EWCA body for workers’ and employer’s co-operation in transnational companies in European Union

What does EWC stand for?

• EWC stands for: European Works Council.

What is EWC?

• EWC is an official platform where the employer of a transnational European company and it’s workers’ representatives can sit down to work together and discuss important issues about their work and the company.

• Companies may choose to name this platform other than EWC.

Is EWC mandatory?

• According to the 2009/38/EC directives, EWC’s formation is mandatory when a company has at least 100 workers in an EU/ETA-country and 150 workers in at least two EU/ETA-countries.

• Corresponding law in Finland is the Act on Co-operation within Undertakings (334/2007). The law is based on the older directive from the year 1994. The new directive will be implemented into the Finnish Law by early June 2011.

Why EWC?

• EWC is a possibility for the staff representatives to learn about their company and discuss its future.

• In EWCs representatives are able to compare how the laws and agreements solve work related issues in other countries.

How does EWC work?

• Some EWC’s exists only on paper. In other words, the company has not understood how to benefit from the EWC.

• Some EWC’s work very well. In these EWC’s, workers are able to influence and participate in their company’s decision making and everyone benefits from the dialogue.

Here’s how it works:

Imagine there is a Company Ltd

2 000 employees

800 employees

1 000 employees

100 employees

50 employees

150 employees

Company Ltd has manufacturing plants in three different countries and marketing organizations in yet another three.

The company has signed an EWC agreement. That is to say the agreement on ”Group Company Co-operation”. In this agreement the total number of EWC representatives the workers have and the number of representatives allocated to each country is stated .

EWC

2 000 employees

800 employees

1 000 employees

100 employees

50 employees

150 employees

EWC agreement

• Each company has its own individual EWC agreement.

• The agreement stipulates how to participate in the council, who represents whom, how the communication is to be carried out and many other details.

• The terms of the agreement vary according to the

laws of the nationality of the corporation. Nationality is determined by the location of the headquarter.

The company is usually represented by either the managing director or the personnel director or both. Managing Director knows what business plans there are. Personnel Director knows what the policy in the company’s work agreements is.

Managing Director

Personnel Director

EWC

Company Employees

In Finland employees are represented by an elected employees’ representative. In some countries a union officer may represent the employees. In countries where organization rates are low workers must learn how to elect a representative. The first election is always the most difficult one. It helps if good practices are shared among representatives form different countries.

Managing Director

Personnel Director

EWC

Company Employees

In EWC meetings, representatives can discuss for e.g. what business plans the company has.

Managing Director

Personnel Director

EWC

Company Employees

EWC

Our production line B is no longer profitable. We intend to sell it away. Instead we want to buy company N which will give us a new production line H.

Company Employees

Managing Director

Personnel Director

EWC

Company Employees

Managing Director

Personnel Director

This would mean a personnel reduction of 600 employees in our Finnish plant and closing down our Estonian sales organization. The new company which we intend to buy, will probably be situated in Belgium and add 400 new employees.

EWC

Our most profitable products are customized products manufactured in Production lines A and C. The tools and know-how needed for these commissions are provided by the employees from Production line B. If we were to sell off Production line B, we would also lose our strategic know-how.

Managing Director

Personnel Director

Company Employees

EWC

Now, this is something to think about. According to our customer survey, quality is the key to our success. Fortunately we presented this plan first to you and not the Board. We need to think about this more.

Managing Director

Company Employees

Personnel Director

Managing Director

Company Employees

EWC

How does EWC benefit the company?

Employees have intimate knowledge on what actually happens at work. By listening to them, management gets information it wouldn’t get from anywhere else.

Experience has proven, that when employees can influence their work, they will be more motivated and committed.Through the EWC, the employer can also benefit from the representatives’ knowledge of the laws, agreements and customs in different countries.

Personnel Director

Company Employees

EWC

•Employees get to be heard and get an opportunity for equal treatment even when decisions concerning their work are made in an other country.

•Dialogue between representatives from different countries help employees understand their company and communication cultures in different countries.

How does EWC benefit the workers?

Managing Director

Personnel Director

Company Employees

EWC

•Representatives get information and an opportunity to influence the decision-making

•Representatives learn to understand how employers think.

•They learn languages and gain presentation skills.

