Think PIECES. 20 years after Delors, the future for Social Europe December 2008 DIRECTION FOR THE DEMOCRATIC LEFT. by Richard Corbett MEP

Transcription

1 Delors thinkpiece 42:Layout 1 15/12/08 12:14 Page 1 DIRECTION FOR THE DEMOCRATIC LEFT 20 years after Delors, the future for Social Europe December 2008 by Richard Corbett MEP Number 42 Think PIECES

2 Delors thinkpiece 42:Layout 1 15/12/08 12:14 Page 2 Number 42 Think PIECES 20 years after Delors, the future for Social Europe by Richard Corbett MEP In our modern, globalised world, technological advancement, free movement of goods, capital and labour has made the world smaller. In this context, the EU is our local neighbourhood community and Britain needs to be a constructive and influential member. Compass publications are intended to create real debate and discussion around the key issues facing the democratic left - however the views expressed in this publication are not a statement of Compass policy.

3 Delors thinkpiece 42:Layout 1 15/12/08 12:14 Page 3 20 years after Delors, the future for Social Europe PAGE 1 20 years after Delors, the future for Social Europe Richard Corbett MEP Introduction This year will mark the 20th anniversary of Jacques Delors' speech to TUC Congress in which he outlined the basis of "Social Europe", in which solidarity and cooperation existed alongside economic competition and entrepreneurship. The British labour movement, having endured nearly ten years of Thatcherism, embraced the possibility of a new political arena where they could fight for workers' rights. Meanwhile, the Labour party completed its shift from a withdrawalist stance on Europe in 1983 to an integrationist one, with Neil Kinnock's powerful conference speech in 1988 embracing the idea that Labour should work closely with its socialist sister parties in Europe. The EU has, largely speaking, been a positive force for workers, enshrining in its work the trade union values of social inclusion and solidarity, welfare states and public services, and worker participation and collective bargaining. Through various decisions in particular those applying the Social Chapter introduced as part of the Maastricht Treaty, the EU has provided and safeguarded important rights, including maternity pay and parental leave, paid holiday as well as a raft of health & safety legislation. Our European social model proves that it is possible to maintain economic growth alongside high levels of employment with social security and quality public services available to all. Indeed, the most recent levels of per capita economic growth in the EU are better and certainly more equitable - than the deregulated USA. However, in recent years, social Europe has stagnated. Its previous achievements remain on the statute book, but new ones are few and far between. The Barroso Commission has had a somewhat onesided focus on market liberalisation, tending to see social Europe more as a cost than a contribution to economic growth. This, combined with the lack of progress on the review of the decade-old directive on Working Time and the six year delay in adopting a directive on Temporary Agency workers, is leading to rising dissatisfaction amongst trades unions and, more broadly, the left. This is in danger of expressing itself in a growing scepticism about the value and purpose of European integration. The political repercussions have started to be felt. The "No" votes against the Constitutional Treaty in France and the Netherlands, with significant minorities in the socialist parties in those countries supporting the "No" campaign, in part reflected dissatisfaction with the stagnation of social Europe. In September last year, trade union frustration at the lack of progress in resolving the Working Time and Temporary Agency workers directives and the protocol negotiated by the UK on the Charter of Rights boiled over, with TUC Congress approving a motion tabled by the normally pro-european GMB, calling for a referendum on the Lisbon Treaty. Moreover, the recent "Vaxholm" and "Viking" cases, where the European Court of Justice (ECJ) appeared to rule that, under the law as it stood, an employer's right to 'freedom of establishment' took precedence over the right of unions to make collective agreements or take industrial action, and some other judgments, were perceived by the ETUC as a further slap in the face to trade unions. But the balance sheet can be changed. Just like the battles we fight at national level, it is ultimately the results of political choices expressed in legislation that determine how social Europe is. The EU is a political and social project. It would be wrong to fight a battle against the European Union when we should be fighting to change the European Union. Of course, the role of the EU in social policy is, compared to that of national governments, decidedly limited. There is also a tendency for national politicians and governments to claim the credit domestically for popular EU directives but blame the laws that they don't like on 'meddling Brussels bureaucrats'. Nonetheless, there are elements in social policy where action is best taken at European level. This pamphlet looks at what the EU