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Britain and the European Social Model: Capitalism Against Capitalism?

Richard Hyman
LondonSchoolofEconomics,UK

Abstract
ItiscommontoarguethatAngloSaxoncapitalismdiffersfundamentallyfrom thatofcontinentalEurope,andthatthiscontrastresultsinincompatiblesystems ofindustrialrelations.Thispaperoutlinessomeofthekeyargumentswhich suggestthatBritainandtherestofEuropeoratleast,continentalwestern Europerepresentincompatiblevarietiesofcapitalism,andexploresthisfurther byconsideringsomeofthemeaningsofthatelusiveconcept,theEuropeansocial model. Thepaperlooksatthecomplexinterconnectionbetweeneconomicintegrationand social(orlabourmarket)regulationwithintheEU.Itgoesontoexaminehow EuropeanregulationhascontributedtothetransformationofBritishindustrial relationswhichhasoccurredoveralmostfourdecadesofBritishmembership. Finallythepaperindicatessomepossibleinfluencesinthereversedirection, leadingtothequestionwhetherBritainisnowspearheadingthetransformationof continentalEuropeintoanAngloSaxonvariantofcapitalism. ThispaperwascommissionedbyIESaspartofitsVisitingFellowsscheme.It helpsmarktheInstitutes40thyearanniversary.

November2008 ISBN:9781851844067 IESWorkingPaper:WP19

Britain and the European Social Model

Introduction
In1969theyeartheIESwascreatedCharlesdeGaulleresignedasPresidentof Franceafterhisproposalsforconstitutionalamendmentsweredefeatedina referendum.DeGaullehadvetoedthefirsttwoBritishapplications,madebythe MacmillanandWilsongovernmentsin1961and1967,foraccessiontothe(then) EuropeanEconomicCommunity(EEC)orCommonMarket.Hissuccessor,Georges Pompidou,indicatedhiswillingnesstoacceptenlargementoftheEECfromthesix signatoriesoftheoriginalTreatyofRomein1957,pavingthewayforthethirdUK applicationundertheHeathgovernmentandaccessioninJanuary1973. BritainsrelationshipwithwhatisnowknownastheEuropeanUnion(EU)has alwaysbeenregardedasuneasy.TheUKdidnotparticipateintheconstructionof theEECin1957,partlybecausegovernmentssawmembershipasathreattonational autonomy;insteadittooktheleadincreatingthemuchweakerEuropeanFreeTrade Area(EFTA)in1960,providingthefirsttwosecretariesgeneral.Howevertherewas achangeofmindwhentheEECappearedasuccess;inconsequencetheUKapplied tojoinaclubwhoseruleshadalreadybeendefinedmostnotably,perhaps,inthe CommonAgriculturalPolicywhichconsumedthebulkofthelimitedcentralbudget. Andformuchoftheperiodofitsmembership,Britainhasbeenregardedasthe awkwardpartner(George1990),actingasabrakeonfurtherintegration, particularlyinthesocialandpoliticalsphere. ThetensionsbecameparticularlyclearfollowingtheelectionofMargaretThatcheras primeministerin1979.InmarkedcontrasttoherpredecessorasConservativeleader, EdwardHeath,shewassuspiciousofallattemptstostrengthentheregulatory competenceoftheEuropeanlevelattheexpenseofnationalsovereignty,and particularlyoftheideaofEuropeaninterventioninthelabourmarketwhichmight reversethederegulatoryeffortsofherowngovernment.Wehaventworkedall theseyearstofreeBritainfromtheparalysisofSocialismonlytoseeitcreepin throughthebackdoorofcentralcontrolandbureaucracyfromBrussels,sheinsisted atherpartyconferencein1988.TheUKgovernmentrefusedtosignthe(non binding)socialcharterof1989,insisted(underThatcherssuccessorJohnMajor)on anoptoutfromthesocialchapterofthe1991MaastrichtTreatyandrefusedto participateineconomicandmonetaryunion(EMU).Thoughthegovernmentof TonyBlairreversedbothoptouts,heequivocatedonentrytotheeuroandresisted muchnewEUregulation.In2000theLabourgovernmentblockedtheincorporation ofthenewCharterofFundamentalRightswithintheNiceTreaty;whileratification ofthesubsequentillfatedConstitutionalTreatywasmadeconditionalonthe outcomeofareferendum.GordonBrownsigneduptotheLisbonTreatywithout suchconditions,butdemandedanoptoutfrominteraliaanyapplicationtoBritish industrialrelationsoftheCharterofFundamentalRightswhichitincorporated.

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Inhispressconferenceexplaininghisoriginalveto,inJanuary1963,deGaulle insistedontheincompatiblecharacteristicsofBritainandthemembersofthethen EEC.ThelatterwereContinentalswithcommonprinciplesofsocialandeconomic organisationandincreasinglydenserelationsofmutualdependence.Britainby contrastwasdetachedfromtherestofEurope,politicallyandeconomicallymore closelyconnectedtotheCommonwealthandtheUSA.Thisviewwasparalleledin theargumentsofmanyBritishopponentsofmembership:theinterestsand obligationsoftheUKlayprimarilyoutsideEurope,notinalliancewiththeEEC.And euroscepticismhasofcourseremainedstrong,notonlyingovernmentalcircles;as Eurobarometerstudiesconsistentlyshow,publicsupportforEUmembershipin Britaintendstobethelowestofallmemberstates. Doesthisreflectaclashofcivilisations,astruggleofcapitalismagainstcapitalism (Albert1993)?ItiscommontoarguethatAngloSaxoncapitalismdiffers fundamentallyfromthatofcontinentalEurope,andthatthiscontrastresultsin incompatiblesystemsofindustrialrelations.InthispaperIwillfirstoutlinesomeof thekeyargumentswhichsuggestthatBritainandtherestofEuropeoratleast, continentalwesternEuroperepresentincompatiblevarietiesofcapitalism,and explorethisfurtherbyconsideringsomeofthemeaningsofthatelusiveconcept,the Europeansocialmodel.Iwillthendiscussthecomplexinterconnectionbetween economicintegrationandsocial(orlabourmarket)regulationwithintheEU.Iwill goontoexamineinmoredetailhowEuropeanregulationhascontributedtothe transformationofBritishindustrialrelationswhichhasoccurredoveralmostfour decadesofBritishmembership.FinallyIwillindicatesomepossibleinfluencesinthe reversedirection,leadingtothequestionwhetherBritainisnowspearheadingthe transformationofcontinentalEuropeintoanAngloSaxonvariantofcapitalism.

Britain and the European Social Model

Britain and Europe: Capitalism against Capitalism?


WasdeGaullecorrectinarguingthatinpoliticsandeconomics,Britainwasmore closelyalignedtotheUnitedStatesthantocontinentalEurope?Acentralthemein therecentliteratureoncomparativepoliticaleconomyistheexistenceofdifferent varietiesofcapitalism,withdistinctiveinstitutionalconfigurationswhichshapethe operationofmarkets(includinglabourmarkets).Thesimplestpresentationofthis approachisbyHallandSoskice(2001),whooutlineacontrastbetweenliberal marketeconomies(LMEs)andcoordinatedmarketeconomies(CMEs).Intheformer, thefunctioningofmarketsissubjecttofewinstitutionalconstraints,andin consequencetheunequalcontrolofeconomicresourcesshapesmarketoutcomes;in addition,collectiveactionproblemsarehardtoovercome.Inthelatter,arangeof institutionsinsomecountriesthegovernment,inothersprivateassociationsor networkssetstightlimitstotheautonomyofindividualeconomicactors.Many subsequentcriticshavepointedtoinadequaciesinthisdichotomy.First,markets requiresomeformofinstitutionalcoordinationeveninLMEs;second,itmakesa considerabledifferencewhethercoordinationiseffectedprimarilybythestate,orby othersocialinstitutions;third,nowheredoLMEsorCMEsexistinpureform. Nevertheless,thestylisedcontrastbetweenAngloSaxonandRhineland capitalisms(Albert1993)doeshaveheuristicvalue.Britain,likeotherEnglish speakingcountries,hasacommonlawsystemandabiaswithineconomic jurisprudencetowardstheprimacyofindividualcontracts.Privatecompaniesarethe exclusivepropertyoftheirowners,andthedutyofmanagersiswithfew qualificationstomaximisethefinancialreturnstoshareholders.Thisdistinguishes theUKfromthecivillawregimesinmostofwesternEurope,wheretheinterestsof otherstakeholdersarealegitimateconcernofmanagementsandwherefreedomof contracthaslessiconicstatus.Anadditionalfactorofimportanceisthatwhilethe Britishelectoralsystemwithitsfirstpastthepostmethodnormallyresultsin singlepartymajoritiesinparliament,inmanyEuropeancountriesproportional representationtypicallyleadstocoalitiongovernment,creatinganinbuiltbias againstradicalchangeintheinstitutionalorderofthekindseeninBritaininrecent decades. Thiscontrastunderliessignificantdifferencesinapproachestoindustrialrelations. Thereisnosuchthingassociety,Thatchernotoriouslyproclaimedin1987.Suchan assertionwouldbetakenasevidenceofinsanityinmuchofEurope.However,it clearlyexpressestheunderlyingphilosophyoftheAngloAmericanmodelof capitalism.Piore(1995:7,24)haswrittenoftheUSAthatwetaketheindividualas thebasicbuildingblockofsocioeconomicsystems....Weasasocietyarecommitted toindividualism.Wetrytounderstandsocietyasanaggregateofitsindividual membersandtheeconomyasacollectionofindividualproducersandconsumers.... Wefinditdifficulttothinkofsocietyasanythingmorethanacollectionof

