The Social dialogue is enshrined in the Treaty on the Functioning of the European Union (Art. 154, 155 TFEU, ex Art. 138, 139 TEC) and is an effective instrument for the social partners (employers and labour unions) in influencing and shaping European social policy. It takes place at different levels and includes discussions, opinions, negotiations, joint statements, recommendations and framework agreements on social policy issues.
In the legislative procedure the social dialogue is preceded by a two-stage consultation procedure (Article 154 TFEU, ex Article 138 TEC). The European Commission is obliged to consult the European social partners previous to any social policy initiative. In the first consultation stage the social partners are consulted on the possible direction of union action. Once the Commission concludes that action is required, it then consults in the second stage the European social partners on the content of any proposal. The social partners can take the opportunity to initiate social dialogue pursuant to Article 155 TFEU (ex Article 139 TEC) and negotiate a joint agreement on the initiative which is then implemented through a council decision on proposal from the Commission.
The normal legislative process which is to involve the European Parliament is put on hold by the Commission while the social partner negotiations are taking place. The legislative process starts again only if the negotiations do not lead to a successful conclusion or if the Council of Ministers refuses to implement an agreement. In addition the social partners may conclude voluntary framework agreements, in which case an initiative by the European Commission is not necessary.
The result is that such agreements lead to targeted and non-bureaucratic outcomes which are less of a burden to businesses than proposals negotiated in the European Parliament. As a direct result of this constitutional structure only companies that are members of an employers’ association are able to influence the legislative process at European level.