Teun Jaspers, Workers’ involvement rights in transnational issues in:

Wolfgang Däubler, Reingard Zimmer (ed.)

Arbeitsvölkerrecht, page 369 - 377

Festschrift für Klaus Lörcher

1. Edition 2013, ISBN print: 978-3-8487-0674-7, ISBN online: 978-3-8452-4921-6,

Bibliographic information
Workers’ involvement rights in transnational issues Teun Jaspers Introduction Globalisation is the key-word when we talk about changes of the system of industrial relations in the world.1 It also influences the decisions of multinational enterprises (MNEs) since they have to cope with the intensified competition between enterprises and between national economies. Part of that is the competition between social economic systems of countries or groups of countries, such as the European Union. In an increasing number MNEs are taking decisions that have a cross-border, a transnational impact. Strategic decisions have to be taken and economic efficiency counts. A big and interesting question is what about the effective influence of workers’ representatives on these transnational decisions and how relates that to national workers’ involvement. It is a two tier question: do transnational workers’ representing bodies effectively have an influence on the decision making of the central management of MNEs with a cross-border impact and on the other hand how does that fit in structures of national workers’ involvement on plant level since the strategic MNE decisions affect the plants in the various countries where they are located. It is a two sided question: 1. when do we speak of transnational issues and 2. what is the relation between the international and the national level and is there a sort of hierarchy between the two levels. Both questions are equally important but space is lacking to deal with both fully. Some observations It is important to note that the target of the workers’ organisation seems to have shifted from the improvement of the working conditions for the workers in the broad sense into a defensive strategy in order to try to preserve as far as possible the position of the workers.2 The power of the workers’ organisations, and I am I. II. 1 Cf. Craig, J./ Lynk, S. (eds.), Globalization and the Future of Labour Law, Cambridge, 2010. 2 Cf. Glassner, V./ Keune, M., Negotiating the crisis? Collective bargaining in Europe during the economic downturn, Working Paper No. 10, ILO, Geneva 2010. talking about trade unions as well as other workers’ organisations such as works councils, is crucial for the attainment of results for the workers. But it is well-known that the powers of the workers’ organisations differ very much not only per country but also per kind of organisation. The powers that are assigned to them or they have acquired by themselves differ either. These differences of power is what interests me in this contribution since they can cause serious difficulties in transnational situations. We have to take into account another feature. The industrial relations systems have been developed mostly within the national boundaries. That explains the big variety of the systems although international organisations as the ILO have done serious efforts to tune the objectives and the activities to each other. The recent history of Europe has shown how difficult this issue is. Transnational bargaining by trade unions and/or by European Works Councils has left its infancy but still has to be developed further. On the global level it seems to be impossible since an international organisation with far reaching competences is lacking. Within the European Union a legal framework does not exist yet in spite of the initiatives the European Commission has taken.3 However in practice MNEs and workers’ representatives have concluded arrangements on issues of a transnational nature. They vary from real legal agreements to codes and guidelines.4 This development is not completely new. The economic crisis of the eighties of last century was also characterised by massive restructurings, mass dismissals, closing downs and mergers. The famous Renault case of 1995 is the striking example of actions by workers’ organisations.5 The creation of a parallel circuit of workers’ involvement, next to the traditional trade unions circuit: information and consultation procedures on multinational level, has certainly contributed to an emerging participation of workers’ organisations in this respect. The European Works Council often together with the trade unions, international, European as well as national, have developed a new way of involvement of workers and their representatives in the decision making of international companies. It is this subject that I will address, a subject that surely touches Klaus Lörcher. In particular I am interested in the issues of transnationality: when is an issue 3 Cf. Rodríguez, R. (coord.)