The European Commission has withdrawn proposed legislation limiting workers’ right to strike, amid a furore from trade unions and EU lawmakers in Parliament who waived a "yellow card" to Brussels for stepping over national sovereignty.
László Andor, EU Employment Commissioner, announced the decision to abandon the proposal to the members of the European Parliament's Employment Committee on Wednesday (12 September).
Critics had condemned the so-called Monti II regulation over its implications for European social rights and for interfering with national sovereignty.
The European Trade Union Confederation (ETUC) rejected the proposal as it “restricts the right to take collective action.”
Monti II had attempted to set an EU-wide legal precedent for the balance between collective action and the freedom of companies to offer services across the continent, following legal disputes between member states over workers rights (see background).
This was the first time that national parliaments had triggered the so-called “yellow card” principle enshrined in the 2009 Treaty of Lisbon, which allows countries to flag up cases where they believe the Commission has overstepped its powers.
Governments claimed the right to strike was an issue to be regulated at the national level, and so the Monti II legislation – named after Italian Prime Minister Mario Monti, who drafted a similar clause while he served as commissioner for the single market – conflicted with the principle of subsidiarity laid down in the treaty.
"The Lisbon treaty is far from perfect, but the yellow-card rule is an important counterbalance against the EU's powers. This is the first time it has made its mark – and we welcome the Commission's acknowledgement of it," said Conservative Employment spokesman Anthea McIntyre MEP.
Setting limits on the right to strike
The proposed law suggested an EU-level agreement on settling labour disputes via an alert mechanism where member states could warn one another of industrial relations problems or "serious social unrest." Its preamble said that the right to strike was "not absolute" and its exercise "may be subject to certain conditions and restrictions."
BusinessEurope, an association representing more than 20 million European companies, welcomed the withdrawal, saying in a statement “the diversity of national industrial relations systems and practices…must be respected.”
But Jonathan Todd, the Commission spokesman for employment and social affairs, said Brussels had not been attempting to overstep its powers. A legal assessment of the opinions issued by national parliaments “did not lead to the conclusion that the principle of subsidiarity has been breached,” Todd explained in emailed comments.
Todd added that the Commission would not however be pursuing the proposal since it was “unlikely to gather the necessary political support for its adoption.”
Social rights vs economic freedoms
The wider social issues that triggered the Commission's proposal in the first place will thus remain unresolved.
ETUC said the withdrawal of the proposal did not solve problems created by the European Court of Justice (ECJ) in their Viking and Laval judgements, which prompted fierce debate due to their perceived lean towards upholding the single market.
The trade union group called for an urgent solution to current legal differences between member states which, it argued, “prevent workers from fully enjoying their rights,” adding that “the Commission should ensure that fundamental social rights cannot be restricted by economic freedoms.”
Todd, the Commission spokesman, contended that “workers’ rights to strike or take collective action as well as the freedom of establishment or to provide service remain fully guaranteed under EU law".
In the absence of the proposed regulation, he said that the EU executive "urges member states to closely liaise with each other in cases of serious acts or circumstance that either cause grave disruption of the proper functioning of the Single Market or create serious social unrest”.
In the European Parliament, MEPs from all political obedience welcomed the Commission's decision to drop the Monti II legislation.
"This decision shows national parliaments' growing role in EU legislation", said Csaba ?ry MEP, and Andreas Schwab MEP, from the European People's Party (EPP). The statement went on to say the "definition of the right to strike is an exclusive national competence."
Stephen Hughes, vice-president of the Progressive Alliance of Socialists and Democrats (S&D) group in the European Parliament, said: "The Commission's proposal – known as Monti II – has been opposed by our Group right from the beginning."
"However the Commission's announcement on the withdrawal of the text leaves a vacuum. There are still huge legal uncertainties left by the European Court of Justice rulings (in the Laval case) regarding the rights of workers. The problem remains and the Commission has the responsibility to act."
Anthea McIntyre MEP, Employment spokesman for the British Conservative Party, said: "It is good to see that for once the Commission is listening. The UK was among 12 member states which saw that this planned legislation would cut right across the key principle of subsidiarity - that matters which can be dealt with by national or local governments should be dealt with there, not by the EU."
"The Commissioners were overstepping their powers. The UK, together with other member states, has reined them in."
German Green MEP Elisabeth Schroedter, vice-chair of the European Parliament's employment and social affairs committee, said: "Today's withdrawal of the draft Monti II legislation on the right strike is a welcome development. These proposals were flawed from the outset and national parliaments were right to deliver a slap-down to the Commission.
"The right to strike is an inviolable fundamental right that should be upheld and defended by the EU, but the Monti II proposals did the reverse, limiting this right."
Bernadette Ségol, general secretary of the European Trade Union Confederation (ETUC), said that “the Commission should confirm that the EU is not only an economic project, but in fact has as its main objective the improvement of living and working conditions of its citizens. The Commission should understand that if there is no social progress in Europe, workers will not keep supporting the European project.”
Philippe de Buck, BusinessEurope’s director general, said that “ensuring a proportionate use of the right to strike is necessary to prevent situations in which strike actions excessively affect equally important rights and freedoms, such as the single market freedoms, or the fundamental right to property and to conduct a business. This is why the approach proposed by the European Court of Justice is balanced. This is why the withdrawal of this regulation proposal is the right approach.”
In the Laval case (also known as the Vaxholm case), Latvian company Laval un Partneri posted several dozen workers from Latvia to building sites in Sweden. Their work included refurbishing a school in Vaxholm.
Swedish unions took action against Laval over the company's refusal to agree to respect Swedish laws on working conditions and minimum wages. The Swedish labour court referred the case to the European Court of Justice.
Presenting his opinion on the Laval case on 23 May 2007, Advocate-General Paolo Mengozzi argued that "where a member state has no system for declaring collective agreements to be of universal application," the Posting of Workers Directive "must be interpreted as not preventing trade unions from attempting, by means of collective action to compel a service provider of another member state to subscribe to the rate of pay determined in accordance with a collective agreement".
In the related Viking case, the Court held that trade unions' right to take collective action may be limited by employers' right to freedom of establishment.
Employment ministers from France, Luxembourg and Sweden called in October 2008 for a political solution to EJC rulings that inflamed debate on the balance between workers' rights and economic freedom in the EU.
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