Transcript Employee Financial Participation – Current European Initiatives

Employee Financial
Participation –
current European
Initiatives
June 2015
Background
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It all started by living in the Basque
country with 2.2mil inhabitants,
exactly in the province of Gipuzkoa
with its 710.000 inhabitants where
the Social Economy accounts for 10%
of employment. Roughly, 50% of
this employment is in manufacturing.
In Gipuzkoa, there are 15 jobs in the
Social Economy per square kilometre.
Background
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I suspect is among the highest rates
around the world, in the same way
that, with respect to fine restaurants,
the number of Michelin stars per
square kilometre is the highest in the
world.
I have decided the Basque Country
makes an excellent case study since
there are some interesting parallels
between the Czech Republic and this
region in the north of Spain.
Case study: Basque/Czech
Regions
1. It experienced 40 years ago a
transition from an authoritarian regime
to democracy in some ways
comparable to that experienced by
Czech society 25 years ago.
2. The Basque Country is today a
comparatively wealthy European region
– the GDP per capita is roughly 140%
of the European average, with an
important concentration of metallurgic
industry and manufacturing SMEs.
Case study: Basque/Czech
Regions
OECD 2014 REGIONAL WELLBEING
REPORT
Household disposable income
Basque country Prague
Moravia
Euro 19.445
13.650 9.515
Bavaria
20.237
Initial Action
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In September 2014 Paper on How to
support entrepreneurship through
Employee financial participation in
the Czech Republic including the best
practice from Mondragon
In October 2014 organised a Seminar
under the auspices The Council for
sustainable development of the Office
of the Government,
Summary & Recommendations on EFP in
Europe
1. The debate on EFP at the European level and in the
Member States must be re-launched, awareness raised
and social partners encouraged.
2. Businesses operating across borders, particularly
SMEs should be offered help, especially in overcoming
tax obstacles in specific EU/EEA countries.
3. The introduction of EFP must be voluntary; it must
be in addition to existing remuneration systems and
not a substitute, independent of pension schemes while
not impeding collective wage bargaining.
Summary & Recommendations on EFP in
Europe
4. EFP may bring desirable benefits such as:
 a proportion of company profits distributed to employees
locally, which in turn helps to increase regional purchasing
power and can boost a company's chances of success in a
given region,
 Improve corporate governance and corporate management
which helps to improve incomes through participation in a
company's success,
 a motivating effect and thus a contribution to a greater
sense of identification with the company, thus reducing staff
turnover.
 it can root economic activity in a region, lowering
unemployment in general, and especially during downturns.
 35 years of scientific research shows that when efp is
combined greater transparency and employee participation
in decisions, company performance generally improves
(growth, productivity, profitability, innovation, etc.)
Summary & Recommendations on EFP in
Europe
5. Examples of best practice should continue to be
publicised. Related activities should be supported by
the EU budget through a dedicated budget heading.
6. Information sources on the implications of EFP for
businesses and employees as well as training and
advisory services by impartial bodies, i.e. qualified
NGOs, should be established.
These facts are derived from the Opinion of the
European and Social Committee on EFP in Europe in
2010
Initial Action
4 main strategies identified:
1. Focus on reducing the lack of
information / Education.
2. Promotion of the positive experiences
via case studies / Best practices.
3. Initiation of steps to conquer the
ideological myth.
4. Identification of legislative obstacles &
drafting of relevant legislative changes.
EU Actions – Pilot Project
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The EU project “Implementation of the
Pilot Project – Promotion of Employee
Ownership and Participation”, therefore
assesses EFP across the EU-28 and aims
at the formulation of possible regulatory
and non-regulatory actions to promote
EFP at EU level.
The pilot project is part of the EC’s 2012
Action Plan on European Company Law
and Corporate Governance.
