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DEMOCRACYAT WORKMATTERSVER!NOW MORE THAN E

CONTENT1IntroductionWhat does Democracy at Work mean?. . . . . . . . . . . . . . . . . . . . . . . . . . .4Two crises in about a decade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4. . . . . . . . . .5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6It’s time to speak about democracy at work!What the ETUC demands2More Democracy at Work –now more than ever. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 hy More DemocracyWat Work? because it is a fundamental right. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . because workers profit from it13. . . . . . .14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 because society as a whole profits from it because companies profit from it. . . . . . . . . . . . . . . . . . . . . . . . . . . . . because it is a safeguard againstabuses in times of crisis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The palette of workers’ participation rights. . . . . . . .413161718Concrete objectivesa. T he revision of the European WorksCouncil Directive22b. A New European Framework forInformation, Consultation andBoard-Level Representation22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Democracy at work is at the coreof trade union action. Democracy atwork is a fundamental value and a guiding principleof the European Union. The right to informationand consultation is anchored in the Charter offundamental rights of the EU as well as in EU law andin international human right instruments. It mirrorsdecades of hard battles to place effective collectiverights of workers at the forefront of an ambitiousEuropean and national political agenda. Democracy atwork matters. For workers, for companies, for society.Democracy at work provides for sustainable andbalanced corporate governance. It allows companiesto perform significantly better and be moreinnovative. It stimulates an enabling environmentfor better working conditions, better paid and moreproductive workers, and for a higher labour forceparticipation. Democracy at work fosters moreequality in the workplace, as well as in society.In time of crisis, in particular in such anunprecedented worldwide pandemic, democracyat work is of paramount importance to maintainworkplaces safe and secure and to ensure theworkers’ health. Democracy at work is also a keycondition for any restructuring process to be carriedout in a sustainable and socially acceptable mannerto safeguard employment and guarantee fair workingconditions in coping with the crisis.These are the reasons why we all should careabout democracy at work. This is the reason whythe trade unions are engaging in an active anddetermined strategy to empower workers and theirrepresentatives to exercise their democratic rightsat the workplace and to strengthen information,consultation and participation rights.Isabelle Schömann, Confederal Secretary23

1. IntroductionFreedom, democracy and social justice are core values ofthe European Union (EU). Democracy is fundamental to oursociety, in its political, economic and social dimension.More Democracy at Work belongs to a robust and fairerSocial Europe. Workers represent an essential constituentof private and public companies and public services. Theyoffer their time, energy and skills on a daily basis. However,their voice and influence are more and more limited andtheir rights are shrinking. As voters can influence theorganisation of their communities, workers should have agreater say regarding the organisation and the choices intheir workplace that impact them most.What does Democracy at Work mean?Workers’ representatives have the right to be informedand consulted, to have meaningful and timely discussionswith management at all relevant levels, and to be activelyinvolved in the decision-making process of their companiesor organisations before any important decisions are made!Two crises in about a decadeIn just over a decade Europe has witnessed two unprecedented recessions. Currently, as a consequence of theCOVID-19 pandemic, dramatic restructuring plans andbankruptcies are mushrooming in all sectors, with newcases reported daily.The financial and economic crisis after 2008 was the resultof unregulated financial markets, financialization of theeconomy, leading to excessive executive salaries, largefinancial gains for shareholders, short-term strategies,reduction of costs at expense of workers and workingconditions, quality, sustainability and innovation. In thefollowing years, while profits grew, wages stagnated.Lessons learntfrom bothcrises clearlyshow theimportanceof and theurgent needfor initiativesto strengthendemocracyat work andcollectivebargaining.by the pandemic. The crisishas above all uncovered thestructural flaws and weaknesses in the economy andsociety. This includes lackof workers’ involvement,attacks to workers’ andtrade union rights, as wellas to wage setting and collective bargaining systems,unsustainablecorporategovernance models basedon short-term decisions andshareholders’ interest.Poor workers’ involvementin the workplace and theviolation of existing legal obligations in this area are someof the most significant flaws in the management of thecurrent crisis. Restructuring and delocalisation processesare taking place on a daily basis. This is also furtherevidence of the need to strengthen the legal framework atEU level with regard to workers’ information, consultationand participation rights.It’s time to speak about democracy at work!It is not acceptable that workers and trade union representatives are barely if not at all involved in strategicdecision-making. Lessons learnt from both crises clearlyshow the importance of and the urgent need for initiatives to strengthen democracy at work and collectivebargaining.After the COVID-19 health crisis hit the world and thousands lost their lives, European workers are now facingthe massive social and economic consequences broughtIn normal times but in particular during crises, workerinvolvement and social dialogue are a necessity and haveproven to be key for a sustainable and long-term recovery.During the 2008 financial crisis, businesses with strongerworker involvement cut far less jobs and performed betteralso in terms of economic performances and investment than45