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individualsandrejectsocialtheoriespredicatedontheideathathumanbeings understandthemselvesonlyaspartofcohesivesocialgroups.OfcourseBritainis nottheUSA,notleastintermsofthesystemsofwelfareprovisionandlabourmarket regulation.Neverthelessthereareimportantsimilaritiesintermsofapproachesto industrialrelations,andIoutlinefiveofthese. ThefirstlinkscloselytothetraditionalBritishlegalsystem,withitsemphasison freedomofcontract(andtheassociateddoctrineofrestraintoftrade)andits difficultiesinadmittingtheideaofcollectiveactors(except,interestingly,forthe capitalistcorporation;judgeshavehadfewproblemsintreatingthisasasortof largescaleindividual).Commonlawsystems,asLaPortaetal.(1998)have demonstrated,tendtogivehighprioritytotheprotectionofpropertyand correspondinglyweakerrightstoemployees.Marketforcesaretreatedasprimary; theroleofgovernmentinterventioniscorrectiveratherthandirective. Asecondcharacteristicisvoluntarism:thenotionthattheemploymentrelationship isinlargemeasureunconstrainedbytheexternalimpositionofnormsbylegislation orothermodesofstateintervention.InBritain,voluntarismis(orwasuntilvery recently)adeeplyembeddedtradition,sharedbyunions,employersand governmentsalike(Hyman,2001).IntheUSA,therestrictedwillandcapacityof governmentstointerveneinthestructuringofthelabourmarkethassimilarly helpedshapeindustrialrelationsasasphereofrelativeautonomy.Such, incidentally,wasthebackgroundtotheemergenceandconsolidationofacademic industrialrelationsasafieldofanalysislargelydetachedfromthebroaderagendaof socialscience. Third,oneexpressionofvoluntarismisthatcollectiveassociationsaretreatedas essentiallyprivateentities.Thisimpliesthatthereisnoqualitativedistinction betweenanemployersassociationortradeunionontheonehand,asportsclubor residentsassociationontheotherthoughofcoursetheremaybeimportant differencesofsizeandresources.Publicstatusiscontingentratherthanformally assignedwiththenotableexceptionoftheChurchofEngland. Afourthfeatureistheprimacyoftheindividualcompanyorworkplaceasthe terrainofindustrialrelations.Thislinkstoarathernarrowconceptionofthe employmentrelationship.InBritainforthepastquartercentury,asintheUnites Statesthroughoutitshistory,collectivebargaining(whereitstilloccurs)is overwhelminglycentredontheindividualcompany.Industrialrelationsisthus primarilyamicrolevelprocess(asisalsotrueofJapan). Fifth,thereisastronginstitutionalseparationbetweenindustrialrelations,the regulationofwagesandothercoreconditionsofemploymentbycollective bargainingor(increasingly)unilateralmanagementdecision,andotherdimensions ofsocialprotectionandcitizenship.Thereareclearboundariesbetweenindustrial

Britain and the European Social Model

relationsandsocialpolicy,ademarcationreflectedinsimilarcompartmentalisation ofministerialresponsibilitiesandacademicspecialisms. Thesecharacterisationsareofcourseoversimplifications:realityismoremessyand qualified.Neverthelesstheybecomeplausibleincomparativeperspective,when contrastedwithsocietiesinwhichfargreaterregulationofmarketforcesisaccepted asnecessaryandappropriate.Andthiscontrastliesattheheartoftheproblematic relationshipbetweenBritainandEurope.

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The European Social Model


Theemploymentrelationship,althoughacknowledgedasbeingattheheartof industrialrelationsstudy,isnotinitselfadequatetodescribetheprocessesatwork indifferentEuropeancountries(Milner,1994:28).WhatinEnglishhasaclearand specificmeaningbecomesmuchmorediffuseandwiderrangingincontinental Europe,implyingarelationshipnotmerelybetweenemployersandemployeesbut implicatingotheractors,inparticularthestate;notmerelyaneconomicexchangebut acomplexofrights,responsibilitiesandobligationswhichguaranteeworkersa recognisedstatus(Supiot,2001);andevenineconomicterms,theframeworknot onlyforawageworkbargainbutalsoforthedefinitionofarangeofothersocial entitlements. Thisfarbroaderunderstandingoftheemploymentrelationshipisafeatureof Rhinelandcapitalism,whichAlbert(1993)counterposestoAngloAmerican economicliberalism.InCMEs,thetermpreferredbyHallandSoskice,theswayof themarketissubstantiallybounded.Indistinctwaysindifferentcountries,the commoditystatusoflabourisseverelycircumscribed;freedomofcontract,much moregenerally,issubjecttolegalandotherconstraints;andtheconditionsof employment,andofemployeesoutsidework,arerecognisedasofmajorsocialand politicalconcern.ToadoptthedistinctionofPolanyi(1957),thecountriesofwestern Europearemarketeconomiesbutnothowevermarketsocieties.Marketsrepresent vehiclesfortheorganisationofeconomicactivitybutarenotassignedoverriding politicalpriority,andamarketlogicdoesnotoverwhelmsocialidentityorpolitical initiative.TheGermanconceptofthesocialmarketeconomy(soziale Marktwirtschaft)whichdevelopedinthe1950sreflectedthisphilosophy.Theideaof aEuropeansocialmodelalsoexpressesthisfeatureofcontinentalwesternEurope, eventhoughthetermismisleadingbecauseitimpliesgreateruniformitythanis actuallythecase. Forthepracticeandtheanalysisofindustrialrelations,thereareseveralimportant corollaries,whichcontrastsharplywiththeAngloSaxonframework.First,collective organisationandactionareregardedasnormal.InwesternEurope,mainstream partiesofrightaswellaslefthavetraditionallyacceptedthatindividualsare embeddedinsocietyandthatsocialregulationistheprerequisiteofindividual welfare.Thenotionofsolidaritycanbeusedwithoutembarrassmentacrossthe politicalspectrum.Bothsocialistandcatholictraditionshaveviewedtheindividual employeeasataseriousdisadvantageinattemptingtoachieveanequitablecontract withtheemployer,andhavethusencouragedawiderangeofmarketsteering interventions.Totaketwoexamples,theprinciplesofanationalminimumwageand ofauniversalstatutorylimittoworkingtimeareuncontentiousinthemajorityof countries,whereastheyhaveonlyrecentlybeenappliedintheUK,against significantresistance.

