European Union: Social implications of draft EU constitutional Treaty

The new text comprises a single Treaty, replacing the previous grouping of policy and work under a range of different pillars. Once in force, this new constitutional Treaty will repeal the Treaty on the European Union, the Treaty establishing the European Community and the acts and treaties which have supplemented or amended them.

It is hoped that this will make the EU's processes more transparent. The new Treaty also refers throughout to the European Union rather than the Community. It gives it a single legal personality, which it is hoped will enable it to take on a higher international profile. Other changes of terminology include the reference to European laws rather than Regulations, European framework law rather than Directives, and the social partners rather than management and labour.

Part I: Definitions and objectives of the Union

This part incorporates the common provisions contained in the Treaty on European Union, in addition to some of the provisions of the Treaty establishing the European Community, reiterating a range of basic social rights and adding to them in some cases.

Thus, Article 2 lists the Union's values, which include "respect for human dignity, liberty, democracy, equality, the rule of law and respect for human rights". It also makes reference to a society based on a range of values, including non-discrimination.

In Article 3, it lists full employment as one of the objectives of the Union, along with the combating of social exclusions and discrimination, the promotion of equality between women and men and solidarity between generations.

Article 4 lists the Union's fundamental freedoms and states that any discrimination on grounds of nationality shall be prohibited.

Article 14 of the Treaty deals with the coordination of economic and employment policies, stating that the Union shall "adopt measures to ensure coordination of the employment policies of the member states, in particular by adopting guidelines for these policies". This is a reference to the European employment strategy, which has been in existence since 1997 and which operates on the principle of member states' national action plans for employment, drawn up on the basis of guidelines issued by the European Commission. For the most recent assessment of progress in this area, see EC: Commission reviews member states' employment progress.

The Treaty also states that the Union may adopt initiatives to ensure coordination of member states' social policies.

The institutions of the EU

The new draft Treaty provides for a number of changes to the EU's institutions and processes. In the case of the European Council, it proposes that a President should be elected for a term of two-and-a-half years, renewable once. This President must not hold a national mandate.

A new post of Union minister for foreign affairs will also be created, with the task of conducting the Union's common foreign and security policy. This minister will be appointed by the European Council, acting on a qualified majority. This post doubles up as Commission vice-president.

In terms of the Presidency of the Council of Ministers, which is currently held in turn by member states for a term of six months, it proposes that, with the exception of the Council of foreign affairs, the Presidency shall be held for periods of at least one year by the member states, according to rules to be adopted by the Council.

The Commission

The European Commission will consist of a President, the Union minister of foreign affairs/vice-president and 13 European Commissioners, selected on the basis of a system of equal rotation between the member states. The exact workings of this will be established by a Council decision according to the following principles: the difference between the total number of terms of office held by nationals of any given pair of member states may never be more than one; and each successive Commission shall be so composed as to reflect satisfactorily the demographic and geographical range of all the members states of the Union.

How this will work in practice has yet to be made clear. At the moment, there are a total of 20 Commissioners, including the President and the vice-President, thus ensuring that all member states have one Commissioner and the larger member states have two. The proposed slimmed-down Commission will mean that some member states will lose their second Commissioner while the smaller countries may not have one at all in some Commission configurations. However, there is also provision for the appointment of non-voting Commissioners from all member states.

The new Commission arrangements will come into force on 1 November 2009.

Role of the social partners

Specific reference is made to the role of the social partners in the European Union. Accordingly, Article 47 states that: "The European Union recognises and promotes the role of the social partners at Union level, taking into account the diversity of national systems; it shall facilitate dialogue between the social partners, respecting their autonomy."

Part II: Fundamental rights

This section of the Treaty encompasses the charter of fundamental rights of the Union, which was originally drawn up in 2000 (EC: Draft EU charter of fundamental rights agreed), but not given legally binding status at that time. The incorporation of this charter into the Treaty now gives it legal status.

The preamble notes that it is necessary to strengthen the protection of fundamental rights "in the light of changes in society, social progress and scientific and technological developments by making those rights more visible in a Charter".

For the main employment-related elements of the Treaty, see the box below. The rights, freedoms and principles set out in the Charter largely bring together the rights already enshrined in existing Community Treaties and legal instruments such as Directives.

However, Title VII of the Charter, which deals with its interpretation and application, allows limitations on the exercise of its rights and freedoms if provided for by law and if they respect the essence of those rights and freedoms. These limitations may be made "only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others".

Further, it states that the fundamental rights of the Charter shall be interpreted in harmony with the constitutional traditions of member states.

These interpretation clauses have been viewed with some suspicion by trade unions, with the ETUC stating that they "will limit [the Charter's] practical benefits to workers and citizens in general".

In the employer camp, there has been some concern about the possibility that the Charter may strengthen national rights in a number of areas, although a number of the Charter's articles state that they must be interpreted in accordance with national laws and practices. Commentators note that the situation will become clearer once the ECJ has begun to interpret it.

Part III: Policies and functioning of the EU

This part of the draft Treaty deals with the policies and functioning of the Union and incorporates many Articles which make up the Treaty establishing the European Community. It sets out clauses of general application, in addition to establishing the detail of voting procedures in the Council, which has relevance to social policy formulation.

In its clauses of general application, contained in title I of this part, it states that in the activities referred to in this part of the Treaty, the Union shall aim to eliminate inequalities and to promote equality between men and women. It also states that the Union shall aim to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.