/ Ahlberg, K./ Davulis, T./ Fulton, L./ Humblet, P./ Jaspers, T./ Miranda, J.M./ Marhold, F./ Valdés, F./ Zimmer, R., Study on the characteristics and legal effects of agreements between companies and workers' representatives, European Commission, September 2011. 4 Cf. Jagodzinski, R., European Works Councils and transnational company agreements – balancing on the thin line between effective consultation and overstepping competences, in: Schömann, I./ Jagodzinski, R./ Boni, G./ Clauwaert, S./ Glassner, V./ Jaspers, T., Transnational collective bargaining at company level. A new component of European industrial relations? ETUI Bruxelles 2012. (quoted as Schömann 2012), p. 157 ff. 5 Cf. Dorssemont, F., The Renault Saga (revisited), European Company Law, 2006, Vol. 3, No. 1, p. 5 ff. (quoted as Dorssemont 2006). They had to a certain extent success. The central management of Renault in Paris had decided to close down the plant of Vilvoorde Belgium. 370 Teun Jaspers transnational and what does that mean in terms of workers’ involvement on the various levels? From the practice as well from a legal point of view it is obvious that there is a tension between the transnational level and the national level. Interests of the national organisations do not necessarily meet with the interests represented by the workers’ organisations operating cross-border. This issue has become so important because due to the globalisation national economies have become interdependent or in more proper words have become interconnected. Multinational companies operate more and more on a global level taking into account the competitiveness in a global context. Technologically it has become easier to reallocate the operational activities by moving production facilities to other countries or to outsource parts of their activities to another part of the world by reason of efficiency. Inevitably that will affect the employment and labour conditions of the workers in the ‘home’ countries when the plants in these countries will remain competitive. By the current economic crisis the tensions related to these developments have been increased. The ‘battlefield’ has got a second dimension. From the employees’ side it is quite logic that the involvement issue has got more attention. Legal and political environment The sources on which transnational involvement of workers can be based, are multiple. Apart from international institutions as the International Labour Organisation, the Council of Europe and the European Union also multinational companies have adopted their own instruments: arrangements with workers’ representing bodies among which international trade unions. How important the legal status of these arrangements might be, in terms of effectiveness it is not always decisive. Moreover till now a binding legal framework is lacking.6 In practice the mere existence and the actual application of arrangements, even when they miss legally binding effect, make them valuable. ILO instruments Workers’ involvement has been a core issue for the ILO. In particular the role of trade unions has been emphasised in various conventions. The conventions con- III. 1. 6 The legal problems that can arise are addressed by A. van Hoek/F. Hendrickx, International private law aspects and dispute settlement related to transnational company agreements, study undertaken on behalf of the European Commission, contract no. VC/2009/0157, Brussels 2009. Workers’ involvement rights in transnational issues 371 cerning the fundamental right to organise and to collective bargaining refer in a general way to this fundamental right imposing on states the obligation to promote and ensure the full exercise of these rights.7 However the conventions do not touch the issue of the transnationality and hence do not deal with the relationships between levels of bargaining. Only on the level of recommendations the issue is raised. Recommendation no. 163 of 1981 explicitly refers in article 4 to the various levels of negotiations: collective bargaining should be possible at any level whatsoever, including that of the establishment, the undertaking, the branch of activity, the industry, or the regional or national levels. It is left to the parties the negotiations to ensure that there is co-ordination among these levels. Although it seems to be not a direct hint to transnational situations, it foresees potential collision between levels of negotiations. The solutions for potential collisions have to be developed by the parties themselves. It is clearly not a task for the states. Anyhow direct and explicit references to enterprise level are hardly found. At the international level workers’ involvement has been recognised as a valuable tool by promoting consultation and co-operation between employers and workers and their representatives. The 1952 Recommendation (No. 94) of the ILO puts forward consultation and co-operation between them on matters of mutual concern next to and not substituting collective bargaining on terms and conditions of employment. “Rapid dissemination and