In itself, a measure of trade union membership underestimates the influence
that European employees may have on their management. Indeed, the practice of
employee involvement is widespread and the latest EU Directive requires organisa-
tions of successively smaller sizes to institute works councils over the coming years.
Works councils across Europe have differing degrees of power: most would shock
American managers influenced by theories of ‘management’s right to manage’.
Employee representatives may, for instance, resort to the courts to prevent, or to
delay, managerial decisions in certain areas (recruitment, termination, changing
working practices), which have bypassed the due consultative process. In the USA,
such decisions would be subject to managerial prerogative or, in limited circum-
stances, individual action (as opposed to collective action as in the EU).
In some countries, such as Denmark, the Netherlands and Germany, legis-
lation goes one step further and requires organisations to have two-tier man-
agement boards. This gives employees the right to be represented at the most
senior level (through a ‘supervisory board’). In such systems, employee repre-
sentatives can, depending on the country, size and sector, make up to 50% of
the supervisory board. These arrangements give considerable (legally backed)
power to the employee representatives.
The tradition of trade unionism and employee involvement therefore
remains widespread and important in Europe. This tradition is further
strengthened by EU policy. The EU is seeking harmonisation of employee rep-
resentation rights in all member states. Thus, EU legislation encourages the
creation of platforms for European-level dialogue through European Work
Councils (EWCs) for organisations with subsidiaries located in different mem-
ber states (see Chapter 18). EWCs complement local employee representation
systems, giving scope for European-level negotiation and consultation
(Communal, 1999; European Commission, 2000). The EU refers to the unions
as ‘social partners’ and the reality is that in many European organisations trade
unions are seen as a positive force for understanding between management
and employees. As such, trade unions are likely to be encouraged and sup-
ported by managers, who may even be trade union members themselves.
Some of the proponents of universalist HRM in the USA argue that con-
sultative and involvement systems can be used to supplant trade unions. In the
differing European context these systems tend to supplement the union posi-
tion. In relatively highly unionised countries, it is unsurprising that many of
the representatives of the workforce are, in practice, trade union officials. In
Germany, for example, the majority of works council and supervisory board
employee representatives are drawn from the union representatives.
An alternative European modelThe contrast between the situation in America and that in Europe has high-
lighted a number of elements, namely: the American propensity for formalised
178 International Human Resource Management