European Communities: Social policy state of play

We round up developments in social policy during the first six months of 2004.

The first six months of 2004, with the Irish government at the helm of the Council of Ministers, saw the adoption of two health and safety proposals - on protection against the risk from exposure to electromagnetic fields and the proposal codifying an existing Directive on protection against exposure to carcinogens or mutagens. It also saw the adoption of the Directive on takeover bids and of the reform of social security Regulation 1408/71. Ministers also reached agreement on the draft of the EU Constitutional Treaty. For their part, the social partners reached a draft agreement on stress at work.

The social policy state of play table contains all important "live" items of the draft social policy legislation that are still in the legislative pipeline and of general interest to our readers. It does not contain those measures that were adopted prior to the most recent table (see EC: Social policy state of play). It shows only those proposals that have yet to be adopted, or that have been adopted since the previous table. Proposals that have become dormant (defined here as not having been discussed in Council for more than two years) are not included.

For each proposal the table provides the following information, as at 16 July 2004:

the full title of the proposal;

a reference to the issue of the Official Journal of the European Union* - the OJ - in which the proposal (and any subsequent revised versions) was published. Laws appear in the Legislative ("L") series, while other instruments and proposals appear in the Communications ("C") series;

where appropriate, or available, the Article of the EC Treaty on which the proposal is based; and

where relevant, the dates of the proposal's submission to the Council, the Opinions issued on the proposal by the European Parliament (EP) and the Economic and Social Committee (ESC), the submission of an amended proposal to the Council, and any Council decisions or debates, as well as the dates of the formal consultation of the social partners, where relevant. Adopted proposals and formally signed agreements are identified with an asterisk.

Adoption and agreements

Takeover bids Directive

The Commission's proposal on takeover bids has progressed speedily through the EU decision-making machinery, achieving adoption in April 2004. This proposal is of interest as it contains provisions relating to the information and consultation of workers or their representatives in the event of takeover bids. The previous Commission proposal for the regulation of company takeover bids had lapsed in July 2001, following rejection of a conciliated text by the EP on 4 July 2001.

Deciding to restart the legislative procedure, the Commission convened a high-level group to look into this issue in September 2001. After examining the group's findings, reported in January 2002, the Commission issued a new proposal on 2 October 2002. The EP gave the text a first reading on 16 December 2003, making a number of amendments. The Council decided on 21 April 2004 that it could accept all of the amendments and adopted the Directive. It appeared as Directive 2004/25/EC in OJ 142 on 30 April 2004.

The Directive states that when an offer document is made public, the boards of the offeree company and the offeror must communicate it to the representatives of their respective employees or, where there are no such representatives, to the employees themselves.

The Directive is without prejudice to the rules relating to information and to consultation of representatives of and, if member states so provide, co-determination with the employees of the offeror and the offeree company, who are governed by provisions adopted under the European Works Councils Directive, the business transfers Directive, the collective redundancies Directive and the information and consultation Directive.

Risks arising from electromagnetic fields

Final adoption of the Directive, aimed at protecting workers from the risks associated with exposure to electromagnetic fields, was achieved in April 2004, following the Commission's decision to accept the amendments proposed by the EP at its second reading of the text.

The original physical agents proposal was issued by the Commission on 23 December 1992 (EIRR 230), dealing with four physical agents: noise; mechanical vibration; electromagnetic fields and waves; and optical radiation. In 1999, it was decided to focus on each of these four issues separately. Thus, a Directive on vibration was adopted in May 2002 and on noise in December 2002.

The proposal on electromagnetic fields was discussed at the June 2003 social affairs Council (EIRR 353) and again in October 2003, where ministers reached political agreement on a common position. The common position was formally adopted on 18 December 2003 and the EP gave the text a second reading, under the co-decision procedure, on 30 March 2004. It made five amendments to the text, which the Commission stated in April that it could accept. The Council adopted the text by written procedure on 7 April. The final text was published as Directive 2004/40/EC in OJ 184 on 24 May 2004.

Exposure to carcinogens or mutagens

The past six months have seen the adoption of the revised proposal, issued by the Commission on 20 March 2003, to codify Directive 90/394/EEC of 28 June 1990 on the protection of workers from the risks related to exposure to carcinogens at work. This is purely a codifying process that does not entail any changes to the content of the 1990 Directive.

The EP gave the text a first reading under the co-decision procedure on 2 September 2003, at which it approved the Commission's proposal without amendment. As no amendments were made by the EP at this first reading, there was no need for more debates in Council, or a second EP reading, and so the final Act was published as Directive 2004/37/EC in OJ L158 on 30 April 2004.

Reform of social security Regulation 1408/71

The past six months have seen the adoption of the reform of Regulation 1408/71, which regulates the application of social security schemes to employed persons and their families moving within the European Community. This reform is aimed at simplifying Community legislation in order to remove obstacles to the free movement of persons created by the co-existence of different national social security systems. A proposal to replace the Regulation was issued by the Commission in 1999. It is subject to unanimity in the Council and also to the co-decision procedure.