exchange of information, as complete and objective as possible, relating to the various aspects of the life of the undertaking and to the social conditions of the workers” is needed and to make it effective it has to be ensured “that information is given and that consultation takes place between the parties concerned before decisions on matters of major interest are taken by management”. It should include all matters of interest to the workers relating to the operation and future prospects of the undertaking and to the present and future situation of the workers.8 It is clear that the ILO is taking this form of workers’ involvement seriously.9 In two other international sources this issue has been tackled: the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy 7 ILO Conventions 87, 98 and 154. 8 Article 15 of R 129 gives a number of more specifically indicated issues. 9 The importance of the issue of ‘timeliness’ is widely recognised in EU law (cf information and consultation directives), in the ESC and the case law of the ECSR as well as in some decisions of national judges when hearing transnational cases. Cf. Tribunal de Grande Instance de Paris, 21 november 2006 and the Cour d’Appel de Paris, 21 november 2006, confirmed by the Cour de Cassation, 16 januari 2008 (Gaz de France/GDF); and Tribunal de Grande Instance de Paris, 27 April 2007, no 07/52509 (Alcatel-lucent). 372 Teun Jaspers of 200610 and the OECD Guidelines for Multinational Enterprises.11 It shows the awareness of the ILO and the OECD of the specific problems that could rise when cross-border issues are at stake. The prominent role of MNEs in the process of social and economic globalisation has been emphasised by giving them a pioneer’s role. It is important to stress that both instruments require an effective involvement of workers on the various stages of operation of MNEs, nationally and transnationally. The governments have the duty to facilitate the involvement processes in the MNEs. The multinational as well as the national enterprises belonging to the group have to provide – on the basis of a mutual agreement – for regular consultation on matters of mutual concern.12 European initiatives In Europe, at least continental Europe, workers’ involvement in enterprise’s business has a longer tradition: information and consultation have been adopted in the European Social Charter of the Council of Europe, in 1996 transposed to the core of the ESC (article 21). The provision is open as to the levels. It can be at all levels. Even it is not necessary that the information and consultation has to be given at the same level as the decisions are made.13 It is left to management and labour to determine freely, the various levels of information and consultation. It can be a parallel process: in the various production units and in the decision-making centre of the group of enterprises.14 Finally we have to look to the EU law, shortly because this contribution does not include explicitly an EU law approach. I do so because the concept of transnationality has been subject of discussions in the EU. Transnationality is the core of 2. 10 The Tripartite Declaration has been adopted by the Governing Body of the International Labour Office at its 204th Session (Geneva, November 1977). It has been amended at the 279th Session (November 2000) and at the 295th Session (March 2006). The declaration was explicitly linked with the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up in 1998. 11 Lastly amended in 2010. It is part of the OECD Declaration and Decisions on International Investment and Multinational Enterprises. The OECD guidelines as well as the ILO Declaration are not binding in nature. 12 A reference is made to Recommendation (No. 94) concerning Consultation and Co-operation between Employers and Workers at the Level of Undertaking; and to Recommendation (No. 129) concerning Communications within the Undertaking. 13 Explanatory Report to the Protocol, para. 33. Collected Texts, (6th edition) 2008, p. 144. 14 Article 21 (R)ESC. This provision emphasises also that the consultation has to be timely on proposed decisions which could substantially affect the interests of workers. The European Committee of Social Rights, the supervisory body of the ESC, has been very consistent when assessing these provisions and more in particularly their effective exercise. See Conclusions 2007 Vol. 1 (Belgium), Conclusions XVIII-1 Volume 1, Document ID c-18-1-en1 (Croatia). Workers’ involvement rights in transnational issues 373 the rights of the European Works Council (EWC) being transnational by nature while dealing with transnational issues. In the beginning the concept was quite limited.15 In two cases, both concerning restructuring of MNEs, the core question was whether the EWC is competent in case the central management takes a decision that affects only one plant in one Member State directly.16 The French judges in the Renault case of 199717 