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Unit 10: International Industrial Relations

health and safety at work. It also provides the permanent secretariat for the Advisory Notes
Committee of Safety, Hygiene and Health Protection at the Workplace.
Directorate G: is responsible for the management of human and financial resources of the
Directorate-General, for audit and inspection, and evaluation.

The European Works Councils (EWC) Directive was approved on September 22, 1994, and
implemented two years later. Under the terms of the Treaty of Amsterdam, this directive applies
to all EU member states. This is the first pan-European legislation that regulates collective
relationships between MNCs and employees.

1. The directive requires EWCs to be established in MNCs with at least 1,000 employees,
having 100 or more employees in each of two member States.
2. The directive is designed to provide coverage to all employees.

3. The EWC aims to enhance employee’s rights to information and consultation and provide
rights to information regarding international corporate decisions that would significantly
affect workers’ interests.

Example: In response to the EWC directive, General Motors and Heinz have subsidised
visits of worker representatives to other plants and provided information and forums for
discussion at the European level.

The EU Council of Ministers has approved the pension funds Directive that sets standards for the
prudential supervision of pension plans in the EU. The Member States will need to implement
the Directive by the middle of 2005. The Directive covers employer-sponsored, separately funded
pension plans. The Directive provides pension funds with a coherent framework to operate
within the internal market and allows European companies and citizens the opportunity to
benefit from more efficient pan-European companies and citizens the opportunity to benefit
from more efficient pan-European pension funds.
Once implemented, the Directive will ensure a high level of protection for both members and
beneficiaries of pension funds. The Directive refers to the pension plan provides as ‘Institutions
for Occupational Retirement Provision’ (IORP) who will be subject to detailed rules of operation,
including requirements to inform members and beneficiaries properly of the terms and status
of the plan, prudently calculate promised benefits and cover them with sufficient assets and give
supervisory authorities the necessary powers to monitor and supervise the plans.

The greatest barrier to implementation of the pan-European pensions is the taxation differences
among member States. The Directive does not attempt to cover taxation issues which may need
a separate and more prolonged process though the EU legislative institutions. Many member
countries’ tax laws do not recognise contributions to foreign pension plans. This creates
unfavourable tax circumstances for employees working outside their home countries and
contributing to pension plans in their host countries.
There was an impact on the jobs due to the formation of the Single European Market (SEM).
There was alarm that those member states that have relatively low social security costs would
have a competitive edge and that firms would locate in those member states that have lower
labour costs. The counter-alarm was that states with low-cost labour would have to increase
their labour costs, to the detriment of their competitiveness. There are two industrial relations
issues:
1. The movement of work from one region to another and its effect on employment levels

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