The paper analyses the role of prevailing systems of employee voice in Hungary, such as works councils and trade unions, and assesses their capacity to influence voice within the European Works Council (EWC). Moreover, it examines the impact of EWCs and establishes whether they have strengthened voice locally for Hungarian workers of UK-owned multinationals. More than six years have past since Hungary joined the European Union (EU) and the findings indicate that EU membership has done little to harness Hungarian voice.
Despite early studies charting the Polish experience of EWCs (Meardi, 2004) and a more recent overview of the impact of EWCs across new member states (Voss, 2006), there remains little in-depth analysis examining the role of EWCs in Hungary and the relationship between local and European level voice mechanisms. Hungary’s own geo-politically history offers a unique example of a country that previously operated a pseudo-market economy, under the Communist regime and during the transition period, adopted a dual channel of worker representation. The Labour Code (1992) introduced works councils to counterbalance trade union fragmentation (Vaughan-Whitehead, 2003; Neuman, 2005). However, the dual system has not been without its problems and so far has failed to bolster employee voice (Toth, 1998a, 1998b; Frege and Toth, 1999; Toth and Ghellab, 2003; Aczel, 2005).
With the arrival of foreign direct investment, many previously state-owned enterprises have been sold to multinational companies and consequently Hungarian representatives have a new role within existing EWCs (Lado, 2001). Lecher et al’s (2001) typology highlights variations in the capabilities of EWCs, with some mechanisms more robust than others. Indeed, there exists a wealth of evidence outlining the issues and challenges of organising EWCs within a Western European context (Streeck, 1997; Royle, 1999; Wills, 2000; Hancke, 2000; Whittall, 2000; Waddington, 2005). More generally, the range of collective non-unionised voice mechanisms and scope they provide, have received considerable scrutiny since their introduction (Terry, 1999; Gospel and Wood, 2003; Dundon et al, 2005; Wilkinson and Dundon, 2010) and these findings resonate with Hungarian voice structures.
An empirically driven study, the paper provides qualitative case study evidence from three organisations from the printing, chemical and food industries. The data comprises of a series of semi-structured interviews, observational studies and archival records from Hungarian employee representatives of both the local works councils and EWCs, as well as Hungarian trade union delegates, local and central managers. The study concludes that participation within the EWC has not provided Hungarian workers with a European voice, nor has the EWC reinforced voice in Hungary, through the local works council and trade union networks. Whilst these mechanisms remain weak and operate under a Communist legacy, the findings show that Hungarian workers are unable to effectively develop their voice at a European level.
Act XX11 of 1992 on the Labour Code of the Republic of Hungary, http://www2.ohchr.org/english/bodies/cescr/docs/E.C.12.HUN.3-Annex4.pdf
Aczel, J. (2005) ‘Changes in the role of the trade union in the Hungarian printing industry’, Employee Relations, Vol 27, 6, 568 - 580
Dundon, T. Wilkinson, A. Marchington, M. Ackers, A. (2005) ‘The management of voice in non-union organisations: managers’ perspectives, Employee Relations, Vol 27, 3, 307 - 319
Frege, C. and Toth, A. (1999) ‘Institutions matter: the case of union solidarity in Hungary and East Germany’ British Journal of Industrial Relations, Vol 37, 1, 117 - 140
Gospel, H. Wood, S. (2003) Representing Workers – Union Recognition and membership in Britain, Routledge, London
Hancke, B. (2000) ‘European Works Councils and Industrial Restructuring in the European Motor Industry’, European Journal of Industrial Relations, Vol 6, 1, 35-59
Lado, M. (2001) ‘Hungary: FDI and its impact on industrial relations’ in Gradev, G (Ed) CEE Countries in EU Companies’ Strategies of Industrial Restructuring and Relocation, ETUI, Brussels
Lecher, W. Platzer, H. Rub, S. Weiner, K. (2001) European Works Councils: Developments, Types and Networking, Gower, Aldershot
Meardi, G. (2004) ‘Short Circuits in Multinational Companies to Poland’, European Journal of Industrial Relations, Vol 10, 2, 161-178
Neumann, L. (2005) ‘Trade Unions in Hungary: Between Social Partnership, Political Action and Organizing Drive’ in Dimitrova D. Vilrokx, J. (Eds) Trade Union Strategies in Central and Eastern Europe: Towards Decent Work, International Labour Organisation, Geneva.
Royle, T. (1999) ‘Where’s the Beef? McDonald’s and its European Works Council’, European Journal of Industrial Relations, Vol 5, 3, 327-347
Streeck, W (1997) ‘Neither European Nor Works Councils: A Reply to Paul Knutsen’ Economic and Industrial Democracy, Vol 18, 325 - 337
Terry, M. (1999) ‘Systems of collective employee representation in non-union firms in the UK’, Industrial Relations Journal, Vol 30, 1, 16 - 30
Toth, A. (1998a) ‘The Transformation of the Industrial Relations System in Hungary’, South-East Europe Review, Vol 3, 117 – 133
Toth, A. (1998b) ‘FDI and industrial relations in Central and Eastern Europe: the exceptional case of the Hungarian airline’, International Journal of Manpower, Vol 19, ½, 115 - 133
Toth and Ghellab (2003) ‘The Challenges of Representation at the Workplace in EU Accession States: Does the Creation of Works Councils Offer a Solution alongside Trade Unions?’, International Labour Office, Warsaw
Waddington, J. (2005) ‘The Views of European Works Council Representatives’, in What’s the Problem?, European Trade Union Institute, Brussels
Whitall, M. (2000) ‘The BMW European Works Council: A Cause for European Industrial Relations Optimism?’, European Journal of Industrial Relations, Vol 6, 1, 61 – 83
Wilkinson, A. and Dundon, T. (2010) ‘Direct Employee Participation’ in Wilkinson, A. Gollan, P. Marchington, M. Lewin D. (Eds) The Oxford Handbook of Participation in Organizations, Oxford University Press, Oxford
Wills, J. (2000) ‘Great Expectations: Three Years in the Life of a European Works Council’, European Journal of Industrial Relations, Vol 6, 1, 85-107
Vaughan-Whitehead, D. (2003) ‘Worker Participation in Central and Eastern Europe: Union Strategies’ in Gold, M. (Ed.) New Frontiers in Democratic Participation at Work, Ashgate, Aldershot
Voss E. (2006) ‘The experience of European Works Councils in new EU Member States’, European Foundation for the Improvement of Living and Working Conditions, Dublin, published online www.eurofound.europa.eu