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Published on March 9th, 2016 | by frances

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What has Europe ever done for us: attack on collective bargaining

By John Stevenson

Those trade unionists advocating remaining within the structures of the European Union are likely to point to the fact that much employment legislation in Britain today is derived from the EU. The list is impressive, covering business transfers; equality; working hours; and more. But what it fails to demonstrate is the systematic and sustained attack on trade unionism itself by the erosion of collective bargaining. What the EU has given with one hand it has taken away with the other.

There are effectively two models of collective bargaining:

  1.  the “regulatory model” where industry wide agreements are the norm, or
  2.  the “representative model”, like that adopted in the USA, whereby collective agreements are limited to enterprise-level.

The importance of collective bargaining cannot be underestimated – it raises wages; equalises incomes; stimulates demand; increases employment; and reduces welfare dependency. Both models were developed to achieve this but have produced markedly different results in collective bargaining coverage. For example, in 1946, 86 per cent of British workers were covered by a collective agreement; a figure that remained virtually static until the 1980s. Today it is closer to 23 per cent – its coverage already the second lowest in Europe, just above Lithuania’s 15 per cent – whilst in the USA it has never been much more than 10 per cent.

Collective bargaining in Britain was undermined and attacked from the onset of the Thatcher government in 1979. As the Tory White Paper[1] stated: collective bargaining was an “outdated personnel practice” that was “increasingly inappropriate” and that the government “will continue to encourage employers to move away from traditional, centralised collective bargaining.” It is no accident that the decline in trade unionism mirrors the decline in collective bargaining.

The proportion of employees covered by collective bargaining across the 28 EU states varies from well over 90 to 15 per cent. At the top of the league are the nations that either have high levels of union membership (as in northern Europe) or have legal structures that ensure collective agreements have a wide coverage. In the countries at the bottom of the table, like in the UK, company (enterprise) level bargaining dominates.

In 1989, Jacques Delors, the then President of the European Commission, seduced many at the TUC Conference with his view of a social Europe, promoting a vision that all workers would be protected by collective bargaining and reinforced by the EC Charter of the Fundamental Rights of Workers. The Charter in respect of collective bargaining and the right to strike laid out that workers of the EU “Shall have the right of association” and “the right to negotiate and conclude collective agreements under the conditions laid down by national legislation and practice.

On reading the Charter, all appears well but, in reality, this is far from the truth as the Charter has been dismantled by the EU itself. First came the judicial attacks by the European Court of Justice (ECJ, now CJEU) in respect to the Viking[2] and Laval[3] cases where employees undertook action to protect their collective terms and conditions. The ECJ rulings crushed the fundamental human right to take industrial action and bargain collectively. The ECJ ruled in favour of the EU pro-business rights that were enshrined in the EU Treaty concerning the free movement of capital and labour.

A later judgment, in Alemo-Herron V Parkwood Leisure [2013], ruled that, despite employees being covered by TUPE legislation, the right to conduct business overruled the rights of employees, meaning that the employer could “Disregard the obligations which it had taken on the workforce.

The neo-liberal ideology of the EU, with the signing of the Single European Act 1986, inspired by Thatcher and German Chancellor Helmut Kohl, established the deregulation of finance capital which eventually led to the banking crisis of 2008 and subsequent austerity policies of governments and, more especially, the EU. The Act set out the process of controlling public spending but not that of banks which had no restrictions placed upon them.

By 2010, with the rules of economic governance firmly in place, the aim had become to harmonise national economies. Social Europe was dropped and the policy of greater wage flexibility and collective bargaining closer to the enterprise was developed.

In consequence, with the bail-out of the banks and the collapse of the economies of southern Europe, especially those of Greece, Portugal and Spain, collective bargaining has again been undermined. For example, Greece: as a part of the bail-out package the Troika (EU, European Central Bank and the International Monetary Fund) demanded the decentralisation of collective bargaining – that is, the adoption of the enterprise model. But as the Charter of Fundamental Rights states, this should be the remit of the nation state where “Conditions (are) laid down by national legislation and practice.” The EU has no remit to do so but nevertheless imposes the conditions that it so chooses.

With Portugal, the government had frequently extended agreements to employers that were not signatories. This has now been greatly limited, with the result that collective bargaining coverage has been much reduced.

The EU’s Information and Consultation Directive of 2001 has further eroded collective bargaining. The Directive proposed dialogue in the workplace, setting out minimum principles and arrangements for information and consultation of employees at “enterprise” level within each country in order to “Make work organisation more flexible.”

The Directive reinforced enterprise bargaining even though a majority of member states still held a regulatory approach. As a consequence, many employers seized the opportunity to consult directly with employees and bypassed established trade union organisations.

The weakening of collective bargaining has begun in the south of Europe and it is likely to head northwards. Belgium and Germany will, at some point, be brought under pressure to align their systems with the view of the EU. It is interesting to note that even the European economic powerhouse of Germany has recently introduced a minimum wage. As in Britain, the minimum wage was introduced as an acknowledgment of the weakness of collective bargaining in that it was no longer able to provide a minimum standard of living for many employees.