At the 1-2 December 2003 social affairs Council, ministers reached a unanimous partial political agreement on the text (with the exception of the annexes). The two most controversial issues related to the provisions contained in the unemployment chapter. The first concerned the payment of unemployment benefits to frontier and seasonal workers, where there were concerns about the cost of unemployment benefits to be provided by the state of residence to unemployed persons who did not reside in the state in which they were previously employed. As the state of residence had not received any contributions from the worker, because the worker had not worked in this state, it was proposed that the state of last activity should, within certain limits, reimburse the costs of unemployment benefit provided by the state of residence. The proposal accepted by all delegations provides that the reimbursement will be for a period of three months, extended to five months where the person has, in the previous 24 months, spent at least 12 months employed or self-employed in the state to whose legislation they were last subject. In the case of relations between Luxembourg and France, and Belgium and Germany, arrangements will be the subject of separate bilateral agreements.

The second issue concerned Luxembourg's request for a specific transitional period in view of the need to reinforce its employment services, which would result from frontier workers being able to register additionally with the employment service of the state of their last activity. It was agreed that a two-year transitional period should be granted to Luxembourg.

Thus, after these issues had been solved, it was possible to reach full political agreement on 26 January 2004. The text was then returned to the EP for a second reading, at which point two amendments were made. These concerned: notification to the EP and the Council; and bringing the period of eligibility for benefits in kind within the territory of the previous state of employment, documentation which is to be completed by family members in line with that to be completed by former frontier workers themselves.

The Commission stated on 22 April that it could accept both amendments and the final act was made on 29 April and published as Regulation (EC) no.883/2004 of the European Parliament and of the Council of 29 April 2004 on coordination of social security systems in OJ L200 on 7 June 2004.

Stress at work

After eight months of negotiations, the EU-level social partners - the European Trade Union Confederation ETUC, UNICE for private sector employers and CEEP for public sector employers - reached an agreement on stress at work. Negotiations between the parties began on 18 September 2003, following the decision by the executive bodies of the ETUC and UNICE to authorise negotiations, taken in April and June 2003, respectively. These negotiations were carried out within the framework of the social partners' joint multi-annual work programme for 2003 to 2005 (see EC: Social partners set out three-year work programme).

The agreement was approved by UNICE's executive body, the Council of Presidents, on 11 June 2004. EIRR will look at this agreement in detail once it has been formally approved by all the signatory parties.

New proposals

Services in the internal market

The Commission issued a proposal on 13 January 2004 on services in the internal market. This proposal is aimed at providing a legal framework that will eliminate the obstacles to the freedom of establishment for service providers and the free movement of services between the member states. In essence, it aims to remove all national Regulations that obstruct freedom of establishment and free movement of services. Among other things, it states that a service provider will be subject only to the law of the country in which it is established. Member states may not restrict services from a provider established in another member state. However, derogations may be put into place on either a general, temporary or case-by-case basis. Services are defined widely by the Directive and include the services of temporary employment agencies.

However, it is proving to be extremely controversial among trade unions throughout Europe, which have been staging protests against the proposal. They fear that it will result in employers locating themselves in countries with the lowest fiscal, social and environmental requirements and subsequently extending from this base their activities throughout the EU. The ETUC has stated that: "We support an EU single market in services but not at the expense of European and national social standards, labour law, services of general interest, health and safety and collective agreements."

The text, which is subject to the co-decision procedure, is currently awaiting a first reading in the EP.

Consultation and amended proposals

Equal treatment in the access to and supply of goods and services

The Commission's proposal seeking to prohibit discrimination based on sex in the access to, and supply of, goods and services, issued on 5 November 2003, has been making its way through the decision-making procedure. Although this proposal does not relate to equal treatment at the workplace, it is of interest as it has implications for private pension provision. It is based on Article 13 of the Treaty establishing the European Community (TEC) and seeks to prohibit discrimination in the access to, and supply of, all available goods and services. It allows for justified exceptions, such as where a good or service was intended exclusively or primarily for members of one sex, or where the skills required for its delivery were different for each sex.

The proposal explicitly sets out to tackle the issues of premiums and benefits in the insurance sector. For example, in a majority of cases, women pay higher premiums than men for pension and annuities, or their plans pay out less per year, whereas men tend to pay higher premiums for life insurance. The insurance industry justifies this by citing the fact that women generally live longer than men. However, the Commission states that this justification is not necessarily valid as there are a number of factors that are not linked to sex that are equally important in establishing life expectancy, such as socio-economic or marital status, the region in which a person lives and levels of smoking. When these factors are removed from the equation, the difference in life expectancy between men and women can be between zero and two years.

The proposal is subject to the consultation procedure, which means that the Council only has to consult the European Parliament and is not obliged to reach a joint agreement with the Parliament on the text, although there must be unanimity in the Council.