has done in the field of social policy and what it has still to do, the legislative priorities, and the institutional tools at our disposal. Some argue that the EU should be about unrestricted market forces. But, if a market is to work fairly and efficiently, it must be, where necessary, corrected and regulated. In any case if the EU is to flourish then it must be more than just a market. It is a political and social project - as Delors put it in his TUC speech: "No one falls in love with a market". Achievements of European social policy legislation Labour made joining the Social Chapter, which the Conservative government of John Major had refused to join, a pledge in its 1997 manifesto. As a result, the UK agreed to take on board the legislation that had been adopted under the Chapter during its absence. These included: Maternity and Parental Leave Regulations The Parental Leave Directive became part of UK law in It ensures that -

4 Delors thinkpiece 42:Layout 1 15/12/08 12:14 Page 4 PAGE years after Delors, the future for Social Europe All employees are entitled to at least 3 months unpaid leave on the birth or adoption of a child. Employees are guaranteed protection from dismissal for taking parental leave and have the right to return to the same or an equivalent job. The European Works Council Directive This was integrated into UK law in 2000, having been adopted at EU level in It gives 10 million workers in companies across the EU the right to information and consultation on company decisions and consultation rights for workers on crossborder takeovers. Part Time Workers Directive This stemmed from an agreement between the Social Partners (employers and trade unions) at European level to safeguard the rights of part-time workers. This directive was adopted in 1997 and implemented in the UK in The directive was amended in 2002 to ensure equal access to occupational pensions for part workers, improving the provisions on claiming backdated pay and scrapping the qualification whereby the legislation only applied to those who had worked for at least two years. Fixed Term Work Also the result of an agreement between the Social Partners, the Fixed Term Workers Directive (adopted in 1999) sought to safeguard the rights of those with fixed term employment contracts Burden of Proof in discrimination on base of sex This was agreed under the Social Protocol in December 1997 after the signature of the Treaty of Amsterdam, but before its ratification which enabled Britain to join it. This Directive ensured that the burden of proof was with the employer to demonstrate that they were not acting in a discriminatory manner. Implementation in the UK was contained within the Sex Discrimination Act of Working Time The Major government resisted the Working Time directive, which was adopted in November 1993 by a qualified majority (with Britain abstaining in the Council of Ministers), not under the social chapter in its strictest sense but as health and safety legislation. Its purpose is to protect workers from being forced to work excessive working hours and being excluded from holiday entitlements. The Conservatives challenged the directive in the European Court of Justice (ECJ), arguing that working time was not a health and safety matter, but lost in November In 1998, Labour implemented the directive but with a number of minimalist features which: Counted public holidays as part of holiday entitlement Adopted only the legal minimum of 20 minutes for work breaks Introduced a 13 week uninterrupted qualifying period And, most significantly: Kept the right of individuals to opt out of the 48 hour week. In 2001, following a legal challenge to the government s application of working time by the trade union BECTU, on the grounds that the 13 week qualifying period prevented many workers on shortterm contracts from getting paid annual leave, the ECJ found the UK government to be in breach of EU law for trying to restrict application of what was a direct and immediate right. The UK has since amended its regulations and the future of the individual opt-out is now under consideration. Updating the Acquired Rights Directive (TUPE) Although this directive is, too, not part of the Social Chapter, it clearly has a social aspect protecting the rights of workers who have their employment contracts transferred to a new employer. The rights and obligations of the original directive (which was adopted in 1977) remain in place, but were updated by a revised Acquired Rights Directive which was adopted in 2001 and integrated into UK law by the 2006 TUPE Regulations. The new regulations have the effect of: Widening the scope of the directive to cover service contracting operations involving labour-intensive services such as office cleaning, catering, security guarding and refuse collection (while leaving unaffected the position in relation to "professional services" such as accountancy, consultancy and legal advice); Ensuring that the new employer is better informed of the ongoing employment rights of the employees he or she takes on; Improving the way TUPE operates when insolvent businesses are sold, to help promote the ''rescue culture'' and save businesses and jobs that would otherwise be lost. Equal pay and non-discrimination legislation The principle that men and women should receive equal pay for equal work is one of the fundamental principles of the EU and is enshrined in Article 141 of the Treaty of Rome. The Equal Pay Directive is designed to facilitate the practical application in law of Article 141 and its provisions require that: Job classification systems to determine pay must be based on the same criteria for men and women and drawn up to ensure that there can be no discrimination on the grounds of sex

