Employee Financial Participation in the New Member States  - CLEO Skip to main content


Employee financial participation (EFP), whether in a company’s profits or in its ownership, constitutes one of the four basic pillars of employee participation in organisations; the three other pillars are direct participation, indirect participation and collective bargaining. Since the 1990s, EFP has gradually emerged as an important component of employment relations.

In Europe, the interest in EFP has been promoted mainly by several actions of the European Commission, in particular through the Pepper reports focusing on the ‘promotion of employee participation in profits and enterprise results’. These studies provided an overview of the application of EFP in the Member States of the European Union, underlining the nature and extent of its forms and the reasons for its application; at the same time, they assessed the attitudes of governments and social partners regarding this issue, the instruments developed in order to support EFP, its economic effects and the relationship between EFP and the other three aforementioned pillars of employee participation (see also Pendleton et al, 2001; Pendleton and Poutsma, 2004).

This report looks at the current situation in relation to EFP and its recent developments in the new Member States (NMS) of the EU: Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. The report takes as its main points of reference the national contributions to the European Industrial Relations Observatory (EIRO) and the Pepper III report. It provides a summary of the main findings regarding the existing EFP schemes and their applications in the NMS, the preconditions for their existence and the more significant and recent legislative interventions in this field since 2005. Special attention is given to the position of the social partners, the regulation of EFP schemes through collective bargaining and, where it exists, the relationship with legislative regulation. The main aim of the report is to analyse the role of the legislative framework, the socioeconomic contexts and the attitude of the different actors, along with the interrelations between these three dimensions, in order to identify the main features of the various EFP schemes in the NMS. Finally, the report assesses the possible difficulties faced in implementing EFP schemes and the current trends in the development of EFP in the NMS.