Lack of clarity

Has
the Government really safeguarded the UK’s flexible labour laws in the new EU
constitution, and what does it mean for business? DeeDee Doke reports

The
UK Government says it achieved its aims in safeguarding the flexibility of UK
labour laws in the newly-agreed European Union constitution – but UK business organisations
and legal experts believe the jury is still out on what the terms will
ultimately mean for UK employers.

Instead
of clarifying employment issues, the new constitution has further clouded them,
they say. “In fact, the constitution is not a business-friendly document,” says
James Walsh, head of European and regulatory affairs for the Institute of
Directors (IoD). “It’s lengthy, it’s confusing, and far from clarifying things,
it’s left many employers scratching their heads and wondering what it actually
means.”

One
key provision that is causing concern for business provides a new EU-level
power for co-ordination of economic, employment and social policies. Another,
in the Charter of Fundamental Rights portion of the constitution, sets out a
number of human rights, including the right to work and the right to strike
which, experts believe, are not sufficiently addressed. “The big question is,
what will these rights be in practice? And the answer to that is, we just don’t
know. It will remain for the courts to interpret,” Walsh says.

The
IoD fears that the European Court of Justice will assert what Walsh calls “an
extremely activist approach” to employment law issues as the court has to
taxation questions in recent years. “Every time it’s had an opportunity to
extend the reach of the EU over tax, the European court has taken it,” Walsh
says. “We’re concerned it will take the same activist approach in employment
law. It will start from this rather loosely-worded set of rights and apply them
in a very activist way, extending the EU’s control over employment law.”

The
Charter of Fundamental Rights is also a point of concern for the CIPD, which
cites the flexibility and adaptability of the existing employment relations
provision as critical to companies who want to compete globally. Ben Willmott,
CIPD employee relations adviser, says: “It is important that the Charter of
Fundamental Rights does not undermine this position, and we would welcome
further clarification on this.”  

Employment
lawyer Stephen Brown, of Latham & Watkins, agrees that the true strength of
UK employment law will “only be tested when someone decides to take a case to
the ECJ”. One likely such case could be the UK’s 48-hour week ‘opt out’, Brown
suggests.

Unions
would probably be willing to sponsor a test case to the ECJ, Brown predicts,
“just to get some finality about it. Then, we will be at the mercy of the
ECJ”. 

The
CBI, on the other hand, has praised the Government for protecting British
interests in the constitution. Yet, its director general, Digby Jones, also
voiced concerns that “pro-integrationist decisions by the ECJ in the fields of
tax and labour law are very worrying, and remain a serious threat to UK
competitiveness”.

UK
voters will have their say on the new constitution in a referendum, of which a
date has yet to be decided.

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