Thematic feature - works councils and other workplace employee representation and participation structures
This article examines the Norwegian situation, as of September 2003, with regard to works councils and similar workplace employee representation and participation structures. It looks at the regulatory framework, statistical data, evidence on practice and the views of the social partners.
The issue of works councils and similar workplace employee representation and participation structures is topical at present, with the EU Member States required to implement the recent Directive (2002/14/EC) establishing a general framework for informing and consulting employees in the European Community (EU0204207F) by March 2005 (though countries which currently have no 'general, permanent and statutory' system of information and consultation or employee representation may phase in the Directive's application to smaller firms up until 2008). The Directive applies to undertakings with at least 50 employees or establishments with at least 20 employees (the choice is left to the Member States). It provides employees with the following rights to information and consultation:
- information on the recent and probable development of the undertaking's or the establishment's activities and economic situation;
- information and consultation on the situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged, in particular where there is a threat to employment; and
- information and consultation, with a view to reaching an agreement, on decisions likely to lead to substantial changes in work organisation or in contractual relations.
Information and consultation arrangements set out in agreements between management and labour, including at undertaking or establishment level, may differ from those laid down in the Directive.
While the Directive does not stipulate that information and consultation must be provided through any particular channel or structure, it defines such information and consultation as taking place between the employer and the employee representatives provided for by national laws and/or practices. It is these representatives, who in most EU Member States sit on standing 'works council'-type structures (and in many countries already enjoy all or most of the information and consultation rights laid down in the Directive) that are the focus of this article. The existence of workplace employee representation and participation structures, based on law or widespread collective agreements, is seen in some quarters as a distinctive and important feature of the (mainland) European industrial relations model. Indeed, the idea has been raised of using the coverage of such worker involvement arrangements as an indicator of 'quality' in industrial relations (as suggested, for example, by the European Commission’s June 2001 Communication on Employment and social policies: a framework for investing in quality).
In this context, in September 2003, the EIRO national centres in each EU Member State (plus Norway), were asked, in response to a questionnaire, to provide information about the current situation with regard to national (rather than European level) works councils and similar bodies – the regulatory framework, statistical data (or estimates where not available), evidence on practice and the views of the social partners. The Norwegian responses are set out below (along with the questions asked).
Regulation
What is the legislative framework in your country concerning works councils and/or other workplace employee representation and participation structures? Please include here: definition; workforce-size threshold for establishment; composition/election; subjects for information, consultation and co-determination; conditions under which information, consultation and co-determination should take place (ie timing, methods, contents, level of representation, type of response by employees, form of interaction etc); meetings; confidentiality; protection of employees’ representatives. If there is no legislation on this issue in your country, please refer to widespread systems of works councils etc based on collective agreements.
Employee representation and participation structures are well established in Norway, on the basis of both agreements between the social partners and the legal framework. They vary between arrangements based on contacts with shop stewards/trade union representatives, and arrangements based on representatives elected by and for all employees within companies. Collective agreements providing shop stewards and company-level trade unions with the right to information, consultation and negotiations in a range of areas are probably the most important form of representation in the day-to-day running of companies. Furthermore, both the legal framework and collective agreements establish more formal structures enabling employes to be represented and heard. Company-level trade unions and their representatives play an important role in the Norwegian particpatory system, and they also play a significant role in the more formal structures for employee representation.
Collective agreements
Collective agreements (in the form of 'basic agreements') regulate the rights and duties of workers' representatives and company management with regard to participation and co-determination (information, consultation and negotiations). They also establish formal participatory bodies. Basic agreements between the main trade union and employers' confederations make provisions for the establishment of works or company councils (bedriftsutvalg). The basic agreement between the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) and the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) (NO9808182N) has more or less set the norm, making works councils compulsory in companies with more than 100 employees. The parties may also jointly raise the establishment of a works council as a demand in companies with fewer than 100 employees. These works councils are bipartite bodies composed of an equal number of employee and employer representatives. The LO-NHO basic agreement, section 12.8, stipulates that 'Matters that are of material importance for the employees and their working conditions, which relate to the activities of the enterprise, substantial investments, changes in systems and methods of production, quality, product development, plans for expansions, reductions or restructuring, shall be submitted to the council for its opinion before any decision is made.' Basic agreements also provide for other types of structures, such as works councils for groups of enterprises, and divisional councils for companies with more than 200 employees.
Legislation
The Act relating to Worker Protection and Working Environment (Arbeidsmiljøloven, AML) makes working environment committees (arbeidsmiljøutvalget) compulsory in all enterprises with more than 50 employees, and also in enterprises with between 20-50 employees if required by the parties themselves. These committees are bipartite bodies composed of an equal number of employee and employer representatives. The various duties of these committees include considering questions relating to plans that may be of material significance for the working environment, in areas such as rationalisation schemes, work processes and working time arrangements (section 24 of the AML). In the public sector, the Civil Service Act (Tjenestemannsloven) provides public sector employees with the same type of protection and rights.
