HOUSES OF THE OIREACHTAS MEDIA RELEASE Lisbon Treaty will Strengthen Workers’ Rights and Claims to Contrary are Unfounded-Oireachtas European Affairs Committee Report 13TH September Ratification of the Lisbon Treaty will enhance workers’ rights and strengthen Irish workers’ entitlements to collective bargaining including taking strike action, while claims that the Treaty will undermine employee’s pay and working conditions are without basis. These are some of the principle findings contained in a report published today, (13th) by Oireachtas European Affairs Committee. The report presents detailed research on the issue of Workers’ Rights and the Lisbon Treaty. As part of this research, Committee members examined EU Law, judgements relating to workers’ rights from the European Court of Justice and also analysed some of the specific cases (Posting of Workers Directive1 Laval2, Viking 3, Luxembourg 4 and Rüffert Cases5) which have been cited as having relevance to workers’ rights and the Lisbon Treaty. As part of this analysis, a delegation from the Committee visited Finland and Sweden where the Laval and Viking cases originated to consider the impact these judgements have had there and their significance to the Lisbon Treaty and Ireland. Report Co-Author and Committee Member, Joe Costello TD said; “Workers rights have emerged as a central issue in the Lisbon Treaty debate. Following the outcome of the first Lisbon Treaty vote, research showed that 40% of those who voted “yes” cited workings rights as an important issue when deciding how to vote, while 52% of “no” voters referred to it as a factor. The reason, therefore, for compiling this report was to bring a sense of reality to the debate on Lisbon Treaty and workers rights. From our detailed enquiry it is clear that claims made by opponents of the Lisbon Treaty that it will undermine workers’ rights or force a reduction in the minimum wage are completely false.” Some of the main findings in the report include: • The Laval case is unique to industrial relations systems in Sweden and could not have happened in Ireland as Ireland has a statutory minimum wage rate. The Laval case cannot and should not be linked to the Lisbon Treaty. The European Court of Justice in the Viking, Laval, Ruffert and Luxembourg cases established some important principles which benefit workers’ rights in Ireland. These include the right to collective bargaining, including taking strike action and the legitimacy to take strike action to combat social dumping6. • • There is unanimous agreement in both Sweden and Finland (where the Laval and Viking cases originated) among social partners and political parties that the Lisbon Treaty is good for workers’ rights and should be ratified. The rights of workers in Ireland have been greatly enhanced by membership of the EU. The vast majority of legislation in Ireland pertaining to conditions for workers in Ireland originated in the EU The Lisbon Treaty will give “treaty status” to the Charter of Fundamental Human Rights (7). Treaty status will give the Charter a stronger legal footing, including its articles protecting the rights of workers to take collective action. The Solemn Declaration on Workers’ Rights(8) agreed by the European Council in June 2009 reinforces the fact that the Lisbon Treaty will improve and promote the protection of workers’ rights in the EU, in particular through its social clause (9). While in Sweden and Finland, the Committee delegation, consisting of Timmy Dooley TD and Joe Costello TD, met with the main trade unions, employers’ organisations and key parliamentarians in order to consider the effect of the Laval and Viking cases. • • • • Report Co-Author and Committee Member, Timmy Dooley TD said; “The Posted Workers Directive, as well as the Viking, Laval, Ruffert and Luxembourg cases and their potential impact on workers’ rights were raised as issues of concern during the Lisbon Treaty referendum campaign last year. Workers’ rights has also become a central theme in the current debate. From our discussions with key players in both Sweden and Finland, it is now clear that the Laval case could not have happened in Ireland, given our industrial relations legislation and our statutory minimum wage. Subsequently, any claims that the Lisbon Treaty will mean a reduction in Ireland’s minimum wage rate or impact on workers’ entitlement to take strike action are totally unfounded.” On the contrary, it is clear from our examination that the Viking, Ruffert and Luxembourg cases have established some very important principles which advance workers’ rights an that the Lisbon Treaty is good for workers.” We feel that this report now clarifies some of the main conflicts about the Lisbon Treaty and helps people to be better informed as they face one of the most important decisions Ireland has taken in recent times.” To find out more about the Oireachtas European Affairs Committee see http://euaffairs.ie/ ENDS Daniel English Oireachtas Communications Unit 087 6949926 01 618 4484 Note to Editor 1. The Posted Workers Directive The Posting of Workers Directive was adopted by the Council of Ministers and the European Parliament in 1996. It was adopted in order to ensure that Member States establish rules for minimum protection of posted workers (workers from another EU Member State) in order to avoid discrimination between posted and national workers and to alleviate unfair competition between companies and business operating across Member States. The Directive requires Member States to determine the terms and conditions of employment, including minimum rates of pay of posted workers. The Directive was brought into Irish law in 2001. It provides that all Irish labour legislation applies to workers posted to