Constantinos Parissis - UMIST MBS - MScThesis

Enforcing EU Employment Law in the UK The Pending Directives on Individual Labour Law

and the Consequences of their Forthcoming

Implementation

A Thesis submitted to the

THE UNIVERSITY OF MANCHESTER

INSTITUTE OF SCIENCE AND TECHNOLOGY for the Degree of

Master of Science in International Business

by

Constantinos Parissis

Manchester School of Management

The University of Manchester

Institute of Science and Technology

September 1999

DECLARATION

No portion of the work referred to in this thesis has been submitted in support of an

application for another degree or qualification of this or any other university or other

institute of learning.

ACKNOWLEDGEMENTS

I would like to express my gratitude to Professor Jill Rubery, who supervised this study,

for her support, guidance and understanding.

Special thanks are given to Brian Bercusson, Professor of European Law in the

University of Manchester, for his invaluable suggestions, although he was carrying no

obligation to help.

I would like to thank Dr. Dave Murphy and Dr. Jiens Peter Reinhardt from the

Manchester School of Management for their precious advice and encouragement.

I would also like to thank Ioannis Manoledakis, Professor of Penal Law in the Aristotle

University of Thessaloniki, for his highly influential teaching that made me think as a

legal scientist, as well as C. Hadjiconstantinou, Professor of International Law and L.

Kotsiris, Professor of Company Law in the same University, for recommending me to

UMIST.

Finally, I would like to express my deepest love and gratefulness to my parents who

once again supported me with any possible means in fulfilling my dreams.

7

ABSTRACT

This study has two objectives: firstly, to interpret the pending in the UK Directives on

Individual Labour Law; and, secondly, to assess the impact of their forthcoming

implementation on the employees and business in the UK. The Directives examined are

those on the Burden of Proof in Cases of Discrimination Based on Sex, Parental Leave,

Part-time Work, Fixed-term Work and on the Posting of Workers.

The first two Chapters constitute the literature review. Chapter 1 refers to the legislative

background and briefly covers the evolution of labour law in Western Europe, the

(E)EC and the UK, the institutional framework of the European Union, the main sources

of EU Labour Law, the legislative process in the EU and the hierarchy between Union

and national laws. Chapter 2 includes an overview of the most important of the existing

analyses reviewed, and a summary of the current legislation in the UK.

Chapters 3-6 constitute the legal interpretation of the Directives: Chapter 4 covers both

of the Directives on atypical work (part-time and fixed-term work), while each one of

the other chapters concern each one of the rest of the Directives. This part of the study

reveals several issues of legal and practical importance, as the Directives major

weaknesses and limitations, as well as potential problems related with their

implementation.

In Chapter 7 we attempt to assess the most important direct and indirect effects of the

regulations on the employers, the workers and the employment conditions.

The final part (Conclusions) provides a synopsis of the most important points of the

analysis, associating the findings of the legal interpretation (from ch. 3-6) with the

findings on their impact (from ch. 7).

The law is as stated at 1 September 1999.

9

Table of Contents

ABSTRACT ..................................................................................................................... 7

TABLE OF CONTENTS ................................................................................................. 9

LIST OF ABBREVIATIONS ........................................................................................ 15

INTRODUCTION ........................................................................................................ 17

I. AIM OF THE RESEARCH .........................................................................................17

II. ACADEMIC RELEVANCE.......................................................................................17

III. SCOPE OF THE RESEARCH...................................................................................18 III. a. Directives to be Examined......................................................................................................18

III. b. Directives Excluded...............................................................................................................19

IV. RESEARCH METHODOLOGY ...............................................................................20 IV. a. Legal analysis.......................................................................................................................21

IV. b. Socio-economic analysis ........................................................................................................23

V. STRUCTURE ...........................................................................................................23

REFERENCES ..............................................................................................................24

CHAPTER 1

LITERATURE REVIEW, PART I: PRESENTATION OF THE CONTEXT...... 25

A. THE LEGISLATIVE BACKGROUND .....................................................................26

A.1 The Evolution of Labour Law in Western Europe...................................................26

A.2 The Evolution of European Labour Law within the EEC ........................................27 A.2.a 1957-1973: The Market Approach of Labour Issues..................................................................28

A.2.b 1974-1980: The Golden Era of European Labour Law ...........................................................29

A.2.c 1981-1991: The Interaction between UK Politics and EEC Social Concerns ...............................29

A.2.d The Developments in Maastricht.............................................................................................30

A.2.e The Treaty of Amsterdam........................................................................................................30

A.2.f An Overview: European Social Policy......................................................................................31

A.3 The Evolution of British Labour Law ....................................................................31 A.3.a Collective Laissez-faire..........................................................................................................32

A.3.b Deregulation and the End of Trade-unionism.......................................................................32

A.3.c The role of Common Law .......................................................................................................33

10

A.3.d The British Labour Law in the Context of the EEC....................................................................33

A.4 The Interaction Between the UK and the (E)EC Labour Law ..................................34

A.5 Transposition of (E)EC Labour Law into Domestic UK Law ..................................35

B. THE EU INSTITUTIONAL FRAMEWORK ..............................................................35

B.1 The Basic Institutions ...........................................................................................36 B.1.a The European Parliament (EP)...............................................................................................36

B.1.b The Council ..........................................................................................................................36

B.1.c The Commission ....................................................................................................................38

B.1.d The European Court of Justice................................................................................................39

B.2 The Social Partners ............................................................................................40

C. THE MAIN SOURCES OF EU LABOUR LAW .........................................................40

C.1 Primary Sources of EU Labour Law: The Treaties..................................................41

C.2 The Directives as a Source of EU Labour Law .......................................................41 C.2.a Common Principles Across the Employment Related Directives.................................................43

C.3 Other Secondary Sources......................................................................................44 C.3.a Regulations...........................................................................................................................44

C.3.b Decisions..............................................................................................................................44

D. HIERARCHY BETWEEN EU AND NATIONAL LAW .............................................45

D.1 The Question of Supremacy of EU Law ................................................................45

D.2 Applicability and Effect of EU Law ......................................................................46 D.2.a Direct Effect .........................................................................................................................46

D.2.b Indirect Effect.......................................................................................................................47

E. THE LEGISLATIVE PROCESS ON LABOUR ISSUES IN THE EUROPEAN UNION48

REFERENCES ..............................................................................................................50

CHAPTER 2

LITERATURE REVIEW, PART II: THE PENDING DIRECTIVES ................... 51

A. PROBLEMS OF THE REVIEW.................................................................................52

B. EXISTING ANALYSES REVIEWED ........................................................................53

B.1 An Overview .......................................................................................................53 B.1.a Catherine Barnard (1996): EC Employment Law .....................................................................54

B.1.b Catherine Barnard and Tamara Hervey (1998): European Union Employment and Social Policy

Survey 1996 and 1997............................................................................................................54

B.1.c Brian Bercusson (1996) European Labour Law........................................................................54

B.1.d Roger Blanpain and Chris Engels (1998): European Labour Law - and Roger Blanpain and

Ioannis Koukiadis (1993): Community Law of Employment: before and after Maastricht.............55

B.1.e Mark Jeffrey (1998): Not Really Going to Work? Of the Directive on Part-time Work, Atypical

Work and Attempts to Regulate it...........................................................................................56

11

B.2. Burden of Proof in Cases of Discrimination Based on Sex .....................................56

B.3 Parental Leave .....................................................................................................56

B.4 Atypical Work .....................................................................................................57

B.5 The Posting of Workers ........................................................................................59