EU Actions – Conference in
January 2014
As part of the Pilot Project, the
conference Taking action:
Promotion of Employee Share
Ownership was organised by
DG MARKT in January 2014
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((https://scic.ec.europa.eu/streaming/index.php?es=2&sessionno=db095b
d14b838cbf3abf886f492c721b)
EU Actions
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Study The Promotion of Employee
Ownership and Participation
commissioned by DG MARKT and prepared
by the Inter-University Centre – Final
Report was published in October 2014
The Commission has decided on a major
restructuring of the new DG dealing with
Internal Market, Industry, Entrepreneurship
and SMEs which was created at the
beginning of 2015 – DG Growth
Five-Point Plan:
1.
2.
3.
4.
5.
Launch a Virtual Centre for EFP
Set up a Commission Expert Group
Implement an Action Program to
raise awareness
Launch of Code of Conduct
Legislative proposal for a Common
Optional European Regime
Study tax benefits for EFP. Even if
they are modest,, they can have a
significant incentive effect“.
Five-Point Plan:
1. Launch a Virtual Centre for EFP
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Action 1: Provide an online tool that
could be uploaded on different
websites, giving easy access to
information on EFP across the EU-28
Action 2: Include an effective tax
rate calculator as a complementary
decision – making tool comparing
social security contributions and
taxation of EFP in the 28 Member
States
Five-Point Plan:
2. Set up a Commission Expert
Group
Action 3: Set up an expert group on EFP with the
following tasks:
 Give regular policy recommendaitons an EFP on the
basis of best practice and update the information on
EFP available through the Virtual Centre for EFP
 Prepare the elaboration of a Code of Conduct for EFP
compiling information on standard EFP templates
and on employee guidelines to EFP and continuosly
improve this toolkit
 Assist the Commission in checking the feasibility and
preparing potential future draft legislation on EFP
Five-Point Plan:
3. Implement an Action Program to
raise awareness for EFP
Action 4: Launch an information campaign
and engage with employers and workers’
representatives and other stakeholders. This
should be accompanied by a PT strategy.
Action 5: Implement a package of awareness
raising measures, e.g.
 Allocate the EFP – related activiities to one
specific Commissioner responsible for EFP
Five-Point Plan:
3. Implement an Action Program to
raise awareness for EFP
Eg. Because EFP is a cross – sectorial topic,
the individual actors from different political
bodies and their network can have a
considerable effect.
 Therefore, appointment of a specific
Commissioner to increase the visibility of
the EFP topic is crucial since the personal
involvement of individual actors is a proven
factor in moving initiatives forward.
Five-Point Plan:
3. Implement an Action Program to
raise awareness for EFP
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Develop a network of officials / politicians
interested in EFP from political bodies at EU
level
Popularise EFP in a media – friendly
manner, e.g. information leaflets or short
videos https://www.youtube.com/watch?v=yxzwxOcbsHM
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Undertake additional publicity actions, e.g.
establish a European EFP Day
Five-Point Plan:
4. Launch of Code of Conduct for
EFP
Action 6: Elaborate standard templates for
EFP schemes based on best practice resulting
from the EU pilot project. Such «off the
shelf» templates would be of a general
nature, taking into consideration different
existing national models and traditions of EFP
as well as the different types of firms
concerned. Common definitions of relevant
concepts could be also collected in this
context.
Five-Point Plan:
4. Launch of Code of Conduct for
EFP
Action 7: Develop a guide on EFP for
employess describing in a clear way the
concept of EFP, the options for employees as
well as potential pitfalls.
Standard templates & guide for employees
could be made available via the Virtual Centre
for EFP.
Five-Point Plan:
5. Legislative proposal for a Common
Optional European Regime on EFP
Action 8: Verify the legal basis and feasibility of a
Common European Regime on EFP as requested
by the European Parliament Resolution of 2014.
such a voluntary 2nd regime would function in
parallel to national laws and would contribute to
creating a level – playing field for EFP.
Study tax benefits for EFP. Even if they are
modest,, they can have a significant incentive
effect.
EU Actions
Table:
Classification of EU Member States
based on regulatory density and
support measures for EFP
Conclusion
“We can have democracy in this country or
we can have great wealth concentrated in the
hands of a few, but we can't have both.”
Attributed to Louis D. Brandeis, American
Judge
 Inspiration and guidance from professor in
Social Economy and Cooperative Entreprise
Fred Freundlich from Mondragon University
 Eskerrik
asko