Social dialogue stops communicating

Date: 21/05/1998

The EU's adventure in attempting to bring harmony to labour relations has come to a halt, says Simon Coss

ON A chilly February day last year, the Renault car company brutally demonstrated the reality of modern labour relations in the European Union. Renault's shock decision to close its profitable factory in Vilvoorde, Belgium, was a rude awakening for anyone who believed that industrial restructuring in the EU would be achieved through negotiation and agreement between workers and employers.

Outrage at Renault's decision was widespread. Aside from the trade unions, who were incensed at the announcement and at the fact that they had not been consulted by Renault, the European Commission also launched an uncharacteristically forthright attack on the French car company.

President Jacques Santer described the move as “a serious blow to confidence in Europe”, while Social Affairs Commissioner Pádraig Flynn was even more outspoken.

“The decision by Renault has provoked outrage because of its abruptness and its apparent lack of concern with the rights of the employees,” he told the European Parliament shortly after the closure was announced. “Renault management, in a manner which I can only describe as irresponsible, has not complied with its obligations as regards information and consultation of representatives of the workers prior to its decision.”

But despite all the anger, the bluster and the protest marches, the factory still closed. When push came to shove, Renault boss Louis Schweizer showed only too clearly who was going to decide how his company should be run (although there were suggestions at the time that he could never have taken such drastic action at a French factory).

Apart from the personal tragedy for the 3,000 car workers who lost their jobs when the plant finally closed its gates last summer, the whole episode called into question the effectiveness of the EU's 'social dialogue' system which is supposed to bring trade unions and employers together to discuss issues of mutual concern in order to avoid precisely the sort of crisis seen at Vilvoorde.

The social dialogue was first incorporated into EU law in the 1992 Maastricht Treaty and was the jewel in the crown of its famous social chapter.

Although a system of worker-employee talks had been in existence for several years prior to Maastricht, it was only with the treaty's entry into force that the social dialogue gained some real legal weight.

Under the system, the Commission can call on the EU's three 'social partners' - the European Trade Union Confederation (ETUC), the Union of Industrial and Employers' Confederations of Europe (UNICE), and the European Centre of Enterprises with Public Participation (CEEP), representing public sector employers - to draw up draft agreements which can then be turned directly into proposals for EU legislation.

The principle behind the social dialogue is that the social partners are best placed to propose EU labour laws as they are the people who will be directly affected when legislation comes into force. But the system has not been an unqualified success. Since Maastricht, the partners have only managed to reach agreements which have subsequently been turned into legislative proposals on two occasions.

In December 1995, they drew up an accord on the amount of parental leave workers should be granted to care for babies and young children, and last summer they agreed on provisional rules to govern the rights of part-time workers. The three sides are currently engaged in negotiations on the rights of workers on fixed-term contracts.

In other areas, however, the system has been rather less successful. The employers refused to negotiate on the issue of setting up consultative works councils in multinational companies, forcing the Commission to come forward with a deal to be imposed on the two sides. It was the Works Council Directive resulting from this proposal which Renault was accused of ignoring at Vilvoorde.

UNICE also refused to enter into talks on procedures to deal with sexual harassment, and both sides turned down negotiations on the issue of the burden of proof in sex discrimination cases.

The most recent blow to the social dialogue came in the middle of March this year when UNICE refused to take part in discussions on giving workers in national companies the same rights to consultation as their counterparts in multinational firms. The ETUC and CEEP were both prepared to sit down and talk.

Flynn had decided to ask the social partners to agree on what is known in Euro-speak as 'information and consultation of employees at national level' as a direct consequence of the Vilvoorde affair.

“The importance of this issue has been highlighted by the recent events regarding the closure of the Renault plant in Vilvoorde,” the Commission announced when Flynn first floated the plan.

UNICE's refusal to negotiate, a decision apparently forced on the organisation because of the opposition of a small number of its national member federations, drew howls of indignation from the Commission and the unions.

ETUC general secretary Emilio Gabaglio warned that the employers' federation was playing a dangerous game by refusing to negotiate. “This is a serious blow to the social dialogue as a long-standing operation. UNICE has taken a very heavy responsibility in taking the stand it has,” he said.

Santer also expressed his dismay at the employers' decision. “This is a serious setback for the social dialogue as it gives the wrong impression of what joint action at European level is all about,” he said.

Flynn was equally indignant at UNICE's attitude, arguing that it undermined much of the work done at last November's EU jobs summit to produce a set of guidelines for creating employment across the Union.

“The decision by a small group of UNICE's national federations to prevent the employers' body from negotiating runs contrary to the expectations raised by the employment guidelines and raises questions about the preparedness of some social partners to contribute positively to achieving adaptability and employability,” he said.

Flynn's comments represent the views of a growing number of sceptics who argue that UNICE is now using the social dialogue as a means of blocking or delaying unwanted legislation rather than taking a positive role in its framing.

The Commission has said that it will now come forward with its own proposal on national worker consultation, although officials admit privately that a last-minute change of heart by UNICE could still revive the talks.

Whichever route is chosen, the plans will have been held up for more than a year before they are even presented to the Council of Ministers.

Insiders warn that UNICE risks shooting itself in the foot if it is employing delaying tactics. “For their own sakes they need to show they are prepared to take this on,” said one Commission social policy expert.

“If they really are using the process to stymie social policy, who is to say that at the next treaty revision they won't lose this power?”

UNICE itself argues that it is not being wilfully obstinate, but insists it will examine each invitation to negotiate on a case-by-case basis.

Flynn and Santer are so concerned about the future of the social dialogue that they have called the heads of the social partner organisations to an emergency 'summit' meeting, scheduled to take place on 2 June , to discuss how the system can be revitalised as Europe continues along the painful road of industrial restructuring.

As one Flynn aide put it recently: “We're very concerned about the future of the social dialogue. If we don't have this process, it's very hard to see where we are going.”