Global judgements and ideas.
This is a modified transcript of the invited talk I gave at the ESRC seminar ‘Assessing change in economic management, welfare, work and democracy in the context of Brexit’ at the Foundation for European Progressive Studies (FEPS), Rue Montoyer 40, 1000 Brussels on 10/12/16 and the IPEG annual conference 2016 ‘International Political Economy?’.
The UK voted to leave the European Union in a momentous referendum held on 23rd June 2016. This was the second time Britain has held a European Union related referendum. The first time was in 1975 where the vote was whether to stay within the European Economic Community (EEC). Britain has always had a tense relationship with the EU and even in the lead up to its joining the ECC. Historically, Disraeli and others were concerned that Britain was more interested in a transatlantic relationship with the USA rather than membership in the EU and were very sceptical about its joining.
At the time, British trade unions were not particularly keen to stay within the EEC as it was seen to represent all things capitalist. Nonetheless, the vote swung to remain and Britain stayed in the Common Market. Then, resulting from 1980s conservative leadership, British unions realised that EU was the most beneficial thing unions had available as a defense for employment law. The European Communities Act 1972 (ECS 1972) had a significant impact on Britain’s legal order, much more impact and effect than for example ILO Labour Conventions, which Parliament can easily legislate in contradiction to. Based on direct affect, or the requirement for member states to take EU labour law on board, British labour law has repeatedly benefited from EU directives. While EU Law is not perfect, it holds a better promise of social democracy than we have could find on our own since the post-war bubble in Britain.
I claim that a series of governments have worked to prevent the public from understanding the benefits of being part of the EU for many years, not least the understanding that the ‘four freedoms’ of the European Union are the freedom of movement of goods, people, services and capital over borders. I think that various techniques I outline below have obscured the issue and changed/skewed the debate for people who definitely want change and alternatives to years of austerity and central authority as have been enacted by decades of governments both Labour and Conservative. Rather than addressing precisely how inequality has emerged, techniques of moral panic and trasformismo have shifted attention from identifying the root cause for people’s concerns, which is global capitalism rather than regional powers. The lack of understanding regarding how global capitalism perpetuates and relies on inequality to thrive and a belief in an unobtainable better Britain based on what is on offer from corporate driven consumerism and anti-collective policies, has resulted in populations targeting immigration and ‘othering’ rather than asking governments to distribute resources more fairly and recognise populations for what they actually are, hardworking people, who no longer want the status quo.
So, the vote for Brexit symbolizes much more than the polarising rhetoric following the vote to leave. We must look at the global political economic context to get a sense for how and why this happened at this point in history. The vote shows widespread nostalgia for the fantasy of free market capitalism that had been generated by a series of governments in earlier periods of British history. Blame is placed on the EU for the failure of this project rather than looking internally or realising the inherent impossibilities of capitalism to provide equality, basic welfare and access to resources (see Worth 2016). The ‘alternative’ that leave voters desire is unachievable simply by leaving the EU. The Brexit vote symbolises what may look like a ‘last round’ of the fight between capital and labour and if Britain leave the EU, we can say that capital, and capitalists, will have won.
Tensions exist between free movement of capital and free movement of labour in a capitalist system, but these are two of the four freedoms that are required for membership in the EU. However, even if free movement of capital ‘wins’ and if Teresa May is able to negotiate free movement at the sector level rather retaining than the freedoms required for EU membership of the single market that we now have, an EU-free Britain will not provide what has been lost by British citizens or indeed perhaps never ‘had’. British governments, both Conservative and (New) Labour, have systematically absorbed ideas that challenge capitalism by making other ideas appear as beneficial for workers using the technique Gramsci called trasformismo. One example is workfare, which sounded good at first glance, whereby all people are given a ‘right to work’, but in practice, meant that unpaid workers were required to benefit private companies’ profits as a condition to receive their benefits. These kinds of government antics have been accompanied by the dearth of discussion in the media about the benefits of EU membership and the lack of educational materials in curricula or in public discourse along these lines, leading to expressed widespread ignorance, revealed in the run-up to the referendum, about what the EU was/what it does/who runs it/how it is more than faceless unelected bureaucrats.
