EU social policy state of play

The co-decision procedure

The co-decision procedure now applies to the majority of social policy instruments. Based on Article 251 of the Treaty, the Commission first issues a proposal to the Council and the EP. The EP then gives the text a first reading. Following this, the Council, acting on a qualified majority, will either: adopt the proposal if it agrees with all the amendments suggested by the EP; adopt the proposal if the EP has not made any amendments; or (this is the most likely development) adopt a common position and send the text back to the EP.

The EP then has three months in which to give the text a second reading. It can either: approve the common position or take no action, in which case the proposal is deemed to be adopted as set out in the Council's common position; reject (by an absolute majority) the common position, in which case it is deemed not to have been adopted; or propose amendments to the common position, by an absolute majority. This latter scenario is the most common, and if this route is chosen by the EP, the amended text is sent back to the Commission and the Council, which then both give an opinion on the amendments.

The Council then has three months to act. It can, by qualified majority, approve all the EP's amendments, in which case the proposal is adopted, in the form of the Council's common position as amended by the EP. There is a complication here, however, in that if the Council wishes to accept EP amendments on which the Commission has delivered a negative opinion, it must act unanimously. If, however, the Council cannot accept all of the EP's amendments, a Council/EP conciliation committee should be convened within six weeks in order to find a compromise text. The committee comprises an equal number of Council and EP members. If, within six weeks of being convened, the committee agrees on a joint text (acting on a qualified majority of its Council members and a majority of its EP members), the Council and the EP then have six weeks to approve the text. The Council acts on a qualified majority and the EP on an absolute majority. If either the Council or the EP fails to approve the conciliation text within six weeks, the text falls. Equally, if the conciliation committee fails to agree on a joint text, the proposal falls. All the three-month periods referred to in this process may be extended by the EP or the Council by a period of a further month. Equally, all the six-week periods referred to may be extended by a further two weeks.

Adoption

The main event of the past six months has been the adoption, on 8 October 2001, of the Regulation on the statute for a European Company (SE) and the accompanying Directive, which provides for the involvement of employees in a European company. This represents the culmination of more than 30 years of debate on this issue - the blockage focused on the worker involvement provisions contained in the Directive. Consensus on the Directive (approval needed to be unanimous) was in fact achieved in the Council in December 2000 and the text was subsequently passed to the EP for scrutiny, although the approval of the EP was not needed. The EP's opinion was given on 4 September 2001, following which the text was formally adopted at the 8 October employment and social policy Council. The Regulation and the Directive must be transposed into national legislation by 8 October 2004. The text appeared in the OJ on 10 November 2001 - see Employee involvement in a European company for a reproduction of the Directive, and European Company Statute adopted for a commentary. Now that the legislative framework for the formulation of a European company is actually in place, it will be interesting to see how many companies actually take advantage of this and incorporate it as an SE.

The proposal for a Directive modifying the 1989 Directive on health and safety requirements for the use of work equipment at work (the second individual Directive within the meaning of article 2 of the 1989 framework Directive on health and safety) was adopted on 27 June 2001, following the acceptance of the text by the EP at a second reading given on 14 June.

Agreements and new proposals

On 12 October, the Commission issued a new proposal aimed at regulating driving times and rest breaks for drivers of heavy goods vehicles. The proposal will replace Regulation 3820, which has been in force since 1985. It is also intended to sit alongside and therefore complement the current proposals to extend some of the protection afforded by the 1993 working time Directive to the road transport sector (a conciliated text on this proposal has now been issued).

The Commission issued on 20 July a new proposal for a Directive updating the 1983 Directive protecting workers from the risks related to exposure to asbestos at work. The new proposal aims to modernise the 1983 Directive and introduce one single limit for exposure to asbestos, compared with the two limits contained in the 1983 Directive. It also aims to bring the maritime and air transport sectors within the scope of the Directive.

Consultation and amended proposals

The Commission's proposal for a Directive establishing a general framework for informing and consulting employees has now almost completed its journey through the decision-making machinery. The Council's common position on this text, reached on 11 June 2001, was adopted by the Council on 23 July. The EP gave it a second reading on 22 October, suggesting a number of amendments. One of the main suggested changes was the removal of the longer implementing period for countries such as the UK and Ireland, which do not have general, established information and consultation procedures in place. However, the EP did not, as many had expected, reintroduce provisions relating to sanctions for non-compliance with the Directive. As the EP's amendments were not all accepted, a Council/EP conciliation committee was convened, which issued a compromise text on 17 December. No official text is available as EIRR goes to press, but one of the main compromises is the reduction of the second extra implementing period for countries such as Ireland and the UK, from two years to one year. Thus, after the general three-year implementation period, these countries will be able to limit the Directive's scope to undertakings of at least 150 employees (or establishments of at least 100 employees) for a further two years. For a further one year, they may limit the scope of the Directive to undertakings of at least 100 employees (or establishments of at least 50 employees), instead of two years as contained in the Council's common position. The text will now be forwarded to the EP for scrutiny - it is expected that the EP's opinion will be given in February, enabling the Council to adopt the text formally shortly afterwards.

