II. Protection of workers and European rules on social conditionality in the regulation 2021/2115

In the context of the broader issues concerning social sustainability in the new CAP, a particular regulatory profile, of an innovative nature compared to the pre-existing regulatory framework on agricultural policies, is provided for by the so-called “social conditionality”, laid down in Article 14.

This rule extends the model of the environmental conditionality (the “cross-compliance”, already regulated by the previous CAP regulations), expressed here in the form of administrative penalties for farmers who do not comply with the rules designed to protect workers.

In the context of the broader issues concerning social sustainability in the new CAP, a particular regulatory profile, of an innovative nature compared to the pre-existing regulatory framework on agricultural policies, is provided for by Article 14 of Regulation 2021/2015.

This rule extends the model of the environmental conditionality (the “cross-compliance”, already regulated by the previous CAP regulations), by introducing the so-called “social conditionality”, expressed here in the form of administrative penalties for farmers who do not comply with the rules designed to protect workers.

The starting point of this instrument begins by the valorisation of the dignity of work and the acceptance of the perspective according to which, once defined in a legal system the protection of workers (also in light of context variables), the guarantee of their effectiveness must constitute a variable independent from market conditions.

In particular, within the framework of the numerous remedies which, depending on the context, have been used to make the application of labour protection regulations effective, those based on various forms of conditionality represent – not only today – a very interesting frontier. because they impact on the convenience calculations of economic operators. By resorting to them, the public decision-maker chooses, in fact, to influence those calculations by hitting companies that opt for non-compliance with the protection rules with economic disadvantages of various kinds.

Of course, it is important to underline right now that, in practical terms, the real impact of the instrument on the concrete dynamics of employment relationships depends, on the one hand, on the list of protection rules whose effective application is intended to be promoted and, on the other one, on the incisiveness of the action of those who verify and monitor compliance with the rules in question, as well as on the extent of the disadvantages that affect companies that violate them.Footnote ¹⁶

As regards Regulation 2021/2115, first of all it is of extreme interest that the Union has moved in the direction of expanding the content of conditionality also to the protection of workers, therefore using the CAP (whose relevance in the economic context obviously cannot be discounted) as a crowbar to unhinge behaviours that undermine the effectiveness of the rules established to protect employment. Especially since, in the past, proposals to include aspects relating to occupational safety in the framework of the legislation on agricultural support schemes had never led to a legislative provision.Footnote ¹⁷

The breadth of the purposes pursued with this choice and, at the same time, the current boundaries of the chosen protection legislation are very clear from the recitals, in particular 45 and 46, where it is stated that “(45) In order to contribute to the development of socially sustainable agriculture through better awareness, on the part of beneficiaries of CAP support, of the employment and social standards, a new mechanism integrating social concerns should be introduced” and that “(46) to the compliance of farmers and other beneficiaries with basic standards concerning working and employment conditions for farm workers and occupational safety and health, in particular certain standards under Council Directive 89/391/EEC [ie the framework directive on the safety and health of workers] and Directives 2009/104/EC [concerning the minimum safety and health requirements for the use of work equipment by workers at work] and (EU) 2019/1152 [on transparent and predictable working conditions] of the European Parliament and of the Council. By 2025, the Commission should assess the feasibility of including article 7(1) of Regulation (EU) 492/2011 of the European Parliament and of the Council and should, if appropriate, propose legislation to that effect”.Footnote ¹⁸

In turn, article 14(1), located in a Section of the regulation specifically dedicated to Social Conditionality, establishes that “Member States shall indicate in their CAP Strategic Plans that, at the latest as from 1 January 2025, farmers and other beneficiaries receiving direct payments under Chapter II or annual payments under articles 70, 71 and 72 are to be subject to an administrative penalty if they do not comply with the requirements related to applicable working and employment conditions or employer obligations arising from the legal acts referred to in Annex IV” (ie the directives referred to in the recital 46).

On a procedural level, then, article 14(2) provides that “When including a system of administrative penalties in their CAP Strategic Plans as referred in paragraph 1, Member States shall, in accordance with their institutional provisions, consult relevant national social partners representing management and labour in the agriculture sector and shall fully respect their autonomy, as well as their right to negotiate and conclude collective agreements. That system of administrative penalties shall not affect the rights and obligations of the social partners where they are, in accordance with national legal and collective bargaining frameworks, responsible for the implementation or enforcement of the legal acts referred to in Annex IV”.

