European Labour Law & Social Security Law 2018-2019
European labour law and social security law is often referred to as European Social Policy. In
principle labour law and social security law are matters that have to be dealt with by the
member states. It is up to the Member states to regulate and set up their own systems /
determine the conditions etc. So it is in essence a national thing.
So you can ask yourself the question, what is the European law dimension in European
Social Security law?
From the beginning of the EU integration process up to today there is a debate about the
question: why should we give EU power about things that are national?
Some member states think that there is no need at all, while other Member States are in
favour. It is a debate and it is not settled. In essence, there are 4 different answers to the
question if EU should be given powers and if yes, to what extent.
There are 4 school of thoughts, consisting of 2 economic schools and 2 social once:
1
, 1. Economic school of thought: no need for powers / harmonization. According to
this school of thought, the European Union should stay away from labour law and
social security law. Most advocates of this school of thought can be found in the UK.
They think that we should not give the EU any powers, EU is about market
integration. According to them, the creation of the big market will lead to an economic
growth and to more jobs. It is a government task that everybody has a job and can
provide for themselves. According to them, we should leave labour law to the
member states. There is no need to regulate it on EU level, because the market will
lead to economic growth. It will be a national process leading to economic growth.
The UK is usually not pro EU powers on labour law and social security law. Other
member states who also have problems with the EU intervening on national law didn’t
express it because Margaret Thatcher was doing it all. There is among more MS
certain opposition towards the EU. They think they are entitled to determine what the
law is. In the UK they have a different view to organize the solidarity of social security
law.
2. Economic school of thought: powers / harmonization to ensure fair competition
The EU should be given certain powers, not so much to protect poor employees but
to make sure that those companies are placed in a situation of fair and equal
competition. The more protective the EU law is, the stricter the law of dismissal and
the higher the benefits are. It is imposing a financial burden on employers. If the
minimum wages in Germany are much higher than in Portugal, it will mean that
German employers are paying more. It is putting an additional financial burden on
them comparing it with Portugal. If you have one common market and different social
security laws, you create unfair competition between companies. So you want to
make sure they can all compete on equal terms. We should harmonize the terms in
order to make sure that all the companies are placed in an equal position. So it’s
purely for economic reasons for companies. The same thing apply in the field of
environmental policy, health policy etc. You create certain norms and this affects the
Member States. So second reason is to harmonize social norms to make sure that all
the companies are in an equal situation to compete equally.
3. Social school of thought: powers / harmonization needed to prevent social
dumping: A member state sets certain social norms / gives certain social rights.
When there is a freedom of movement, there is always the fear that when the
minimum wages are increased, the big companies are going to flee. In the
Netherlands we want to have higher minimum wages, but the risk is that employers
are going to flee to other countries. As a member state you want to create jobs, but
when the big companies go, you lose jobs. To prevent employers to move to other
countries, the Netherlands needs to lower the minimum wage. So by dumping norms
you are trying to attract companies and create jobs. If the Netherlands start dumping
norms, you will get a snowball effect. Every country is going to do it and you get a
race to the bottom. They are all going to lower the social standards and labour law /
social security law will be gone completely.
How do we avoid the downward movement?
By harmonizing / setting minimum standards that no state can go below. The
harmonization in this school of thought is different than in the second school of
thought. Now we do it for the sake of our workers. Keep in mind that it is very difficult
to harmonize and it depends on the topic. In certain fields it can be done, while in
other fields it is not possible. For example, it is very difficult to harmonize minimum
wages. Even if you take all the things into account, the differences in minimum wages
are so huge. How are you ever going to harmonize it? In the Netherlands it might be
€1000 and in Portugal €300. €300 is unacceptable in the Netherlands while €1000 is
not acceptable in Portugal. Where do we meet, somewhere in the middle? It is very
difficult. Certain topics are easier to harmonize, for example health and safety in
work. You can easily harmonize rules about asbestos in the wall or liability for
2
European labour law and social security law is often referred to as European Social Policy. In
principle labour law and social security law are matters that have to be dealt with by the
member states. It is up to the Member states to regulate and set up their own systems /
determine the conditions etc. So it is in essence a national thing.