This post has focused on the issue of collective bargaining, but it is worth looking at the individual rights gained through EU membership. Those who advocate remaining in the EU say we will lose these employment rights but, in reality, a vote to leave the EU would be unlikely to cause immediate and major employment law policy change in Britain.

Many of the EU laws and directives would be retained.

  • Withdrawal negotiations would take at least two years with current legislation remaining in place during this period;
  • Britain will be expected to adhere to much of EU legislation as part of any trade agreement;
  • Many of Britain’s laws which originate from the EU have become workplace norms as a consequence, and it would be politically unattractive for a government to initiate wholesale removal; and
  • Much of British law exceeds minimum EU requirements e.g. family leave rights, or falls outside the remit of the EU e.g. unfair dismissal rights.

A great deal of the debate about an exit from the EU is as much about what type of trade unionism we want – one based on weak minimum rights; or one based on robust collective bargaining. Trade unions cannot hope to attract new members if they cannot provide a conduit for change in the workplace. Change can only be achieved through collective bargaining. By remaining in the EU, legislation will be minimal in scope and depth, and the ability to challenge will be undermined by weak collective bargaining.

This is a crossroads for a trade union movement that, if it wishes to survive and indeed flourish, needs to campaign to leave.

[1] People Jobs and Opportunities 1992

[2]International Transport Workers’ Federation, Finnish Seamen’s Union v Viking Line ABP and anor [2007]

[3] Laval un Partneri Ltd v Svenska Byggnadsarbetareforbundet and ors [2008]


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2 Responses to What has Europe ever done for us: attack on collective bargaining

  1. frances says:

    Comment from Calvin Allen, Prospect Researcher:

    An interesting and thought-provoking piece, John – and one which does prompt me to put fingers to keyboard!

    There’s no argument from me on the importance of collective bargaining, which remains as important as when Beatrice Webb first defined it – although it would be interesting to debate, not least in this immediate context, her view (in principle) that collective bargaining would decline in importance as legal regulation took hold. As trade unionists – in the UK or in Germany – a belief in (and desire to extend) collective bargaining is what we all hold in common.

    But, clearly, this level of decline is not the fault of the EU. As you indicate, collective bargaining coverage reflects national traditions and practices: there is a wide variety of coverage within the EU; and the UK’s enterprise-level collective bargaining has been the case since long before this country ever joined the EU (alongside a shop steward system that was proud to uphold it, much to the chagrin of continental colleagues: back then, we thought we had it made!). The reasons for the decline in coverage in the UK are many and, sure, will include the effects of liberalisation alongside the decline in manufacturing and successive governments committed to twin policies of privatisation and decentralisation. To the extent that the EU is the product of national member state governments who are committed to these policies, it shares in that responsibility – but it is not itself the author of them.

    The Viking and Laval cases clearly represent bad outcomes. But we also have courts in the UK where decisions are nonsensical and which represent retrograde steps for trade unions. Judges, whether they are located in London or in Luxembourg, tend towards the reactionary and are rarely in sympathy with the aims of collective bargaining or collective organisation in general.

    I’d agree – as would all our colleagues in EU trade unions – that ‘social Europe’ has been downgraded in importance by successive Commissions. Again there are a number of reasons for this which clearly include, at the minute, the UK’s renegotiation and referendum: few European leaders want to jeopardise the UK’s continued membership by putting social rights on the agenda. I wouldn’t argue that this was the only reason – but the biggest of them all is that, right across the continent, crisis, austerity and a spinning moral compass has frequently (although clearly not everywhere) led to the election of right-wing governments. Personally, I would agree with Brecht on this point! At a policy-making level, the EU is bound to reflect that – it does, ultimately, reflect the governments of the EU’s member states and the policy measures it takes are those which resemble the collective will of national governments.

    European trade union organisations are trying very hard to get social Europe back on the EU agenda and here I would simply argue, as in any other situation, that workers’ rights have to be fought for, they never fall into our laps.

    I would not seek to defend the EU’s actions in Greece which are clearly anti-democratic – but I would take issue with your points on the Information and Consultation Directive. This does indeed do what it says on the tin – it is about ensuring that workers are informed and consulted, but it is intended neither to replace nor act as a proxy for collective bargaining. As a dedicated student of industrial relations, I also could come up with several examples of where an employer has sought to defeat attempts at collective organisation by setting up an employee forum but an employer will rarely be able to bypass an established, vibrant trade union in this way – and this is not the purpose of that legislation.

    I look forward to developing with you a robust collective bargaining system in this country which helps to redefine the role and the voice of the trade unions in workplace change and which achieves positive, strong gains for workers. That’s the task for all of us in this union and all others. We can (and we must) build strong trade unions based on a core of strong workplace rights and the need to do so I think exists entirely outside of the considerations of whether we’re in or out of the EU. But, while we’re doing that, the steps that this government is likely to take in support of its own pro-business agenda if it was outside the restraining influence of the EU, will only make our task quantitatively more difficult.

  2. Pingback: TUC publishes report on EU and workers’ rights – EUmatters

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