Explicit European-level initiatives in the sphere of industrial relations remain
unusual: a small number of MNCs have concluded joint texts with either their
EWC and/or with international trade union organizations on employment
matters (Carley, 2001).
The combination of a European dimension to corporate activity, the exis-
tence of points of convergence within sectors and companies which transcend
national borders, together with the EU’s social policy measures and new regu-
latory processes and instruments described in the preceding chapter, constitute
the elements around which a distinctively European dimension to industrial
relations is emerging.
5 THE CASE OF EUROPEAN WORKS COUNCILS
At company level, the most significant institutional innovation in the develop-
ment of a European dimension to industrial relations has been the estab-
lishment of EWCs. Their emergence is an example of the interaction of
pressures from both ‘above’ and ‘below’. From above, proposals for employee
rights to transnational information and consultation, which resulted in the
directive on European Works Councils, were central to the European
Commission’s initiative for a social dimension (Hall, 1994). From below – in
the face of increasing international integration of production and growing
trade union organizational capacity at European level, as well as distinctive
political circumstances – a small number of French- and German-owned MNCs
had already established voluntary European-level information and consulta-
tion arrangements prior to the publication of the draft directive in 1991.
Indeed, as Hall (1992) argues, the terms of the directive were both prefigured
and influenced by these prototype EWCs.
Originally adopted by 17 European Economic Area (EEA) countries in
September 1994, and subsequently extended to the UK in December 1997, the
directive requires ‘European-scale’ companies to establish EWCs for the pur-
poses of informing and consulting with employees and their representatives on
matters of a transnational nature affecting employees’ interests (see Box 18.3).
The framing of the directive, which provides scope for negotiated arrange-
ments to take precedence over the statutory requirements which it specifies,
has prompted European-level negotiations between management and
employee representatives (frequently trade unions) on an unprecedented scale.
To date, some 700 MNCs (or international divisions of MNCs) have negotiated
agreements to establish EWCs (ETUI, 2001) (see box 18.4). Of these, no more
than 40 were in existence at the time the directive was adopted.
468 International Human Resource Management