C. THE DIRECTIVES FROM THE SCOPE OF BRITISH LABOUR LAW......................59

C.1 Burden of Proof in Cases of Discrimination Based on Sex ......................................60

C.2 Parental Leave .....................................................................................................61

C.3 Atypical Work .....................................................................................................62 C.3.a Part-time Work .....................................................................................................................63

C.3.b Fixed-term Work ...................................................................................................................66

C.4 The Posting of Workers ........................................................................................69

C.5 Concluding Remarks ............................................................................................70

REFERENCES ..............................................................................................................72

CHAPTER 3

THE BURDEN OF PROOF IN CASES OF SEX DISCRIMINATION ................. 75

A. GENERAL INFORMATION .....................................................................................76

B. CONTENT OF THE DIRECTIVE..............................................................................78

B.1 Definitions...........................................................................................................78 B.1.a Principle of Equal Treatment..................................................................................................78

B.1.b Indirect Discrimination..........................................................................................................78

B.2 Purpose and Manifestation....................................................................................80 B.2.a The Burden of Proof ..............................................................................................................81

B.2.b Information...........................................................................................................................81

B.3 Scope ..................................................................................................................82

B.4 Other Provisions ..................................................................................................83

C. IMPLEMENTATION IN THE UK .............................................................................83

REFERENCES ..............................................................................................................87

CHAPTER 4

PARENTAL LEAVE ................................................................................................... 89

A. GENERAL INFORMATION .....................................................................................90

B. CONTENT OF THE DIRECTIVE..............................................................................91

B.1 Purpose, Manifestation and Function.....................................................................91 B.1.a The Right to Parental Leave ...................................................................................................92

12

B.1.b The Entitlement to Time Off on Grounds of Force Majeure........................................................94

B.2 Scope ..................................................................................................................95 B.2.a Limitations Regarding Parental Leave.....................................................................................95

B.2.b Limitations Regarding Time Off..............................................................................................96

B.3 Other Provisions ..................................................................................................97

C. IMPLEMENTATION IN THE UK .............................................................................98

C.1 Parental Leave .....................................................................................................99

C.2 Time Off from Work .......................................................................................... 100

REFERENCES ............................................................................................................ 102

CHAPTER 5

ATYPICAL WORK ................................................................................................... 103

A. GENERAL INFORMATION ................................................................................... 104

A.1 Definitions ........................................................................................................ 106 A.1.a Atypical Work ..................................................................................................................... 106

A.1.b Part-time Work.................................................................................................................... 107

A.1.c Fixed-term Work.................................................................................................................. 108

A.1.d Temporary Work ................................................................................................................. 108

A.1.e The Comparative Employee................................................................................................ 108

B. THE DIRECTIVE ON PART-TIME WORK.............................................................109

B.1 Purpose and Manifestation.................................................................................. 109 B.1.a The Removal of Discrimination............................................................................................. 110

B.1.b The Improvement of the Quality of Part-time Work ................................................................. 111

B.1.c Facilitating the Development of Part-time Work on a Voluntary Basis...................................... 112

B.1.d Contributing to the Flexible Organisation of Working Time () .............................................. 114

B.2 Function and Scope ............................................................................................ 114 B.2.a The General Principles and Minimum Requirements............................................................... 114

B.2.b Other Functions .................................................................................................................. 116

B.3 Other Provisions ................................................................................................ 116

C. THE DIRECTIVE ON FIXED-TERM WORK ..........................................................117

C.1 Purpose and manifestation .................................................................................. 117 C.1.a The Application of the Principle of non-discrimination ........................................................... 118

C.1.b The Improvement of the Quality of Fixed-term Work............................................................... 119

C.1.c The Establishment of a Framework to Prevent Abuse.............................................................. 120

C.2 Scope ................................................................................................................ 121

C.3 Other Provisions ................................................................................................ 122

D. IMPLEMENTATION IN THE UK...........................................................................122

13

D.1 Part-time Work .................................................................................................. 122

D.2 Fixed-term Work ............................................................................................... 124

REFERENCES ............................................................................................................ 125

CHAPTER 6

POSTED WORKERS ................................................................................................ 127

A. GENERAL INFORMATION ................................................................................... 128

B. CONTENT OF THE DIRECTIVE............................................................................ 130

B.1 Definitions......................................................................................................... 130 B.1.a Social Dumping................................................................................................................... 130

B.1.b Home and Host State ........................................................................................................... 130

B.1.c Worker................................................................................................................................ 131

B.1.d Posted Worker..................................................................................................................... 131

B.1.e Minimum Rates of Pay....................................................................................................... 132

B.1.f Non-significant Work ......................................................................................................... 132

B.1.g Universally Applicable Collective Agreements or Arbitration Awards.................................... 132

B.1.h Equality of Treatment........................................................................................................... 132

B.2 Scope ................................................................................................................ 133 B.2.a General Applicability........................................................................................................... 133

B.2.b Exemptions and Derogations ................................................................................................ 134

B.3 The Basic Principle and the Key Provisions ......................................................... 135 B.3.a The Basic Principle.............................................................................................................. 136

B.3.b The General Level of Protection............................................................................................ 136

B.3.c Sources of Applicable Regulations......................................................................................... 137

B.4 Function ............................................................................................................ 138

B.5 Other Provisions ................................................................................................ 140

C. IMPLEMENTATION IN THE UK ...........................................................................142

REFERENCES ............................................................................................................ 143

CHAPTER 7

IMPACT ASSESSMENT........................................................................................... 145

A. THE METHODOLOGICAL APPROACH................................................................146

B. THE DIRECTIVE ON THE BURDEN OF PROOF ...................................................148

C. THE PARENTAL LEAVE DIRECTIVE................................................................... 150 Note on the Governmental Resources............................................................................................. 150

C.1. Parental Leave .................................................................................................. 151

14

C.1.a Direct Impact on the Employees............................................................................................ 151

C.1.b The Gender Impact.............................................................................................................. 153

C.1.c The Impact on Business........................................................................................................ 156

C.1.d Impact on Employment Conditions........................................................................................ 157

C.2 Time off ............................................................................................................158

D. THE DIRECTIVES ON ATYPICAL WORK............................................................ 159

D.1 The Directive on Part-time Work ........................................................................159 D.1.a Scope ................................................................................................................................. 159

D.1.b Governmental Estimations ................................................................................................... 159

D.1.c The General Level of Protection ........................................................................................... 162

D.1.d The Trojan Effects of Clause 6(2)a........................................................................................ 168

D.2 The Directive on Fixed-term Work......................................................................169

E. THE POSTED WORKERS DIRECTIVE ..................................................................171

REFERENCES ............................................................................................................ 173

CONCLUSIONS......................................................................................................... 175

SELECTED BIBLIOGRAPHY ................................................................................... 181

INTERNET RESOURCES........................................................................................... 187

APPENDIX I SELECTED ARTICLES OF THE EC TREATY............................................................189

APPENDIX II THE PENDING DIRECTIVES..................................................................................... 195

APPENDIX III

SELECTED RULINGS OF THE COURT OF JUSTICE ................................................239

Note on the numbering of the Articles of the EC Treaty: unless explicitly stated, the

numbering is as it appears in the Treaty of Rome and its following amendments, until

Maastricht. Thus, the numbers of the Articles do not correspond to the numbers of the

consolidated texts of the EC Treaties.

