European Participation Index (EPI)
Researchers at the ETUI have developed a new tool called the European Participation Index (EPI) designed to examine the relationship between worker participation and social cohesion, economic performance and sustainable development in Europe. The Indicator shows how worker participation helps achieve the political objectives of the Lisbon Agenda. Published as part of this year’s ETUC/ETUI Benchmarking Working Europe report, the Index shows that countries with stronger participation rights have performed better along a range of key Lisbon Strategy indicators than countries with weaker participation rights. These key indicators include labour productivity, overall employment rates, expenditure on research and development and sustainable development.
What is the European Participation Index*?
What is the relationship between worker involvement, social cohesion and economic performance in Europe? In order to enable Europe-wide comparisons in this regard between the EU member states, the ETUI-REHS has developed a European Participation Index (EPI), consisting of three equally weighted components:
The EPI measures the extent to which a country embraces the issue of worker participation.
It has three equally weighted components:
- Plant-level participation i.e. the strength of worker participation at plant level;
- Board-level participation i.e. the level of legal rights in a given country for employee representation in a company’s top decision making body;
- Collective bargaining participation i.e. the level of union influence on company industrial relations policies, union density and number of workers covered by collective bargaining agreements.
Why is worker participation important?
Worker participation in company decision making has two objectives:
- to make social rights effective in order to strengthen democracy and social understanding;
- to help companies achieve economic competitiveness and ecological sustainability.
According to the analysis prepared by Sigurt Vitols, Norbert Kluge and Michael Stollt. Countries were classified based on their overall scores on the participation index. The ‘stronger participation rights’ group includes nine countries: Austria, Denmark, Finland, France, Germany, Greece, Luxembourg, the Netherlands and Sweden. The ‘weaker participation rights’ group includes 18 countries: Belgium, Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Ireland, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and the United Kingdom. Each of the two groups accounts for roughly half of EU27 GDP, making their importance in economic terms approximately equal.
The Index shows that companies located in countries that recognise a greater participatory role for workers operate more in coherence with social and ecological objectives and this has a beneficial effect on European society as a whole. Europe needs skilled, mobile, committed, responsible workers that are able to identify with the objective of increasing competitiveness and quality without fear of losing their job.
The comparison of the EU-27 countries classified by strength of workers’ rights regarding information, consultation and participation shows that, on the whole, countries with stronger participation rights performed better along a range of Lisbon Strategy indicators than did countries with weaker rights. The figure below shows that the ‘strong rights’ group of countries surpassed the other in a wide variety of key indicators: GDP per capita, labour productivity, overall employment rate, employment rate of older workers, youth educational attainment, expenditures on R&D, progress on the reduction of greenhouse gas emissions and consumption of energy.
Figure: European Participation Index
| Performance indicator | Countries with stronger participation rights | Countries with weaker participation rights |
| GDP per capita in Purchasing Power Standards (EU-27 = 100) | 116,5 | 104,5 |
| Labour productivity per person employed | 113,9 | 103,6 |
| (EU-27 = 100) | ||
| Employment rate (total %) | 67,6 | 64,7 |
| Employment rate of older workers (percent) | 46,1 | 44,3 |
| Youth education attainment level - % of the population aged 20 to 24 having completed at least upper secondary education | 77,8 | 75,8 |
| Gross domestic expenditure on R&D (percent of GDP) | 2,3 | 1,4 |
| Index of greenhouse gas emissions and targets - In CO2 equivalents (Actual base year = 100) | 92,7 | 103,3 |
| Gross inland consumption of energy divided by GDP (kilogram of oil equivalent per 1000 Euro) | 170 | 261,7 |
Source: ETUI Benchmarking Working Europe 2009 / Data source: Eurostat. Note: all data for 2006. Countries weighted by 2006 GDP.
Remarks:
- Board-level participation – measures the strength of legal rights in each country for employee representation in the company's highest decision-making body. This classification was developed by the SEEurope network of ETUI and classifies countries in three groups: ‘widespread participation rights’, ‘limited participation rights’ and ‘no (or very limited) participation rights’.
- Plant-level participation – measures the strength of worker participation at the plant level. This includes three sub-indicators, including i) the probability of the presence of an interest representation body (including in smaller companies), ii) the existence of extensive information and consultation rights, including the right to veto or delay decisions with strong impact on employees like restructuring, closure, and mass redundancies, and iii) the competence to negotiate and sign legally binding agreements.
- Collective bargaining participation – measures union influence on company industrial-relations policies, including an average of i) union density (i.e. percentage of workforce belonging to unions) and ii) collective bargaining coverage (i.e. percentage of the workforce covered by collective agreements).
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European politicians should remind themselves of this beneficial, somewhat forgotten, resource. Our analysis is clear. Appropriate legislation at EU level i.e. in the field of European company law is needed to ensure that workers enjoy the same status as shareholders or managers.
Norbert Kluge, senior researcher ETUI
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