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Social policy: the UK and Maastricht.

On 7 February 1992, European Community Foreign and Finance Ministers signed the Treaty on European Union which contains only the second set of constitutional amendments to the EEC Treaty since 1957. This new Treaty merged into one text the Treaty on Economic and Monetary Union and the Treaty on Political Union which had been agreed at the European Council in Maastricht two months previously.

The significance of the new Treaty for the future of the European Community is considerable as it promotes further integration between the member states across a wide range of policy areas, including economic and monetary union, rights of citizenship, foreign affairs and institutional reform, amongst others").

However, this process of promoting further integration did not run altogether smoothly. Both before and during negotiations over the new Treaties the UK Government made clear its opposition towards the accelerated harmonisation of key aspects of social and labour policy. The outcome was the Social Protocol: an agreement amongst the twelve member states to continue to pursue the adoption of social and labour policy measures through the existing provisions of the EEC Treaty, but with the proviso that eleven of them could make progress with the more contentious items outside the formal provisions of the Treaty if the UK would otherwise block them. In such cases, majority voting on the Council will be extended to govern a wider range of social and labour policy areas and the role of management and labour in the policy-making process will be strengthened.

The position is a complex one which is confused further by the terminology-the Social Charter, the social action programme, the social chapter and so on. In this note we therefore outline the origins of the Social Protocol before turning to examine its implications for the UK.

Background

The Community Charter of Basic Social Rights-adopted by 11 of the 12 EC member states at the Strasbourg summit in December 198 9 as a `Solemn Declaration'-focussed attention on the social dimension of the EC in a way which had been unprecedented until then.

Although international agencies such as the ILO and the Council of Europe have a long history of attempting to define general principles of employment rights, the institutions of the EC had never before attempted o draw tip anything like the Social Charter. Whilst the Commission's first social action programme dates back to the early-1970s, debates on social and labour policy till now have tended to centre on specific initiatives, notably equal treatment, industrial participation and health and safety.

The Social Charter, however, was intended to establish a basis for the European social dimension by establishing a set of rights systematically applicable to all workers and to certain groups of marginalised people across all member states. Its accompanying social action programme proposed 47 individual measures grouped under thirteen separate headings, such as the labour market, employment and remuneration, social protection and vocational training, as well as under more familiar headings like equal treatment and health and safety. it also covered action for children and adolescents, the elderly and the disabled.

The Social Charter also helped focus attention on certain procedural issues. Its supporters maintained that its chances of implementation were severely limited if unanimous voting on the Council of Ministers were required to adopt the majority of its proposals. Therefore, it was argued, majority voting should be extended to cover all social policy initiatives, not just health and safety as then the case. Without majority voting, any one member state could veto proposals which were otherwise supported by all the rest.

The Social Charter therefore sparked off a double controversy: debate raged both round the substantive issues-the merits and demerits of individual measures-as well as round the procedural issues and the alleged democratic deficit' within the EC institutions which might hinder their implementation.

Indeed, during 1991-the year of the intergovernmental conferences on economic and monetary union and political union-the Social Charter and the action programme came to symbolise either all that was good or all that was bad about EC social and labour policy: for some it represented the struggle for a set of basic social rights designed to protect the interests of workers and other groups exposed to the pressures of the fast-changing, competitive international markets of the 1990s, whilst for others it represented an outdated regulatory

The resulting final text of the Treaty on European Union, which contains a series of protocols, therefor includes the Protocol on Social Policy to which is annexed a separate Agreement.

* The Protocol on Social Policy notes that 'eleven member states ... wish to continue along the path laid down in the 1989 Social Charter' and so exempts the UK from participation in the Agreement annexed to it.

* An `Agreement on social policy concluded between the member states of the EC with the exception of th UK' contains what had been the intended new social chapter itself, that is, the amended versions of EEC Treaty Articles 117 to 122 which smooth the passage of the social action programme accompanying the Social Charter.

Since, in the event, these amended versions were no agreed by all twelve member states, they are referred to here as an Agreement' since the term `social chapter' would imply their embodiment in the Treaty itself.