15

List of Abbreviations

CEEP European Centre of Enterprises with Public Participation

EC European Community

ECJ European Court of Justice

ECSC European Coal and Steel Community

EEC European Economic Community

EP European Parliament

ETUC European Trade Unions Confederation

EU European Union

IRS Industrial Relations Services

IRSET Industrial Relations Services Employment Trends

SPA Social Policy Agreement

TEU Treaty on the European Union

UNICE Union of Industrial and Employers Confederations of Europe

TU(PE) Transfer of Undertakings (Protection of Employees) (Act)

EqPA Equal Pay Act

LIFO Last In First Out

ERA Employment Relations Act

TULR(C)A Trade Union and Labour Relations Consolidation Act

CAC Central Arbitration Committee

EAT Employment Appeal Tribunal

SDA Sex Discrimination Act

RRA Race Relations Act

RIA Regulatory Impact Assessment

DTI Department of Trade and Industry

17

INTRODUCTION

I. Aim of the Research

The primary purpose of this research is to interpret the new, to the UK,

regulations on Individual Labour Law emanating from European Union Directives.

However, instead of introducing a strictly legal document expanding the legal

discussion over the new legislation, we will attempt to examine the regulations in the

context of their foreseen implementation and to assess their impact, primarily on the

parties concerned (management and labour), as well as on the employment relations in

general.

II. Academic Relevance

The UKs labour market being the least regulated in Europe and the present

number of European Union proposals on employment issues being rather large, keeping

up to date with legislation emanating from Europe is likely to become increasingly

important for UK employers over the forthcoming years (IRSET 671, p. 6), after the

Labour Governments opt-in to the European Social Chapter (similarly IRSET 679, p.

16). Moreover, the volume of new regulations on employment issues is increased by

Britains peculiar position in the EEC and its successor the EU: for eighteen years

(1979-1997) the Conservative Administration followed a policy which, before 1989,

blocked the adoption of almost all employment legislation at European level and,

between 1989 and 1997, suspended the harmonisation of UK law to most of the

Introduction

18

European employment legislation, which must now be embodied in the national law.

This legislation, as a whole, touches virtually all known aspects of the employment

relationship and establishes individual employment rights, which to a great extent are

novel for the UK as mandatory regulations. Hence, the scrutiny of the forthcoming

legislation may be characterised as essential, not only for the employers but also for the

employees, and the examination of its prospective impact in the UK seems a high

priority.

III. Scope of the Research

This study is concerned with the employment legislation emanating from

Directives, since this form of Community action is the main instrument of implementing

law unification policies1 across the EU (Morris, P.E., 1989, pp. 242-243). More

specifically, it is focused on the Directives the implementation of which is pending in

the UK, either because they are novel as regulations or their implementation was

postponed by the previous Governments.

III. a. Directives to be Examined

During the summer and at the final stage of the research, two of the Directives

which were from the beginning intended to be part of it, the Directive on Parental Leave

and the Directive on Part-time Work, came into implementation by the new

Employment Relations Act (27/7/99). However, the Directives are at least partially

pending and, since their examination was deemed as compliant with the general

purposes of this study, their analysis was included in the final text. Moreover, on June

1 The importance of the Directives is such that Coopers and Lybrand Consulting, in an informative

brochure of 1988, was suggesting to its clients, in certain instances, even to rearrange their company or

group structure in anticipation of the requirements of forthcoming Directives, or to lobby for changes to

draft directives (Coopers and Lybrand, 1980).

Introduction

19

28 the Council adopted as a Directive the Framework Agreement on fixed-term work,

which was concluded by the Social Partners earlier this year (18/3/99). The text of the

Directive was published in the Official Journal on July 10 and became publicly

available on July 26. This Directive was also included. Thus, the Directives which shall

be examined are:

1. Directive 97/80/EC of 15 December 1997 on the burden of proof in cases of

discrimination based on sex (to be implemented in the UK by 13/7/2001).

2. Directive 96/34/EC of 3 July 1996 concerning the framework agreement on parental

leave, concluded by ETUC, UNICE and CEEP (to be fully implemented in the UK

by 15/12/1999).

3. Directive 97/81/EC of 15 December 1997 on part-time work (to be fully

implemented in the UK by 7/4/2000).

4. Directive 99/70/EC of 28 June 1999 concerning the framework agreement on fixed

term work, concluded by ETUC, UNICE and CEEP (to be implemented in the UK

by 10/7/2001).

5. Directive 96/71/EC of 16 December 1996 on issues related to posting of workers

(to be implemented in the UK by 24/9/1999).

III. b. Directives Excluded

The Directives which, although at least partly pending, have not been

deemed as compliant with the aims of this study, are:

1. Directive 98/59/EC of 20 July 1998 on collective redundancies. The reason for

excluding this Directive is that it does no more than consolidate the texts of

Directive 75/129/EEC of 17 February 1975 and its following amendment, Directive

92/56/EEC of 24 June 1992, both implemented in the UK.

2. Directive 94/33/EC of 22 June 1994 on the protection of young people at work. The

Directive has been excluded because all of its important parts have already been

implemented (i.e. the Health and safety - Young Persons - Regulations of 1997

Introduction

20

implemented articles 6 and 7 of the Directive, and the Children - Protection at Work

- Regulations of 1998 implemented article 4, as well as all other provisions related

to the employment of children).

3. Directive 98/50/EC of 29 June 1998, amending the Directive 77/187/EEC of

14/2/1977 on the protection of employees in cases of transfer of undertakings,

implemented in the UK with the Transfer of Undertakings (Protection of

Employees) (TU(PE)) Act of 1977. The new Directive incorporates in the text of

the regulation the most important rulings of the European Court of Justice on the

issues it concerns, brings the amended provisions into line with the (above-

mentioned) Directive on collective redundancies and, in general, resolves several

problematic points of the amended text. Hence, although very important, it can be

considered more as an improvement of the existing regulations than as a novel piece

of legislation.

IV. Research Methodology

The study in its entirety follows the Aristotelian principles, employing the four

basic tools of reasoning: analysis, meaning the dividing of the complex until the

reaching of the simplest possible elements, the ones that cannot be divided further

(Aristotelis, Politica 1252a 18-20), in chapters 3-6, induction and production, mainly

in chapter 7, and synthesis of the findings, in the conclusions.

Also, due to its atypical nature as a multidisciplinary academic paper, the study

employs various methods of methodology in order to reach the stated goals, which in

total represent three different phases of collecting and analysing empirical evidence

(Yin, 1994, p. 3): the exploratory phase (to identify which the new regulations are),

the descriptive phase (what the regulations prescribe) and the explanatory phase

(legal interpretation and estimation of their further impact).

For the exploratory phase, the data being legal and thus restricted in certain

formal sources, logically the method to be used is a non-critical review (equivalent to

Introduction

21

Yin s archival analysis) of the official documents setting out the regulations. For the

descriptive phase2, the method to be employed is a critical review of informal

resources of legal reading, that is legal books and legal or managerial periodicals with

reference to the issues concerned. The explanatory phase consists of two parts: the

legal analysis, which refers to the interpretation of the regulations, and the socio-

economic analysis, which aims to assess the impact of the legislation to the parties

concerned and the employment relations.

IV. a. Legal analysis

The legal analysis concentrates primarily on the interpretation of the Directives

already presented (paragraph III.a supra), but also refers to UK legislation existing

before the implementation of these Directives. During this analysis, three major

methodological problems were encountered.

Firstly, the fact that I was taught the Law in Greece, the legal system of which is

based on Civil Law, influenced me to consider case law as a tool for reference and not

as a set of rulings with universally binding features. However, it would be

methodologically inappropriate to overlook the fact that, under Common Law, the case

law in the UK plays a significantly more enhanced role, being a source of legislation

equivalent to the statutes (Stamatis, 1991, p. 83). The solution which was found

appropriate was to generally rely on the opinions expressed by British legal scientists,

regarding the UKs legal environment, and to accredit to British case law the specific

gravity given by them at every instance.

