EU Developments: has social Europe disintegrated? Liverpool

About the Conference

Just three months before the EU referendum, delegates met in Liverpool to examine the economic and legal questions surrounding the in-out vote at an event that posed the question: is Social Europe disintegrating? Opening the conference, Carolyn Jones, Director of IER, noted that 23 June will be the first opportunity UK citizens have had since 1975 to vote on the EU. Carolyn said this provided an opportunity for people to express their opinion on the EU – an opinion that should be based on facts not fear.

Before introducing the speakers, Carolyn asked the audience to indicate their current opinion. The vote to stay in the EU was overwhelming – higher than those wanting to leave and the undecided put together. So, would the speakers confirm or challenge the delegates’ opinions?

Kathleen Walker-Shaw

The first speaker of the day, Kathleen Walker-Shaw, GMB European Officer, provided an overview of what she described as the ‘good, bad and ugly’ of the EU. She said that while the GMB would never be an apologist for the EU, she rejected the idea that the EU could be blamed for everything bad that happened to UK workers and unions. She noted that the Trade Union Bill has not been forced on the UK by the EU but developed by our own, elected, Tory Government, indicating the direction of travel an unrestrained Tory government would follow. Kathleen summarised the history of the EU from its halcyon days of Delors delivering labour rights through the disappointing days of Blair watering down EU rights before implementing them in the UK, to now when we are fighting to protect rights form the tide of attacks by the Court of European Justice and the restrictions imposed by the economic rules of the EU. Kathleen concluded by saying that she believed the biggest reason for staying in the EU was the list of rights stemming from the EU and she said the GMB would be deciding its attitude at its conference due in early June.

Download Kathleen Walker-Shaw’s slides
Download List of EU Rights

Professor Keith Ewing

Professor Keith Ewing then took the floor and outlined the values, procedures and rights associated with the modern EU. In terms of values, he suggested the Post-Lisbon EU resembled American free market capitalism more than European social democracy and that social dialogue had all but ended. Keith said since the global financial crisis of 2008, Europe has unravelled and that the 2020 Growth and Productivity Programme set of EU legal obligations, social Europe has melted away still further, with rights to collective bargaining and freedom of association being continually and systematically undermined. Keith outlined how the Troika used bailout deals to impose new bargaining arrangements on nation states including Greece, Portugal, Spain and Ireland. He said the rule of law had become the rule of the jungle.

Keith went on to explain how the EU monitors all 28 nation states every year against a set of economic rules set down by the EU in 2010. These rules encourage nations to shift from central to enterprise bargaining and to use the public sector to set pay policy across nations. Keith noted that in the UK the Tories embrace such moves, but that such procedures are now being enforced on other EU states as part of structural adjustment programmes. He said such shifts are having a massive impact on the power and reach of trade unions. He said this shift towards a USA style of industrial relations was being reinforced via free trade agreements, which reduced labour rights to the lowest common denominator – that of the USA.

In conclusion Keith warned that by looking back and trying to protect an EU of the past, we risk failing to look forward and fight for the protection of our future.

Download Professor Keith Ewing’s paper

Kevan Nelson

The next speaker, Kevan Nelson, North West Reginal Secretary of UNISON, began by comparing the political situation in the UK in the 1980s with today. He noted that now, as then, unions feel like they are in retreat and are looking favourably on a possible external saviour, wanting to see hope in a progressive European project. He suggested that delegates continue their research and recommended a short article by Danny Nichol.
Kevan noted that UNISON is currently consulting its members on the union’s position towards the referendum.

Kevan looked at the economic and legal arguments surrounding Europe and focused on the deregulatory impact of its overarching goal of ‘competitiveness’. He outlined the implications of the EU’s Regulatory, Fitness and Performance Programme – REFIT – the EU’s equivalent to the ‘cutting red tape initiative’ which he said has involved ‘screening the whole stock of EU legislation’ to remove ‘burdens’ on corporations. According to the European Trades Union Congress, the REFIT programme has an action plan to ‘simplify EU social laws’, including key directives that underpin workers’ employment rights in Europe, such as the directives on information and consultation, temporary agency work, data protection, posted workers, as well as the Working Time Directive.

The EU’s pursuit of deregulation is also evident in the position of its negotiators in regard to the TTIP proposals.

Kevan went on to highlight how UNISON has a positive view of public spending, noting how the UNISON EU consultation document states that “[p]ublic spending supports economic growth through investment in infrastructure, through supporting an educated and healthy workforce and through redistributing income to increase the spending power of poorer consumers”. Based on that opinion, UNISON conference has voted to oppose “every major treaty over the past 23 years, from Maastricht at the founding conference in 1993, through the Amsterdam, Lisbon and the constitutional treaties and the Services Directive”.