What does Democracy at work mean?business without worker involvement . During the coronapandemic, companies with strong worker involvement andcollective bargaining performed better and their workersfaced fewer negative consequences from the crisis. 21Stronger involvement of workers within companies andpublic services directly improve working conditions,economic performances, labour rights and sustainability.It also contributes to a more balanced, long-term and stakeholder oriented and effective corporate governance and tohigher quality for public services .3 It is time to put democracyat work on the political agenda to achieve its full potentialand contribute to a more social, inclusive and fair Europe.What the ETUC demands For more info skip to page 20 (Chapter 4)The ETUC’s demands concentrate on mainly two dimensions. On the one hand and in the short-term, the respectand enforcement of existing rights has to be ensured duringthe Covid-19 crisis and its recovery. On the other hand, it isimportant to fight for a better future and to learn from thecurrent flaws of European legislation. This is why the ETUCalso calls for a better legislative framework on democracyat work.It means democratic involvement and participationof workers and oversight in their workplace.It is a founding European principle, anchoredin fundamental rights to join a trade union,to represent and defend workers’ interests– the right to information, consultation andparticipation. Growing globalisation of exchange,exacerbated flexibilisation of the labour marketsand also the latest recessions have increasinglyjeopardised these rights.The ETUC is fighting for workers’ representativesto be informed and consulted, to have meaningfuland timely discussions with management at allrelevant levels and to be actively involved in thedecision-making process of their companies ororganisations before any important decisions aremade, respecting EU rules and national provisions.The respect and enforcement of existing rightsAt the European level, the ETUC is working to ensure therespect of existing workers’ information, consultationand board-level representation rights, in particular in thecontext of restructuring processes, as well as to strengthenthe legal framework to improve democracy at work.“ Mit Mitbestimmung Durch Die Finanzkrise,” Boeckler Impuls 07/2020,July 2020, bestimmung-durch-die-finanzkrise-23261.htm2 Eric Seils and Helge Emmler, “Die Folgen von Corona - Eine AuswertungRegionaler Daten,” Policy Brief WSI Nr. 43, no. 6/2020 (2020),https://www.wsi.de/de/faust-detail.htm?sync id 89493 Robert Scholz and Sigurt Vitols, “Working Paper - Co-Determination:A Driving Force for Corporate Social Responsibility in GermanCompanies?,” in WZB Discussion Paper, 4/1/1043362150.pdf167