The second methodological problem encountered was in regard to the case law

of the European Court of Justice and the manner in which it should be treated. The

Court, according to Steiner and Woods (1998, p. 31), in developing the substantive law

2 The term descriptive refers only to the chronic phase of selecting data, not to the way of presenting it

in the text of this study, which effort has been made to be highly critical.

Introduction

22

draws on principles and traditions from all the Member States. Since the EC Treaty is a

framework Treaty the Court has been extremely influential in filling the gaps, and in

doing so has created law (), something which is apparent in several rulings on cases

of Sex Discrimination (ibid)3. The problem is that, in doing so, the Court is following its

own way, which is similarly surprising for the scientists or judges of both legal systems:

a court to create law is in principle unthinkable from the scope of view of Civil Law; at

the same time, as Lord Diplock stated4, the ECJ applies teleological rather than

historical methods (), it seeks to give effect to what it conceives to be the spirit rather

than the letter of the Treaties () [which] sometimes indeed, to an English judge, ()

may seem to the exclusion of the letter. To overcome this problem, whenever

appropriate, we will distinguish the interpreting Clauses from the law-making ones and

we will read them with respect to their legal substance.

The third methodological problem was the small quantity of available European

case law on the basis of the new legislation, because of its novelty. Hence, the

utilisation of European case law as a tool for validating the opinions expressed in

published legal studies concerning the herein examined Directives will be limited.

Nonetheless, whenever there exist rulings relevant to the subject of this study, they will

be cited5.

All kinds of resources, formal, informal and juridical - the latter when available -

will be examined from the point of view of analytical jurisprudence, as the doctrine was

(re)defined by H.L.A. Hart in 1961: The legal scientist perceives the Law as granted,

enacted by the qualified State Authorities. [] The legal scientist keeps to a logical

reconstruction of the meaning of the rules of definite law, as they apply, [the scientist

being] distant of axiological thinking. This thinking is related to ideological positions of

3 That is even more obvious if we consider that, in most of the Directives examined in this study, it is

mentioned as one of their purposes to come to terms with rulings of ECJ, when one would normally

expect the reverse.

4 In R v Henn [1981] (cited in Steiner and Woods, ibid)

5 See also Appendix III

Introduction

23

subjective nature, however the exercise of the legal science has to be ideologically

unprejudiced, in aim to be conditioned by scientific objectivity (Stamatis, ibid, p. 92).

IV. b. Socio-economic analysis

For this part of the analysis (chapter 7, Impact Assessment) we will employ

three different methods, each one where appropriate, which may provide credible data

for each of the aspects investigated:

- National and European Secondary Data: Use of secondary data resources providing

figures about the employment in the UK and the EU, which will be used as tools for

measuring the prospective impact of the new regulations, as well as previous

research particularly surveys referring to the implementation of these

regulations.

- Literature review: Critical review of opinions expressed by specialists and

researchers, forecasting the impact of the new regulations to the UK.

- Scenario analysis.

V. Structure

In the main part of the study, we will firstly expound the Directives, analysing

their content in terms of the legal meaning, effect and function, with particular interest

to potential weaknesses, as well as to implications which may derive from their foreseen

implementation (chapters 3-6). Secondly, we will point out ways by which these

Directives may affect the employers and the employees, as well as the employment

relations in the UK in general (chapter 7). Chapters 1 and 2 are a literature review over

the legal context and the pending Directives, respectively. After the last chapter of the

main part (7) we will draw the conclusions.

Introduction

24

REFERENCES

Coopers and Lybrand Consulting, (1988) informative brochure: Europe: The EEC

Directives

Hart, H.L.A. (1961) The Concept of Law. Oxford: Oxford University Press

Industrial Relations Services - Employment Trends issue 671: Employment law

update: whats next from Brussels?, January 1999

Industrial Relations Services - Employment Trends issue 679: Towards a one-speed

Europe?, May 1999

Morris, P. E. (1989) The Direct Effect of the Directives - Some Recent Developments

in the European Court - part I, Journal of Business Law, May 1989, pp. 233 - 245

Stamatis, C. (1995). The Foundation of Legal Reasoning: Introduction to Legal

Methodology. Thessaloniki: Sakkoulas

Steiner, J. and Woods, L. (1998). Textbook on EC Law. London: Blackstone Press Ltd

Yin, R. (1994). Case Study Research. London: Sage publications

25

CHAPTER 1

Literature Review

Part I

Presentation of The Context

Chapter 1

26

A. THE LEGISLATIVE BACKGROUND

A.1 The Evolution of Labour Law in Western Europe

From an article of Mark Jeffrey (1997, pp. 205-228) we can summarise the

historic development of labour law in Western Europe as follows:

In the geographical area of the European Union, historically, the accumulation of

regulations in the areas of labour law and social security law was the result of a series of

responses to perceived threats to the established social order. Any benefits for the

workers concerned were largely the means to the end being aimed at (that is, social

stability), and not to the ends in themselves (p. 206). Some workers in a relatively

weak industrial position especially women and children were the subject of some of

these laws, but the main focus remained on those workers who were perceived as the

principal threat to the social order: mostly the unionised, skilled, male, manual workers

in heavy industry the typical workers. Since the end was social stability, eventually

the workers who were not perceived as a threat the atypical workers were ignored

or deliberately excluded by legislature, the exclusion being occasionally reinforced by

the courts and, sometimes, by collective agreements.

Throughout the countries which now constitute the European Union, the

conception of social rights6 is relatively recent, as it was developed in the last few

decades during which perceptions of law and rights, of work and of workers have all

6 Koukiadis (1985, p. 1-5) attributes the labour legislation to the need of protection of the weak part of

the employment contract, the worker, against the potential peremptoriness of the strong part, the

employer.

Literature Review: The Context

27

been changing. Factors which influenced this evolution were the vast increase in the

volume of the legal and collective regulation of work, and parallel with this, the

expectation that all workers should enjoy the same social rights. The sharp decline in

heavy industry and the growth in services, which have greatly emphasised the

importance of forms of work which do not correspond to the typical stereotype, made

the exclusions of workers from social legislation to seem unfair. Finally, the way in

which womens work is perceived has changed and is now widely accepted as it should

not be undervalued, although this principle is still far from having been translated into

practice (ibid, p. 206).

A.2 The Evolution of European Labour Law within the EEC

According to Bercusson (1996, p. 8) the national laws in the original six

Member States were not conceived of in terms of the European Communities. However,

the evolution of labour law and social law of the Community was inevitably influenced

by the mature and maturing conceptualisations of the national labour laws of the

original Member States and of later adherents (ibid, pp. 9-10, also Barnard and Deakin,

1998, p. 135). Conversely, as (E)EC labour law and social law norms developed, they

began to influence the formulation and conceptualisation of national labour laws (ibid).

Hence, the two processes are now linked in a specific symbiosis (ibid). In formulating

(E)EC labour law, the law- and policy-making institutions of the EC had to come to

terms with these systems and were influenced by them7.

