Protectionism will jeopardise more jobs

The outcry over British jobs going to foreign workers is understandable if indeed the Italian company that won the tender for work at the Total oil refinery has a discriminatory policy (which would be illegal under European law) not to employ British workers.

This claim must be investigated urgently, as must allegations that the company concerned is circumventing British labour standards by undercutting pay, conditions and health and safety standards, which would also be illegal under European law (apart from one major loophole, of which more below).

But it cannot be claimed that only British companies should have been able to tender, or that the company should be obliged to take on only British citizens. As one national newspaper reminded us today, there are two million British citizens living and working in the rest of the EU, but only one million people from other EU countries living in the UK. A protectionist or discriminatory policy would rebound at put those British jobs at risk.

What can be and should be investigated is the wider claim that rulings from the European Court of Justice have created a loophole, underminding the intention of EU legislation that was intended to ensure that companies cannot circumvent national rules about pay and working conditions by bringing in employees from abroad employed under less stringent rules of another country. Foreign contractors who employ their own staff on a temporary project are bound by the EU's "posted workers" directive (not, as the Daily Telegraph said, the "postal workers directive!), which stipulates that the foreign employees must enjoy the same rights as local workers, not undercut them. I have blogged before about how certain court rulings have undermined one aspect of these protections, and I have also pointed out how small changes in the law can rectify the problem.

The expression "British jobs for British workers" means making sure that British workers are able to access good employment opportunities, equipped with the right qualifications, and without any discrimination against them. To take it further and argue that jobs should only be given to nationals of the country concerned would have dangerous consequences (e.g. you must be German to work in Germany, you must be Irish to work in Ireland, Spanish to work in Spain, etc) that would ultimately jeopardise British and other workers.

Debating Viking and Laval - why the ECJ rulings show we need to change the law to guarantee workers' rights

The Parliament today debated a report by Swedish Social Democrat Jan Andersson, looking at the effects of the recent rulings, in particular - Viking, Laval, Rüffert and Luxembourg - by the European Court of Justice. These cases have, rightly, caused a great deal of consternation amongst trade unions in that the court seems to have given a higher priority to the freedom to provide services to the right to join a trade union, negotiate and enforce collective agreements and take industrial action.

For instance, in the “Laval” judgment of 18 December 2007, the ECJ ruled that a service provider from another Member State is not obliged to respect local collective agreements that aren’t legally obligatory on third parties. The answer is surely to give collective agreements recognition in national legislation, as is done in many countries. Then, any service provider from another Member State would be obliged by law to respect national collective agreements when providing services in the country in question.

In the Ruffert case, the Court accepted a national court ruling to overturn a measure requiring companies supplying a public sector institution to pay a minimum wage, on the grounds that: a) the “Building and public works collective agreement" only applied to public contracts and so covered only part of the construction sector; and b) there was no evidence to show that construction workers on public works needed more protection than those on private works. The answer is surely to make such requirements binding also on the private sector. Indeed, it is surely an anomaly that it doesn’t!

In this same judgement, with reference to the Posted Workers Directive (PWD), the Court said that the collective agreement did not fix a minimum rate of pay in accordance with any of the procedures laid down in the Directive (e.g. by law, regulation or universally binding collective agreements). It had not been declared universally applicable, as required by the Directive, even though there is a system for doing so in Germany. Again, the answer is surely to declare the agreement to be universally applicable, as provided for in the directive.

Some have suggested that the problem could be solved by having a new Social Protocol, annexed to the treaties. This would be very welcome but, in practice, would require the unanimous support of all Member States and would hence be extremely difficult to obtain.

We should be clear that not much is to be gained from blaming the Court or suppose that the Court has an anti-social bias – after all, the court merely clarifies what the state of the law is – rather, we should focus our attention on rectifying the underlying legal situation. In other words, the Laval, Ruffert, Luxembourg and other judgments tell us that it is the law, not the Court, that is the ass, in allowing the court to make an extremely minimalist interpretation of the PWD. Given that the ECJ rulings reveal that existing laws are inadequate, it is up to us to change the law - broadening the legal basis of the PWD to include a reference to the free movement of workers and to ensure that the PWD does not allow companies to undercut wages and working conditions in host countries.

The Andersson report is a useful contribution to this controversial and highly legally complex debate. Amongst its conclusions are a recommendation that EU countries should properly enforce the PWD, and a demand that the Commission draft legislative proposals to deal with the legal loopholes thrown up by the judgments and to prevent any conflicting interpretation of the law. Indeed, this is a point that should be part of our campaign in next year's European elections; that we will use our power to vote against the new Commission if they do not include the necessary legislative proposals in their first work programme.

The Commission has made encouraging noises in this regard. In April, a Commission statement emphasised that the freedom to provide services did not contradict and was not superior to the right to strike, organise and join a trade union or negotiate collective bargaining agreements. We need to ensure that they follow up their words with action.

