EC Employment Law - Essay Example

I. Introduction Mutual support is the core principle of the European Commission Treaty. This is clearly d in Article 137 which provides theright to the Community to intervene to “support and complement activities of the Member States.” Part of the support mechanism is the enactment of laws and regulations. The adoption of the Working Time Directive 1 by the European Union’s Social Affairs Council is 1993 and later its incorporation into the Treaty2. Under the Working Time Directive, working long hours is limited to protect the health and promote the safety of workers3. Under the preamble of the World Health organization to which all Member States belong, “health is defined as a state of complete physical, mental and social well-being that does not consist only in the absence of illness or infirmity.”4 Although the intent of the law is good, there have been many debates regarding the effectiveness of its implementation. Most of these arguments and debates hinges on the fact that there is no rules or uniform application and interpretations of the law and that each State is given the right to set their own standards as to the number of hours work. Note that under Working Time Directive, there are only two provisions, which are mandated to be adopted uniformly throughout the union. These provisions are the Article 4 which provides for a rest break period after six consecutive hours’ of work, and 11 hours daily with a maximum 14 days reference period and Article 7 which provides for a minimum of four weeks paid annual leave with no option of foregoing thereof, nor carrying over of pay in exchange for the leave. Even so, Article 7 is often a subject of controversies in some States as there are sectors or class of employees, which are not covered by this provision. The question now lies on whether or not the Working Time Directive is capable of fulfilling the Community’s social policy objective and whether or not there is a need for a more intensive harmonization of the implementation thereof. II. Legal Framework of the Working Time Directive Member States of the European Union already have their own employment laws5. However, most of these laws are quite restrictive as compared to the Directive.6 Based in the current trends of working hours throughout the union, the framers of the Directive did not expect any controversies arising there from the fact that it provides better terms compared to the existing employment laws. Unfortunately, their expectations did not materialize. The root of the problem really is in the definition of working hours itself and the fact that each State are allowed to interpret the contents thereof in the absence of a clear cut rule as to how it should be construed. Article 2(1) defines working hours as “any period during which the worker is working at the employer’s disposal and carrying out his activity or duties in accordance with national laws and practices.” This provision clearly confers upon the States the right to implement the law in accordance with “national laws and practices.” In other words, the Directive has to be transposed into national law where each State would comply with the minimum standards framework of the Directive7. States are offered by Directive flexibility8. Member States are therefore free to set their rules including derogations, variations of collective agreements, phased implementation and the possibility of an opt-out from the average 48-hour limit for individual workers9. Based on this context, each State can then legislate rules and regulations, which would allow employees and employers to agree among themselves as to what should be considered as working hours, and what are rest periods. Some sectors believe that the fact that the Directive needs to be transposed into national law and that existing national laws and practices are to be taken into considerations in applying the directive is self-defeating. According to the OECD, international comparisons on working hours suggest that the United Kingdom and Portugal in particular have a large portion of their workers working long hours.10 Many believes that since the Directive provides for adaptation into national law where workers an employers can agree as to number of working hours, the Directive would loose teeth in its implementation. With the global pressure to produce more and adhere to stricter standards, it is not uncommon for employers to ask their workers to spend longer hours at work. Recently, many workers would generally agree to work longer hours based on several reasons both practical and impractical. In the case of Cawley v Hammersith Hospitals NHS Trust (1999), the Court ruled that the worker could consensually derogate or become autonomous worker11. Therefore, where the worker voluntarily agrees to not to be governed by the Directive, he/she will not be taken out of its protection. This is allowed under the Directive. In most cases, workers enter into different working hours agreements than that which is stated in the Directive for several reasons. For those earning on an hourly basis, longer working hours would mean bigger pay12 and for some, it would mean being closer to job promotions13. Others are forced to agree work long hours due to the fact that there is a current high unemployment rate, which could mean they may have some gaps in their employment status. Working long hours would give them the opportunity to save in anticipation of the times when they may be out of work14. However, not all work agreements between employers and employees are detrimental to the workers. For some workers, agreeing to a customized working time is convenient as it will now match their personal circumstances such as educational background, lifestyle and will mean they can arrange to spend more time with their families15. Annualised hours and work on call are often favourable to some people