The Parliament debated the proposal on 30 March 2004, broadly approving it but making a number of mostly technical amendments, some of which were intended to align the Directive with existing equal treatment Directives and the case law of the European Court of Justice (ECJ). For example, although the Directive does not apply to the content of media and advertising, the Parliament specified that it should apply to advertising of the terms and conditions on which access to goods is granted and services are supplied. It also wanted member states to report to the Commission three years after the Directive's entry into force and every three years thereafter, rather than every five years as originally proposed. In addition, it wanted the Commission to report back to Parliament and the Council every four years.

The proposal was then debated at the 1-2 June social affairs Council. Ministers were asked by the Presidency whether they welcomed the Directive and, most specifically, whether they thought that the use of sex-based actuarial factors in insurance and related services should be banned as unacceptable discrimination. They were also asked whether they would consider part-solutions, such as:

applying the ban to the calculation of premia and benefits, but not applying it in the calculation of risks;

extending the transitional period for full implementation of the Directive; and

devising different solutions based on the type of insurance product.

Alternatively, ministers were asked whether they thought that the use of sex-based actuarial factors should continue as long as it was based on objective statistics.

Revision of the EWCs Directive

The Commission issued its long-awaited consultation document on the possible review of the European Works Councils (EWCs) Directive on 20 April 2004. It asks EU-level social partners how they think the EWCs Directive, which dates from 1994, can best respond to the challenges of a changing economic and social environment. In particular, they are asked to give their opinion on:

how best to ensure that the potential of EWCs to promote constructive and fruitful transnational social dialogue at the level of the undertaking - which will benefit both companies and their employees - is fully realised in the years ahead;

the possible direction of Community action in this regard, including, as the case may be, the revision of the EWCs Directive; and

the role they believe the social partners themselves can play in addressing the issues that arise, having regard, as appropriate, to their recent reflections on related issues in the context of managing change and its social consequences. This is a reference to the social partners' joint text on orientations of reference for managing change and its social consequences, concluded in June 2003 (see International: Socially responsible enterprise restructuring in Europe - part one).

The ETUC is keen to see concrete revision of the text of the Directive and has been active in putting together a list of amendments it would like to see. However, UNICE is thought to be more interested in entering into a process of dialogue with the ETUC to examine case studies and discuss best practice. Theoretically, talks of this kind could result in some sort of joint text, along the lines of the June 2003 orientations for reference in the case of restructuring. This would not have legally binding status, but would serve as a reference point for implementation and good practice.

However, whether the ETUC would be happy with this approach is a moot point, given that it has been lobbying for a significant number of changes to the Directive.

Review of the working time Directive

The second half of 2004 saw progress in the Commission's consultation of the EU social partners on the operation and possible review of the 1993 working time Directive. The Commission's first consultation ran from 5 January 2004 to 31 March 2004, in which the social partners and interested parties were asked for their views on selected aspects of the Directive, focusing in particular on the so-called "opt-out" to the maximum 48-hour week provision of the Directive, which was due for a review by 23 November 2003. This relates to article 18(b)(i) of the Directive, which allows member states not to apply the Directive's provisions relating to maximum weekly working time. This article essentially allows employers not to enforce a 48-hour maximum working week if the consent of the individual employee is given, workers do not suffer any detriment and the employer keeps records which may be examined by competent authorities. The UK has included this possibility in its implementing legislation and it is thought that the practice of opting out from the 48-hour maximum working week is widespread. Other countries, notably France and the Netherlands, have made use of the opt-out for certain sectors, such as health.

In the first consultation document, the Commission invited responses from interested parties on the opt-out, the operation of reference periods for calculating working time, the definition of working time (following recent ECJ judgements in the area of on-call working), and measures to improve the balance between work and family life.

After receiving a range of responses, the Commission issued on 19 May 2004 its second consultation document. In this, it states that all interested parties wish to see a revision of the Directive, although opinions differ on how this is to be achieved. The document is strongly-worded, urging the social partners to negotiate an agreement on changes to the text in the following areas:

the individual opt-out;

the reference periods for calculating the average 48-hour working week;

the creation of a third definition of working time, in addition to "working time" and "rest period".

If they do not, it proposes to take action itself.

In relation to the opt-out, it states that it will propose amendments based on one or more of the following approaches:

tightening the conditions of application of the opt-out to strengthen its voluntary nature and raise the level of protection for workers. This could include the separation in time between the individual consent of the worker and the signature of the employment contract, or an obligation to review regularly the individual consent given by the employee, as well as a cap on the maximum number of hours of work permitted;

providing for exemptions from the maximum working week only through collective agreements or agreements between the social partners;

providing that derogations from the maximum working week would only be possible when authorised by collective agreements or agreements between the social partners. Where there is no applicable agreement and no employee representation, the individual opt-out under tighter conditions would remain applicable; and

revising the individual opt-out, with a view to its phasing out, as soon as possible. In the meantime, practical ways of tackling abuses would be identified.

