The EU: friend or the foe of trade unions?

06 July 2012

Many thanks to those who attended our Developments in European Employment Law conference at the Adelphi Hotel in Liverpool on Wednesday (July 4th).

Perhaps the main theme of the event was the debate among both our speakers and attendees over whether the EU was the friend or the foe of trade unions. Back in the 1980s, while working rights were being threatened by Thatcher, trade unions embraced a more “social” Europe. But now that EU countries are being torn apart by the financial crisis and member states are implementing harsh austerity measures (or being forced to in return for bailout packages) there has been a change in attitude toward employment rights on the continent.

Developments in European Employment Law

In March 2011, the Euro Plus Pact was approved by the European Council. All 17 members of the eurozone, plus Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania, agreed to reconsider wage-setting arrangements and bring wage indexing and centralised collective bargaining to an end in the name of “competitiveness”.

Then, earlier this year, new Monti II regulations threatened to set in law the mistakes made by the European Court of Justice when it found in favour of Viking and Laval, two companies which flagrantly defied international labour law. Finnish shipping company Viking dismissed domestic seafarers and replaced them with Estonian workers on a lower salary, while Laval imported Latvian construction workers to build a school in Sweden to avoid paying the rates expected by local tradesmen.

As yet, the Monti II regulations have not been passed, with neither trade unions nor employers in support of them. However, the fact they were drawn up shows the right of corporations to search for cheap labour across the globe is seen as more important than the fundamental right of workers to take action against such unfair circumstances.

When employment law fails workers: Cases Studies

Exclusion of maritime and offshore workers from employment rights

First to speak at yesterday’s conference was President of the National Union of Rail, Maritime and Transport Workers (RMT) Alex Gordon, who detailed the problems his organisation is are fighting against when it comes to the rights of their members – particularly the exclusion of offshore and maritime workers from basic employment rights when they leave UK borders.

Seafarers are vulnerable to being dismissed while overseas, without consultation, and replaced by workers from other countries who they are not obliged to pay the UK minimum wage, for example.

Exploitation of posted workers

Jeff Beck of the GMB revealed to attendees at yesterday’s conference the importance of being able to pursue a case across borders. He introduced the case of 14 Polish workers at Uskmouth’s combined cycle gas turbine, who were employed by contractor Darmar, who had found them through an agency called Isochore. The workers sought the GMB’s help when it became clear their accommodation costs were being taken out of their wages and the amount of money paid into their bank accounts by Darmar was significantly below that shown on their payslips. When the GMB won their case against Darmar, the employer shut their UK offices and fled to Hamburg, where they insisted to Beck that they were an unrelated company with the same name.

How EU trade agreements affect workers

Linda Kaucher presented the case that EU trade agreements wage “a war on workers”, pointing out that trade-in-services is particularly profitable for EU countries and can mean sending workers across borders on a temporary basis (an exchange the World Trade Organisation defines as Mode 4 service delivery).

Kaucher argued that pressure on the UK government to push for increased liberalisation in terms of Mode 4 trade agreements comes from the City of London’s transnational financial services sector, which stands to profit from access to international markets in exchange for the opening of UK workplaces to immigrants.

In her presentation, Kaucher brought attention specifically to 2007’s EU/India Free Trade Agreement, which saw the UK take the largest share of Mode 4 commitments out of any member state.

The outcome of the trade deal is that the cream of the crop of Indian IT specialists can be brought to the UK in unlimited numbers for temporary work and hired at a much cheaper cost compared with British-born workers, due to lower wage agreements and exemption from national insurance contributions in the first two years the temporary worker stays in the country.

Kaucher called on unions to act by “proactively” demanding a Resident Labour Market Test on labour migration and raising awareness about “secretive” Mode 4 agreements and the City of London’s role in them, as well as counteracting the spin that defines any discussion of immigration as “racism”.

During her presentation, Hannah Reed of the Trades Union Congress (TUC) stated that the TUC are not against migration, but they are opposed to the cross-border movement of workers if it is being used to lower standards.

EU laws and privatisation

Another theme that emerged during the conference was the fact EU directives apply to public bodies but not private ones. Indeed, in a lively question and answer session, delegates questioned whether the Localism Act – which is seeing more private contractors taking on public work – will mean EU laws that protect workers will cover fewer and fewer of the UK’s employees.

Public law expert Michael Dougan of Liverpool University outlined the method and means of enforcing EU employment laws and raised the outcome of the Mangold case, in which the European Court of Justice stated that German law must be brought into line with the Employment Equality Framework Directive, even though this legislation had not yet come into effect. German laws applying only to employees of certain ages “offends the principle” of not discriminating on the basis of age, the court decided.

Dougan suggested this opens up the possibility of other national legislation being found illegal in the eyes of the law, stating that the application of EU directives to only public bodies could break a “general principle” of EU law.

Trade Union Relationships to the EU

One of the hottest debates was the relationship of trade unions to the EU and its laws and suggestions were made about which way is best for trade unions to go forward.

Gordon argued optimism over a ‘Social Europe’ is misplaced, noting that even when progressive European legislation comes into effect, it has little impact on UK workers. National action is far more effective, he noted, proposing that fighting for stronger trade union rights will make it more difficult for future governments to bring in fundamentally undemocratic laws against workers.

However, Neil Todd of Thompsons Solicitors concentrated on the ways in which EU laws could provide the right to strike for British workers. In an argument similar to that written by IER President Keith Ewing and IER Chair John Hendy QC in the employment law publication Days of Action, Todd said Article 11 of the European Convention of Human Rights provides trade unions with the right to take secondary action.

Providing the point of view of the TUC, Hannah Reed argued that the EU should continue to provide a minimum floor of rights below which no worker should fall, and reconfirmed that the TUC would only support the EU if it retained with a strong social element, rejecting the current “turning tide” in Europe which increasingly focused on market principles. In this respect, Reed outlined the TUC’s campaigning work against the Monti II regulations and in favour of improvements to the Posted Workers Directive and the Public Procurement Directive. She also outlined attempts to strengthen the worker voice in situations including redundancy, TUPE and information and consultation provisions.

Conference papers from Wednesday’s event are currently being uploaded here.

To find out more about forthcoming employment law conferences, please see our events section.

The contradiction between EU and UK trade union rights law is explained in detail in the Institute of Employment Rights’ employment law publication Days of Action, authored by our Chair John Hendy QC and President Professor Keith Ewing.

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