The last reference provides the Member State with the right to entrust the implementation of directives relating to social policy to the collective bargaining system, provided that the collective agreements satisfy certain requirements, in particular general binding effects.Footnote ¹⁹

With a provision aimed at ensuring that the instrument does not transform into a simple simulacrum of conditionality mechanisms, article 14(3) establishes that “The CAP Strategic Plan shall include rules on an effective and proportionate system of administrative penalties”.

The question of the extent of the sanctions is crucial for the maintenance of the instrument, as demonstrated also by the attention that workers’ trade union organisations at European level (and in particular EFFAT – European Federation of Food, Agriculture and Tourism Trade Unions) are paying to this topic,Footnote ²⁰ with the ambitious objective of coordinating the process of implementation of social conditionality in member countries.

For a more in-depth evaluation of the real usefulness of social conditionality in the framework of the new CAP one must wait for the outcome of the adapting process of the current national legal framework, also observing the penalties that will weigh, in each Member State, on agricultural employers who violate labour protections, as well as, naturally, on the real effectiveness of the controls implemented by the subjects who, in various capacities, have the task of ensuring compliance.

Nonetheless, it is certainly possible now to propose some reading keys, useful to understand the scope of the Union’s choice regarding the other element which, as mentioned above, must be considered to concretely evaluate the instrument’s ability to impact the dynamics of employment relationships, namely the list of provisions to protect workers whose effective application is to be encouraged through conditionality mechanisms.

III. Social conditionality in regulation 2021/2115: an important step or a missed opportunity?

Observing the evolution of the legislative draft, the content of the final European regulation appears significantly different and less broad than expected. In any case, it does not respond to the readings that were given in some journalistic and trade union communications at the time and immediately following the approval of the regulation. In these communications we can read that the CAP reform would contain a clause on social conditionality according to which farmers who do not respect collective agreements and legislation on working conditions will no longer be able to receive Union aid.

First of all, it should be noted that the consequences of the employer’s failure to comply with the rules are not so radical since, as we have seen, sanction mechanisms must consist in “an effective and proportionate system of administrative penalties”.

Secondly, and above all, the content of those communications is incorrect as concern the scope of the obligations of employers considered in the final version of Regulation 2021/2115 (much broader obligations were instead considered in the amendments of the European Parliament adopted on 23 October 2020: see below).

We must recognise that the emphasis placed on those communications can be accepted if we want to highlight the symbolic significance of the innovation introduced in the European legislation on conditionality, namely its openness to social issues related to the protection of workers. It cannot be denied, in fact, that the outcome is, in itself, anything but irrelevant, precisely due to the fact that social conditionality has been recognised as having a role within the CAP; this justifies the satisfaction of those who, even at national and European trade union level, were committed to the introduction of the instrument in the new regulation.

However, the judgment must be more cautious if we observe the real scope of the forecast that interests us here.

As can be easily inferred from the list of directives referred to in Annex IV (two on workers’ health and safety and one on transparent and predictable working conditions: supra, paragraph II), in the final text of the regulation a significant selection has been made of the numerous directives on social policy and, above all, no reference has been made to the safeguards deriving from national collective bargaining.

This choice justifies the question that, in reality, it was a missed opportunity for the enhancement of social conditionality in the Union’s agricultural policies.

To understand the meaning of the question, and the underlying criticism, it must be clarified that the actual latitude of the provisions whose violation determines the sanctioning intervention is undersized compared to expectations, which had instead been strengthened by the position expressed by the European Parliament with the aforementioned amendments of 23 October 2020.