5 Delors thinkpiece 42:Layout 1 15/12/08 12:14 Page 5 20 years after Delors, the future for Social Europe PAGE 3 There can be no provisions in national law, collective agreements, wage scales or contracts of employment which are contrary to the principle of equal pay, Employees must be protected against victimisation if they take measures to force compliance with equal pay law The impact of EU law on equal pay cannot be overemphasised. As the Equal Opportunities Commission has said, "most of the progressive developments in equal pay law in the last 25 years have come from EU law", and Article 141 has led to significant equal rights legislation. Indeed, this principle has been extended to include legislation ensuring equal treatment of people regardless of their racial or ethnic origin, which became part of UK law in The Temporary Agency Workers Directive It has now been over six years since the Commission first brought forward proposals for a Temporary Agency Workers directive. Under this directive, temporary workers will be given the same rights to pay, hours and holidays as their full-time colleagues. The number of temporary agency workers in the public and private sectors of the UK labour market has greatly increased in recent years. Temporary agency work contributes to a dynamic and flexible modern economy and can often be a bridge for long term unemployed to get back in the labour market. But agency workers should not be treated as secondclass workers and agencies should not be able to distort the labour market by undercutting the wages and conditions of other workers. Following the directive's first reading in the European Parliament, which approved it with the support of Labour MEPs, TAW was blocked in Council, not least because of reticence by the UK government. The main concerns have been over the length of the qualifying period before equal treatment rights apply. The Commission proposed six weeks, while the Parliament, trades unions and a majority of Member States are calling for equal treatment from the first day of the temporary contract. The UK, along with three other Member States (Denmark, Germany and Ireland), long argued that temporary workers should only enjoy equal rights after working at a firm for 12 months. The impasse understandably caused huge frustration for trades unions. One of the terms of the 2004 Warwick Agreement between the government and unions was that the government would support a temporary agency workers directive or, in the absence of European legislation, provide domestic legislation. This frustration was heightened when the Government talked-out Paul Farrelly's back-bench bill on agency workers in the House of Commons last year. However, in May, the Government reached an agreement with the unions and the CBI that would give equal treatment after 12 weeks, allowing a deal to be reached between European Employment ministers in the Council of Ministers in June. In October, when the directive returned for second reading in the European Parliament, MEPs approved the deal reached in Council and this vital legislation, which will protect over 1.3 million temporary and agency workers in the UK, will now come into force. This is a major step forward that will protect some of the most vulnerable workers in our labour market, and also demonstrates that 'social Europe' in which flexible labour markets exist alongside social protection can be a reality and not a myth. Unfinished business The Working Time directive The requirement for a review of the Working Time directive was built into the original directive. Two elements of the text were to be reviewed ten years after the directive first entered into force: The period over which the calculation of working time is averaged (the "reference period'), and The status of the individual opt-out The latest Commission proposal attempts a compromise to allow for flexibility: that opt-outs be subject to collective agreements; that "inactive parts of on-call time" not be considered as working time; and that the reference period for calculating the average weekly working time should remain four months. The proposal was approved by the European Parliament (including Labour MEPs) but has since been stuck in the Council, which must take a position by qualified majority (over 70% of the votes) to be referred back to the European Parliament for a second reading. Council has been almost equally divided between Member States that want the individual opt-out to continue (led by UK, Germany, Poland) and those insisting that it must end (led by France, Spain, Italy). Some have argued that the law should allow those who genuinely want to do so, to work longer and earn more, as a matter of personal choice. Others claim that the extra flexibility in the labour market provided by the opt-out is important to our economic performance, while others argue that some sectors, such as the NHS, could not manage with a 48 hours limit on working time. However, there are serious objections to the principle of opting out of health and safety legislation. Why should we try to opt out of legislation responding to growing medical evidence that regular long