The EU-level restrictions on member states’ room for manoeuvre on fiscal policy – through the European Fiscal Compact, for example – is of ongoing concern to UNISON. The EU presents a potential block to the ability of a radical future Government to break with austerity and adopt policies that could realise a more just economy and society. He also noted that the EU has become explicit in its advocacy of privatisation, noting that when EU institutions dictate terms to countries requiring a bailout, they take the opportunity to impose privatisation, as in Greece, Ireland and Cyprus.

Kevan concluded by saying it is absolutely crucial to keep our eyes on the challenges that will still confront us on the morning of 24 June. We’ll still have a Government committed to reducing public spending to historic lows, pay caps in the public sector, a private sector workforce with low levels of unionisation and collective bargaining coverage, and the impact of the oppressive Trade Union Bill. Whatever the result of the referendum, we urgently need to better organise working people in the UK.

Download Kevan Nelson’s paper

Dominique Lauterburg

The next speaker, Dominique Lauterburg from Manchester Metropolitan University, started her presentation by declaring a personal interest! As a lecturer in EU and EU labour law, she wanted the UK to remain within the EU, though she noted that as a Swiss national she would not have a vote! She said she was of the opinion that social Europe had not disintegrated but was in need of serious renovation and noted that whatever the result of the referendum, Britain would remain within Europe if not the EU.

Dominique then gave a quick history of the EU and outlined the four principles at the heart of the EU Treaty – the free movement of goods, services, capital and labour. She then went on to pose a number of questions starting with what is social Europe? She identified five main elements: fundamental social righta, social protections, social dialogue, social and employment regulations and full employment. Dominique went on to ask what has the EU ever done for citizens and workers? She pointed to the free movement rights of citizens, workers and students, all of which she said encouraged people to be free moving European citizens. She also looked at employment rights and protections, pointing to the list of rights enjoyed by workers, despite attempts by UK governments of all hues to undermine those rights, and asked delegates to imagine how it would be without the EU.

Finally, Dominique turned to the question of what will happen if the UK leaves the EU? On this she highlighted the role of the Court of Justice of the European Union (CJEU) and noted that UK courts can and do ask the CJEU to interpret UK law against the principles set down by the EU. She noted that in many past instances this has been helpful including in its encouragement of respect for fundamental rights. She acknowledged, however, that in more recent times, that interpretation had been disappointing, noting the Viking and Laval cases and more recently the Woolworths case, allowing a major company to avoid redundancy payments by treating each establishment as a separate identity. In conclusion, Dominique thought that social Europe has not disintegrated but is disintegrating and is in need of serious renovation – as she said, not just a lick of paint but scaffolding and underpinning too! She believes we should stay in to negotiate change and reminded delegates that their “red tape” is our protection.

Download Dominique Lauterburg’s slides

John Hendy QC

The afternoon session began with Institute Chair and member of Old Square Chambers, John Hendy QC. John said he wanted to address six issues relating to the EU dealing with democratic structures, the court, attitudes to collective bargaining, TTIP, the better regulation regime and labour rights.

The first issue he addressed was democracy, asserting that not only is the EU internally undemocratic but it exports that lack of democracy, imposing policies, procedures and structures on member states. Greece is the classic example but in Ireland too the EU has intervened to impose conditions including labour market reforms. He agreed with Keith Ewing and said that national level collective bargaining structures and the right to strike have been diminished, job security undermined and pay freezes imposed.

In terms of the developing attitude of the CJEU, John told the conference of a recent EU court decision relating to attacks on collective bargaining and the rights of trade unions to protect the terms and conditions of their members. He said that the cases of Viking and Laval were well known, but a new case: Fonnship highlighted how the EU courts continue to place the rights of companies above the fundamental rights of unions to protect their members. Similarly, in the Alemo-Herron case, a UNISON case dealing with the protection of pay rates during a TUPE transfer, the CJEU placed the rights of business above the rights of workers.

John suggested that no more workers’ rights are going to flow out of the EU. So he asked should trade unions support continued membership on the back of past introduction of rights? Recent European Court of Justice decisions do nothing to suggest that the EU legal system is going to provide workers with collective bargaining rights protection and it is likely to continue to hold that the employer’s right to run a business trumps the right of workers to the benefits of collective bargaining.

He then turned to the trade agreements negotiated by the EU. Not just TTIP but agreements with Canada, Vietnam and trade in services agreements as well as others. These agreements give companies the right to sue governments but not vice versa. All of these agreements contain no enforcement mechanism for International Labour Organization conventions by workers against corporations or governments. They all contain a prohibition of states discriminating against corporations which could lead to a corporation suing a member state of the EU which offers a greater freedom to strike than others, on the grounds that this adversely affects their business.

John concluded that these facts may lead one to assume that a vote against EU membership is appropriate, but he warned that outside of the EU the present government would seek to impose further restrictions on trade union activity and a further diminution of workers’ rights. He suggested that the only hope to avert such a situation would be a government led by Jeremy Corbyn.