A proposal first issued by the Commission on 15 January 2001, aiming to protect employees against the insolvency of their employer, is progressing through the decision-making machinery. It was given a first reading by the EP under the co-decision procedure on 29 November, at which the EP made amendments to the text. It will now be returned to the Council. This text aims to update a Directive that dates from 1980.

Following the adoption of the text governing worker involvement in a future European company, the Commission has now revived a text on worker involvement in the European Co-operative Society (SCE). The proposal for an SCE was originally issued in 1992 and is intended to be a parallel text to the European Company Statute. It provides for the creation of a specific legal entity that would be available to co-operatives with operations in two or more member states. This text has received a detailed reading in the preparatory bodies of the Council, and the Belgian Presidency has progressed this dossier, with work now reported to be "at an advanced stage".

The proposal updating the 1976 equal treatment Directive in line with European Court of Justice judgments in the area of sex discrimination has been making progress. Following political agreement in the Council on a common position, on 11 June 2001, formal adoption of the common position was completed on 23 July 2001. The EP gave the text a second reading on 24 October, introducing a number of amendments, not all of which were accepted. The proposal will now go into the conciliation process. The text also characterises sexual harassment as a form of sexual discrimination that entails a risk of liability for employers that fail to provide a workplace that is free of such harassment.

The Council's common position on a proposal for a Directive aimed at protecting workers against the risks associated with mechanical vibration, on which political agreement was reached at the 27-28 November 2000 employment and social policy Council, was adopted on 25 June 2001. This proposal was revived by the German Presidency during the first half of 1999, and based on an original proposal aimed at protecting workers against the risks associated with four physical agents - noise, mechanical vibration, optical radiation and electro-magnetic fields and waves. The text concentrates on mechanical vibration, due to the fact that there is no existing Community legislation on this issue and the Presidency considered that a one-by-one approach to these four issues was best. The text was given a second reading by the EP on 23 October 2001, at which amendments to the text were introduced. Not all the EP's amendments have been accepted, and the text will now go into conciliation.

The text regulating working time for mobile workers in the road transport sector has been making progress through the decision-making machinery. Political agreement on a common position was reached at the 22 December 2000 transport Council. The text was given a second reading by the EP on 14 June, at which amendments were made. The EP's amendments were not accepted by the Council and so the text was forwarded to a Council/EP conciliation committee briefed to find a compromise. The conciliation committee issued a compromise text on 17 December, providing for a temporary exclusion for self-employed drivers - the issue of self-employed drivers has been largely responsible for blocking adoption of this text. The conciliation text stipulates that self-employed drivers will be covered by the Directive four years after the date of implementation of the Directive (which is three years from adoption), provided that the Commission does not recommend further exclusion of these drivers in a report that it will draw up two years before the end of the four-year temporary exclusion period. The text also refines the definitions of working time and self-employed drivers.

Social partner negotiations on the issue of teleworking got under way on 12 October and a second round was held on 12 November. The parties - UNICE/UEAPME for private sector employers, ETUC for trade unions and CEEP for public sector employers - are aiming to negotiate a voluntary accord. This follows a proposal by UNICE made in March 2001, shortly before the Commission's second stage of consultation of the social partners on the issue of the modernisation of work, which focused on teleworking. After an exchange of letters, ETUC agreed to enter into talks for a voluntary accord, although the issue of how this can be implemented satisfactorily in member states will be a focus. This is the first time that the social partners have set out to negotiate a voluntary agreement in this way. For more details on this, see The future of the European social dialogue.

Lapsed texts

The proposal for a 13th Directive on company law concerning takeover bids was given a second reading by the EP under the co-decision procedure on 13 December. The EP made a number of amendments to the text, which were not accepted by the Council. A conciliation committee was subsequently convened to broker a deal, and issued a text on 6 June 2001. However, the EP decided on 4 July 2001 that it could not accept the text prepared by the conciliation committee. The proposal has therefore lapsed. Nevertheless, the Commission set up a high-level group on 4 September to look at this issue with a view to preparing the ground for a further Commission proposal.

No progress

There has been no progress on the issue of temporary work since the social partner talks collapsed irrevocably at the end of May. Although at the time employment and social policy Commissioner Anna Diamantopoulou stated that the Commission will shortly publish a proposal for legislation to govern this issue, no text has been forthcoming over the past six months. It is possible that this issue will be progressed under the incoming Spanish Presidency of the Council. This is the final topic to be examined within the framework of the Commission's original 1995 consultation of the social partners on the general issue of atypical working. This consultation has already resulted in two social partner agreements - on part-time work and fixed-term contracts.