Since the outbreak of the Covid-19 crisis, the ETUC hasbeen monitoring emergency measures taken by theMember States in relation to workers’ information,consultation and participation rights in particular in restructuring processes. The European Trade Union Federationshave issued concrete joint recommendations to supportEWC/SE-WCs in managing workers representation duringthe COVID-19 crisis.In addition, ETUC and the European Trade UnionFederations have called on the European and national institutions to deliver concrete and rapid actions to guaranteethe effective enforcement of workers’ rights.The ETUC will carry out further actions to support ETUCaffiliates and to put pressure on the institutions to ensureworkers’ Information, Consultation and Participation rightsare fully complied with and enforced in the Covid-19 crisis.The call for a better legislative frameworkon democracy at workThe crisis has also shown very clearly that the currentlegal framework does not safeguard effectively workers’information, consultation and participation rights, makingit easy for management to disregard them. The recoveryfrom the Covid-19 crisis should pave the way for a fairerand more sustainable society, based on the social progressand on the improvement of living and working conditions.In this context, improvements to the legal framework onworkers’ Information, Consultation and Participation areof paramount importance and should be introduced in themedium term.4In this regard the ETUC is looking to achieveamongst others the following objectives:a) a review of the European Works Councils Directive 4, toreinforce these key actors, to ensure effective and timelyinformation and consultation of workers’ representatives in multinational companies and to ensure access tojustice, adequate remedies and dissuasive sanctions incase workers’ rights are not respected.b) a new framework on workers’ information, consultationand participation rights for European company forms andfor companies making use of EU company law instrumentsenabling company mobility. Such a framework shouldinclude minimum standards for workers’ involvement. Itwould constitute an important step to strengthen workerinvolvement, since European company forms and companies which make use of company mobility instruments needto be regulated in a more effective way to ensure adequateworkers’ information, consultation and participation.E TUC, “For a Modern European Works Council (EWC) Directive in theDigital Era,” March 2017, files/en-position-for a modern ewc directive in digital era2.pdfThe ETUC also advocates for effective worker involvementin the framework of a new directive on due diligence insupply chains and for fairer corporate governance rulesto guarantee a sustainable economic model based on theinvolvement of all stakeholders, on sustainability and ondecision-making processes based on long-term considerations and not on short term shareholders’ interests.89

2. More Democracyat Work – now morethan everThe COVID-19 crisis has accelerated corporate restructuringin almost all sectors of the economy with far-reachingimpacts on the labour market. This is why it is more important than ever to shape the economic and social futurewith workers and trade union involvement, through socialdialogue, collective bargaining and workers’ information,consultation and participation. However, lately the situation in the EU has evolved into the opposite direction.The “shareholder primacy” theory has been promotedfor too long to the expense of the real economyand the workers. “While shareholders contributecapital, employees contribute their time, skills andlife – they are the core constituency of companies”. 55 ETUC, “European Appeal. Companies and Employees – Blazing aNew European Trail,” 2019, http://european-appeal.org/app en.pdfHow come that businesses, in crisistime, can rely on public supportschemes while circumventing workers’rights to health, safety and decentworking conditions as well as tradeunion rights?How come that restructuring processeswithout proper involvement of workerscan still proceed and take place?10Their voice should be strengthened and should count morethan the ones of shareholders inthe decisions.The“shareholderprimacy”theoryhas beenpromotedfor toolong to theexpenseof the realeconomyand theworkers.In view of the much demandedand necessary sustainable andsocially fair recovery after thepandemic, it is now time –more than ever – to strengthendemocracy at work at Europeanand national level. Workersshould have the possibility ofactively participating in thedefinition of management’sstrategies and in shaping theirworking conditions and work environment. This shouldinclude statutory rights enshrined in European or nationallegislation, strong collective bargaining and structured andrecognised social dialogue.How can letterbox companiesbe tolerated and supported,when the aim is to intentionallyevade taxes, labour laws andregulations?How can it be that, despite scandals suchas the Rana Plaza factory collapse inBangladesh, many companies continue toturn a blind eye to suppliers that ignorethe most basic social, environmental andhuman rights?11