Protocol on Social Policy

The original intention at the Maastricht summit was to revise the principal social policy Articles of the EEC Treaty through a series of amendments known as the social chapter. Eleven member states agreed these amendments as presented by the Dutch Presidency. The most controversial extended qualified majority voting to cover adoption of measures relating to working conditions and information and consultation of workers and promoted contractual relations between employer and employees at European level. However, none of th amendments was accepted by the UK Government.

A further proposal was also rejected by the UK: this would have introduced the new social chapter into th Treaty, thereby replacing existing Articles 117 to 122 a the constitutional framework for the eleven to have pursued implementation of the social action programme, bu it would have allowed the UK to opt out of these ne provisions.

The eventual agreement was a kind of mirror image of this proposal. The Protocol on Social Policy states that the eleven 'have adopted among themselves' an Agreement to continue along the path laid down in the 1989 Social Charter and that the contracting parties, including of course the UK - `Agree to authorize those eleven member states to have recourse to the institutions, procedures and mechanisms o the Treaty for the purposes of taking among themselves an applying as far as they are concerned the acts and decision required for giving effect to the above-mentioned Agreement.'

The Protocol adds that the UK 'shall not take part in the deliberations and the adoption by the Council of Commission proposals made on the basis of this Protocol and the above-mentioned Agreement'. Proposals requiring a qualified majority vote will therefore be adopted if they receive 44 out of a possible 66 votes rather than 54/76, when the UK is included). Those requiring unanimity will still require unanimity, but amongst the eleven only.

In purely legal terms, then, the social chapter does not replace the existing social provisions of the EEC Treaty. Technically, the UK has not opted out of the new Treaty which, once ratified, will retain these provisions as before. What the UK Government has done is to decide, at least for the time being, to stay out of the new social chapter which will now be appended to the Treaty as the `Agreement on social policy'. Therefore, in this note, to emphasize this legal distinction, we have called the UK position a `stay-out'.

So the question now naturally arises: what are the practical implications of these manoeuvres?

First, the Commission will continue to plan the implementation of the social action programme on the basis of full agreement of all twelve member states as at present (a course of action which will, of course, continue until the entry into force of the new Treaty'n any case). If a proposal is in fact blocked because of opposition from the UK, the Commission will then have recourse to its second set of procedures laid out under the Social Protocol. It will resubmit the proposal to the eleven, which may then take their own decisions outside the Treaty. As the Commission itself puts it, such 'agreements made under the Protocol will still be taken within the framework of the Community's institutions on loan' to the Protocol signatory states'

The first procedure, then, remains located within the familiar, existing provisions of the Treaty, whilst the second is located outside, as a kind of private arrangement amongst the eleven but with the willing connivance of the UK. Because the Treaty continues to bind all parties, it is unlikely that the Commission, anticipating UK opposition, could introduce a proposal straightaway under the Protocol.

Agreement on Social Policy

The Agreement on social policy will apply to all member states of the EC except the UK from I January 1993 according to the current timetable). However, its provisions in legal terms fall outside existing EEC Treaty social provisions even though eleven member states and all the EC institutions may be involved, and binding legislation adopted in line with its procedures will be enforced through the European Court of justice.

We now turn to examine the nature of the provisions contained in the Agreement itself, provisions which have been couched within the broad context of `subsidiarity', a general principle now found centre stage in the Treaty.

The new Article 3b of the Treaty on European Union stateS:

The Community shall act within the limits of the powers

conferred upon it by this Treaty and of the objectives

assigned to it therein. In areas which do not fall within its

exclusive competence the Community shall take action, in

accordance with the principle of subsidiarity, only if and

insofar as the objectives of the proposed action cannot be

sufficiently achieved by the member states and can therefore,

by reason of the scale or effects of the proposed action, be

better achieved by the Community.

