The terrible tale of the EU and Trade Union Rights

John Hendy outlines why the EU is a disaster for trade unions and workers rights

The social dimension of the EU merited merely a mention in the Treaty of Rome 1957 which effectively founded European Economic Community, subsequently named the European Union. That is because the EU was always a business oriented organisation of States in which the interests of its citizens were very much of secondary interest.

It was not until the 1970s (after the events of 1968 and destabilising oil price rises) that it was appreciated “that the Union required a human face to persuade its citizens that the social consequences of growth were being effectively tackled and that the Union was more than a device enabling businesses to exploit the Common Market.”  An Action Programme was drawn up in consequence of which Directives were adopted on sex discrimination, health and safety, mass redundancies, transfers of undertakings, and insolvent employers. With the election of Mrs Thatcher and the UK’s adoption of an overt and aggressive neo-liberal stance advocating de-regulation of the labour market to drive down labour costs, further development of social policy in the EU froze.

In 1986 the EU adopted the Single European Act with the objective of a Single Market across Europe. Again, to sugar coat this pill some social measures were felt necessary and a majority vote (instead of the previous unanimity) was instituted to pass social measures and side-step UK objection. In 1989 the EU adopted the Community Social Charter for the Rights of Workers which proclaimed, amongst other things the right to freedom of association, to negotiate and conclude collective agreements, and a right to resort to collective action in the event of a conflict of interests including the right to strike. Mrs Thatcher called it a “Marxist Charter”. With such bitter opposition it was doomed to be given no free standing legal effect and was no more than a “solemn proclamation”.

A Social Charter Action Programme was adopted which led to Directives on workplace safety, work equipment, personal protective equipment , VDUs, manual handling, proof of the employment contract, posted workers, pregnant workers, young workers, and working time.

The Maastricht Treaty, the Treaty on European Union 1992, gave greater prominence to what was called the Social Chapter to which the UK promptly secured an opt-out. Amongst other things the Social Chapter provided for European level collective agreements between the “social partners” to be enforced as EU law. In fact very few such agreements have ever been reached because of the attitude of the employers. By the time Labour was elected and the UK opted back in again only 4 Directives had been adopted under the Social Chapter: on European Works Councils, parental leave, part-time work and burden of proof.

The Treaties underpinning the EU were tweaked by the Amsterdam Treaty in 1997 and the Lisbon Treaty in 2000. They gave the illusion of a greater social dimension but little of substance. The identified as fundamental social rights those in the 1889 Charter and those in the European Social Charter 1961 of the Council of Europe (see below) but no effect was given to them. Documents were published by the EU Commission speaking of the need to foster equal opportunities for citizens even if equal outcomes could not be guaranteed. But little was done. The Nice Treaty of 2001 was significant for its adoption of a Charter of the Fundamental Rights of the EU.

The Lisbon Treaty 2007 took time to pass because France and Holland had rejected its forerunner in the form of an EU Constitution so necessitating a revised formula which then required a second referendum in Ireland in order to secure a majority. Clearly the perception that the sugar on the pill was wearing thin was widespread. The Lisbon Treaty was particularly significant in the field of social rights since it gave legal effect to the Charter of the Fundamental Rights of the EU. The Charter is considered below.

Before we come to that we need to note two points. The first is that the EU Treaties protect four fundamental freedoms for business to:

  • provide services,
  • establish business,
  • move capital,
  • move labour,

from one member State to another. The neo-liberal purpose of ensuring that there is no distortion of competition is to be found in the Treaties.  As we will see these four freedoms practically trumps all other rights.

The second is to point out that the Directives passed by the EU on individual employment rights were and are valuable, not least because EU laws are binding on EU member States so that it was and is not open to UK governments to opt out of them. But on the other hand the limited scope of these individual rights is notable. They have little application to most terms and conditions of employment to protect or encourage good pay and decent jobs. They say nothing about pensions nor about dismissal (save in particular circumstances such as in a transfer of undertaking). They neither promote nor protect collective bargaining. They do nothing to protect the right to strike. And there appears to be little implication to protect workers’ rights much further. The Agency Workers Directive appears helpful but in fact has led to a massive increase across Europe in the number of workers employed through agencies and hence without the full rights of directly employed workers.