European Union law explicitly defends workers’ rights allows workers to cross borders and work wherever they want in the EU: Free Movement of Workers, set out in Article 45 of the Treaty on the Functioning of the European Union (TFEU). This requirement for state’s inclusion in the single market of the EU prohibits any discrimination based on nationality between workers. It allows all EU citizens to:
British workers, then, are permitted to work across borders if they desire and several hundred thousand British workers have taken advantage of this permission. We are seriously at risk of losing this right as well as the rights we have obtained as an EU member.
Meanwhile, governments have systematically demonised alternatives or agents carrying ideas for alternatives to what people perceived they were experiencing, paradoxically, including fairness for working conditions heralded by trade unions. Instead, we have seen ongoing trade union busting policies since Thatcher that portray unions as demonic rather than legitimate social partners as is (historically) done in other European countries. This has also been seen in the ongoing tensions in incorporating EU labour law such as the Working Time Directive which was avoided by the UK and still demonised. The WTD was only permanently signed for by Tony Blair who strangely also brought in an ‘opt in/out’ clause, meaning workers are permitted to state whether they would like to work longer hours. While this appears to give great flexibility and workers’ choice, companies often ignore overworked hours, or tell employees that working longer than 48 hours is a condition of employment.
Governments, including New Labour, have failed to address festering local issues and to invest properly in de-industrialised areas which would have involved addressing working class concerns that are now generalised to as xenophobic, anti-immigrant concerns. Reactions to lower living standards was exacerbated by a period of sustained moral panic carried out by ‘moral entrepreneurs’ (Becker 1963), particularly politicians and reporters, who worked to generate antagonism against immigrant workers that worked to prevent solidarity between the national and international working class (Moore and Forkert 2014). Meanwhile, a series of trade union busting policies and media coverage of strike action portray unions as demonic troublemakers, rather than legitimate social partners: unions, whose work historically has given us basic workers’ rights.
Workers gained a huge number of rights during Britain’s period of EU membership which we are now set to lose. This covers British workers’ rights locally and huge risks for EU workers, in leaving free movement. For this argument, I rely on two reports, one published by the Trades Union Congress called UK Employment Rights and the EU published on 25 February 2016 and one provided by Michael Ford, QC Employment Tribunal Judge.
UK has one of the lightest regulated labour markets in the world. The idea is that this gives us a ‘competitive advantage’. My concern is that post Brexit this country will become akin to a ‘race to the bottom’ country if deregulation becomes our default. David Davis has iterated: “To those who are trying to frighten British workers, saying, ‘When we leave, employment rights will be eroded,’ I say firmly and unequivocally, ‘no they won’t’.” However, this statement relies on a pro-regulation government. There is a lot of evidence that the current government and its actions over time certainly are not that. The last coalition government showed deregulated labour market preference shown in for example its ‘Red Tape’ challenge  which was a drive set up by Cameron to ‘get rid of the burden of excessive regulation’. The BIS Consultation ‘Flexible, Effective, Fair: Promoting Economic Growth Through a Strong and Flexible Labour Market’ 2011 which emphasised minimal government interference. The Beecroft Report  looking at extreme deregulation ‘in relation to areas not governed by EU law, principally unfair dismissal law’.
QC Michael Ford points out that ‘If Brexit occurs there will be no legal barrier to a government legislating to create a labour market whose predominant feature is freedom of contract (for which read a legal system to permits the employer to dictate terms)’ and ‘where there is no longer the extensive collective bargaining coverage which can operate to correct inequality of bargaining power between individual and employer’. The key areas at risk are:
EU law has greatly benefited domestic law and there are many cases where people’s social rights were upheld as a direct result. The European Courts of Justice (ECJ) require member states to ‘interpret social rights in the employment sphere widely, not narrowly’. Domestic courts have often interpreted employment laws in overly-narrow terms. There are many examples where ECJ has played a corrective role include in equal pay and sex discrimination. This is called ‘direct affect’ meaning that provisions in EU law do not require any domestic law to already exist in the areas that it prioritised, so there is no need for a ‘vehicle’ for claims brought to the ECJ. A classic case is Article 157 in 1976 Defrenne v Sabena (No.2), where a woman flight attendant indicated that she had not been given equal treatment on the grounds of gender when she was forced to retire and forced to take worse pension rights. In this case  ECR 455 had direct effect against both state and private bodies. Articles of Directives can be used in this way, meaning that workers can use them in court unconditionally.