Any action by the Community shall not go beyond what is

necessary to achieve the objectives of this

Treaty.' [Emphasis added]

In other words, the Community will intervene only if there is a positive argument in favour. Such a decentralising tendency had in fact already become the guiding principle for EC social policy throughout much of the 1980s, when many EC member states had become increasingly nervous about their position in the face of intensifying economic pressures. However, now that it has been enshrined as a Treaty provision, the principle of subsidiarity acquires legal status and will undoubtedly require the Commission to take still greater care in justifying interventions(9).

The focus of Article 1, which opens the Agreement on social policy, contains a significantly different emphasis from Article 117 of the EEC Treaty which it had been intended to replace(11). The notion of 'upwards harmonisation'-that member states agree to promote improved working conditions and standards' so as to make possible their harmonisation while the improvement is being maintained'-has been replaced with that of greater flexibility and decentralisation in social policy. The objectives of the Community and member states are listed as follows:

`...the promotion of employment, improved living and working

conditions, proper social protection, dialogue between

management and labour, the development of human

resources with a view to lasting high employment and the

combatting of exclusion.'

The commitment to 'dialogue between management and labour', which is expanded in the revised Article 2, is designed to foster flexibility, an aim also reflected in explicit recognition that:

...the Community and the member states shall implement

measures which take account of the diverse forms of national

practices, in particular in the field of contractual relations,

and the need to maintain the competitiveness of the Community

economy.'

Reference to economic competitiveness is new, whilst ensuring that measures take account of 'the diverse forms of national practices' go to meet the criticism that the Commission imposes its own models on member states (an accusation often levelled by the UK particularly in relation to employee participation)"').

Article 2 (1) requires the Community to 'support and complement' member states' activities to improve the working environment including health and safety); working conditions; information and consultation of workers; equal opportunities; and the integration of people excluded from the labour market. To promote these activities, under paragraph (2), the Council may adopt Directives through the co-operation procedure, which entails a qualified majority vote on the Council, as outlined in Article 189c of the amended Treaty. This procedural amendment represents a significant extension of the EC's competence, since it removes the veto from any one single member state over the items listed, all of which, except the working environment and health and safety provisions, previously required a unanimous vote on the Council.

The definition of working conditions' is, in particular, potentially very wide. For example, the draft Directive concerning aspects of the organisation of working time whose legal base as a health and safety measure has been challenged by the UK - could now presumably be redefined as a working conditions' measure, which would remove any controversy over the procedure through which it is to be adopted, if not that over its actual content. Another controversial proposal now subject to the co-operation procedure is the draft Directive on European Works Councils, which is analysed in greater depth below.

Paragraph (3) of Article 2, however, goes on to specify a series of areas in which unanimous voting is still required. These cover social security, termination of employment contracts, the representation and collective defence of the interests of workers including co-determination), employment conditions for third-country nationals and financial contributions towards job creation.

A member state is permitted, under paragraph (4), to entrust management and labour, at their joint request, with the implementation of directives' concerned with all the areas listed in paragraphs (2) and (3), though it must remain finally responsible for the results imposed by the directive. In addition, in line with paragraph (5), a member state may always introduce more stringent measures than those laid down.

Finally, paragraph (6) declares that the Article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs.' Clearly, it focusses principally-though not exclusively-on individual rather than collective rights at work.

Article 3 centres on the promotion, by the Commission, of consultation of management and labour at Community level' which it is required to facilitate through balanced support for the parties' (paragraph (1))

The Commission must consult management and labour `before submitting proposals in the social policy field' (paragraph (2)) and, if it considers Community-level action advisable, it shall then consult them again on the proposal itself, on which management and labour are to forward ... an opinion, or where appropriate, a recommendation' (paragraph (3)). This requirement clearly gives employers' organisations and unions a formal, consultative role at the very earliest stages of decision-making. But their involvement continues in that paragraph (4) confers their right to inform the Commission that they wish to negotiate an agreement on the issue, normally within a nine-month period (though this may be extended by arrangement).