Next we need to leave the EU for a moment and consider international law protecting trade union rights.

International law – The United Nations

The UN Declaration of Human Rights 1948 provides at Article 23(1) that everyone is entitled to “just and favourable conditions of work”, and at Article 23(4) that “everyone has the right to form and to join trade unions for the protection of his interests.” This latter phraseology is reproduced in the European Convention on Human Rights in which the European Court of Human Rights (ECtHR) has held (see below) that that general right contains specific trade union rights including the right to collective bargaining and the right to strike.  This is reinforced by the International Covenant on Civil and Political Rights 1966 which provides by Art 22 that ‘Everyone shall have the right to freedom of association with others, including the right to form and join trade unions for the protection of his interests’.

The International Covenant on Economic, Social and Cultural Rights 1966 by Article 8(1)(a) protects “the right of everyone … to join the trade union of his choice … for the promotion and protection of his economic and social interests.” Article 8(1)(d) specifically protects the right to strike. Whilst the right to bargain collectively is not specifically mentioned, it is inherent in the right to trade union membership – as the ECtHR have held on the basis of similar wording (see below).

The International Labour Organisation is the starting point for specific trade union rights under international law.   The tripartite ILO was created in 1919 and is an UN agency, responsible for setting labour standards. ILO Convention C87 protects the right of trade unions to organise their activities. The ILO has held for 60 years that this includes the right to strike. ILO Convention C98, requires States to encourage and promote the full development and utilisation of machinery for collective bargaining, with a view to the regulation of terms and conditions of employment by means of collective agreements.

As we know the supervisory bodies of the ILO, for over 20 years, have routinely found the United Kingdom to be in breach of its Convention obligations, particularly in relation to the right to strike.

Europe

Here we have to recall that from a legal point of view there are two Europes. There is the European Union which is the subject of this paper. It has 27 member States and is primarily an economic union, a common market. Its laws are in the Treaty of the European Union and the Treaty on the Functioning of the European Union (as well as Regulations and Directives). Its court is the Court of Justice of the European Union (CJEU).

The other Europe is Council of Europe consisting of 47 member States and is the body which has given us the European Convention on Human Rights and the European Social Charter. It has its court, the European Court of Human Rights (ECtHR).

The Council of Europe

Article 11 of the European Convention on Human Rights and Fundamental Freedoms 1951 says:

Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests.

The European Court of Human Rights (ECtHR) made clear in recent landmark judgments that Article 11 includes the right to bargain collectively, the right to strike, the right of unions to decide their own constitutions and membership, and the right of members not to be penalised for seeking union support. In the most important European labour law judgment this century Demir and Baykara v Turkey,  the ECtHR makes clear that workers must have (and States must protect) the right to collective bargaining.

Unlike the other international supervisory bodies, ECtHR decisions are binding on UK courts because of the Human Rights Act 1998 – though so far the UK courts have resisted acknowledging the right to strike or to bargain collectively. But one way or another, the United Kingdom will ultimately have to yield to the over-riding supremacy of international human rights law and fully recognise the trade union rights of British workers, or become an international pariah State.

The European Social Charter 1961 is also a Treaty of the Council of Europe (a sort of little sister). Article 6(2) requires ratifying States to promote collective bargaining with a view to the regulation of terms and conditions of employment by means of collective agreements. Article 6(4) of the Charter provides for the right to strike for the purpose of collective bargaining.

The quasi-judicial body supervising the Charter is the European Committee of Social Rights. It has found that the United Kingdom is now one of the countries most seriously in breach of its obligations under the Charter, particularly in relation to its laws on strikes, the ECSR having repeatedly held that:

the scope for workers to defend their interests through lawful collective action is excessively circumscribed; the requirement to give notice to an employer of a ballot on industrial action, in addition to the strike notice that must be issued before taking action, is excessive; the protection of workers against dismissal when taking industrial action is insufficient.

Now we turn back to the EU.