Ireland. In addition, the Directive allows Member States to provide that companies must guarantee temporarily posted workers the same terms and conditions which apply to temporary workers in the Member States where the work is carried out 2. The Laval Case In the Laval case, a Latvian construction company named “Laval un Partneri” posted workers from Latvia to building sites in Sweden. Swedish unions took action against Laval over the company’s refusal to sign a collective labour agreement. Laval were party to a collective agreement under Latvian law. The case was brought to the Swedish Labour Court who referred it to the European Court of Justice. (ECJ) In its judgement the ECJ stresses that Article 49 of the Treaty of Europe (i.e. the free movement of services) precludes a Member State from restricting foreign service providers’ ability to move freely with its staff on the territory of the Member State. Member States may, however, apply their own rules on minimum wages where it is appropriate for the protection of posted workers. On the issue of the collective action and its justification, the ECJ points out that although the right to strike is an exclusive national competence it must be exercised consistently with Community law. The ECJ states that the right to take collective action is a fundamental right which forms an integral part of Community law. 3. The Viking Case The Viking Case involved the re-flagging of a Finnish ferry operating between Helsinki and Tallinn, under he Finnish flag, and with a predominately Finnish crew who benefit from a collective agreement negotiated by the Finnish Seamen’s Union (FSU). In 2003, the Finnish Viking shipping line decided that it could gain a competitive advantage by re-flagging its ferry as an Estonian vessel. Following legal actions in both the Finnish and British Courts the case was referred to the ECJ in an attempt to clarify whether the EC Treaty prohibits collective actions seeking to prevent an employer from relocating its assets to another EU Member State where salaries and benefits are lower. As part of its judgement, the ECJ declared that the right to take collective action is a fundamental right as recognised by the European Social Charter, the International Labour Organisation (ILO), the Charter of Fundamental Social Rights of Workers and the EU Charter of Fundamental Rights. The right to strike must therefore be recognised as a fundamental right which forms an integral part of the general principles of Community law. 4. Luxembourg Case: The Luxembourg case relates to the issue of public policy contained in Article 3.10 of the Posting of Workers Directive. The European Commission referred Luxembourg to the ECJ arguing that the Luxembourg legislation transposing the Posting of Workers exceeds what is allowed under Community law. In its judgment, the ECJ acknowledges that a Member State may impose upon foreign service providers the respect of terms and conditions of employment other than those contained in the exhaustive list of Article 3.1 of the Posting of Workers Directive (see above) if they constitute public policy provisions. The Court recalls that public policy provisions are those which are deemed to be so crucial for the protection of the political, social or economic order as to require compliance by all persons present on the national territory, regardless of their nationality. 5. Ruffert Case: The Rüffert Case concerned the reward of public contracts to foreign workers by a district in Germany to carry out building work. The contract was awarded to a Polish company. When it was discovered the 53 foreign workers were earning almost half of the applicable minimum wage for the construction sector for that German region, the local authority withdrew the contract and demanded payment of contractual penalties. The construction company took legal action as a result. In deciding this case, the ECJ essentially applied the provisions of the Posting of Workers Directive. The Court finds that the rate of pay laid down by the law of that German region was not fixed in accordance with one of the procedures of the Directive 6.Social Dumping Social Dumping is a term used to describe a temporary or transority movement of labour, whereby employers use workers from one country or area in another country or area where cost of labour is usually more expensive, thus saving money and potentially increasing profit. 7. The European Union Charter of Fundamental Rights This document sets out in a single text, for the first time in the European Union's history, the whole range of civil, political, economic and social rights of European citizens and all persons resident in the EU. These rights are divided into six sections: Dignity Freedoms Equality, Solidarity, Citizens’ rights and Justice. The Lisbon Treaty gives the Charter the same legal effect as EU treaties. 8. The Solemn Declaration on Workers’ Rights This statement highlight the Union’s aim of achieving full employment and social progress, its recognition of the rights, freedoms and principles of the Charter of Fundamental Rights, its commitment to combating social exclusion and discrimination, its commitment to promoting social justice and protection and equality between women and men. The Solemn Declaration makes it clear that the EU Council must act unanimously when concluding international agreements in the field of trade in social, education and health services, when these could disturb the delivery of those services at national level. 9. Lisbon Treaty’s Social Clause The Lisbon Treaty includes a new social clause. This clause obliges the European Union, when defining and implementing its policies and activities, to take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health.