Answer to Question #275698 in Management for Mila

Question #275698

Discuss the level of employee representation in Germany, UK and Sweden. In doing so, discuss some employee representation models that exist in Germany, UK and Sweden?


1
Expert's answer
2021-12-06T17:03:02-0500

Employee engagement in enterprises at the board level is left to the discretion of the Member States under EU law. There is no uniform European BLER model that applies to all European employees. Employees elect or appoint representatives to the strategic decision-making body of firms, which is known as board-level representation of employees (BLER). Only the circumstance in which the employee representative has voting rights and represents the interests of all employees of the company, regardless of their capital interests, is considered BLER. The legal structures of companies differ depending on the country. The law in Germany allows for different levels of board representation. The first step is for enterprises with 500 to 2000 employees to elect 1/3 of the board of directors. Companies with more than 2000 employees are in the second tier, where workers make up half of the board and the chairman, who has the casting vote, is elected by the shareholders. For enterprises with more than 1000 people, a different system is the original system in the iron, coal, and steel industry. Employees elect half of the board members, with a neutral individual chosen by both the employee and shareholder sides as the casting vote. Employees also have a representative on the management board who can veto the nomination of the labor director. In Sweden, workers can elect two members and up to half of the board of directors in companies with less than 1000 employees (depending on the general assembly). Workers can elect three members and up to half of the board of directors in companies with more than 1000 employees and that operate in multiple industries (depending on the general assembly). An equal number of deputy representatives can attend board meetings with a consultative (rather than voting) voice in both systems.

Workers' interests are represented in Germany on two levels: at the plant level (through works councils) under the works constitution system, and at the corporate level (via corporate boards). In Sweden, employees are represented at work by their local union. There isn't any other option. Before implementing major changes, the employer is required by law to notify and negotiate with the unions at the workplace, and many of the practical arrangements for doing so, which are defined by law elsewhere in Europe, are left to local agreements in Sweden. In the United Kingdom, workers have traditionally been represented by recognized unions. This is the well-known single-channel approach, in which a recognized union has exclusive rights to employee representation. The concept of works councils or its equivalents, as well as the concept of direct representation, were foreign in the UK until recently (worker scan represent themselves). Since the nineteenth century, British industrial relations have been distinguished by a single channel strategy mixed with the state's abstention from engagement in labor relations. The result of these developments is the emergence of a significantly weakened union structure, with collective bargaining taking place primarily at the level of the establishment/company or even plant, as well as the emergence of alternative methods of worker consultation mechanisms influenced by the Continent's "dual channel" approach. While developments at the European Union level clashed with the British model of single channel, they received widespread support from the British trade union movement and, to some extent, helped to save a dying institution by allowing trade unions to field candidates for election as worker representatives, even if the employer does not recognize trade unions.


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