Chapter 5 - the European Dimension

chapter 5

the european dimension

5.1 Introduction

The euro was introduced according to schedule on 1 January 1999, with 11 countries participating, and the General Council have sought to foster debate about the consequences for British working people in line with the call of last year's Congress.

Among other important developments, has been the adoption of the structural funds reform package, opening the way for EU enlargement at the special European Council in Berlin in March, and the ratification of the Amsterdam Treaty on 1 May, with the full enactment of the Social and Employment chapters and the introduction of EU competence in the field of non-discrimination. Agreement on a European Employment Pact involving the social partners was reached at the Cologne European Council in June. Framework agreements between European Social Partners on fixed-term work and on working time for certain workers in transport were transposed into EU law.

The ETUC four-yearly Congress was held in Helsinki in June/July and agreed trade union approaches to the developing European social model, and in particular industrial relations issues, in the context of an integrating European environment. The French CGT was in attendance for the first time, having been accepted into membership of the ETUC in March. The representativeness of the Western European trade union Movement is now therefore complete.

5.2 Institutional developments

The College of Commissioners resigned on 15 March, on the day of publication of a report by a committee of independent experts set up at the instigation of the European Parliament to examine allegations of fraud, mismanagement and nepotism in certain areas of the Commission's work. No new initiatives were taken by the Commission from that date while awaiting the nomination of a new Commission under the Presidency of Romano Prodi, who was appointed by the Berlin European Council. The General Council issued a statement recalling the constant support of the TUC and ETUC for more democracy, openness and accountability in the EU. They said that the two British Commissioners had been doing a good job, were not implicated in the experts' report, and should be renominated if available.

In February, the General Council considered the draft Manifesto of the Party of European Socialists for the June European Elections. This had been drawn up by a working party chaired by Robin Cook. They noted that the draft stated the need for close co-operation with the social partners in developing a modern economy, an, in particular, for `the informed participation of the workforce', which it was pointed out was a helpful commitment in the context of discussions of worker information and consultation. In the run-up to the election, the TUC produced materials demonstrating the higher productivity, flexibility and job-creatingcapacity of European social partnership approaches compared to US-style hire and fire de-regulated economies. The failure of the Left in the elections in some countries, particularly in the UK and Germany, was addressed by a number of speakers at the ETUC Congress. In his contribution, John Monks called for more to be done to ensure that ordinary people could see clear benefits from the European project as integration proceeded, as it inevitably would, and for a stable settlement in Europe which would condemn to the sidelines 'modern day Thatcherites'.

5.3 Employment

National employment action plans

The 1999 Employment Guidelines to be followed by governments under the Employment Chapter of the Treaty were endorsed by the Vienna European Council in December. They extended the number of specific guidelines within the four pillar structure, covering employability, entrepreneurship, adaptability and equal opportunities. Social partner involvement was built into all of the four pillars with specific roles being suggested. The TUC and the ETUC called for the guidelines to be strengthened by combatting discrimination against people with disabilities, ethnic minorities and other groups disadvantaged in the labour market. This was included in the employability pillar. The equal opportunities pillar was also strengthened to include a gender mainstreaming approach in implementing the guidelines in all four pillars. The TUC and CBI attended the UK national seminar with the European Commission to prepare the UK National Action Plan 1999. Joint contributions by the TUC and CBI covering measures to improve employability and modernising the organisation of work were included in the Plan. In considering the National Action Plan, the General Council drew attention to the absence of adequate legal or institutional provisions in the UK to advance the social dialogue process as required to meet EU objectives. The national plans will be evaluated at the Helsinki European Council in December.

Cologne European Council - European Employment Pact

The Vienna European Council on 11-12 December 1998 agreed that there should be a report to the Cologne European Council of 3-4 June 1999 on the development of a European Employment Pact in the framework of the Luxembourg process. The German Presidency included the social partners in a wide consultation on their draft report which went to Cologne. The European Council adopted a resolution on the European Employment Pact - closer co-operation to boost employment and economic reform in Europe together with the Presidency report and a supplement, Youth and Europe - our future. The resolution summarised the process of the Pact, based on three pillars: the Luxembourg employment strategy (Employment Guidelines and National Action Plans), the Cardiff process for structural reform of product, service and capital markets, and the new Macroeconomic Dialogue.

The aim of the Macroeconomic Dialogue is to develop a policy mix which promotes growth and employment while safeguarding price stability. It will seek an effective interaction between budgetary policy, monetary policy and wage developments. The Macroeconomic Dialogue will take place within the framework of the ECOFINCouncil in co-operation with the Social Affairs Council and with the Commission, the European Central Bank (ECB) and the social partners. At a technical working group level the Macroeconomic Group of the Social Dialogue will work with representatives of the Commission, ECB and the Economic Policy and Employment and Labour Market Committees. The Portuguese Presidency will hold a special European Council on employment, economic reform and social cohesion with a focus towards a Europe of innovation and knowledge, in the spring of 2000. Shortly afterwards there will be forum of the Macroeconomic Dialogue, including the European Parliament, to evaluate the results. This may become a permanent body meeting twice a year.