It will be sufficient to mention here, without claiming to be exhaustive, the amendments (728 and 785) which proposed to modify a recital (no 21 of the Commission text; but now see recitals no 41ff):

• – on the one hand, clarifying that “the system of new conditionality links full receipt of CAP support to the compliance by beneficiaries of basic standards concerning the environment, climate change, public health, applicable working and employment conditions, animal health, plant health and animal welfare”;

• – on the other hand, and specifically, providing that “Moreover it is of particular importance that Member States take relevant measures to ensure employers’ access to direct payments is conditional on the compliance with the applicable working and employment conditions and/or employer obligations resulting from all relevant collective agreements and social and labour law at national and Union levels, inter alia in the field of “awareness of conditions of employment, remuneration, working time, health and safety, housing, gender equality, free movement of workers, equal treatment, posting of workers, conditions of stay of third-country nationals, temporary agency work, social protection and social security coordination among Member States.”Footnote ²¹

These recitals should then have been translated, in the legislative framework, into an ad hoc provision (at the time, article 11-bis, provided for by Amendment 732), entitled, precisely, Principle and scope on the social conditionality: “1. Member States shall include in their CAP Strategic Plans a system of conditionality, under which beneficiaries receiving direct payments under Chapter II and Chapter III of this Title or the annual premia under articles 65, 66 and 67 shall be subject to an administrative penalty if they do not comply with the applicable working and employment conditions and/or employer obligations resulting from all relevant collective agreements and social and labour law at national, Union and international levels.” Footnote ²²

The model of social conditionality proposed by Parliament would therefore have had a very broad scope, both as regards the question of guarantees whose effective application was intended to favour and as regards their sources of discipline; a model which, inter alia, would strengthen the functional integration of the right and collective bargaining in labour protection.

It is therefore clear that there is a gap between this global perspective and the selective choice made in the text of Regulation 2021/2115. In the definitive text of article 14, not only was the reference to collective agreements and national legislation omitted, but also a selection of Union safeguards was made, since the principle of conditionality, as we have seen, is currently only used for Directives no 89/391, 2009/104 and 2019/1152.

The first omission is also explained by the differences in protection still existing between Member States: the sanction mechanism proposed by Parliament, if adopted, could have penalised companies operating in the most virtuous Member States (where more protective collective legislative and contractual rules apply). Nevertheless, this does not justify the exclusion of many Community directives on social policy, which are applied in all Member States.

However, the critical evaluation of mediation reached in Article 14 cannot make us forget its importance, not only symbolic.

Firstly, the social conditionality mechanism should be designed to penalise those who violate the provisions on safety at work, an essential area of protection for workers of the primary sector.

Secondly, if one takes into account the characteristics of that sector, where a large proportion of the infringements occur in the undeclared, unofficial work, often recruited by gangmasters, the inclusion in Annex IV of the Directive on transparent and predictable working conditions may be very useful.

In fact, the sanction for the violation of the provisions of Directive 2019/1152, which requires to provide written conditions of employment and to deliver the employment contract within seven working days, is certainly an interesting tool to contribute to the objective of reducing the use of irregular forms of work, again affecting the calculation of convenience of operators.

More generally, it should be stressed that the inclusion of Article 14 in the regulation avoided the risk that, because of the complexity of the negotiations and the economic interests during the approval of CAP 2023–2027, the extension of cross-compliance mechanism to the employment protection would be completely excluded.

However, the road is now open and, of course, the future extension of the rules covered by the mechanism is not in any way prejudiced, as suggested in recital 46 of the regulation (paragraph II above).

IV. Rethinking social measures in rural areas: the European framework and the member states responsibilities

In regard to the further issue concerning the social aspects of agricultural sector – ie the need to ensure the maintenance of farmers in rural areas – it should be noted that this is mentioned in Article 39 TFEU.

Thus, it can be stated that the new Regulations are consistent with the legal principles governing the agricultural policy,Footnote ²³ affirming the essential role of support measures aimed at strengthening small farmers and rural fabric. Such measures shall be considered as a corrective tool for improving the functioning of the whole agrifood system, in addition to the direct payments provided by the CAP. Articles 5 and 6 Regulation no 2021/2115 define general objectives of the CAP payments, related to both environmental profiles, already strongly present in the agricultural policy regulationFootnote ²⁴ since the 1990s, as well as socio economic ones, aimed at “strengthening of the socio-economic fabric of rural areas.”

