Analytics, EU – Baltic States, Labour Unions, Round Table

This article is prepared for the Round Table on a topic: “Trade unions in the civil society, market reality or social guarantees?”, which was held on November 21 and organized particularly by The Baltic Course.

 

Single market requirements demanded serious changes in organising labour: most challenging in this regard are freedom of movement and freedom of establishment. Perspectives are clear enough; this sphere of social activity is being regarded as the EU shared competence, i.e. under regulation and coordination from both sides – the EU institutions and the member states’ policies.

 

Labour movement’s traditions in Europe have defined the unions’ sectoral structure. At the same time, central, national-type labour organisations (LO) have been established in most countries which in modern time turned into national employees associations playing important role in “social partnership”. Modern society is clearly divided between public and private sectors, between workers and employers. But even more important are the inherent connections of both “divisions” with democracy: in most countries the concept of democracy is limited to the role of parliaments and legislation. However, much more important are the larger connections to all parts of civil society. One step further would be the introduction in the basic laws the possibility to allow business and unions to negotiate certain elements of social legislation.

 

Generally rhetoric question of what is best for the unions require a plausible answer: the member states actions and the EU policies and regulations. No doubt, the EU’s penetration is becoming ever more challenging; since the “Social Dialogue” in 1985 and “European Social Model” in 1992 exert more pressure on the unions’ activities from the EU derived regulations compared to that of the member states.

Trade Union associations and employers’ organisations

These two parts of the “social dialogue” have been organised separately: the former according to unions’ needs, the latter according to national industrial policies.    

 

Presently in all EU member states there are representatives of both employers and employees taking part in “tuning relationships” between the two most important parts of the labour market.

 

• Trade Unions. Union’s membership is extremely variable among the EU states with a general downward trend. Three groups can be distinguished: high membership countries (Scandinavian states and Belgium) with about 70-85%; medium group with about 30-40% (Italy, Germany, the UK), including two small countries –Luxembourg (50%) and Ireland (45%); and low density group with 10-14% membership, e.g. Spain and France. Average EU-15 union density is about 40-44%; compared with the US which in 2000 was 13,5%. At the member states’ level, the union’s organisations differ according to the degree of centralization or/and sectoral division (with either more centralised or less sectoral, and vice versa).

 

• Employers’ organisations. Very active on a national level they are generally represented at the EU level by “industrial confederations”, such as UNICE or Business Europe. The EU intends to activate the role of sectoral employers’ organisations in the social dialogue. The inter-sectoral (general) unions and sectoral ones represent different sides of the EU’s model of employment and industrial relations. 

 

Contemporary Western society is most often divided between left and right, public and private sectors, workers and employers. The more visible are these divisions, the more are the possibilities that a society can be persuaded to move further on through social conflicts, e.g. strikes, street protest, even riots (recent examples in France, Denmark, Germany, the UK). Thus Medef, powerful business federation in France, already shares some social issues (e.g. social security contributions), however the government can amend their agreements. Various parts of “social accord” –not only the state- can be the guardians of public, social interests.

 

On another hand, European countries are more actively integrating into the single marker structures, the latter taking over some social policy functions as well.      

Social model for Europe

The so-called European Social Model was described in the Commission’s White Paper (COM-94, 33, para 3; 1994) in terms of values which include among other aspects “free collective bargaining, equality of opportunity for all and social welfare”. For example, in public social spending, compared with the “US model” (which mainly relies on private expenditures), about 40% of the US population lacks access to primary health care (COM, 2001, 313). As to the employment and social relations within the EU social model, hey are described in the EU

 

Charter of Fundamental Rights, which includes in the long list of fundamental rights both traditional civil and political rights, as well as social and economic rights. The following are of importance: protection of personal data, art. 8; freedom of association, art.12; freedom to chose occupation and right to engage in work, art.15, non-discrimination, art.21; gender equality, art/ 23; workers’ rights to information and consultation within a company, art. 27; right of collective bargaining and collective action, art.28; protection in the event of unjustified dismissal, art.30; fair and just working conditions, art.31; prohibition of child labour and protection of young people at work, art.32.  

 

However, the Charter is still limited to a political declaration; it might acquire a formal legal status (for those provisions included as protocols and declarations to the treaty) in case the LRT is ratified in 2009.

 

Another aspect of “social model” represents “European social citizenship”, with a central part based on “workers’ life” – terms of work, conditions, payment, etc.