Britain and the European Social Model

Second,AngloSaxonvoluntarismhasmorelimitedresonance(thoughcertainly moreinScandinaviathanfurthersouth).Thelabourmarketisseentobesocially constructedanddelimited:itistakenforgrantedthatthestateisdirectlyimplicated inindustrialrelations.Inmostcountries,lawandcollectivebargainingaretreatedas complementaryratherthancontradictory(Supiot,2001:958).Thisperspectiveis equallyinfluentialforindustrialrelationsactorsandpolicymakersandforacademic analysts:itisrecognisedthatindustrialrelationspracticeistoanimportantdegree politicallyconstructed. Third,thereislittlesenseofthecompanyorworkplaceassegregatedsocieties. Employersolidarityandmultiemployercollectivebargainingcontrastwiththefar greaterdecentralisationinAngloSaxoncountries(andalsoinmostofeastern Europe),sothatmultiemployercollectivebargainingremainsanimportantpractice evenif,increasingly,companylevelbargainingoccursinparallel.Aconsequenceis thatthecoverageofcollectivebargainingtendstobehigh,evenincountrieswhere unionmembershipisfarlower.Thereexiststandardisednationalsystemsof workplacerepresentation(establishedbylaworpeaklevelcollectiveagreement,or both),whichentailthatemployeesarecollectivelyrepresentedwhetherornotstrong unionorganisationexistsintheirenterprise.Tradeunions,thoughinsomecases stronglyrootedintheworkplace,haveamuchbroadersocialidentity;andtheirrole oftenextendstodetailedengagementintheformulationofpublicwelfareandlabour marketpolicyandtheadministrationofsocialbenefits.(Insomecountries,suchas FranceandperhapsalsoItaly,thismaybemoresignificantthantheirroleas collectivebargainers.)ItmaybesymptomaticthatinmostEuropeancountriesthe ministriesresponsibleforindustrialrelationshavetitlessuchasLabourandSocial Affairs.WemayalsonotethatelusiveelementofEurospeak,espacesocial:usually translatedasthesocialdimension,butalsomeaningmoreprosaicallythesphereof industrialrelations. Fourth,conflictandcooperationarewidelyregardedasinterdependent:economic dynamicsgenerateconflictswhicharemoremanageablewhenovertlyexpressedand collectivelyrepresented.Thelanguageofsocialpartners,sopuzzlingtomostnative Englishspeakers(Iincludemyself),seemstoreflectaconsciousnessofthe precariousnessofsocialorderandthepotentialforeconomicantagonismstoexplode intodestructivewarfare(thefateofmuchofEuropeinthefirsthalfofthetwentieth century).Conflictmanagementisregardedasanartwhichrequiresstablecollective organisation;inthissense,socialpartnershipisvirtuallyequivalenttotheEnglish conceptofjointregulation,thoughitimpliesasignificantlybroaderagenda. YetiftheorganisedcapitalismsofwesternEuropeshareimportantcommonfeatures intheirindustrialrelationssystems,therearealsomajordifferences(Ebbinghaus, 1999).Crouch(1993)hasindeedarguedthateverynationalsystemofindustrial relationsisdistinctive,inthatthehistoricalevolutionofemploymentregulationhas

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beenshapedbyspecificnationalstatetraditions;andTurnerhaswritten(2002:165) thatthereisnooneEuropeanandsocialmodelbutmanydifferentnationalmodels commononlyatthelevelofobjectivesandbroadapproaches.Tosimplifythis diversity,onemightsuggestthatmainland(western)Europeseemstoencompass threesubsidiarytypes(thoughwithmanymixedcases):aMediterranean(or southern)model,withelaboratelegalregulationofsubstantiveemployment conditions;aGermanicmodel,inwhichtheactorsandproceduresofindustrial relationsarejuridicallydefined,withvaryingdegreesofsubstantiveregulationof employmentconditionsbutabiastowardsfreecollectivebargaining;andaNordic model,morevoluntaristthantheGermanicsystemsbutbasedonstrongcollective organisationoneitherside,reinforcedbyinstitutionalintegrationinparastate labourmarketregulationbodies.ThismeansthatthemuchcitedideaofaEuropean socialmodelisdeeplyambiguous.Giventhegreatdiversityinboththeextentand theinstitutionalformoflabourmarketregulationacrossthememberstates,thereare remarkablyfewcommonfeatures.SocialEuropeisthusamenufromwhichthose whoadoptthetermcanpickandchoosewithsubstantialdiscretion.Cruciallyalso, thedifferentEuropeansocialmodels[have]differentperformanceintermsof efficiencyandequity(Sapir2006:370)akeypointforanydiscussionoftheneed forreformandmodernisation. Suchcrossnationaldifferenceshavealsomadeitverydifficulttoharmonise institutionsandprocesseswithintheEU.However,Britainisclearlyanoutlier:it possessesneitheratraditionofextensivestateregulation,norstrongcentral organisationsofunionsandemployers;inconsequenceitisscarcelypossibleto speakofanationalsystemofindustrialrelations,sincethereislargescopeforeach companytoestablishitsownemploymentregime.

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The Single Market and the Social Dimension


TheEUissomethingofanenigmaforpolitical(andothersocial)scientists.Itisnot justaregionaltradingbloc;unlikeforexampletheNorthAmericanFreeTradeArea, itpossessesasignificantadministrativeinfrastructurewithauthorityofapolitical nature.Butnorisit,assometimesasserted,asuperstate:thecompetenceoftheEU institutionsislimitedtotheagendaspecifiedinthegoverningTreaties,andthe principleofsubsidiarityinsiststhattheEuropeanlevelshouldregulateonlywhen thiscannotbeaccomplishedeffectivelyatnationallevel(thoughitislessclearwhois tojudgewhetherthisisthecase). AlmostfromtheformationoftheEEC,analystsdebatedthenatureoftheEUpolity. Muchoftheearlyacademicdiscussionassumedthatthepoliticalauthorityand competenceoftheEuropeanlevelwouldinevitablyexpand,becausepowersto regulateinonepolicyfieldwouldspilloverintoothers.Thusincreasingly,the balanceofpowerbetweennationalandEuropeangovernmentswouldshift.This wouldobviouslyfavourharmonisationofemploymentsystems.Butscholarssoon proposedacontrastinginterpretation:therewouldneverbeatrulyfederalEurope, becausenationalgovernmentswereeffectiveprotectorsoftheirownautonomy. Europewasnotasuperstateinthemaking,butanarenagovernedbythediplomatic manoeuvresofthememberstateshencetheemphasisonsubsidiarity.Theobvious corollarywasthatnationalemploymentsystemswouldremaindistinctive.More recently,attemptshavebeenmadetobridgetheseconflictingpositions.Todaya fashionablenotionismultilevelgovernance(Marksetal.1996).Thisimpliesthat bothnationalandEuropean(andalsosubnational)levelshaveanimportant influence,andthatitistheinteractionbetweenlevelswhichiscrucial.Moreover,the primarylocusofpowermayshiftovertime,andmayalsovaryaccordingtopolicy issue. AsecondkeyquestionisthecharacterofEuropeanintegration.Formany commentatorsitonceseemedselfevidentthatiftheimportanceoftheEuropean levelincreased,thiswouldentailagrowingbodyofEuropeanrules,includingthose regulatingemploymentandthelabourmarket.Butsubsequentlyamoresceptical positionwasdeveloped,basedontheconceptofnegativeintegration(Scharpf 1999).Theargumentherewasthatintegrationhasoccurredprimarilythrough weakeningoreliminatingnationalruleswhichconstraincrossnationaleconomic integration,withoutnecessarilyestablishingsupranationalrulesintheirplace.For example,centraltothesingleEuropeanmarketarethefourfreedomsofmovement (forgoods,services,capitalandlabour).Freedomofmovementmeanteliminating nationalbarriers;butforneoliberalsandadvocatesofflexibility,itwasneither necessarynordesirabletocreatepositiveregulationatEuropeanlevel,aposition recentlyreassertedbytheEuropeanCourtofJustice(ECJ).Iwillsaymoreaboutthis issuebelow.

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Thisquestionoverlapswiththerelationshipbetweeneconomicandsocial integration.Whatwasestablishedin1957wasaEuropeanEconomicCommunity,or commonmarket,andmarketintegrationwasintheeyesofmanyobservers(both supportersandopponents)thebeallandendall.However,thereweresomefears thatcountrieswithinferioremploymentconditionswouldgainanunfairadvantage inthecommonmarket(whatwouldlaterbedescribedassocialdumping).Forthis reason,theoriginalTreatyofRomeincludedArticle118(now137)onthe harmonisationofworkingconditionsandArticle119(now141)prescribingequal payforwomen.Inthe1970s(whencentreleftgovernmentswereinpowerinmany memberstates)thereweremoreambitiouseffortstoadoptdirectiveswhichwould ensureupwardsharmonisationofemploymentregulations.Butthiswashaltedwith ashifttotherightinEuropeanpolitics(notablyThatcherselectioninBritainin1979) andthemoregeneralpostKeynesianenthusiasmforlabourmarketderegulation. AnewphasebeganwhenJacquesDelorsbecameCommissionPresidentin1985.He helpeddrivethesinglemarketproject,butalsoinsistedthatgreatereconomic integrationmustpossessasocialdimension.Thisdevelopedintotheinitiativefora Europeansocialcharter(formallytheCommunityCharterofFundamentalSocial RightsforWorkers),eventuallyadoptedbyelevenmemberstatesinDecember1989 (withtheUKdissenting).Thishadnobindingstatus,butgaveagreenlightfor furtherCommissioninitiatives.Thiswasfollowedbythesocialchapteragreedat MaastrichtinDecember1991,withprovisionfortheUKoptout.ThisenlargedEU competenceintheemploymentfield,andextendedtherangeofissuesonwhich directivescouldbeadoptedbyqualifiedmajorityvoting(QMV).Maastrichtalso establishedthesocialpartnersroutetoEuropeanregulation.Aswellasbeing guaranteedconsultativeinputduringtheframingofCommissionlegislative proposals,thesocialpartnersatEuropeanleveltheEuropeanTradeUnion Confederation(ETUC),theemployersconfederationUNICE(nowBusinessEurope) andthepublicsectoremployersbodyCEEPacquiredanewrighttoopttodeal withanissuebymeansofEuropeanlevelagreements.Suchagreementscouldbe implementedeitherinaccordancewithproceduresandpracticesspecificto managementandlabourintheMemberStatesor,atthejointrequestofthe signatorypartiesandonaproposalfromtheCommission,byaCouncildecision. AfterMaastrichttherewasaconsiderableaccelerationinemploymentlegislationby theEU,butfromthelate1990sthepaceslowedagain.Manyarguethattheaccession ofthenew0fromCentralandEasternEuropehasnowcreatedalargeblocwithout thetraditionsofsocialEuropeandwithacompetitiveinterestinpreventingnew employmentregulation(thoughtheyhavebeenrequiredtoadopttherulesalready inplace).MoreoverthewholearchitectureofEUdecisionmakingcompoundsthe obstacles.LegislationinvolvescomplicatedinteractionbetweentheCommission (whichhastheprerogativeofinitiatingtheprocess),theCouncil(whichineffectcan vetoanyinitiativeunlessthenecessarymajoritycanbeconstructed)andthe

