Magazine article Management Today

Inside Out

Magazine article Management Today

Inside Out

Article excerpt

The highly regulated market resulting from the EU constitution will hit disadvantaged and unskilled workers, immigrants and women especially badly.

A curious inconsistency in British government policy was acted out last month. Tony Blair and Gordon Brown trooped to the TUC annual conference to tell union leaders that labour flexibility remained the key to British growth and prosperity, that rigid continental labour practices would not be adopted here and that a return to the TUC's glory days of the 1970s would not happen under this Government.

Yet that same week the Government published its white paper on the proposed constitution for the European Union (EU). In this, it accepted all the provisions in the constitution that will pave the way for the greatest drive to regulate Europe's labour markets since the Social Chapter was signed in the early 1990s. Few people - even those in business - realise this.

Most commentary focused on how the constitution will lead to greater political unification and centralisation in Brussels. Just as significant are those parts of it that amount to a huge (if hidden) setback to the cause of economic liberalism in the EU, and for jobs and prosperity.

The new constitution gives trade unions a formal constitutional role; it encourages a renewed emphasis on '70s-style corporatist bargaining between employers' groups and organised labour; and workers are granted a new range of 'social rights' which may overrule much national legislation and undo years of painful British labour-market reforms. During the constitution's drafting, the Government was opposed to some of these proposals. Its white paper makes it clear it has thrown in the towel.

This labour revolution by constitutional change will not happen overnight.

But it will happen. Only in the years ahead, when decisions and rulings by the European Court of Justice are taken to enforce the constitution, will its full implications emerge.

It is already clear that, under the constitution, companies and governments will have to consult trade unions on a range of decisions. For Britain, the change will be especially severe. For France and Germany, where big business and the trade unions already work closely together, it will make little difference.

The greatest threat to Britain's flexible labour regime is the inclusion in the constitution of the Charter of Fundamental Rights; Britain had previously pledged to veto such a move.

As economist Brian Hindley noted in a paper published by the Centre for Policy Studies in London, the provisions of the charter that deal with the labour market are so vague they have the potential to be expanded by an activist European court to an almost unlimited extent. …

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