Guest author Professor Brian Bercusson of Manchester University looks at the latest trade union case from Europe.

On 21 September 1999 , the European Court of Justice handed down what may be one of its most important labour law decisions. Cases C-67/96, C-115-117/97 and C-219/97 (referred to as Albany) concerned a challenge to a collective agreement in the Netherlands which established a pension fund system for workers in the textile sector. Affiliation by employers to this sectoral pension fund was made mandatory by an order of the Dutch Minister of Social Affairs.

Albany, a textile business, sought exemption from affiliation and was refused. It complained that mandatory affiliation to a collective agreement violated EC competition rules in Article 81(1) (formerly 85(1)) of the EC Treaty.

What made Albany significant was the Opinion of Advocate General Jacobs, handed down on 28 January 1999. The Opinion shaped analysis of the employers' complaint in two ways. First, the Opinion shifted the focus of the complaint from mandatory affiliation to the collective agreement itself. Secondly, it posed the question whether collective agreements were "immune" from competition law; the cases: (para. 79) "raise the fundamental issue of the relationship between the prohibition [from restricting competition] contained in Article 85(1) (Article 81(1)) of the Treaty and collective agreements concluded between representatives of employers and employees, an issue which the Court has not yet had occasion to consider".

Advocate General Jacobs (who is British) perceived the issue in terms of an "immunity" of collective agreements from competition law ("an antitrust immunity"), an approach derived from the history of trade union law in Britain (the Trade Union Act 1871) and the USA (the Clayton Antitrust Act 1914). In contrast, the continental European approach of fundamental and positive trade union legal rights would have formulated the issue in terms of a "right" of trade unions to enter into collective agreements.

The Advocate General's Opinion denied the existence of a fundamental trade union right to collective bargaining in EU law. To reach this conclusion meant that Jacobs had to dismiss ILO Conventions 87 and 98, which have been ratified by all the Member States of the EC, the Community Charter of Fundamental Social Rights of 1989, approved by all Member States, the Council of Europe's Social Charter of 1961 and the European Convention on Human Rights. In his view, none of these international instruments supported a fundamental right to collective bargaining in EU law.

Following from this denial of any right to collective bargaining, Jacobs asserted that collective agreements were merely "contracts", and as such had only limited immunity from EC competition rules, which impose justified limitations on collective agreements. Collective agreements are protected from EC competition law (enjoy "anti-trust" immunity) only in the case of: "collective agreements between management and labour concluded in good faith on core subjects of collective bargaining such as wages and working conditions which do not directly affect third markets and third parties...".

Jacobs' Opinion meant that the legal protection of collective agreements, painfully acquired by trade unions in the Member States (in the UK, by granting immunity from judicial doctrines on restraint of trade, beginning with the Trade Union Act 1871) was now potentially threatened by the supremacy of EC competition law. The Opinion seemed to offer employers a weapon to challenge collective agreements, and competition lawyers began to raise questions in the professional legal literature about what trade unions could and could not demand in collective agreements.

It was a relief, therefore, when, in a decision on 21 September 1999, the European Court of Justice rejected the Advocate General's contention that collective agreements were in conflict with the competition provisions of the EC Treaty. The Court did not even mention the Advocate General's Opinion, either on this issue, or on the issue of fundamental trade union rights.

Instead, the Court emphasised the social policy objectives of the EC found in Articles 2 and 3 of the EC Treaty, alongside competition policy objectives. Social policy is to be given at least equal weight to competition policy objectives. Even more significant in the long-term was the Court's decisive pronouncement that its conclusion was supported by provisions in the Social Chapter (the Agreement on Social Policy; after the Amsterdam Treaty, now Articles 138-139 of the EC Treaty) which explicitly support social dialogue and collective bargaining between employers and workers, including at EU level.

While there are still questions as to the precise scope of the rights to collective agreements protected by the Court, the decision in Albany has a number of potentially fundamental implications for the future of labour law, both in the EC and in the UK. 
First, EC labour law is not following the much criticised path of UK labour law, which has traditionally regarded trade unions and their collective agreements as merely enjoying special "immunities" or "privileges". Instead, EC social policy acknowledges that there are trade union rights, in this case, with equal or greater status than competition law. 
Second, these trade union rights derive support from the EC Treaty Articles 2 and 3. However, the future significance of the Court citing these provisions may be affected because, although they applied in the Albany case, they were later re-drafted and re-structured by the Treaty of Amsterdam.

Particularly important, therefore, is the Court's reliance in the Albany judgement on the provisions of the Social Chapter, now reinforced by their insertion into the EC Treaty by the Treaty of Amsterdam. The EC Treaty itself now not only encourages and recognises social dialogue and collective agreements at EU level, but authorises their mandatory extension in the form of Council directives. The Court cited these provisions: (now in Article 139 EC) "the dialogue between management and labour at Community level may lead, if they so desire, to contractual relations, including agreements, which will be implemented either in accordance with the procedures and practices specific to management and labour and the Member States, or, at the joint request of the signatory parties, by a Council decision on a proposal from the Commission'.

Thus, the success of the European Trade Union Confederation (ETUC) in achieving the agreement of 31 October 1991, now the Social Chapter in the EC Treaty, is even more important than previously realised. It enabled the Court in Albany to assert that the EC Treaty protected collective agreements.

Third, the Albany decision has implications for labour laws in the Member States, including in the UK, which attempt to restrict trade union rights guaranteed by the EC Treaty. For example, if Member States try to constrain collective agreements by invoking competition law, these may be blocked by EC law's right to collective agreements.

Finally, Albany highlights how the struggle by the European trade union movement, through the ETUC, to obtain trade union rights at EU level is of vital importance for the protection of trade union rights in the Member States. Trade union rights at EU level become essential in the face of unforeseeable challenges from the EC law emerging from the economic and monetary union of the EU (another example is the "Monti" regulation; see Issue 20 of LELR).

There are currently initiatives to enshrine fundamental rights in the EC Treaty, aimed at the Intergovernmental Conference scheduled for the end of 2000. These require careful scrutiny, not only to ensure that trade union rights are safeguarded, but that the existing rights recognised by the Court in Albany are not diminished by any new formulation.