International Centre for Trade Union Rights

Undermining the European social modelAuthor(s): STEFAN CLAUWAERT and ISABELLE SCHÖMANNSource: International Union Rights, Vol. 19, No. 2, Austerity and trade union rights inEurope: Reports from Greece, Spain, Ireland and across Europe (2012), pp. 6-7Published by: International Centre for Trade Union RightsStable URL: http://www.jstor.org/stable/41936874 .

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FOCUS O AUSTERITY AND TRADE UNION RIGHTS IN EUROPE

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on 14 September 2011, ILO Director-General Juan Somovia stated: 'respect for fundamental prin-

ciples and rights at work is non-negotiable: not even in times of crisis when questions of fairness abound. This is particularly important in coun- tries having to adopt austerity measures. We can- not use the crisis as an excuse to disregard inter- nationally agreed labour standards. '

A recent working paper of the European Trade Union Institute CETUI') focuses on labour law reforms in various European countries either trig- gered by the crisis or introduced using the crisis - falsely - as an excuse. The report critically addresses the large-scale deregulation of labour law currently taking place in the European mem- ber states, in particular the lack of democratic foundations underlying the reforms, and their negative impact on fundamental social rights and workers' protection.

Evidence shows that since the end of 2008, the start of the economic crisis, public authorities and national legislators have taken a range of mea- sures to boost enterprise flexibility, including amendments to national labour law. In some countries, such as Hungary, after a change of government (shifting to the right), this led to the acceleration of drastic changes in labour law, even bypassing participatory consultations with, among others, the social partners, in particular the trade unions. In other instances, these struc- tural reforms have been required or indeed forced upon these member states by European and international institutions and organisations, such as the European Central Bank ('ECB'), the European Commission and the International Monetary Fund ('IMF'), the so-called Troika'. Examples are Greece, Ireland and Portugal where the reforms were 'agreed upon' between this Troika and the respective governments in Memorandums of Understanding. In addition, the European Union together with the IMF has undertaken 'missions' to European member states in economic difficulties. In 2010, for example, they went to Latvia to discuss the 2011 budget with the government, insisting that it included measures to deliver lasting deficit reduction, while providing adequate funding for the social and health safety nets, public works employ- ment, and job training to alleviate the impact of the crisis on the most vulnerable part of the pop- ulation.

Interestingly, the European Commission has not had recourse to labour law and fundamental social rights to ascertain the maintenance of min- imum social standards; neither has it resorted to hard law mechanisms, although it has the legisla- tive competence to do so under the Treaty. On the contrary, the European Union tends to follow

its longstanding trend of calling for labour market 'flexibilisation' (and labour law deregulation), as stated in a Communication in 2010: 'flexicurity policies are the best instrument to modernise labour markets: they must be revisited and adapt- ed to the post-crisis context, in order to acceler- ate the pace of reform, reduce labour market seg- mentation, support gender equality and make transitions pay'.

However, there is no evidence that the finan- cial and economic crisis is the result of labour law provisions in the member states. The labour law reforms (currently) being implemented in many Member States are thus justified by the argument that making labour markets more flex- ible is one of the best responses to the crisis. In some countries it consists only of piecemeal although significant deregulatory measures, while in others it involves far-reaching overhauls of the whole labour code. Labour law domains that are most affected are working time, atypical employ- ment (fixed-term, part-time and temporary agency work) and the introduction of new types of contracts (collective and individual), dismissal law, and collective bargaining.

Indeed, in several countries fundamental changes are being made to industrial relations structures and processes whereby it is a clear pol- icy and/or ambition to decentralise collective bar- gaining, shifting from national/sectoral level to company level. Examples can be found in Italy, Greece, Portugal, Romania and Spain. Apart from shifting the onus to other levels, there is often the (additional) problem of allowing lower-level bar- gaining outcomes to deviate unfavourably from the protection provided by higher level collective agreements or even statutory legislation. Such collective agreements deal, for instance, with working time and wages. Examples of the latter can be found in France, Greece, Italy and the Slovak Republic.

Another trend is the adoption of measures reviewing representativeness criteria for social partners (for example, Greece, Hungary, Italy, the Netherlands, Portugal Romania, Slovakia and Spain) and extending what used to be trade union prerogatives to other bodies of workers' rep- resentation (often at company level) (for exam- ple, Greece, Portugal and the Slovak Republic). There are also examples of countries - for exam- ple Hungary and Romania - abolishing or at least diminishing the role of certain (tripartite) social dialogue institutions , with the government with- drawing from such bodies. These reforms of col- lective labour law will definitely weaken trade union representation and action at all bargaining levels as they affect the very structure of trade unions as well as their institutional means of pro- tecting and representing workers.

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FOCUS □ AUSTERITY AND TRADE UNION RIGHTS IN EUROPE

Decentralisation of collective bargaining to the lowest level weakens the level of protection (termed the social acquis) achieved so far by the trade unions at national and local level, and it will affect sectoral collective bargaining. It will also lower the standard of rights recognised so far and anchored in legislation and collective agreements, as well as affecting fundamental employment conditions related to working time, pay, work organisation, working environment and social protection.