Prospects

The Belgian Presidency's main achievements include the final adoption of the texts relating to the European Company Statute, and significant progress on the proposal for a framework for information and consultation of employees. It is likely that this latter proposal will now achieve final adoption within the next few weeks, making this the first major social policy proposal to be adopted under the incoming Spanish Presidency. The main factor contributing to the progression of this proposal was the fact that the EP did not vote to reinsert provisions relating to sanctions for non-compliance with the Directive. This would have been a major source of controversy within the Council, meaning that the conciliation committee would have had a very difficult task to find a compromise text.

Now that the European Company Statute proposals have been adopted, and final adoption of the information and consultation draft Directive looks certain, it is likely that the Commission will, finally, issue proposals to revise the 1994 European Works Councils Directive. This development has been expected for more than a year, with the social partners - particularly trade unions - setting out their preferences for the content of a revised text.

In terms of social partner negotiations, the first half of 2002 looks likely to see significant progress and possibly the conclusion of the intersectoral level talks on teleworking. If the social partners manage to negotiate a joint text, this will be the first voluntary text to be concluded using this Treaty-based route of social partner consultations by the Commission, followed by social partner negotiations. More widely, the social partners have recently set out their vision for the future of the social dialogue in a joint declaration to the Laeken Council, which took place on 14-15 December. For details, see The future of the European social dialogue.

Although a proposal on the regulation of temporary work has been promised for some months, nothing has yet materialised. It is, however, likely that the Commission will issue a proposal in this area during the first six months of 2002.

The idea of setting up voluntary conciliation and arbitration mechanisms at European level is gathering momentum. The issue was discussed at the 3 December employment and social policy Council, and the Commission is now expected to pursue this area, in conjunction with the social partners. We may therefore see a consultation document on this issue released over the coming months. Consultation of the social partners was first mooted on this issue in the Commission's five-year social policy agenda, issued in June 2000 (EC: New social policy agenda ). In this document, the Commission stated its intention to consult the social partners (although it did not specify a date) on the need to establish, at European level, voluntary mechanisms on mediation, arbitration and conciliation for conflict resolution. This commitment was reiterated in the Commission's more recent package of measures designed to combat the social effects of restructuring, although a date was still not specified.

The issue of the social effects of industrial restructuring has gained a high profile over the past few months, and is set to remain a major focus of debate, partly due to the fall-out from the 11 September attacks on the USA, coupled with cyclical economic downturn. The Commission is reported to be preparing a document on industrial restructuring, which is expected to be issued in the coming weeks. The coming six months will, therefore, no doubt include debates on this issue, the exact nature of which will depend on the final content of the Commission's document.

In terms of the takeovers draft Directive, which lapsed in July 2001 following the EP's rejection of a conciliated text, in September, the Commission has recently launched a high-level group briefed to look into this area. The Commission will base any future initiatives on the recommendations of this group, which will issue a final report in mid-2002. This area is of interest in social policy terms, as it contains proposals for the consultation of the workforce in the event of a takeover.

The issue of labour conditions, social clauses and labour standards looks set to become an area of focus in the coming months. The Commission issued in July 2001 two documents - one focusing on labour standards and the other on corporate social responsibility. It also held a major conference to discuss the issue of corporate social responsibility in November 2001. This is likely to extend to debate on social conditions and clauses in public procurement - in October 2001, the Commission issued a Communication containing guidelines on how to integrate social considerations into public procurement procedures (Public procurement guidelines).

Following the declarations made at the 14-15 December Laeken Council, a new process of Treaty revision will be initiated in the medium term. A Convention, made up of the main parties involved in the debate on the future of the European Union, will be convened shortly, briefed to pave the way for a further Intergovernmental Conference (IGC). The previous IGC culminated in the conclusion of the Nice Treaty in December 2000, although the new Treaty has yet to come into force (it must first be ratified by all member states, a process that usually takes around 18 months).

Finally, it should not be forgotten that Europe entered a new era on 1 January 2002, the date on which Euro notes and coins were issued in 12 countries. While this will have limited short-term effect on the types of social policy issues covered here, it nevertheless heralds the beginning of a new phase of European integration.

¹Copies of the Official Journal may be obtained from: Office for Official Publications of the European Communities, 2 rue Mercier, L-2985 Luxembourg, tel: + 352 499 281, fax: + 352 48 85 73; or in the UK from the Stationery Office, International Sales Agency, 51 Nine Elms Lane, London SW8 5DR, tel: + 44 020 7873 90 90, fax: + 44 020 7873 84 63.