Relating to the reference period for calculating average maximum working time, the Commission states that it will extend this unless the social partners negotiate on this issue.

Relating to the definition of working time, the Commission states that if the social partners do not negotiate on a new, third category of working time, it will propose the insertion of such a definition into the Directive, in addition to clarifications regarding compensatory rest.

At present, it is unclear whether the social partners will try to negotiate an agreement as there appears to be little common ground between UNICE and the ETUC. For an overview of this second consultation and the current position, see EC: Commission urges negotiations on working time.

Exposure of workers to optical radiations

The final part of the Commission's original 1992 proposal on exposure of workers to the risks arising from physical agents concerns protection against optical radiations. The other three areas contained in the original proposal - vibration, noise and electromagnetic fields - have now all been adopted as separate texts. The optical radiation text is currently awaiting a common position in the Council. The incoming Dutch Presidency has stated that it aims to progress this proposal over the coming six months.

No progress

Temporary work proposal

No progress has been made over the past year on the Commission's proposal for a Directive on the working conditions of temporary workers.It had been hoped that political agreement on a common position could be reached in the June 2003 Council. However, this was not the case, due to continuing differences of view between the various delegations - at present, a blocking minority of four member states, the UK and Ireland, supported by Denmark and Germany - persists. The main issues of contention are:

the need for a specific derogation in order to help unemployed people gain access to the labour market;

a review and possible deletion of restrictions to temporary agency work; and

the nature of the exemption from the principle of equal treatment between agency workers and user company workers, in addition to the length of the so-called qualifying period during which an exemption may be put into place.

This issue did not feature on the agendas of any of the social affairs Councils organised by the Irish Presidency during the first half of 2004 and so no formal discussions on this have taken place for a year. The Dutch government now holds the Presidency, but it would seem that this dossier is unlikely to feature in any Council discussions over the next six months, as it is not cited in the Dutch Presidency's priorities for its term of office.

Proposal on cross-border mergers

There has been no formal progress over the past six months in the case of the new proposal for a Directive on cross-border mergers of companies with share capital, issued by the Commission on 18 November 2003. However, a first reading in the EP is scheduled for November 2004.

This proposal is the latest attempt by the Commission to address the issue of cross-border mergers: previous attempts have always become bogged down over the issue of worker involvement. However, in the light of the agreement on worker involvement in a European Company, reached in October 2001 see EC: European Company Statute adopted), the Commission believes that a proposal for a Directive on cross-border mergers could contain similar worker involvement provisions.

The proposal contains specific provisions relating to employee participation, seeking to address fears that in the case of cross-border mergers the process might be hijacked by companies which, faced with having to live with employee participation, might try to circumvent it by means of such a merger. It provides that the cross-border merger remains subject, with regard to rights other than those of participation in the acquiring company or in the new company created by the cross-border merger, to the relevant provisions applicable in member states. The change of employer resulting from the merger operation must have no effect on the contract of employment or employment relationship in force at the time of the merger, which is automatically transferred to the new owner.

Likewise protected after the merger are all acquired rights of employees agreed under a collective agreement, and their rights to old-age, invalidity or survivor's benefits under statutory social security schemes.

It contains special provisions concerning a situation where the protection of acquired rights of participation is put at risk by the merger. This is relevant only in a situation where one of the merging companies has a compulsory or voluntary participation regime and the law of the member state where the company created by merger is to be incorporated does not impose compulsory employee participation. If the merging companies fail to reach a negotiated solution, the participation system that best protects the acquired rights of the workers and which already exists in one of the merging companies is extended to the company created by merger.

This proposal has caused some anger among employer representatives. UNICE, the European-level organisation representing private sector employers, has stated that the proposal is "unacceptable" and is particularly critical of the Commission for proposing it without "specific consultation of stakeholders".

Harmonising social legislation in road transport

There has been no progress over the past six months on the proposal for a Regulation harmonising social legislation in road transport. The initial proposal was issued by the Commission in October 2001, aiming to update a Regulation that dates from 1985. The proposal contains working time provisions that sit alongside those contained in the new Directive on the organisation of working time for mobile workers in road transport. The ESC gave its Opinion on the text on 29 May 2002 and the EP gave the text a first reading on 14 January 2003, making a number of amendments. A revised text was subsequently issued by the Commission in August 2003. Since then, the text has been awaiting discussion in the Council, with a view to reaching a common position. Once this has taken place, the text will be returned to the EP for a second reading, under the co-decision procedure.

Portability of supplementary pension rights

There has been no progress over the past six months on the issue of the portability of supplementary pension rights. The first consultation of the social partners on this issue was launched by the Commission on 12 June 2002, in which it invited the social partners to give their views on this topic. It argued that some framework is needed at European level, given that there is currently no general framework, which hampers freedom of movement. After considering the social partners' responses, the Commission launched the second stage of consultations on 15 September 2003, stating its belief that a social partners' agreement was the most appropriate instrument to regulate this area.

