Lisbon Treaty (No. 3)

Like the right hon. Member for Wells (Mr. Heathcoat-Amory), I shall focus on the charter of fundamental rights, pose some questions about how effective the protocol will be and highlight key labour market issues that a number of Members on both sides of the House have raised in the debate. Four key issues appear to be relevant to a discussion of the labour market elements of the charter. First, to what extent will British workers be denied the opportunity to rely on the charter to interpret and expand existing rights derived from Community law? If British workers are unable to rely on the charter, is it conceivable that EU rights will have a diluted status in the UK? Secondly, to what extent are British workers protected when they take industrial action that an employer claims violates his or her right to freedom of establishment? Is it enough that the workers have complied with domestic law, or is their action vulnerable to legal restraint? Thirdly, to what extent are British workers at a disadvantage compared with workers in other member states by virtue of the fact that they are unable to rely on the charter as a defence in legal proceedings against them by an employer who claims that their action violates EU law? In effect, does the opt-out prioritise business rights over UK workers' rights, as a number of my colleagues mentioned earlier? Fourthly, we must assume that the charter is designed to add value to existing rights and principles in European law. If it does not, what is the point of it? What do the Government believe has been added and what do they believe will not be applicable in the United Kingdom? To pursue those topics, I shall go back to the Laval and Viking cases—important European case law that emerged only at the end of last year, after the signing of what was initially the opt-out and subsequently became the protocol. They have profound implications for European labour law and specifically for this country, with its history of legal abstention, in respect of the role of the law in industrial relations. Viking Line is a Finnish ferry company that decided in 2003 to reflag its vessel and employ an Estonian crew on Estonian pay and conditions, cutting its wage costs by some 60 per cent. The case was referred to the European Court of Justice, which ruled that in future any strike action affecting this freedom would have to meet stringent legal tests that the court itself would assess. The key issue, which I find unprecedented, is that no longer does the legitimacy of industrial action rest upon the democratic mandate of the Union derived from its members and regulated through laws determined by the Parliaments of member states. Now it will also need to meet the criteria imposed and assessed by European judges. I see no precedent in domestic strike law in the UK. The Laval case is central. As my hon. Friend the Member for Elmet (Colin Burgon) mentioned, Laval is a Latvian company, which in 2004 posted workers from Latvia to work on building sites in Sweden. The Swedish construction union asked the company to agree to the existing collective agreement within the building sector. The company refused, operating instead under the Latvian agreement, including a lower pay scale that undercut the Swedish workers' wages. Subsequently the court ruled, essentially, that the company's freedom to provide services in any member state should not be restricted by compliance with non-statutory collective bargaining agreements in one member state. Again, that has huge implications for an industrial relations system that is built on legal abstention and free collective bargaining, as in the British case. Critically, the court argued that because the EU posted workers directive set out minimum rights, it was unreasonable to force the company to comply with further non-statutory agreements at local or national level. So, instead of EU legislation setting minimum standards, which has been the argument over the past 20 years, going back to 1988 and Jacques Delors coming to the TUC, we now face the threat of those standards being seen as a maximum instead of minimum criteria across the EU. All of us on the Labour Benches should be acutely aware of the implications for further labour market deregulation. Those two cases, among others, give rise to widespread concern that in recent case law the EU has been engaged in a race to the bottom in terms of labour market standards. Indeed, it could be argued that the very notion of a social dimension to the European project, a cornerstone of the Labour party's strategy over the past 20 years, is under threat. That deserves profound discussion in this place, not least because of the centrality of that concept in redirecting our party's approach to Europe more generally. Let me deal specifically with the protocol and workers' rights. The first concern is that the protocol could restrict the protection of workers' rights. However, I understand the Minister's position that this is not an opt-out, and I hope that he will make it clear in his reply that it will not affect the way that the title IV rights are applied to EU law. That has been his approach throughout the Committee stage, but we need to hear a far broader outline of the Government's position as there is confusion about that on all sides. I note that many of the articles contained in title IV specify that the rights that they set down are defined as they exist in"““Community law and national laws and practices””." The Minister may argue that therefore the protocol is simply a truism. That would raise the question why the protocol was negotiated in the first place. Leaving that aside, I notice that article 31 does not contain such limited language. That article deals with maximum working hours. I hope that the Minister will clarify that the protocol was not negotiated with a view to evading the article 31 rights. A particularly important question for the labour movement is the purpose of paragraph 2 of article 1 of the protocol, which has been quoted extensively during the debate. It states:"““In particular, and for the avoidance of doubt, nothing in Title IV of the Charter creates justiciable rights applicable to the United Kingdom except in so far as the United Kingdom has provided for such rights in its national law.””" In short, title IV is singled out for a unique provision within the protocol. Title IV, as we know, is the section of the charter entitled ““Solidarity”” and it contains what we would call workers' rights, such as the right to information and consultation at work, the right to collective bargaining and collective action, protection from unjustified dismissal, fair and just working conditions, the prohibition of child labour, and so on. This provision has never been fully explained in the House. In fact, when the former Prime Minister reported back in his statement of 25 June last year he mysteriously omitted the words ““Title IV of”” when reading out the protocol to hon. Members. Perhaps he simply made an inexplicable error of fact, but we need to explore the Government's reasoning more fully. As I understand it, the existing charter was referred to by the Advocate-General in recent BECTU litigation extending paid holidays to people with less than 13 weeks' service. It is unclear whether this will be possible in future in the British context, or whether any attempts to use the charter in this way would breach the provisions of the protocol stating that charter rights are not"““justiciable rights applicable to the United Kingdom except in so far as the United Kingdom has provided for such rights in its national law””." It might otherwise be possible to use charter rights to strengthen existing rights in various areas, including information and consultation. The charter provides that workers or their representatives must be"““guaranteed information and consultation in good time””." On protection in the event of unfair dismissal, the charter provides:"““Every worker has the right to protection against unjustified dismissal, in accordance with Community law and national laws””." On fair and just working conditions, the charter provides:"““Every worker has the right to limitation of maximum working hours””." The information and consultation regulations, the redundancy consultation procedures and the TUPE regulations do not guarantee that workers will be consulted in good time, the TUPE regulations do not protect every worker from dismissal, and the working time regulations do not ensure that every worker has the right to limitation of maximum working hours. The last point was raised by the European Scrutiny Committee of the House of Commons, and according to the Committee, the charter could be used to challenge the implementation of the working time directive, as in the BECTU case. That might also happen in one of the other member states, but because of the opt-out it may not be possible to mount such a challenge from the United Kingdom, where arguably the need is most acute, given the long hours culture. This gives rise to the possibility that established rights under EC law could have diluted content in the United Kingdom—a view reinforced by the Committee's apparent concern that ECJ decisions on social policy in cases involving other countries could creep into UK law. Perhaps the fundamental question is whether it is acceptable, especially for a Labour Government, to put workers' rights on a different footing from the freedoms of employers, which are contained in title II and are thus not covered by paragraph 2. I would like to think that the Government will not in future seek to celebrate the way in which they have excluded British workers from protections afforded to European workers, and that they will not make a virtue of this to the CBI and the press. We need to be sure that title IV does not have some kind of separate status from the rest of the charter. I am worried that a clever corporate lawyer might try to argue that, as the protocol states only that title IV cannot create new justiciable rights, by implication title II can therefore do so. This is an important matter for the Minister to clarify. Many of the counter-arguments that I have heard so far seem to amount to saying that the provision makes no difference whatever. Either way, many of us would also like to hear why such an apparently specific proviso was ever negotiated in the first place and, perhaps more importantly, that workers' rights will not be treated in that way in future.