The Charter of the Fundamental Rights of the EU

The Charter appears to be of great significance. Notwithstanding UK attempts at an opt-out,  the Charter of Fundamental Rights of the EU 2000 provides in Article 28 that:

Workers and employers, or their respective organisations, have, in accordance with Community law and national laws and practices, the right to negotiate and conclude collective agreements at the appropriate levels and, in cases of conflicts of interest, to take collective action to defend their interests, including strike action.

This is significant but not perhaps as significant as Article 12 which provides that everyone has a right to freedom of association, said to imply ‘the right of everyone to form and to join trade unions for the protection of his or her interests’.

The Charter now “has same legal value as the [EU] Treaties” by virtue of Article 6(1) of the Consolidated Version of the Treaty on European Union.  Furthermore by Article 6(3) of that Treaty the rights guaranteed by the European Convention “shall constitute general principles of the [European] Union’s law.”

Article 12 of the EU Charter corresponds directly with Article 11 of the ECHR,  so it should mean the same as in Demir and Baycara v Turkey, above. The importance of this correspondence with the ECHR is found in the provisions of Article 52(3), which provides that:

In so far as this Charter contains rights which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, the meaning and scope of those rights shall be the same as those laid down by the said Convention. This provision shall not prevent Union law providing more extensive protection.

If Article 12 of the EU Charter is both of equal value to the EU Treaties and to be read consistently with the ECHR and if Article 11 of the ECHR is to be read consistently with ILO Convention 98, the implications are as enormous as they are obvious.

However, the reality may be different. It is true that the CJEU protected the right of collective bargaining from falling foul of EU competition law in Albany cases,  though not apparently for those who are self-employed.  The CJEU has also recognised the right to collective bargaining as a fundamental principle of EU law: see the Laval case.  However, enforcement of a collective agreement by taking industrial action against a business exercising one of the four freedoms is subject to stringent conditions which essentially make the human right to collective bargaining defer to the business right to enjoy an undistorted labour market in which it can bring workers from a low wage EU State to a high wage State, ignore collectively agreed terms there and pay instead the wages payable back home.

The CJEU has also held that industrial action to protect terms and conditions for workers brought from a low wage EU State to a high wage State is also subject to such stringent conditions: the Viking case.  That is notwithstanding that the Court in both cases recognised the fundamental nature of the right to strike, protected amongst other things by the Charter of Fundamental Rights of the EU:

The right to take collective action, including the right to strike, must … be recognised as a fundamental right which forms an integral part of the general principles of Community law.

The ILO has criticised this decision in relation to the BALPA case.  On 20 November 2013 the European Committee of Social Rights (above) held that Swedish law effectively implementing the Laval  judgment was in breach of Article 6 of the European Social Charter 1961. This is good news but overshadowed by decision of the CJEU on 13 July 2013.

The CJEU has held in the case of Alemo-Herron  that a term in contracts of employment requiring adherence to a local authority collectively agreed National Joint Council rate of pay could be overridden after a TUPE transfer of the undertaking into the private sector because the Directive underpinning TUPE had to be read consistently with Article 16 of the Charter of Fundamental Rights of the EU which guarantees the right to conduct a business. Consequently, the new owner had to have the freedom “to assert its interests effectively in a contractual process to which it is p[arty and to  negotiate the aspects determining changes in the working conditions of its employees with a view to its future economic activities.” Because the private owner could not participate in the NJC it was “contractual freedom is seriously reduced to the point that such a limitation is liable to adversely affect the very essence of its freedom to conduct a business.” The right of the workers to the benefit of collective bargaining in the Charter, in the ECHR and in the ILO was not mentioned.  Nor was any reference made to the widespread use of sector wide collective bargaining throughout Europe in which it is common for employers (and workers) to be bound by collective agreements to which they were not party. ILO jurisprudence supports such arrangements which were the norm, even in the UK, for ¾ of a century.

This case is an appalling attack on collective bargaining and is at least as serious as Viking and Laval.

However, the attack on collective bargaining is more extensive than that. The glamorous gown of the social dimension, already worn bare, has now been torn by the policies of austerity into discarded rags.

