Amsterdam Treaty brings small advances for employment and social policy

On 17 June 1997 in Amsterdam, the European Council agreed a new draft Treaty. This feature presents those contents of the Treaty which are set to have an impact on European industrial relations, outlines the reactions of the social partners and provides an initial assessment of the outcomes.

The objectives of the Treaty

The main objectives of the draft Treaty agreed in Amsterdam in June are to:

  • enhance the rights of European Union (EU) citizens and place further emphasis on the basic principles of the Union in terms of democracy and individual rights;
  • establish an area of free movement, security and justice;
  • strengthen EU policy-making in certain areas such as employment, social policy and the environment;
  • introduce changes in institutional arrangements and decision-making procedures and simplify the way the EU works and help prepare it for enlargement; and
  • strengthen the external policy activities of the Union

There were three main reasons why a revision of the Treaties was necessary. The first reason is to be found in the requirements laid down in the Treaty on European Union (TEU) negotiated at Maastricht in 1992. For example, this Treaty obliged the Intergovernmental Conference (IGC) to carry out a review of the new co-decision procedure introduced under Article 189b of the TEU. The second reason is more practical, and relates in particular to enlargement and the ability of current decision-making and administrative structures to accommodate new Member States. The third reason is political and is rooted in the widespread acknowledgement of the diminishing support for the aims of the TEU among the citizens of the Union.

The new draft Treaty agreed at Amsterdam contains a number of provisions which are of relevance to European industrial relations. These are summarised below.

Enhancing the rights of EU citizens and emphasising the basic principles of the Union

A new paragraph has been added to the Preamble of the TEU, which confirms the Union's attachment to the fundamental social rights as defined in the Council of Europe's European Social Charter signed at Turin on 18 October 1961 and the in the 1989 Community Charter of the Fundamental Social Rights of Workers.

Under the same title, a new article 6a of the Treaty establishing the European Community (TEC) affirms the principle of non-discrimination and gives the Council of Ministers- acting unanimously on a proposal of the European Commission- the power to take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. In addition, a declaration states that the Community shall take account of the needs of disabled persons when drawing up measures relation to the Single Market (Article 100a).

In Article 2 of the TEC the words "equality between men and women" are added to the list of general principles to be promoted by the Community. The principle of "mainstreaming" - the inclusion of considerations of gender equality into all the policy objectives of the Community - is included in a new Article 3 of the TEC.

On the ever-controversial concept of subsidiarity, the Treaty includes a protocol which reiterates that if Community action is to be justified, the following criterion must be met: the objectives of the proposed action cannot be sufficiently achieved by Member States' action in the framework of their national constitutional system and can therefore be better achieved by action on the part of the Community. Equally, "where the application of the principle of subsidiarity leads to no action being taken by the Community, Member States are required in the action to comply with the general rules laid down in Article 5 of the Treaty, by taking all appropriate measures to ensure fulfilment of their obligations under the Treaty and by abstaining from any measure which could jeopardise the attainment of the objectives of the Treaty."

Strengthening EU policy-making in the areas of employment, social policy and the environment

Employment policy

Article B of the TEU has been expanded to include the objective of promoting "economic and social progress which is balanced and sustainable and a high level of employment". This employment objective is also reflected in the changes made to the general objectives of the European Community as set out in Articles 2 and 3 of the TEC.

An new Title on Employment, or "employment chapter", is included in the TEC under Title VI, which sets the objective of working towards the development of a "coordinated strategy for employment and particularly for promoting a skilled, training and adaptable workforce and labour markets responsive to economic change". Member States, having regard to national practices related to the responsibilities of management and labour, will be required to regard the promotion of employment as a matter of common concern and will be called upon to coordinate their actions in this respect within the Council.

The Community is given the task of encouraging cooperation and the exchange of experience between Member States on the issue of employment, and if necessary, to complement their actions. Article 5 of the employment chapter allows the Council to adopt incentive measures designed to encourage cooperation between the Member States on employment. The aim of the achievement of a high level of employment will have to be taken into consideration in the formulation and implementation of Community policies.

Article 4 of the employment chapter states that the European Council will consider the employment situation in the Union annualy and on this basis draw up guidelines for employment policy. Member States will have to prepare annual reports on the measures they have taken to implement these guidelines. Where necessary, the Council can make recommendations to Member States on their employment policies.

Article 6 of the employment chapter confirms the establishment of the Employment Committee with advisory status to promote cooperation on employment and labour market policies.

Social policy

As a result of the new UK Government's decision to "sign up" to the Agreement on Social Policy (UK9704125F), the new Treaty is set to repeal the Protocol and Agreement on Social Policy currently annexed to the TEU and integrate the Agreement into the Treaty in the form of a new Chapter on Social Policy. Most of the text of this Chapter is taken directly from the Agreement, with a number of alterations, as listed below.

Article 117 will be changed (in relation to the equivalent section in the Agreement on Social Policy) to take account of the detailing of the general objectives of Community social policy ("the promotion of employment, improved living and working conditions, so as to make possible their harmonisation while the improvement is being maintained, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting employment and the combating of social exclusion"). It will state that the Community and Member States will implement measures which take account of the diverse forms of national practices and the need to maintain the competitiveness of the economy.