Last night I went head to head with Graham Stringer on BBC Radio 4, debating the proposed EU treaty.

You can listen to the whole discussion by clicking on the link on the Westminster Hour webpage here.

Another useful link:

John Redwood's latest return from the wilderness won him extensive headlines with his deregulation, red tape-cutting policy proposals. Many people couldn't believe the Conservatives returned to Redwood, though many of his ideas went down well with the right-wing press.

The TUC has produced a paper on what Tory deregulation, including the Working Time Directive, would mean. It's also a useful guide to what the EU's Social Chapter actually is. Click here to read.

So, the Tories seem to have abandoned their short-lived, "moderate" strategy and taken a turn to the right and deeper into anti-European territory.

The move comes in a desperate attempt by Cameron to boost his lagging popularity. It might help him placate the right wing of his party, and save him from attempts by them to oust him, but it will not help with the wider public.

The manoevre comes via a report drawn up by former cabinet minister John Redwood who claims his “war on red tape” will cut £14 billion, in what he described as “a tax cut by any other name”. But this money isn’t going to magically appear out of thin air. It will come at a cost: less safety protection at work, no statutary paid holidays for employees, no guaranteed maternity or paternity leave, lower standards of consumer protection and more damage to the environment.

Such ‘magic money’ is guesswork as to how much it will really save companies, but it is extraordinary to focus on cutting health and safety legislation where any short term saving will be outweighed by long term costs to the Health service.

Will they spell out to people that "we’ll give you tax cuts, but by the way you might not be able to have any paid holidays any more at work"? A strange way to win hearts and minds!

As to the promise to opt-out of European legislation, they have (of course) totally ignored the point that many of these rules are intended to cut red tape. The fact that a small firm can now register a trademark once and it is valid across 27 European countries, instead of having to go through 27 different national procedures each with their own forms, fees and hassle, is a benefit from EU legislation. So is the ability of British lorries to take our exports to, say, Milan, showing only a single administrative document at frointiers instead of the dozen or so at each frontier that used to be necessary.

And unilaterally opting out of the common rules for the common market that we have agreed with our European partners is not so easy. Do the Tories really think that they will say "yes, by all means, play to a different set of rules from the rest of us, we don't mind"? Would they let British companies alone not abide by minimum standards for environmental protection, consumer protection, workplace safety, decent treatment of staff and so on?

Of course they wouldn't. It would mean the end of the common market. The Tory Eurosceptics know this. They see it as part of their strategy for leaving the EU, by making demands they know cannot be met, but they prefer not to spell that out openly.

All this is further evidence of a clear lurch to the right, even beyond traditional Tory values, to a new hard line approach that even traditional tories should find difficult to swallow.

Ever since David Cameron put himself under pressure from both sides of his party by promising to pull the Tory MEPs out of the EPP in the European Parliament, the issue has been a constant headache for him. In a bid to end the confusion, he launched his Movement for European Reform in Brussels on Tuesday.

It is, Cameron claims, “a Pan-European campaign open to everyone”, albeit a campaign which has so far gathered the support of just one other party, the Czech Republic’s Civic Democrats. To put this in perspective, 235 different parties are represented in the European Parliament, with the abominable far-right Independence, Tradition & Sovereignty group attracting more takers that Cameron’s Movement for European Reform.

There has been plenty of debate in the blogging world about Cameron’s speech and intentions on Europe with the Nosemonkey/Europhobia blog providing a comprehensive set of links on the subject.

Another pertinent comment was Kevin Maguire in the Mirror: "Confused Cameron claims he'll concentrate on 'things that matter' To be honest, I can't recall a politician who's ever vowed to focus on 'things that DON'T matter'. But Cameron can't square his declaration with pulling his MEPs out of the centre-right EPP in 2009. The EPP grouping dominates the European Parliament and has real clout. His plan to ally them with nationalist nutters, including an idiot who denies global warming, will reduce the Tories' influence."

As far as I’m concerned, Cameron’s Movement for European Reform is a failed diversion. Far more important is his pledge to pull the UK out of the Social Chapter of the Treaty, which is the basis for the legislation which protects workers across the whole of the EU's single market.

Previously Cameron has been keen to claim that he supports a better work-life balance but this is completely contradicted by prioritising the UK’s exit from the Social Chapter.

EU social chapter legislation has given both parents the right to time off when a child is born or adopted, improved the rights of temporary workers, and provided for employees in large companies to be prperly informed and consulted. Should Cameron ever succeed in pulling the UK out of the charter (which is extremely doubtful) it would be the most vulnerable British workers who would suffer most.

Curiously, what the Tories usually object to is the Working Time Directive, which is not part of the Social Charter and was adopted when they were in government. At the time they did not oppose it - the UK government abstained in the Council of Ministers. Probably a bit too confusing for Cameron’s advisors!