EWCs facing the challenge of digital transformation of transnational companies

From the objective to the realization

The project

All over the world, digitalization has become a key word to describe profound transformations that our societies are facing today. This term, which has uncertain content, refers to the changes that new technologies are bringing and will continue to bring to our ways of living and in particular our ways of working.

There is no doubt that all companies, regardless of their sector of membership or type of activity, are already engaged or will very quickly engage in a digital transformation process in line with their development strategies: customer relations, production methods for goods and/or services, development of new markets or activities, etc. Reasonably transnational companies and groups are at the forefront of these developments, which are made up of new challenges and opportunities.


In this context, it seems questionable that many ongoing innovations (use of new production technologies, use of internal and external social networks, data management and, increasingly, use of artificial intelligence) raise many employment and labour issues: adaptation and skills development, personal data management, work-life balance building, etc.

Social dialogue is in view of these major developments an essential tool for dealing with the impacts, both positive and potentially negative of new technologies that are themselves constantly evolving. However, European social dialogue and especially the European works council dialogue involving European Works Councils or European Company Committees, still seems to be emerging to this day.

As a result, ASTREES and IR Share have decided to launch a project to develop the role and added value of European Works Councils and European Company Committees in relation to the impact of the ongoing digitalization of transnational groups. Therefore EWC 4.0 project was made from the thought that it was possible to make progress on these issues by mobilizing the collective intelligence of the actors in European social dialogue in companies.

The process developed for this purpose was thus mainly based on the organization of three workshops aimed at two closely related objectives:

Enable mutual learning between EWC actors from different transnational companies, sectors and countries of origin; whether they are HR managers or employee representatives.

Contribute to identifying relevant questions and courses of action to “engage” European Works Councils and European Company Committees in a process of dialogue relating to ongoing technological changes and the ever-uncertain future

The three workshops held in 2018 and 2019 brought together participants from a total of about 15 different transnational groups in the metal, chemical, banking, insurance, IT services and telecommunications sectors. In accordance with the project’s logic, it was both employee representatives within the targeted bodies and HR managers in charge of leading these bodies who took part in our project. In addition, there were a number of experts in particular a researcher delegated for this purpose by Eurofound and others from the organizations associated with the project but also trade union representatives at sectoral level.

Those who made the project possible

The project was selected by the European Commission’s DG Employment, Social Affairs and Inclusion of the European Commission under a call for proposals (VP/2017/008) and therefore received co-funding from the European Union.
The project leaders also benefited from a mandate from CEC EUROPEAN MANAGERS, which enabled them to request the support of the European Commission for the call for proposals in question.


Issues at stake

Talking to the parties who sit on European Works Councils confirms what our intuition suggests: digital transformation is a reality that exists in the here and now, as apparent in the technologies already at work. While these technologies do of course vary in terms of the activities and sectors to which a given company belongs, they all prompt Works Council members to make comments and express thinking linked to trends in employment and work


Automation of work tasks

“in the insurance industry, automation means the planned disappearance of low added-value tasks” (Secretary, European Works Council)

Remote working and "new ways of working"

“a blurring of the boundaries between personal life and working life, the role of management and new systems of work organisation are all disrupting employer/employee relationships (Consultant)

(Big) data at the heart of the changing face of business

“The exploitation of data in HRM processes may be a source of discrimination” (HR manager, IT services)

Employee training is changing too

“New technology allows changes to be made in employee training practices (just-in-time learning, on-the-job learning, etc.” (HR
manager, insurance)


Arguments for

Transnational nature of digital transformation

European Works Councils as the only forum genuinely available for accessing strategic information within a multinational group

An ongoing transformation, conducive to an ongoing social dialogue

Arguments against

Digital transformation is an integral part of a company’s strategy and a management prerogative

No link established between the European Works Council and the internal and/or external teams in charge of innovation processes

Insufficient training for European Works Council actors in the area of digital innovations

The European Works Council, as the company’s central representation body, is far-removed from what is happening at “grassroots” level

Insufficient cohesion between European Works Council members

Digital transformation, just one subject among many others


Key points - What to remember?

The digital transformation seems both likely to legitimize a real commitment of the European Works Councils in these subjects of great economic and social importance, as the well as to crystallize weaknesses that have long been identified in the concrete functioning of the EWCs.

The technical nature and complexity of the targeted changes as well as the ways in which innovation itself is conducted within companies are likely to make it more difficult for European works council actors to address these issues.

Surveys, working parties Identifying changes and their impacts, in concrete terms. Hard to make concrete use of the information gathered. / Hard to monitor the situation.
Training Building up a shared appreciation of the issues and impacts of transformation within the European Works Council. Not easy to specifically define what the training should be about.

Hard to follow up training actions.

Information and consultation Familiarity with the digital strategy

Accompanying its implementation and minimising its negative impacts.

Hard to identify in concrete terms the diverse impacts of digital transformation, over and above its impacts in terms of employment.

Hard to properly guarantee win/win changes over the long term.

Monitoring and sustaining social dialogue at local level Coordinating an approach that is both global and local.

Affirming the added value represented by the European Works Council.

Fostering concrete initiatives.

Identifying pre-conditions to be met.

Determining the resources required to play this role.

Negotiating a transnational “agreement” Forging a common framework to facilitate the group’s cohesion.

Helping to harmonise the situation of the group’s European employees.

Defining the object of the agreement.

Risk of excessive formalities.

Possible lack of effectiveness and monitoring over the long term.

Possibility of local resistance / legitimacy issues

"Going further": building and sustaining a concerted approach to support European digital change?

In view of the complexity of the subjects involved and the possible limits to the initiatives that can already be identified, it may seem that what is at stake for European Works Councils is first and foremost the development of a concerted method for accompanying change at European level, bodies wishing to see digital transformation as a field for action.

This issue if considered relevant supposes first and foremost that the actors have the means to engage themselves:

  • an awareness of the issues raised
  • a willingness to work together between management and employee representatives
  • the adoption of a proactive stance by the European Committee

It then calls for joint arbitrations to be carried out:

  • Is a European initiative really desirable and useful?
  • What topics and time horizon (short term or long term) should be given priority?

Finally, it is actually a European and concerted approach which will necessarily be built on a
case-by-case basis, leads to the targeting of several issues:

  • Who, from the group’s management or European employee representatives, is at the initiative of the process?
  • How to lay the foundations for a fruitful and sustained dialogue between management and the European Committee?
  • How to build a joint and evolving diagnosis of the social impacts of digital transformation?
  • What are the possible consequences and results of the approach taken?

Details? it’s here