Of all the subjects controlled by the societal, public, and employment strategy set by the European Union (EU), the intrinsic worth of implementing worker participation in the administration of businesses on a wide extent has turned out to be highly contentious over the years. The stipulations put forward by the EU, for example, equivalent opportunities for employees as that of employers, operational or working timing, and unusual contracts, all of them, time and again, have triggered disagreements amid employers.
Despite the fact that an increasing number of organizations are turning out to be of interest in employee participation as a possible measure for expanding labor efficiency and trimming down nonattendance, staff resignation rate, and rate of recurrence of industrial disagreements. Considered as the most hostile and invasive, is that kind of employee participation, which outwardly inflicts constrictions on the management’s perquisites or their privilege for that matter.
Traditional executives dread, though, that due to the pressures on an employee participation system, grounding on their temporary, peculiar interests would, among other things, steer to too much wage upsurge. These could possibly lead to a decline of internal principal on hand for investing or capital spending in the short run and for moving the available capital out of the country in the long run. It is much unexpected that there has been very slight economic evaluation of the present familiarity with employee participation.
The majority of researches have dealt with the topic entirely from a philosophical, historical, or sociological perspective. (Svejnar, pp. 1, n. d. ) Recently, employee participation has grown into a central point in labor-management discourse and a significant matter on the European political arena. (Raskin, n. p. , 1976) In certain countries systemized work force has been revealing an urge for involvement in management, as a way of democratizing the whole business systems and policies.
Lately, though, this gravity has intensified, nonetheless, creating numerous problems, which are in fact, compounded by a number of reasons, one, and a very major, of which is the utter assortment of standing official and legal frameworks within the associate states of the EU. Various Systems followed by the EU Member States Considering the member states of the EU, the employee participation and representation at executive level, for instance, is obligatory in private corporations situated in Germany, Austria, Luxembourg, and most Scandinavian countries.
On the other hand, countries like France and the Netherlands practice the ‘hybrid form’, while there are still others like Greece and Spain, which allow for this kind of system only in the communal or public sector. In contrast, countries such as, Italy, Belgium and the UK constitute no stipulation at all. (EIRO, pp. I-IV, 1998) The principles and conventions regulating works councils and coalition representation at workplace or sub-executive levels evenly complicated. In the Scandinavian countries, Italy, Ireland and the UK, there happens to be ‘single channels’ of representation via the joint associations.
In case of ‘dual channel’ system of representation, the employees are spoken for by work councils, which function beside the unions. In countries like France and Belgium, the manager presides over the work council; however in the majority of other countries, for example Portugal, the Netherlands, and Germany, the work councils simply contain employee representatives. On the other hand, in Ireland and the UK, employee representation has conventionally been identified merely on a voluntary base, even though elsewhere it is regulated by established rules or communal agreements.
Rationales The concepts of a ‘democratic organization’, ‘employee involvement and ‘employee participation’ have sustained arguments and disagreements. The degree to which the management is ready to let their employees to take part in matters concerning decisions about their lives at work is in fact one of the most complicated, vibrant debated features of employment relations as they have developed in technologically advanced countries. All concerned parties differ in their interests and viewpoints.
In general, the managers suppose that the employees should be assimilated into organization’s frameworks to make certain that they realize the organization’s intentions, targets and objectives and can add into its success. Unions, on the other hand, may possibly be keen to hold out their impact over the management’s decision making to making sure that their own priorities, for example power over work patterns, or in cases when employment patterns are stable, are suitably met.
System Followed by Germany The system of employee participation is developed and regulated by the German co-determination law. This law making has its origin in the Weimar Constitution of 1919, which, grounded on a social-democratic philosophy, created constraints on personal rights over possessions and took care for the social privileges and entitlement to life of its people. Under the Article No. 65 of the very Constitution, it was publicly stated that the waged working staff was to be granted correspondence with managers in settling with salaries and working circumstances and to be allowed a full opportunity to express opinions when deciding the overall economic advancement. The 1920 Works Councils Act specified that organizations with no less than twenty workers ought to set up a works council made up of representatives opted for at workplaces, which consult with the board on the carrying out of business objectives.
Two years later, the directive was revised to allow works council representation of a couple of their members in directorial management of corresponding organizations and restricted involvement in the board’s decision making process. These were the fundamental developments that molded the base for co-determination law. Both the Weimar Constitution and the Works Council were done away with as the Nazi’s rule made its entrance. The directive, on the other hand, was revitalized in the shape of the Coal, Iron and Steel Industry Co-determination Act of 1951.
The Act was originally designed for the coal and steel firms employing greater than a thousand employees but then later, in 1976, the Co-determination Act enfolding all large organizations was legislated and is presently in effect. In case of major and significant organizations, the present structure grants for an equal number of twenty representatives to in the same way be represented by stockholders and employees, with the stockholders decided on at the general stockholders’ meeting.
The worker representatives include delegates from workers’ associations and those chosen from all the different levels of workers. The twofold technique of industrial relations in Germany has maintained collective bargaining and the ascertaining of salary and specifications, not together with the subject of participation for example information release, discussions, meetings and co-determination. Here the industrial relations system has been portrayed as ‘sanctioned, integrated, and cooperative’.