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EuropeanParliament(EP),whichpossessesfarfewerpowersthananynational legislaturebutcanneverthelessprovideanadditionalvetopoint.Muchdelicate manoeuvringanddiplomacyisinvolvedbeforeanyEuropeanlegislationcantake effect.Itshouldalsobenotedthatthemaininstrumentofregulationisthrough directives;thesearebindingastotheresulttobeachievedbutleavethemethodof implementationtomemberstates,allowingconsiderablediscretionastothenational legislationwhichresults.Atleastintheemploymentfield,itiscommonlyargued thatUKgovernmentsadoptaminimalistapproach. Isthesocialdimensionsimplyafigleaftomakeaneoliberaleconomicprojectmore acceptable,orisitathingofsubstance?Howfarhastherelationshipbetween economicandsocialchangedovertime?Ifthewholeideaofasocialdimensionis littlemorethanrhetoric,thepossibilityofsignificantEuropeanlevelemployment regulationisminimal;ifithasrealmeaning,thentheEuropeanisationofindustrial relationsseemsmorefeasible.IntermsoftheEUconstitution,theSingleEuropean Act(SEA)prescribedalargeagendaofeconomicintegration,withdisagreementsin manyinstancesresolublebyQMV,ratherthanunanimitywhichwaspreviouslythe generalrule.TheTreatyimposedfarfewerobligationsconcerningsocialregulation, andmostdecisionsstillrequiredunanimity(thoughtheMaastrichtandAmsterdam TreatiesincreasedthescopeforQMVonemploymentissues).

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European Social Regulation: The Impact on British Industrial Relations


GiventheobstacleriddenframeworkofEUdecisionmaking,particularlyinthe socialfield,regulationofemploymentissuesisoftenviewedastheadoptionofa lowestcommondenominatorofexistingpracticeinthememberstates.However, becauseofthecontrastbetweenAngloSaxonandRhinelandcapitalisms, regulationofthelabourmarketwhichiscommonplaceinmostofwesternEuropeis hardertoaccommodatewithinthelightlyregulatedBritishsystem.BelowI examinetheimpactinseveraldistinctpolicyareas.

Working time
Historically,Britishlawhasregulatedworkingtimeonlyforspecificcategoriesof employee(womenandyoungworkers)andinoccupationswithsignificantsafety implications;whereasinmostcontinentalcountries,maximumworkinghoursforall employeeshavelongbeenprescribedbylaw.EUregulationinthisareahastherefore beencontentious.TheSEAprovided(article118a,nowpartofarticle137)for legislation,whichcouldbeadoptedbyQMV,inpursuitofimprovements,especially intheworkingenvironment,asregardsthehealthandsafetyofworkers.Yetwhile workingenvironmentseemstocovermostaspectsofemploymentconditions, healthandsafetyseemsmuchnarrowerinscope.TheCommission(whichhasthe discretiontochoosetheTreatybaseonwhichitmakesanyproposalforlegislation) arguedthatitwasentitledtouseabroadinterpretationwhichwouldenablethe UKvetotobebypassedintheCouncil.Wedderburn(1990)hasreferredtothisasthe Treatybasegame. The1989socialcharter(which,asnotedabove,hadnobindingeffect,butlegitimised manysubsequentCommissionproposalsfordirectives)includedaclauseinsisting thatapproximationoflivingandworkingconditionsmustbepartoftheinternal marketprocess,asregardsinparticularthedurationandorganisationofworking time.Therewasspecificmentionoftheneedforaweeklyrestperiodandannual paidleave,thedurationofwhichmustbeprogressivelyharmonisedinaccordance withnationalpractices.Adraftdirectivewaspublishedin1990,andwasadoptedin 1993againsttheoppositionoftheUKdespitethedilutionofanumberofits provisionsinresponsetoBritishobjections.Keyprovisionsincludedamaximum workingweekof48hoursincludingovertime(thoughthiscouldbeaveragedovera referenceperiodof4months);amaximumof8hoursnightworkonaverage;a minimumdailyrestperiodof11consecutivehours;arestbreakwheretheworking dayislongerthan6hours;aminimumrestperiodof1dayperweek(inprinciple Sunday)plus11hours;andminimumannualpaidleaveof4weeks.Theworking timedirective(WTD)allowedforvariationinthisprovisionsviacollective agreements,andforworkinghoursabovethe48hourmaximumwithanemployees

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agreement.Thedirectivedidnotapplytoanumberoftransportsectorsortojunior hospitaldoctors;butthesegroupswerecoveredbyextensiondirectivesin2000and 2004. TheUKchallengedthevalidityoftheQMVtreatybasis,arguingthatworkingtime wasanissueofsocialpolicyratherthanhealthandsafety.Thischallengewasalmost whollyrejectedbytheECJinNovember1996(ironically,thiswaswidelyseenas strengtheningthehandoftheCommissionbyconfirmingthebroadscopeofArticle 118a).TheConservativegovernmentthenpressedforthedirectivetobedisapplied fromtheUK,beforedraftingregulationswhichfellshortofthedirectives requirements.TheLabourgovernmentelectedin1997acceptedthedirective,and issuedregulationsinOctober1998whichtookfulladvantageofthederogationsand exemptionsintheWTD.Inparticular,theUKwastheonlymemberstatetoinclude ablanketprovisionforanindividualoptout.Itsrestrictiveinterpretationoftheright toholidayentitlementwassuccessfullychallengedintheECJ(Geyeretal.2005:131). Atthestartof2004theCommissionlaunchedaconsultationprocessontherevision ofthedirective.Keyquestionswerewhethertheindividualoptoutshouldbe retained;whethertimespentoncallshouldcountasworkingtimeastheECJhad ruledin2003;andwhatshouldbethereferenceperiodoverwhichworkingtimeis averaged.TheCommissionsubsequentlyissuedproposalswhichwouldretainthe optout,narrowthedefinitionofoncalltimewhichwouldcountasworkingtime, andextendthereferenceperiodfrom4to12months.TheETUCconsideredthis veryunsatisfactory,andin2005theEPproposedmajorchangestothe Commissionsdraft.Currentlytheissueisstilldeadlocked,thoughinJune2008the CouncilofMinistersagreedonproposalsbroadlyinlinewiththeearlierCommission draft. WhatisthepracticalsignificanceoftheWTD?Inmostmemberstates,the48hour ceilingisabove,orequalto,themaximumnormallypermittedundernational workingtimelawinmostcountries,whilecollectivelyagreedlimitsareusually significantlylower.IntheUKbycontrast,thedirectiverequiredtheintroductionofa completelynewstatutoryframeworkbecauseoftheabsenceofanyuniversal legislationonworkingtimeissues.AndbecauseoftheBritishovertimeculture,the averageworkingweek(forfulltimeemployees)isconsiderablyabovetheEuropean norm.Yetbecauseofthewidespreaduseofindividualoptouts(andtheweaknessof enforcementmechanisms)theimpactofthedirectiveseemstohavebeenminimal. Officialstatisticsshowthatinthefirstsixyearsaftertheregulationstookeffect,the proportionoftheworkforcenormallyworkingover45hoursaweekdiddecline (from37%in1998to31%in2004)butthefigurehassincestabilised.Whetherthis reductionwasactuallycausedbytheregulationsisuncertain:asurveybytheCIPD (2001)aftertheregulationshadbeeninplacefortwoyearsfoundthatthemajorityof workerswhohadbeenworkingover48hoursaweekwerestilldoingso,whileonly

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2%wereworkingreducedhoursbecauseofthedirective.Analysingunpublished officialdata,theTUC(2008)reportedthatthoserecordedasworkingover48hoursa weekfellfrom3.8millionin1998to3.1millionin2007,butroseagainto3.3million in2008.