The Social Dialogue Committee, in May, prepared a joint declaration from the Social Partners to Cologne which included references to the Fixed Term Contract Agreement, the joint 'factors for success' study on best practice agreements on flexibility and security, the joint statement on employment of people with disabilities and discussion of future themes for discussions within the Social Dialogue. The ETUC Executive Committee, in May, also adopted a separate statement which called for a macroeconomic policy mix capable of sustaining growth rates in excess of three per cent. It emphasised the need for post-EMU thinking; the need to ensure that the level of demand is sufficient; and the need to reinforce the European Social Dialogue. It called for social partner involvement in drawing up the Broad Economic Guidelines as well as in the Cardiff process. The ETUC statement also emphasised the willingness of European trade unions to take part in the Pact process provided that there is full respect for their autonomy.

5.4 Economic and Monetary Union

Congress last year adopted two composite resolutions which referred to Economic and Monetary Union and its economic, social and institutional context, in view of the expected launch of the single currency in 11 EU countries on 1 January 1999, for which Congress urged all concerned in the UK to be fully prepared.

As called for by Congress, the General Council, over the year, have followed developments closely and sought to foster wide-ranging debate on related issues in the trade union movement and more widely.

In December the General Council agreed the publication of Preparing for the euro, relating to the launch of the single currency and to the implications for British trade unionists. The publication included the Government's position and the five economic tests announced by the Chancellor of the Exchequer in October 1997. The relevant decisions of the 1998 Congress were reprinted as annexes. The publication was widely distributed, including to a number of organisations concerned with the single currency who were asked for their comments.

In February, the Prime Minister launched the UK Outline National Changeover Plan, which had been prepared by the Chancellor's Standing Committee on EMU Preparations, and the Business Advisory Group, in both of which the TUC has been represented.

In his Statement to the House, the Prime Minister thanked those who had contributed to preparing the plan, including the General Secretary of the TUC. Hesaid that the announcement was not a change in the policy announced by the Chancellor: it was a change of gear. "If we wish to have the option of joining, we must prepare", he said, adding that Parliament would be asked to approve expenditures prior to a referendum so that the flexibility could be maintained for Britain to make the changeover as quickly and cost-effectively as possible. The Government would be making active preparations for the euro, in the belief that it would be in the country's interests to join in the future should its economic tests be met, and business should do the same. The Government had resolved the political issues in favour of the principle of joining, should the economic tests be met, but they should be met.

The General Council organised a major conference on Unions and the euro on 13 May, chaired by John Edmonds, at which the Chancellor of the Exchequer made the opening speech. He drew a parallel between his approach towards achieving economic stability through his `golden rules', and those being applied in the eurozone through the EU Growth and Stability Pact. Side by side, the UK was involved with other EU partners in the debate about a more dynamic job-creating economy for Europe, and he expressed support for an EU Employment Pact. He repeated the Government's position that there was no overriding constitutional barrier to EMU membership and its commitment to make economic advantage, as measured by his five tests, the decisive test.

The conference also was addressed by Stephen Hughes MEP, Chair of the EP Social Affairs Committee. A panel chaired by Neil Kinnock and including William Keegan, economics Editor of The Observer, Dr Pauline Conroy, Editor EU Gender Equality, Rita Donaghy and Ken Jackson, addressed European Economic, Employment and Social Questions. In the afternoon, the keynote debate was on the pros and cons of UK participation between the Giles Radice, Chair of the European Movement, and Lord Shore, Chair of the Labour Euro-Safeguards Campaign. John Monks concluded. The speeches of the guest speakers were reprinted in the booklet Unions and the euro, which has been widely circulated and is being circulated to Congress delegates.

In July, the General Council reviewed EU developments as a whole during the year, taking the view, as does the Government, that the debate on EMU is a part of the general approach to Europe. This paragraph of the Report deals primarily with issues identified by Congress relating to EMU institutional issues; rules regulating public expenditure, public debt and inflation rates; and the effect on UK trade and investment of the high value of the pound compared to European currencies and of the relatively high interest rate. Other issues, notably important developments under the Social Chapter, are reported elsewhere in this Chapter.

The General Council repeated their concern at the lack of openness and accountability of the European Central Bank, and underlined the call by Congress for a dialogue between the Bank, the European Parliament and the social partners. On the question of the stability criteria, they noted that the Chancellor of the Exchequer was pursuing parallel policies to those being pursued under the Stability and Growth Pact. They agreed, as had the ETUC Congress in Helsinki in June, that stability should be used as the basis of a strategy for growth and employment. They endorsed proposals for infrastructural investment as set down,for example, in the position adopted in October by the eleven European Socialists-led EU governments, in which the Chancellor of the Exchequer had played a prominent part. They noted that the Cologne European Council had made welcome moves in asking the European Investment Bank to widen credit allocation in a number of fields.

The General Council noted that the exchange rate between the £ and the euro, after narrowing at the launch, had reverted to around the equivalent of £1 = DM 3.00, which Congress last year found to be too high and damaging to British manufacturing. To help deal with this problem, they repeated their call for a reduction in the gap in interest rates between the eurozone and the UK, while noting that that had narrowed over the last year, with 2.5 per cent currently set by the ECB and 5 per cent in Britain. They noted that a sustainable exchange rate between the £ and the euro would need to be reached and stabilised over the period leading up to any referendum on entry. They also noted Government statements that preparations should be made in this Parliament so that a referendum could be held early in the new Parliament should the economic tests be met.