6 Delors thinkpiece 42:Layout 1 15/12/08 12:14 Page 6 PAGE years after Delors, the future for Social Europe working hours can seriously damage health, not to mention the dangers that can be inflicted on others by exhausted doctors, nurses or lorry drivers? Besides, there is plenty of evidence to suggest that the countries that enforce the opt-out have not suffered with a drop in economic performance or productivity. Output per hour in France, for example, is far higher than in the UK or the US. Besides, the TUC has estimated that, despite claims by business to the contrary, abolishing the opt-out would actually be cost neutral. Similarly, Working Time is not a rigid edict whereby workers would be forced to down their tools, stethoscopes or pens as soon as their 48 hours were up. It is about a 48 hour average of a period of three months, and there is no reason why a flexible interpretation cannot be used to allow those in front-line services to be excused from a rigid enforcement of the directive. Above all, Britons currently work the longest hours in Europe - an average working week of 43.6 hours a week, compared with a European average of 40.3 hours, while the TUC estimates that over 4m Britons regularly work more than 48 hours per week. This is 700,000 more people than in 1992 when there was no protection against working long hours. In May 2008, the British and other European Employment Ministers agreed a deal that would leave the status of the opt-out intact but toughen up protection of workers to prevent employees from coercing them to opt out. This is a vital point. Indeed: Only one in three workers knows that the law protects them from working over 48 hours. Nearly two thirds of workers say they have not been asked whether they agree to opt-out. One in four who have signed an opt-out say they were given no choice about signing away their rights. 60% of those who work more than 48 hours say they would like to work fewer hours. The directive will now return to the European Parliament, where a battle will be fought over the status of the opt-out. It is crucial that the gap between Council and Parliament is bridged. At the very least, if it kept it is vital that the Government increases protection for workers to prevent the abuse of their ability to opt in or out, as agreed between Unions and the Government at Warwick. Ten years after the Social Chapter, Labour's record and the new Tory threat It is difficult to deny that the Government has a mixed record on European social legislation. While the bulk of legislation has been agreed and integrated into national law, the UK has implemented some legislation in a minimalist way and dragged its feet on others (working time and temporary agency worker being the most notable). Granted, when it signed the Social Chapter in 1998, the UK had a lot of catching up to do, with some in Government understandably calling for a gradualist approach rather than a rush to implement swathes of legislation in full. But, ten years on, this argument will not wash. As Roger Lyons, former General Secretary of Amicus, put it: "The Government cannot pick and choose cafeteria-style which laws they apply and which they don't". However, the Government's record must be viewed within a wider context. The balance sheet is obviously far healthier than it would have been under a Conservative government, and signing up to and implementing the Social Chapter, and its accompanying legislation, is rightly highlighted as a major achievement of our Labour government. At domestic level, Labour has also introduced a minimum wage (which has been increased each year at well above the level of inflation) and repealed the most regressive anti-trade union legislation passed by the Thatcher and Major governments. Moreover, attitudes to European social legislation will be a significant dividing factor between the two main parties in next year's European elections and at the next general election. The Tories are bitterly opposed to the very concept of a social Europe in which market forces are balanced by social protection provisions. Instead, they fantasise about a US-style model of unrestrained capitalism and are seeking to turn back the clock on EU laws that protect workers. David Cameron has pledged that a Tory government would take Britain out of the social chapter - a bold promise that offers a clear dividing line between Labour and the Conservatives and, unwittingly, highlighted one of the strengths of having social protection legislation at EU rather than national level. As restoring Britain's opt-out would require the agreement of every EU country, it would, in practice, be very