Treaties of Rome
The European Economic Community (formerly EEC, now EC) and Euratom (the European Atomic Energy Community) were created by the Treaties of Rome of 1957 with Belgium, France, Germany, Italy, Luxembourg and the Netherlands as the founding Member States. The ‘Treaties of Rome’ is the term used to refer to the legal foundation of the European Community, which came into force on 1 January 1958.
The law of the EEC was notably declared by the European Court of Justice to be ‘a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only Member States but also their nationals’ (N.V. Algemene Transport- en Expeditie Onderneming van Gend & Loos and Nederlandse administratie der belastingen (Netherlands Inland Revenue Administration), Case 26/62).
This new legal order of European Community law has significant effects on the employment and industrial relations in the Member States. The EC may also be said to have a labour law. However, the European Economic Community was founded to create a common market in services, goods, capital and labour. Freedom of movement for labour in a common market as a founding objective provides the initial context of employment regulation in the provisions of the Treaties of Rome.
Title III of the EC Treaty, ‘Social Policy’, contained only two Chapters with only 12 Articles. The second Chapter of Title III of the EC Treaty was on the ‘European Social Fund.’ Its main function was ‘to improve employment opportunities for workers in the common market’ (Article of 123 EC) and it was regarded as a weaker version of provisions in the Treaty of Paris of 1951, which allowed for extensive training and retraining schemes in the European Coal and Steel Community (ECSC).
An even greater contrast with the active labour market intervention policy of the Treaty of Paris is in the first Chapter, where the first of six Articles, Article 117 EC, was as follows:
Member States agree upon the need to promote improved working conditions and an improved standard of living for workers, so as to make possible their harmonisation while the improvement is being maintained.
They believe that such a development will ensue not only from the functioning of the common market, which will favour the harmonisation of social systems, but also from the procedures provided for in this Treaty and from the approximation of provisions laid down by law, regulation or administrative action.
The Member States’ decision, embodied in the Rome Treaties, was taken following two reports issued in 1956, one of a Committee set up by the Member States (the Spaak Report) and another by a committee of experts from the International Labour Organisation (the Ohlin Report). Both reports recommended that there was no need for an interventionist social dimension for the proposed common market, save for certain measures against ‘unfair competition’. Article 117 EC reflected the Member States’ decision that social policy, employment and labour relations were to be determined by market mechanisms, not legislative intervention.
Article 118 EC stipulated:
Without prejudice to the other provisions of this Treaty and in conformity with its general objectives, the Commission shall have the task of promoting close cooperation between Member States in the social field, particularly in matters relating to:
labour law and working conditions;
basic and advanced vocational training;
prevention of occupational accidents and diseases;
the right of association, and collective bargaining between employers and workers.
The foundation of the European Economic Community did not initially appear to represent an immediate and total break with the experience of the same six Member States of the ECSC. In 1958, the Commission began to plan the implementation of Article 118 EC. The Commission sought the opinions of representatives of the social partners in the six Member States and agreement was reached on a series of issues that would be the subject of detailed investigation by the Commission, to be followed by the social partners who would discuss the action to be taken. However, several governments questioned these consultations with employer and employee organisations, and adopted a clear position to the effect that the Commission was not to promote social policy.
It was not until the early 1970s that the political context changed and initiatives on social policy were taken, which eventually led to the First Social Action Programme of January 1974. In 1986, the Single European Act (SEA) amended the Treaty of Rome to grant the EC competence in the field of the working environment and health and safety at work. Later, with the Treaty of Maastricht (Treaty on European Union) of 1992, the Community finally gained the competence to act in wide areas of employment and industrial relations. It was with the Treaty of Amsterdam of 1997 that the Employment Title gave the EU a role in coordinating Member States’ employment policy.
Today, the EU has come a very long way from the vision in the Treaties of Rome of labour as a mere factor of production in a common market. Nonetheless, that vision dominated the first 35 years of the EC, and retains much of its original power.