7 Bercusson provides a number of examples from different periods that, according to him, illustrate the

historical continuity if this influence: The insertion of Article 119 of the Treaty of Rome was due to

the insistence of France , concerned to extend its own legislation on equal treatment on men and

women. The Commissions proposals beginning 1970s on workers participation in company structures

owe their inspiration to the German law co-determination. The Thatcher governments declared policy

of labour law deregulation in Britain during the 1980s led to blockage of new EC social regulations

during that decade. The Danish tradition of basing law primarily on collective agreements between the

social partners (trade unions and employers associations) rather than legislation, and Italian emphasis

Chapter 1

28

A.2.a 1957-1973: The Market Approach of Labour Issues

The Treaty of Paris in 1951 on the ECSC provided its authorities with powers to

enable them to restructure the coal and steel industries. This included measures to deal

with the social consequences for workers in this process, including retraining, relocation

and housing (ibid).

The Treaty of Rome on the European Economic Community, much closer in

spirit to the labour market policies of the Member States during the 1950s, did not

follow the precedent of the ECSC (ibid, pp. 12). The EEC was founded to create a

common market in services, goods, capital and labour, having as cornerstone in the

social field the free movement of workers (ibid). But, freedom of movement for labour

in a common market as a founding objective is quite different from the objectives

associated with national labour laws and also those of international labour standards.

However, this primary association of EEC labour law with free movement provides the

initial context of labour and social law of the Community in its earlier stages (ibid).

Hence, the first fifteen years of the EEC (1957-1972) are usually identified as its

neo-liberal phase, with emphasising solely on free movement of workers and labour

mobility within the Common Market to the exclusion of other social policy initiatives

(ibid). The return to concerns on workers rights and industrial democracy initiatives

influenced EEC labour law only after the Paris Summit of 1972 and the Action

Programme of 1974 (ibid, pp. 10).

on the autonomy of the Social Partners, led to pressures allowing for EC labour law Directives to be

implemented through collective agreements. Finally, the experience of constitutionalisation of social

and economic rights in the new or revised constitutions of Greece, Spain, Portugal and the Netherlands

contributed to the formulation of the Community Charter of fundamental Social Rights of Workers of

December 1989 (1996, pp. 9-10).


29

A.2.b 1974-1980: The Golden Era of European Labour Law

This period has been characterised as the golden era of Labour Law in the

EEC (Blanpain and Koukiadis, 1993, p. 60). The Action Programme, which was

adopted by the Council of Ministers on 21 January 1974, had as priorities the

achievement of total employment under better conditions, the improvement of living

and working conditions, the harmonisation of national labour laws of the Member

States, and the upgrading of the roles of labour and management in the planning and

adoption of social policies, together with the upgrade of the role of the employees in the

enterprise (ibid, pp. 61-62). During that period the Council of Ministers adopted the

landmark Directives on equality between the sexes (equal pay, equal treatment, social

security) and the Directives on collective dismissals, acquired rights upon transfer of

undertakings and protection of workers in insolvency.

A.2.c 1981 - 1991: The Interaction between UK Politics and EEC Social Concerns

During the 1980s, the legislative process in the EEC in terms of Labour Law was

held back as a result of the British governments counteraction8. As a result, the

Community legislation was reduced only to health and safety issues. Thus, in the

following years the activity of the Community in the social field was characterised by

the conflict between the UK government, which was determined in blocking every

policy at the social field which was not in terms with its deregulation plans, and the

attempts of the rest of the Member States and the EEC authorities to overcome the

British opposition. For reasons of conciseness, we will not continue with the

presentation of the issue, since it is discussed more extensively under section A.4.

8 According to all the sources reviewed

Chapter 1

30

A.2.d The Developments in Maastricht

The Treaty on the European Union, signed by the Member States of the

European Community on 7 February 1992, included a Social Chapter in the form of

the Protocol on Social Policy (No 14) and an Agreement (Social Policy Agreement)

annexed to the Protocol between all other Member States except the UK, also on Social

Policy (Bercusson, ibid, p. 35). The Protocol noted that the Member States wish to

continue along the path laid down in the 1989 Social Charter [and] have adopted among

themselves an Agreement to this end, and formed an integral part of the EC Treaty.

The Agreement was stated in the Protocol to be annexed to the Protocol and became,

therefore, part of Community law (ibid). Similarly, any measures adopted using the

institutions, procedures and mechanisms of the Treaty have had effects in Community

law, as far as all Member States except the UK were concerned. The UK opted out of

the Social Chapter, the Agreement and the Treaty on the European Union (ibid, p.38),

but the British social partners remained within the organisations of labour and

management at EC level (ibid, p. 28). However, the exclusion was not considered to be

permanent and alternatives for the UK to opt in were provided (ibid).

A.2.e The Treaty of Amsterdam

According to Barnard and Deakin (1998, p. 133), the most significant part of

the Treaty of Amsterdam () regarding social policy was the introduction of a new

Chapter on Employment. According to Article 1 of the new Title in the Treaty,

Member States and the Community shall work towards developing a co-ordinated

strategy for employment and particularly for promoting a skilled, trained and adaptable

workforce and labour markets responsive to economic change. However, the

protagonists remain the Member States: according to Article 3 the Community is to

support and, if necessary, complement their action. On the other hand, Article 4 permits

the Council to adopt certain labour market policies, albeit in the form of soft law,

drawing up guidelines on employment (ibid). The Luxembourg European Council of 21

November 1997 decided to put the new Title on Employment into effect immediately in


31

order to implement the provisions on co-ordination of Member States employment

policies from 1998. The co-ordination was based upon employment guidelines drawn

up by the Commission, this time structured around the four pillars of employability,

entrepreneurship, adaptability and equal opportunities (ibid).

A.2.f An Overview: European Social Policy

According to Barnard and Deakin (ibid), the traditional model of social policy

at national level encompasses social insurance, public assistance, health and welfare

services and housing policy. Although both the EC Treaty and the Commissions White

Paper of 1994 talk of a Community social policy, most of these concerns are absent

from the Commissions concept of the term: in the place of the traditional model there

exist rules relating to sex equality in the workplace (but not yet racial equality), health

and safety, and protection in the case of corporate restructuring. Therefore, the

terminology of social policy masks what is in essence employment related social

policy and an eclectic body of employment law at that (ibid).

A.3 The Evolution of British Labour Law

At the dawn of the one-speed European Union, there are three main

characteristics of British Labour Law, which distinguish it from the legal systems on

employment that exist elsewhere in Europe: a singular relationship between collective

bargaining and social legislation, a degraded role of collective bargaining, and, in

general, minimal regulation of the employment relationship. The vicious circle, which

resulted in the current situation, can be briefly described as follows:

Chapter 1

32

A.3.a Collective Laissez-faire

From the beginning of the Industrial Revolution, legislation in the UK played a

relatively limited role in directly regulating employment relations, and the greater

importance traditionally was accorded to voluntary sources, of which collective

bargaining has been the most important (Deakin and Morris, 1998, p. 15). In 1954,

Kahn-Freund wrote that there is, perhaps, no major country in the world in which the

law has played a less significant role in the shaping of [labour-management relations]

than in Great Britain (ibid, p. 47). By this, according to the same authors, he meant that

not only was collective bargaining, and not legislation, the principal source of norms

governing wages, working time and other terms and conditions of employment for most

workers; but also that legislation played little or no role in determining the form which

collective bargaining between labour and management should take. Kahn-Freund

described the result as collective laissez-faire. And, although in this system the state

was not absent, or neutral, still it retained for legislation the role of subsidiary to that of

voluntary bargaining (ibid, p. 16).

A.3.b Deregulation and the End of Trade-unionism

As a result, in the beginning of the 1980 s, formal labour law regulation was

comparatively weak in Britain, but extra-legal sources of regulation were

correspondingly strong, as part of the legacy of collective laissez-faire (ibid, p. 45). The

Conservative Administration of the years between 1979 and 1997 chose to adopt instead

a programme of economic deregulation and further liberalisation, designed to

promote product-market competition and reduce the size of the public sector (ibid).