Beyond participation and representation at workplace level, employee representation on the boards of companies is predominantly regulated in the 1997 Act relating to Public Limited Companies (Aksjeloven) (TN9809201S). Although there are also other relevant acts, most other legal arrangements in this area are very much based on the principles of this companies Act. Only in a few cases is the right to board representation regulated by nationwide collective agreements. Employees have a right to board-level representation in companies that, on average, have had 30 employees or more during the past three years. In companies with 30 to 50 employees, two-thirds of the workforce may demand one representative on the board, together with an observer and two deputies. In companies with more than 50 employees, a majority of employees are entitled to a number of representatives not exceeding one-third of all the board members, or a minimum of two representatives. Employee representatives are chosen by and from the employees. Companies which in the past three years have had on average over 200 employees must elect a 'corporate assembly', one-third of whose members are chosen by and from the employees. The corporate assembly elects the company board, and the electoral rules stipulate that employees may elect board-level representatives and deputies from their own ranks, not exceeding one-third of the total number of board representatives, with a minimum of two representatives.
Although working environment committees and board representation are based on representation of all employees, trade unions nevertheless play a significant role in these bodies. The Norwegian system is very much marked by an amalgamation of both trade union representation and employee representation.
Statistics
Please provide the most recent available statistics (in absence of statistics please provide estimates referring to sources) on the following (referring to other workplace employee representation and participation structures where works councils are not present and to widespread collective agreements on the issue where there is no legislation):
- the total number of employees and undertakings/establishments in your country;
- the total number of undertakings/establishments covered by the works councils legislation in your country and their total employment (data should be as much as possible disaggregated by gender, company size and sector);
- the total number of undertakings/establishments in your country which have established works councils and their total employment (data should be as much as possible disaggregated by gender, company size and sector).
Please provide any other national data indicating the number/diffusion of works councils.
The applicability of a number of the representation arrangements mentioned above (under 'Regulation') depends on the number of workers employed in the companies concerned. The figures on coverage provided in the table below do not provide data on the actual number or coverage of representation bodies in Norwegian firms, but indicate the proportion of employees who are potentially covered by such bodies (according to the rights and entitlements in collective agreements and the legal framework). The figures are based on various types of questionnaire surveys, and thus are only reasonably accurate estimates of coverage. Whether or not such bodies actually operate hinges on a number of factors, such as the extent to which the employer complies with the legal framework, or to which employees actually demand the establishment of such bodies.
| Type of structure | Provisions applicable to: | Employees covered by such entitlements |
| Representation on company boards | Companies with over 50 employees | 43% |
| Companies with 30-50 employees | 11% | |
| Working environment committees | Companies with over 50 employees | 43% |
| May be raised as a (mutual) demand in all companies | 100% | |
| Health and safety officer | Companies with over 10 employees | 81% |
| Works councils | Companies with collective agreement and with more than 100 employees | 33% of all employees, 76% of whom are covered by collective agreement |
Source: Makt og demokrati i arbeidslivet [Power and democracy in working life], Engelstad, Svalund, Hagen and Storvik, Gyldendal, 2003.
In the public sector arrangements are some what different, with a majority of employees working in enterprises without boards or similar arrangements. There are however rules providing rights in relation to information, consultation and negotiations.
Practice
If there are any other statistical sources or recent research on the current practice of works councils or other workplace representation/participation bodies, please give details of the results paying attention to the issues covered by Question 1 (Regulation). Please provide as much quantitative data as possible - eg how many meetings and how often, chair, agenda, composition (eg how many representatives of management, if any, workers, proportion of women members, proportion of women as head of works councils etc) and identify factors of success. Please indicate how the works councils (or works council-type bodies) institution has evolved over the years.
There is little statistical information available on the actual operation of works councils, and on how many works councils and similar participation structures there are in Norwegian companies. The most recent research on the current practice of workplace representation bodies in Norway was a so-called 'citizen survey' (Medborgerundersøkelsen) carried out in 2001 in connection with a research project entitled 'Power and democracy in Norway' ( makt og demokratiutredningen), part of which was devoted to power and democracy in working life. In this survey, a number of people were asked about their views on participation in working life, and on the existence of participation structures within their own workplace. Around 60% of employees claimed to be represented on company decision-making bodies in some way or another, while 70% of the employees stated that representative bodies are present at their workplace (whether working environment committees, works councils etc). Of those with representative bodies in their workplace, 70% said that that they had participated in the election of representatives to boards or various other company representative structures. With regard to their own participation in such bodies, 45% of employees stated that they had been members of a representative body, and as many as 38% claimed to have been a member of the company board (or other similar decision-making body). A considerable proportion of Norwegian employees thus claim to be, or previously to have been, a member of such bodies.
Social partners
Please summarise the views of trade unions on works councils etc and their operation, and outline relations between works councils and trade unions.
Please summarise the views of employers’ organisations on works councils etc and their operation.
Employee representation and participation structures have been an intrinsic part of Norwegian industrial relations for a long time, and are hardly controversial. Employees, trade unions and employers appear to recognise the value of participatory structures, both in relation to company development and production, and as a mechanism to improve the working conditions of ordinary workers. LO and NHO pursue formalised joint cooperation on enterprise development, which includes the funding of company-level projects encouraging cooperation and participation. (Håvard Lismoen, FAFO Institute for Applied Social Science)