but would make it very difficult to distinguish free time from work time16. In a Spanish Case Sindicato de Medicos de Asistencia Publica (SIMAP) v Conselleria de Sanidad y Consumo dela Generalidad Valenciana (2000)17, the Court attempted to define working time for those workers who are on call. According to this case, all the time spent on call can only be considered as working time if they are required to be present at the health centres. As a consequence, by merely being contactable and available could not be considered as working time18. This for me quite a drawback since by making oneself available and contactable would hinder the worker from engaging in other productive endeavours for fear that he/she might be called anytime to report to the employer. Consequently, the time spent by the worker waiting to be called is considered unpaid working hours. According to the study conducted by the Labour Force Survey in the UK, a quarter of the respondents reported that they have unpaid overtime19. Most of these respondents who reported unpaid overtime are female. Clearly there is a gap between the intent of the Directive and its impact on the subject thereon. The Directive should have been construed as to support the employment laws of the States and protect it workers but with the many provisions thereon which are permissive to the extent where it can be twisted to suit the needs of the employers to the detriment of the workers. III. Economic Reasons for the Working Time Directive Although the rationale of the Directive was couched on the ideals of protecting the health of the workers, one cannot disregard the fact that the reason thereon can also be economic in nature. Given the fact that there is a growing unemployment in the European Union, working hours can be considered as one of the key elements for employment policy20. Germany, France the Netherlands and Italy have taken advantage of the reduced hours of work to generate employment through work sharing. However, critics argued that such system as work sharing is not highly feasible. Proponents of working sharing assumed that the bulk of work is constant21 where in fact it is not. Experience would tell us that workload is often not constant. Thus, we could not really divide it equally. Furthermore, work sharing may prove to be burdensome on the part of the employers they will now spend more time and money training new employees, which is in reality, counterproductive. How then can government intervention on work sharing be viewed? Will this kind of intervention feasible? Studies how that normal market driven time-series in production, which reduces working hours, generates more employment22. However, the same study show that a government induced work-sharing scheme has little or no effect at all. This is due to the fact that skilled and unskilled workers compliment each other in the production area. “Since overtime is concentrated amongst the skilled and unemployment among the unskilled, a general reduction in the overtime working lowers production and unskilled employment.”23 IV. Conclusion The intent of the Directive is generally sound. However, it may not be in consonance with the best interest of the workers to give too much prerogatives on the hands of the employers. The fact that the law is so permissive as to allow the States to adopt measure which are in consonance to their present national laws and practices would leave so much rooms for the states continue their current practices which may not be favourable to labour. For instance, England and Portugal condone long working hours for purely economic reasons. On the context of economics and market competition, stepping up production by asking working to spend longer working hours is sound but it is contrary to the well being, health and safety of the workers. It is a given fact that Member states have different employment policies and environment and that their national circumstances may also differ. However, this does not mean that each State should be given an unlimited freedom to interpret the directive to suit them. The Directive is geared towards providing a better working environment, thus, it is recommended that stricter guidelines to harmonize the implementation thereof should be observed. It may not be desirable that uniformity be observe in the implementation but more guidelines to harmonize the implementation thereof would greatly enhance the working environment and would perhaps result to more employment. As the EU thrives on sharing of best practices among its Member States, best practices in the implementation of the Directive. Question 2 I. Introduction According to the European Governance: A White Paper24, Governance means the “rules, processes and behaviour that affect the way in which powers are exercised at European level, particularly as regards openness, participation, accountability, effectiveness and coherence.” In line with definition of governance, a system of Open Method Coordination is being implemented in the EU. However, there is a growing controversy centred on whether or not the Open Method of Coordination (OMC) is an effective alternative for achieving good social policy in the EU. Most of these arguments stem from the fact that OMC employs “non-binding objectives and guidelines to bring about change in social policy and other areas.”25 In other words, the OMC, unlike the Community method, does not provide for clear rules nor does it provide for penalties and sanctions for those members who will fail to adhere thereto. Moreover, OMC violations are not justiciable, meaning, one cannot go to Court for redress in the events of violations of the rules set therein. Critics of the OMC argue that it cannot bring about changes and will not be able to “do what is needed to construct Social Europe”.26 The debate is actually not just about governance but also revolve on the issues of policy options. As