They welcomed advances in employment policy co-ordination, most recently with the European Employment Pact agreed at the Cologne European Council, and the progress made in agreeing National Employment Action Plans, which are reported elsewhere in this Chapter of the Report. These developments come under the Employment Chapter of the Treaty, introduced in Amsterdam following pressure from the ETUC in particular, to rebalance the Maastricht EMU Chapter.

Developments on social policy are also reported elsewhere. Central to the debates at the ETUC Congress was the development of an EU industrial relations area and of legislation on minimum social standards as part of the process of integration which EMU inevitably brings, including to countries such as the UK which are at present not in the eurozone. The General Council endorsed the positions adopted by the Congress in respect of the need to strengthen the capacity of the trade union movement to operate in a unified way at the European level in that context.

The General Council continued to reject the anti-European stance of the Conservative Party, Business for Sterling, and of sections of the media.

The General Council welcomed the Outline National Changeover Plan and the statements made by the Prime Minister and the Chancellor of the Exchequer about the need for the UK to prepare so as to give the British people the possibility of a choice.

The General Council will continue to engage in all aspects of the European issue in a positive way, keeping in close touch with the Government in the process.

5.5 Social Dialogue and the development of an EU industrial relations area

A wide discussion on the future for European industrial relations has been taking place throughout the ETUC. The same concerns were expressed at the ETUC Congress in June. These include the impact of the launch of the euro on collective bargaining; the need for a review of the experience of negotiating frameworkagreements; the implications for the social partners flowing from the Social Chapter of the Amsterdam Treaty; the balance between negotiated agreements and legislation; and the point of view of the other EU institutions, in particular the European Parliament. Following the European elections there will be a need to work jointly with the Parliament on several of these questions especially through the ETUC-Parliament Intergroup. Parliamentarians feel that as a result of the Social Chapter their function as legislators is in danger of being taken over by the social partners as negotiators. The Parliament is seeking an inter-institutional agreement with the Council and the Commission to have its consultative role reinforced in relation to the negotiation track of the Social Chapter procedure. At present the Commission is required to inform the Parliament about the outcome of negotiations between the social partners.

Following the successful social partners' Conference on Enlargement, organised in Warsaw in March and drawing in the social partner organisations of the countries applying to join the EU, a steering committee is to be established. The committee will work with the Commission to determine the social partners' needs; organise a regular exchange of informatio;n and provide guidance for various initiatives such as seminars and evaluation studies. The joint declaration of the social partners arising from the Warsaw conference stressed the need for social dialogue and participation of trade unions as essential to the process of reform in those countries preparing to join the EU. It was also in Warsaw that the social partners formally signed the Framework Agreement on fixed term work.

Social Dialogue Committee

The Social Dialogue Committee and its working groups have focussed on a range of macroeconomic and employment issues over the past year. These have included the Broad Economic Guidelines, the Article 127 Report on mainstreaming employment in EU policies, and the European Employment Pact. A joint declaration on the employment of people with disabilities was adopted in May for inclusion in the social partners' contribution to the Cologne Council. A further important discussion has been based on the Commission Communication, Modernising the organisation of work - a positive approach to change. Relating the Communication very closely to the adaptability pillar of the Employment Guidelines, the Commission identified the over-riding objectives for the EU as competitiveness and employment and in that context the factors of improved productivity and a balance between flexibility and security. However, the Commission did not lay out a legislative agenda but placed the onus for much of the work expected to flow from both the modernisation of work organisation and the adaptability pillar of the Employment Pact on the social partners. In developing a framework for future action, the key role is given to the social partners. Agreements between the social partners are seen as one way to handle the modernisation of work organisation.

In relation to the European Employment Pact, the Social Dialogue Committee has discussed how specifically the Macroeconomic Dialogue element will involve the social partners. The social partners' joint declaration to the Cologne Council stresses the autonomy of each of the partners concerned. It also stresses the objective as the exchange of information rather than to enter into binding commitments. On modalities, there are likely to be three phases:

· an analytical or stocktaking phase to establish the significant trends in budgetary policy, monetary policy and wage developments. This will be aided by the Commission services, including Eurostat, in liaison with the other dialogue partners;

· an expert phase to draw on the data, will include representatives from the social partners, the Council, Commission and ECB.

· a political phase will take place around the ECOFIN meetings but also include the Social Affairs Council.

Following the 1998 Communication on Social Dialogue and the adoption of the decision on setting up a new framework for sectoral social dialogue committees, 22 joint social partner requests have been made to establish committees. The majority of the committees have already met. In addition to the majority of the formerly existing groups four new applications have been received. More are expected. Of the former groups some met as committees while others were informal or unstructured working groups. Four of the unstructured groups (electricity, printing, wood and local public services) have yet to submit applications. The new procedures involve one high level plenary meeting per year, reimbursement for a maximum of 15 participants on each side, secretarial support from the Commission and improved technical back up for the preparation and follow-up to meetings. The Commission will chair the meetings in the absence of a joint request that one of the delegations' members takes the chair.

