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BackThis week, the European Parliament considered the question whether financial participation of employees in their own company is a good thing. According to the Liberal rapporteur Phil Bennion, the concept of employee participation would only be positive, whether it was in respect of employment, fighting poverty, modernising labour markets or social protection He even demands a separate optional 29th set of rules, which should be available to all employers in the EU. Apart from that, he welcomes the change of attitude by trade unions towards the financial participation of employees – who are visibly not aware of this. Does this mean that the Bennion’s report is only wishful thinking? It almost looks like it.
In many cases expectations are unreasonably high
The draft report by MEP Bennion on the financial participation of employees in companies’ proceeds clearly emphasises, which positive role programmes could play concerning the financial participation of employees in business management and the financial success of the company they work for. However, the fact that the motives to let employees participate in companies are multifaceted is often overlooked. This being the case, one might say from the point of view of a labour representative, that in many cases expectations are unreasonably high and that the effects of employee participation have a tendency of being exaggerated. It is quite often the case that embedding shareholder-value thinking in the heads of employees is an important target by employers. Entrepreneurial thinking shall increasingly take hold in the heads of employees. Whilst it is true that employers frequently achieve this by employee participation, employees still remain just employees. In most cases, their share is far too small to achieve any extension of co-decision. They still depend on their job and their wage and salary respectively. Admittedly, employees have the chance to receive a higher income; however, this also poses the risk of loss of assets. Hence, the remaining effects of employee participation are above all a flexibilisation of wages and salaries as well as change of corporate culture towards shareholder orientation. However, the draft report regards the matter as consistently positive; it has even been pointed out that employee participation would improve job security based on options concerning the take-over of companies by employees, as in particular these options could help employees to take over companies in financial difficulties.
Differentiated way of looking at things is necessary
During the debate in the EU Parliament, Evelyn Regner, MEP of the S&D faction in the European Parliament and responsible for this topic on behalf of her faction, put it in a nutshell when she said that financial participation for employees could have a positive, but also a negative outcome and that all Member States would have a different approach. She also claimed to know that the trade unions, in contrast to the rapporteur’s statement, are not unreservedly in favour. It was important that employee participation would remain voluntary and that trade unions had to play a special role. The Chamber of Labour agrees that absolute voluntariness had to be the basic requirement for the participation of each and every individual. The plenum in the European Parliament will vote on the report in early 2014. Until then the negotiations in the competent committee will continue. The Chamber of Labour will continue to make a strong contribution with regard to this important dossier to prevent an undifferentiated image of employee participation taking hold, which might make the EU Commission act in a way, which has an unfavourable effect on employees.
Further information:
Draft report on the financial participation of employees in companies’ proceeds
The draft report by MEP Bennion on the financial participation of employees in companies’ proceeds clearly emphasises, which positive role programmes could play concerning the financial participation of employees in business management and the financial success of the company they work for. However, the fact that the motives to let employees participate in companies are multifaceted is often overlooked. This being the case, one might say from the point of view of a labour representative, that in many cases expectations are unreasonably high and that the effects of employee participation have a tendency of being exaggerated. It is quite often the case that embedding shareholder-value thinking in the heads of employees is an important target by employers. Entrepreneurial thinking shall increasingly take hold in the heads of employees. Whilst it is true that employers frequently achieve this by employee participation, employees still remain just employees. In most cases, their share is far too small to achieve any extension of co-decision. They still depend on their job and their wage and salary respectively. Admittedly, employees have the chance to receive a higher income; however, this also poses the risk of loss of assets. Hence, the remaining effects of employee participation are above all a flexibilisation of wages and salaries as well as change of corporate culture towards shareholder orientation. However, the draft report regards the matter as consistently positive; it has even been pointed out that employee participation would improve job security based on options concerning the take-over of companies by employees, as in particular these options could help employees to take over companies in financial difficulties.
Differentiated way of looking at things is necessary
During the debate in the EU Parliament, Evelyn Regner, MEP of the S&D faction in the European Parliament and responsible for this topic on behalf of her faction, put it in a nutshell when she said that financial participation for employees could have a positive, but also a negative outcome and that all Member States would have a different approach. She also claimed to know that the trade unions, in contrast to the rapporteur’s statement, are not unreservedly in favour. It was important that employee participation would remain voluntary and that trade unions had to play a special role. The Chamber of Labour agrees that absolute voluntariness had to be the basic requirement for the participation of each and every individual. The plenum in the European Parliament will vote on the report in early 2014. Until then the negotiations in the competent committee will continue. The Chamber of Labour will continue to make a strong contribution with regard to this important dossier to prevent an undifferentiated image of employee participation taking hold, which might make the EU Commission act in a way, which has an unfavourable effect on employees.
Further information:
Draft report on the financial participation of employees in companies’ proceeds