OMC is non-binding, it is regarded as “soft law” as opposed to the Community Method, which is binding upon all its members, which is regarded as “hard law.” The OMC was first endorsed among EU Members during the Lisbon Summit27 as a tool for EU governance. The first OMC took the form of the European Employment Strategy (EES) which addressed the issued of high rates of unemployment and social policy28. Since then, it has been a subject of continues debates among different sectors. The greatest fear of critics of the OMC is that the adoption of OMC is EU governance will undermine the existence of Community Laws and will affect the status of interdependent of States. With the unification of the European currency and the declaration of a single market, most anti OMC are fearful that it cannot fulfil the joint commitment of the Member States made at Lisbon. However, before make any judgments and conclusions as to whether or not OMC can bring about the desired social changes within the Union, let us first examine the characteristics of OMC and assess its strengths and weaknesses. II. OMC and the EES The OMC is a response of the EU for a more flexible approach in governance as opposed to the traditional rule-based and centralized approach, which had been the traditional system, adopted by the EU. Under the OMC, Members jointly define their initial objectives (both specific and general), set indicators for success based on these objectives and in some cases, provide guidelines on how these objectives should be met29. Member States are also made to come up with their plans in relations to objectives and propose reforms, subject to peer reviews and recommendations.30 The methods applied in the OMC is monitoring and reviewing rather than sanctioning. As an open communication method, Member States share experiences and best practices as means of helping one another prevent a downward spiral movement in development. In other words, quality is maintained through peer management. As earlier mentioned, the first and the most elaborate OMC took the form of the EES. It must be noted that unemployment problems have crosscutting issues that is rooted not only terms of economics but also on the areas of laws and government policies. Through the EES, we can appreciate the wisdom of the OMC. Member State of the EU is not similarly situated. Each Member has their own unique system and practices, which are often very difficult to give up. Furthermore, the members do not have the same circumstances in terms of resources both human and material, thus it would be very difficult to implement uniform policies throughout the European States. In the Lisbon European Council Presidency Conclusions31 the legitimacy of OMC was amplified. According to the Council “a fully decentralized approach will be applied in line with the principle of subsidiary in which the Union, the Member States, the regional and local levels, as well as the social partners and civil society, will be actively involved, using variable forms of partnership.” Clearly this endorses the OMC as viable vehicle for social policies. According to Title VIII on Employment, as embodied in Article 15-130 of the EC Treaty, the issues on employment is now at the heart of the Union endeavour. As such, employment has become a matter of common concern for all Member States32. This means that Member State is to address such issues at their own level based on their local situations and common practices. Article 126(2) specifically put the responsibility of address the employment issues on the States concerned by saying Member States “shall regard promoting employment as a matter of common concern and shall co-ordinate their action in this respect with the Council.” Note that the key word now in this provision is coordination and common concern. The word common concern appears several times under the Treaty when referring to employment and economic policies. For instance, Article 99(1) [ex 103 (1)] of the EC clearly states that Member States “shall regard economic policies as a matter of common concern”33 and like those endeavours concerning employment policies, should also be coordinated with the Council. On the other hand, Article 130 EC Treaty provides for the establishment of an advisory Committee, which will be responsible for “coordinating and formulating opinions”. Contrasting these provisions with the ideals of hard law, we find that the trend now is no longer centralization and harmonization but rather more on coordination whereby diversity of systems and situations of Member States are now taken into consideration. Since the Lisbon Summit, OMC have been as an essential element for achieving flexibility in the employment sector by giving the Member States the freedom. Accordingly, this freedom to adopt their own internal measures will increase employment opportunities as workers, enterprises and other institutions are now flexible as opposed to being bound by uniform rules and regulations, which may not be applicable to their current circumstances. It is interesting to note therefore that in the entire Title VIII on Employment only Article129 provides for specific legal measures for adoption as well as outlines a binding effect. Not surprisingly, the content of this Article is on the sharing of information and best practices including pilot projects.34 A particular line in this provision exclude from the measures “harmonization of laws and regulations of Member States.”35 A further look into the Lisbon European Council Presidency Conclusions yields evidences of support to idea of sharing information and best practices. According to the Council, “A method of benchmarking best practices on managing change will be devised by the European Commission networking with different providers and users, namely the social partners. Companies and NGOs.”36 This and the provision on the EC in Article 129 merely