Standing Committee on Employment

The reorganised Standing Committee on Employment held its first meeting in April, concentrating on the European Employment Pact. The Committee is smaller than previously, with ten representatives respectively from the trade union and employers' sides and representation from the Commission and, at ministerial level, from the Member States. There were also representatives from ECOFIN and the Employment and Labour Market and Economic Policy Committees. It has been agreed that the Committee should be a forum for continuous dialogue between the Council, Commission and the social partners on the co-ordinated employment strategy. It will take into account the social and economic objectives of the EU as reflected in both the Employment Guidelines and the Broad Economic Guidelines.

5.6 European Works Councils

The pace of signing new agreements continued to be slow. The number of companies concluding agreements with Special Negotiating Bodies on which the UK workforce was represented increased from the 15 reported in 1998 to 30 (including BTR which was one of the earlier examples of TUC coordination). However, no new examples were reported of voluntary agreements being concluded with companies covered as a result of the UK opt-in. It is thought that this may reflect both the uncertainty as to the content of the Government's proposals on transposition (see below), and the need to devote resources to improving the performance of existing EWCs.

UK Transposition

After several postponements, the Government published a consultation document on 2 July. Comments on this were invited by 8 October, and a consultative process with affiliates agreed by the Executive Committee in July. Unions were sent copiesof the consultative document and a seminar of experts from unions was organised for 27 August.

An initial examination of the Government's proposals revealed three main areas of concern:

· the failure to grant existing recognised unions the right to select their representatives for SNBs or EWCs unless they represented all employees in a company;

· the absence of detailed regulations on the conduct of elections to SNBs/EWCs beyond those covering the establishment of voting constituencies;

· disproportionate penalties between those against representatives for revealing information said to be confidential (criminal proceedings with a maximum penalty of two years' imprisonment) and those against management for breach of agreements or the directive (fines under the EAT of up to £75,000).

The inclusion of merchant navy crews and a calculation method for SNB/EWC seats which gave a greater weight to the larger workforces than that adopted in many Member States were welcomed.

A final draft response will be considered by the Executive Committee in September. The legislation is due to be in force by 15 December 1999, after which no new 'Article 13' agreements will be possible.

EWCs in practice

Evidence from existing EWCs continues to support the view that EWCs need a clear relationship with trade unions in order to succeed. It also becoming evident that this support requires a substantial resource commitment, which affiliated unions are increasingly taking steps to meet, on occasion with the TUC providing the 'expert' to EWCs, at the request of the unions involved.

The need for training has also been highlighted, and the TUC's involvement in a two-year Leonardo project on training needs has continued. A pilot training programme is being developed for an EWC in the drink and leisure industry, using methods being developed in this project.

The first steps have also been taken towards offering a full 'package' of services to EWCs (via affiliated unions) which will include bespoke courses, as well as technical advice, and assistance with conference facilities, interpretation and translation. It is intended that this would be ready by the end of 1999.

UK coordination

In addition to the support given on training and in providing 'experts', the TUC has continued its work on coordinating union approaches. The Vivendi Forum has continued to operate as a valuable conduit between unions and the representatives on the EWC, and unions in other companies (such as Bouygues and Suez Lyonnaise des Eaux) are now examining similar approaches to equally diversified companies. In other cases (such as FKI and Serco) initiatives which maylead to the establishment of EWCs are being proposed by the joint unions with assistance from the TUC.

The long-running coordination of the BTR unions was successful in achieving a satisfactory EWC agreement. This was immediately followed by the merger of BTR with Siebe plc, leading to the formation of the new company Invensys. Consideration is now being given to the adaptation of the EWC to reflect this. Such mergers, and their consequences for EWCs are now becoming a major consideration for unions.

The P&O unions ran a high-profile campaign for a trade union slate for UK representatives on an SNB in the face of considerable problems. Management decided unilaterally to exclude all UK seafarers from participation as well as the entire workforce of a majority-owned subsidiary. Effective coordination between the UK unions and those elsewhere in the EU is maintaining a strong trade union voice on the SNB, and contacts have been established with senior management in an attempt to resolve the difficulties resulting from lack of consultation over the elections.

Revision of the Directive

During the year, it became clear that the Commission would only commence the process over consultation on the need to revise the Directive in September 1999.

In advance of the revision, the ETUC Democratisation of the Economy Working Group continued to discuss priorities, focusing on the precise nature of consultation, the need for trade union involvement, and the need for the right to training for EWC representatives, as well as on the possible revision of employment thresholds as envisaged in the original Directive.

As part of the preparations for the formal consultation, the Commission, in conjunction with the ETUC, CEEP and UNICE, organised a major conference which took place in Brussels on 28-30 April. Originally, this was aimed at existing EWCs, and invitations were issued to one representative from management and one from the workers' side of each EWC known to be in existence. The approach, however was not effective, with invitations arriving with management and frequently not being passed on. The TUC and affiliated unions used their channels to ensure a respectable attendance by UK representatives from EWCs and trade union advisors, who ensured that their concerns regarding trade union participation and rights to time off and training were clearly articulated.