Focusing on the effects of employee participatory system in Germany, regarding the wages, both in short and long-run, the representation is said to be quite a fruitful one, because it gives evident examples of several participatory systems from the post World War II events to the Co determination law of 1951, which provided employees with 50% representation on the executive boards. The very Act is also said to have created the rank of a labor director on the management panels of all corporations.
Despite of the fact that the employee participatory and representative groups in Germany were considered as distinct from the trade unions and the process of wage determination, an uncertainty comes up that whether their effect on wages was in fact missing. In real, there happens to be a considerable connection between unions and the employee representative groups in relation to their workforce, their objectives and activities. But without any reason, it is said that the union and board representatives diverge substantially in their opinions as to the influence of employee participation and representation on wages.
Having a unique system of employee participation in corporate management, the German corporate system is said to have some gain. The very advantage appears when it is about effectively testing out and verifying mistreatments by the management. The German corporate system is a twofold one, where the administrative management performs the role of corporate surveillance, whereas the executive board accountable for execution. Originally, the Co determination Act was envisioned to arbitrate the possible disagreements or conflicting interests between the employees and employers and was highly in the favor of workforce.
Currently it has been moving on, assuming to an increased level, the function of managing the corporate administration. Although there is some disapproval regarding the fact that the legislation has mislaid its essence with reported circumstances where the board treated employee representatives, in a way to high officials accommodated for and by them, it stays to be a considerable extent to elevate the understanding of societal responsibilities and obligations amid corporate managers and their movements for public causes. (Otsuka, pp. 3, 2006)
System followed in the UK In the UK, the whole world is observed through a prism of collective bargaining by unions, which has provided industrial relations with an argumentative placement. Contrasting with the ‘sanctioned, integrated, and cooperative’ industrial relations followed in Germany, the UK’s system is ‘voluntary, dispersed, and opposition-based’. (William, pp. V, 1988) However, such divergences haven’t been taken much into consideration by the Commission of the European Communities, when it is time for them to propose systems of employee participation.
In the year 1970, the European company statute and the Fifth directive were founded widely on the basis of the German model but did not have much appeal for the UK. Moreover, amid the important factors, particularly governments, point of views regarding employee participation have gone through periods of interest and aggression. Taking successive UK governments as instances, the governments in the 1970s, both the Conservative and Labour, were normally in favour of the propositions included in the European company statute and the Fifth directive for employee participation and representation at management’s level.
But on the other hand, in the 1980s and 1990s, the Conservative governments were unbendingly against all systems of employee participation, even though these situations were, as a minimum, partly looked over when the succeeding Labour government, in 1997, endorsed the social chapter, and in so doing established European Works Councils into the UK. (Gold, pp. 2 , n. d. ) If looked upon in the past, the Commission has been prosperous in achieving approval for the system of employee participation when it is connected with certain areas of industrial relations.
According to the 1975 directive on collective redundancies, the employers are required to notify employee representatives concerning the particulars and to refer to them with a view to pursuing an agreement. Then there was an ‘acquired rights directive’ of 1977, after that, the ‘health and safety framework directive’ of 1989, which provided the employees the privilege to acquire information on threat considerations and safety measures.
More recently, the statute adopted in 2004, provides employee representatives in the organizations included several rights to information and consultation without any bias. However, the implementation of all these employee rights has time and again, proved challenging in the UK, because the commandments put away the characterization of ‘employee representatives’ up to the state’s legislation.
Under the critical environment of sinking union membership, and prior to the arrival of legislative stipulations for union recognition, leave alone worker representation, this has implied that managers frequently do not possess representatives to advise or consult. In 1994, the European Court of Justice, brought forward two litigations against the UK for failing to suitably implement the directives passed in 1975, and the transfer of responsibilities, instructed that it was mandatory for all the EU states to establish appropriate systems for assigning suitable employee representatives.
In the UK, the Bullock Committee was established by the government to assess the matter of executive-level employee representation, but managers and several other officials of the labour movement proved intimidating, and the Conservative governments voted for during the course of 1980s and 1990s ruled out any possibility of lawmaking on the issue, as it has a need of an undisputed, common vote on the Council. Nonetheless, a Green Paper was published in 1975, by the Commission, to inspect the major disagreements provoked. The Social and Economic Committee along with the European Parliament both argued upon the topic in detail.
To close, the Commission assumed an amended text, in 1953, on the draft Fifth which has not been withdrawn officially up till now. Conclusion In my opinion, keeping in mind all the aforementioned prospects of employee participation and representation, the UK should certainly respect all the directives passed by the EU and all other Unions formed in coalition with all the European states and should give up its present times general framework, under which representation only occurs through unions, and which leaves large gaps in stipulation in those organizations where union membership is vulnerable and sometimes even non-existent.
It is necessary for the UK to revive itself from being isolated in the Council, and should bring about measures in order to mobilise its blocking minority. Following the German twofold system, which is better in every way, and also being successful in introducing European Works Councils, it has been foreseen and seen respectively, by the UK employers themselves that this has enhanced their effectiveness in granting a medium for information exchange