Article 4 declares, in paragraph (1), that should management and labour so desire, the dialogue between them at Community level may lead to contractual relations including agreements

The extension of a voluntarist approach to employee relations to the Community level is a significant step, and paragraph (2) elaborates on how such agreements could be implemented. This is to be: either in accordance with the procedures and practices specific to management and labour and the member states', for example, through further negotiation on the details at lower levels (such as sector or company), so long as the member state is not obliged to apply the agreement directly or amend national legislation to facilitate its passage; or - in relation to the issues covered in Article 2 through a Council Decision, on a proposal from the Commission, provided that this has been requested by the signatories. In such cases, the Council shall act on a qualified majority, unless the agreement covers issues referred to in Article 2(3) in which case it requires unanimity.

This provision therefore allows for the statutory backing of agreements where such a request is lodged since, under Article 189 of the EEC Treaty, 'a decision shall be binding in its entirety upon those to whom it is addressed.' Presumably such decisions would be addressed to employers' organisations and trade unions at national level, and to national governments too if appropriate, but how they would then be actually put into practice across sectors and within companies remains unclear.

Under Article 5, the Commission bears responsibility for promoting co-operation and co-ordination between member states in these areas.

Article 6, which deals with the principle of equal pay for equal work, acquires an important addition in a new paragraph (3), which allows for positive action in favour of women in certain circumstances.

Article 7 requires the Commission to present an annual report on progress in achieving the objectives laid out in Article 1, as well as on the demographic situation, to the European Parliament, the Council and the Economic and Social Committee. As before, the European Parliament may still invite the Commission to draw up reports on particular social problems.

The UK position

On Thursday 12 December 1991, Ruud Lubbers, the Dutch President of the European Council, came before the European Parliament to explain the Treaty reforms agreed at the Maastricht summit earlier that week.

Having outlined developments across a variety of areas, including monetary union-which he described as `irreversible'-he stated that in respect of social policy: `the eleven had agreed to extend majority voting to key areas... with the intention being to involve both sides of industry to reach agreements that would be transposed to European level'. He added that 'the feeling was that too many concessions had been made to allow Britain to stay on board and that it was better for the eleven to accept a more meaningful agreement. Existing EEC Treaty social policy provisions would, however, continue to apply' .

The two important points to bear in mind here are, first, that the eleven believed that, to preserve the meaningfulness of the social chapter, the UK had to be excluded and, second, that the UK is, of course, still bound by the existing Articles of the EEC Treaty relating to social policy.

The practical consequences of the UK's position may not, as we noted earlier, become apparent until the new Treaty on European Union takes effect assuming it is not challenged beforehand). Till then, the intention remains to complete the social action programme by the end of 1992. However, initial reaction in the European Parliament centred on concern over the complexity of the legal procedures being introduced. The consequence in the Parliament was that none of the resolutions tabled on the outcome of the summit was adopted. As Europe noted:

`The fact that the European Parliament was not able to express a clear political judgement on the outcome of the Maastricht summit is largely due to the complexity and sometimes obscurity of some texts which, as they are not definitive, have to be interpreted in the light of debates which took place in camera and at different levels.' Yet it is instructive to raise a number of questions over the UK's position in an attempt to assess the areas in which it could have greatest impact.

Constitutional aspects

The Treaty on European Union is not due to come into effect, assuming the timetable goes according to plan, till 1 January 1993 and so the existing Treaty, including, of course, its social provisions, remains effective till then. The period to the end of 1992 covers both the Portuguese and UK Presidencies. UK priorities for the Social and Labour Affairs Council are not yet apparent, but the Portuguese Presidency, following its meeting with the Commission on 9 January 1992, announced that it would forge ahead with the draft Directives on maternity rights and on working time-both controversial measures opposed by the UK but subject to qualified majority voting. So progress on implementing the broad base of the social action programme across all twelve member states will continue, at least until the end of the UK Presidency on 31 December 1992.

However, the new Treaty must be ratified by the legislatures of all twelve member states-the failure of only one to do so would create serious problems. Three countries (Belgium, Germany and Italy) have declared that they will ratify the Treaty automatically provided that the European Parliament, which is due to adopt its POSition in April, approves it, but in at least two other countries (Denmark and Ireland) referenda will be held(14). In 1987, ratification of the Single European Act was jeopardised at the last moment by a challenge mounted against it in the Supreme Court in Ireland. Delays and upsets can and do occur, and attitudes towards the British position on the Agreement are not yet clear. Might a legislature, for example, object to it on the grounds that it would distort labour costs, and hence competition, between the member states?

