EU labour law directives and national collective agreements: A clash of cultures?

Collective agreements are among the panoply of national measures deemed appropriate mechanisms for the implementation of EU directives in the fields of social and employment policy and industrial relations. This role of collective agreements is prescribed by Article 153(3) of the Treaty on the Functioning of the European Union (TFEU), which states that a Member State may entrust management and labour, at their joint request, with the implementation of labour law directives adopted. The vast majority of scholars and practitioners also agree that a directive in principle may be implemented by way of collective bargaining. This form of implementation of international norms via collective agreements has also been recognised by other international organisations, such as the Council of Europe and the ILO, as well as by the Community Charter of Fundamental Social Rights of Workers of 1989. Yet, the Laval case in Sweden highlighted prominently the ‘clash of cultures’ that may arise when collective bargaining is used for legislative ends, in particular in the absence of extension mechanisms or legally enforceable national provisions. ^[1]

• European Industrial Relations Dictionary: Laval case

Transposition of EU labour law directives through national collective agreements

EU law does not have a precise legal definition of collective agreements. According to Eurofound, collective agreements at national level ‘are agreements concluded between single employers or their organisations, on the one hand, and organisations of workers such as trade unions, on the other. These agreements establish the content of individual contracts of employment and regulate relationships between the parties.’ ^[2]

• Working paper: Transposition of EU labour law directives through collective agreements at national level

The process leading to these outcomes is collective bargaining, which is the ‘negotiation between unions and employers regarding the terms and conditions of employment of employees, and about the rights and responsibilities of trade unions. It is a process of rulemaking, leading to joint regulation’. ^[3]

The role of statutes and collective bargaining in the governance of the employment relationship, in general, and the legal concept of collective agreements, in particular, vary substantially among the EU Member States. The main dividing line has been the one between the continental cluster of industrial relations and that of Ireland and the United Kingdom (which is no longer a Member State). Collective agreements of continental Member States tend to have mandatory normative force, whereas in Ireland and the United Kingdom, they are seen as ‘extra-legal counsel’, ‘custom’ or ‘gentlemen’s agreements’ only and are not legally binding unless it is stated otherwise. ^[4]

In the national law of continental countries, collective agreements fulfil two distinct objectives: they have a contractual (or procedural) function and a normative function. The contractual function regulates the relationship between employers (single-employer bargaining) and employer organisations (multi-employer bargaining) and trade unions, i.e. their rights and obligations. The normative function regulates terms and conditions of the individual employment relationship, such as pay, working time, holidays and leave, health and safety, skills, and so on.

In EU law, national collective agreements may have a double role:

• as tools of implementation of other EU legal sources, such as directives
• as mechanisms to derogate, under certain circumstances, from EU standards laid down by directives.

When it comes to the first role, which is at the centre of our analysis, Ruth Nielsen distinguishes four modes of implementation of EU directives into national legislation: ^[5]

1. ordinary statutory legislation
2. a combination of statutory legislation and collective agreements
3. collective agreements with mandatory effect extended erga omnes (with regard to all parties)
4. collective agreements with mandatory effect that are applicable inter partes (only between the parties).

Only the second and third categories are a suitable avenue for the implementation of directives via collective agreements. Collective agreements with mandatory effect that are applicable only between parties or mere gentlemen’s agreements – as in the United Kingdom without any mandatory normative effect – are to be considered as not appropriate instruments for transposing EU directives into national law. ^[6]

First- and second-degree implementation

The European Commission distinguishes between first-degree and second-degree implementation of EU directives by national collective agreements:

• first-degree implementation refers to a mode of implementation that transposes a directive as a whole via a collective agreement
• second-degree implementation refers to a mode of implementation by national law or collective agreement where that implementation leaves space for further collective bargaining over, for example, exceptions to the directive

In the current acquis communautaire (the cumulative body of EU laws), there are total of 25 genuine EU labour law directives, as well as their modifications and recasts. Eurofound assessed the transposition of these law directives, on the basis of several sources: mainly the EUR-Lex database, case law of the Court of Justice of the European Union (CJEU), selected academic literature, policy documents, and six country reports from the Eurofound Network of Correspondents based in Belgium, Denmark, Finland, Luxembourg, Italy and Spain. These countries were identified as the most pertinent ones when it comes to the transposition of EU labour law directives by national collective agreements.

Of the 25 EU labour law directives, 20 have been transposed by collective agreements (first- and/or second-degree) in at least one Member State and some in more than one Member State. Sixteen directives have been mainly transposed by first-degree implementation, and 12 have been implemented by the second-degree route. Eight directives have been implemented by first- and second-degree avenues. Three have not been transposed by collective agreement at all. The Member States that have used first-degree implementation most are Belgium (11), Luxembourg (3), Denmark (2) and Finland (1).

Figure 1: First-degree and second-degree implementation of EU labour law directives by collective agreement compared

Notes: CA = collective agreement; > = effect of collective agreements on regulation in statutes.

The first-degree implementation route has never been used by more than two Member States per directive, whereas the second-degree approach has been used more frequently. The directive that has been transposed most often by second-degree implementation is the Temporary Agency Work Directive (2008/104/EC: 14 Member States), followed by the Working Time Directive (2003/88/EC: 11 Member States), according to Commission implementation reports.

The Member State with the highest incidence of second-degree transpositions is Denmark (12), followed by Italy (3). Belgium, Finland, Germany, the Netherlands and Sweden each have taken that approach twice.

Out of the 25 EU labour law directives, 16 directives have been transposed by national collective agreements. A total of 13 directives, i.e. the vast majority, have been transposed by a combination of collective agreements and extension mechanisms. The Member States where this happened are Belgium (Royal Decree) and Luxembourg (Grand Ducal Regulation).

Two EU labour law directives were transposed by collective agreements in combination with subsidiary legislation; this happened for two directives transposed in Denmark only. One directive has been transposed by collective agreements only, without extension or supplementary legislation: Council Directive 2005/47/EC on certain aspects of the working conditions of mobile workers in interoperable cross-border services in the railway sector (Finland). The Working Time Directive was transposed in Denmark by legislation, a collective agreement and an ‘implementation agreement’ between the Danish social partners LO and DA: this is, to date, the only example of a directive transposed by a collective agreement and ‘extended’ by another collective agreement.

An uncommon phenomenon

At present, the transposition of EU labour law through national collective agreements is not a common avenue of implementation. It is mainly used in three Member States: foremost in Belgium, Luxembourg and Denmark. In Denmark, the second-degree implementation route prevails.

The recognition of the role of collective agreements in implementing directives has emerged only slowly from the case law of the CJEU. Despite the sometimes critical approach of the Advocate-General and the CJEU, collective agreements are deemed formally acceptable as an industrial relations mechanism for the enforcement of EU law today. Yet, the effectiveness of this mechanism is closely scrutinised by the CJEU. Member States that rely on the implementation of directives through collective agreements must demonstrate that they allow for effective enforcement of the directive’s provisions. In order to comply with the requirements of effective implementation of EU law, as postulated by the Commission, the Council and the jurisprudence of the CJEU, transposition through collective agreement needs to be either accompanied by administrative extension mechanisms (Belgium and Luxembourg), unless extensions are quasi-automatic (Finland), or accompanied by supplementary legislation (Denmark).

• European Industrial Relations Dictionary: Enforcement of EU law

The Eurofound working paper Transposition of EU labour law directives through collective agreements at national level explores the topic discussed in this article in detail.

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