Election Briefing: THE SOCIAL CHAPTER: The battle between dignity and profit

The social chapter, an agreement to which all 15 European Union states except Britain adhere, defines a set of rights for employees in areas such as health and safety, sexual equality at the workplace and consultation of staff by manage- ment. Yet many important aspects of industrial relations, such as trade union membership, the right to strike and pay levels, are specifically excluded.

In the view of some Continental politicians and trade unionists, the agreement helps to demonstrate that the EU is not just about free markets, big business and the pursuit of profits, but about upholding the dignity of workers.

However, some Continental employers have long feared that the social chapter may one day reduce business efficiency by imposing higher costs and restricting the right of management to hire and fire.

Despite such reservations, even conservative or centre-right politicians on the Continent tend not to share the British government's view that the social chapter is something dangerous and typically "socialist". Some point out that the idea of promoting skills, productivity and harmonious labour relations, by distributing rights and responsibilities to both management and workforce, owes much to the successful post-1945 West German practice of Mitbestimmung (industrial partnership).

"The social chapter is a platform for good industrial relations," Jacques Santer, the European Commission president, said last Wednesday. "Good industrial relations strengthen competitiveness, they do not weaken it."

The social chapter specifies that measures introduced under its auspices must not threaten the competitiveness of the EU economy. Moreover, they must not hinder the creation and development of small and medium-sized businesses.

The agreement is attached to the 1991 Maastricht treaty as an annex signed by every EU state except Britain.

The Government's opposition to the social chapter was so intense that the other EU states decided to sign a protocol among themselves rather than risk a British veto.

Article One of the social chapter sets out ambitious objectives, including "the promotion of employment, improved living and working conditions, proper social protection, dialogue between management and labour and the development of human resources with a view to lasting high employment". Since its adoption only two directives have been issued under the chapter, which may be a reflection of the waning enthusiasm of Brussels and most EU governments for adopting rafts of social legislation.

Even John Major acknowledged last week that not much had changed in the EU as a result of the measures. Answering questions after a speech in which he denounced the agreement as a destroyer of jobs, he said: "As of tonight, there is not a lot in the social chapter."

One directive requires large companies to establish elected councils to represent their workers. Some British firms have chosen to introduce this measure even though there is no legal obligation to do so. The other directive entitles new parents to three months' unpaid leave from their jobs.

Among measures that may be passed in the future is one that would shift the burden of proof to the defendant in sex discrimination cases. Other proposals include the extension of the works councils directive to smaller companies, stronger action against sexual harassment at work, and enhanced rights for part-time workers.

If Britain were to join the social chapter, as Labour wants, it would still have the right to veto measures in five areas: social security, protection of redundant workers, workers' representation on company boards, employment conditions for non-EU nationals, and financial contributions for job creation.

In areas such as health and safety, working conditions and sexual equality, decisions are reached by majority voting. In theory Britain could be outvoted by a coalition of other states, but in practice the aim is to reach a consensus among all member-states before proceeding with a measure.