difficult for a Cameron government to repeal the Social Chapter. None of this means we should be complacent, either on Labour's record or the EU's on social rights. Of course, economic reform and modernisation is vital. European countries recognised this in agreeing the Lisbon agenda to make the EU a more competitive, knowledge based economy. Reform and adaptation to new realities is at the heart of progress. To quote Anthony Giddens, "Nordic social democracy remains robust, not because it has resisted reform, but because it embraced it." But let's not shrink away from the fact that the EU has been a positive force in enshrining the values of social inclusion and solidarity alongside economic growth in a way that is clearly differentiated from the US model which allows private wealth and public squalor. The right, embodied by the Thatcherite Centre for Policy Studies think-tank may claim that the EU has 'destroyed' Britain's ability to compete, but this charge is not borne out by reality. I fail to see how Britons enjoying the longest

7 Delors thinkpiece 42:Layout 1 15/12/08 12:14 Page 7 20 years after Delors, the future for Social Europe PAGE 5 period of uninterrupted growth alongside the workplace rights enshrined by the Social Chapter amounts to economic destruction. On the contrary, it demonstrates that you can have both economic growth and social protection. A way forward The Lisbon Treaty - laying the institutional basis for social Europe The Lisbon Treaty would enhance the social dimension of the Union, committing the EU to "a social market economy, aiming at full employment and social progress" and provides safeguards for public services, with a new protocol that will require the Union to respect services of general economic interest, including the way they are organised and financed by Member States. Similarly, the Treaty requires the Union, in all policy areas, to take account of "the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health". It emphasises that the EU must work to "combat social exclusion and discrimination", and will be legally required to promote social justice and protection, equality between women and men and solidarity between generations The Treaty also enshrines the Charter of Fundamental Rights that will be binding on the EU institutions and apply to the full body of EU law. The charter includes a number of social and work-place rights, including the right to negotiate collective agreements, take collective action and to fair workplace conditions. The EU institutions and all Member States, when implementing EU law, will have to respect these rights. Finally, it will help avoid gridlock in the now enlarged European Union of 27 countries as it will make voting in the Council less susceptible to blocking minorities and will enhance the role and powers of the European Parliament. The Irish 'No' vote in their referendum on the Lisbon Treaty, in part, reflected the fact that it is difficult for voters to enthuse about politicians haggling over changes to the EU's rule book. Indeed, just as Delors told TUC conference that "nobody falls in love with a market" so it is true that no one is going to fall in love with revised voting weights in Council and an expansion of co-decision powers for the European Parliament. But if we want the EU to deliver on policy, we do need to fix the mechanics. Some on the left have accused the treaty of being 'neo-conservative' and a 'capitalist's charter'. Such assertions are way off the mark. Rather, the Lisbon Treaty provides us with the institutional tools and mechanics with which to construct a social Europe, provided we win the political battles at European level just as we must win them at national level. Dealing with the recent ECJ rulings The recent Laval, Rüffert and Viking rulings of the European Court of Justice have understandably caused consternation amongst trade unionists across the whole of Europe. In them, the court appeared to give a higher priority to the freedom of circulation of capital and labour across the European market than to social rights. But it is wrong to criticise the Court. It can only rule on disputes that are referred to it about the scope and meaning of existing law. If its rulings show that existing laws are inadequate, it is up to us to change the law. In these particular cases, changes to European law (and to national law in some countries) can provide remedies to the insufficiencies that have been shown up by these judgements. The necessary legislation, if not adopted before then, should feature in the manifesto of the Party of European Socialists for the 2009 European elections, and the PES should make it clear that it will not approve the appointment of the new European Commission following the elections (nor vote for a President of the Commission, who, under the Lisbon Treaty, will be elected by Parliament) unless there is a clear commitment that the Commission will put the necessary legislation before Parliament. Over the next few months, Labour MEPs in the Socialist group and the ETUC should discuss and define exactly what legislative changes are needed at European level. This discussion must reach clear conclusions in