In its reply to the Commission's second consultation, UNICE stated on 19 November 2003 that any EU-level instrument in this area should deal with the cross-border portability of supplementary pensions only and should not tackle the conditions for acquisition, preservation and transferability of supplementary pension rights at national level, as this would interfere with member states' competence in this area. Further, it stated that it would not like to enter into European-level social partner negotiations on this issue, although it does see merit in organising a technical seminar within the context of the social dialogue process at EU level in order to make a joint contribution to the debate on how to alleviate the obstacles to cross-border labour mobility, linked to supplementary pensions.

The ETUCE adapted its response on 16-17 October 2003, stating that it is in favour of a European initiative in this area. IT maintains that it is ready to participate in EU-level negotiations and calls on the Commission to take steps if other EU-level partners are unwilling to participate in such negotiations.

Data protection at work

On 31 October 2002, the Commission launched a second consultation of the social partners on the issue of data protection at work. This follows a first consultation exercise, which began on 27 August 2001. Although two Directives currently regulate data protection, the Commission believes that a separate Community instrument is necessary to regulate the issue of data protection at work. On 6 January 2003, UNICE issued its response to the Commission, stating that it did not intend to open EU-level negotiations on this issue. It states that existing regulation in this area is adequate and believes that additional rules could hamper the development of information technology in the EU and be detrimental to competitiveness. It also asked the Commission to prepare a report on implementation of this legislation in the member states.

Social security

There has been no progress over the past six months on the proposal for a Council Regulation amending Regulation (EEC) no.1408/97 with regards to its extension to nationals of third countries. The aim of this proposal is to extend to nationals of non-EU member states who are living in the EU the provisions of Regulation 1408/71/EEC on the coordination of social security schemes. Political agreement on a common position was reached at the December 2002 social affairs Council.

Prospects

The second half of 2004 sees the Dutch government taking over at the helm of the EU Council of Ministers for a six-month term and it is likely that there will be movement in two high-profile areas in the coming months.

The first is the revision of the working time Directive. The social partners are now digesting the Commission's second consultation document on this issue, in which it is threatening legislation if the social partners do not negotiate. However, as seen above, it is unclear whether it will be possible to find any common ground between UNICE and the ETUC.

The second is the revision of the EWCs Directive. The first Commission consultation of the EU-level social partners on this was issued in April 2004, asking them for their views on the possible direction of Community action.

While the ETUC will certainly favour legal revisions to the text, UNICE is thought to be more in favour of negotiating good practice guidelines and orientations, along the lines of the text negotiated in June 2003 by the EU-level social partners on the issue of restructuring.

The proposal for a Directive on working conditions for temporary workers has not made any progress for a year. It is unclear whether this dossier will feature in Council debates under the Dutch Presidency, as there is no mention of it in the Presidency's priorities for its six-month term.

In terms of the other legislative instruments, the Dutch Presidency has stated that it intends to progress cross-border coordination of social security and the protection of workers against optical radiation.

Enlargement and a new Constitution

Two important events that took place over the past six months will shape the future of the EU. Firstly, on 1 May 2004, the EU admitted 10 new member states. These are: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia, taking the number of member states from 15 to 25. This is the most far-reaching enlargement of the EUever to have taken place and will no doubt have profound consequences for EU employment and social policy.

To ensure that the decision-making processes of the new, enlarged EU would not grind to a halt under the weight of its 25 members changes in processes, such as the composition of the Commission and the calculation of qualified majority voting (QMV) in Council, needed to be made. These were incorporated into the text of a new Constitutional Treaty, drafted by the European Convention. The draft also provides for the integration of the charter of fundamental rights, which includes a number of rights in the employment and social policy field. This gives the charter legal status. For an overview of the new Treaty, see European Union: Social implications of draft EU constitutional Treaty.

It has proved difficult to get agreement from all member states on the content of this Treaty - the December 2003 Council failed to gain unanimous support, because of disagreements about the future calculation of qualified majority voting. Spain and Poland want to retain the current calculation, which gives them 27 votes each, rather than use the new, simplified system provided for by the new draft from 2009.

However, the June 2004 Council resulted in agreement on the new Treaty. For details, see box . The Treaty will come into force once it has been ratified by all member states, a process that could prove to be lengthy, particularly as some member states will hold referendums.

Finally, the Commission's five-year term of office comes to an end on 31 October 2004, after which a new Commission will take office. The new Commission President has now been chosen - José Manuel Durão Barroso, the current Portuguese prime minister, was chosen by ministers at a special EU summit on 30 June 2004.

* Copies of the Official Journal may be obtained from: Office for Official Publications of the European Communities, 2 rue Mercier, L-2985 Luxembourg, tel:+ 352 499281, fax: + 352 488573; or in the UK from the Stationery Office, International Sales Agency, 51 Nine Elms Lane, London SW8 5DR, tel: +44 (0)20 7873 9090, fax: + 44 (0)20 7873 8463.