Employment and industrial relations

These relations are often described as “social partnership”, i.e. organizational forms of “workers-employers” relationship most familiar through collective bargaining. Both at the EU and member states’ level the “bargaining” occurs between the labour union and an employer at sectoral level and/or at a company, enterprise level. These “employee-employer” relationships are, generally taking place at other two levels as well: national level (through government policies and dialogue among different sectors of labour market) and “ground” level (at the concrete workplace). In some countries, in fact, there are no traditions of tripartite dialogue at national level (the UK in Europe and the US over the Atlantic where the individual company level is predominant).

 

Collective bargaining coverage differs in Europe from 90% in e.g. Austria, France, Sweden and Finland, to 83% in Denmark, while being at the level of 67% in Germany and 58% in Luxembourg. In the UK -36%, Japan -21% and the US -15% (data from 2001-02. European Union law for the 21^st century, vol.2, Oxford, 2004, p.317). 

 

Starting from 1985, while preparing the amendments for the Single European Act, some parts of social dialogue were later on transformed into several directives (with the active assistance of the 3 main European associations, see table below): framework agreement on parental leave 1996; part-time workers, 1997; and fixed-term work, 1999.

 

Table: Associations in Europe cooperating in “social partnership” on a regular basis:

European Employers’ Confederation, UNICE;

European Trade Union Confederation, ETUC;

European Center of Enterprises with public Participation, CEEP

 

While collective bargaining is absent at the EU level (except the workers’ rights for collective bargaining in the Charter), important trends of coordination are emerging. Thus, bargaining at inter-sectoral level is dominant in Belgium, Finland and Ireland, while sectoral ones are common in Austria, Germany, Italy, Portugal, Spain, etc.     

 

There is, at the same time, in the EU member states a mandatory system of workers’ participation at national/local decision-making levels, e.g. “workers councils”, “enterprise committees”, etc. Improving information and consultation rights of employees becomes important part of EU actions: see, e.g. Council Directive 2002/14, February 2002. Thus, decisions of professional bodies and associations shall be taken into effect when proving access to service activity from other countries (Directive, art.14.6).

Code of conduct as a “regulatory instrument”

LO activity is an important part of national regulations concerning economic sectors’ development. Thus, compliance with the rules governing professional ethics and conduct (which vary according to the specific nature of each profession) is becoming part of the Member States’ obligations to provide services in the single market.

 

Another important trend is assessment of service activities provided in the member states (made by independent or accredited bodies at national level) which is performed according to “quality charters” or labels drawn by professional bodies at Community level (Service Dir. 123/2006). 

 

One of the recent examples – provisions of Codes of conduct at Community level in Directive 123/2006 requires that “MS in cooperation with the Commission shall take accompanying measures to encourage the drawing up at Community level, particularly by professional bodies, organisations and associations, of codes of conduct aimed at facilitating the provision of services in another member states, in conformity with Community law” (Service Dir. art 17.1).    

“European Company”: a threat to unions?

Since late 2004 it had become possible for companies in the EU to switch its corporate entity from national registration into a European one –so-called European Company (Societas Europeaea-SE) under European law. Growing number of companies –mainly blue chip firms- in Europe are switching to the SE legal form, e.g. already six out of top 30 DAX-listed companies in Germany acquired SE-status within first 3 years. Some experts believe that SE can weaken the influence of powerful unions, e.g. in Germany, France and Denmark on corporate strategy. Thus, the EC-option for German companies gives workers half the seats on supervisory boards. But these bodies have to include foreign staff, weakening the voice of German workers. The latter, i.e. the option to change the composition of the supervisory board becomes one of the main drives to adopt SE status.

 

The EU law starts treating the whole region as the “home market”. And so is with the union’s rights and social protection; in this regard the SE status needs additional clauses concerning corporate governance and the workers’ rights.      

Conclusion

In line with the basic Community principle of freedom of movement, the “unions are moving” in developmental strategy together with the workers and services’ providers.      

 

Two distinct approaches to “fundamental social rights” are visible in the political dialogue in Europe: one that of excluding social rights and minimizing their importance, another one is that of “inclusion”, i.e. granting them the same status as civil and political rights. The EU Charter of Fundamental Rights is aimed at balancing the mentioned trends. Trade union rights contained in the Charter will become part of the EU law after ratification by all EU-27. However the protocol nr.30 to the LRT provides for some derogation for Poland and the UK. At the same time, Declaration concerning the Charter attached to the LRT clearly states that its legal effect on the member states is limited to “the constitutional traditions common to the member states”.

 

Certain trends are already apparent in the EU social dialogue, e.g. coordinated collective bargaining, closer ties with the EU employment strategy. However the two are presently managed in the EU through separate institutional frameworks.

 

Trade unions can still contribute to the European social model both by activating member states’ macro- and micro-economic policies and by contributing to the workers security and services’ providers in sustainable quality of life. This way the European Union can better reach its aims.