Workers’ and trade union rights: the dilemma of the EU referendum

John Hendy QC
Standing Counsel to the POA


Steve Gillan
General Secretary of the POA

With the prospect of a referendum on continued EU membership drawing closer, trade unions and their members in the UK need to take a view on the merits of the EU. For many, disgust at the EU’s shameful rôle in the humiliation of Greece, the supplanting of Greek democracy by rule from Brussels, and the imposition of terms which even the IMF considered counterproductive will be decisive. But there are other matters to be weighed in the balance.

Since 2008 the Troika (European Commission, European Central Bank and the IMF) has abused every request for financial assistance from countries which crashed their public finances by bailing out the banks which caused the financial crisis. Every intervention has been seized as an opportunity to impose structural adjustment programmes and austerity. Austerity is a particularly effective means of redistributing income and wealth from the poorest to the richest. One of the measures used has been the imposition of ‘labour market reforms’ the effect of which is to restrict worker and trade union rights in the countries affected. So national level collective bargaining structures and the right to strike have been diminished, job security undermined and pay freezes imposed.

Beyond that new rules for economic governance and ‘structural reform’ since 2011 (the ‘Six Pack’ for all EU countries and the ‘Two Pack’ for Euro countries which build upon the Stability and Growth Pact) have permitted the European Commission to interfere in the economies of all EU countries, not least in relation to wage determination mechanisms where pressure is applied to apply labour market reforms, in particular, the decentralisation of collective bargaining.

TTIP etc.
It is the EU too, which has negotiated the EU/South Korea Free Trade Agreement, the Comprehensive Economic Trade Agreement (‘CETA’) with Canada and the EU/South Korea Free Trade Agreement. The EU is now negotiating the infamous Trans-Atlantic Trade and Partnership Agreement (‘TTIP’) with the USA and the less well known multi-lateral Trade in Services Agreement (‘TISA’). All these Free Trade Agreements (negotiated in absolute secrecy so that even the members of the Parliaments concerned are not permitted to see drafts) give multinational corporations rights which citizens do not have, in the name of ‘investor protection’. This is a right over and above the law of the States in which the corporations operate. It is a right to sue a State for loss of hoped-for profit arising from alleged lack of ‘fair and equitable treatment’ or ‘expropriation’. The latter is the means by which billions of dollars can be awarded against a country which renationalises services which have been privatised; the former is for claims for profit loss such as from a decision to stop building nuclear on public interest grounds. All the Agreements contain the dreaded ISDS arbitration provisions, which means a private court in which only a multinational can sue. And the decisions of these private arbitrations override contrary judgments of national courts and even those of the European Court of Human Rights and the Court of Justice of the EU (‘CJEU’). The main object of these Free Trade Agreements is de-regulation, i.e. the watering down of protective laws to the lowest common denominator, (‘regulatory co-operation’ resulting in ‘downward harmonisation’, to use the jargon). Campaigners have pointed to the likely catastrophic effect of these Agreements on food, environmental and medicines standards but de-regulation is likely to be used against workers’ rights too (on e.g. health and safety, working time, collective agreements and strikes). A Free Trade Agreement has already been used as the basis of a claim for loss of profit by reason of a State’s increasing of the national minimum wage.

The EU has already passed Directives which require privatisation and preclude renationalisation. An example is the railways. Privatisation always reduces terms and conditions and reduces security of employment.

EU rights
On the other hand, European workers, especially UK workers, have a lot to thank the EU for. During the bleak Thatcher neo-liberal years and since, it was the EU which required UK governments to legislate against discrimination and for equal treatment, to protect health and safety at work, limit maximum working hours and provide paid holidays, to secure rights on transfers of undertakings, to give minimum rights to part-time, temporary and agency workers, and to require information and consultation. But the well of such EU protections has now dried up and no more significant rights are likely ever to flow again. Indeed, with David Cameron touring Europe to seek support for UK opt-outs from the application of EU workers’ rights, other right-wing EU governments are likely to follow suit so such rights may be reduced across the EU.

In fact, the EU has long faced both ways on labour rights. In a series of cases including Viking and Laval, the CJEU subjugated the fundamental human rights to strike and bargain collectively to the freedoms of business enshrined in the Four Pillars of the EU Treaty: freedom of movement of capital, freedom of movement of labour, freedom for a business in one EU country to establish in another, and freedom for a business in one EU country to provide services in another.

The focus of those four freedoms is to permit capital to exploit cheap labour and in that connection, the right of free movement of labour, attractive though it sounds, has been the source of much friction exploited by neo-fascists across Europe. The EU, instead of outlawing the undercutting of collectively bargained terms and conditions, has deliberately refused to uphold the primacy of collective bargaining. This has encouraged employers to import migrant labour (skilled and unskilled) to work on lower terms and conditions than local workers, undermined (and, in some cases, destroyed collective bargaining), fanned the flames of racism, and, often, condemned migrant labour to Victorian levels of poverty. This is precisely the ‘social dumping’ which it was claimed the Social Dimension of the EU would prevent.

Consistently with the underlying policy of Viking and Laval and illustrative of the real nature of the EU, was the case of Alemmo Heron. There the CJEU held that the employer’s ‘right to run a business’ trumped the workers’ rights to the benefits of collective bargaining incorporated into their contracts of employment – disregarding the fact the right to collective bargaining is expressly protected by the Charter of Fundamental Rights of the EU.

The dilemma
From the perspective of labour rights, the answer to the question of which way to vote in the forthcoming referendum may appear self-evident. But the dilemma for the UK trade union movement is that exit from the EU would remove any restraint on our current government sweeping away workers’ EU-derived rights as well as the few home-grown rights that workers and unions still enjoy in the UK. The government’s pursuit of the spiteful and unnecessary Trade Union Bill proves the point.

A vote to stay in the EU, on the other hand, would be a vote to support an institution which will not extend workers’ rights any further and positively works to destroy existing trade union rights. A yes vote will be premised on the opt-out of existing rights which Cameron will by then have achieved. The fact that the EU is an institution which is quite prepared to override the democratic will of nation States means that a future government with a different agenda may not be able to fully restore workers’ and trade union rights.

All this means that the EU referendum presents a real quandary for British trade unions - unless, of course, we have a new government committed to the restoration of trade union and worker rights. With the campaign of Jeremy Corbyn, that is at least a possibility.

3 August 2015
1279 words