decided that the rule of consultation has to be respected in the cases wherein the interests of the workers could be substantially affected by the decision even when it concerns a subsidiary in one member state. The Nanterre court argued that the issue was transnational when it is a major development at a daughters company with an impact on the group. In another case (the British Airways case of 2006), the Labour Court of Brussels decided in a similar way: ‘restructuring in a member state can have a transnational character even when the decision has been taken in another member state subject to that the decision has or can have an impact on the interests of the workers employed in that subsidiary of the MNE’.18 It has to be kept in mind the cases were cases before national courts.19 The cases of Renault and British Airways have underlined how serious this issue is. However the discussions on a revision of the EWC directive that lasted more than ten years, have not resulted in a clear solution. Also the issue of transnationality was too controversial. Only the preamble of the recast directive may shed some light on what is meant: “matters which, regardless of the number of Member States involved, are of importance for the European workforce in terms of the scope of 15 The definition was not found in the text of the directive but in article 1 of the Subsidiary Requirements referred to in Article 7 of the Directive 94/45/EC: only on matters which concern the Community-scale undertaking or Community-scale group of undertakings as a whole or at least two of its establishments situated in different Member States. 16 The Central management of Renault in Paris decided to close down a plant in Belgium (in Vilvoorde). 17 Tribunal de Grande Instance de Nanterre, 4 April 1997, Chroniques de droit social, 1997, 339-340; Cour d’Appel de Versailles, 7 avril 1997, Revue de Jurisprudence sociale 1997, nr. 829; Droit social, 1997, 506-508 (commented by A. Lyon-Caen). Among others see Dorssemont (2006), p. 6. 18 Arbrb. Brussel, KG 6 december 2006, A. e.a. vs. British Airways Group. Soc. Kron., 2008, 03, p. 146-147. The applicable EWC Agreement contained a provision reading that transnational means ‘a cross-border project with potential impact on the workers’ interests’. British Airways was intended to outsource the client services of the Vienna airport as it has done with the services in Paris, Prague, Geneva and Zürich. 19 See in this respect the analysis of Dorssemont, F. The European Works Councils Directive and the domestic Courts, in: Dorssemont, F./ Blanke, T. (eds.), The Recast of the European Works Council Directive, Antwerp-Oxford-Portland 2010, p. 225 ff. (quoted as Dorssemont/ Blanke 2010). 374 Teun Jaspers their potential effects or which involve transfers of activities” will fall under the scope of the directive.20 Since the official texts do not clarify sufficiently what transnational means in practice, one may assume or hope that the existing transnational (company) agreements will do. These agreements however have not been examined till now on this issue. A quick scan learns that the agreements do not contain a definition or even an indication of the term transnationality. A more thorough research has to be done, not only of the texts of the agreements but also to the practice.21 Transnationality: relationship between the levels This problem is even more urgent since we also have to solve the problem of the relationship between the levels when an issue has been raised that affects the group or a part of the group of companies of a MNE and one or more separate subsidiaries of the MNE.22 Here I only can indicate the problems we are facing. The discussion is about the question whether the transnational workers’ representing bodies have priority over national bodies on issues with a cross-border effect or the other way round. There are at least two problems. The first one is the substantive aspect: which decision has to be discussed with which workers’ representatives?23 That question becomes more relevant when it concerns the strategic policy of the MNE and at the same time affects one or more subsidiaries in different countries. The second problem is the time issue, the so called concordantia temporis. There is no case law of the CJEU although it is an EU law problem. Some national case law exists, but the decisions of the courts are not very consistent.24 Similar to the ILO instruments also the recast EWC directive leaves it to the central management and the special negotiating body (the workers’ representatives) to regulate. The directive seems to solve the problem by proposing a kind of parallel process. Article 12 (3) of the recast directive stipulates as a fall back clause, that when nothing is arranged by the parties themselves, it has to be ensured that the information and consultation will be conducted both in the transnational body as IV. 20 Cf. Alaimo, A., The New Directive on European Works Councils: Innovations and Omissions, International Journal of Comparative Labour Law and Industrial Relations 26, no. 2 (2010): 217–230. 