Works Councils and Organizational Change

Works Councils and Organizational Change – help or hindrance?

I was talking to a client recently who is working through a major organizational change. The change was initiated from the USA and, in most parts of the world, had progressed much more quickly than in Europe where the mandatory consultation period with works councils, Comité d’Entreprise and other employee participation structures was taking much longer.

These bodies give employees more protection and a say in how changes like this are implemented; usually by having mandatory periods of consultation or powers to stop change unless companies follow a particular process. In the past this has led to very long periods of delay in implementing change. Today European governments are, in general, tightening up the timescales and process that need to be adhered to in handling objections.

What is happening in practice in this particular organization is that everyone knows that the change is going on, they can see it happening elsewhere in the world and messages are leaking out from consultation discussions. The level of uncertainty in the European operation is much higher than in those operations which have already announced and implemented the change. Rumors abound and the company is unable to answer them before the end of the consultation period.

As line managers we know that if there is uncertainty and change we should try and manage it quickly. If we don’t, motivation falls and our best people start looking for new jobs – and the best people always have choices. Clearly we need to balance good practice in all of these areas. We have no choice but to adhere to local regulations so we need to factor in this consultation into our change management processes. Sometimes this consultation even helps us come up with a better solution.

This can be frustrating for people from jurisdictions that don’t have these constraints; they see the delay as wholly unnecessary. It can also be tempting for people in local operations to use the spectre of a works council to frustrate a head office initiative “we can do that here because of the works council” but people eventually learn about this ruse and it then undermines their case when there are legitimate needs to consult in the future.

These processes rarely stop you doing something but they may well change the way in which you get to implementation. As a global leader it is important to be aware of these processes and to factor in the necessary timescales – the law is not optional.

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