Reform of industrial relations and restructuring of the labour market were central parts

of this wider economic programme. Legislation limited and finally virtually abolished

the collective laissez-faire, at the same time as statutory employment rights were

qualified and in some instances removed completely, in favour of a return to the

common law institution of the individual contract of employment (ibid). What was

perhaps most remarkable about this programme of reform was the use of labour law not


33

as a means of achieving distributive goals or embodying a notion of industrial - or social

- justice, but as part of an economic policy designed to foster competitiveness (ibid,

p.39).

Furthermore, on the grounds that it would promote labour market flexibility,

within individual labour law a policy of partial or selective deregulation was adopted,

removing legal protections even for the young workers and the low paid (ibid, p. 43).

A.3.c The Role of Common Law

On the other hand, Common Law, which was favoured as a source of labour law

by the deregulation process, had been traditionally sceptical of collectivism and

simultaneously consistent in aiming to retain conditions of economic liberalism, thus

reducing even more the employee protection in the workplace (similarly Deakin and

Morris, ibid, p. 14).

A.3.d The British Labour Law in the Context of the EEC

A comparative study of the labour law in the ten EEC members of 1982 and

Switzerland (Ellis and Storm, 19829) shows that, even at the time when the labour

market in the UK was much more regulated than today, the employment conditions

were still far below the standards in the other European countries - members of the

EEC. Ever since, and while the labour market in Britain was following its individual

route to deregulation, the other Member States were strengthening even more their

social legislation. Hence, even if the EEC legislation represented the lowest common

denominator among the other Member States, the UK regulations stood below it.

9 See pp. 117-140, 152-160, 186-206, 247-257, 293-302, 337-340, 383-389, 430-441, 491-511, 550-553

and 598-604.

Chapter 1

34

A.4 The Interaction Between the UK and the (E)EC Labour Law

As already stated, the accession to the EC of the UK in 1973 coincided with the

beginning of a period of legislative activity in the field of EC labour law, which

according to Bercusson has been so far unique (ibid, p. 27). The impact of the five

Directives on equality issues and acquired rights, all adopted during that period, on

domestic labour and social law has been profound (ibid). The change of UK

government in 1979 led to the adoption of an official attitude of fundamental hostility to

the social dimension of the integration process (ibid) while, on the other hand, the trade

union and labour movement reversed their previous hostility (ibid, p. 31). It is

commonly accepted that, since 1979, EC legislative activity in the labour field has

largely halted in the face of the UK governments rejection of almost all proposals from

the Commission, and their consequent failure to achieve the necessary unanimous

approval in the Council of Ministers10.

According to Bercusson, this UK veto was one of the reasons which led to the

initiation of the policy of stimulating the European Social dialogue as an alternative

path to a social dimension for the EC (ibid, p. 28). During the 1980s, two more

strategies were developed to maintain and continue Community Social policy and

labour law (ibid, p. 65): The first was the use of indirect financial instruments to

promote social policy initiatives and to further labour law objectives, with the principal

instrument the European Social Fund. The second involved amending the Treaty of

Rome to allow for qualified majority voting on social policy issues. This culminated in

the Social European Act 1986, under which articles 100A and 118A were added to the

Treaty of Rome, although in the text of the Act there was no direct reference to Labour

Law (Blanpain and Koukiadis, ibid, p. 62). According to Bercusson, the end result of

the tension was manifest in the Community Charter of Fundamental Social Rights of

Workers of 1989, which was signed by all the Member States with the exception of the

UK (ibid, p. 28). However, the Charter was no more than expression (declaration or

10 From all sources, also referred in Bercusson (ibid).


35

reclamation) of the political will of the signing parties, therefore it did not have any

legal effects (Blanpain and Koukiadis, ibid, p. 63, also Barnard, 1996, pp. 61-3).

As stated before, the UK opted-out of the Treaty on the EU, the SPA and the

Social Chapter. However, a change of government in the UK On May 1997 led to a

change of approach towards the Amsterdam Treaty negotiations (Barnard and Deakin,

ibid, p. 133) and the UK agreed to opt-in to the Social Chapter. As a result, the SPA was

merged with the Chapter on Social Policy (Articles 117-121) on the EC Treaty to form

part of mainstream Community law. The force of the Directives already adopted under

the SPA has been extended to the UK by the means of extension Directives under

Article 100 EC.

A.5 Transposition of (E)EC Labour Law into Domestic UK Law

According to Bercusson, EC social and labour law can be incorporated in the

UK by various ways and methods (ibid, p. 28). By the passing of primary legislation,

through the House of Parliament, or by secondly legislation, through acts of the

Administration: Section 2(2) of the European Communities Act 1972 gives power to the

Ministers to make regulations. Thirdly, the UK courts have accepted the EC law

doctrines of vertical direct effect (please see section B.2, infra) and that UK legislation

must be interpreted in accordance with the requirements of Community Law. If such

means do not secure the full and appropriate implementation of EC labour legislation,

the Commission is able to pursue infringement proceedings under Article 169 of the

Treaty of Rome.

B. THE EU INSTITUTIONAL FRAMEWORK

Chapter 1

36

B.1 The Basic Institutions

B.1.a The European Parliament (EP)

According to Blanpain and Engels (1998, p. 42), the EP consists of 626

representatives of the peoples of the States brought together in the Community (Art.

137 of the EC Treaty). Its members are elected by direct pan-European elections and

their mandate lasts 5 years. The EP is a very special parliament, in that there is not a

Government which has to rely on its confidence (ibid, p. 43). Also, for the EP to

exercise a certain control over the Commission and to censure the Commissions

activities, a certain procedure has to be followed, which, according to Blanpain and

Engels, constitutes such a huge task that it has no real significance in practice. The EP

has a consultative and supervisory role, the latter being most important in regard to the

budget, and its legislative role is slowly expanding. Its important powers in relation with

employment law are in the cooperation and the conciliation procedure, which are

discussed under section E (infra). Except where otherwise provided in the Treaty, the

EP acts by an absolute majority of votes (ibid, p. 44).

B.1.b The Council

The Council of the European Communities, established by Article 1 of the

Merger Treaty of 1965, is undoubtedly the most important European institution, since it

is the principal European legislator (ibid, p. 44). According to Article 2 of that Treaty,

the Council consists of representatives of Member States. Each Government shall

delegate to it one of its members. Which member assists at a given meeting depends on

the agenda (ibid). If the Social Council meets, the Ministers competent for these affairs,

e.g. the Ministers of Employment will attend. The social council is one of the sectorial

or specialised councils. If general points are on the agenda, the Ministers of Foreign

Affairs will meet in the General Council. The European Council is the Council of Heads


37

of Governments and Prime Ministers, which meets three times a year together with the

Ministers of Foreign Affairs. The Council is an institution of the Community. This

means that, although national interests are defended in the Council and the Ministers

defend the point of view of their respective Governments, Member States are bound to

take all necessary measures to realise the objectives of the Communities (Article 5 of

the EC Treaty).

The most important tasks of the Council relating to Labour Law are (ibid, p.

45):

- the organisation of free movement of workers (Art. 48-51 EC Treaty);

- the approximation of (labour) laws (Art. 100-102 EC Treaty);

- the elaboration of a social policy (Art. 117-122 EC Treaty);

- the implementation of decisions regarding the Social Fund (Art. 125 EC Treaty);

- the development of quality education and vocational training (Art. 126-127 EC

Treaty);

- the promotion of stronger economic and social cohesion (Art. 130A-E);

- the implementation of the Social Charter and the Agreement on Social Policy.