Download John Hendy’s paper

Professor John Foster

John Foster, Professor at the University of West Scotland, then gave a detailed and very informative overview of the economic causes and consequences of EU austerity. He began by setting out the causes of economic austerity within the EU and summed these up in three points: the assumptions of the 1986 Single European Act and subsequent treaties; the contradiction between these assumptions and the real world; and the resulting financial crisis and subsequent political use of the crisis. He described the consequences as increased inequality of power between labour and capital as well as between EU states, and the export of the crisis to the rest of the world.

John described the assumptions of the 1986 Act as ensuring competition would maximise growth and governments would not interfere with demand leading to an increase of five million jobs. Mrs Thatcher’s objective was to open up European financial services to the City of London, whereas Chancellor Kohl wanted to expand the German industrial market across Europe.

These assumptions were contradicted by the nature of competition between producers across Europe, the increase of bank credit, and the nature of labour markets in Europe. The EU leaders ignored the first two and focussed on the reform of labour markets. John then described the impact of the financial crisis, which brought a neoliberal solution that allowed no EU transfer funding, no monetary boost to demand, the reversal of bank funding and massive reform for labour markets through attacks on collective bargaining, labour contracts, pensions, benefits and welfare. He evidenced this attack by reference to the Portuguese reform programme of 2015, which saw the number of sectoral agreements fall from 172 in 2008 to 36 in 2012. The number of employees covered by collective agreements fell from about 1.9 million in 2008 to around 225,000 in 2014.

Professor Foster concluded that the inequalities that existed between the states before the crisis massively increased as a result of these actions. He described the consequences as having created the conditions needed to meet the original neoliberal economic assumptions. Labour mobility has greatly increased, and the effectiveness of collective bargaining greatly reduced. However, he asserted that uneven development within the EU is even greater and financialisation even more marked. Many of the EU’s social protections have been eliminated. He posed the question of how far working people across Europe would be willing to carry the costs of continuing EU austerity into the 2020s.

Download Professor John Foster’s slides

Professor Michael Doherty

The last speaker of the day, Professor Michael Doherty of the Maynooth University Department of Law, talked about free movement and workers’ rights. He reminded the conference of the original commitment of the EU to promote improved working conditions, which has been led by treaties which included the Charter of Fundamental Rights of the EU. He drew attention to the fact that only 2% of EU citizens exercised their right to free movement in 2004, and by 2016 this had only increased to 3%.

He went on to look at four issues affecting free movement and workers’ rights. The first of these related to equal treatment of workers when moving to another EU country. He emphasised that equal treatment has to be the lever which guides the economic policy of the EU. If equal treatment was not adhered to then a labour market would be disadvantaged, which in turn would lead to social inequality. The second issue looked at the relationship between the internal market and free movement of labour. These, he argued, need to be complementary not in opposition. However the danger arises from the fact internal market law is a matter for the EU, while social and labour rights are “relegated” as an issue for member states.

Thirdly, the issue of posted workers introduced a second tier of workers who do not enjoy equal rights, which effectively suspends rights in favour of employers’ freedom to provide services. The sectors where this occurs tend to be where work is of a more precarious nature. The final issue addressed was that of free movement and social assistance. Michael reminded conference that the intent of the EU was that workers should not lose out on social security by movement to other member states. This, he said, has been complicated by non-economically active citizens but argued that “welfare tourism” is not a massive problem. He expressed concern that non-economically active restrictions can spill over into areas of job seekers or those who were working but lose their jobs, and that it would be both counter to the spirit of, and actually illegal in, EU law.

Michael concluded by saying that the level of movement is still very small but is seen by some member states as a “flood”. Fear of decline in wages/living standards is common, but political reaction may make the decline more likely.

Download Professor Michael Doherty’s slides

Conclusion

To round up the day, Carolyn once again asked the audience to indicate how they might vote in the referendum in June. In a noticeable shift in numbers, the leave vote was greatly increased, overtaking those wanted to remain in the EU. But the biggest vote was from those who were now undecided. It was felt that the day of debate had provided a whole host of facts hidden by the trivia in the mass media – facts that raised questions and a thirst to know more. To assist in that discussion and dissemination of ideas, video clips of the excellent presentations of the day will be available from IER soon.

Speakers

Chair: Carolyn Jones Director, IER.

John Hendy. QC Old Square Chambers and IER.
Download John Hendy’s paper

Kathleen Walker Shaw GMB.
Download Kathleen Walker-Shaw’s slides
Download List of EU Rights

Keith Ewing King’s College London and IER
Download Professor Keith Ewing’s paper

John Foster Academic
Download Professor John Foster’s slides and paper

Michael Doherty Maynooth University Department of Law
Download Professor Michael Doherty’s slides

Dominique Lauterburg MMU
Download Dominique Lauterburg’s slides

Kevan Nelson UNISON
Download Kevan Nelson’s paper