Memorandum by Professor J R Shackleton
1. My primary worry with the EU Reform Treaty
is the possible impact of the introduction of the Charter of Fundamental
Rights on the legal status of the employment relations framework
which has evolved in the UK in the last twenty years. This framework
is widely seen as more flexible and business-friendly than its
equivalent in most European countries.
2. The areas which are particularly significant
are Articles 12, 15, 27 and 28. All seem to have some potential
for turning back the clock and restoring—or even extending—trade
union powers which were removed by the Thatcher and Major administrations
(1).
3. Article 12, Freedom of assembly and
of association, mentions the "right of everyone to form
and to join trade unions". While this right already exists
in the UK, it is possible that this wording might be interpreted
to imply that such unions, to be effective, should be recognised
by employers for collective bargaining and other purposes. At
the moment, union recognition is subject to various conditions,
including majority support in a secret ballot. One concern for
small businesses (which, despite the emphasis on inclusive "social
partnership", are largely unrepresented in EU policy-making
processes) is the possible threat to the exemption of businesses
with less than twenty employees from compulsory recognition procedures.
4. Article 15, Freedom to choose an occupation
and the right to engage in work, gives non-EU nationals who
are authorised to work in the EU entitlement to "working
conditions equivalent to those of citizens of the union".
This may affect, for instance, the conditions of seamen working
in British-registered ships. It could give union agreements a
wider coverage and limit firms' ability to substitute cheaper
employees. There is currently a case in progress relating to the
use of Latvian workers in Sweden where the Charter of Fundamental
Rights has been cited.
5. Article 27, Workers' right to information
and consultation within the undertaking, guarantees "information
and consultation in good time"; this is ambiguous over the
type of information, the form of consultation, and the definition
of "good time". Some fear that it could have the effect
of reducing the scope for mergers and acquisitions (the UK has
a very active and effective market for corporate control which
is anathema to many union activists, particularly in France and
Germany) and companies' ability to shed labour in periods of economic
downturn.
6. Finally, the article which has most exercised
commentators is Article 28, Right of collective bargaining
and action. This gives the "right to negotiate and conclude
collective bargaining" to workers—again raising the
possibility of this right being extended to small firms. More
significantly, it gives the right, "in cases of conflict
of interest, to take collective action . . . including strike
action". Since the Thatcher reforms, the right to strike
has been considerably reduced in the UK. One fear is that this
Article might be used to restore the legality of unofficial, "wild
cat" strikes. Another is that the right to strike might be
extended to groups which do not currently possess it because of
security considerations. One such group is Prison Officers. Their
Association has recently announced that it is planning to take
a test case to the European Court of Justice. They may be followed
by the Police Federation, which is planning a ballot of members
on the right to strike.
7. Are the concerns of business critics
legitimate? The government's position is that they are not. According
to a document on the Foreign and Commonwealth Office's website,
"the Charter gives people no greater social and economic
rights than are provided in UK laws. The Charter will have no
new legal impact on the UK domestic law and creates no new powers
for the EU to legislate. The Charter does not extend the powers
of any court—domestic or European—to challenge UK
employment and social legislation" (2).
8. It is pointed out that a protocol to
the Treaty exempts Poland and the UK by asserting that "nothing
. . . creates justiciable rights applicable to Poland or the United
Kingdom except insofar as Poland or the United Kingdom has provided
for such rights in its national law" (3).
9. However there are doubts about the robustness
of these exemptions. Members of the European Court of Justice
are rarely strict constructionists in the American sense. They
have in the past considerably extended the coverage of European
Union Law, and as a group tend to be favourable towards extending
their remit. They are not answerable in any way to national governments.
There must be a possibility that they will interpret the ambiguities
in the wording of the Charter (for instance phrases like "information
and consultation in good time" in Article 27) in broader
terms than was initially understood, and exploit inevitable loopholes
in UK law to introduce compliance with practice in other parts
of the EU.
10. Nor should the fact that Poland also
stands aside from the Charter be considered to offer much support.
Poland's reasons for exemption are very different from the UK:
they relate to the implications for the recognition off same-sex
marriages, something which was opposed by their previous government.
The new Polish Prime Minister, Donald Tusk, has indicated that
he will consider accepting the Charter of Fundamental Rights at
a later stage. If and when that happens, the UK will be isolated
in its rejection of the Charter.
11. Past experience also suggests that in
those circumstances the UK government could be tempted, or pressurised,
into accepting the Charter as a quid pro quo when horse-trading
over some other issue.
12. If union power were to be enhanced by
the Charter, it is feared that management's ability to manage
would be reduced as unions acquired an effective veto over dismissals
or major changes of company policy: this could impact on competitiveness
and discourage firms from hiring workers. Enhanced powers to strike
would discourage managerial risk-taking, add to costs, cause disruption
to the public and possibly encourage the re-emergence of an inflationary
mindset.
13. But maybe this is just too pessimistic.
It can be argued that the other EU member countries are unlikely
to gang up on the UK in relation to the issue of unions and strike
action. For industrial relations practices across the EU are far
from homogenous, as the appended Table indicates, and many countries
may wish to preserve their own independence in this area. The
Table shows that there are considerable differences between member
countries in relation to restrictions on the right to strike,
unionisation rates, the use of collective bargaining and so on.
