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Collective industrial relations

Introduction

Collective industrial relations between employers and organisations of workers are fundamental to the regulation of employment and industrial relations in all the Member States of the European Union. At EU level, the term collective industrial relations looks at the relationship between the EU-level organisations of workers and employers. The outcomes are reflected in different forms and degrees of interactive processes, such as tripartite concertation, social dialogue, collective bargaining, information and consultation, participation, industrial conflict, dispute resolution, constitutional protection, legislative regulation and judicial intervention.

The system of industrial relations at EU level reflects many of the qualities of national systems of the Member States. For example, employee representation is rooted in the Member States’ labour laws on trade unions and representation of workers, in the form of organs based on the workplace or based on corporate structures. Promotion of collective employee representation is now a cornerstone of employment and industrial relations in the EU.

An EU system of collective industrial relations implies a system which is transnational. However, the Member State presence in the institutions of the transnational system of collective industrial relations is crucial. An EU system of collective industrial relations, therefore, engages industrial relations at both the transnational and national levels. There must be mutual adaptation of collective industrial relations at EU level and in national systems of industrial relations.

Legal framework

The components of collective industrial relations in the EU usually have a legal basis. The precondition for collective industrial relations is the existence of collective organisation of the social partners, and in particular, representative organisations of workers. Consequently, the right to constitute and freedom to join trade unions is fundamental and recognised in the Charter of Fundamental Rights of the European Union of 2007 which became an integral part of EU law with the entry into force of the Treaty of Lisbon on 1 December 2009. Article 11 provides that ‘employers and workers of the European Community shall have the right of association in order to constitute professional organisations or trade unions of their choice for the defence of their economic and social interests’.

This fundamental precondition of collective industrial relations is also found in Article 12 of the EU Charter of Fundamental Rights 2000 on the right to freedom of association at all levels, including the right to form and to join trade unions. Trade union activities are to be protected at EU level as a vital element of the solidarity principle in EU industrial relations. These rights are to be found in the EU Charter’s Solidarity Title, which includes rights concerned with solidarity and social protection, solidarity in individual employment and solidarity in industrial relations.

The principle of collective employee representation has become a pillar of collective industrial relations in the EU. For example, the European Court of Justice (ECJ) made mandatory employee representation a necessary condition for the obligation of employers to inform and consult employee representatives under Directives of 1975 and 1977 (Commission of the European Communities v. United Kingdom, Cases C-382/92 and C-383/92, [1994] ECR 2435, 2479).

The Charter of Fundamental Rights of the European Union also includes in Article 27 workers’ information and consultation rights. Information and consultation of employee representatives is now established as a general principle of European industrial relations by Directive 2002/14/EC, and specifically in EU regulation of areas such as health and safety, collective dismissals and restructuring of enterprises. The concept underlying the EU’s vision of collective industrial relations is expressed in the duty of cooperation contained in Article 1(3) of Directive 2002/14. The success of this vision depends on a number of factors, such as whether information and consultation timing will allow for employee representatives to influence management decision-making, and whether management’s information and consultation failures will be effectively remedied (consultation in the enterprise: timing).

The EU has adopted a strategy of enabling the representatives of the two sides of industry, employers and trade unions, to play an active role in EU labour regulation. Collective agreements between the social partners have an essential function in the regulation of employment. For example, according to Article 153(3) TFEU, Member States may entrust labour and management with the implementation of directives by collective agreement, and many directives allow for derogation by collective agreement from the provisions of the directive.

The EU Charter of Fundamental Rights includes in Article 28 the right of collective bargaining. The fundamental value of this right in EU industrial relations was recognised when, in a case involving collective agreements and competition law, the European Court of Justice upheld collective agreements as exempt from the competition law of the EC (Albany International BV v. Stichting Bedrijfspensioenfonds Textielindustrie, Case C-67/96; with joined cases C-115/97, C-116/97 and C-117/97, [1999] ECR I-5751).

The concept of collective agreements setting labour standards is reflected in a number of EU directives. The role of collective agreements and terms of employment is explicitly recognised in Council Directive 91/533/EEC of 14 October 1991 which requires employers to provide written information to individual employees about the terms and conditions of work, including those governed by collective agreements.

Main actors

In collective industrial relations at EU level, the central actors are also employer organisations and trade unions – the European social partners. The most important organisation representing employees is the European Trade Union Confederation (ETUC), to which are affiliated most national trade union confederations in the Member States as well as European industry federations which bring together at EU level national sectoral organisations of workers, for example, in construction and in metalworking. Organisations also exist for cross-border trade union cooperation on a regional basis, and include trade union cooperation in non-EU Member States. Enterprise representation at transnational level is provided for in directives on European works councils, European company (Societas Europaea, SE) and European Cooperative Society representative bodies, allowing for transnational information and consultation.