Why is democracy at work important?It makes the difference for all: for workers, forbusiness, for society in general. Evidence showsthat democracy at work increases democraticinvolvement of citizens at large, ensures healthand safety protection of workers, but also triggersmore equality, more sustainability and higherproductivity at work. Businesses with workersrepresentation are also resilient during crises andperform better and also more competitive.Workers’ involvement is key in crisis situations.Studies indicate that the existence of workscouncils and collective agreements protectemployees from the social and economicconsequences of the corona pandemic.For instance, employees in companies with acollective agreement or works councils were moreconfident of overcoming the crisis safely and hadto accept financial losses less frequently.Companies and countries withmore #democracyatworkperform better economically3. W hy MoreDemocracy at Work?DEMOCRACY AT WORKIS IMPORTANT Workers’ rights toinformation andconsultation are basicdemocratic rights,enshrined in the EUTreaty and in theCharter of FundamentalRights of the EU(Art. 27 and 28).7At ILO level, a seriesof instrumentsensures workers’rights to information,consultation andparticipation.6 BECAUSE IT IS AFUNDAMENTAL RIGHTWorkers’ rightsto information,consultation andparticipationare groundedin a several EUsecondary laws.8They are anchored inthe European SocialCharter of the Councilof Europe (Art. 21)and in the EuropeanConvention on HumanRights (Art. 11 ECHR).C o-operation at the Level of the Undertaking Recommendation of 1952,the Communications within the Undertaking Recommendation of 1967,Workers’ Representatives Convention and Recommendation of 1971,the Termination of Employment Convention and Recommendation of1982, as well as the ILO Tripartite Declaration of Principles concerningMultinational Enterprises and Social Policy. Further ILO instrumentsdeal with workers’ information and consultation rights in health andsafety matters. These ILO instruments define important rights forworkers’ representatives, as well as certain obligations for employerswith regard to information and consultation of workers.7 Workers or their representatives must, at the appropriate levels, beguaranteed information and consultation in good time in the cases andunder the conditions provided for by Union law and national laws andpractices”. Article 27, Charter of Fundamental Rights of the European Union.8 Stan De Spiegelaere et al., “Democracy at Work,” in Benchmarking WorkingEurope 2019 (ETUI, 2019), 67–89.61213

Civic democracy:employees in jobswith greater autonomyand involvement arepolitically more activeand have more trust indemocracy.Stronger democracyat work is linked tohigher-quality jobs andhigher degree of lifesatisfaction. BECAUSEWORKERS PROFITFROM IT 10 BECAUSE SOCIETYAS A WHOLE PROFITSFROM IT 9Employment advantage:On average, countrieswith more democracyat work also have morepeople in work.More equal societies:Organised employee voicereduces management andshareholder greed andensures higher and moreequal wages.Safer workplaces:Democracy at workgoes hand in hand withstronger compliancewith health and safetyprotection measures.109 Ibid.1114Where employeeshave better collectiveinterest representation,wages tend to behigher and workingconditions better.Companies with aworks council aregenerally moreengaged in thetraining of theiremployees.11 Ibid. I.M.U., “Why Codetermination? A Collection of Good Argumentsfor Strong Workers’ Voice” (Hans-Boeckler Stiftung, October 2019),https://www.boeckler.de/pdf/mbf praes arguments co determination.pdf15

The triple win.Data suggests thatdemocracy at workgoes hand in hand withhigher productivity,higher labour forceparticipation rate andmore innovation.Democracy atwork strengthensthe economiccompetitiveness ofEuropean companies.13 BECAUSE IT ISA SAFEGUARD AGAINSTABUSES IN TIMESOF CRISIS 14 BECAUSECOMPANIES PROFITFROM IT 12Companies are generally moresustainable when workers are effectivelyinvolved in decision-making and/or arerepresented in the company’s board.Amongst others, they score better inenvironment, human rights, corporategovernance, business behaviourand human resources.During the 2008 financial crisis,businesses with workersparticipation were moreresilient and lost far fewerjobs than business withoutworkers participation. They alsoperformed better in terms ofprofitability and investment.16141213“ De Spiegelaere et al., “Democracy at Work.” “Why Workers’ Participation in Europe?” worker-participation.eu,accessed August 25, 2020, orker-Participation16During the COVID19 crisis, workersin companies withworkers participationexpressed significantlyless concerns andsuffered fewerfinancial losses.15It helps to shapesustainable and sociallyacceptable restructuringprocesses and tomaintain employmentand fair workingconditions. De Spiegelaere et al., “Democracy at Work.” “Die Folgen von Corona - Wirtschafts- Und SozialwissenschaftlichesInstitut (WSI) in Der Hans-Böckler-Stiftung,” accessed August 25,2020, https://www.wsi.de/de/faust-detail.htm?sync id 894916 “Mit Mitbestimmung Durch Die Finanzkrise.”1517