Indeed, such a consideration becomes even more urgent in relation to the role of the European Court of justice, whose function is to ensure that the law is observed in the interpretation and application of the Treaty(15) . Could there be grounds for objecting that the UK stay-out is unconstitutional? This is undoubtedly an immensely complex legal question, but there do appear to be two sets of grounds prima facie for arguing it could be so.

-First, there appears to be a contradiction between measures adopted by the eleven, which exclude the UK, and the principle of non-discrimination of workers. British employees will not enjoy the same rights at work as their counterparts in other EC member states and will not therefore benefit from equal protection before the European Court of justice. Such a circumstance would also appear to conflict with the notion of citizenship of the European Union developed at Maastricht and written into the new Treaty

-Second, the stay-out arguably infringes EC competition icy. This question was raised by Vitor Martins, the Portuguese Secretary of State for European Integration and President of the Council, when he addressed the plenary session of the Economic and Social Committee at the end of January. The signing of the Social Protocol, he said, risked putting the eleven at a competitive disadvantage in relation to the UK, an abnormal situation which would require a solution.

However, it is difficult to foresee how, in practice, a challenge on this point would be mounted. The Protocol was signed by all twelve member states and, since Jacques Delors was himself party to it, the Commission might find it awkward to take action involving the European Court of justice. It is more likely that a third party, such as an employer or trade association, might eventually initiate proceedings.

Political aspects

The future of the stay-out policy depends on the results of the UK general election. Both principal opposition parties, Labour and the Liberal Democrats, have stated that, if they were to form the next government, they would sign the social chapter-that is, they would take steps to ensure that the Agreement on social policy were transferred back, as the social chapter, into the body of the Treaty on European Union itself. Such a step would naturally short-circuit any further problems between the UK and its EC partners.

However, should the Conservatives win and continue the stay-out policy, a series of political problems may be envisaged beginning with the UK's relationship with certain of the EC institutions themselves.

On the one hand, there has been little significant pressure to exclude British MEPs from continuing involvement in debate on social policy. Jean-Pierre Cot, for example, leader of the Socialist Group in the European Parliament, stated in the Maastricht debate on 12 December that his British colleagues need not fear exclusion, whilst Enrique Baron Crespo, then President of the European Parliament, stressed that the stay-out was a matter for the UK Government which should not affect the work of British MEPs. In a similar vein, Jacques Delors has declared that the two British Commissioners (neither of whom is directly concerned with social policy) should continue to operate as normal.

On the other hand, it is difficult to see how the work of the UK Presidency could remain unaffected in the light of a continuation of the stay-out policy. During the 1986 Presidency, the UK made an effort to introduce its own policy agenda into the Social and Labour Affairs Council, in particular by mustering support for a Council Resolution advocating greater deregulation of labour markets across the ECC(18). However, it could not make a second attempt in this direction during the 1992 Presidency given its explicit rejection of mainstream European perspectives on the role and purpose of labour policy and it would seem to be a waste of time to try-after all, not a single other member state joined the UK in the stayout(19). So the 1992 UK Presidency is presumably likely to focus on non-controversial areas in the social action programme like health and safety and on acting as broker between other member states on areas of common concern, and once the Treaty on European Union takes effect, one would assume that the UK would no longer take part in the development of policy in many of the areas covered by the Agreement on social policy. Presumably this withdrawal would also embrace the related work of the Committee of Permanent Representatives (COREPER) and other groups linked to Council activities. The UK would need to seek new working relationships between itself and the other eleven member states.

A further consequence of the stay-out is that it could accelerate the progress of the more controversial proposals subject to qualified majority voting (QMV). As things stand, each EC member state has a vote weighted broadly according to population-so the four largest states (France, Germany, Italy and the UK) have ten votes each, Spain has eight and so on down to Luxembourg, with two. Under QMV, a proposal requires 54 votes out of a total maximum of 76 to be adopted on Council. in other words, a coalition of countries with 23 votes between them is needed either to vote against or to abstain if a proposal is to be rejected.