reinforced the fact that what is being favoured is really more on coordination and sharing of insights and learning rather than impose upon Member States rigid common rules. Moreover, 137 (2)(a) EC is set to add the provisions further strengthening the ideals of cooperation and not harmonization. This provision so states “The Council may adopt measures designed to encourage cooperation between Member States through initiatives aimed at improving knowledge, developing exchanges of information and best practices, promoting innovative approaches and evaluating experiences, excluding any harmonization of the laws and regulations of the member States.”37 This provision will also apply in the sectors of social policy especially on employment. What is the reason for this shift from hard rules to soft rules in the EES? Enforcing uniform standards may prove to be detrimental instead of beneficial in the sense that we may be imposing standards and programs which such State do not really need. There also areas in which the EU itself have no clear knowledge as this often the turf of the State involved and more often than not, the State is not willing to impart such knowledge readily. Thus, it would be very difficult for a national law to be implemented uniformly all throughout and get very good results especially if it is a social legislation such as employment policies. A clear example of this is with regards to women members of the work force. If the we apply a uniform rules, regulations and strategies to encourage women to go back to the work force and stay longer, it would not effective to all Members of the State. Statistics shows that in Sweden, Finland and Denmark gender gaps among workers is very narrow and thus there is no need for programs and policies to encourage women to work38. However, such types of policies may be applicable in Greece, Spain and Italy where gender-gaps in the workplace are very much pronounced39. Moreover, where we try to implement uniform rules among States, we may stifle the very essence of development, which is anchored on the idea of diversity. Another thing, which should always be remembered, is that application of uniform standards may prove to ineffective, as nobody really knows what is the root cause of unemployment and how it should be effectively solved40. Under the EES, there are three major objectives, which the Member States agreed upon namely: full employment, adaptability and equality. There are hard and fast rules on how the Member shall meet the indicators of success for these objectives but rather, each Member State is free to improvise and learn. According to OMC principles, where the root of the problem is not well understood, it is best for the union to let the States handle them in their own way and experiment which methods would best suit their needs. As the EU is keen on sharing experiences with different States, it is best to let the Member States discover for themselves what works for them and then share their best practices with the other Members later on. This one the great advantages of soft law over the hard law which would thrive on centralized operation and rules. In the hard law, it is very difficult to experiment and find new means of solving the problem of unemployment. III. OMC and Monitoring As earlier mentioned, OMC is a non-binding agreement between parties and operates on the methods of monitoring and review. Member States has the option to follow or not to follow what had been stated in the objectives jointly set by the parties, however, they can be constructively compelled to comply through peer pressure, monitoring and shaming. The most popular method of keeping the performance of the Members in Check in progress monitoring based on the set indicators. So far, reports shows that Members comply with the goals to avoid being given recommendations form other members, which usually highlights the negative practices in such State. According to the agreements of the parties of the OMC, Member States shall produce a “National Action Plan (NAP) in which it shall plot its progress towards the goals set by the guidelines in the prior years.”41 The NAP is subject to peer review and monitoring where the Member States shall give comments as to the progress of the other States. However, recommendations made by other Members to the Member State in question are not legally binding. In the event where the Member State lag behind the others and would not comply with the recommendations set, it cannot be legally compelled to do so. Critics to the system believes that this makes OMC not sustainable as there is no way of forcing the Members to comply with the standards set unlike that of the hard law. With the one currency and single market system, critics believed that there should be clear and concise laws to be followed in order to ensure that interdependent States would function in a unified manner. IV. Conclusion Many arguments have been presented on both sides. However, let us look into the records of the EES for the last 8 years of its implementation using the OMC. In a review conducted in 2002, it was reported “there have been significant changes in national employment policies, with a clear convergence towards the common EU objectives set out in the EES policy guidelines… Employment policies and the role of public employment services have been reshaped to support an active and preventive approach.”42 I believe that this proof that OMC does work given its limitations. However, there many who thinks that OMC would generally affect the status of EU Members the fact that the EU has now only one currency and one market. Detractors of the OMC would argue that unification would call on more rigid rules and regulations that will bring everyone on the mainstream and follow one rule to avoid a downward spiral movement in the different areas of development. I believe that this is not really