•Experience from working with representatives of different countries broadens one’s mind. It is a good way to learn more about union practices and collective bargaining.

How does EWC benefit the employees’ representative?

Managing Director

Personnel Director

Company Workers

EWC

AssociationTrade Union

•In transnational companies employees are hired and fired and collective bargaining tried out. Best practices tend to set a model. This model may in time become basis of an EU directive and after that get to be implemented in work laws of all member states. EWC representatives are the forerunners, who have the opportunity to influence these practices when they are just beginning to form.

How does EWC benefit a union?

Managing Director

Personnel Director

How does EWC work in practice?

Company Employees

EWC- meeting

Company agrees on an ”international co-operation within Group companies” –agreement, which stipulates for e.g. how often the EWC-representatives meet. The agreement stipulates also other important meeting practices, such as who can propose items on the agenda, time schedule of such proposals, whether it is mandatory for each country to have a representative, is there a deputy system…

The 2009/38/EC Directives provides guidance on the minimum number of delegates in a meeting and directs that the EWC should meet at least once a year. There are few limitations on the quantity of delegates and the number of meetings as long as the minimum requirements are met.

Managing Director

Personnel Director

Employees

EWC- meeting

The employee representatives must always be given the opportunity to have their own meeting before and after EWC-meetings.

Company

Managing Director

Personnel Director

Employees

For effective interaction, one or two meetings a year are not enough. In business life, plans and decisions are being made all the time. What the EU directive aims at, is that employees should have an opportunity to influence. This aim will not be fulfilled if corporate decisions are only made known to employees afterwards.

Therefore annual EWC-meetings are supplemented by working committees. They consist of fewer people and can be summoned easily. It is also possible to form other work groups to take a stand on upcoming matters.

Company

Managing Director

Personnel Director

Annual EWC- meeting

Work committee

Personnel training work

group

Strategy work group

R&D work group

Employees receive information about decisions and their rationales through their own representatives. Through representatives a genuine dialogue and possibility to influence is made available to all employees.

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Strategy work group

Work committee

Personnel training work

group

R&D work group

Employees receive information about decisions and their rationales through their own representatives. Through representatives a genuine dialogue and possibility to influence is made available to all employees.

How to start EWC in a company?

Special Negotiation

BoardSNB

When a company becomes a multinational company e.g. , through acquisition, either management or the employee representatives of at least two countries will propose to call a meeting of a Special Negotiation Body (SNB). The body will make the preparations for the starting of the EWC.

It is not wise to wait too long for the employer to take initiative. In Europe there are about 2000 companies, where there should, according to the law, be an EWC but only about 850 where one has been established.

Employee representative

I propose to call for an SNB meeting.

Employee representative

I support the proposal.

Managing Director

Personnel Director

The SNB shall be represented by at least one representative from each EU member state, where the company operates. The employees get one additional representative for each 25% of employees of the total number of employees in Europe. (This may change with the new law.) An SNB-representative represents all groups of employees in his or her country.

Administration Production

Production workers

Administration Sales

ManagementProduction

ManagementSales

Production workers

WorkersSales

Special Negotiation

BoardSNB

Managing Director

Personnel Director

SNB negotiates the international co-operation of the Group companies. The agreement will form a base for the future co-operation function. When an agreement is achieved, the SNB will be dissolved and its work will be continued by the EWC. The same persons, however, may continue to work in the EWC. Trade unions provide support and expertise in the negotiations.

Employee representativeAdministration Production

Employee representative WorkersProduction

Employee representativeAdministration Sales

Employee representative ManagementProduction

Employee representativeManagementSales

Employee representativeWorkersProduction

Employee representativeWorkersSales

Special Negotiation

BoardSNB

Managing Director

Personnel Director

Agreement

What does EWC-agreement cover?

Agreement on Group Company co-operation

Total number of EWC-representatives, manner

of election, duration of their term

Number of meetings per year, where meetings take place

How long is the agreement valid and

when must it be renewed

Scope of financialresources,

how many days, etc.

Language, use of interpreters

Agenda of meetings

Methods of information and communication

Group companies’ structure, financial sitution, business and employmentProspects, transfer of production,

fusions…….

Always consult your national union when negotiating the terms of the agreement. You will benefit from their experience.