It is also worth noting that countries with very different legal
frameworks have similar levels of strike activity and other manifestations
of union activism.
14. The leaders of some other countries
might therefore be uncomfortable with Commission initiatives or
judicial activism that enhanced the power of trade unions, in
an environment where governments are increasingly aware of the
need to free up labour markets. President Sarkozy, for example,
is currently trying to reduce the ability of French unions to
bring his country to a standstill every time a policy proposal
is aired which they don't like.
15. Fair enough: the policy environment
may be less straightforward than alarmists allege. But should
we have to take the risk that our European colleagues will share
the UK's perspective on this issue? This is the question for Parliamentarians.
(1) For a summary, see J R Shackleton (1998)
"Industrial relations reform in Britain since 1979"
Journal of Labor Research 19, 581-605.
(2) Foreign and Commonwealth Office website "The
EU Reform Treaty: Ten Myths" http://www.fco.gov.uk/files/kfile/EU Reform
Treaty
(3) Protocol No 7 to the Treaty "On the
application of the Charter of Fundamental Rights to Poland and
the United Kingdom", Article 1.
December 2007
INDUSTRIAL RELATIONS IN THE EUROPEAN UNION'S
MEMBER COUNTRIES
|
| Country | Unionisation
Rate % *
| Right to Strike |
Collective Agreements |
Other Features of
Employment Relations
| Working Days
Lost per 1000 employees**
|
|
| Austria | 47
| In practice, not in law |
Yes, across the board | Works Councils and employees on Supervisory boards
| 41 |
| Belgium | 60
| Yes except ships and police
| 90% of workers covered |
Nationwide bargaining between Belgian Business Fedn and unions
| n.a. |
| Bulgaria | 18
| Banned in some parts of public sector
| Weakly adhered to | "Charter for social cooperation" between unions and employers
| n.a. |
| Cyprus | 60-70 in private sector
| Yes | Limited
| | n.a. |
| Czech Republic | 25
| Yes, following mediation |
Yes | Legal requirement for employers to get names of strikers in advance
| n.a. |
| Denmark | 60
| Yes, except essential services
| Yes—very important |
National Conciliation Board if negotiations fail. "Flexicurity" model links generous benefits to rigorous requirements for job search.
| 172 |
| Estonia | 30
| Yes | Very limited
| Labour Code sets rules |
n.a. |
| Finland | 80
| Strikes illegal once agreement is in force
| Widespread | Incomes policy often used
| 85 |
| France | 9 |
Yes | 90% of workforce
| Works Councils in businesses with
.>50 employees. Frequent government consultation and highly politicised unions.
| n.a. |
| Germany | 27
| Yes | Sectoral agreements
| "Co-determination" within firms.
| 3 |
| Greece | 26 |
Courts can ban illegal or abusive strikes
| Yes | |
n.a. |
| Hungary | 16
| Yes except military and police
| Limited | Tripartite determination of minimum wages.
| n.a. |
| Ireland | 50
| Yes except military and police
| Widespread | Labour Relations Commission provides advice and conciliation
| 68 |
| Italy | 30 |
Yes, in constitution, except essential services
| Widespread | Very difficult to dismiss workers
| 100 |
| Latvia | 17 |
Yes | Yes
| | n.a. |
| Lithuania | 10
| Yes except essential services
| Limited | Works Councils
| n.a. |
| Luxembourg | 57
| Yes, but after conciliation
| Yes | Works Councils and employees on supervisory boards
| 6 |
| Malta | 63 |
Yes except military and police |
Yes | Wage Councils regulating sectors
| n.a. |
| Netherlands | 25
| Yes except civil servants |
Cover 75% of workforce | Strong "social partner" institutions
| 18 |
| Poland | 14 |
Yes, except essential services, but lengthy procedures
| Mainly at company level |
Tripartite discussions setting framework for bargaining. Many disputes submitted to labour courts.
| n.a. |
| Portugal | 26
| Yes. Lockouts illegal. |
Widespread | Minimum essential services must be maintained during strikes. % days notice needed in private sector. State mediation in lengthy disputes.
| 19 |
| Romania | 44
| Yes | With government
| If a court rules a strike illegal, employers may claim damages.
| n.a. |
| Slovakia | 30
| Yes except armed forces |
Widespread sectoral bargaining |
Sympathetic strikes allowed. |
n.a. |
| Slovenia | 41
| Yes but restrictions in public sector
| Very extensive. Sectoral agreements across economy.
| Tripartite negotiations on public sector wages.
| n.a. |
| Spain | 15 |
Yes. Must give 5 days notice |
80% coverage | |
200 |
| Sweden | 80 |
Yes. Employers can also lock out.
| Widespread | National sectoral organisations negotiate framework agreements.
| 39 |
| UNITED KINGDOM | 30
| Yes, except armed forces and police
| Very few sectoral or national agreements
| Little government or "social partner" involvement.
| 25 |
|
* Percentage of workforce, 2004 or nearest year
** Average 1999-2004
Sources: Federation of European Employers, Office of
National Statistics
| 