Sector level bargaining remains a common feature of the northern and western European States. Integration with lower level bargaining differs from one regime to another and evidently presents some problems.  On average across the EU, 62% of workers remain covered by collective bargaining, with significant variations between countries. There are 10 countries with collective bargaining coverage of around 80% or more. In Sweden, Finland and Denmark high collective bargaining coverage goes with high union density. In Sweden and Denmark lower level bargaining builds on national agreements. In Finland the pattern of national agreements making recommendations to lower level negotiators, which had lasted for almost 40 years, appeared to have finally ended in 2007 when the employers refused to negotiate a new national agreement. But in 2011 in the light of the economic crisis, the employers again agreed to sign a national framework agreement.

In Austria (95% coverage), Belgium (96%), France (98%), Italy(80%), the Netherlands (81%), Portugal (92%) and Slovenia (90%) the high levels of collective bargaining coverage reflect, at least in part, legal underpinning of sector level collective agreements. In Austria the negotiators on the employers’ side include the chambers of commerce and industry to which all employers must belong, with the result that almost all employees are covered. In Belgium agreements signed at industry level automatically extend to all those employed in that industry, though there is also company level bargaining. In Italy there is no legislation which makes industry level agreements generally binding but courts have normally interpreted them in this way. In the Netherlands, Slovenia and France, though agreements do not apply to whole industries, collective agreements are extended to non-signatories.

Germany (59%), Greece (65%), Norway (70%) and Spain (70%) all have extensive industry level bargaining, though all have lower level bargaining as well. In Greece (see box 1.1 above) and Spain national level bargaining is likely to dramatically reduce under the austerity measures which enable employers to undercut national agreements. In Malta (61%) bargaining is entirely company based. In Croatia (61%) and Luxembourg (50%), company bargaining applies in some sectors but industry bargaining in others. In Ireland (44%) the system of national agreements which set pay increases, among other things, for more than 20 years, effectively broke down in 2009 under the pressure of the economic crisis.

Below Ireland in terms of collective bargaining coverage comes the Czech Republic (38%), Romania (36%), Slovakia (35%), Latvia (34%), Estonia (33%), Hungary (33%), and Bulgaria (30%). Poland (25%) has the next lowest collective bargaining coverage. The UK (23%)  is second to bottom with only Lithuania (15%) below it. In all these countries industry-wide bargaining has largely disappeared, at least in the private sector, and bargaining occurs at company level if it occurs at all.

The level of coverage in Europe is falling under pressure from the neo-liberal policies of the Troika,  especially the European Commission  and in the shadow of the EU-US Trade Agreement.  Schulten  has revealed that a report  prepared by the European Commission’s Directorate General for Economic and Financial Affairs (DG ECFIN) lists the following measures under the heading of ‘employment friendly reforms’:

  • General decentralisation of wage setting and collective bargaining.
  • Introduction of or wider scope for opportunities to derogate from industry-level agreements at workplace level.
  • Limitation or abolition of the ‘favourability principle’, under which the most favourable agreed term provision in a hierarchy of agreements will apply to employees. Typically, this means that workplace agreements may not provide for poorer terms and conditions than those negotiated at industry level. Limitations and reduction in the scope for the extension of collective agreements to non-signatory employers.

In addition, the recommendations also refer directly to:

  • ‘decreasing bargaining coverage’ and
  • ‘an overall reduction in the wage-setting power of trade unions’.

The principal means of achieving the reduction of coverage in Europe has been the decline in national and sector level bargaining and limitations on the extension of collective agreements to non-signatories. Yet industry-wide agreements and the extension of more limited agreements has been a central feature of European industrial relations and one reason for the success hitherto of the European economy and the standard of living enjoyed by its peoples. Collective bargaining has been damaged by (purported) austerity measures – none more so than Romania where the national collective agreement has been abolished and sector level agreements much restricted in coverage.  The effect on collective bargaining coverage there has been catastrophic, a reduction from 98% in May 2011 to 36% at the end of 2012.  This is a decline as dramatic as (but much more sudden than) the UK.

The EU has become a disaster for the collective rights of workers and their unions. It is essential that the institutions of international human rights law be upheld; it is yet more vital that working people and trade unions across Europe achieve the solidarity necessary to prevent the further depredations of the EU.