Commission to consult on EU-level dispute resolution machinery

During 2002, the European Commission is expected to begin consultations with the social partners on the possible establishment of a voluntary conciliation, mediation and arbitration service at European level. This feature reviews the background to this initiative.

The European Commission's social policy agenda, which set out its priorities for action in the field of social policy and employment over the 2000-5 period, contained a commitment to consult the social partners on 'the need to establish, at European level, a voluntary mechanism on mediation, arbitration and conciliation for conflict resolution' (EU0007266F). The Commission is expected to initiate the consultation process in the coming months. This feature examines the background to this move.

Strong support from Belgian EU Presidency

The idea of establishing EU-level dispute resolution machinery received considerable attention during the second half of 2001, particularly as a result of its promotion by the Belgian government, which held the EU Presidency during this period.

In July 2001, at the first informal Employment and Social Policy Council meeting of the Belgian Presidency, held in Liège, the Belgian deputy prime minister and minister of employment, Laurette Onkelinx, canvassed support for the idea of a European system of mediation in industrial disputes which would be available on a strictly voluntary basis to facilitate dialogue between employers and workers' representatives in disputes involving several EU member states (BE0108357N). As an example of the sort of dispute she had in mind, Ms Onkelinx cited the controversial move by the UK-based retail group Marks & Spencer to close its continental European operations, including stores in Belgium, France and Spain (FR0104147F).

The social partner representatives attending the Liège informal Council are reported to have given mixed reactions to the plan. While the European Trade Union Confederation (ETUC) encouraged the Belgian Presidency to investigate the issue further, the Union of Industrial and Employers' Confederations of Europe (UNICE) questioned the added value of such a transnational system and also raised the question of potential interference with conciliation services already in place at national level. However, the ministers and social partner representatives present at the meeting agreed that the Presidency should proceed with exploring the idea further.

Belgian government officials subsequently undertook a tour of Member States' capitals to elaborate on their proposals, and in November 2001 the Belgian Presidency held a conference in Brussels focusing on labour dispute settlement in Europe (see below).

The Commission's approach

For its part, the European Commission has been examining the feasibility of establishing conciliation, mediation and arbitration mechanisms at Community level. During 2001, the Commission set up a group of experts to study national practice in this area, and held an informal meeting on the issue with the secretariats of the EU-level social partner organisations.

The most developed exposition to date of the Commission's views on the desirability and feasibility of solving labour disputes at European level was given by the employment and social affairs commissioner, Anna Diamantopoulou, in a speech at the November 2001 Belgian Presidency conference.

Ms Diamantopoulou said that the existence, extensive use and apparent success of publicly-provided dispute resolution mechanisms at national level had prompted the Commission to ask whether similar mechanisms could play a useful role at European level. She said that the response of the social partners to the Commission's eventual proposals would be 'crucial', but that the 'spadework' which the Commission was undertaking with the aid of the group of experts had yielded some 'useful pointers'. Among these were that:

  • an EU-level mechanism would be concerned only with issues of a collective nature. Disputes concerning individual employment relations would continue to be dealt with nationally;
  • an EU-level mechanism is more likely to develop in respect of conciliation and mediation rather than arbitration, at least at this stage; and
  • recourse to any EU-level mechanism - and acceptance of any outcome - would have to be on a purely voluntary basis.

The commissioner emphasised that, to be dealt with at European level, disputes would have to have a 'transnational dimension'. An EU-level dispute resolution mechanism could potentially have a role to play in:

  • assisting management and employees to reach and interpret agreements under the European Works Councils Directive (94/45/EC) and the European Company Statute (EU0206202F);
  • helping the parties to the European-level cross-industry and sectoral social dialogue to reach agreements and resolve disputes over their interpretation; and
  • contributing to resolving transnational labour disputes arising from company restructuring.

Ms Diamantopoulou said that she favoured a 'pragmatic, gradualist approach' to establishing European-level dispute resolution arrangements, preferring to 'develop familiarity with and confidence in an EU-level mechanism on a step-by-step basis rather than seeking to define and establish an elaborate system from the outset'. She said that 'the possible nomination of a panel of mediators from which the parties themselves would select someone to mediate in their dispute' appeared to be a 'more appropriate avenue to explore' than creating a 'permanent agency' which she felt would be 'totally unwarranted'.

Ms Diamantopoulou concluded by stressing that 'an EU-level dispute resolution mechanism is only likely to be successful if it is developed with the full and active support and involvement of both sides of industry.'

Council conclusions

At the Employment and Social Policy Council on 3 December 2001, the Council adopted a series of conclusions on this issue (EU0112245F). The Council:

  • agreed that 'it would be appropriate to investigate fully whether an EU-level dispute resolution mechanism might help resolve employer-employee disputes that transcend the national territories';
  • welcomed the study launched by the Commission and the plans to consult the social partners; and
  • invited the Commission to report on the outcome of its consultations.

The issue was also touched on by the Presidency conclusions (paragraph 25) issued following the European Council summit meeting held in Laeken on 14-15 December 2001 (EU0201231N). These stated that the European Council 'stresses the importance of preventing and resolving social conflicts, and especially transnational social conflicts, by means of voluntary mediation mechanisms concerning which the Commission is requested to submit a discussion paper'.

Current position

The Commission-sponsored study of conciliation, mediation and arbitration arrangements in the member states has now been published. On 12 April 2002, a senior Commission representative told a conference on dispute resolution held in Madrid that the promised consultation of the social partners on this subject would be launched 'before the summer'. Commission officials are currently preparing a consultation document for this purpose and EIRO will carry details of the Commission's proposals once they are available.

Commentary

The establishment of EU dispute resolution mechanisms has the potential to be a further significant step in the development of a European-level system of industrial relations. Most Member States have apparently indicated general support for some development in this direction, provided the use of such a mechanism is voluntary, although the UK is thought to have expressed reservations.

As indicated by the commissioner, the views of the social partners are likely to have a crucial bearing on the nature of such a mechanism. The initial signs are that ETUC will be more positive about such a development than UNICE. ETUC's response to the Commission's recent consultation document on anticipating and managing the social effects of restructuring (EU0204202N) supported 'further consideration of the proposal by the Commission to develop conciliation possibilities at the European-level in cases of disputes with a transnational dimension'. However, ETUC 'asks to be better involved in this proposal', and argues that 'European-level conciliation can only function if it is part of a European system of industrial relations which includes freedom of association, the right to collective bargaining and the right to cross-border [strike] action.'

Clearly the potential willingness of the parties, particularly employers, to agree to refer an issue to an EU-level dispute resolution mechanism is as yet unknown and therefore the likely level of demand for its services remains unclear. Such uncertainties, as well as the likely reservations on the part of employers' groups and some Member States, point to the likelihood of only modest moves towards the provision of EU-level conciliation/mediation services, at least initially. (Mark Hall, IRRU)

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