The UK position changes this situation. Without the UK, under the terms of the Social Protocol, the required majority will be 44 votes out of 66, which means that the size of the minority vote required to reject a new proposal stays the same (23). As Peter Kellner has pointed out:

Without Britain playing the role of licensed sceptic, there will be few, if any, occasions when that figure will be reached. The worried, poorer states-Spain, Portugal, Greece and Ireland-have a combined strength of only 21 votes: without Britain, they lack the muscle to block any measure the rest want to enact.'

If and when the UK does eventually decide to sign the social chapter, it is likely that the country will be subject to social and labour legislation which it could have helped to reject, or at the very least have helped to amend. The close attention to detail of UK officials responsible for co-drafting EC legislation has often improved the wording of a text and hence its effectiveness. The quality of future texts may be adversely affected by the loss of such UK input.

If the stay-out does continue, however, there are certain other political consequences which deserve consideration. If the UK is right, and its stance is seen to improve its international economic competitiveness, what will be the attitude of the other eleven member states? If the noii-application of social measures agreed by the eleven did indeed act to the benefit of the UK, for example, by attracting an inflow of foreign investment, then this would amount to 'social dumping' (that is, comparative advantage gained through non-application of EC legislation).

And, of course, if the UK is wrong, then neither economic nor political advantage would have been derived from the stay-out anyhow"' .

Industrial relations aspects

A further set of questions centres on the implications of the UK's position for personnel policy and practice in multinational companies, both those based in the UK and those based in another EC member state. To what extent, for example, will British multinational companies actually be able to insulate themselves against labour policy developments in the other eleven member states despite the UK stay-out?

The draft European Works Council Directive illustrates some of the difficulties. This draft Directive, which was published by the Commission in january 1991 and amended last September, would require-if adopted-certain multinational companies based in the EC to introduce a European works council if so requested by their employees(22). The draft, which is strongly opposed by the UK Government (23), may now-under Article 2 of the Agreement on social policy-be adopted through a qualified majority vote on the Council. It advances the principle that employees should, through a European-level works council, receive information regularly on the activities and prospects of their company and that they should be consulted over management proposals of transnational applicability likely to have serious consequences' for workers' interests, though final decisions 'shall be exclusively the responsibility of the central management'. This principle has been widely accepted amongst the eleven, and the draft Directive now stands a fair chance of adoption by them even though certain outstanding technical aspects remain to be resolved. If it is adopted, what effect might this have on the UK, despite its stay-out?

Workers employed by UK-based multinationals in their subsidiaries located in the eleven other member states would be subject to the terms of the Directive, even though their counterparts employed by the same company in the UK would not be. A UK-based multinational would therefore be placed in a position similar to that of its US or Japanese equivalent-that is, one in which central management is located outside the EC. In such cases, the Directive requires the company to appoint a representative agent to take responsibility for setting up the European works council or else, failing that, to ensure that management of the largest subsidiary performs that function. If the company then neglected to take the necessary action, it would be in breach of the law: member states are required to `provide for appropriate remedies in the event of failure to comply' and to `ensure that adequate procedures exist' to this end (Article 10(2)). Proceedings could be initiated against it.

It seems likely that, rather than break the law in this way, most UK multinationals would find a way to comply. Whether they would then step beyond their statutory obligations and also encourage the participation of their UK employees in the evolving European works council is another question(24) . Undoubtedly UK trade unions, supported by their EC-based opposite numbers, would campaign for recognition on the new bodies and indeed exclusion of UK representation could lead to certain anomalies. For example, even though complying with EC legislation governing other aspects of their operations, such as their legal regimes and accounting procedures, multinationals which did exclude UK employee representation would find themselves standing outside the standard industrial relations framework adopted for European-level participation throughout the rest of the EC. It does not seem unreasonable to speculate that such a policy might tarnish their image in other EC countries, especially those like Germany which have evolved a culture which places great emphasis on partnership in industry. Whereas clearly no one would question the absence of, say, US employee representatives from the meetings of a European works council, the absence of employee representation from the UK, an EC member state, might not be so readily understood.(25)