The Council acts by absolute majority, qualified majority or unanimity. Absolute

majority is the general rule (Article 148(1) of the EC Treaty). In practice, however, the

general rule is the exception and qualified majority is the rule (ibid).

In regard to labour law, a qualified majority is needed for the following issues:

- free movement of workers (Art. 49 EC Treaty);

- the establishment of the internal market (Art. 100A EC Treaty);

- the improvement of the working environment, health and safety of workers (Art.

118A EEC Treaty);

- economic and social cohesion under the Art. 130E (EC Treaty);

- the European Social Fund (Art. 125 EC Treaty);

- the implementation of the Maastricht Agreement on Social Policy (partly).

Chapter 1

38

Unanimity is required for decisions regarding the rights and interests of

employed persons (Art. 100A(2) EC Treaty) and for economic and social cohesion

purposes under the Art. 130D (EC Treaty);

B.1.c The Commission

The Commission consists of 20 members chosen on the grounds of their

general competence and whose independence is beyond doubt (Art. 157(1) EC Treaty).

Smaller countries have one national as a member and larger countries have two. The

Commissioners term of office is 5 years and is renewable (Art. 158 EC Treaty). The

Commission acts by majority vote (11 votes). Under the Maastricht Treaty, the EP has a

say in the appointment of the Commission. The Commission is, in contrast to the

Council, European par excellence (ibid, p. 47): Art. 157(2) of the EC Treaty prescribes

that the members must, in the general interest of the Communities, be completely

independent in the performance of their duties. In principle, they may neither seek nor

take instructions from any Government or from any other body and each Member State

has the obligation not to influence the members of the Commission.

Each Commissioner is accountable to the EP for all decisions taken by the

Commission. Nevertheless, there is a division of labour, which takes place under the

form of a distribution of portfolios: each Commissioner is thus competent for a number

of directorates-general. This means, for example, that the Social Commissioner is

responsible for employment, industrial relations and social affairs, education and

training. Directorate-general V is for employment, industrial relations and social

affairs.

The most important task of the Commission is undoubtedly its participation on

the European legislative process (Art. 155 EC Treaty)11. In quite a number of cases,

the Treaties indicate that the Council can only act on a proposal of the Commission. The

11 Please see subchapter E, infra.


39

Council can only act with unanimity if it amends such a proposal, while the

Commission is entitled to change its proposals, as long as the Council has not made a

decision, either at its own initiative, or at the request of the Council itself, of the EP, or

the Economic and Social Committee (ibid). Another important task of the Commission

is to ensure that the provisions of the EC Treaty and the measures taken by the

institutions pursuant thereto are applied (Art. 155 EC Treaty). If the Commission

considers that a Member State has failed to fulfil an obligation under the Treaty may

bring the matter to the ECJ (Art. 169 EC Treaty). It also has a decision-making power

of its own and is competent to conduct negotiations that may lead to the conclusion of

international agreements (ibid).

B.1.d The European Court of Justice

According to Art. 164 of the EC Treaty, the Court ensures that in the

interpretation and application of this Treaty the law is observed. The Member States

undertake to respect the competence of the Court regarding disputes concerning the

interpretation or the application of the Treaty (Art. 219 EC Treaty). It consists of fifteen

judges and is assisted by nine Advocates-General. The members of the Court are

proposed by the Governments of the Member States and their six-year term of office is

renewable.

The Court is competent to judge whether Member States live up to their duties

under the Treaties (Art. 169-170 EC Treaty), and to review the legality of the acts of the

Council and the Commission and whether they need to be declared void (Art. 173-174

EC Treaty). The Court has also the jurisdiction to make preliminary rulings concerning

the interpretation of Community law at the request of courts or judges of the Member

States (Art. 177 EC Treaty). These rulings are binding for the national judges. The

judgements of the ECJ are made in last resort and are consequently not susceptible to

appeal. They are enforceable in all Member States of the Community. Natural and

private persons also have access to the Court (ibid).

Chapter 1

40

In conformity with Art. 168A of the EC Treaty, a Court of First Instance was

attached to the ECJ, in order to ease the case load of the latter. Its jurisdiction includes

the disputes regarding the Communities and their staff, appeals by enterprises

concerning ECSC levies, production quotas, prices and competition, and certain appeals

relating to compensation concerning the points raised above.

B.2 The Social Partners

The most significant changes introduces by the Social Chapter relate to the way

that decisions are made and legislation is passed (Barnard, ibid, pp. 67-68). The Chapter

envisaged a twin-track approach: on the one hand legislative, following the usual

channels, subject to certain amendments to take account of the UKs absence, and the

other collective. This second approach permitted the substitution of Community

legislation by an agreement between the Social Partners (usually referred as

management and labour), reflecting an increased role for the Social Partners in the

EU, and incorporating subsidiarity as regards the choice, at Union level, between the

legislative and collective approach (Bercusson, 1994, ibid).

The recognised Social Partners in the EU are the European Trade Unions

Confederation (ETUC), the Union of Industrial and Employers Confederations of

Europe (UNICE) and the European Centre of Enterprises with Public Participation

(CEEP). UEAPME, the organisation for small and medium sized enterprises, has

unsuccessfully challenged its exclusion from the negotiations on parental leave before

the Court of First Instance (Barnard and Deakin, 1998, p. 133)12.

C. THE MAIN SOURCES OF EU LABOUR LAW


41

C.1 Primary Sources of EU Labour Law: The Treaties

The European Coal and Steel Community (Paris, 1951), the European Economic

Community (Paris, 1951) and the European Atomic Energy Community or EURATOM

(Rome, 1957), including their Annexes, Protocols and Conventions13, constitute the

founding Treaties of the European Community (Blanpain and Engels, ibid, p. 35,

Barnard, ibid, p. 15) and the primary sources of Community Law. To these we should

add their amendments through the Merger Treaty of 1967 (Paris), the Single European

Act (1986), the Treaty on the European Union (Maastricht, 1991), and the latter

development, the Treaty of Amsterdam (1997), with their respective supplements.

Together, they form the backbone of the European Union, its constitutional character,

and thus take precedence over any secondary or derived legislation which conflicts with

their provisions (Barnard, ibid, p. 15). After the consolidation of the Treaties in

Amsterdam, the Primary Sources of Labour Law are addressed in Articles 39-42

(previously, 48-51) on the Free Movement of Workers, in Art. 125-130 (pr. 109N

109S) on Employment, and in Art. 136-150 (pr. 117-127) on Social Policy, Education,

Vocational Training and Youth.

C.2 The Directives as a Source of EU Labour Law

The Directive is one of the three legally binding sources of secondary law, the

other two being the Regulation and the Decision (please see next section, C.3). It is

binding to the result to be achieved, upon each Member State to which is addressed, but

leaves to the national authorities the choice of form and method (Art. 189 EC Treaty).

Since it is only the result that counts, the implementation of a Directive can be done by

all appropriate legislative means (Blanpain and Engels, ibid, p. 55). The intention of the

12 Case T-135/96, Judgement of 17 June 1998.

13 Which form an integral part of the Treaties, according to Article 239 EC

Chapter 1

42

Directives is to harmonise (though not make identical) the law in Member States. The

employment related Directives are the main secondary source of EU employment law

(ibid).