Agreement on the Constitutional Treaty Ministers met on 17 and 18 June in the framework of the Intergovernmental Conference to discuss the draft Constitutional Treaty. This text was drawn up by a specially convened body - the European Convention - headed by the former French premier Valéry Giscard d'Estaing. The Convention issued its final draft text to the Council of Ministers in June 2003, but EU heads of state failed to reach agreement on all aspects of it at the European Council meeting held in December 2003 (see Council: December social affairs council). For an overview of the main employment and social policy implications of the draft Treaty, see European Union: Social implications of draft EU Constitutional Treaty . This time, however, ministers succeeded in reaching agreement on amendments to the Constitutional Treaty. Below, we examine the main changes with relevance to social policy. The Commission One of the main obstacles to agreement on the composition of the European Commission under the new Treaty had been the number of Commissioners. It was felt that the present system, under which each member state has one Commissioner and the larger countries have two, was too unwieldy in an enlarged EU of 25 member states. However, member states were reluctant to give up their quota. The text agreed by ministers in June states that the first Commission appointed under the provisions of the new Treaty will consist of one Commissioner from each member state. After this, however, the Commission will consist of a number of members corresponding to two-thirds of the number of member states. These members will be selected on the basis of a system of equal rotation between the member states. Given that the Commission will, in future, no longer include nationals of all member states, the text says that the Commission should "pay particular attention to the need to ensure full transparency in relations with all member states". Qualified majority voting This was another area of contention, with Spain and Poland at the December 2003 Council blocking the original plans for a new definition of qualified majority. However, ministers have now agreed the following procedures: a qualified majority will be defined as at least 55% of the members of the Council, comprising at least 15 Council members and representing member states comprising at least 65% of the population of the EU; a blocking minority must include at least four Council members; however, if the Council is not acting on a proposal from the Commission or from the EU's minister for foreign affairs, the qualified majority will be 72% of the members of the Council, representing member states comprising at least 65% of the population of the EU. This is unlikely to be the case in the social policy field - it is more likely in areas such as economic and monetary policy, when the Council may act on a recommendation from the European Central Bank. The Council adds a decision on the implementation of this system, stating that if Council members representing at least three-quarters of the level of the EU population or at least three-quarters of the number of member states that is necessary to form a blocking minority indicate their opposition to the Council on a particular proposal, the Council will discuss the issue and try to reach a satisfactory solution to address the concerns raised. The current system of qualified majority voting, as set out in the Treaty of Nice, will apply until 31 October 2009. From 1 November 2009, the procedures outlined above will come into force. The Charter of Fundamental Rights One particular focus of controversy in December 2003 and since has been that status and content of the Charter of Fundamental Rights, which sets out a range of basic labour, social and human rights for EU citizens and which has been incorporated into the text of the Constitutional Treaty. The Charter remains part of the Treaty as before, with its provisions unchanged. Ministers agreed a total of three amendments relating to the interpretation of the Charter: the first is an addition to the fifth paragraph of the preamble to the charter. This paragraph already stated that the Charter will be interpreted by the courts of the EU and the member states with regard to explanations prepared under the authority of the Praesidium of the Convention. A provision has been added, stating that these explanations will be updated under the responsibility of the Praesidium of the Convention; the second amendment adds a new paragraph to Article II-52, which deals with the scope and interpretation of rights and principles. This new paragraph states that "explanations drawn up as a way of providing guidance in the interpretation of the Charter of Fundamental Rights shall be given due regard by the courts of the Union and of the member states"; and the third amendment is a declaration on the explanations relating to the Charter. It states that the Intergovernmental Conference takes note of the explanations relating to the Charter, prepared and updated under the authority of the Praesidium of the Convention. Thus, there is no substantive change to the provisions of the Charter and it is incorporated into the Treaty as Chapter II of the text. Enhanced cooperation Ministers agreed a change to the procedures governing enhanced cooperation between an agreed number of member states. This essentially gives a group of member states an opportunity to process more rapidly on a particular issue than the EU as a whole. These procedures have been amended to ensure that authorisation to proceed with enhanced cooperation will be subject to unanimous Council decision (Articles III 325 and 326). The Council may use qualified majority voting, if it decided unanimously to do so. Under this provision, a group of member states may decide to progress proposals in most policy areas, including employment and social policy. Reactions The European Trade Union Confederation (ETUC), while expressing reservations in some area of the Treaty, has welcomed the integration of the Charter of Fundamental Rights into the Treaty as "two big steps forward". The Union of Industrial and Employers' Confederations of Europe (UNICE), representing private sector employers, has also welcomed the agreement on the new Treaty. It states that this will: strengthen European competitiveness, adaptability to structural change and employment prospects; strengthen Europe's economies and fulfil the potential of European Economic and Monetary Union; successfully enlarge the EU without any distortion of the internal market; and strengthen European's economic power on the international stage. The new Treaty must be ratified by all EU member states before it can come into force. This is often a rather lengthy process, which can take up to 18 months. A referendum on acceptance will be required in some member states.

