The competences of the European Community in the social field as defined in the Treaties of Rome in 1957 were very limited. Article 118 of the EC Treaty (now Article 140 EC) provided that:
The Commission shall encourage cooperation between the Member States and facilitate the coordination of their action in all social policy fields under this chapter, particularly in matters relating to employment, labour law and working conditions, basic and advanced vocational training, social security, prevention of occupational accidents and diseases, occupational hygiene, [and] the right of association and collective bargaining between employers and workers.
Despite the apparent wide scope of activity, this was held by the European Court of Justice to be merely a procedural power to organise consultations and not to stipulate results to be achieved by Member States (Germany, UK and Others v. Commission, Cases C-281, 283, 285 and 287/85 ).
In practice, therefore, the Community was able to take action mainly with regard to the free movement of workers in a common market with fair competition. These limited competences of the European Union were constrained by economic and political developments, which led to the adoption of the Social Action Programme in 1974. There were no Treaty provisions granting the Community explicit competence to take action to protect employees or their organisations. The directives which followed, on collective redundancy, transfer of an undertaking, equal pay and equal treatment of female and male workers, were therefore justified as necessary to achieve fair competition in a common market, and based on the relevant Treaty provisions concerned with ‘the establishment or functioning of the common market’ (now Article 94 EC).
Other developments led to EC intervention in the sphere of health and safety at work (the Single European Act), but the real breakthrough came with the Treaty of Maastricht (Treaty on European Union). The Agreement on Social Policy provided the Community with the competences to take action in a wide area of employment and industrial relations (Article 137 EC). The main barrier to the Europeanisation of employment and industrial relations is no longer the lack of competences, but the political will of the Member States and the institutional voting constraints in the Council of Ministers.
However, disputes over the scope of EU competences in the social policy field continue. At present, the focus is on the Charter of Fundamental Rights of the European Union, in which the chapter entitled ‘Solidarity’ provides for a number of fundamental rights in the employment and industrial relations fields. There is some contention over the precise scope of these rights, and whether they are consistent with EU competences. The incorporation of the EU Charter in the Treaty establishing a Constitution for Europe and its possible consequences will probably add fuel to the debate.