Employment protection and atypical work


InBritain,thecontractofemploymentwastraditionallyopentoterminationby eitherside,subjectonlytotheperiodofnoticewhichitspecified.Legislationin1965 establishedastatutorysystemofcompensationincasesofredundancy,andthe principleofunfairdismissalwasintroducedbythe1971IndustrialRelationsAct (bothsubjecttoaminimumlengthofservice).Muchsubsequentlegislationon employmentprotectionhashoweverstemmedfromEUdirectives. OneinitiativewithanimportantimpactintheUKwasthe1977AcquiredRights Directive(ARD,revisedin1998and2001).ThiswasimplementedintheUKasthe TransferofUndertakings(ProtectionofEmployment)Regulations1981(amended severaltimesbetween1995and2006),usuallyknownsimplyasTUPE.Theaimwas toensurethatwhenanundertakingwastransferred,inwholeorinpart,toanother firm,employeescontinuityofemploymentandtheirassociatedtermsand conditionsshouldbeprotected. Inimplementingthedirectivein1981,theThatchergovernmentdefineditsscopeto applysolelytocommercialundertakings.Thismeant,inparticular,thatactivities outsourcedbypublicauthoritiesunderthecompulsorycompetitivetendering (CCT)requirementsimposedfrom1983werenotcovered.Adecadelater,this narrowinterpretationwasshowntobeinconsistentwiththemeaningoftheARD, throughaseriesofECJrulingsandaCommissionreportcriticalofTUPE.In consequence,thegovernmentwasobligedtowidenthescopeofTUPEaspartofthe 1993TradeUnionReformandEmploymentRightsAct(CutlerandWaine1998:93). TheimpactonthepropertyrightsofUKfirmsinitiallyproducedshocksofa seismicscale(Anderman2004:107).SincemuchofthelogicofCCTwastoenable outsidecontractorstocutlabourcosts,thisradicallydilutedakeyelementof Conservativestrategytowardspublicservices.However,thisdidnotpreventthe newemployerfromnegotiatinginferiorconditionswiththeworkforce,andnew employeeslackedanyprotection,oftenleadingtothedevelopmentofatwotier workforcewithdifferentcontractualprovisions. Formanyobservers,theARDwasinternallyinconsistentandcontainedmany ambiguities,forexampleoverthecontinuityofpensionentitlements.Rulingsbythe ECJcompoundedtheuncertainties(Davies1993;McMullen1996;Shrubshall1998).A decadeago,Adnett(1998:79)wrotethatnearlytwentyyearsafteritsintroduction theARDisstillasignificantsourceofconfusionanduncertaintyinEuropeanlabour

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markets.NowhereistheconfusiongreaterthanintheUK.Thoughrecentrevisions ofthedirectiveandtheRegulationshaveclarifiedsomeoftheuncertainties, complexitiesremain;nevertheless,theARDhascertainlyimposedsignificantlimits ontheabilityofemployerswhetherintheprivateorthepublicsectortouse subcontractingasasimplecostcuttingmeasure.Inthisrespect,aliberalmarket economyhasbecomemorecoordinated. Thetreatmentofatypicalemploymentusuallyunderstoodasinvolvingcontracts whicharenotfulltimeandpermanenthaslongbeenacontentiousissueintheEU. Onerationaleforregulationhasbeentheargumentofalevelplayingfield;if atypicalworkershaveinferiortermsandconditionsofemploymenttostandard workers,andifsuchcontractsaremorecommoninsomememberstatesthanothers (bothofwhichareindeedthecase),competitionwillbedistorted.Anotherconcerns equalopportunities,particularlyinthecaseofparttimework,which disproportionatelyinvolveswomen;forthisreasonIdiscussthisaspectinaseparate section.TheCommissionfirstproposedtheregulationoftheconditionsofparttime andtemporaryworkersprimarilyinrespectofstatutoryandcontractual employmentrightsin1982,butwithoutsuccess.Theinitiativewasrevivedasa packageofthreedirectivesonatypicalemploymentin1990,ofwhichonlythe healthandsafetyelementwasadopted.SubsequentlytheCommissionconsultedthe socialpartnersonaproposedinitiativeonflexibleworkingtimeandsecurityfor workers.NegotiationsbetweenthesocialpartnersbeganinOctober1996separately (atUNICEinsistence)overparttimeandtemporarywork.InJune1997theyreached anagreementonparttimework(seebelow),andinMarch1999onfixedterm contracts;theCounciladoptedbothagreementsasdirectives. TalksonadirectiveregulatingtemporaryagencyworkbrokedowninMay2001;the CommissionissueditsowndraftinMarch2002,butthiswasblocked,mainly becauseofoppositionbytheUK.However,inMay2008anagreementwasreached betweentheTUCandCBI,inpartbrokeredbythegovernment.Thisreflectedan assessmentthat,withinthehorsetradingprocessesoftheEU,theUKgovernment wouldonlysustainthe48houroptoutifitwaswillingtoagreeadirectiveon agencywork.Thekeypointsintheagreementwerethatafter3monthsinagiven job,anagencyworkerwouldbeentitledtoequaltreatmentatleastasregardsbasic employmentandworkingconditionswithdirectlyemployedworkers.The followingmonththerewaspoliticalagreementintheEuropeanCouncilonequal rightsoncoreemploymentconditionswithoutanywaitingperiod,andtheseterms wereapprovedbytheEPinOctober2008,pavingthewayforformaladoptionofthe directive. ThefixedtermdirectivehashadarelativelylimitedimpactintheUK,wherethe proportionofsuchcontractsisonlyabouthalftheEUaverage.Thisreflectsthefact linkedtothecontrastbetweenvarietiesofcapitalismthatpermanentcontractsof

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employmentareinpracticefareasiertoterminateintheUKthaninmanyother memberstates.Conversely,theimpactoftheagencyworkerdirectivewillbefar greaterthemainreasonforUKgovernmentoppositionbecausetheincidenceof suchworkisfarhigherthaninmostoftheEU.Onsomeestimates,agencywork covers5percentoftheUKforce,byfarthehighestproportionamongthemember states.

Information and Consultation


Asnotedabove,mostcountriesofcontinentalwesternEuropehavelongestablished nationalsystemsofcompanylevelemployeerepresentationwithworkscouncilsor similarchannelsofindustrialdemocracy.Yetattemptstogeneralisesuch arrangementsbyEUlegislationhaveprovedparticularlycontentious;despite continuousdebatesincethe1960s,nobreakthroughwasachieveduntiltheEuropean WorksCouncils(EWC)directiveofSeptember1994.Amajorreasonforthelong deadlockwasthelackofanyanalogousarrangementsintheUK.Butthoughallthe originalsixmembersoftheEECpossessedstandardisedworkscouncilsor committees,theircompositionandpowersdifferedsignificantly;andthisdiversity wasincreasedwitheachroundofenlargement.Inparticular,companylevel representationintheNordiccountriesrestedonpeaklevelcollectiveagreements ratherthanlegislationandusuallyinvolvedasinglechannelstructurebasedon tradeunions. Duringthe1970sand1980stheCommissionlaunchedthreemaininitiatives,with draftsoftheEuropeancompanystatute(1970and1975);theFifthcompanylaw directive,providingforboardlevelemployeerepresentation(1972and1983);and theVredelingdirectiveconcerninginformationandconsultationinmultinationals (1980and1983).Allwereblockedasaresultofemployeropposition(including stronglobbyingbyUSfirms),resistancebysomegovernments(primarilytheUK) andproblemsinharmonisingdiversenationalpractice.Earlydraftstendedto attempttogeneralisetheGermanmodel;laterdraftsweremoreflexible,butstill alienformanymemberstates. TheSingleEuropeanMarket,whichwasexpectedtoleadtoanaccelerationofcross bordermergersandacquisitions,encouragednewCommissionproposalson transnationalinformationandconsultationprocedures:arevisedcollective redundanciesdirective(adoptedin1992);successivedraftsoftheEWCdirective;and newproposalsforaEuropeancompanystatute(1989and1991). TherationaleforVredeling,andsubsequentlytheEWCdirective,wasthat nationallybasedrightsofemployeeparticipationwerebeingoutflankedbythe transnationalisationofcorporatestructures;andtherewasapoliticalneedforsocial acceptabilityofsuchrestructuring.Alsoimportantwastradeunionpressure,and