 

Social policy state of play
Subject	Legal base	Current position
Employment and remuneration
Commission consultation on the re-examination of Directive 93/104/EC concerning certain aspects of the organisation of working time.	Article 138(2).	First Commission consultation on the implementation and possible review of the 1993 working time Directive ran from 5 January 2004 to 31 March 2004 (see Consultation on working time). Particular areas of focus were the opt-out from the maximum 48-hour week and reference periods for calculating average working time. Second consultation was launched on 19 May 2004 (see EC: Commission urges negotiations on working time). Commission is urging the social partners to negotiate an agreement on revision of the text.
Proposal for a Directive of the European Parliament and the Council on working conditions for temporary workers. COM(2002)0701 (modified proposal).	Article 137(2). Co-decision procedure.	Commission launched the first stage of social partner consultation on atypical work on 27 September 1995 (EIRR 262) and second stage from 18 April 1996 to 14 June 1996. Social partner talks resulted in two agreements, on part-time work and fixed-term contracts. UNICE announced on 3 May 2000 that it was willing to enter into talks on temporary work (EIRR 317). Talks stalled in March 2001 (EIRR 327), were re-animated in April 2001 (EIRR 328), but failed definitively in May 2001 (EIRR 329). Commission issued a proposal for legislation on 20 March 2002 (see EC: Commission issues temporary work proposal and EC: Temporary work proposal). ESC Opinion on 19 September 2002 (see ESC: Opinion on temporary work proposal), EP first reading on 20-21 November 2002 (see Parliament: Opinion on temporary work proposal). Commission issued revised text on 28 November 2002. Discussed at 2-3 December 2002 (see Council: Social Council debates temporary work) and 3 June 2003 social Councils (see Council: No agreement on temporary work Directive). No progress since.
Equal treatment
Proposal for a Council Directive implementing the principle of equal treatment between women and men in the access to and supply of goods and services (COM(2003)0657).	Article 13. Consultation procedure.	Commission issued a proposal on 5 November 2003 (see Commission: Equality proposal may affect pensions) with the aim of ensuring equal treatment in access to and supply of goods and services. This proposal has implications for private pension provision. Debated in the EP on 30 March 2004 as part of the consultation procedure. The EP broadly approved the proposal, voting to make some amendments to the text. Discussed at the 1-2 June 2004 social affairs Council (EIRR 365).
Improvement of living and working conditions
Proposal for a Regulation of the European Parliament and of the Council on the harmonisation of certain social legislation relating to road transport (COM(2003)0490).	Article 71. Co-decision procedure.	Proposal issued by the Commission on 12 October 2001 (EIRR 334). Text will update existing Regulation, dating from 1985, and sit alongside the Directive on the organisation of working time for mobile workers in road transport. ESC Opinion given on 29 May 2002. EP first reading on 14 January 2003 (see Parliament: EP considers road transport text). Modified proposal issued by the Commission on 11 August 2003. Awaiting discussion in Council.
Information, consultation and participation
First consultation of the EU-level social partners on the review of the European Works Councils Directive.	Article 138.	The Commission issued the first stage of consultation on revision of the EWCs Directive on 20 April 2004 (see European Commission: Consultation of possible review of EWCs directive), asking the social partners for their views on the possible direction of Community action.
Proposal for a Directive of the European Parliament and of the Council on cross-border mergers of companies with share capital. COM(2003)0703.	Article 44.	Following the agreement reached in October 2001 on the worker involvement provisions of the European Company Statute, the Commission issued a new proposal on cross-border mergers, containing provisions relating to worker participation, on 18 November 2003. Awaiting first reading in the EP, due in November 2004.
Health protection and safety at the workplace
* Directive 2004/40/EC of the Council and the European Parliament of 29 April 2004 on the minimum health and safety requirements regarding the exposure of workers to the risks arising from physical agents (electromagnetic fields) (18th Directive within the meaning of Article 16(1) of Directive 89/391/EEC). Appeared in OJ L184 on 24 May 2004.	Article 137(2). Co-decision procedure.	Commission's original proposal issued in December 1992, dealing with four types of physical agents: noise; mechanical vibration; optical radiation; and electromagnetic fields and waves. ESC Opinion on 30 June 1993, EP Opinion on 20 April 1994. Text was split in 1999, with a proposal issued on vibration and a second proposal on noise. Following adoption of the vibration proposal in May 2002 (see EC: Social policy state of play) and the noise proposal in December 2002 (see EC: Social policy state of play), the Council looked at this dossier in June 2003 (EIRR 353) and reached political agreement on a common position on the text in October 2003. Formal adoption of the common position on 18 December 2003. EP second reading given on 30 March 2004, making five amendments to the text. Council adopted the Directive by written procedure on 7 April 2004 (see Council: Adoption of electromagnetic exposure Directive). The final act was published in the OJ on 24 May 2004.
