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No justice for unions in Europe’s courts

Over the last few years, a formidable body of legal decisions in both British and European courts has further undermined the basic rights of workers and their trade unions. Peter Arkell reports.

Just before Christmas, the High Court granted an injunction against the proposed 12-day action by British Airways cabin crew staff after they had voted by an overwhelming 9:1 majority on an 80% turnout to strike over plans to cut 1,700 jobs, freeze wages for two years and create a second-tier workforce.

In a blatantly political decision by the High Court judge, the vote was ruled unlawful because a small number of the cabin crew who were balloted were in the process of taking voluntary redundancy which meant they would not be working at the time of the strike.

BA’s lawyers had plainly learned from an earlier dispute between the same union, Unite, and Metrobus, when action by bus drivers in pursuit of parity with other drivers in the same area, was ruled illegal for similar reasons. Some of the drivers voting had agreed to leave the company. The strike was called off by the union for fear of being fined large sums of money by the courts.

Unions find themselves in an impossible situation when employers are able to continuously challenge the legality of a ballot, especially as, under the 1992 Trade Union Act, the union is required to hand over to the employer all kinds of details about the organisation of the ballot and even about internal discussions relating to the dispute. Naturally, the employer is not required to give information to the union about who is quitting their job, for example.

Following the Metrobus dispute in October 2008, employers have applied for injunctions on at least 11 occasions. Most of them were granted and in the words of one commentator writing for Marketing Week, by no means a supporter of trade unions, “Metrobus has become a by-word in the legal profession for anti-union actions, including claiming compensation from any union successfully injuncted in this way”.

This attack on the unions is not confined to the British courts. An even more serious, indeed linked, threat against their independence and their freedom to represent their members’ interests comes in the shape of the European Court of Justice (ECJ). This court, the top one in Europe, has made a series of judgements that give precedence to the employers’ right to the “freedom of establishment” over the workers’ fundamental right to “freedom of association”.

The context and the circumstances of these judgements and the implications of the precedents set are discussed in detail in a new book, The New Spectre Haunting Europe—The ECJ, Trade Union Rights, and the British Government” edited by Keith Ewing and John Hendy, and published by the Institute of Employment Rights. Written by different legal experts, it calls for an urgent political response to four recent judgements by the ECJ in which the right of freedom of association (to join trade unions) is undermined by restrictions imposed by the court on the right to collective bargaining and to strike.

The enlargement of the European Union and the consequent movement of workers and employers from low to higher-wage economies has provided the context in which the ECJ has produced judgements that now threaten the right of unions to take action to prevent obvious abuses such as sackings and cuts in wages. The ECJ has also produced judgements that effectively overturn national law in each individual country, laws originally brought in to protect the interests of workers.

The Viking case in 2004 centred round an attempt by the Viking line in Finland to re-flag one of its ships to Estonia, saving money by sacking the Finnish crew and taking on an Estonian crew on lower wages. The Finnish crew were entitled to strike under Finnish law and received the support of the International Transport Workers Federation (ITF), based in London, which issued a circular calling on affiliates to show solidarity.

Viking brought an action in the High Court in London on the basis that the proposed action by the union and the ITF would impede its free movement rights, namely the right of establishment under EU treaties. After an 11-day hearing the court granted Viking the full scope of the remedies it sought, preventing the unions from pursuing their industrial action.
On appeal the injunction was set aside and the appeal court referred a series of complex questions to the ECJ for a preliminary ruling. But the resulting judgement, although declaring that “the right to take collective action, including the right to strike must... be recognised as a fundamental right...” then went on to hedge this right with so many conditions that it became meaningless.

In the Laval case, just a week after the Viking judgement, the ECJ effectively ruled that the trade unions could not take industrial action in Sweden to compel a Latvian builder in Stockholm to observe the terms and conditions of collective agreements operating in Sweden. EU law appears to allow members states to prevent “social dumping” where workers posted from another country are exploited by being paid less, under-cutting the going rate. But in the Laval case, the ECJ held that member states could not require foreign employers who bring in their own workforce to the host country to observe more than the minimum terms and conditions applicable in the host country. They could, in other words, unless the going rate has been deemed in the host country to be “universally applicable”, pay their workers less and undermine agreements.

In the Ruffert case, a Polish contractor building a prison in Lower Saxony could not be required to observe collective agreements that were locally but not nationally applicable. Furthermore, in effect the court held that the law in Lower Saxony, in Germany, did not comply with EU law as set out in the Posted Workers Directive. It declared that the directive would be deprived of its effectiveness if member states were entitled to exceed the minimum standards laid out in the directive.

In the Luxembourg case, a whole series of national laws designed to protect both local workers and posted workers were held to be incompatible with the EU’s Posted Workers Directive and that in the event of a conflict, the Posted Workers Directive prevails. As the book points out, the Posted Workers Directive of the EU, originally introduced to ensure “a climate of fair competition” has, at the hands of the ECJ, been turned into a way of attacking the trade unions and collective bargaining.

The implications of these judgements for the unions are very serious, even threatening their existence. Employers now can seek an injunction to halt any planned industrial action on the basis that it might violate the employer’s rights under EU law. The granting of interim injunctions is dependent only on the employer demonstrating that there is a “serious issue” to be tried. With the possibility of unlimited damages being imposed on the union a situation now exists where trade unions that pursue redress can face liquidation.

“The European Court of Justice has administered four stab wounds that have left Social Europe bleeding on the ground,” the book explains. “The ECJ has made the Four Freedoms at the core of the EU instruments to facilitate social dumping … It may be that the economic catastrophe which neo-liberalism has now been revealed to have wreaked ... will lead to some restoration of Social Europe, but there is precious little sign of it —especially at the ECJ.”