5.8 European Company Statute

The Austrian Presidency were optimistic about the chances of achieving a compromise on the issue of employee participation in the 'European Company', and had proposed a series of modifications to this end.

The key new proposal related to the requirement for a qualified majority vote on the SNB in order to opt for any participation system which offered lower levels than that which already applied in any of the companies making up the new European Company. This would now be subject to the companies with existing participation rights employing a minimum (as yet unspecified) percentage of thetotal workforce.

After considerable effort, a compromise along these lines was presented to the Social Affairs Council in June, but objections from the Spanish Government blocked further progress. The principal Spanish objection is that the proposed compromise could result in the imposition of co-determination by a minority of the workforce in a newly-formed European Company.

The Finnish Presidency have put the issue back onto the agenda of the Social Affairs Council, but it is not yet clear if any compromise is possible which will satisfy Spanish objections.

Information and Consultation

After having first rejected the option of negotiations, as was reported to Congress last year, UNICE indicated that there might be further room for consideration, following the widespread distribution of an unofficial draft directive which it was suggested was to have been presented to the Commission in July 1998. This draft suggested an employment threshold of 20, and would have required consultation to consist of 'an attempt to seek prior agreement.'

The Commission decided to give the employers further time for consideration. However, in October, UNICE confirmed its decision not to negotiate. The ETUC immediately demanded that legislation be pursued by the Commission and President Santer and Commissioner Flynn announced their intention to proceed. Commissioner Flynn attempted to introduce discussion of the issue at the Social Affairs Council in October, but a number of Member States objected - UK, Ireland, Denmark and Spain. It was also widely believed that the new German government was also opposed, in a continuation of the policy of the Kohl Government. Initial objections from Denmark were lifted following guarantees being obtained by Danish trade unions and employers over the protection of their voluntarist system.

On 11 November, the Commission adopted a proposal for a directive which was less stringent than the earlier unofficial version. In particular, it re-established the threshold at 50 employees, and required attempts towards 'prior agreement' only for issues which were likely to lead to changes in work organisation or employment contracts. Failure to consult on some issues would result in the legal effect of management's actions on contracts being null and void until their obligations were observed. Provision was also made for agreements on information and consultation reached between social partners to be recognised, in a similar manner to 'Article 13' agreements on European Works Councils.

At a meeting in London, in November, the General Secretary pressed the case for the proposed directive on Chancellor Schröder, who indicated that attempts to soften British hostility to this measure should at first be focussed at the national level. The proposal was not brought forward for discussion in the Social Affairs Council by the German Presidency despite representations of the DGB among others. The European Parliament adopted a generally favourable opinion on the Proposal on 14 April, while the Economic and Social Committee published its Opinion on the Commission's Proposal on 7 July.

The ETUC at its Congress on 29 June - 2 July, committed itself to continue to promote, through European legislation, recognition of rights to information and consultation at company level. Efforts to ensure that the issue is discussed in the Social Affairs Council during Finland's presidency have continued, with the active support of the Finnish trade unions.

5.8 Social policy

Successful negotiations on framework agreements on fixed-term work and working time in the rail and shipping sectors were completed during the course of the year. A number of proposals including legislative ones were launched under the Social Action Programme 1998-2000 and under other programmes. Among the most important were:

Communication on modernising the organisation of work

The communication identified three key factors: productivity, flexibility and security. During the pre-consultation a series of core issues were identified as well: training, working time, new forms of work, the uptake of new technology, increased involvement of workers and equal opportunities. In response to the Commission's Communication the ETUC put a list of priority themes for negotiation to the employers' organisations, UNICE and CEEP for discussion at the Social Dialogue Committee in April. This was in line with the prior agreement by the social partners at the December Mini-Social Dialogue Summit in Vienna to draw up a common agenda on the modernisation of work organisation. The ETUC's themes for negotiations (framework agreements) included: temporary agency work, telework, access to life-long learning, revision of the Working Time Directive and complementary social protection (portability of occupational pensions).

The ETUC also suggested three subjects for possible recommendations: sexual harassment at work, the proposed Observatory on industrial change and one based on Treaty Articles 13 (non-discrimination) and 141 (equal treatment/equal opportunities). During the discussion at the Social Dialogue Committee the employers pressed for a 'realistic' work programme rather than a rolling programme as suggested by the ETUC. They were prepared to examine temporary agency work to see if there was a basis for negotiations and proposed joint seminars on telework, Article 13 and complementary social protection, with no commitment to negotiate.

Working Time Directive - excluded sectors

European framework agreements between trade unions and employers in rail and shipping were signed, extending working time provisions to those sectors but negotiations in the road transport sector were unsuccessful. The Commission published legislative proposals on 18 November 1998, including the two signed agreements. In the Social Affairs Council of 25 May 1999 agreement was reached on the draft common position on the 'horizontal' directive extending the important provisions of the original Working Time Directive to non-mobile workers and to some extent mobile workers in road, air, rail, inland waterways, sea fishing, other work at sea and junior doctors. Agreement was also reached on two separate proposals covering seafarers. The Council compromise lengthened thehorizontal directive's seven year transition period towards the 48 hour week for junior doctors to 13 years. Britain had been calling for a 15 year transition but led the move to a 13 year period, supported by the other Council members. However, as the measure is subject to co-decision with the Parliament, a conciliation process will have to take place with the new Parliament. The outgoing Parliament called for a reduced, four year transition period for junior doctors.

