The Multinational Monitor


G L O B A L   N E W S W A T C H

Labor Initiative Weakened

Firms beat back Europe's threat

Multinational corporations have won a major battle in Europe, using two of their favorite tactics: dilute and delay.

Since 1980, the European Economic Community has been debating a proposal designed to grant workers the right to consult with management over decisions to close down plants (see MM, August 1982).

The European Parliament was scheduled to vote on the proposal, called the Vredeling directive, this September, but deferred consideration.

"The frantic lobbying by U.S. private business has paid off," said Herman Rebhan, general secretary of the International Metalworkers Federation, which represents 14 million workers worldwide. "This is a victory for those who want the EEC to be seen as a playground for multinational capitalism in which workers are not even given the most modest entitlement to share information," Rebhan said at that time.

On October 12, when Parliament reconvened, it again refused to vote on the full directive, choosing instead to take up amendments only. The amendments that passed significantly weakened the original proposal in three important areas:

  • Frequency of consultation

    One amendment reduced the required frequency of management-worker consultations by 50%. Rather than having to meet once every six months with worker representatives, management needs to consult but one time a year, Parliament said.

  • Disclosure of information

    Parliament severely restricted the kind of information that management must disclose to its workers. "The information provided may not in general be more extensive than that required for shareholders." Such information "may not contain any company secret or business," though the amendment did not define such secrets, nor did it specify who would make the determination of secrecy.

  • Consultations with parent firm

    Parliament rejected a provision in the original draft of the directive which would have permitted workers to by-pass managers of subsidiaries and go directly to the management of the parent firm for consultations.

"We're pleased at the tone of the amendments," says Kenneth Hickman, of the National Foreign Trade Council, which represents U.S. firms in Europe. "If there has to be such a directive at all," says Hickman, the amendments are "helpful in mitigating the otherwise very poor" piece of legislation.

"The changes are welcome in the U.S. and Europe among business types," agrees Steve Schneebaum, a lawyer with the Washington firm of Patton, Boggs, and Blow, some of whose clients operate in Europe. "Business is much happier with Parliament's version" of the bill, says Schneebaum. (Patton, Boggs, and Blow ruffled some feathers in the European Community last year with the aggressive representations the firm made about the Vredeling directive.)

How did it happen that the proposal got watered down to the satisfaction of the companies? Simply a matter of political organizing, says Ella Krucoff, spokesperson for the European Community in Washington.

"There's no question that in Parliament the socialist position wasn't as well organized" as the conservatives. The socialists "didn't have their members present," Kurcoff points out. There are 434 seats in the Parliament, but when the vote was taken on the amendments, only 219 members were present. "If they (the socialists) had gotten their act together better," says Krucoff, the vote "may have come out differently."

Although Parliament passed the amendments in October, it still hasn't voted on the directive in its entirety. Parliament is not expected to do so until next spring, according to Krucoff and Schneebaum.

Due to the bureaucratic arrangements of the European Community, the Parliament's vote is only advisory. Any resolution it passes then must go through the European Commission before finally being considered by the European Council.

Currently there is a "struggle between the institutions" on strictly "procedural questions," says Krucoff.

Ivor Richards, who carries the European Commission's portfolio for social affairs, expressed numerous misgivings about the amendments passed in October. Addressing Parliament on November 17, Richards warned that the amendments would "remove virtually all meaning" from some parts of the directive and "fatally weaken" others.

Richards' opposition has occasioned a dispute between the Commission and Parliament about who should have the final say.

As the procedural debate rages, the corporations can simply rest on their haunches. "It will be in their interest to delay the whole thing," says Krucoff.

Table of Contents