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theprecedentsetbythevoluntaryestablishmentofprototypeEWCsinsome (mainlyFrenchandGermanowned)companies.TheCommissionproposalof December1990requiredunanimity;itwentthroughtheinitialstagesofthe legislativeprocedure,butoppositionbytheUK(andalsoreservationsonthepartof Portugal)preventedadoption.Prospectsweretransformedbytheratificationofthe MaastrichtTreaty.Sincemeasuresadoptedunderthesocialchapterwerenotdirectly applicableintheUK,Britainhadnoformalroleinthelegislativeprocess;and directivesconcerninginformationandconsultationofworkersweresubjecttoQMV amongtheelevenothermemberstates.UndertheMaastrichtprovisions, consultationofthesocialpartnersledtotalksabouttalksbetweenETUC,UNICE andCEEPabouttriggeringnegotiationsforaCommunitylevelagreementon transnationalinformationandconsultationproceduresinsteadoflegislation.Talks brokedowninMarch1994(partlybecausetheBritishCBIstiffenedUNICE resistance).AnamendeddirectivewasadoptedbyCouncilinSeptember1994, applyingtoallmembersofthebynowenlargedEU,exceptfortheUK,plusthethree othermembersoftheEEA. TheaimoftheEWCdirectivewastocoordinatenationalprovisionsinordertocreate aEuropeanlegalframeworkfortransnationalinformationandconsultationwithin communityscaleenterprises(withatleast1000employeesintheEEAcountries, including150inatleasttwoofthese).Onarequestbyemployeerepresentatives, companiesweretosetupEWCsortransnationalinformationandconsultation procedures.Therewasconsiderableflexibilityforthenegotiationofcompany specificarrangements,butthedirectivedefinedastandardEWCpackageasa defaultoptionintheabsenceofagreement.ThisprovidedforanEWCofupto30 membersdrawnfromexistingemployeerepresentatives,todiscusstransnational issuesinanannualinformationandconsultationmeetingwithcentralmanagement. Theoperatingcostsweretobemetbytheenterprise.Inlinewithsubsidiarity, memberstatesweregivenconsiderablescopeforensuringthatthatlegalframework forEWCsreflectednationaltraditionsandpractices. TheeffectoftheUKoptoutwasonlypartial:theUKgovernmentdidnothaveto implementthedirective,butUKbasedmultinationalswithrequisiteemployment figuresintheothercountriesconcernedwerestillobligedtoestablishEWCsin respectoftheirnonUKoperationswithintheEEA.Insuchcasestherewas inevitable,andusuallysuccessfulpressuretoincludeUKrepresentativesvoluntarily intheEWC.FollowingtheelectionoftheLabourgovernmentwithacommitmentto endtheMaastrichtoptout,anextensiondirectivewasagreedinDecember1997. Enlargementin2004and2007hasextendeditsscope. WhatdoEWCsmeaninpractice?Streeck(1997)arguedthattheywereneither Europeannorworkscouncilsbutmeretokenmechanisms,lackingthepowersof nationalrepresentativeinstitutionsandtypicallyancillarytonationalproceduresin

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thecompanieshomecountry.Subsequentresearchhasrevealedaslightlymore nuancedpicture.First,thecomplexityoftheprocedureforestablishinganEWC(and thescopeforhostilemanagementstoobstructtheprocess)meansthatonlyjustover athirdofthecompaniesthatmeetthesizethresholdsinthedirectiveactually possessanEWCthoughcoverageoflargermultinationalsisfargreater. Interestingly,theproportionofUKownedfirmswithanEWCisabovetheaverage. ThereisevidencethatmostEWCsareeithermarginalisedbymanagement,orelse incorporatedintoaprocessofinstillingcompanyculture.Problemsoflanguageand ofdifferentnationalindustrialrelationsbackgroundsinhibitcrossnationalunity amongemployeerepresentatives,andintimesofrestructuringandredundancy, representativesareoftenpreoccupiedwithprotectingtheirnationalinterests. Nevertheless,thereisevidencethatinaminorityofcases,EWCshavedeveloped intogenuinetransnationalactorswithaquasibargainingrole(Fitzgeraldand Stirling2004;Lecheretal.1999;Whittalletal.2007).Inanyevent,theEWCgave roughlyathousandUKemployees(mainlytradeunionists)andalsomanagers theexperienceofcontinentalrepresentativemechanismswhichwerepreviously unfamiliar(Marginsonetal.2004). TheETUChaspushedforadecadeforstrongerpowers,moreresources,anda loweringoftheemploymentthresholdfortheestablishmentofEWCs,butwithout success.InFebruary2008theCommissionannouncedanewconsultationprocesson possiblerevisionofthedirective,andissueddetailedproposalsinJuly.Onthis occasion,thesocialpartnersatEuropeanlevelwereabletoagreeacommon positiononatleastsomeelementsofrevision;buttheUKgovernmentappearstobe lobbyinghardtoblockorminimiseanychanges. PotentiallymoreradicalinitsimpactontheUKisthe2002directiveestablishinga generalframeworksettingoutminimumrequirementsfortherighttoinformation andconsultationofemployeesinundertakingsorestablishmentswithinthe Community.ThiswasproposedbytheCommissioninNovember1995asarevival oftheinitiativesonthisthemelaunchedinthe1970s,and(afternegotiationsbetween thesocialpartnersfailedtotakeoff),adraftdirectivewasissuedinNovember1998. TherewereconsiderabledifferencesofopinionwithinCouncil,withstrongUK oppositioninparticular,reflectingapowerfulcampaignbytheCBI;butpolitical agreementonarevised(anddiluted)textwasreachedinJune2001.TheEPpressed foramendments,aconciliatedtextwasagreedinDecember2001,andthedirective wasadoptedinMarch2002. Thedirectiveappliestoundertakingswithatleast50employees,withaphased introductiontofirmswithunder150employeesincountrieswithoutestablished informationandconsultationarrangements(theUKandIreland).Itcreatesan obligationtoinformandconsultemployeerepresentativesonrecentandforeseeable developmentsinthefirmsfinancialsituation,employmentandworkorganisation;

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withopportunitiesfortherepresentativestorespondandseekagreementbefore implementationofchanges. Inpractice,theUKwasthemaincountrywheresignificantinstitutionalinnovation wasrequiredthoughafterEUenlargementin2004mostofthenewmemberstates alsohadtointroducenewmechanisms.Thegovernmentbrokeredan (unprecedented)agreementbetweentheTUCandtheCBIonthedetailed arrangementsfortransposition,andlegislationwasimplementedbyregulations issuedin2004,whichtookeffectinApril2005.Thisprovidesthatarequestby10%of employeescantriggernegotiationstoestablishaninformationandconsultation procedure.Afallbackmechanismisprescribedforcaseswherenoagreementcanbe reached,andpreexistingagreementsareprotected.Inlinewiththerequirementsof thedirective,theemploymentthresholdforapplicationoftheregulationswas reducedto100in2007and50in2008. Informalterms,theinformationandconsultationlegislationentailsamajor institutionalinnovationintheUK.Thepracticalsignificanceisfarhardertoassess. Certainlytheproceduresspecifiedinthedirectivefallfarshortoftherightsof employeerepresentativesinmostofwesternEurope,andtheUKregulationsmake extensiveuseoftheflexibilitywhichthedirectivepermitsindeedsomeconsider thatitfailstocomplyfullywiththerequirements.Inthedebatesbeforetheadoption ofthedirective,someobserverssuggestedthattheelectionofemployee representativesmightprovideabridgeheadforunionisation,whileothersonthe contrarysawthisasameansforantiunionemployerstobypassunion representation.Atthisstagethereislittleindicationthateitherscenariowillbe common.Oneofthefewstudiesoftheimplementationofthenewprovisions(Hallet al.2007)indicatesthatthemainoutcomehasbeentoprovideacommunication channelformanagement.

Equal Opportunities
EqualitybetweenwomenandmenistheareaofsocialpolicywhereEUlawhashad themostsustainedandprofoundinfluence.Asnotedabove,theTreatyofRome embodiedtheprincipleofequalpayforequalworkthespringboardforall subsequentdevelopmentsinthisarea.However,foralmosttwodecadestheformal commitmenttothisprinciplehadlittlepracticaleffect.Thischangedinthe1970sand 1980s,withtheadoptionofdirectivesin1975prescribingequalpayforworkofequal value,andin1976banningsexdiscriminationinallaspectsofemployment.TheECJ alsoplayedapathbreakingrolewithaseriesoflandmarkrulingsinterpretingand developingECequalitylaw.InsomecasesitruledthatTreatyprovisionsandcertain aspectsofdirectiveshadadirecteffect:inotherwords,theyshouldinformnational judicialdecisionsevenifnationallawhadnotbeenbroughtintoconformity.