A further question concerns the operations of foreign-based EC multinationals with subsidiaries in the UK. Would a French or German multinational, for example, attempt to exclude its UK employees from representation on its European works council on the grounds that the Directive had no statutory force in the UK? Such a policy might seem unlikely as it would undoubtedly be opposed by the employee representatives drawn from the company's subsidiaries in the other eleven member states, whilst management would itself derive less benefit from meetings which excluded UK representatives . The involvement of British employee representatives under such circumstances would then tend to reinforce a trend already noted by the Advisory Conciliation and Arbitration Service (ACAS): that foreign-owned organisations consult over a wider range of issues than their British-owned counterparts (27).

British-owned counterparts

Conclusion

The complexities of the UK's relationship to its EC partners, as demonstrated in the Social Protocol, have resulted from deeply contrasting attitudes towards both European integration and social policy. The UK would have preferred a slower rate of harmonisation of social and labour policy for all twelve member states and could not countenance the acceleration demanded by its partners. Similarly, the UK opposes what it sees as the imposition of further regulation of labour markets governing areas like working time, maternity rights and participation. Its partners, however, reflecting more regulatory traditions, could not envisage the creation of a single European market without a `social dimension' to protect employees exposed to increased competitive pressures.

The selective staying out of certain policy areas may, in time, become a more accepted way to proceed as and when the EC expands to include the countries of Eastern and Central Europe each with its own social and labour traditions. In the meantime, the UK position, which involves a series of legal and political uncertainties, does not seem to set a convincing precedent.

NOTES

(1) Treaty on European Union, reproduced as a supplement to Europe, 7 February 1992.

(2) Communication from the Commission concerning its Action Programme relating to Implementation of the Community Charter of Basic Social Rights for Workers, COM (89) 568, Commission of the EC, Brussels, 27 November 1989. For a commentary, see Social Charter-Action Programme released', European Industrial Relations Review, no.192, january 1990, P. 11.

(3) Maastricht battle lines drawn on social policy', The Independent, 9 December 1991, p.1.

(4) 'ECU likely to take over by 1999', The Independent, 10 December 1991, p.1. In fact, Article 118(6) of the social chapter-which subsequently became Article 2(6) of the Agreement on social policy- specifically excludes 'pay, the right of association, the right to strike or the right to impose lock-outs' from its remit.

(5) Though Ireland and Portugal were also reported to share some of the UK's objections to the direction of EC social policy, their opposition was muted and negotiable.

(6) However, the precedent for a 'two-speed Europe' had been set in June 1990 when the Schengen Convention was signed by the Benelux countries, France, Germany and Italy (and since then by Portugal and Spain too). This Convention aims to facilitate free movement of people between the signatory states.

(7) All quotations from the Social Protocol are taken from the Treaty on European Union, op. cit.

(8) First Report on the Application of the European Community's Social Charter, Commission of the EC (London Office), 9 January 1992 (Press Release ISEC/B1/92), p.3.

(9) Though will Commissioners be able to agree about when the principle of subsidiarity should actually apply? The answers are political, with each Commissioner logically able to surround himself with opinions, legal and other.' Europe, 25 january 1992, p.1.

(10) Articles 1 to 7 of the Agreement on social policy annexed to the Social Protocol contain the amended versions of Articles 1 17 to 122 of the social chapter originally intended by the Dutch presidency for inclusion in the Treaty on Political Union. Readers who would like to compare the Agreement with the existing social provisions in the EEC Treaty should bear in mind that Article 1 of the Agreement would have replaced Article 117 of the EEC Treaty; Article 2 would have replaced Article 1 1 8; Article 3-Article 118a; Article 4-Article 118b; Article 5-Article 118c; Article 6-Article 119; Article 7-Article 122. Articles 120 and 121 of the EEC Treaty, which cover paid holiday schemes and procedural matters relating in particular to migrant workers, would have been deleted altogether.