BA of course has been one of the leading employers to make use of these laws, both the British and EU varieties. They now face the probability of strike action by their cabin crews after a second large vote in favour of action by the 12,000 cabin staff. The Unite union has yet to decide on strike days, but it can hardly back down now, although they are trying to find a deal. If it needs to, BA will again resort to the courts in an attempt to halt what will be a very damaging and expensive strike, as they have demonstrated in the past.

In February 2008 BA proposed to launch a wholly-owned subsidiary airline operating from Paris to fly between various European and American destinations. The pilots’ union (BALPA), while accepting that the new subsidiary company would need to operate with lower labour costs than in BA itself, was concerned that company would use the opportunity to drive down labour costs within the whole airline.

So the unions sought various protective amendments to the main collective agreement. The long negotiations produced no agreement, so BALPA held a ballot which was overwhelmingly in favour of strike action. BA threatened BALPA with an injunction if it called for any industrial action, alleging that any strike would be unlawful in view of the precedents set by Viking and Laval. It did not, on this occasion, dispute the legality of the ballot.

BALPA applied to the court for a ruling on the legality of its proposed strike action, arguing that it was a last resort and proportionate. BA counter-claimed and sought unlimited damages. Faced with the likelihood that any decision would be appealed all the way to the House of Lords and the further likelihood that there would be another referral of the case to the ECJ, all of which would take at least 18 months, BALPA decided that it could not risk taking strike action in case the courts eventually ruled it unlawful and it was fined. The action was called off.

EU law and the ECJ rulings have become an important fact of life in British disputes. This is further illustrated in the bitter East Lindsey dispute early last year, when construction workers at a refinery in Lincolnshire walked out, accusing one of the sub-contractors (IREM) at the Total site of under-cutting the agreed terms, conditions and wages for its workforce of “posted” Portuguese and Italian workers. True to form the New Labour government had not changed British labour law to bring it into line with EU law and its directives, particularly the Posted Workers Directive.

So all the conditions were in place for an explosive dispute that took the nationalist form of a strike by British workers against Italians and Portuguese. The conciliation service ACAS, called in by the government to investigate the allegations of under-cutting, was unable to establish whether IREM were or were not paying the going rate. The incident, in the words of the book, “provided a glimpse — on the basis of highly-charged speculation — of life under the PWD (Posted Workers Directive) as it had been gift-wrapped by the ECJ”.

The book characterises the judgements of the ECJ as “an attack by the Supreme Court of the EU on workers’ rights” and suggests a strategy to make the court accountable to other legal institutions, in particular the International Labour Organisation (ILO) and the Council of Europe. The new restrictions on the circumstances in which industrial action can be taken may well be incompatible, the authors write, with Convention 87 of the ILO. In 1998 the ILO Committee of Experts in its report to the governing body berated the continued restrictions on the means for workers organisations to defend their members’ interests. “This is particularly flagrant with respect to the right to strike,” they said.

Likewise, the book states, it is difficult to see how the decisions of the ECJ are compatible with the obligations of states under the EU Social Charter to “to promote machinery for voluntary negotiations between employers and workers organisations” for the regulation of terms and conditions of employment by means of collective agreements. The authors also put forward a proposal for trade unions to make complaints to the European Court of Human Rights.

They go on to suggest that the two courts at the apex of the European legal system, that is the ECJ and the Court of Human Rights, are pulling in different directions, with the Luxembourg court (ECJ) “being propelled by the engine of neo-liberalism and free trade in the direction of business rights”, and the Strasburg court (ECtHR) in the direction of human rights. Should the gap widen between the two courts, the authors contend, there will inevitably be a battle “to determine which one of them enjoys supremacy in the European legal order”. This could lead to a new political settlement where the ECJ would have to re-consider its orientation.

At the launch of the book at the TUC, Professor Keith Ewing, acknowledged: “We can no longer look to government to protect our funds, agreements or any of our freedoms.” The Labour Party had received £100m from the unions. “But for what?”, he asked. Ewing drew a parallel between the situation today and that of 1902, when 1,000 workers at the Taff Vale Railway Company went on strike and their union was fined £23,000, a judgement that became a big factor in the building of Labour to represent the interests of the unions.

The book provides an important analysis of the way in which EU law in the hands of the ECJ has been pulled away from its requirement to protect trade union rights towards a pro-business stance, and it points out the very serious dangers facing trade unionists in Britain as a result of recent judgements. Together with the anti-labour laws from the Thatcher/Major period which New Labour has refused to repeal, trade unions find themselves in a very hostile environment, with the fundamental right to strike seriously eroded to the point where it could be said to exist on paper only.

The attitude of the courts in both the EU and the UK is of course closely tied in to the requirements of business and capital. As the financial and economic crisis deepens, so the courts, as an essential part of the market state, will continue to make judgements to protect the status quo, at all costs. No amount of pleading, complaining or arguing about points of law will change that position.

Throughout history, no law protecting the interests of workers and the unions has ever been enacted except as a result of the most bitter struggles outside the law and the courts. The logic of this crisis for the capitalist class throughout Europe is to destroy the independence of the unions in an attempt to save capitalism by exploiting an enfeebled and docile workforce. The New Labour government is part of this conspiracy, as are most of the British trade union leadership who by refusing to challenge and defy the legal stranglehold they find themselves in fail to represent their members’ interests.

The New Spectre Haunting Europe—The ECJ, Trade Union Rights, and the British Government. Edited by K.D. Ewing and John Hendy QC. The Institute of Employment Rights. £8 trade unions and students, £30 others.

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