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ThishadasignificantimpactonthedevelopmentofequalitylawintheUK.The1970 EqualPayActwasadoptedbeforemembershipoftheEECbutafteraccession negotiationshadcommenced,andtheneedtocomplywithforthcomingTreaty obligationswasoneargumentforthenewlaw.The1975SexDiscriminationAct anticipatedthedirectiveadoptedthefollowingyearHowever,theUKfailedto implementtheequalvaluerequirementsofthe1975EqualPayDirective.The governmentsargumentthatequalvaluecouldbedemonstratedonlyifan employerhadundertakenasystematicevaluationofgradingprocedureswhichno employerwasobligedtodowascontestedbytheCommissionandfirmlyrejected bytheECJin1982(Kilpatrick,1997;StoneSweetandCaporaso1998:1245). Accordingly,theThatchergovernmentfounditselfobligedtoamendthe1970Actto takeaccountoftheruling,resultinginaseriesofsuccessfulequalvalueclaims (Schofield1988). Inthe1980stheCommissionintroducedaseriesof5yearActionProgrammeson EqualOpportunities,containingdetailedproposalsforlegislativeandother measurestopromotetheintegrationofwomeninthelabourmarket.In1990the NOWprogramme(NewOpportunitiesforWomen)waslaunched.Anannual Commissionreportonequalopportunitieshasbeenpublishedsince1996. Directivesconcerningequalitybetweenmenandwomenwithregardtolabour marketopportunitiesandtreatmentatworkwereearmarkedforQMVunderthe Maastrichtsocialchapter,makinglegislationeasiertoachieve.Adirectivewas adoptedin1992coveringmaternityleave,prohibitionofdismissalongroundsof pregnancy,maternitypayandhealthandsafetyprovisionfornewandexpectant mothers,andoneonparentalleavein1996followingthefirstCommunitylevel agreementbetweenthesocialpartners.TheUKgovernmentlimitedtherightto parentalleavetochildrenbornafterthelegislationtookeffect,butafteralegal challengewaseventuallyobligedtoremovethisrestriction.Anotherdirective,onthe reversaloftheburdenofproofinsexdiscriminationcases(puttingtheonusonthe employertorebutaclaim),firstproposedin1988,wasadoptedin1997underthe Maastrichtsocialchapterprocedures;andextendedtotheUKinJuly1998.The socialpartnersagreementonequaltreatmentforparttimeworkwhich particularlyinvolveswomenwasimplementedasadirectiveinDecember1997. ThiswasparticularlyimportantfortheUK,where44%ofwomenworkersarepart timeaproportionexceededonlyintheNetherlands.Anotherproposal,tooutlaw sexualharassment,wasinitiatedin1996butmadeslowprogress,eventuallyleading toanamendmenttotheEqualTreatmentDirectivein2002. The1997AmsterdamTreatyradicallyextendedtheEUsformalcommitmentto equalopportunities,authorisingappropriateactiontocombatdiscriminationbased onsex,racialorethnicorigin,religionorbelief,disability,ageorsexualorientation. AframeworkdirectiveonequaltreatmentwasadoptedinNovember2000,covering

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age,disability,race/ethnicityandsexualorientation;andin2006aConsolidated EqualTreatmentDirectivewasadopted,strengtheningsomeoftheprovisions againstgenderdiscrimination,inparticularintermsoflegalremediesinnational courts.TheUKwasoneofthefewmemberstateswithatraditionoflegislation againstracialorethnicdiscrimination,datingbacktothe1976RaceRelationsAct; whiletheDisabilityDiscriminationActhadbeenpassedin1996;butthreenewsets ofRegulationswererequiredtomeettheotherantidiscriminationrequirements.At thetimeofwritingachallengetothe2006AgeRegulations(issuedalmostthree yearsaftertheimplementationdeadline),whichpermitemployerstomaintaina mandatoryretirementageof65,hasbeenreferredtotheECJ. TheCharterofFundamentalRightscontainsachapteronEqualitywhichismore comprehensivestill:anydiscriminationbasedonanygroundsuchassex,race, colour,ethnicorsocialorigin,geneticfeatures,language,religionorbelief,political oranyotheropinion,membershipofanationalminority,property,birth,disability, ageorsexualorientationshallbeprohibitedThiswouldhowevertakeeffectonlyif theLisbonTreatywereadoptedandeventhen,thelegalityoftheUKoptout wouldneedtobetested. EqualopportunitiesiscertainlytheareaofemploymentrelationswheretheEUhas hadthemostsubstantialimpactinmemberstates.Achievinghardlawonequality issueshasbeenslowandpartial,butneverthelessthereisanextensivebodyof regulation.Asinsomanyotherpolicyareas,onecanaskthequestion:istheglass halffullorhalfempty?Inthecaseofgenderequalitythehistoryofregulationislong enoughtomakeareasonableassessmentofitsimpact.Asnotedabove,UK governmentsofbothpartieshavebeenforcedreluctantlytochangenationallawto meetEUrequirements.Somecriticsarguethatthemainfocusofregulationhasbeen onformalequalitywithinthelabourmarket,ratherthanonthesocialinstitutions outsidethelabourmarketwhichpreventmostwomenfromparticipatingonequal terms.AsMsesdttir(2006)putsit,mostEUinitiativeshavebeenconcernedtogive womenthesamerightsasmeninsofarastheybehavelikemenonthelabour market. Butrealadvanceshavebeenmade,andatfirstsighttheextentofcurrentEU regulationissurprising.GiventhestrengthinmanyEUcountriesofideologies definingdomesticresponsibilitiesasessentiallyfemale,thewiderangeoflegislation ongenderissuesisnoteworthy.Andthedegreeofprejudiceonquestionsofsexual orientationmeansthatmanycountrieswouldnotvoluntarilyhaveadoptednational legislation.Soonecouldaskwhysociallyconservativegovernmentshavesignedup tosuchregulationatEUlevel.Inmanyrespects,equalopportunitiesisanissueon whichacoordinatedanddeterminedcampaigncanexertasubstantialimpactonEU policy,intheabsenceofasimilarlyorganisedcountermovement.Somespeakofan advocacycoalition(Sabatier1987)involvingwomenCommissioners,theEP

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CommitteeforWomensRights,theEuropeanWomensLobby(EWL,which receivesCommissionfunding),andactorsatnationallevel.Since1995,aGroupof CommissionersonequalopportunitieshasheldregularmeetingswiththeEP WomensRightsCommitteeandtheEWL.TheCommissionhasalsofunded considerableacademicresearchwhichdocumentstheneedforreform.Asvander Vleuten(2005)suggests,onecandetectapincermovementatnationallevelwith governmentsunderpressurefromtheEUinstitutionsaboveandequalopportunities organisationsbelow.

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Shareholder Value and Flexibility


TheprevioussectionhasdocumentedthekeyareasinwhichEUlegislationhas broughtmajorchangesintheregulationofemploymentrelationsandthelabour marketintheUK.Inimportantrespects,thenatureofBritishindustrialrelationshas beenEuropeanised.Yetitisalsopossibletospeakofareverseprocess,the Anglicisationofcontinentalemploymentrelations.Asindicatedearlier,European integrationhasalwaysinvolvedacontradictorymixofmarketliberalisationand socialregulation.TheThatchergovernmentwaswillingtoendorsetheSEAbecause, foralltherhetoricconcerningthesocialdimension,itscoreobjectivewasto enshrinethefourfreedomscharacteristicofaliberalmarketeconomy. Thesedevelopmentsmustbeseenagainstthebackgroundofashiftinmanywestern Europeaneconomiestowardstheprinciplesofshareholdervalueratherthan stakeholderobligations.Neoliberalismhasbecomepartoftheconventionalwisdom inmostEuropeancountries,influencingsocialdemocraticgovernmentsaswellas thoseoftheright,embodyingaprojectthathasattemptedtotransformsomeofthe mostbasicpoliticalandeconomicsettlementsofthepostwarera,includinglabour marketaccords,industrialrelationssystems,redistributivetaxstructures,andsocial welfareprograms(CampbellandPedersen2001:1).Oneofthefoundationsofsocial marketeconomieswaspatientcapital,thelongtermcommitmentofinstitutional investorstocompaniesinexpectationofsimilarlylongtermpayoffs;buttheshort termismcharacteristicofBritishcapitalmarketsisincreasinglyevidentincontinental Europe.Thehighermobilityoffinancialcapitalandthegreaterscopeforshortterm profitintheinternationalmarkettendtodestabilizethelongstandingnetworkof relationsbetweenbanksandfirmsthatwastypicalofRhineJapanesecapitalism (Trigilia2002:254). Theassumptionimplicitinmuchearlyvarietiesofcapitalismwritings,thatboth LMEsandCMEswerefunctionallyintegratedwholesincapableofpiecemealchange, isbynowgenerallydiscredited:increasedeconomicinterdependencecanfacilitate incrementaladaptationswhichcumulativelyresultinsystemictransformation (Campbell2004;Crouch2005;StreeckandThelen2005).Suchpressureshavebeen reinforcedbythestrictmonetarydisciplineinherentinEMU;andtheBlair government,thoughnotpartofthesinglecurrencyproject,wasactivein constructingapolicycoalitionwithotherEuropeangovernmentscommittedtoa neoliberalagenda(Sbragia2004:68). ThecomplexinteractionbetweenEuropeanisationandAnglicisationcanbeseen inthedevelopmentoftheEuropeanEmploymentStrategy(EES).Thisdatesfromthe 1993DelorsWhitePaperGrowth,CompetitivenessandEmployment,whichwasan uneasycompromisebetweendemandsforapositiveprogrammeofpublic expenditureandactivelabourmarketandincomespolicies,andcallsparticularly

