the operation and future of the undertaking, and make the undertaking more competitive ... ensure that workers are informed and consulted prior to decisions which are likely to lead to substantial changes in work organisation or in contractual relations [and] ensure the effectiveness of these procedures by introducing specific penalties for those who seriously violate their obligations in this field'.
The Commission believe this initiative to be an essential step in completing the European Union's social dimension and achieving the creation of an adaptable , highly skilled and motivated work force. Speaking after the adoption of the proposal, Employment and Social Affairs Commissioner, Padraig Flynn, stated 'This is an important day for social Europe ... The Commission's proposal provides a framework within which the Member States ... can ensure an effective and balanced involvement of workers in the major issues affecting their company and their jobs'. However the Confederation of British Industry has attacked the plans. CBI director-general Adair Turner said that while worker consultation in EU cross-border companies was a legitimate area of Commission concern, the situation in national firms was not. He called on the government to reject the directive, claiming that 'The U.K. Government has publicly stated its opposition to this proposal'.
Trade Secretary Peter Mandelson warned the Trades Union Congress in September that the government would oppose such proposals on the grounds that extra costs for businesses would stifle job creation. TUC General Secretary John Monks welcomed the proposals, 'I have never understood why the British government is opposed to such measures. At a time when the World and European economies face difficulties such rights are needed more than ever'. As European Union social legislation is decided by majority voting among its members, the United Kingdom will be bound by any decision in favour of the proposals even if it votes against.
The provisions
Article 1 lays out the objective (to establish a general framework for informing and consulting employees in the European Community) and principles (co-operation between the parties, consideration of reciprocal rights and obligations, and the need to take account of the interests of both undertaking and employees) of the proposed Directive.
Article 2 (Definitions and scope) defines the term 'employer', 'employees' representative', 'information', and 'consultation' as well as stating the threshold of 50 employees.
Article 3 allows Member States to let the social partners (essentially unions and employers) determine the procedure for implementing the general principles of the directive, taking into account the already existing national law.
Article 4 sets out the subjects to be covered by information and consultation: (a) economic and strategic matters; (b) employment trends within the undertaking; (c) specific decisions concerning work organisation or contractual relations.
Article 5 deals with the confidentiality of the information provided, necessary as the Directive bears on management decisions which may address sensitive issues.
Article 6 establishes the principle of protection of employees' representatives.
Article 7 deals with enforcement. The first part of this article deals with access to justice and remedies. The second part, which is innovative as far as EU law is concerned, states that decisions taken in serious violation of the Directive 'will have no legal effect on the employment contracts or employment relationships of the employee affected'.
Article 8 concerns the links between the Directive and others on subjects such as Transfer of Undertakings and Collective Redundancies and national law in the same areas.
Article 9 states that the Member States must incorporate the Directive into national law no later than 2 years after its adoption.
Article 10 requires a review of the operation of the Directive by the Commission in consultation with the Member States and social partners.
EU Commission Services estimates for growth in Gross Domestic Product (see definition on page 5) have been revised downward. The increase for 1999 is now reckoned to be 2.4% although this is expected to recover to 2.8% in 2000. The economic turmoil in Russia and Japan as well as falls in European and US stock markets are blamed. U.K. growth is forecast at 1.3% for 1999. Inflation will remain under 2% in the EU as a whole.
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