* Directive 2004/37/EC of the European Parliament and of the Council of 29 April 2004 on the protection of workers from the risks related to exposure to carcinogens or mutagens at work (Sixth individual Directive within the meaning of Article 16(1) of Council Directive 89/391/EEC) (codified version) Appeared in OJ L158 on 30 April 2004.	Article 137(2). Co-decision procedure.	The Commission originally issued on 8 April 1999 a proposal aimed at codifying Directive 90/394/EEC of 28 June 1990 on the protection of workers from the risks related to exposure to carcinogens at work. ESC Opinion on 20 October 1999. On 20 March 2003 the Commission presented an amended version of the codifying proposal. This does not entail any changes to the content of the Directive. EP first reading on 2 September 2003, at which the text was approved without amendment. Final act appeared in OJ L158 on 30 April 2004.
Proposed Directive of the Council and the European Parliament on the minimum health and safety requirements regarding the exposure of workers to the risks arising from physical agents (optical radiations) (18th Directive within the meaning of Article 16(1) of Directive 89/391/EEC).	Article 137(2). Co-decision procedure.	Commission's original proposal issued in December 1992, dealing with four types of physical agents: noise; mechanical vibration; optical radiation; and electromagnetic fields and waves. ESC Opinion on 30 June 1993, EP Opinion on 20 April 1994. Text was split in 1999, with separate proposals issued on vibration, noise and electromagnetic fields. These three proposals have been adopted. The optical radiation proposal is awaiting a Council common position.
Freedom of movement
*Regulation (EC) no 883/2004 of the European Parliament and of the Council of 29 April 2004 on coordination of social security systems. OJ L200 on 7 June 2004.	Article 18, Article 42, Article 308. Co-decision procedure.	Original proposal issued by the Commission on 21 December 1998 with the aim of simplifying Regulation 1408/71/EEC in order to make social security legislation less complex and more manageable. It also provides an opportunity for integrating proposed amendments to the Regulation that have been pending before the Council for several years into a single text. ESC Opinion on 27 January 2000. EP first reading on 3 September 2003. Revised proposal issued on 9 October 2003. Partial political agreement on the text reached at 1-2 December 2003 social affairs Council (see Council: December social affairs Council). Full common position reached on 26 January 2004. EP second reading on 20 April 2004, at which two amendments to the text were made. Commission stated on 22 April 2004 that it could accept these amendments. The final act was made on 29 April and published in OJ L200 on 7 June 2004.
Proposal for a Council Regulation amending Regulation (EEC) no. 1408/97 as regards its extension to nationals of third countries. COM(1997)0561.	Article 42, Article 308. Co-decision procedure.	This proposal was initially issued by the Commission on 12 November 1997. The aim was to extend to nationals of non-EU member states but who were living in the EU the Community coordination of social security schemes laid down by regulation 1408/71/EEC. ESC Opinion on 25 March 1998, EP first reading on 6 October 1998. Proposal was subject to co-decision following the coming into force of the Amsterdam Treaty on 1 May 1999. EP first reading Opinion confirmed on 16 September 1999. Political agreement on a common position reached at 2-3 December 2002 social affairs Council (see Commission: Communication on freedom of movement)
Proposal for a Directive of the European Parliament and of the Council on services in the internal market COM(2004)0002	Articles 47(2), 55, 71 and 80(2).	Commission issued a proposal on 13 January 2004 aimed at providing a legal framework that will eliminate the obstacles to the freedom of establishment for service providers and the free movement of services between the member states. Awaiting EP first reading.
Social partner consultations on portability of supplementary pension provision.	Article 138.	The Commission launched the first stage of social partner consultations on the issue of the portability of supplementary pensions on 12 June 2002 (see Commission: Pensions consultation) as part of efforts to reduce obstacles to the freedom of movement of workers within the EU. Second stage launched on 15 September 2003 (see Commission: Second social partner consultation on transferability of pensions). UNICE has stated that it does not want to negotiate an EU-level social partner agreement.
Protection of employees
Consultation of the EU-level social partners on data protection at the workplace.	Article 138.	First consultation of the social partners by the Commission on 27 August 2001. After receiving a range of replies, second stage launched on 31 October 2002 (see Commission: Second consultation on data protection). ETUC is keen to negotiate an EU-level social partner agreement, but UNICE is not.
* Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids. OJ L142 on 30 April 2004.	Article 44. Co-decision procedure.	Previous Commission proposal for the regulation of company takeover bids lapsed in July 2001 following rejection of a conciliated text by the EP on 4 July 2001 (see EP rejects takeovers Directive). Commission convened a high-level group to look into this issue in September 2001 (EIRR 333). After examining the group's findings, issued in January 2002, the Commission issued a new proposal in this area on 2 October 2002 (see Commission: New takeovers Directive). ESC Opinion on 14 May 2003. EP first reading on 16 December 2003, at which it made a number of amendments to the text. Council decided on 21 April 2004 that it could accept all of the EP's amendments and so the Directive was adopted as Directive 2004/25/EC, appearing in OJ L142 on 30 April 2004.