Old enemies look for new ways to cooperate

Date: 17/06/1999

As members of the European Trade Union Confederation prepare for their four-yearly congress in Helsinki later this month, Simon Coss examines the challenges facing both sides of industry

IT IS a bitter pill to have to swallow, but if the EU's trade unions are to remain a force to be reckoned with, they are going to have to learn to cooperate with the hated 'bosses'.

That will be the message which Emilio Gabaglio, general secretary of the European Trade Union Confederation (ETUC), will deliver when his organisation meets for its four-yearly congress in Helsinki later this month.

For most of the past century, labour relations in Europe have been characterised by a confrontational 'them and us' mentality, with the battle lines clearly drawn between 'workers' and 'management'.

Gabaglio argues that such an approach is no longer valid and that future labour laws should stem from constructive dialogue between the two social partners. "If there was ever a time when social dialogue was necessary, it is now," he insists.

In theory, the Union's employers and trade unions have been involved in precisely these sorts of negotiations for several years now. The 1992 Maastricht Treaty incorporated the social dialogue into EU law as part of its celebrated social chapter, giving the social partners the right to draft EU labour rules.

In practice however, the old differences have often proved to be as pronounced as ever and negotiations between the social partners have regularly ended in stalemate, obliging the European Commission to step in and impose agreements on the two sides.

According to Dirk Hudig, secretary-general of the Union's private sector employers' federation UNICE, the main problem with the current social dialogue system is that trade unions insist on clinging to out-dated ideas and principles.

"There is still a basic divide between us," he says. "They argue that we should stimulate demand in Europe by increasing wages, but the real problem in the EU is the lack of business confidence. We need to make Europe an attractive place to invest. Get the economy right and then you can deal with the social issues."

Hudig argues that the way to stimulate the Union's economy is to cut the amount of red tape currently hindering businesses and to create a more efficient and flexible labour force. To do this, he says, the trade unions need to abandon some of their most cherished "shibboleths".

"They need to start regarding part-time work as having the same calibre as full-time work, for example, or accepting that many people will end up taking out supplementary pensions. The old stereotype of a 9-to-5 job for life is out of date. They must stop being old-fashioned," he insists.

Gabaglio hotly disputes Hudig's interpretation of the current state of EU labour relations.

The ETUC chief insists that the national trade union confederations which make up the membership of his organisation are fully prepared to face the challenges posed by the changing world of work. He says they are ready to adapt both to the new economic realities of the euro zone and to the pressures of competitiveness which have accompanied the globalisation of international trade.

"Are labour markets more rigid or more flexible than ten years ago? I think the answer is clear," he says.

On the specific issue of part-timers, Gabaglio dismisses Hudig's claim that unions are inherently hostile to such working patterns. He argues that a recent deal on the issue between UNICE, the ETUC and the CEEP - which represents the EU's public sector employers - is proof that his organisation is serious about the subject.

The ETUC has no problem with part-time work as long as employees are granted the same rights as full-time colleagues, he explains. "We are against part-time work if it is an imposed choice and treated as a second-class job," he adds.

WHEN it comes to the more general question of facing up to the new economic realities in Europe, Gabaglio appears to favour a 'third way' between total deregulation and stifling legislation similar to that currently being touted by UK Premier Tony Blair and German Chancellor Gerhard Schröder.

The principle behind this approach is that it is possible to 'manage' economic change. "We are not calling for total deregulation, but rather re-regulation. We need rules that are appropriate for dealing with modern working methods," explains Gabaglio.

On the macroeconomic level, this means that the EU's politicians should devote as much time to the Union's social policy as they should to economic questions, he insists.

He believes the decision taken at last weekend's Cologne summit to create a European Employment Pact did not go nearly far enough in this respect. "I am deeply concerned that no decision has been taken to redirect European economic policy in order to promote increased employment on the basis of strong, non-inflationary growth," he said shortly after the summit.

Gabaglio also argues that Union governments must do more to shift the burden of taxation away from employees and on to capital if they really want to reduce unemployment and stimulate economic growth.

This argument is echoed by Acting Taxation Commissioner Mario Monti, who has been trying - albeit without a great deal of success - to persuade EU governments to tackle this thorny issue for some time. However, there are signs that Union leaders are now prepared to address the need for structural reforms, with last week's decision to hold a special summit in Portugal in late March next year to discuss "employment, economic reform and social cohesion".

The ETUC chief believes that the advent of the euro zone will ultimately oblige EU governments to take a more harmonised approach to taxation policy in general. If they do not, he says, they risk undermining the single market with competitive fiscal practices.

"We are now in an integrated economy and we cannot on the one hand integrate and cooperate, and on the other continue to compete against each other on tax issues. We cannot continue to have a single monetary policy and 15 different budgetary policies," he complains.

Gabaglio would like to see next year's Intergovernmental Conference on EU treaty reform consider extending qualified majority voting to certain areas of taxation policy - an EU domain that currently requires unanimous agreement.

Critics argue that governments would never agree to such a move, but Gabaglio remains cautiously optimistic.

"Two years ago, it was taboo to even talk about taxation policy, but now things are moving - very slowly, but they are moving," he says.

Another area where the ETUC believes the advent of the euro zone has changed the EU's labour landscape is on the question of wage bargaining.

Gabaglio stresses that his organisation would never call for Union-wide wage deals. The economic disparities between the EU's richest and poorest states make such an approach totally unthinkable. But at this month's congress, he will suggest that trade unions working in specific industrial sectors try to coordinate their wage-bargaining strategies so that, across the Union, they are campaigning on the same sorts of issues at the same time.

If governments, employers and trade unions are prepared to embrace the sorts of changes the ETUC chief is calling for, then he believes it will be possible for the Union to both remain prosperous and protect its famous 'social model'.

He argues that it is feasible to turn the Union's economy round without adopting the sort of massively pared-down pension, health care and social security rules in place in the US. "I want to keep living the European way," he explains.

Critics will accuse Gabaglio of trying to have his cake and eat it. But his supporters point out that the two EU member states whose productivity per hour is on a par with that of the US are France and Germany, both of whom have extremely generous social protection systems. The deregulated UK, on the other hand, is lagging seriously behind its two Union partners in the productivity stakes.

As members of the European Trade Union Confederation prepared for their four-yearly congress in Helsinki in June 1999, author examines the challenges facing both sides of industry + reports from the Congress. Homepage url: http://www.etuc.org ; Related url: http://europa.eu.int/comm/dg05/soc-dial/social/news/ces_en.htm