A new paragraph is added to Article 118 which enables the Council to adopt measures to encourage the exchange of information and best practice on how to tackle social exclusion.

A subparagraph is added to the forth paragraph of Article 118 which states that where management and labour have been entrusted with the implementation of a Directive, Member States must take measures which enable them to guarantee the results imposed by the Directive.

A declaration in Article 118(2) seeks to ensure that in introducing health and safety legislation, small and medium-sized enterprises are not discriminated against.

A declaration added to Article 118b (on the possibility of agreements being reached by the social partners) states that "the first of the arrangements for application of the agreements between management and labour at Community level ... will consist by developing, by collective bargaining according to the rules of each Member State, the content of the agreements, and that consequently this arrangement implies no obligation on the Member States to apply the agreements directly or to work out rules for the transposition, nor any obligation to amend national legislation in force to facilitate their implementation."

Article 118c is extended to list matters where the Commission will encourage Member States to coordinate their actions. These include:

  • employment;
  • labour law and working conditions;
  • basic and advanced vocational training;
  • social security;
  • prevention of occupational accidents and diseases;
  • occupational hygiene; and
  • the rights of association and collective bargaining between employers and their workers.

A new paragraph is added to Article 119 allowing the Council, using the co-decision procedure, to adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in employment, including the principle of equal pay for work of equal value.

Community responsibilities in relation to environmental protection are also strengthened and the concept of sustainable development is evoked in the Preamble of the Treaty.

Changes to decision-making procedures and institutional structures

The co-decision procedure is extended, replacing the cooperation procedure in all areas other than Economic and Monetary Union. It is also extended to the following new Treaty Articles directly relevant to employment and social affairs:

  • Article 5 on employment incentive measures; and
  • Article 119 on equal opportunities and treatment.

Qualified majority voting in Council is extended to the following new Treaty provisions:

  • Article 4 of the employment chapter on employment guidelines;
  • Article 5 of the employment chapter on incentive measures;
  • Article 118(2) on social exclusion; and
  • Article 119(3) on equality of opportunity and treatment of men and women.

Responses from the social partners

Both the European Trade Union Confederation (ETUC) and the Union of Industrial and Employers' Confederations of Europe (UNICE) approached the IGC and the Amsterdam summit with their own set of desiderata, and assessments are now under way to which extent these priorities have been met.

Initial reactions have been guarded. While UNICE has welcomed the confirmation by the Amsterdam Council of the timetable for the introduction of the single currency and the passing of the Resolutions on stability, growth and employment (EU9706133N), it regrets the lack of substantial process made in the areas of institutional reform.

ETUC, on the other hand, has called the draft Amsterdam Treaty a minimalist solution to the dilemma facing European labour markets. It has welcomed the inclusion of the social chapter in the Treaty, but argued that this and the new employment chapter alone are insufficient in obtaining significant advances in the area of social policy.

ETUC had sought a strengthening of Community social and employment policy and was particularly keen to see it placed on a par with monetary policy. ETUC has long highlighted the importance of a convergence of economic policies going hand in hand with the achievement of the fiscal stability criteria required for the achievement of monetary union. It considers that this element has thus far been neglected. Another key priority for ETUC had been the "democratisation" of the European decision-making process, with more powers and responsibilities to be accorded to the European Parliament. In many of these points the draft Amsterdam Treaty is seen to have failed to measure up to the demands of ETUC.

In its opinion (dated 30 April 1997) on the conclusion of the IGC, UNICE had called upon the heads of government to recognise the importance of measures designed to increase the competitiveness of European industry. This is seen to be a sine qua non for the promotion of employment opportunities. Among its other key demands were the consolidation of the single market, the strengthening of the Community's role in external economic relations, and the reform of Community institutions to render decision-making more effective and transparent. It also called upon decision-makers to make systematic use of impact assessments and cost-benefit analysis when framing policy proposals.

There was in UNICE a particular concern about the nature and content of a new chapter on employment. These concerns were allayed when the draft text of the chapter became known: however, in its press release following the conclusion of the Amsterdam Summit, UNICE underlines its anticipation that the chapter will be interpreted with the aims of the Resolutions on stability, growth and employment in mind. These note, among other items, the need to improve Europe's competitiveness as a prerequisite for growth and employment by relieving tax pressures, reducing non-wage labour costs and increasing labour market flexibility.


Upon first inspection, much of the content of the new Treaty in relation to employment and social policy can be seen, in essence, as an enactment of current procedure and practices, with the inclusion of the social chapter into the Treaty. The employment chapter gives Treaty status to the process instituted after the Essen European Council, in the drawing-up of multiannual programmes and annual national reports on the progress of their implementation.

Clear advances were made in the area of combating discrimination on the basis of sex, racial or ethnic origin, religion or belief, disability, age and sexual orientation, and the extension of qualified majority voting could bring advances in the areas of employment and equal opportunities.

Further analysis is required of the impact of some of the changes under the social policy heading to assess how these will affect decision-making.

There is a general acknowledgement that the Treaty has "fudged" the issue of institutional reform as no concrete decision was taken on the reweighting of votes in the Council of Ministers or the number of Commissioners allotted to Member States. These will have to be readdressed as new countries join the Union. (Tina Weber, ECOTEC)

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