Social and Labour Law

What are the 5 phases of the EU

1. Treaty of Rome

2. 1970s

3. The Delors Commission

4. 2007-2015

5. 2016-Present day

Treaty of Rome

in 1957 there was a mirage of market autopoiesis where people believe the market could organise and regulate itself without political or legal intervention

- no social regulation apart from equal pay

1970s

- emergence of the level playing field rationale,

- emergence of EU directives which harmonised social policy in minimal areas

The Delors Commission 80s-90s

- new ambition for more market integration

- awareness that market integration could not occur without social and labour standards being the same between countries

Jacques Delors, Commission President

"nobody can fall in love with a common market."

- people are not emotionally connected to a purely economic common market they connect with values like community and identity, the EU needs to offer people a sense of purpose and shared values

2007-2015

Turbocapitalism era and the death of social europe

2016-present day

The European pillar of social rights, a new distributive agenda and an uncertain future

Germany/Italy labour concerns

In Italy, salaries were lower than in Germany and there were concerns that German companies would set up in Italy so they could pay workers less

Neoclassical economic theory explanations for why Germany and Italy did not need to harmonise

Wage levels reflect the levels of productivity. Wages are lower in Italy because the productivity there is lower, so German companies would be discouraged from moving there

France/Italy equal pay differences

Both countries had an equal pay provision in their constitutions, but Italy did not properly implement it

The textile industry in Italy was female-dominated meaning Italian companies had a competitive advantage by paying the women less

Since there was no import duties on Italian textiles coming to France, French companies could not protect themselves from the advantage

winners and losers system

market integration introduces winners and losers, winners need to put some money into a fund to support the losers so they continue to participate in the common market

European Social Fund

member states put in money to support industries affected by market integrations

social fund example

The removal of trade barriers on German washing machines made it clear that Greek ones were inferior and more expensive, Greek manufacturers went bankrupt

Germany put money into the European Social Fund to create a training programme to teach the Greek manufacturers skills to gain work elsewhere

Three pillars of the relationship between the single market and social policy

1. Social Regulation via directives

2. Market Regulation

3. Structure of Funds

Social regulation via directive

40+ directives introduced to create a level playing field: equal pay, minimum wage, anti-discrimination, promotes social progress in the EU

the EU can raise social standards and does not have to settle for the lowest common denominator

market regulation

free movement of labour, services and persons

- sometimes leads to market tensions

Article 153(4) TFEU

all directives have a non-regression clause

Article 153(5) TFEU

excluded strikes, pay and walkouts from the regulatory competence of the EU

Article 153(2)(a)

Co-ordination:

- The EU can encourage cooperation, share information, and promote best practices, but it cannot force countries to change their laws

Article 153(2)(b) TFEU

(minimum) Harmonisation:

- EU sets basic minimum standards (e.g. for health, safety, discrimination)

- MS can go beyond these standards

- The aim is to gradually raise standards over time

What was the social context in the 1970s

There was a recession, pressuring companies to restructure based on MS social regulations

- cheaper to make employers redundant in Belgium compared to France

- led to a pressure to level the playing field beyond equal pay

context in the 1980s-90s

- appreciation that market integration required social integration

- Euroscepticism towards the common market by the political left

What promises did Delors make to convince people to support Market integration

1. Social dialogue

2. Community Charter of workers rights

3. new season of EU law-making in the labour law sphere

The Maastricht treaty 1992

integration through single currency (Euro)

- money system had to incorporate system of all MS

Maastricht Criteria

macroeconomic framework which constrained MS economic freedoms and required public debt and deficit

Treaty of Amsterdam 1997

- integrated Maastricht criteria

- introduced European employment strategy and coordinated with MS to reach employment targets

- promoted deregulation from 2000 onwards

Telework Agreement 2002

The EU refused to incorporate remote work in their directives

Trade and Cooperation Agreement Article 387

UK agreed to a non-regression clause to allow for a social level playing field with EU