(11) See, for example, The proposed Directive on informing and consulting employees' in People, jobs and Progress, a fact-pack published by the Employment Department in December 1991, pp.11-12.

(12) The Week, European Parliament, 9-13 December 1991, p.28.

(13) The 'social' side after Maastricht-boomerang for London?' Europe, 16/17 December 1991, p.1.

(14) In Denmark three political parties have already announced that they will recommend a `note' in the referendum due to take place on 2 June 1992: the People's Socialist Party, the Christian Democrat Party and the extreme-right Party of Progress. The People's Socialist Party, which obtains around 10% electoral support, criticises the Treaty for deficiencies in the social dimension and environmental protection. Europe, 20/21 January 1992, p.3.

(15) The European Parliament's Committee on Social Affairs, Employment and the Working Environment is drawing up a report on the consequences of the Maastricht summit for EC social policy. At the Committee's meeting-on 19 December 1991, MEPs stated that the Protocol 'could cause major legal problems'. Europe, 20 December 1991, p.13.

(16) This point was developed by Nicole Buron MEP, a member of the European Parliament's social affairs committee, at its meeting on 24 January 1992. Europe, 25 january 1992, p.11.

(17) `Mr Martins calls for a 'solution by the twelve' in the social sector', Europe, 31 january 1992, page 15.

(18) Duncan Matthews, The 1986 UK Presidency: an assessment of its impact on social policy initiatives', NIESR, January 1992 (unpublished paper).

(19) This point was developed by Willem van Velzen MEP, Chair of the European Parliament's social affairs committee, who, in an open letter to john Major, wrote: ...the often repeated statement by British negotiators that they were not alone in their opposition to a European social policy has now been proved totally wrong'. Europe, 19 December 199 1, p. 11.

(20) Maastricht, where Major made his big mistake", The Independent, 13 December 1991, p.21.

(21) Costs and the competitive value of products depend on many factors, including available resources, the price of raw materials, investment, labour productivity, the tax system, available markets etc, in addition to labour costs. The countries which are most successful in world markets are not always those where labour standards are less favourable.' Bob Hepple, `Harmonisation of labour law in the European Communities', in Essays for Clive Schmitthoff, ed. john Adams, Professional Books: Abingdon (1983), p. 16.

(22) Amended Proposal for a Council Directive on the establishment of a European Works Council in Community-scale undertakings or groups of undertakings for the purposes of informing and consulting employees, COM(91)345 Final, Commission of the EC, Brussels (adopted September 1991).

(23) See People, jobs and Progress, Employment Department, op.cit.

(24) Some companies would attempt to establish their own participation structures. The British Institute of Management, which criticised the UK Government for its 'carping attitude' over the social chapter, has at the same time also called for greater flexibility in EC policy on participation. The draft European Works Council Directive `would create an additional structural tier, instead of allowing organisations to develop the form of employee involvement most suited to their circumstances'. Quoted in IRS Employment Trends, no. 503, january 1992, page 4.

(25) The centrality of the statutorily-based works council in German workplace industrial relations is undisputed: see for example, Germany-industrial relations background', in European Industrial Relations Review, no. 216, january 1992, pp. 21-27; and Anat Arkin, At work in the powerhouse of Europe: personnel management in Germany', in Personnel Management, February 1992, pp. 32-35.

(26) According to managers already involved in European-level information and consultation arrangements, the exchange of views and opinions and the explanation of corporate strategy and restructuring intentions are some of the benefits to be derived from these meetings. See Michael Gold and Mark Hall, European-level Information and Consultation in Multinational Companies: an Evaluation of Practice, European Foundation for the Improvement of Living and Working Conditions, Dublin (1992), page 39.

(27) Consultation and Communication: the 1990 ACAS Survey, Occasional Paper no. 49, ACAS, London, 1991, page 21.
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Author:Gold, Michael
Publication:National Institute Economic Review
Date:Feb 1, 1992
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