Sunday Scribblings
The Pale Shadow of European Social Dialogue
In last week’s Scribblings, I wrote about hitting 75 years of age. Thanks to all of you who sent me kind regards, especially those of you who were surprised to find that I am still alive. To tell the truth, I am surprised to find that I am still alive myself.
I do not know whether it is the algorithms or Karma, maybe a bit of both, but during the past week, every time I logged onto a website, I was greeted with an article on ageing and demographic trends. I am talking respectable websites like LinkedIn, Bluesky, The Financial Times, The Guardian, and the New York Times. I’ll leave it to others to visit whatever other websites there are out there.
Nonetheless, whether it is the algorithms or Karma, what the demographic data shows is a cause for concern for the future of our societies and economies, and no easy answers are available. But I will come back to this issue another day.
In last week’s Scribbling, I talked about the continuing decline of the trade unions. A number of people have asked me if I thought this trend could be reversed. The straightforward answer is no, I do not. I do not see anything that will turn things around, and certainly not the Adequate Minimum Wage Directive.
But it is something else I want to touch on this week, European social dialogue, in particular social dialogue as provided for in Article 154 of the Treaty. We constantly hear politicians and policy makers refer to the importance of European social dialogue but, in reality, does social dialogue actually exist, and if it does, does it deliver much? Let me be upfront. I think the answer to the two questions is: not really and not much. We really just don’t talk anymore, other than to people in our own bubble.
But it does keep plenty of people busy going to meetings, and plenty of others employed processing the paperwork for their expenses.
Back in the 1980s, progress on European employment laws was blocked by the UK. Employment laws had to be agreed unanimously in the Council of Ministers; the Parliament did not have much of a say in matters in those years, and the UK governments of Thatcher were opposed to labour market regulations in general, and regulations “from Brussels” in particular. So, everything was vetoed.
To get around this blockage, the then EU Commission President, Jacques Delors, with a background in the French Catholic trade union movement, decided to launch a social dialogue process between unions and employers. He convened a meeting at a Brussels chateau called Val-Duchesse to that end. His hope was that the “social partners” could negotiate agreements between themselves in place of laws. If they did, the UK could not block that.
Thatcher was incandescent with rage at the whole idea of “Social Europe”, but then she was incandescent with rage most of the time.
Jump forward to the Maastricht Treaty. Delors inserted an article in it, Article 154, which requires the EU Commission, when considering new employment laws or changes to existing laws, to consult the social partners over a two-stage process. During the consultation, the social partners can ask the Commission to hold off putting forward a law while they look to negotiate an agreement between themselves on the issue in question. If they succeed in reaching an agreement, they could ask the Commission to turn the agreement into a Directive, which becomes legally binding. A European erga omnes provision, if you will.
The social partners are also free to negotiate what are known as autonomous agreements between themselves, which are implemented through unions and employers at the national level. The law is not involved.
The Maastricht Treaty came into force in 1994, some thirty years ago, so plenty of time to assess if the social dialogue process designed by Delors has worked.
But the Maastricht Treaty also changed the legislative game. First, most employment law issues would in future be decided by a qualified majority vote. Proposed laws could no longer be vetoed by one Member State.
Second, the UK opted out of the Maastricht social chapter so it would not have a seat at the table when it came to discussing future laws. This was the case until the UK opted back in when Labour came to power in 1997.
In a sense, the raison d’etre for the social dialogue process, to do an end run around the UK veto, had disappeared. The dynamics of lawmaking had changed.
The late UK academic Brian Bercusson once wrote that social dialogue negotiations between unions and employers would take place “in the shadow of the law”.
Bercusson was very trade union sympathetic. I met him on a couple of occasions, so I know this to be the case. What he meant by the phrase “in the shadow of the law” was that employers would have to cut deals with the unions or else face having laws imposed on them. Like many labour law academics, he thought that the arc of history only bent in one direction. It never seemed to have occurred to him that it might be the other way around. That employers would have no incentive to negotiate with unions because the political will to push through laws that the unions wanted was not there.
Which is pretty much the way things turned out.
Look at the record.
Three agreements negotiated between the social partners have been implemented by Council Directives, parental leave (1996) and revised text in 2008, part-time work (1997) and fixed-term contracts (1999).
But parental leave was replaced by the Work/Life Balance Directive. Which just leaves two.
It is worth noting that these three agreements cover individual rights. The social partners have never negotiated an agreement on collective rights.
There are a number of agreements that were turned into Directives in the transport sector: maritime, fishing, inland waterways, civil aviation, but these are of limited application
There are six autonomous agreements, agreements between the social partners which were not turned into Directives, but are to be implemented by the social partners through appropriate processes at the national level.
telework in 2002
·workplace stress in 2004
harassment and violence in 2007
inclusive labour markets in 201
active ageing and intergenerational solidarity 2017
digitalization 2020
Whether these autonomous agreements were followed through at the national level is difficult to say, especially given the weakness of trade unions in many European countries.
More recently, the social partners failed to negotiate on the revision of the European Works Council Directive and negotiations of the “right to disconnect” ended without an agreement.
When you look at the number of agreements reached, whether they were turned into Directives across the board or at a sectoral level, as well as autonomous agreements, it is not much of a return on the Delors investment in social dialogue.
Bercusson was right. The negotiations, or the possibility of negotiations, take place “in the shadow of the law” with each party making the calculation that if the negotiations fail, and if there is to be a law, it will favour their views. There is little incentive to negotiate for the party that thinks it is in the dominant position. You only negotiate if you have to negotiate.
To put it bluntly, social dialogue/labour relations is a matter of competing economic interests, with each side negotiating based on the leverage it brings to the table. It was ever so and ever will be.
For now, at any rate, the political climate just does not lean in a trade union direction.
So, here is the question. If the whole European social dialogue process were to be discontinued tomorrow, would anyone notice, other than those involved and the consultants making a living out of it?
Probably not, I think is the answer.
Thanks, Tom. Very true, I think.
The sentence which made me smile is the one about keeping people busy going to meetings and others processing their expenses. There is, in Europe, at European and national level, a whole superstructure of people who work in and live off these social dialogue processes.
For a while, in Paris, I was one of the MEDEF’s nominees on the board of one of France’s many public institutions jointly overseen by representatives of employer federations and trade unions. (MEDEF, for other readers, is the national employer federation.)
We had quarterly board meetings and occasional other meetings between the board meetings. I was the only person in the room who actually worked in a company. All my other colleagues came from employer federations or from trade union federations.
I was quite a busy guy professionally, as the country HR leader in a large multinational. But it was far more difficult for my colleagues to find times in their diaries for meetings, because of all the other commissions, business lunches, confederal meetings, etc, which they had to attend.
And this was basically all funded by the tax payer and by employers and employees. The particular public body whose board I was part of actually received a mandatory contribution from all private sector monthly payroll deductions (employer and employees). Its role was to fluidify the job market for « cadres » (managers or senior professionals). It did interesting studies of the job market, promoted training and provided support to individuals. But nobody ever questioned whether the best was to help the employment of cadres was to reduce mandatory payroll deductions and boost companies’ competitiveness and profitability.
The Americans called this ‘the cost of doing business in Europe’. Those were the sensible ones. Others called it ‘socialism’.
And the amazing thing is that it just goes on and on. Macron made some timid labour-market reforms but has never questioned this labour-related superstructure. “Jobs for the boys” is what we would have called it in the past. At a time when union membership continues to decline (whether a good or bad thing is not the point) and the country is sinking under the weight of its debt, maybe it’s time for a rethink.