The most important employer organisations at EU level are the Union of Industrial and Employers’ Confederations of Europe BusinessEurope (formerly UNICE), the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP) and the European Association of Craft, Small and Medium-sized Enterprises (UEAPME). Unlike ETUC, however, BusinessEurope does not include sectoral employer federations, for example, again, in construction and in metalworking. Sectoral structures are, however, to some extent involved in the 40 European sectoral social dialogue committees.

Industrial relations

The processes of industrial relations at EU level span a wide spectrum of activities. Collective bargaining, the most important process of industrial relations within the Member States, takes shape at EU level in the form of European social dialogue autonomy (European social dialogue: autonomy), as well as the institutionalised social dialogue process embedded in the formal procedure in Articles 154–155 TFEU. The TFEU imposes an obligation of mandatory consultation by the Commission of management and labour (the social partners) before submitting proposals in the social policy field, both on the possible direction of Community action and on the content of any envisaged proposals (Article 154 TFEU). The social partners may undertake a dialogue at Community level, which may lead to contractual relations, including agreements. These agreements shall be implemented either in accordance with the procedures and practices specific to management and labour and the Member States or may be made legally binding, at the joint request of the signatory parties, by a Council decision (Article 155 TFEU). The latter path of implementation of EU social dialogue agreements is a form of extension of collective agreements through EU legislation. A number of framework agreements have been concluded within the EU social dialogue at both sectoral and intersectoral levels and transformed into Council directives. There are also autonomous agreements on telework, stress at work, harassment and violence at work, and social inclusion, which have been concluded but not put to the Council for a decision.

The impact of change and restructuring of industries consequent on European Economic and Monetary Union has, not surprisingly, led on occasion to outbreaks of industrial conflict. Although industrial conflict is a familiar phenomenon in the industrial relations of all Member States, resolution of industrial relations disputes through conciliation, mediation and arbitration is only beginning to be addressed at EU level. The attributes of industrial conflict, however, namely industrial action by trade unions and employers, are acknowledged at EU level. The EU Charter of Fundamental Rights includes in Article 28 the right to take collective action by workers and employers, including strike action (strike action at EU level). While the right to strike at national level also received some protection from EU law in the Monti Regulation, in 2007 this right has been limited by the rulings of the ECJ in the Viking case and Laval case.

Following the above court cases, the right to strike at transnational level (transnational industrial action) has been restricted by the ECJ. In the Viking case, the employer submitted that the right to take industrial action must be subservient to the rights under Articles 43 and 49 EC (the freedom of establishment and the freedom to provide cross-border services, now Articles 49 and 56 TFEU) and that any industrial action that impedes these fundamental rights should be prohibited. In response, the trade unions submitted that the right to take collective industrial action falls outside the scope of Article 43 EC (now Article 49 TFEU), even where the impact of such industrial action is to hinder, impede or prevent the exercise of an Article 43 EC (now Article 49 TFEU) right. The ECJ considered both positions and held that the industrial action did constitute a restriction on the Article 43 EC (now Article 49 TFEU) right. While this restriction might in principle be justified, by an overriding reason of public interest, such as the protection of workers, the ECJ held that such restriction must be suitable for ensuring the attainment of the legitimate objective pursued and should not go further than what is necessary to achieve that objective. Similarly, in the Laval case, the ECJ held that industrial action to impose the terms of an existing collective agreement on an employer, based in another Member State, amounted to an Article 43 EC (now Article 49 TFEU) restriction. The combined effect of the rulings in the Viking and Laval cases is to impose stringent limitations on any matters, including industrial action, which could limit the rights under Articles 43 and 49 EC (now Articles 49 and 56 TFEU).

Shortly after the decisions in the Viking and Laval cases, the ECJ gave its judgement in the Rüffert case which concerned national legislation on the award of public contracts, which provided that these would only be awarded to undertakings that agreed in writing to pay workers at least the rate provided in the collective agreement and to ensure that subcontractors did the same. Here, too, the court ruled that Directive 96/71 precluded the authority of a Member State from adopting a measure which would require contractors for public works’ contracts to agree to pay their workers at the rate set by the collective agreement.

As there is no clearly defined right to strike at EU level, obstacles to organise transnational industrial action can also derive from the different national systems of industrial relations and the role of the national strike law.

The Commission’s Social Policy Agenda for 2000–2005, produced after the report of the High Level Group on Industrial Relations, invited the European Foundation for the Improvement of Living and Working Conditions (Eurofound) to ‘put in place an adequate information mechanism on change, which could also serve as a forum of exchange’. The initiative was confirmed in the conclusions of the Nice European Council in December 2000 and on 23 October 2001 the European Monitoring Centre on Change (EMCC) was launched, becoming operational in 2002. It takes its place beside Eurofound’s European Industrial Relations Observatory (EIRO)and European Working Conditions Observatory (EWCO), leading sources of information and expertise on collective industrial relations and working conditions in Europe.

Page last updated: 21 November, 2011