time to feature in the electoral programmes for They would include, for instance, a revision of the Posted Workers Directive. Of course, there are also cases when Court rulings do go our way. The "Impact" judgement by the ECJ confirmed that workers under fixed-duration contracts enjoy rights similar to permanent workers. The case, brought by the Irish trades union Impact, complained against the Irish government's practice of employing a number of civil servants under fixed-term contracts, thus excluding them from benefits granted to other workers such as pay rises and pension entitlements. In April 2008, the Court ruled that even in cases where a Member State has failed to properly transpose the non-discrimination clause into national law, the clause remains directly applicable. Significantly, the Court also stressed that Ireland had an obligation to implement and enforce the directive on fixed-term work and that governments may not pass legislation aimed at circumventing the directive. The 2008 Work Programme The Commission work program includes proposals for anti-discrimination legislation, on the grounds of disability, age, religion and sexual orientation. Labour MEPs and our colleagues in the Socialist group will fight to ensure that this directive is not

8 Delors thinkpiece 42:Layout 1 15/12/08 12:14 Page 8 PAGE years after Delors, the future for Social Europe watered down, and that there is equality for all in the workplace. The Commission has also signaled its intention to revise the European Works Council Directive, which gives 10 million workers across the EU the right to information and consultation on company decisions and consultation rights for workers on cross-border takeovers. This should mean that workers in companies with fewer than 1,000 employees can no longer be excluded from having the right to information and consultation rights. The threshold, which is set at 1,000 in the existing directive, must be reduced. It is expected that legislative proposals will be presented by the Commission in mid with a view to reaching an agreement between Parliament and Council by the end of the year, although there may be a battle to get the directive into law in advance of the 2009 election. More than just a market This is a pivotal time for socialists and social democrats across Europe. The French and Dutch "No" votes on the now abandoned Constitutional Treaty and growing trade-union scepticism are a warning that the EU must do more for the 'losers' from globalisation. The Lisbon Treaty lays the basis for this approach, explicitly stating that the EU is "committed to a social market economy" in which economic growth and trade liberalisation are combined with social protection and public services. In our modern, globalised world, technological advancement, free movement of goods, capital and labour has made the world smaller. In this context, the EU is our local neighbourhood community and Britain needs to be a constructive and influential member. political impotence, and would leave us isolated from our socialist colleagues in the European Parliament and fellow tradeunionists in ETUC. Rather, we should join with them to ensure that our single European market is not a free-for-all for multi-national companies but is a rulesbased, socially just economic system that protects the weak and vulnerable from the full harshness of unrestrained market forces. Delors' speech in 1988 prompted the then TUC Chairman Ron Todd to comment that, after nearly 10 years of Thatcherism, the EU was "the only card game in town". After more than a decade of a Labour government, Europe is selfevidently no longer the only game in town. But like national politics, it remains a political battleground that makes decisions that affect our daily lives. Abandoning this battlefield would leave the way clear for the unrestrained and unregulated free trade that the Conservatives dream of. The social vision of Europe is central to the intellectual armoury of the centre-left and is too important not to fight for, but we have to demonstrate to our party and our trade union allies that the EU is about more than the internal market. Next year s European elections are vital in this context. A vote for Labour next year must be a vote for a reinvigorated social Europe. The EU is not a project designed to enable unrestrained market forces - and, as the Socialist Vice President of the Commission, Margot Wallstrom, recently said, "the right of collective bargaining and action is not secondary to internal market rules". It's time to make this a reality. Richard Corbett MEP Above all, we cannot return to the approach of the 1980s when Labour clung to isolationism from Europe and the wrong-headed mantra that the EU was a 'capitalist's club'. This is a recipe for T: +44 (0)

9 Delors thinkpiece 42:Layout 1 15/12/08 12:14 Page 9 Compass is the democratic left pressure group, whose goal is to debate and develop the ideas for a more equal and democratic world, then campaign and organise to help ensure they become reality. Join today and you can help change the world of tomorrow - Southbank House, Black Prince Road, London SE1 7SJ T: +44 (0) M: +44 (0) gavin@online.org.uk