so. Technically, soft laws are not really so soft at all. Although it may not be directly espousing sanctions to Members who would not follow the guidelines set in the OMC, most if not all Member States follow what are embodied in the guidelines for the simple reason of mutual support and survival. If you come to think of it at a different perspective and not just in terms of punishments and retributions as what had been the theme of the hard law, you can clearly see the logic why States would follow OMC guidelines. Clearly, the EU relies on its unified strength to stay as one of the leading powers of the world. Converse, the Member States rely on their uniqueness to stay competitive in terms of products and economies even within the EU. If you put these two factors together, you get an equation, which will tell you that as States have different types of resources and circumstance, they could not effectively follow one and the same rules. However, they can work together towards a common goal. As a culture of interdependence is created in the EU through the one currency, one market policy where the activities of one State would have some effect on the others, it is only logical that one State would want to keep abreast with the other lest it be left behind in terms of development. It’s actually a matter of keeping up with the others guided by the agreed goals. Furthermore, the fact that the Member States agreed on regular progress monitoring and sharing of information would amplify the fact that everyone is willing to work towards a common direction even though the internal implementation thereof within the different territories would somehow differ. For instance, one of the goals of the EES is to extend the employable years of the aging population. All Member States are going to implement measures to reach this goal but such measures need not be uniform. As an alternative technique in bringing about change and promoting social policies such as employment policy, OMC has proven that it does work. However, there are areas, which need improvement. As stated in the same report “in order to cope effectively with the challenges…. Focus on main priorities should be made.”43 It would therefore be under sound judgment to adopt measures to strengthen and develop OCM as a system. According to Kenner, there are at least four challenges faced by OMC namely; (a) a systematic approach to data collection and benchmarking (b) greater emphasis should be given on “delivering” the qualitative aspects of the Social Policy Agenda (SPA) (c) ways and means to address particular participation deficit (d) formulation of ways and means to compel Member States to follow the recommendations of the Council and make them more accountable44. Given all these circumstances, I have great confidence that the OMC is capable of facilitating social policy changes within the Union will bridge the gap between the need for concerted action and local circumstances. Bibliography 1. Working Time Directive 93/104/EC (WTD) 2. EC Treaty Article 138 3. Catherine Barnard (2000) EC Employment Law, Second Edition (OUP) 4. United Kingdom v Council (1994) C-84/94, E.C.R. I-5755 5. Catherine Barnard, Alan Dashwood & Bob Hepple. (1997) “The ECJ’s Working Time Judgment: The Social Market Vindicated” CELS occasional Paper No. 2 6. Adnett N. and Hardy S. (2001) Reviewing the Working Time Directive: Rationale, Implementation and Case law. Blackwell publishers Ltd. 7. Fagertag, G. (1998) “Working Time in Europe: Current Trends”, in J. Wheelock and J. Vail (eds), Work and Idleness: The Political Economy of Full Employment (Dordrecht: Kluwer Academic Publishers) 8. Adnett N. and Hardy S. (2001) Reviewing the Working Time Directive: Rationale, Implementation and Case law. Blackwell publishers Ltd. 9. Kenner J. (2004/2005) Working Time, Jaeger and the Seven-Year Itch. The Columbia Journal of European Law 10. OECD (1998), Employment Outlook, Paris: OECD 11. Booth and Francesconi (1997) “Career Mobility in Britain (ESRC Research Centre on Micro-social Change, Mimeo) 12. Bluestone and Rose (1998) “The Macroeconomics of Work Time”. Review of Social Economy, LVI, 4, 425-41 13. Suppiot A. (1999) “The transformation of Work and the Future of Labour Law in Europe: A Multidisciplinary Perspective” International Labour Review, 138, 1, 31-46 14. Bell, D. and Hart R. (1999) “Unpaid Work” Economica, 66, 271-90 also cited in Adnett N. and Hardy S. (2001) Reviewing the Working Time Directive: Rationale, Implementation and Case law. Blackwell Publishers Ltd 15. Roche W, Fynes B. and Morrissey T (1996) “Working Time and Employment: Review of International Evidence,” International Labour Review, 135, 2, 129-57 16. Addison, J., Barett C. and Siebert W. (1997), “The Economics of Labour Market Regulation” Dryden Press 17. Freeman R. (1998) “Work-Sharing to Full Employment: Serious Option or populist Fallacy?” . New York: Russell Sage Foundation 18. Trubek D and Trubek L. (2005) Hard and Soft Law in the Construction of Social Europe: The Role of the Open Method of Coordination 19. European Council (2000) Lisbon Summit 23-24 March 2000 also explained in Kenner Jeff (2003) EU Employment Law From Rome to Amsterdam and Beyond. Oxford: Hart Publishing 20. Kenner Jeff (2003) EU Employment Law From Rome to Amsterdam and Beyond. Oxford: Hart Publishing 21. Sabel C. and Zeitlin (2003) “Active Welfare, Experimental Governance and Pragmatic Constitutionalism: The New Transformation of Europe 22. Saskia Klose (2005) “The European Employment Strategy: Which Way Forward?” The International Journal of Comparative labour Law and Industrial Relations, Volume 21/1. 5-36 23. Ashiagbor D. (2001) EMU and the Shift in the European Labour Law Agenda: From “social Policy” to “Employment Policy” European Journal Vo. 7, No. 3 pages 311-330 24. European Commission (2000) “Taking Stock of Five Years of the European Employment Strategy” Read More