The Post Brexit ‘Red Tape’ Paradox: Part 2

In Part 1 of this blog, we argued that the Brexit deal – the EU/UK Trade and Cooperation Agreement (TCA) appeared on the surface to offer guarantees on labour standards, but that those obligations are undermined by the provision of compromised heavily qualified scrutiny and dispute resolution mechanisms that subjugate the protection of labour rights to uninterrupted trade and investment. The price placed by the agreement on significant divergence on labour standards – principally the imposition of tariffs as ‘rebalancing measures’ – may on the face of it seem like a powerful and persuasive ‘market mechanism’ of regulation, but it is unlikely to deter a UK government seeking to dilute labour rights and ‘get Brexit done’ in the manner long-anticipated by the libertarian right wing of the Tory Party.

If the cracks in the plaster of the TCA are beginning to reveal themselves, might there be something to salvage in the structure of the agreement? Recent informally issued statements suggest that the EU may seek to postpone ratification of the deal because concerns have been raised about the limited scope for the EU to impose rebalancing measures following dilutions in standards. If this is the case, might there be a way of imposing meaningful protections in the framework of the TCA? After all, the agreement does, in its spirit if not its letter, appear to represent a formal attempt to protect, entrench and even advance the rights enjoyed by British workers.

For example, Article 8.3(5) explicitly ‘commits’ the UK to ‘implementing’ all ratified ILO Conventions and European Social Charter provisions, which is potentially of enormous significance. Despite the choice of wording, which seems an attempt to instill a false sense of ‘pious aspiration’ and a similarly spurious footnote seeking to further qualify and contain these longstanding unequivocally binding treaty obligations, 8.3(5) has the potential to provide an additional tier of scrutiny to complement the work of the ILO and Charter supervisory committees.

There is a certain artificiality to the EU’s pledge on behalf of Member States to uphold the ILO instruments and the Articles and paragraphs of the Charter they have ratified. EU competence in the sphere of industrial relations is limited, so unless there is to be some new internal arrangement, then strictly speaking those pledges are not for the EU to make – or at least it can only give such assurances in relation to Charter provisions and ILO instruments which reflect the demands of the Acquis. Nevertheless, that of itself should not stop the EU invoking the disputes procedure and potentially penalising UK exporters.

The ILO and Charter supervisory committees and their respective jurisprudences are also set to play a welcome and important role in the dispute resolution mechanisms. The TCA requires that during the envisaged formal consultations over alleged breaches of the labour provisions the UK and the EU take advice: ‘the Parties shall take into account available information from the ILO or relevant bodies…[and]…shall jointly seek advice from such organisations or their bodies’ [9.1(3)]. If a Panel of Experts are required to convene to consider the matter, they have a similar obligation and must also to refer ‘to any pertinent available interpretive guidance, findings or decisions adopted by the ILO and those bodies’ [9.2(6)]. If they are used sufficiently, these mechanisms have the potential to complement existing supervisory arrangements by the provision of direct and unequivocal advice on how UK labour standards may be revised and refined in line with the demands of the ILO and Charter and the TCA.

As for collective labour rights, the first two of the fundamental Conventions that the EU and the UK commit ‘to respecting, promoting and effectively implementing’ in the TCA are ILO Conventions 87 and 98 on freedom of association and the right to bargain collectively. Unfortunately, that pledge [8.3(2) and 8.3(3)] is little more than ritualistic, unenforcable FTA rhetoric, as made apparent by 8.3(3) which requires that ‘[e]ach Party shall make continued and sustained efforts to ratify the fundamental ILO Conventions if they have not yet done so,’ the negotiators apparently having overlooked the facts that that the EU cannot ratify ILO instruments and the UK (along with the EU 27) has ratified the full set. It is also unfortunately the case that the UK (along with a handful of EU Member States) has long been in brazen breach of C87 and C98 and of Article 6 of the Charter which requires States to protect the right to bargain collectively. Matters are further complicated by the limited EU competence already referred to, and the fact that, following the CJEU decisions in the Viking and Laval cases, EU law governing certain aspects of cross border industrial disputes is incompatible with those Conventions as well as with Article 6 of the Charter.