The directives are produced after a long period of drafting by experts, exposure

for comment, approval by EEC bodies, redrafting and re-exposure. Comments on the

proposed directives may be made by individuals or representative bodies at many of

these stages. To cater for difficulties encountered in individual states or by individual

types of business (Coopers and Lybrand, 1980):

- In many cases, derogations are permitted allowing a Member State not to

legislate in accordance with particular terms of the directive but instead to enact

alternative legislation normally to achieve the same objective in a different

manner;

- A contact committee has been established whereby the Member States can, in a

consultative capacity, review practical problems arising from the application of

directives and advise the Commission on any supplements or amendments to be

made to Directives.

Due to jurisprudence of the European Court of Justice in several cases, a

question arose in terms of the direct effect of the Directives towards the national legal

systems (Morris, 1988, p. 233). The issue is further discussed in subchapter E (infra).

The Directives are Community law and not in themselves law directly

applicable in the Member States. They take the form of binding instructions by the

Council of Ministers to Member States, requiring them to enact law in accordance with

the provisions of the Directives (Blanpain and Engels, ibid p. 55). Individual Member

States governments are bound by the Treaty of Rome to comply with those

instructions. However, they may not be considered law in national level before being

transposed into national law by the national legislature (ibid).


43

C.2.a Common Principles Across the Employment Related Directives

This paragraph is not aimed at presenting the general principles upon which the

adoption of the Directives was based, but to cite principles which are common in the

texts of the Directives to be presented in the main analysis. It purpose is only to help in

not having to repeat remarks to be made upon the same issues.

Subsidiarity and Proportionality

The application of the principle of subsidiarity is an issue which has triggered a

longstanding legal debate in the EU. However, the most important thing in the

framework of this study is that the principle, found in the texts of all the Directives

related to this topic, means that action is being taken at Community level only when the

Member States cannot achieve a better regulatory result (Barnard, ibid p. 80). On the

other hand, proportionality means that the measures taken are the minimum required

for the attachment of those objectives and [do] not go beyond what is necessary for the

purpose (from the Directive on fixed-term work, recital 16). Both principles have been

set out by Article 5 of the Treaty of Rome (ibid). Another aspect of the principles is

commonly met in their provisions on implementation (usually the last set of provisions),

where the Directives declare that the Member States can maintain or introduce more

favourable provisions than the ones the Directives set out, and that the measures the

Directives provide do not prejudice the right of the Member States to introduce different

measures as long the principles declared in the main text of the Directives are respected.

Non Victimisation

According to Lewis (1997, p. 69), victimisation means the harassment by legal

or practical means of people simply because they have given evidence in connection

with proceedings, have brought proceedings or intend to do so against someone under

the provisions of the source of law in question. All of the Directives related to our topic

deny victimisation.

Chapter 1

44

Non Regression

This is another principle met in all the Directives to be examined. It deters the

Member States from reducing the general level of protection afforded to workers in the

field of the Directives.

C.3 Other Secondary Sources

The sources of secondary law are the Directives, the Regulations and the

Decisions, which are legally binding, and the Recommendations and the Opinions,

which are not binding (Blanpain and Engels, ibid , p. 55).

C.3.a Regulations

The Regulations have general application, are binding in their entirety and

directly applicable in all Member States (Art. 189(2) EC Treaty). A regulation is

clearly a generally binding norm, like an act of parliament (Blanpain and Engels, ibid, p.

55). It is immediately and directly binding without any specific intervention of the

national authorities. Consequently, they supersede national law; national law which is

contrary to a Regulations is null and void and may not be applied. Despite their

undoubted direct applicability, their direct effectiveness is conditional (Barnard, ibid p.

31) (please see next subchapter, D). In the case of a regulation with direct effectiveness,

the effect will be vertical and horizontal (ibid).

C.3.b Decisions

Like the Regulations, the Decisions are binding to their entity upon those to

whom they are addressed (Art. 189 EC Treaty). The can be addressed to natural or legal


45

persons (Blanpain and Engels, ibid, p. 57). They are not general norms: they are

directed to specific persons. Decisions which are addressed to the Member States can

have direct effect. They are notified to those to whom they are addressed and take effect

upon notification.

D. HIERARCHY BETWEEN EU AND NATIONAL LAW

D.1 The Question of Supremacy of EU Law

In the early case of Costa v ENEL the ECJ established that, where national law

conflicts with directly effective (please see paragraph D.2.b, infra) Community law,

Community law prevails (Barnard, ibid, p. 27). According to a not unchallenged

opinion expressed in Barnard (ibid, p. 28), on the basis of the judgement of the ECJ on

Simmenthal, the doctrine of supremacy of the Community law applies irrespective of

the nature of the Community provision (constitutive Treaty, Community Act or

agreement with a non-Member State) or the national provision (Constitution, statute or

subordinate legislation)14; it also applies irrespectively of whether the Community

provision comes before, or after the national provision: in all cases the national

provision must give way to Community law.

14 However, Areios Pagos, one of the two supreme Courts of Greece, in a recent judgement denied the

application of the doctrine over the provisions of the Greek Constitution. Under the implications of such

a ruling, the issue has to be investigated further.

Chapter 1

46

D.2 Applicability and Effect of EU Law

It is not uncommon for the concepts of applicability and effect to be confused,

even in the case law of the ECJ15. According to Winter (cited in Barnard, ibid, p. 31),

applicability connotes the quality of applying within the domestic legal system even in

the absence of implementing legislation. Effect describes the quality of giving rise to the

rights which an individual may rely on in a domestic court. A measure which is directly

applicable is not necessarily directly effective.

Another issue with importance for the needs of our analysis is in terms of the

vertical and horizontal effect of a Community provision: vertical effect means the

ability of a person to turn against a Member State (or the Community), relying on a

right provided by the Community provision, while horizontal effect means the ability to

turn against another person. It is accepted (ECJ rulings in Van Gend en Loos and

Defrenne II ) that the provisions of the Treaty have both vertical and horizontal effect.

D.2.a Direct Effect

From a dissertation written by J. Fairhurst (1997, pp. 34-40) we are informed

that the ECJ developed the principle of direct effect in Van Gend en Loos v Nederlandse

Administratie der Belastingen [1963]. In that decision, the Court creatively established

that the Treaty may create rights which an individual may enforce directly in the courts

of the Member States. [] However, in establishing the general principle of direct

effect, the ECJ limited its scope only to those provisions which were sufficiently precise

and unconditional. [] A Community provision is unconditional when it is not subject,

in its implementation or effects, to any additional measures by either the Community

Institutions or the Member States. In order to be sufficiently precise (or clear and

15 See Defrenne II, [1976] Case 43/75, where applicability is mentioned but effect is meant (Barnard, p.

31)


47

unambiguous) it is necessary to be able to identify the persons who are entitled the

right, ascertain the content of that right, and identify the person/body liable to provide

that right. [] In Francovich v the Republic of Italy it was made clear by the Court that

the fact a Member State may have a number of possible options (or derogations)

available to it when adopting or implementing legislation will not necessarily prevent

the content of the measure from being adjudged to be sufficiently precise.

For the EC Treaty Articles and the Regulations to have direct effect the only

conditions to be met are the ones described above. Also, their effect, once ascertained, is

always horizontal and vertical. As for the Directives, an additional condition applies:

the Directive in question not to have been transposed into national law within the time

limit specified in its body, either not at all or not correctly (Pubblico Ministero v Ratti

[1979]and Becker v Finanzamt Munster-Innerstadt [1982], cited in Barnard, ibid pp. 31-

32). Also, Directives can only have upward vertical effect (Marshall v Southampton

Health Authority [1986] and Dori v Recreb [1994], ibid). Their effect does not depend

on the capacity in which the State is acting, whether an employer or a public authority.

D.2.b Indirect Effect

The doctrine of indirect effect is of particular importance for the Directive

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