21 A research project by Meijers, R. (Utrecht University), recently started, will deal with this issue. 22 Above I also used the term hierarchy. See about that Jaspers, T., Effective transnational collective bargaining Binding transnational company agreements: a challenging perspective, in: Schömann 2012, p. 246 ff. 23 This issue will be more complicated due to the fact that Private International Law issues are involved. 24 See Dorssemont, F. in: Dorssemont/Blanke 2010, p. 264 ff. Workers’ involvement rights in transnational issues 375 in the national employees representation bodies. That does not seem to solve the problem when the opinions of the various workers’ representing bodies differ from each other substantially. Not only the Renault case has shown that this is not unusual. Even a contradiction seems to be introduced by stressing that the national law or practice cannot be set aside.25 In the eyes of the European legislator it seems that the national level even prevails which seems to be contradictory to the aim of the workers’ involvement by the EWC in transnational matters. Conclusions The solutions proposed seem to be immature. More, profound research, legal as well as in practice, has to be done in order to be able to come up with solutions in order to provide workers’ representatives with an effective influence on decisions of MNEs affecting the MNE as such as well as the various subsidiaries and the workers employed. Since and as long as no international, including European, legal source has developed a clear concept of transnationality the problem will remain unsolved. V. 25 By using the term: without prejudice to the national provisions of national law or practice; article 12 (2) Directive 2009/38. 376 Teun Jaspers Verhandelte Mitbestimmung im multinationalen Konzern Chancen und Risiken der SE-Beteiligungsvereinbarung Manfred Bobke-von Camen Einleitung Internationalisierung und Globalisierung verbunden mit Produktionsverlagerungen und Markteintritte in ökonomisch prosperierende Regionen der Welt haben aus deutschen Industrieunternehmen global players gemacht. Deregulierung und länderübergreifende Fusionen haben gleiche Tendenzen im Finanzsektor befördert, und für die ehemaligen Staatsunternehmen in der Daseinsvorsorge führte die Privatisierungswelle zu gleichen Ergebnissen. Mit leichter Verzögerung werden inzwischen Konzernvorstände international besetzt, Aufsichtsräte einigen sich zunehmend auf Englisch als Arbeitssprache. Die Anteilseignerbank im Aufsichtsorgan der Gesellschaft wird bunter durch Vertreter und (verzögert doch zunehmend mehr) Vertreterinnen von Partnerunternehmen und Direktinvestoren aus aller Welt. Lediglich die Arbeitnehmerbank bietet ein Bild wie aus vergangenen Tagen der Deutschland-AG. Deutsche Arbeitnehmervertreter repräsentieren deutsche Arbeitnehmerinnen und Arbeitnehmer, weil ausländische Repräsentanten nach deutschen Mitbestimmungsgesetzen nicht entsandt (Montanmitbestimmung) oder gewählt (Mitbestimmung 76) werden. Es scheint, dass im weltweiten Maßstab auch Änderungen dieser Situation nicht abzusehen sind. Die relevanten internationalen Anstöße könnten aus der dreigliedrigen Grundsatzerklärung über multinationale Unternehmen und Sozialpolitik der Internationalen Arbeitsorganisation oder der OECD-Leitsätze für multinationale Unternehmen folgen, aber die Lektüre ergibt eine komplette Fehlanzeige, was die Vertretung von Arbeitnehmerinteressen in Aufsichtsorganen der multinationalen Unternehmen angeht. Zaghafte Änderungen gibt es allerdings seit nunmehr 10 Jahren in einer Weltregion, nämlich in Europa, genauer gesagt in der Europäischen Union. Still ruht der See? Die Diskussion um die Zukunft der Mitbestimmung in Deutschland und Europa scheint in sehr ruhiges Fahrwasser geraten zu sein, "Never Change a winning sys- I. II.

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Die wachsende Bedeutung des internationalen Arbeitsrechts schlägt sich in vielen Bereichen nieder: Tarifautonomie und Streikrecht werden durch die Rechtsprechung des EGMR mitbestimmt, die ILO-Übereinkommen stellen einen Mindeststandard dar, der auch in einer Wirtschaftskrise nicht unterschritten werden darf. Nicht jeder nationale Gesetzgeber und nicht jedes Gericht hat dies aber bisher erkannt. Von daher ergeben sich viele Kontroversen, in Deutschland u. a. bei der Kündigung kirchlicher Mitarbeiter und bei der überlangen Dauer gerichtlicher Verfahren deutlich werden.

Die insgesamt 35 Autoren sind in der Wissenschaft, aber auch in internationalen Organisationen, in Ministerien und als Richter tätig. Der Band verbindet Theorie und Praxis; als Leser bekommt man nicht nur Stoff zum Nachdenken, sondern nicht selten auch ganz konkrete Handlungsanleitungen. Bislang gibt es kein vergleichbares Buch in der rechtswissenschaftlichen Literatur.