The EU’s social pillar and the revival of the European social model: too late for the UK?

Posted in: Brexit, Business and the labour market, European politics

Dr Susan Milner is Reader in European Politics in the University of Bath's Department of Politics, Languages & International Studies.

Although the EU’s Gothenburg summit on 17 November was overshadowed by the continuing row over how much the UK will pay as its ‘divorce’ settlement to the EU, its purpose was to relaunch the ‘social dimension’ of European integration. The Social Pillar, put forward by the Commission in April 2017, agreed by Council and Parliament in October, and formally endorsed by heads of state and government on Friday, revives the notion of a ‘European social model’ – which, according to European Central Bank president Mario Draghi, ‘had already gone’ by the time the financial crisis laid it to rest.

What then is the European social model, according to the Social Pillar? It is based on the ‘solid social acquis’ accompanying the single market, consisting of measures to ensure freedom of movement, improvements in living and working conditions, equality between women and men, health and safety at work, social protection, and education and training, and on support for social partnership. But the Proclamation also refers to the need for ‘a stronger focus on economic and social performance’ in the context of slower economic growth and the challenges posed to labour market regulation by technological change.

The Social Pillar is couched in the language of rights, and enumerates twenty basic rights not just for those employed in the 21st-century labour market, but also for children (‘Children have the right to protection from poverty’) and for all citizens as regards healthcare, long-term care and adequate resources in old age. Although it does not fully address housing, it recognises the right of all to ‘adequate shelter and services’. Taken in its broadest sense, the Social Pillar has the capacity to provide a framework for effective social citizenship.

Whether the political will exists to take forward the generally-expressed rights remains to be seen. The Social Pillar has the status of a solemn proclamation, like the Charter of Fundamental Rights before it was incorporated into the consolidated treaties (with a couple of potentially undermining opt-outs), which does not prevent the Commission from proposing legislation based on it, but does raise questions about the hierarchy of legal norms and the priorities of policymakers. Social charters or proclamations tend to be put forward as the counterweight to moves in other areas, in this case most obviously the reform of eurozone rules as advocated by President Macron, but rendered politically vulnerable by Germany’s domestic political stalemate.

From a British perspective, the revival of a framework for rights-based social protection, albeit as yet broadly articulated, raises other questions about how far the EU serves as a policy model and to what extent Brexit exposes us to unfettered deregulation. This question is of fundamental importance to all of us who live and work in the UK, and it is posed at the same time as two parliamentary committees published a bill taking forward the recommendations of Matthew Taylor’s review of modern working practices – as the Conservative manifesto pledged to do in June 2017.

Perhaps most controversially from the British perspective, the Social Pillar defines work-based citizenship as applying to all EU citizens (and ‘third country nations with legal residence’) – that is, without reference to qualifying periods and without distinction between categories of worker. The European Commission wants to broaden current regulation of employment contracts to cover new forms of employment, such as platform work (the Uber model). Commissioner Marianne Thyssen says she wants “all workers across the EU to be covered by basic rules, independent of their employment status, be they IT platform workers or delivery people.”

The draft bill published on 20 November, based on the Taylor inquiry recommendations, would require that all people working for others must receive a written statement of the terms of that work, defining them as either workers or employees. It seeks to define clearly the distinction between the self-employed and those in an employment relationship, and establishes the principle of ‘worker by default’ – that is, an assumption that those who work for others are workers or employees rather than independent contractors, unless self-employment is evidenced. The proposed text would also enable use of class actions in disputes over wages, working time and conditions, in order to ease enforcement of fair practice. If adopted, the bill should go a considerable way to resolving the abuse of self-employment and the growing number of disputes over platform work which have appeared over the last year or so, providing evidence of the large loopholes in existing regulation.

It is, therefore, a welcome first step. However, in itself it forms only part of a wider framework for defining and regulating ‘good’ work in the 21st century. The Taylor inquiry also looked at whether further regulation is needed to discourage abuse of extreme and one-sided forms of flexibility, such as zero-hour contracts. Another example of a current regulatory loophole is the widespread use of qualifying periods, which seems better suited to an age of stable employment than to current conditions of job mobility.

Speaking at the Bristol Festival of Ideas on 18 November, Mr Taylor advocated a new framework for employment regulation, as well as a much wider debate than has hitherto been the case about what constitutes ‘good’ work today, and the ways in which technological advances can be harnessed to suit society – not just the 1% who own half of the planet. It may be that encouraging written terms of employment for all workers, not just those classed as employees, can help to reduce abuse of zero-hour contracts – but stronger enforcement mechanisms are surely needed. Reliance on litigation, a long and costly process, needs to be complemented with other forms of regulation which encourage greater transparency and consistency of basic rules on terms and conditions of work. Perhaps new enforcement mechanisms, like the Fair Work Ombudsman in Australia, could help provide a means of redressing the balance – once the rules of the game have been established – and of extending protection to those workers most in need of it.

The UK certainly needs to find its own solutions which fit society’s preferences, but the trends shaping employment here are much the same as in other EU member states. On the creation of a basic level playing field for worker in the ‘gig economy’, the British parliament and the EU seem to be broadly in agreement – so far, at least.

Posted in: Brexit, Business and the labour market, European politics


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