The directive for mobile workers in road transport and for self employed drivers has been discussed in the Transport Council without agreement being reached under qualified-majority voting and, as a result, will be passed over to the Finnish Presidency. In addition to the four weeks paid holiday as provided for under the horizontal draft directive, new provisions include a limit of 60 hours working week providing the average over four months is 48, a daily rest of 11 hours and some restrictions on night hours. Despite the flexibility of the proposal, the UK, together with a majority of other Member States (including Finland), is opposed to its application to self-employed drivers and wants greater flexibility for limits on night work and maximum working time.

Free movement of people proposals

Under the Finnish Presidency, Social and Labour Affairs Ministers will start discussions on Commission proposals of July 1998 to update the rights of EU workers and their relatives to move and reside freely in the EU in line with both EU treaties and the new Employment Chapter of the Amsterdam Treaty. These proposals will go under qualified majority voting and codecision with the Parliament. Both the ETUC and European Parliament are calling on the Council to adopt these proposals which reflect a step forward towards a European labour market and European Citizenship. Key provisions include a stronger principle of equal treatment for workers and trainees, clearer and stronger rules on residence rights for workers on short-term contracts, job seekers and trainees, broader definition of family reunification, recognition of past professional experience in relation to entitlement to promotion and to some social benefits, and new provisions for non-EU relatives of EU workers. The package also includes a proposal, at the request of both sides of the industry, to merge the two existing tripartite advisory committees on free movement of workers and on the coordination of social security schemes for migrant workers into a single body.

The Finnish Presidency will also launch the discussions on some other related proposals adopted last November by the Commission to simplify the coordination of social security rights for migrant workers. The main changes concern the extension of current provisions to all persons (including non-EU nationals legally resident in the EU and students) covered by a member state's social security scheme, a longer period of entitlement to unemployment benefits from three to six months when seeking a job in another EU Member State and the right for an unemployed person to receive -under the same conditions as nationals- benefits other than cash benefits to facilitate access to work. The ETUC welcomes these amendments but regrets that the unanimity required in Council to adopt the proposals will be difficult to achieve.

Communication on supplementary pensions

In May the Commission adopted a Communication on Supplementary PensionSchemes based around three main principles: better protection of scheme members coupled with more efficient investment by pension funds; gradual removal of obstacles to labour mobility; and reduction of tax distortions affecting supplementary pension provision on a cross-border basis. The new Commission will decide on the follow-up but one of the proposals could be for the creation of a pensions forum in which the social partners could take part, to discuss the implications of labour mobility in the EU. During the course of the next year the Commission expects to start consultations with the social partners among others on the conditions for acquiring supplementary pension rights and on technical work on the transferability of supplementary pension rights.

Fixed- term work agreement

On 14 January after ten months of negotiations agreement was reached on the Framework Agreement on fixed-term work. The TUC Europe Monitoring Group followed closely the course of the negotiations and TUC affiliates were consulted throughout. In February, the General Council mandated their representatives in the ETUC Executive Committee to support the agreement. The ETUC and the two employers' organisations, UNICE and CEEP signed the agreement on 18 March. The Commission adopted its proposal for a Council Directive transposing the framework agreement into EU law on 1 May, and the Council adopted the directive in June. The heart of the agreement is in clauses one (purpose), clause four (principle of non-discrimination) and clause five (measures to prevent abuse). These will provide important new rights for the more than 850,000 workers in the UK on fixed term contracts. In clause one the quality of fixed-term work is stressed. The non-discrimination principle embodied in clause four will mean that comparable workers will have equal access to statutory and contractual conditions. Under this principle, waiver clauses such as those on statutory redundancy pay will be discriminatory.

There is currently no framework for regulating the use of fixed-term contracts in the UK. Clause five will require Member States, after consulting the social partners, to set up a framework to prevent abuse arising from the use of successive fixed term contracts. Where equivalent legal measures (such as fines on employers for abuse) are not available, Member States will have to introduce a framework based on one or more of three measures (objective reasons justifying the renewal of contracts; the maximum total duration of successive contracts; the renewals of such contracts). The agreement also includes a commitment on the part of employers and trade unions at European level to consider the need for a similar agreement on temporary agency work.

Article 13 (non-discrimination)

The Commission intends to bring forward, under the non-discrimination Article 13 of the Amsterdam Treaty an action programme on discrimination and two directives - a horizontal one dealing with all forms of discrimination in relation to work and a specific one on racial discrimination in relation to access to training, education and social services. The action programme should reflect the Parliament's report by Stephen Hughes MEP, a report fully supported by the ETUC. However, these measures will be delayed until the new Commission has been appointed. A seminar was organised by the ETUC and the TUC on 11-12 May inShepperton, Middlesex, on implementing Article 13. Further work on race equality and Europe is reported in Chapter 4.

