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Trade union positions

The positions of employees and trade unions in Europe with regard to employee financial participation are basically just as disparate as the participation schemes practised in the individual EU Member States. There is however one common strait to be found in trade union positions, i.e. that (collectively agreed) wage increases and reliable and transparent pay have priority over participation schemes.

In general, there is a correlation between the intensity of trade union engagement in policy discussions and the extent of the development of financial participation policy and frameworks in each country. Positions towards financial participation may differ between trade union confederations in countries with more than one confederation; differences may also occur between unions in the same confederation.

In 2002, the European Trade Union Federation (ETUC) adopted a resolution on employee financial participation.1 It contained a number of basic conditions and requirements to be fulfilled when dealing with participation schemes. These included:

 

  • Employee financial participation needs to be embedded in a comprehensive system of material and immaterial employee participation covering all levels of a company for it to have any positive effect.
  • Profit-sharing, but also all further forms of employee financial participation, should represent an additional source of income, in no way substituting guaranteed income components. Employee financial participation must also not be a substitute for state pension schemes or pension schemes anchored in collective agreements. Any negative effects of the taxation of financial participation on state social security systems are to be compensated.
  • All employee financial participation modalities are to be set through negotiations between the social partners, with the agreed provisions being set forth in wage or company agreements. Participation in any such scheme must always be voluntary.
  • Financial participation offers must always be open to the whole workforce of a company.
  • Financial participation schemes should be transparent and closely linked to long-term company policy and verifiable corporate social responsibility. Financial participation schemes should be discussed and negotiated at an early stage with employee representatives and trade unions.

 

The debate over the opportunities and risks of employee financial participation is not to be seen separately from the overriding debate on corporate governance and the European social model. In its March 2006 resolution on corporate governance, the ETUC put forward proposals for a European corporate governance model promoting the focussing of corporate policy on long-term added value, industrial relations based on mutual trust, employee co-determination in corporate decision-making, and social responsibility. The ETUC underlined the fact that employees are not just the “owners of employment contracts”, but also “investors” and “citizens”. Staff should not just be seen as a group carrying the risks of corporate decisions. Staff are affected by corporate decisions in different ways:

 

  • As employees, they constitute the “human resources” of any company, wanting to earn their living under decent working and employment conditions governed both by statutory provisions and by collective and company agreements.
  • As “investors”, they may either directly or indirectly hold shares in the company they work for. Any income derived from such shares should be used to upgrade their pension entitlements.
  • As “citizens”, they value social justice and ethical principles to be complied with not just locally but globally.

 

Questions arising from employees’ financial participation are therefore linked to other topics such as corporate governance, informational transparency and co-determination.

At a meeting at the beginning of March 2013 the Executive Committee of the ETUC declared that especially in the current crisis in Europe financial participation can be used to stabilise enterprises and that over the long term it can help to strengthen them.2 Furthermore, the Executive Committee affirmed and renewed its general principles on workers’ financial participation of 2002.3

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.

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