EPI in 2013 (Vitols 2013) Works Councils in Europe

Previous editions of Benchmarking working Europe applied the European Participation Index (EPI), an instrument for measuring the strength of worker participation in different countries (ETUI 2009: 55; ETUI 2011: 98-99; ETUI 2012: 104). The EPI includes three sources of worker influence on companies: 1) board-level employee representation, 2) workplace representation, and 3) collective bargaining strength, as measured through the percentage of the workforce covered by collective bargaining and trade union membership. The components are scaled: countries get an EPI score of between 100 (very strong participation rights) to 0 (no participation rights). The EPI is described in detail in Vitols (2010). In successive annual evaluations, countries that score higher on the EPI have performed better on all eight of the Europe 2020 headline indicators. Income inequality is also lower in countries with higher EPI scores. The original EPI was based on data gathered in 2009, at the start of the financial crisis. An update based on data from 2013 shows that developments within its individual components and between specific countries have been rather differentiated. On the whole, however, worker participation rights have weakened since the crisis. The average EPI decreased from 55 to 52 between 2009 and 2013. The EPI component with the greatest stability in the past half-decade has been board-level employee representation (BLER). This component differentiates between three types of countries: those with widespread worker rights, those with limited participation rights (mainly stateowned or privatised companies) and those with no or very limited rights. Between 2009 and 2013, only two countries have switched groups: Malta moved downward, from the ‘limited’ to ‘no’ category, whereas France moved upwards, from the ‘limited’ to the ‘widespread’ category. Because the French workforce is larger than the Maltese workforce, the ‘average’ EPI weighted by the size of workforce has therefore slightly increased. A second component of the EPI, however, indicates an overall erosion of participation rights at the workplace. The extent of workplace representation in Europe can be estimated through large-scale establishment surveys, such as Eurofound’s European Company Survey (ECS) and EU-OSHA’s European survey of enterprises on new and emerging risks (ESENER). An analysis of the 2009 and 2013 waves of ESENER estimates a drop by 3% in the proportion of workers that enjoy formalised workplace representation through a works council or trade union. An estimated 68% of workers in establishments with ten or more workers had formal representation in 2009, but by 2013 this had eroded to 65%. The third component of the EPI, worker voice through collective bargaining, also indicates an overall weakening since the financial crisis. The percentage of workers represented by trade unions through collective bargaining decreased by an average of 5% from 65 to 60%. Especially large decreases were experienced in collective bargaining coverage in Romania and Greece (down by 63% and 41%, respectively). Trade union density fell less drastically from 23.9 to 22.4%. Due to the small sample size of establishments in different countries, it is not possible to make detailed statements about EPI trends in specific countries. However, it is possible to create a rough ranking of countries based on their EPI score at a specific point in time. Figure 4.9 shows that Finland, Sweden and Denmark have the highest score (around 85 out of 100 possible points). These countries have strong rights in all three components of the EPI. Several eastern European countries as well as Cyprus and the UK have EPI scores at the lower end of the scale. The EPI tended to decrease more in countries which had a lower score in 2009, indicating an increasing cleavage between countries with strong versus weak participation rights.

Source: Chapitre 4_0.pdf (etui.org) ETUI and ETUC (2017) Benchmarking Working Europe.