Draft bill presented on new union representativeness rules

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In late October 2001, the Luxembourg Minister of Labour presented a draft bill redefining the concept of 'representative' trade unions (representative status brings unions various rights, such as concluding collective agreements). The move is a response to court rulings which overturned existing practice by awarding a sectoral trade union nationally representative status.

Interpretation of the law of 12 June 1965 concerning collective agreement s, as it defines the 'representativeness ' of trade unions at national level, has periodically given rise to incidents since the late 1970s.

Representativeness as defined until 2000

For a collective agreement to be valid, the 1965 law requires that it be signed by one or more of the most representative trade unions at national level; it excludes sectoral unions, company unions, and enterprise- and plant-level employes representatives. The most representative trade unions at national level are deemed to be those that identify themselves as such through the size of their membership, their activities and their independence.

According to two Council of State (Conseil d'Etat) rulings of 19 June 1980 and 6 July 1988 respectively, a trade union's nationally representative status does not derive ipso facto simply from being established in a particular sector; the union also has to provide evidence of substantial membership, and therefore a degree of influence in various sectors of economic life. It is also considered important to establish whether the signatory parties to an agreement, and those representing workers in particular, are able to ensure that their assent binds, or is capable of binding, sufficient numbers of employees for the agreement to described as 'collective'.

In 1995, the government asked the tripartite consultative Economic and Social Council (Conseil économique et social, CES) for its opinion, with a view to producing a clearer definition of the representativeness concept, but the social partners on the Council failed to reach an agreement in 1997 (LU9705107F).

Matters came to a head when, in April 1999, the Luxembourg Association of Bank Employees (Association luxembourgeoise des employés de banque, ALEBA) signed a collective agreement in the banking sector ( LU9905104F), but the Minister of Labour refused to register it (a legal requirement for an agreement to come into effect) on the grounds that the union did not enjoy nationally representative status (LU9912117N). ALEBA complained to the International Labour Office (ILO) in Geneva that the Luxembourg government was guilty of 'interference in trade union affairs through the creation of monopolies that favour political unions'. In 2000, the ILO Committee on Freedom of Association issued an opinion, in response to the ALEBA complaint, calling on the Luxembourg government to review the criteria for nationally representative status on the grounds that they offend the principles of freedom of association (LU0004135N).

Representativeness as defined by the administrative courts

Within the framework of an appeal brought by ALEBA against the Minister of Labour, in 2000 first the Administrative Tribunal (Tribunal administratif), and then the Administrative Court (Cour administrative) awarded nationally representative status to this trade union, which was clearly represented only in the banking and insurance sectors (LU0011152F). (Until 1997, the Council of State had been Luxembourg's only administrative judicial body, but in that year a more independent system of an Administrative Tribunal and a higher Administrative Court was established.)

Following a detailed analysis of the law of 12 June 1965 on collective agreements, the administrative courts reached the conclusion that none of the 'sectoral' criteria hitherto used to determine representativeness was based on any part of this legislation.

On this basis, the judges laid down a new 'pyramid' of criteria for trade union representativeness (all of which ALEBA was deemed to meet) as follows:

• at the basis are all trade union organisations;

• in the middle are those organisations that are the most representative in a given occupation (in the ALEBA case, bank staff), and which must be able to demonstrate substantial membership, activities and independence; and

• at the top are organisations which meet the first two criteria and which can be considered as the most nationally representative trade unions, in that they represent a substantial proportion of all white- or blue-collar workers in the country as a whole.

Minister of Labour's proposals

The administrative courts' rulings meant that one of the elements on which the 'Luxembourg model' of industrial relations is founded - the award of nationally representative status only to trade unions with a multi-sectoral membership - was brushed aside. However, this condition is widely regarded as essential, in particular in order to prevent sectoral trade unions from being able to paralyse the entire economy through strike action. Holding the whole country to ransom over particular demands has so far proved impossible in Luxembourg, with representative trade unions being established in several sectors and necessarily having to think of the interests of all their members.

It was this consideration that encouraged the Minister of Labour on 29 October 2001 to present a series of proposals for the reform of the 1965 Law, which in particular contains a more detailed definition of trade unions' representative status.

The draft bill contains provisions relating to the representativeness of trade union, as follows:

• to be deemed representative at national level generally, a trade union would be required to have won an average of at least 20% of the total vote among among blue- and white-collar workers in the two most recent sets of elections of representatives in professional chambers and on the tripartite bodies which run the various social security funds (LU9810172F), with an average of at least 15% of the votes in each category of staff (white- and blue-collar);

• to be deemed representative at sectoral level in an important sector of the economy, a trade union would have to represent at least 10% of employed workers in Luxembourg; and

• a new structure, the 'bargaining commission' (commission de négociation), would be introduced into the legal procedure for negotiating collective agreements. This commission would be made up of trade unions with national or sectoral representative status, which could, by a unanimous vote, agree to allow other unions to take part in the negotiations. In the event of a dispute, or a non-unanimous decision, the National Conciliation Office (Office national de conciliation) would hear the case.

In parallel with these proposals, the Minister wants to improve the way the National Conciliation Office works by appointing an independent civil servant from the Ministry of Labour as its president: this function is currently carried out by civil servants on an honorary basis.

The Minister has arranged to meet the social partners in January 2002 with a view to discussing with them the content of a bill that will subsequently pass through the legislative process.

Commentary

It seems clear that the Minister of Labour was obliged to react very quickly as soon as one of the elements on which the 'Luxembourg model' is founded - ie the award of nationally representative status only to trade unions established in several sectors - had been removed by the administrative courts. As noted above, this condition is essential, and in particular is needed to prevent sectoral unions being able to block the entire economy through strike action, and hold the whole country to ransom in order to have a few specific demands accepted.

The current proposals (which are similar to suggestions raised in LU0011152F), involve speedy adaptation of new legislation structured around:

• allowing sectoral trade unions with a certain degree of membership in a relevant occupation to sign collective agreements for their sector; and

• awarding the status of nationally representative trade union, with all the obligations and responsibilities that attach to it, only to the largest unions established in several sectors.

It is to be hoped that the spirit of the current draft bill, when adopted, will survive. (Marc Feyereisen)