5.9 Structural Funds - Agenda 2000

The Structural Funds are important to regional regeneration and national competitiveness and over the last two years trade unions have played a more significant role in these programmes as a result of the Government's decision to involve the social partners in the Monitoring Committees and related bodies. In 1998 the European Commission put forward proposals for the reform of the Structural Funds, that were set out in Agenda 2000. Affiliated trade unions and representatives of the TUC's regional machinery were consulted and a formal TUC response was drawn up in the autumn.

The General Council welcomed a number of the proposals including the links with the Employment Chapter and the positive references to social partner involvement, simplification and clarity in the respective roles of the Commission, Member States and partnerships. A programme of lobbying was agreed which included contact with Ministers, a briefing for MEPs, and work to seek support from other organisations. The TUC was represented in the meetings of national partners convened by the DTI during the process of the negotiations, and supported the ETUC in its work with the Commission and the Parliament.

The reform package was finally agreed at the Berlin European Council. The TUC's priorities include support for regional TUC involvement in the preparation of the new plans for Objective 1 and 2 areas; building on the TUC's involvement in the National Employment Action Plan to seek to influence the national 'Policy Frame of Reference' that will guide ESF spending; and to be a key partner in the development of the new Objective 3 programme. The Minister responsible, Andrew Smith, replied in July expressing particular interest in the TUC's comments and noting the TUC's wish for its role in drawing up the National Action Plan, and for social partnership more generally, to be highlighted. He welcomed the TUC's ongoing involvement with the ESF, at EU and national levels, and encouraged the TUC to promote active participation by trade unionists in the new Objective 3 programme.

It is also proposed to produce a Guide for affiliates on how union objectives can be pursued and social partnership promoted through the Structural Funds

and to explore the possibility of securing support for union capacity building programmes, particularly at regional level.

5.10 Network Europe

The TUC continues to maintain a high profile in relation to a wide range of organisations relating to European issues. The Europe Monitoring Group, chaired by Mr Edmonds and including Ms Donaghy, Mr Dubbins, Mr Jackson, Mr Morris and the General Secretary, have continued to monitor important European developments, such as the negotiation of framework agreements or the introduction of the euro, to facilitate the work of the Executive Committee. The TUC holds monthly meetings of the Network Europe Contact Points, composed of representatives of affiliated unions, at which up-to-date information is discussed.

The TUC Brussels Office maintains close contacts with the ETUC and its Industry Federations, the European Parliament (particularly its Employment and Social Affairs Committee), the Commission and other European institutions. The office takes part in the network of national trade union centre representatives in Brussels and during the year has received and assisted a variety of trade union groups and other visitors.

The TUC European Information Service, as one of the sectoral information relays established in conjunction with the London Office of the European Commission, provides affiliates with access to a wide range of European publications and databases. The TUC also publishes Eurobriefing, an occasional round-up of European issues for wide dissemination. This is accessible on the TUC website together with other information on European subjects.

European Trade Union Confederation

The ETUC has in affiliation 68 national trade union centres in 29 countries (39 in the 15 countries of the European Union) with a total membership of over 50 million. Five organisations, from the Baltic States and Croatia, have been granted observer status. Following the affiliation of the CGT, France, in March, the ETUC represents all significant national trade union centres in western Europe. Also affiliated are 15 European Industry Federations covering all the main fields of activity.

BOX

TUC representatives on ETUC Executive Committee:

Rita Donaghy, John Edmonds, Jimmy Knapp (from July), John Monks and David Lea (until July)

Deputy members:

Rodney Bickerstaffe, Barry Reamsbottom, Maureen Rooney and Tom Jenkins

Steering Committee:

David Lea (until July), John Monks (from July)

Members of the Women's Committee:

Diana Holland, Judy McKnight and Jo Morris

CLOSE BOX

In May, the General Council agreed to proposals for ETUC affiliation fees for the period 2000 - 2003, which would entail an increase of four per cent a year for the organisation but which was modulated so that larger affiliates would pay less per member than the smaller ones, with an outcome for the TUC of an increase of 13.6 per cent by the fourth year of the exercise. The proposal was subsequently agreed by the ETUC Executive Committee.

ETUC Congress

The Ninth Statutory Congress of the ETUC was held in Helsinki between 28 June and 2 July, at which the TUC was represented by John Edmonds, George Brumwell, Rita Donaghy, Dave Feickert, Anne Gibson, Diana Holland, Tom Jenkins, David Lea, Hector MacKenzie, Judy McKnight, John Monks, and Bob Purkiss.

The Congress was addressed by, among others, Romano Prodi, European Commission President Designate; Juan Somavia, ILO Director General; MarioSoares, European Movement President; Walter Riester, Federal Minister for Labour and Social Affairs for the outgoing German Presidency; and on 1 July, the first day of the Finnish Presidency of the EU, by the Prime Minister of Finland, Paavo Lipponen.

The Congress was also addressed by the Presidents of the BSKP, Kosovo, and of Nezavisnost, Serbia, respectively Professor Hajrullah Gorani and Mr Branislav Canak, who received standing ovations. The ETUC General Secretary announced that a major trade union conference to discuss the reconstruction in the Balkan region is planned for the Autumn. Further ETUC work on Kosovo is reported in Chapter 13.

