Introduction
The creation of the internal market (SM, the Single Market) is the centrepiece of the European integration project. Market integration involves processes of de- and re-regulation, nationally as well as supra-nationally, and changes the conditions for labour market governance. The institutions for the regulation of work, labour markets, and social rights have been cornerstones in the national regimes of governance in Western Europe, not least so in the Nordic countries where strong social partners and systems of collective bargaining, including tri-partite cooperation, have played key roles in the determination of employment and working conditions as well as in the representation of social and economic interests vis-à-vis political-democratic authorities.
The idea of creating a social dimension to the SM has from early on, and especially after the adoption of the Maastricht Social Protocol, nurtured a protracted and compound development of a regime for labour market regulation at the EU level, with a view to countering perverse effects of market competition and to prevent the SM from becoming a vehicle for regime competition, social dumping and erosion of national labour relations.
Multilevel facets of governance and legislative measures
In this core field of EU social policy, a unique system of multilayered European governance has been evolving, shaped by complex and contested interaction between European framework legislation – hammered out through social partner negotiations and/or political decisions – and the entrenched and diverse systems of social regulation and labour law in the national labour markets. As such, this is a prototypical example of a policy field in which the competencies are shared between the European and national levels, governmental and civil society actors, and the challenges associated with application of the (double) subsidiarity principle are tested in full.
The labour market hence serves as a hub between the market-driven dynamics of free movement and economic integration, on the one hand, the impact of political processes of supra-national reregulation, on the other, and the national processes of adjustment and response to these dual, transformative pressures from below and above, originating from the Europeanization of markets and politics. These interconnections have recently visibly manifested themselves through the surge in cross-border mobility of labour and services after the 2004 EU enlargement, national labour market actors and authorities thus being faced with new economic opportunities and challenges of regulation and justice. This is exemplified by current disputes on possible conflict between EU law on free movement of persons and services, the Posted Workers Directive (PWD) 96/71/EC and national labour market regimes, highlighted, i.a., by ongoing debates pertaining to recent ECJ case law and also by the controversies surrounding and influencing the adoption of the new Services Directive 2006/123/EC.
Themes and perspectives
With the single market being the nucleus of the EU/EEA, market integration has evolved in two directions. In part, there has been a territorial expansion through successive enlargements of the union, most prominently marked by the twelve new Member States in 2004 and 2007. Further, it is apposite to speak of a deepening of the market integration through the increased opening up in particular of the services sector, as epitomized by the Services Directive and its underlying processes. The project will analyse how these aspects of market integration impact on conditions in the labour and service markets as well as the regimes for regulating these markets. The interplay between increased mobility of services and labour, the Services Directive, and the Posting of Workers Directive provides the basis for several interlinking topics of study:
(1) The project will analyse the (development of) European regulation in the field. The analysis will comprise both a substantive and a governance perspective.
(a) In the substantive perspective the main issue concerns the relationship between the economic and social aims of the EU. The economic aim is mainly manifested in regulation on freedom of establishment, free movement of capital, goods, services and workers, as well as regulation on competition and public procurement. The social dimension of the EU is found mainly in the labour and employment law legislative instruments. The focus here is how the balance or demarcation between these aims is struck in relation to cross-border services in the Services Directive, the PWD, and related case law from the ECJ.
(b) From a governance perspective the evolution of European regulation in this field presents a paradigmatic case for closer study of
- changes in the (vertical) relationship between supra-nationality and inter-governmental powers, the implications of shared competences, subsidiarity and growing elements of the
Open Method of Coordination, Commission guidelines and monitoring, etc., and the role of the social partners, in this field;
- changes in the horizontal institutional relations to bodies responsible for other policy areas, especially free movement and competition policies, and fundamental rights (e.g., the EU
Charter and draft Constitutional Treaty), and developments in the interplay between different EU-level institutions in policy formation and decision-making. Here, whether new forms
of governance are evolving and if so, what characterizes these forms are salient questions;
- a common and key issue is, do we see changes in the overall regime in the direction of supra-nationalization (and if so, in what form) or a retreat to stronger Member State control
through coalition-building or new alliances (inter-governmental efforts) after enlargement.