Title II of this part is devoted to non-discrimination and citizenship, with the former Article 13 non-discrimination provisions now contained in Article 8 of the new Treaty. Although there is no substantive change to this Article - it is still subject to unanimity in the Council - the wording has been changed slightly, arguably giving the European Parliament an enhanced role in the formulation of legal instruments in this area - it states that the Council shall act unanimously after obtaining the consent of the European Parliament, whereas the previous Article 13 states merely that the European Parliament shall be consulted.

Employment and social policy chapters

The employment chapter is now contained in title III, chapter III, in Articles III-97-102. There are no significant substantive changes to this chapter.

The social policy provisions of the Treaty are contained in Articles III-103-112. The new draft Treaty lists the social policy areas in which the Union is committed to supporting the actions of member states as follows:

(a)improvement in particular of the working environment to protect workers' health and safety;

(b)working conditions

(c)social security and social protection of workers;

(d)protection of workers where their employment contract is terminated;

(e)the information and consultation of workers;

(f)representation and collective defence of the interests of workers and employers, including codetermination (although not in the areas of pay, the right of association, the right to strike or the right to impose lock-outs);

(g)conditions of employment for third-country nationals legally residing in Union territory;

(h)the integration of persons excluded from the labour market;

(i)equality between men and women with regard to labour market opportunities and treatment at work;

(j)the combating of social exclusion; and

(k)the modernisation of social protection systems.

Any legal instruments drawn up in this field must be adopted after consultation of the Committee of the Regions and the European Economic and Social Committee. However, laws in the areas covered by paragraphs (c), (d), (f) and (g) will be subject to unanimity in the Council.

Further, the Council may unanimously adopt a European decision (based on a proposal from the Commission) to apply what the Treaty terms the "ordinary legislative procedure" (set out in Article III-302) - ie the codecision procedure, which is subject to qualified majority voting - in respect of the areas outlined in (d), (f) and (g).

One area where there is a straight switch from unanimity to qualified majority voting (QMV) is the field of social security for migrant workers. The new provisions are contained in Article III-21.

This effectively means that QMV is extended to one further area of social policy - that of social security for migrant workers. In addition, as in the Nice Treaty, if a unanimous Council decision is made allowing this, QMV may be extended to the areas of protection of workers where their employment contract is terminated, the representation and collective defence of the interests of workers and employers, including codetermination, and conditions of employment for third-country nationals legally residing in Union territory.

Articles III-182-183 deal with the issue of vocational training, containing no major substantive differences from the wording of these Articles as set out in the Treaty establishing the European Community, with the exception of a specific reference to sport in the context of education and vocational training.

Enhanced cooperation

The new Treaty allows a smaller group of member states (at least a third of the member states) to get together to progress a particular issue in any area, although the process in the case of common foreign and security policy is more complicated. The Treaty notes that authorisation to proceed with this will be granted by the Council of Ministers as a last resort where "the objectives of such cooperation cannot be attained within a reasonable period by the Union as a whole". This means that a smaller group of member states can decide to use QMV in areas subject to unanimity, to progress particular legal instruments, which would then apply to those member states only.

This is not a new process, as it was provided for by the Amsterdam and Nice Treaties, although the Nice Treaty states that at least eight member states should take part in enhanced cooperation, which is more than a third of member states in the context of an EU of 15 member states. However, this provision has not as yet been used. It remains to be seen whether this process - which has clear implications for social policy in that a smaller group of countries could theoretically adopt proposals by QMV which would then apply to them and not to the other countries - will be made use of.

Reactions to the draft Treaty

The ETUC has given the draft a guarded welcome, stating that "clear progress has been made in areas on the trade union agenda . . . the benchmark values of social justice, equality and solidarity, and the Union's objectives of full employment, a social market economy and sustainable development are in line with our demands". It also praises the incorporation of the Charter of Fundamental Rights and the enhanced recognition given to the role of the social partners and social dialogue process. However, it criticises what it perceives as a failure to make progress on a number of issues, including the wider extension of QMV.

The Union of Industrial and Employers' Confederations of Europe has also welcomed the draft, stating that it "represents a satisfactory balance between economic and social aspects". It is particularly pleased with the official recognition of the nature and role of the social partners and the social dialogue process.

The European Commission has characterised the draft as "making major strides forward with regard to the Union's new tasks and the institutional architecture", although it points out a number of areas where, in its view, there is still cause for concern. These include insufficient extension of QMV, unsatisfactory institutional balance, lack of clarification of the role of the institutions, and the possibility that a more permanent President of the European Council may upset the institutional balance and cause some duplication with the role of the Commission.

More generally, there have been criticisms from many sides that the new draft Treaty has failed to extend the practice of qualified majority voting as widely as is needed, although these criticisms centre on taxation rather than social and employment policy.

In terms of the institutions, commentators note that the role of the European Parliament has been much strengthened, with the codecision procedure extended from 37 to around 80 areas.

Next steps

This draft Treaty will now form the basis of work to be carried out by an intergovernmental conference, which will be launched in October 2003. It is hoped that the IGC will complete its work on the final version of the Treaty by December 2003, in order to allow a new Treaty to be signed as soon as possible after 1 May 2004, the date from which the 10 new member states will join the Union. In any case, it is hoped that the new Treaty will be signed before the next elections to the European Parliament, due to take place in June 2004.

Once the new Treaty is in force, the existing Treaty on European Union and the Treaty establishing the European Community will be repealed, alongside all their amending treaties and acts.