Source: ETUI1819

4. Concrete objectivesA significant number of restructuring processes arecurrently ongoing in the EU in different sectors followingthe Covid-19 crisis. It is absolutely necessary: to ensure that those processes are in compliance withworkers’ rights and are managed in a socially responsible manner. to guarantee that workers’ right to information andconsultation is fully enforced before any managementdecision that has consequences on employment or working conditions is taken. that unions and workers’ representatives have accessto expertise to discuss possible alternatives to plans ofmanagement in order to ensure that the restructuring processes are carried out in a socially responsible manner,to avoid adverse consequences, including redundancies. to ensure the full involvement of workers’ board-level representatives in discussions and decisions onrestructurings.However, too often companies are not complying withworkers’ rights to information, consultation and participation,as defined in human rights instruments and in Europeanlegislation.Following the start of the Covid-19 crisis, the ETUC hashighlighted the importance of full respect of workers’ information, consultation and participation rights in particularin restructuring processes. In particular, the ETUC haspublished the Briefing note Covid-19 and Workers’Information, Consultation and Participation. Together withthe ETUC, the European Trade Union Federations haveissued concrete joint recommendations to support EWC/SE-WCs in playing their part in the management of theCOVID-19 crisis as well as joint recommendations on EWC/SE negotiations during the COVID-19 crisis.The crisis hasalso shownvery clearlythat thecurrent legalframeworkdoes noteffectivelysafeguardworkers’ ICPrights, whichare too oftendisregarded bymanagement.and enforcement of workers’information,consultationand board-level representation rights, in particular inrestructuring processes.Additional urgent actions willbe put in place to supportETUC affiliates and to putpressure on the institutionsto ensure workers’ rightsare fully complied with andenforced in the Covid-19crisis. This is a matter ofgreat urgency and a priorityfor the European Trade Unionmovement in the short term.The crisis has also shown very clearly that the current legalframework does not effectively safeguard workers’ information, consultation and participation rights, which are toooften disregarded by management. The recovery from theCovid-19 crisis should pave the way for a fairer and moresustainable society, based on the social progress and onthe improvement of living and working conditions. In thiscontext, improvements to the legal framework on workers’Information, Consultation and Participation are of paramountimportance and should be introduced in the medium term.The existing European legal framework on workers’ information, consultation and board-level representation (forexample the EWC Directive, the SE Directive and theDirective on cross-border conversions, merger and divisions) leaves gaps and shortcomings which need to bedealt with and solved in order to ensure the respect ofworkers’ rights, to fight letterbox companies, to ensureeffective and dissuasive sanctions in terms of violations.Moreover, the ETUC and the European Trade UnionFederations have taken actions towards the European institutions demanding concrete initiatives to ensure the respectConsequently, the European Trade Union Movement seeksto improve European legislation amongst others through:2021

