Do We Need Another Renault To Wake Us Up?

Exactly 20 years ago today, the very first European-wide strike was organized. In all Renault plants workers suspended work for one hour in protest against the closure of the Vilvoorde factory. This gesture of transnational solidarity was made possible thanks to a then recent piece of experimental European legislation called ‘European Works Councils’ (EWCs). But even today, two decades after the closure of Renault Vilvoorde, about one in three companies involved in cross-border restructuring do not have a EWC, effectively curtailing employees’ leverage in company decisions.

On February 27 1997, Renault announced Vilvoorde’s closure in a press conference at the Brussels Hilton hotel. At the same time, an extraordinary works council was called to inform the employee representatives. But news travels fast and shocked employees on the factory floor heard it first on the radio news. Renault workers then started a struggle over several months to keep the plant open, or to at the very least negotiate a good social plan. Occupations, demonstrations, lobbying, strikes, solidarity strikes… all possible means were used to pressure management and politicians.

But one action was brand new: the European strike. On March 6 1997, all Renault plants in Europe downed tools. Granted, this work suspension lasted only an hour, but its symbolic significance was substantial: for the first time, employees joined forces across borders to protest against management decisions. This European strike was followed by further international demonstrations and actions. This international solidarity couldn’t prevent Vilvoorde’s closure but it certainly gave a boost of morale to the Renault workers facing lay-offs.

EWCs bring together employee representatives from all over Europe to be informed and consulted by the top management of a multinational company about corporate strategy. It lets them meet and exchange information about what’s happening in their individual countries. And in times of crisis, this personal contact is crucial. In the words of Karel Gacoms (ABVV union secretary at Vilvoorde): “If there were no European Works Council, we wouldn’t’ve known who to contact in France”.

Since then, more than 1000 such EWCs have been created covering millions of workers in European multinationals. And they are used in various ways: in times of crisis to challenge management’s decisions over large transnational restructuring or mobilize cross-border pressure for good social plans (see for example the recent Caterpillar case); and otherwise to counterbalance management’s ability to put employees from different countries in competition.

And now for the bad news. According to new research, as many as a third of all companies involved in large transnational restructuring processes still do not have a European Works Council. These are generally ‘smaller’ multinationals but, as they are involved in transnational restructuring, employees have a real need for relevant information and consultation at a transnational level.

So why are there still so many companies without an EWC? Simple: because it is not obligatory. It depends on an initiative from employees or employers. And, in many companies, such an initiative is not taken – maybe because the employees don’t see the value, maybe because management discourages the employees or maybe because the employees simply don’t know they can organize an EWC. Either way, employee participation rights shouldn’t be optional in a genuine social Europe but should be guaranteed by a fitting policy framework with the necessary incentives and sanctions if companies refuse to follow the rules.

Luckily, the European Commission is preparing an evaluation of its EWC policy and should propose ways to improve the policy framework by the summer. An easy policy comparison could give them inspiration on how to move forward. For so-called ‘European Companies’, the EU established works councils very similar to EWCs. Here, however, it’s the management’s initiative to ask the employees whether they want a works council with employees from different countries. And the consequence is telling: none of the European companies involved in transnational restructuring in the last three years lacks a suitable transnational works council. Rarely have European policy makers been as lucky as they are now. They know what the problem is, they know the remedy and they even know it works. Hopefully, we won’t need another Vilvoorde to make them do the obvious.