The ETUI mapping exercise also shows the lack of respect for democratic and participatory fundaments and procedures in passing the reforms, thus affecting the hierarchy of social norms. For example, in some cases, there has been recourse to 'emergency procedures' by national legislators to bypass agreements on 'anti- crisis' measures agreed upon by social partners and / or prepared by national government with the consultation of social partners (e.g. Estonia, Hungary, Slovakia). In Greece and Portugal the national authorities had no recourse but to imple- ment the memorandum of understanding imposed by the Troika to get access to so-called 'financial rescue umbrella', thus without any gen- uine consultation of the national or European parliament. This, together with the reduction of the role of social partners in drafting social legis- lation, in particular considering the decentralisa- tion of collective bargaining and the new criteria applying to trade union representation, charac- terises an alteration of the procedures for social legislation, thus dismantling the democratic path of passing legislation.

Such procedures have put in question the legit- imacy of the national reforms either because the lawfulness of the procedures (that is the respect of democratic procedures) have been margin- alised and/or because they violate fundamental rights and freedoms set up at international and European level, to the extent that, like in the case of Spain, Greece and Hungary, the trade unions have put complaints to the ILO and the Council of Europe.

See for instance the seven collective com- plaints put forward by Greek trade unions in the framework of the Council of Europe European (Revised) Social Charter: http://www.coe.int/t/dghl/monitoring/soci alcharter/Complaints/Complaints_en.asp).

The ETUI Working Paper demonstrates the major negative impact of labour law reforms on workers' rights and fundamental social rights under cover of the economic and financial crisis. National reforms tend to deregulate already flex- ibilised labour law regulations, and thus in most cases represent a step backwards in terms of workers' protection. A recurrent feature of these labour law reforms and flexibilisation is the explosive growth of inequalities and insecurity in most of the countries concerned (Laulom and others, ETUI Policy Brief 2, 2012, 5). Setting this alongside measures affecting social security, such as pension reforms or public sector reforms, reduction of job seekers' benefits, salary cuts and so on, calls into question the European concept of 'quality employment' and the international concept of 'decent work', which national labour

law reforms in Europe no longer seem to meet. The meaning of the European social model is also undermined.

Interestingly, or rather, not surprisingly, the European Commission has not yet reacted to measures violating fundamental rights of the kind guaranteed in the Treaty and in the Charter of Fundamental Rights. More worrying is the fact that the EU, as party to the Memoranda of Understanding, signed with Greece, Ireland and Portugal, and also as party to additional financial programmes supporting European member states (like in Latvia and Romania), is putting so much pressure on the member states to reform their labour law and social protection, using the vague wording of the Treaty to support such reforms (in particular citing Article 122.2).

These labour law reforms tend to adjust labour regulations in the member states designed to combat precarious employment, labour market segmentation and a certain labour law rigidity, taking it for granted that these have a negative impact on productivity and employment. Their aim is therefore to flexibilise labour law protec- tions perceived as too complicated, too expen- sive and too burdensome for enterprises. However it has not been proven that such reforms - in particular the decentralisation of col- lective bargaining - work. Furthermore, the assumption that labour law reforms in Europe are needed to exit from the crisis can be questioned, as it is difficult to distinguish whether labour law reforms are a response to the economic crisis or merely accompany the crisis, with no certainty about any causal link between them. Indeed, at present the reforms seem to be giving rise to increased precariousness but no more employ- ment. Labour law reforms supported by the European Union are confirming the trend accord- ing to which quality employment is perceived as being incompatible with competitiveness. This indirectly affects labour law protection and emphasises economic freedoms, at the expense of democratic traditions in Europe.

There is thus clear evidence of a 'deconstruc- tion' of labour law under the guise of the eco- nomic crisis. The hope of the authors is that, besides functioning as a mapping exercise, bring- ing together information on the various reforms already implemented or on-going in the member states, this working paper may also serve as an important warning signal and help to raise aware- ness among all relevant actors and institutions of the fact that closer monitoring of these reforms is necessary.

Such continued monitoring will indeed remain important, as the wave of labour law reforms is far from over. Just looking at European Commission country-specific recommendations for 2012, and the national reform programmes on which they are based, it shows that many intru- sive reforms are still to be expected. For instance not less than 17 out of the 27 member states are recommended by the European Commission to take steps to reform, in consultation with social partners and in accordance with, national prac- tices, the system of wage bargaining (and wage indexation), 'to ensure that wage growth better reflects developments in labour productivity and competitiveness' while several others are asked to review their legislation 'to increase the attrac- tiveness and availability of more flexible forms of working arrangements'.

There is no WĒĒĒ evidence that the financial and economic crisis is the result of labour law

provisions in the member states

See Clauwaert, S. and Schümann, I., 'The crisis and national labour law reforms: A mapping exercise', ETUI Working Paper 4 (Brussels, 201 2, ETUI). Available in English, French, German, Italian and Spanish language versions at: www.etui.org

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