These inconsistencies are primarily of interest in the context of 8.3(5). British breaches of C87 and C98 and the equivalent Charter provisions have long permitted UK exporters an immediate economic advantage over their competitors in states where workers do have the right to effective bargain collectively. 8.3(5) requires the UK to adhere to its ILO and Charter obligations and therefore continuing British refusal to adequately protect the right to bargain collectively is a prima facie breach of 8.3(5). That said, given the EU’s less than flawless record on the protection of those rights, and the fact that it cannot oblige Member States to comply with those fundamental ILO and Charter obligations, it is unlikely that the European Commission would wish to make such a complaint. The position is similar, although not identical, with respect to the 6.3 requirements for effective labour inspection and enforcement: The Commission permitted the UK to introduce and maintain its policy of occupational safety and health regulatory surrender and impose the tribunal fees regime – which effectively withdrew many important individual employment rights of European origin – when the UK was a member of the EU. Consequently, it is unlikely that it will raise objections to these de facto deregulatory measures in the post-Brexit era, not least because it would have difficulty in providing a plausible explanation for its selective approach to calling member states to account for failing to effectively enforce EU law.

Nevertheless, the TCA has the makings of a framework for maintaining and advancing labour standards. Stripped of the ambiguity and contradictory qualifications which litter the agreement – the real red tape – it could provide the central pillar of an enforcement mechanism which would make divergences from EU, ILO and Charter standards politically untenable.

For that effective entrenchment to take place, the UK government must drop the necessity for regression in labour protection to impact on trade and investment. It must concede dynamic alignment on labour protection – even as the agreement stands it is possible to interpret 9.4 (1) and (2) as allowing for rebalancing to be imposed should either of the parties raise labour standards sufficiently to create a ‘significant divergence’. Crucially, it should pledge to ratify the full hand of ILO Conventions. South Korea has recently learnt that it is legally bound by the provision in the FTA it concluded with the EU requiring it inter alia to:

‘make continued and sustained efforts towards ratifying the fundamental ILO Conventions as well as the other Conventions that are classified as “up-to-date” by the ILO.’

That obligation could replace the anodyne equivalent Article 8.3(4) in the TCA with the level of obligation cranked up well beyond that which the Panel of Experts convened to consider that case established was the standard the EU could hold Korea to (‘higher than undertaking merely minimal steps or none at all, and lower than a requirement to explore and mobilise all measures available at all times’) and be extended to embrace the European Social Charter. UK workers would ultimately not only be protected by the genuine threat of penalties levied against firms exporting to the EU but by the ILO and Charter monitoring watchdogs, the Committee of Experts and the Charter’s European Committee of Social Rights.

This was essentially what we argued for in our IER booklet International health and safety standards after Brexit: The UK must initiate a programme of ratification of up-to-date ILO Conventions. It should ratify the Revised European Social Charter and it must ratify the Charter’s Collective Complaints protocol, following Finland’s example of giving domestic civil society organisations standing to bring a complaint of non-compliance before the European Committee of Social Rights.

As for the EU, it is unlikely to take exception to British efforts to protect and advance labour rights. Indeed, if it is indeed currently seeking to postpone the deadline for ratification of the TCA until April, it is likely that the obstacles to guaranteeing labour and social protections that litter the agreement may be back on the table. While no doubt some of the problems we have highlighted will be addressed and clarifications issued, it seems likely that the TCA will be ratified, and that formal review and revision will not commence until the scheduled date of 2025 – 26.

In the meantime, it is up to the trade union movement to ensure that there can be no red tape in the way of labour protections. We have a historic opportunity to demand intenational standards of collective bargaining rights, working conditions and transparent and effective enforcement mechanisms. This will not come from above, and it will certainly not come from a revised TCA. Yet there are labour and social protections on the table, still to be fought for, and there is a post-Brexit world still to be lost or won.