a. The revision of the European Works CouncilDirective (Directive 2009/38/EC)The ETUC is pushing for the revision of the EWC Directiveand has put forward 10 demands for the revision of theDirective.Inter alia, the ETUC calls for: effective and dissuasive sanctions and ensuring accessto justice; more efficient coordination between local, national andEuropean levels (including by ensuring the necessaryresources and rights for workers’ representatives); improvement and clarification of the rules for negotiations with the Special Negotiating Bodies; prevention of abuses of confidentiality and reinforcement of the subsidiary requirements; clarification and reinforcement of the role of “representatives of competent, recognised community-leveltrade union organisations” and inclusion of the conceptof “transnational character of a matter” in the mainbody of the directive; introduction of a real level playing field by applying allprovisions laid out in the directive to all agreements[including the so-called voluntary “Article 13” agreements], either automatically or by renegotiation.b. A New European Framework forInformation, Consultation and BoardLevel Representation Rights for Europeancompany forms and companies making useof company mobility instrumentsThis is particularly important since the Company LawPackage has failed to adequately define a high Europeanstandard for information, consultation and workers’board-level representation in cases where companiesrestructure across borders. Several loopholes and inconsistencies remain or have been newly created in the newlegal package.The ETUC is also pushing for the determination of a newframework for information, consultation and board-levelrepresentation rights for European company forms and forcompanies making use of EU company law instrumentsenabling company mobility, establishing minimum standards for worker involvement.The aim of the horizontal framework would be to permanently secure a high standard of rights in existing andfuture EU legislation, particularly in cross-border situationswhere the national laws cannot be applied in a coordinatedand equitable way. Key principles should thus be defined asbinding standards, and ambitious subsidiary requirementsshould be designed. These requirements would apply asfallback provisions in the absence of an agreement or if theparties wish so.2223

Overall, the horizontal framework would help to avoidregime shopping and use of letterbox companies acrossEurope and protect domestic legislations. Moreover, itwould lead to a more efficient coordination between local,national and European levels of workers’ information,consultation and board-level representation.Such a framework should inter alia: ensure the creation and functioning of a EuropeanWorks Council (SE Works Council) for European company forms and companies making use of EU companylaw instruments enabling company mobility; ensure that an adequate and in-depth information andconsultation process takes place before the decision onrestructuring has been taken. Amongst others, workers’representatives need to be given the necessary information on the changes in the company structure andorganisation, on the reasons for the restructuring andon any impacts on employment, working conditions; provide the necessary resources and time for the fullinvolvement and link between the different levels(national and transnational) and, where relevant,instruments (e.g. transfer of undertakings, collectiveredundancies, insolvency.) for workers’ informationand consultation; 16ensure that companies open negotiations with theworkforce in order to reach an agreement on workers’board-level representation in the resulting companiesafter the restructuring. The new framework shouldtherefore introduce a right for workers to put in placea system for workers’ representation in the board. InI n the 2016 ETUC position, the escalator approach foresees a lowerproportion of workers in boards for small enterprises and increases tohigher proportions depending on the size of the company (both for themonistic and the dualistic systems): small companies (50-250 employees within the company and itsdirect or indirect subsidiaries): 2 or 3 workers’ representatives; medium companies (250-1,000 employees within the companyand its direct or indirect subsidiaries): one third participation isproposed; big companies (more than 1000 employees within the companyand its direct or indirect subsidiaries): parity (half of the seats).24case an agreement is not reached within the time-limitdefined in the horizontal framework for the negotiationswith the company management, subsidiary provisionswould apply, including the escalator approach 16. introduce effective and dissuasive sanctions fornon-compliance, including the fact that decisions andrestructuring process taken without full respect ofworkers’ information and consultation rights are nulland void. The framework should also include instruments and mechanisms to ensure access to justice forthe transnational body for information and consultationin case of violation of workers’ rights.The ETUC also advocates for effective worker involvementin the framework of a new directive on due diligence insupply chains and for fairer corporate governance rulesto guarantee a sustainable economic model based on theinvolvement of all stakeholders, on sustainability and ondecision-making processes based on long-term considerations and not on short term shareholders’ interests.The ETUC is also pushing – together with EPSU – toensure the respect of information and consultation rightsof public sector workers. In line with the EmergencyMotion in support of the Social Partners Agreement onInformation and Consultation Rights for Workers in CentralGovernment, a directive reflecting the Social Partners’agreement that ensures that trade union representativesin public administration have information and consultationrights should be proposed by the

Freedom, democracy and social justice are core values of the European Union (EU). Democracy is fundamental to our society, in its political, economic and social dimension. More Democracy at Work belongs to a robust and fairer Social Europe. Workers represent an essential constituent of private and public companies and public services. They

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