(2) The project will also study national level developments. The aim here is to analyse the responses, adjustments and innovations in national labour market regulation (labour and employment laws and collective bargaining, monitoring, control and enforcement of terms and conditions for the mobility of work and services) that have been introduced as a consequence of the European regulations or the increased mobility of labour or services. There are mainly two interlinked aspects:
(a) First is the legal dimension relating to the application of measures, and changes therein, as regards the transposition and application of the PWD and, up-coming, the Services Directive. Various means are employed, e.g., legislation, collective agreements, forms of extension of agreements, as are differing machineries for control and enforcement. Shifts in the distribution of responsibility between different actors – government bodies, courts, and social partners – can be seen to be involved. Especially concerning the PWD, but prospectively as regards the SD as well, the possible impact and restrictions on the freedom to take recourse to industrial action within the national labour market context is a topic of key importance, topical as well as controversial, as again illustrated by the ECJ case law). Moreover, a comparative study in this field is important to enhance understanding of differing national approaches as well as points of antagonism between European-level and national regimes. Further, it is of particular interest to study the machineries for control and enforcement that are in place or will be established and their operation in practice. This is an important aspect of the PWD regime and is added to by a new control cooperation system under the SD. This is a
problem area closely linked to EU/EEA legal norms, thus also complementing the study of regulatory interplay, while at the same time reflecting national characteristics.
The countries chosen for this study have significantly different regimes for governing labour and service mobility and posting of workers, ranging from liberal market models or reliance
primarily on collective bargaining (UK, DK, SWE) to various forms of state intervention and mandatory application of wage standards (DE, NO, FIN, PL). The differences are eminently suited
to feed analyses of the questions raised above. Also, common market challenges and EU regulations can be supposed to prompt diverse national responses/adjustments. A further question then is, whether developments will tend towards a convergence of some Continental European form or towards increased divergence.
(b) The second aspect pertains to the institutional industrial relations effects: how market extension and supra-national regulations, via the chosen paths of adaptation by way of juridification, influence the patterns of interest organisation, power relations and strategies among different national actors. E.g., in Norway significant changes can be seen to alter or exert pressure on pay determination and the role of trade unions in the non-unionised part of the labour market, and similar discussions on the underlying issues are coming up also in other countries.
(c) A third aspect is which aims and strategies national actors pursue and which channels they exploit in order to influence the external factors impacting on national regimes through changes in policies and regulation at European level.
Key objectives
The key objectives of the FORMULA project are to develop applicable knowledge about:
- How the interplay between extension of the EU/EEA market, growth in cross-border services, supra-national regulations, and national responses, influence the evolving multilayered
regime of labour market regulation, industrial relations and interest intermediation in the EU/EEA; this includes national reactions to and influence on EU legislative initiatives and different forms of adaptation in transposition. - The impact of these processes, and of the application of the Posted Workers Directive and the Services Directive in particular, on the national regimes of labour market regulation in
the Nordic countries, Germany, Poland, and the UK; and - the aims, strategies, and institutional channels through which the political authorities and the social actors in these countries try to influence EU policies and regulations in this field.
Through (1)-(3) the overriding ambition is to - deepen the understanding of how interacting political, legal, socio-institutional and economic logics are influencing the interplay between the different institutions and organised
actors shaping supra-national decision-making and national adjustments in the emerging multilayered European polity, with particular regard to the formation, adaptation, and application of legal regimes in the labour market.
Theoretical and methodological perspectives
The interdisciplinary character of the study and the research team implies that the project will build on a variety of theoretical and methodological approaches, with the main emphasis on legal studies of law and jurisprudence and institutionally oriented analyses of policy formation and industrial relations adjustments. In addition, we will apply qualitative sociological analyses of actor views and interpretations of the processes under study and draw on political economy analyses of the socioeconomic impact of market integration and service mobility.
Empirically we will make use of a number of sources and methods, in particular
- legal and political documents (from the relevant institutions at EU and national levels, including social partners);
- case law (from national courts and ECJ);
- interviews with representatives of key institutions and social partners at the EU and national levels;
- as well as comprehensive literature studies.
By approaching the thematic from such different conceptual angles and empirical sources, and at several levels, the aim is to develop a more comprehensive understanding of national regulatory regimes, their idiosyncrasies and interaction with European level regulation, and of the main logics, conditions and mechanisms determining (changes in) the mode of functioning and actual outcomes of the developments in this evolving area of multilayered governance in the EU.
Postscript
At the time when the project application was drafted, early in 2007, the field concerned was seen to be at a critical juncture on account of, in particular, the increased topicality of the PWD following the EU enlargements and the adoption of the Services Directive. The project thus represented a sterling opportunity to gain better insight into what are the forces and constraints determining the changes. All of the core research personnel have for a number of years been active in research in the fields involved. Thus there is a sound basis on which to develop enhanced knowledge. Also, by bringing together and combining legal and social sciences expertise the study can contribute to generating new perspectives on developments in an area often predominated by uni-professional approaches. The themes and issues discussed in the course of the project, in working papers and at conferences, and the resulting two books have proved to still be topical and in part quite controversial. The Formula project has fed into this larger debate by its multi-faceted and comprehensive contributions.