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EWCs negotiating below the radar?

Recently published exploratory research conducted in the metalworking sector has revealed that over the past five years, a striking new negotiating phenomenon has emerged: In addition to negotiating formal framework agreements, EWCs and central management have increasingly developed informal arrangements in order to regulate a wide range of issues, such as transnational restructuring, remuneration, health and safety policies, and shaping industrial relations arrangements within the company. These developments can pose real challenges to collective bargaining and workers’ participation at the local level.

In the absence of a legal framework, such as that demanded by the European Parliament or European company-level framework agreements have been concluded more and more often, usually by EWCS and/or trade unions. Accordingly, such agreements have received growing attention by trade unions, policy makers and academics alike.

Unlike formal framework agreements, however, the informal arrangements identified in the study are not necessarily laid down in formal agreement texts at all, but instead are documented in the minutes of meetings, or letters of understanding, or in some cases are agreed only verbally. The key contribution of the study, “Transnational company agreements and the role of European Works Councils” lies in having uncovered a significant degree of negotiations that have resulted in such informal arrangements.

The study thus maps both formal and informal arrangements and agreements at the company level in the metal sector. Strikingly, both formal framework agreements and the informal arrangements struck in the metalworking sector cover roughly the same spectrum of subjects. Moreover, these informal arrangements more frequently cover key issues which are normally within the remit of trade unions or local works councils, such as restructuring, remuneration and the protection of health and safety. Most importantly, trade unions may have not been a party to the negotiation of such arrangements with the EWCs, which raises far-reaching questions about both the political impact and the legal status of such arrangements.

While such arrangements may not have a legal status, they nonetheless have important practical and political implications for the activities and room for manoeuvre of employee representatives and trade unions at the local or national level. The procedures, measures, or benefits agreed transnationally between the EWC and central management may well confront local unions or employee representatives with a fait accompli that they are powerless to influence, whether legally or politically.

These findings suggest that firstly, EWCs move beyond their formal information and consultation role more frequently than is realized by either academics or policymakers –as well as many trade unions. Secondly, the regulation of industrial relations and working conditions at European company level is being promoted in more companies than was hitherto believed to be the case. Thirdly, because these developments are taking place within a legal vacuum, an optional regulatory framework at European level is needed which ensures negotiation prerogative for the trade unions according to their own internal procedures. Clearly, this phenomenon deserves close attention by trade unions, since its potential impact on collective bargaining and interest representation at the local level should not be underestimated.

The study “transnational company agreements and the role of European Works Councils” by Torsten Müller, Hans-Wolfgang Platzer and Stefan Rüb is published as ETUI Report 127 and can be downloaded here.

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