Horizontal direct effect allows general principles and rights in EU law to have automatic effect in UK legislation, being most effective in areas of discrimination where local law does/did not cover all categories. In the UK we did not have protection for age, belief, religious or sexual orientation discrimination and this resulted from the EU Framework Equal Treatment Directive in 2000. Interpretative obligation, also called the ‘Marleasing duty’ means that domestic law should be interpreted to achieve results sought by EU law. This is a duty of consistent interpretation, meaning that EU law has both horizontal and vertical effects. In the UK, the Marleasing duty helped with preventing avoiding the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) in the Lister V Forth Dry Dock ICR 341 (1989) case  and the Webb V Emo ICR 1021 (1995) case which got rid of the seen need to compare women with a sick man in a pregnancy case. The 2010 Attridge LLP V Coleman ICR 242 case led to more provisions that protected against associative discrimination added to the Disability Discrimination Act 1995, and the NHS Leeds V Larner ICR 1389 2012 case led to words being added to the Working Time Regulations to make sure workers had the same entitlements to paid annual leave, as required by the Directive see also Bear Scotland V Fulton (2015) ICR221.
Infringement proceedings, also called ‘Francovich’, means that direct action can be brought against members from not including EU labour law. Bodies can also appeal directly to European Commission e.g. a trade union to ask it to bring proceedings against a member state that is failing to implement EU law. One example where this was successful was where the UK was required to ‘introduce equal pay for jobs of equal value where no job evaluation study had been carried out into equal pay law’ in Commission V UK 1982. This also led to amendments to TUPE 1981 and Trade Union and labour Relations (Consolidation) Act 1992 (TULRCS) meaning employers who do not recognise a trade union must go into consultation when there’s a threat of large scale redundancies, that consultation should be held with the ‘view to reaching agreement’, to require consultations when dismissals also lead to changes to terms/conditions at work and remove limitations on compensation.
In conclusion, while free movement has been the most discussed area at risk in the months following the referendum, workers enjoy a range of security at work and benefits of working conditions that we have not realised are a direct result of EU labour law. After the ‘great repeal’ Teresa May has indicated she wants to implement, or keeping all of these additions to law just after Article 50 is triggered, it remains to be seen which areas of law consecutive governments will keep. This poses a reminder that the ‘alternative’ leave voters desired and the likely reality of this a new ‘alternative’, are very different things.
 This case was where Gabrielle Defrenne who worked as a flight attendance for Sabena was forced to retire in 1968, which, under Belgian law, women working as flight attendants, at age 40, were required to do, unlike men. Defrenne claimed that this violated her right to equal treatment, given she had to take lower pension rights. This was under article 119 of the Treaty of European Community now Article 157 of the Treaty of the Functioning European Union.
 In this case, workers were fired by the new company one hour before the transfer of another company took place (Forth Dry Dock was received by Forth Estuary). The Forth Estuary already had workers lined up who would take lower pay and could not pay for damages or other dismissal pay. TUPER 1981 regulation 5(3) held that Regulations should be applicable for employees just before a transfer which is now held in TUPER 2006 regulation 4(3). While it was not an immediate victory, workers appealed and finally under the Business Transfers Directive the conclusion was that the United Kingdom courts are under duty to follow the ECJ by allowing ‘purposive construction to the Directives and to Regulations issued for the purpose of complying with Directive…’ and agreed that ‘in the case of an insolvent transferor are largely illusory unless they can be exerted against the transferr’. So dismissals must be treated fairly at a transfer moment as any other employee under the Directive.