Contributions from the TUC delegation included: John Edmonds on means of action and the role of the European Parliament; Bob Purkiss on the involvement of black and ethnic community workers in trade unions; John Monks on flexibility and the European Social Model; Rita Donaghy on social dialogue negotiations and the position of women in relation to `atypical' work; and Anne Gibson on health and safety.

The Congress adopted a general trade union policy resolution and a specific resolution, Towards a European System of Industrial Relations, both of which had been drafted by a Congress Preparatory Committee, CPC, and which incorporated amendments presented by ETUC affiliates - including amendments agreed by the TUC Executive Committee in April, after unions had been consulted. The TUC amendments had sought to improve the text on health and safety, on social protection systems, and on discrimination issues. Among the comments received by unions, questions had been raised about proposals in the Resolution calling for common basic rules in the field of corporate taxes, taxation of income from capital, and green taxes. However, the Executive Committee had found those reference acceptable, and it was pointed out that it was clear that income tax harmonisation was not being suggested.

Votes were taken in the Congress on outstanding amendments which had not received a consensus in the CPC. The main points of contention arose around proposals from some Nordic organisations pressing for a greater application of the principle of subsidiarity and for a preference towards collective bargaining as opposed to legislative action, and from other affiliates, principally from Belgium and Italy who, on the contrary, sought greater integration notably in the field of taxation. However, most amendments did not receive the required majority, and the resolution did not differ essentially from the draft discussed in the TUC Executive Committee. A key point was the agreement that an ETUC collective bargaining committee should be set up to provide overall co-ordination of the process, and the recognition that the sectoral dimension will be essential and will require the European Industry Federations to create the required structures and instruments.

During the Congress, the Executive Committee adopted a Declaration which was signed by all presidents or general secretaries of organisations affiliated to the ETUC, committing themselves to follow-up the specific resolution by generalising cross-border trade union co-operation and mutual assistance agreements. TheETUC Executive Committee will set a timetable for the elaboration of a charter fixing a common orientation for such agreements.

The Congress adopted a series of amendments to the Constitution proposed by the Executive Committee which reinforced moderately the representation of larger organisations, and of groups representing youth and retired members, cross-border trade union councils, and Professional and Managerial Staffs in ETUC structures; and underlined the position of European industry federations as sectoral negotiating agents. Congress authorised the Executive Committee to set up a working group to consider and report within a year on proposals to further amend the Constitution in order to make the ETUC more efficient and more able to confront new challenges. A number of amendments ranging further than those presented to the Congress had been withdrawn on the understanding that they will be considered by the Working Group.

The Congress re-elected Fritz Verzetnitsch as President, Emilio Gabaglio as General Secretary, and Erik Carlslund and Jean Lapeyre as Deputy General Secretaries. The Executive Committee following the Congress re-elected as Confederal Secretaries Maria Helena André, Willi Bushack, Peter Coldrick, and Beatrice Hertogs.

An equality conference was held on 27 June, whose report dealing in particular with gender equality within trade union organisations was adopted by the Congress. This will be considered in detail by the Women's Committee.

A number of workshops were held during the Congress in which TUC representatives participated actively from the platform, including Anne Gibson on health and safety, Bob Purkiss on opposing all kinds of discrimination, and Rita Donaghy on organising new forms of work.

ETUC Institutes

TUC representatives have continued to participate in the work of the ETUC Trade Union Institute, the European Technical Bureau for Health and Safety and the European Trade Union College, which are linked to the ETUC.

Economic and Social Committee

TUC nominees have continued to play an active role in the EU Economic and Social Committee, which scrutinises all important EU draft legislation as well as acting on its own initiative, particularly in fostering contacts with economic and social organisations around the world. Tom Jenkins stood down as President of the Committee after his two-year term of office in September. In June, George Wright was elected President of the ESC Section for External Relations. British trade union representatives have acted as experts for the ESC trade union group, notably on an opinion which was adopted by the Committee calling for the banning of asbestos.

Professional and managerial staff representation

The TUC convenes meetings of interested unions covering professional and managerial staffs (P&MS) which, through their membership of the TUC, are members of the ETUC P&MS Council - Eurocadres. This allows access, in particular, to the Eurocadres General Assembly and Symposium, which was held near Vienna in October and focussed on work organisation, new technology and flexibility.

Discussions in the TUC group have focussed on P&MS representation in EU social dialogue structures, and in particular in the reconstituted Standing Committee on Employment following a decision of the Council of Ministers, in April, which included provision for P&MS representation through both Eurocadres and the Confédération Européenne des Cadres (CEC). In June, the ETUC Executive Committee took note of an agreement between Eurocadres and the CEC to set up a liaison committee to deal with certain matters at European, but not national, level. In these discussions, TUC representatives have been guided by the resolution of the 1998 Congress which made clear the primacy of the ETUC as the only intersectoral trade union organisation in Europe.

A TUC P&MS Symposium was held in Congress House in July at which a report on personal contracts specially commissioned from the Labour Research Department was discussed. A separate session on Government science policy, chaired by Roger Lyons, was also held which was addressed by Lord Sainsbury, Dr David Fisk (DETR), and Valerie Ellis (IPMS).

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