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9 August, 2005ICEM News release No. 11/2001
Workers now have information and co-determination rights on the supervisory board of Franco-German chemicals giant Aventis.
An important precedent for European worker participation is set by the agreement, which has just been finalised by the French and German chemical workers' unions, the company and the European Mine, Chemical and Energy Workers' Federation (EMCEF).
German law provides for Mitbestimmung (worker co-determination) in big companies at two levels - the works council and the supervisory board. Within the European Union (EU) as a whole, meanwhile, worker participation so far has been at the level of European Works Councils.
The supervisory board is one of the two tiers within German company boards. It determines overall corporate policy and appoints the management board, which is in charge of the day-to-day running of the company. The management board answers to the supervisory board for its conduct of the company's business.
The most common type of corporate-level co-determination in Germany requires equal numbers of employee-elected and shareholder-elected representatives within the supervisory board. However, at least one of the employee representatives is a senior manager and the chairman is, in practice, an extra shareholder representative with a casting vote. Nonetheless, there is strong pressure to maintain consensus within the supervisory boards, which also play a crucial role in German unions' information about trends within the company.
The German labour minister has tabled proposals to further update and strengthen the country's co-determination system. But the growing economic integration of the EU has raised some issues. Labour legislation varies greatly from one EU country to another, and the creation of a European company statute could complicate the question of co-determination rights.
So an important test case was created in 1999 by the merger of German-based chemicals multinational Hoechst AG with French-based Rhône-Poulenc S.A. to form Aventis S.A.
Aventis is headquartered just outside Strasbourg, France. Hoechst AG continues to exist as a German-registered firm, but it is now an intermediate holding company affiliated to Aventis, which owns about 97% of the Hoechst shares.
Immediately after the merger, the German and French chemical workers' unions set about ensuring worker participation within the new company. An agreement in principle was reached with the Aventis management last year. But the new arrangement, the first of its kind at the European level, ran into problems on the ground. The additional agreement just signed clears up the practical details.
The package is a "viable compromise," commented Hubertus Schmoldt. He is President of the German chemical workers' union IG BCE and of EMCEF, and Vice-President of the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM).
"The decisive point," Schmoldt said, "is that we are making a start on the qualified representation, in practice, of workers on the boards of transnational corporations."
Four of the six worker representatives - two French and two German - will be voted on to the supervisory board of Aventis S.A. by the company's shareholder assembly. The worker representatives will have the same rights as the ten representatives of capital on the board.
The two other worker seats on the board are those required by French law, which assigns them to the works council (comité d'entreprise). Under the Aventis agreement, EMCEF will nominate the candidate for one of these two seats. In return for the works council's agreement to this, it will have the right to be represented on the Aventis "European Dialogue Committee".
The unions see this package as a milestone on the way to co-determination within European companies.
The agreement now goes to the Aventis AGM for formal approval.
Aventis employs around 95,000 people in more than 120 countries. In November 2000, it announced that it intends to focus on pharmaceuticals and will divest its activities in agriculture.
An important precedent for European worker participation is set by the agreement, which has just been finalised by the French and German chemical workers' unions, the company and the European Mine, Chemical and Energy Workers' Federation (EMCEF).
German law provides for Mitbestimmung (worker co-determination) in big companies at two levels - the works council and the supervisory board. Within the European Union (EU) as a whole, meanwhile, worker participation so far has been at the level of European Works Councils.
The supervisory board is one of the two tiers within German company boards. It determines overall corporate policy and appoints the management board, which is in charge of the day-to-day running of the company. The management board answers to the supervisory board for its conduct of the company's business.
The most common type of corporate-level co-determination in Germany requires equal numbers of employee-elected and shareholder-elected representatives within the supervisory board. However, at least one of the employee representatives is a senior manager and the chairman is, in practice, an extra shareholder representative with a casting vote. Nonetheless, there is strong pressure to maintain consensus within the supervisory boards, which also play a crucial role in German unions' information about trends within the company.
The German labour minister has tabled proposals to further update and strengthen the country's co-determination system. But the growing economic integration of the EU has raised some issues. Labour legislation varies greatly from one EU country to another, and the creation of a European company statute could complicate the question of co-determination rights.
So an important test case was created in 1999 by the merger of German-based chemicals multinational Hoechst AG with French-based Rhône-Poulenc S.A. to form Aventis S.A.
Aventis is headquartered just outside Strasbourg, France. Hoechst AG continues to exist as a German-registered firm, but it is now an intermediate holding company affiliated to Aventis, which owns about 97% of the Hoechst shares.
Immediately after the merger, the German and French chemical workers' unions set about ensuring worker participation within the new company. An agreement in principle was reached with the Aventis management last year. But the new arrangement, the first of its kind at the European level, ran into problems on the ground. The additional agreement just signed clears up the practical details.
The package is a "viable compromise," commented Hubertus Schmoldt. He is President of the German chemical workers' union IG BCE and of EMCEF, and Vice-President of the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM).
"The decisive point," Schmoldt said, "is that we are making a start on the qualified representation, in practice, of workers on the boards of transnational corporations."
Four of the six worker representatives - two French and two German - will be voted on to the supervisory board of Aventis S.A. by the company's shareholder assembly. The worker representatives will have the same rights as the ten representatives of capital on the board.
The two other worker seats on the board are those required by French law, which assigns them to the works council (comité d'entreprise). Under the Aventis agreement, EMCEF will nominate the candidate for one of these two seats. In return for the works council's agreement to this, it will have the right to be represented on the Aventis "European Dialogue Committee".
The unions see this package as a milestone on the way to co-determination within European companies.
The agreement now goes to the Aventis AGM for formal approval.
Aventis employs around 95,000 people in more than 120 countries. In November 2000, it announced that it intends to focus on pharmaceuticals and will divest its activities in agriculture.