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fromtheUKgovernmentforderegulationandflexibility.TheAmsterdamTreaty, andthesubsequentjobssummit,gavetheEESaformalbasis:theCommissionwas todraftannualguidelinesforemploymentpolicy,andmemberstateswereto producenationalactionplanswhichwouldbereviewedbytheCommissionand Council,whichcouldissuerecommendationstoindividualgovernments.The LuxembourgjobssummitinNovember1997adopted19employmentguidelines withfourmainpillars:employability,entrepreneurship,adaptabilityandequal opportunities.Thesewereradicallyrevisedin2003,andthewholestructureofthe EESwastransformedin2005.Thepredominantfocusonsupplysidemeasures closelymatchedtheprioritiesofthenewBlairgovernment. TheEESwasamplifiedattheLisbonsummitofMarch2000,whichfamously declaredthatEuropeshouldbecomeby2010themostcompetitiveanddynamic knowledgebasedeconomyintheworld,capableofsustainedeconomicgrowthwith moreandbetterjobsandgreatersocialcohesion,andrespectfortheenvironment. Here,inanapproachwhichIhaveelsewheretermedthecompositeresolution (Hyman2005),essentiallycompetingaimsweresubsumedinamannerwhich delegatedthechoiceofprioritiestoadministrativediscretion.Lisbonalsointroduced theconceptoftheopenmethodofcoordination(OMC),wherebyinformation exchange,peerreviewandthehighlightingofbestpracticewereexpectedtoguide nationalpolicywithouttheneedforcoercivesanctions:anapproachconsistentwith theUKgovernmentspreferenceforexhortationratherthanregulation. AfurtherboosttoUKgovernmentconceptionsoflabourmarketflexibilityderived fromtheEuropeanEmploymentTaskforceunderformerDutchpremierWimKok, whichwasappointedbytheCouncilinMarch2003andreportedthatEUpolicies shouldfocusonincreasingadaptabilityofworkersandenterprises,attractingmore peopletothelabourmarket,investingmore,andmoreeffectively,inhumancapital andensuringeffectiveimplementationofreformsthroughbettergovernance.The currentCommissionunderJosManuelBarrosohasintensifiedthepressurefor flexibilitypresentedinthenowfashionablelanguageofflexicurity.ItsGreen PaperModernisingLabourLaw,issuedinNovember2006,placedcentralemphasis onthisconceptbutwasfarmoreconcreteinitsprescriptionsforflexibilitythanin thoseforsecurity(KeuneandJepsen2007).IndeedAshiagbor(2007:110,113)has remarkedthatthefinalversionoftheGreenPaperreflectedfiercecriticismsfrom MemberStates,inparticulartheUK,aswellasconcertedlobbyingfrombusiness organisations,aboveallUNICE.Sheaddedthattherearemarkedsimilarities betweenBritishdiscourseonlabourmarketpolicy,andEUleveldiscourseonthe needtoremovelabourmarketrigidities(113). Discourse....mattersmostinmomentsofcrisis(Schmidt2002:309),andchangesin thedominanteconomicdiscourseandinthebalanceofpowerbetweensocialand politicalactorscanhaveradicaleffectsoninstitutionalarrangements.Akeycurrent

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developmentistheroleoftheECJ,whichhasbecomeincreasinglyautonomousinits rulings(Alter1998).ExpandedjudicialreviewintheEuropeanUnion simultaneouslyhasempoweredjudges,shiftedagendasettingpowersawayfrom thememberstatestowardtheEuropeanCommission,alteredthecharacterof discourseoverpolicyreform,transformedthekindsofpolicyinstrumentsthat decisionmakersprefertouse,anddramaticallychangedthevalueofpolitical resourcestraditionallyemployedbyinterestgroups(Pierson2004:109).Inthepast theECJuseditsdiscretionarycompetencetoenhanceemploymentprotections,but todayitisincreasinglyinterpretingtheTreatycommitmenttomarketfreedomsas overridingnationalemploymentprotectionrules(HpnerandSchfer2007).Its landmarkdecisionsintheVikingandLavalcasesin2007adoptedtheprinciplethat, irrespectiveofnationallaw,industrialactionwhichinterferedwithfreedomof movementwaslegitimateonlyifitsatisfiedaproportionalitytest(A.C.L.Davies 2008).Thiswasfollowedin2008bytheRffertandLuxembourgcases,whichset verystrictlimitsontheextenttowhichpublicauthoritiescouldprescribeminimum employmentstandardsiftheseinterferedwiththefreedomtoprovideservices(P. Davies2008). NooneisforcingtheEuropeanUniontobecomemorecompetitivethantheUnited Statesinnineyearstime,declaredFritsBolkestein(2000),whoasCommissioner responsiblefortheinternalmarketpushedfortheradicalliberalisationofservices. Butifthatiswhatwereallywant,wemustleavethecomfortablesurroundingsof theRhinelandandmoveclosertothetougherconditionsandcoldclimateofthe AngloSaxonformofcapitalism.ThoughBolkesteinfailedtorealisehisobjectives duringhisperiodasCommissioner,thebalanceofforceswithintheEUis increasinglyfavourabletotheagendawhichheincommonwithUKgovernments espoused.

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Conclusion
TheBritishsystemofindustrialrelationshasbeenradicallytransformedoverthe pastfourdecades.Manyofthechangesreflectdomesticsocial,economicand politicaldevelopmentsintheUK.ButEUmembershiphasalsohadasignificant impact,astheprevioussectionshaveshown.Giventheresistanceofboth ConservativeandLabourgovernmentstostatutoryregulationofthelabourmarket, itisveryimprobablethatlegislationonworkingtimeandinformationand consultationwouldhavebeenenactedvoluntarily,andthesameistrueofmuchof thelegislationonemploymentsecurityandequalopportunities.Indeedthevirulence ofUKgovernmentsresistancetomostEUsociallegislation,andtheirminimalist approachtoimplementingthosedirectiveswhichareneverthelessadopted,indicates thatBritishlabourlawtodaywouldbeverydifferentbutforEUmembership.Over therecentdecades,Britishgovernmentshavebeenobligedtomoveclosertothe EuropeansocialmodelofindividualemploymentrightsthoughtheEUhaslittle capacitytoshapecollectiveindustrialrelations. TheEUhasclearlyaddedanewlevelabove,andinfluencing,nationalindustrial relationssystems:therearenewrules,newpressures,newactors,andanewagenda (MarginsonandSisson2004).Formostcountriesatleastbeforeenlargement Europeanisationhasprobablyhadlimitedimpact,exceptoverissueswhichwere previouslynotseriouslyaddressedatnationallevel.Thisismostobviouslythecase asregardsequalopportunities:here,theEUhasbeenthematrixofapolicy community(Falkner1998;HecloandWildavsky1974)whichhasdriveninitiatives whichwouldhavebeenfarlesslikelytoachieveresultsatthelevelofindividual memberstates.TheimpactofEUregulationhashoweverbeenmoreextensivein countrieslikeBritainandtoalesserextentIreland,wherethevoluntaristtradition hasmeantthatareasofemploymentrelationscontrolledbylawinmostof continentalEuropewerelefttoregulation(ornot)throughcollectivebargaining. TheUKhasplayedtheroleofcheerleaderforeconomicreformintheEuropean Unionforatleasttwodecades(HopkinandWincott2006:53).Theambiguousand multifacetedcharacteroftheEuropeansocialmodel(JepsenandSerranoPascual 2006)makesitvulnerabletoerosion;Britishgovernmentshaveshownsomeskillin exploitingthisvulnerability,andparticularlysinceenlargementhaveincreasingly foundalliesinothermemberstates.Thuswecandiscernaformofdouble movement.TheprocessesofBritishindustrialrelationshaveinsignificantmeasure beenEuropeanised,despiteoftenstrenuousresistancebybothConservativeand Labourgovernments.ButtheEuropeansocialmodelhasbecomeinkeyrespects increasinglyAngloSaxon.Completeconvergenceisunlikely,butitnolongermakes muchsensetospeakofaclashofsystems.

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