In particular, Article 6 frames the new aspects of social sustainability in the European agriculture, and among them the objectives to: “improve the farmers’ position in the value chain” (lett c), “attract and sustain young farmers and new farmers and facilitate sustainable business development in rural areas” (lett g) and “promote employment, growth, gender equality, including the participation of women in farming, social inclusion and local development in rural areas, including the circular bio-economy and sustainable forestry” (lett h). The critical aspects of rural areas are furthermore identified in Annex I, defining “Impact, result, output and context indicators pursuant to article 7.” Among them, the attraction of young farmers, evolution of new farm manager, including gender breakdown, the evolution of the employment in rural areas, the promotion of rural inclusion and the fight against poverty can be found.

The result is a comprehensive framework, including and linking different aspects of sustainable rural development, as outlined by the Farm to Fork strategy. The tools aimed at competitiveness and resilience of agriculture ensure both its economic and social sustainability, as far as the maintenance of European agricultural production, that guarantee a “long-term food security.”

Within the European framework, Member States have to define the contents of national strategic plans, taking into account the specific actions and their territorial implications. As declared in the 3rd recital of Regulation 2021/2115 “Enhanced subsidiarity makes it possible to better take into account local conditions and needs and the particular nature of agricultural activity, which results from the social structure of agriculture and from structural and natural disparities between the various agricultural regions, tailoring the support to maximise the contribution to the achievement of Union objectives.”

The effectiveness of the national choices for the implementation of the CAP measures, although the decentralisation, is also strongly constrained by the result indicators, laid down in Annex I, aimed at measuring the achievement of the objectives and evaluating the effectiveness of the interventions national level, to check the consistency of national interventions with respect to the critical issues existing within Member States. This approach, undoubtedly increases the responsibility of Member States in implementing the objectives laid down in the CAP Regulations.

Moreover, the objectives of rural development in light of SDGs are specified by the Commission document “A long-term vision of rural areas,” defining the concerns of a “rural pact” to be implemented by an action plan involving business, public authorities and stakeholders.Footnote ²⁵ The document is meaningful from two points of view, for a correct interpretation of social sustainability in the agricultural sector.

Firstly, it concretely clarifies the concept of development of rural communities. Compared to Green Deal principles, the type of interventions to be implemented by Member States is clearly pointed out.

Secondly, the Commission document identifies four complementary areas of intervention (for stronger, connected, resilient, prosperous rural areas within 2040). Furthermore, the typologies of rural communities are clearly distinguished in “resilient” and “prosperous,” to which a set of actions addressing national intervention measures is connected.

Notably, within the initiatives proposed to improve quality of life – ie achieving balanced territorial development and stimulating economic growth in “resilient rural areas,” social issues are expressly mentioned. The latter “should ensure the inclusion of EU citizens at risk of being deprived of their rights, the promotion of gender equality, the equality and inclusion of people with a minority ethnic or racial background living in rural areas or seasonal workers, and to give equal priority to economic and social advancement.” (paragraph 3.2)

On one hand, the provision of tailored actions aimed at facing situations of social vulnerability in rural areas has the undoubted advantage of addressing the social gaps existing in several areas of the European Union. On the other hand, the full distinction between goals provided for resilient areas and those aimed at the development of “prosperous rural areas” risks to create a rift, if referred to the specific measures to be implemented in each of them. The document stress the goal to foster economic actions, to implement green and digital transition and to strengthen value chains mainly in most developed rural areas; while social sustainability aspects as well as measures aimed at the protection of vulnerable population, refers primarily to the internal and less economic developed rural territories, described as “resilient rural areas.”

The rural action plan drafts two different models of rural development: his approach appears to be flawed by the assumption that criticalities at social level are limited to marginal areas.

Integration policies (eg actions concerning the integration of immigrants workers) should therefore not be limited to specific rural areas. At the same time, measures the fostering of farmers cooperation, as the provision of ecological and digital transition tools should be addressed also to improve the weakest rural areas. In this case, usefully, could be particularly relevant the involvement of public authorities (eg by the implementation and support of districts of productions, fostering the groups of producers, as well as supporting short supply chains).

Therefore, regardless to a schematic classification defined by the Commission, the role of Member States and public local authorities is crucial to define appropriate tasks tailored to the territorial specificities, as it emerges from the strategic plans laid down by Member States.