So you can ask yourself the question, what is the European law dimension in European
Social Security law?
From the beginning of the EU integration process up to today there is a debate about the
question: why should we give EU power about things that are national?
Some member states think that there is no need at all, while other Member States are in
favour. It is a debate and it is not settled. In essence, there are 4 different answers to the
question if EU should be given powers and if yes, to what extent.
There are 4 school of thoughts, consisting of 2 economic schools and 2 social once:
1
, 1. Economic school of thought: no need for powers / harmonization. According to
this school of thought, the European Union should stay away from labour law and
social security law. Most advocates of this school of thought can be found in the UK.
They think that we should not give the EU any powers, EU is about market
integration. According to them, the creation of the big market will lead to an economic
growth and to more jobs. It is a government task that everybody has a job and can
provide for themselves. According to them, we should leave labour law to the
member states. There is no need to regulate it on EU level, because the market will
lead to economic growth. It will be a national process leading to economic growth.
The UK is usually not pro EU powers on labour law and social security law. Other
member states who also have problems with the EU intervening on national law didn’t
express it because Margaret Thatcher was doing it all. There is among more MS
certain opposition towards the EU. They think they are entitled to determine what the
law is. In the UK they have a different view to organize the solidarity of social security
law.
2. Economic school of thought: powers / harmonization to ensure fair competition
The EU should be given certain powers, not so much to protect poor employees but
to make sure that those companies are placed in a situation of fair and equal
competition. The more protective the EU law is, the stricter the law of dismissal and
the higher the benefits are. It is imposing a financial burden on employers. If the
minimum wages in Germany are much higher than in Portugal, it will mean that
German employers are paying more. It is putting an additional financial burden on
them comparing it with Portugal. If you have one common market and different social
security laws, you create unfair competition between companies. So you want to
make sure they can all compete on equal terms. We should harmonize the terms in
order to make sure that all the companies are placed in an equal position. So it’s
purely for economic reasons for companies. The same thing apply in the field of
environmental policy, health policy etc. You create certain norms and this affects the
Member States. So second reason is to harmonize social norms to make sure that all
the companies are in an equal situation to compete equally.
3. Social school of thought: powers / harmonization needed to prevent social
dumping: A member state sets certain social norms / gives certain social rights.
When there is a freedom of movement, there is always the fear that when the
minimum wages are increased, the big companies are going to flee. In the
Netherlands we want to have higher minimum wages, but the risk is that employers
are going to flee to other countries. As a member state you want to create jobs, but
when the big companies go, you lose jobs. To prevent employers to move to other
countries, the Netherlands needs to lower the minimum wage. So by dumping norms
you are trying to attract companies and create jobs. If the Netherlands start dumping
norms, you will get a snowball effect. Every country is going to do it and you get a
race to the bottom. They are all going to lower the social standards and labour law /
social security law will be gone completely.
How do we avoid the downward movement?
By harmonizing / setting minimum standards that no state can go below. The
harmonization in this school of thought is different than in the second school of
thought. Now we do it for the sake of our workers. Keep in mind that it is very difficult
to harmonize and it depends on the topic. In certain fields it can be done, while in
other fields it is not possible. For example, it is very difficult to harmonize minimum
wages. Even if you take all the things into account, the differences in minimum wages
are so huge. How are you ever going to harmonize it? In the Netherlands it might be
€1000 and in Portugal €300. €300 is unacceptable in the Netherlands while €1000 is
not acceptable in Portugal. Where do we meet, somewhere in the middle? It is very
difficult. Certain topics are easier to harmonize, for example health and safety in
work. You can easily harmonize rules about asbestos in the wall or liability for
2