- UK not allowed to reduce social standards from where they were when they signed the agreement

- static requirement only, no dynamic requirement to keep up to date with the changes made in the EU

TCA Article 399

- requires both parties to respect and promote multilateral labour standards

- dedicated dispute settlement and enforcement process

Elements of reciprocity, the UK and the EU are held to the same standards

What article 399 means

- committed to respecting 8 ILO conventions and the implementation of any other ILO conventions UK ratified

- committed to implement social provisions in European Social Charter

UK in breach and consequences

UK in breach of Convention 87 (respect of secondary industrial action)

- not automatically in breach of TCA, but can be brought before a dispute resolution mechanism

Context in 2000s

- desire for labour market deregulation to create more jobs and economic efficiency

- 2008 economic crisis

How did the 2008 crisis impact the EURO

→ if too many countries are defaulting, it impacts the value of the EURO

European Solution

- countries given bailout packages in exchange for harsh social and welfare conditionalities

- wages reduced by decentralising wage setting from the sector to the enterprise

Laval facts

facts: Latvian company sent workers to Sweden under freedom to provide services

- Swedish trade unions wanted Laval to sign a collective agreement to pay workers higher Swedish wages but Laval refused

- Swedish unions organised strikes to pressure Laval, Laval stopped working and went bankrupt

laval issue

Does the right to strike override EU free movement rules or does the freedom to provide services override national labour protections?

laval decision

- Although the right to strike is a fundamental EU right, it has to be balanced against economic freedoms

- the union blocked Laval's freedom to provide services and Sweden's wage system was not clear and accessible enough for foreign companies so it was unlawful

effect of Laval

- economic freedoms prioritised over workers' rights

- The EU can limit how fair states/unions can go in protecting local wages

- fear of social dumping (companies moving workers to lower labour cost environments to undercut wages)

Posted workers directive 1996

countries were trying to take advantage of their low wages to grow their country

workers directive tried to strike a balance between legitimate opposite concerns and interests of new members of the EU and the competitive advantage of the low wages

what was the effect of the worker's directive

- allows companies to send workers from lower-wage countries to higher-wage countries, so they can benefit from lower labour costs (a competitive advantage).

- But they must still follow core rules of the host country (e.g. minimum pay, working conditions) especially if wages are set by binding collective agreements

Viking Line case

facts: Finnish ferry company decided to re-register ships in Estonia to hire workers at lower wages, Finnish and international trade unions striked

decision: Trade union action that makes it harder for a company to relocate can breach EU law.

National courts must assess whether the strike is proportionate.

shift towards market constitutionalism

Laval and Viking suggests that EU prioritises economic integration over national social protection systems

threat to equal treatment of workers

Workers doing the same job, side by side, recruited in different countries, are paid different wages

Agent Ikralis Advoacte General

the EU is based on a free market economy, which implies that undertakings must have the freedom to conduct their business as they see fit

Contrary to the idea, the EU was based on a social market economy

Agent Ikralis CJEU

the EU is based on values such as solidarity and tries to embody a social market economy

Amendment of the posted worker directive

hanged the term pay to 'remuneration'

A much broader meaning than the concept of minimal pay

remuneration

all the elements of pay that employers are legally required to provide under national laws or universally applicable agreements in a country.

EU pillar of social rights

- encourages secondary legislation

- indicated a new political consensus had formed across MS that had a different vision of social and labour standards

- introduced to prevent the death of social integration

EU pillar of social right Directive 2041

prescribes the introduction of adequate minimum wages across the EU

Article 4 of the social charter

- the level of adequacy has to be 60% of the minimum wage

- MS have to promote collective bargaining until the coverage of collective agreements in n MS reaches 80% of the workforce

- have to report what action they are taking to push the levels of collective bargaining to 80%

validity of the social charter

MS can challenge the validity of the act of EU if it has been introduced ultra vires

Denmark argued that Treaty 153 excludes from the competence of the EU wages, strikes and freedom of association