EU member states 'deconstructing' labour laws

There is clear evidence of a 'deconstruction' of labour laws under the pretext of the economic crisis - claims European Trade Union Institute

Since the outbreak of the economic crisis, the United Kingdom has witnessed several proposals for and actual changes to its labour laws. Economic reasons for collective redundancies have been introduced. Dismissal procedures have been made easier and access to employment tribunals has been restricted. In addition, alternative dispute resolution mechanisms have been imposed.

A paper by the European Trade Union Institute entitled The crisis and national labour law reforms: a mapping exercise demonstrates that the UK is, in this regard, not 'living on an island'. The study, covering 24 European Union member states, describes the main changes that, by shifting the emphasis to soft law or deregulation, have served in a nutshell to make existing labour law provisions more flexible and to loosen minimum standards. In some countries the changes consist only of piecemeal - albeit far from insignificant, deregulatory measures - while in others they involve a far-reaching overhaul of the labour code as a whole.

In some instances, these structural reforms have been required or indeed forced upon these member states by European and international institutions and organisations such as the European Central Bank, the European Commission and the International Monetary Fund - together referred to as the 'Troika'. Furthermore, in several countries, industrial relations structures and processes are being subjected to fundamental changes that are likely to jeopardise social dialogue and collective bargaining in these countries. They are therefore expected to entail additional long-term detrimental effects for the protection of workers' rights.

Four broad trends or areas of reform can be identified across Europe. Firstly, regarding working time arrangements, 15 of the 24 states studied have in recent years adopted legislative changes concerning working hours. This has led, mainly, to the possibility of increasing the permissible volume of overtime. For example, in Hungary it has been raised from 200 to 250 hours and is now applicable to all employees. In other cases, the level of overtime pay has been lowered. For instance, in Portugal the first hour of overtime worked used to be paid at 150 per cent of the normal hourly rate, but this has been reduced to 125 per cent.

Nearly all states have reformed their rules on atypical employment contracts - referring mainly to fixed-term and part-time work. In addition, in several countries new categories of atypical contract are being created offering, of course, less protection than normal employment contracts. These are targeted frequently at groups like young and older workers whose labour market situation is already vulnerable. We question whether or not such measures can be considered to be in line with several European directives on fixed-term contracts and part-time work.

At least 14 other states have - including Britain - introduced amendments to the rules governing dismissal, whether individual or collective, mainly with the aims of redefining the criteria and easing the conditions which allow employees to be dismissed. This meant more rapid procedures, less obligations in terms of social guarantees, court referral restrictions, and trade unions.

A step which almost sure to prove detrimental in the long term come the changes so far introduced by at least 14 member states to their collective bargaining and industrial relations system. Changes which focus principally on a decentralisation of collective bargaining - emphasising the company level at the cost of national, sectoral and regional agreements; and even allowing agreement on less favourable conditions at company level compared to those laid down in these higher-level agreements and statutory law. In other countries, governments have gone as far as to abolish tripartite social dialogue structures or at least to limit their former bargaining role to one that is now merely advisory.

What is more, in several states, these reforms have been introduced via the use of 'emergency procedures' - thereby avoiding dialogue with social partners and approval by parliaments. Or by-passing agreements on 'anti-crisis' measures approved by the social partners and prepared by national government, with the consultation of social partners.

And so there is clear evidence of a 'deconstruction' of labour laws under the pretext of the economic crisis. And yet it is abundantly clear that, while the outbreak of the financial and economic crisis is attributable to manifold causes - the member states' labour law provisions are not one of them. The assumption by institutions like the IMF, ECB and European Commission that labour law reforms are needed to exit from the crisis is questionable on a number of grounds. And, in particular, because it can be shown that the reforms in question give rise - at the present time - only to increased precariousness and in-work poverty. Certainly not to more employment, let alone to decent-quality jobs.

Stefan Clauwaert and Isabelle Schömann work for the European Trade Union Institute, in Brussels