This week’s guest column from FTdynamo un-ashamedly asks what’s so wrong with the recently passed EU Directive on Consultation?
A minor management earthquake rumbled through the European Union this month, but thankfully no-one was hurt. The EU Directive on Consultation has finally been passed, with the UK falling into line after years of opposition. The ‘subsidiarity’ argument – with the UK and other states, most notably Germany, claiming that individual nations should be allowed to draw up their own legislation – has been dropped. The single European market will now be home to the same consultation process in every member country.
The basics of the directive are as follows. Consultation with the workforce on major business decisions will be compulsory for firms employing more than 150 people, with this requirement being phased in after three years. After a further two years the directive will also apply to those with 100 or more staff. After seven years it will affect businesses with 50 or more workers, while firms employing fewer than 50 people will remain exempt. Resisting this modest proposal for so long has not perhaps constituted Britain’s finest hour on the world stage. Essentially managers will still be free to manage.
Big decisions will not be blocked or made impossible by the timely involvement of staff. It need not even necessarily slow down the decision-making process; it is all a question of when consultation takes place. Business organisations, in particular the UK’s Confederation of British Industry (CBI), should ask themselves why this legislation can be accepted so calmly by successful companies and employer organisations in the rest of Europe, but not, apparently, in Britain.
Worried business leaders point to Renault’s experiences in Belgium a few years ago, when the proposed closure of the Vilvoorde plant led to mass unrest and industrial action. But look at Renault and Nissan today, led by that far-from-timid executive Carlos Ghosn. Is he really in a weaker position having consulted with his staff? Does he feel inhibited in his decision-making? And is the firm’s track record any less impressive than that of other firms where less consultation takes place?
Confident, competent managers are rarely too scared to talk to their employees about the strategic challenges ahead. They don’t have anything to fear from the shop-floor. They look on their colleagues as more than simple factors of production. They seek the views of employees before taking big decisions, because experience has taught them they will probably take better decisions that way.
The new consultation directive may even, much to the surprise of many boards, actually lead to better management. It’s just another example of the way in which the European single market is developing into a force to be reckoned with.
FTdynamo features writings and opinions by leading people in the the world of work and business.
