Price fixing and collective bargaining in Europe

Sectoral collective bargaining is widespread throughout the European continent. But when competitors meet to agree wage rates with their unions could they be infringing EU competition rules?

London, England. Thursday November 21st 2003 at 1.00 pm GMT. The Federation of European Employers (PRWEB) November 23, 2003

PRICE FIXING AND COLLECTIVE BARGAINING
For the past year, FedEE has been in correspondence with the European Competition Commissioner, Mario Monte, about the status of multi-company collective agreements under EU competition rules. Clearly, cooperation between competitor companies to establish the price of labour in a particular economic sector constitutes cartel-like behaviour. However, does such a price-fixing activity infringe Article 81 (1) of the EU Treaty?

The current position of the European Commission is based upon a European Court of Justice ruling in the Albany et al case of 21.9.1999, where the collective bargaining process was effectively excluded from the ambit of competition rules. However, an important question remained about the precise scope of the exemption and whether all meetings involving worker representatives were automatically considered to constitute collective bargaining and therefore would be outside the price fixing restrictions imposed by EU competition rules.

In the Commission's latest letter to FedEE, a senior official from the Competition DG has confirmed that "the exemption for agreements between employers and employees concerns the substance of the agreement and not the circumstance that employers and employees are physically meeting. If competitors meet to discuss price fixing in areas other than labour, although in the presence of employees, this still amounts to cartel-like behaviour, which will be sanctioned by the Commission."

Commenting on the latest opinion from the Commission, Robin Chater, Secretary-General of the Federation of European Employers said that "the implication of the Commission's statement is that sectoral bargaining must not involve any reference to corporate profitability or product prices. It could also place fresh legal limitations onto the exchange of information between companies during merger, takeover and other business transfer exercises - even within the context of employee consultation meetings to discuss such proposed changes."

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