Article 153 of the Treaty on the functioning of the EU states that the Union supports and complements the activities of the Member States concerning, inter alia, the information and consultation of workers and the representation and collective defence of the interests of workers and employers, including co-determination (excluding pay, the right of association, the right to strike or the right to impose lock-outs). In addition, the 1989 Social Charter, acknowledged by the TFEU (Article 151) stipulates that information, consultation and participation for workers must be developed along appropriate lines, taking account of the practices in the various Member States. Such information, consultation and participation must be implemented in due time, particularly in the following cases:
* when technological changes which, from the point of view of working conditions and work organisation, have major implications for the work-force, are introduced into undertakings;
* in connection with restructuring operations in undertakings or in cases of mergers having an impact on the employment of workers;
* in cases of collective redundancy procedures; and
* when workers, especially transboundary ones, are affected by the employment policies of the company where they are employed.
A general framework for minimum requirements relating to the right of employees to be informed and consulted is applicable to undertakings and establishments operating within a single Member State and with at least 50 or 20 employees respectively [Directive 2002/14]. The emphasis is on fostering social dialogue and ways of ensuring information for employees and effective consultation of their representatives at the earliest possible stage of the company decision-making process. Εmployers must inform employees about: the recent and foreseeable development of the company’s activities and its economic and financial situation; the situation, structure and reasonably foreseeable developments of employment within the company; decisions which may lead to substantial changes in work organisation or in contractual relations (consultation between the employer and employees entails dialogue and exchange of views, including efforts to reach prior agreement on the decision in question).
The information and consultation of workers in multinational companies is pursued by a Directive providing for the establishment of a European Works Council or a procedure for the purposes of informing and consulting employees in European-scale undertakings [Directive 2009/38]. The companies or groups of companies concerned are those with more than 1000 employees in total in the Union and with at least two establishments in different Member States, each employing at least 150 people. The Directive also covers undertakings or groups of undertakings with headquarters outside the territory of the Member States, in so far as they meet the above criteria. The Directive provides for the establishment, at the initiative of the company or group management or at the written request of at least 100 employees or their representatives in at least two Member States, of a "special negotiating body" with the task of concluding an agreement between the management and the employees' representatives, on the scope, composition, powers and term of office of the European committee to be set up in the undertaking or group, or the practical arrangements for an alternative procedure for the information and consultation of employees.
In parallel with the regulation on the statute for a European company, with the Latin designation Societas Europaea (SE) [see section 17.2.1], the Council adopted a directive supplementing this statute with regard to the involvement of employees [Regulation 2157/2001 and Directive 2001/86]. The rules relating to employee involvement in the SE seek to ensure that the creation of an SE does not entail the disappearance or reduction of practices of employee involvement existing within the companies participating in the establishment of an SE. Therefore, when the management or administrative organs of the participating companies draw up a plan for the establishment of an SE, they must as soon as possible after publishing the draft terms of merger or creating a holding company or after agreeing a plan to form a subsidiary or to transform into an SE, take the necessary steps (including providing information about the identity of the participating companies, concerned subsidiaries or establishments, and the number of their employees) to start negotiations with the representatives of the companies' employees on arrangements for the involvement of employees in the SE. For this purpose, a special negotiating body representative of the employees of the participating companies and concerned subsidiaries or establishments must be created in accordance with the provisions laid down in the directive. The special negotiating body and the competent organs of the participating companies must determine, by written agreement, arrangements for the involvement of employees within the SE. Member States must lay down standard rules on employee involvement which must satisfy the provisions of the directive.
The directives above concern the information of workers in European-size companies. The Directives discussed below concerning large-scale redundancies and the safeguarding of employees' rights in case of transfers of undertakings stipulate that the workers must be informed and consulted in good time, so that they can make constructive proposals [see section 13.5.3]. By the same token, Directive 89/391 on the improvement of the health and safety of workers in the workplace, also makes worker participation compulsory [see section 13.5.7].
Another issue is employees' participation in the company's capital and profits. Some see this as relinquishing management control, diminishing the shareholders' authority and "forfeiting dividend income". Others believe that allowing employees to share in the profits makes for greater flexibility in their earned income, has a stabilising effect in macro economic terms and is a motivating force resulting in greater productivity and consequently in an improved financial performance. Siding with the latter point of view, the Council has adopted a Recommendation concerning the promotion of employee participation in a company's capital and profits. The Recommendation, which has not a binding character, encourages the Member States to: ensure that they have the appropriate legal structures for implementing various forms of financial participation effectively; consider the possibility of offering tax or other incentives for doing this; encourage the distribution of information about participation and about the experiences of other countries in the Union; and make sure that the social partners have a wide enough range of formulae to choose from based on consultations between employers and employees or their representatives. In any event, companies and employees alike must be able to decide freely whether or not to participate. From a Commission report on the implementation of the Council Recommendation by the Member States, it emerges that participation in profits goes hand in hand with better productivity, and that participation schemes have positive effects on wage flexibility, employment and worker involvement. The Commission provided guidance for the development of employee financial participation in Europe by outlining the transnational obstacles hampering the introduction of Europe-wide financial participation schemes and by proposing concrete measures to overcome them [COM/2002/364].