The Impact of the European Union Economic Governance on the Hierarchy of National Labour Law Sources

n coordinating national economic policies within the framework of the Euro- pean Economic Governance (EEG), the Institutions of the European Union (EU) have interfered with the hierarchy of labour law sources of some Member States. In this respect, the EU has challenged the traditional European model of employment regulation, built on a rigid floor of mandatory statutory protections and a centralised system of collective bargaining, endorsing a completely different and more flexible one, that is to say, a model based on decentralised collective bargaining and on a loose application of one of the founding principles of labour law, the so-called favour (or favourability) principle. In investigating the impact of the EU economic governance on the hierarchy of national labour law sources, this chapter will provide a preliminary brief description of the functioning of the EEG, followed by a consideration of the economic arguments underpinning the revision of the hierarchy of labour law sources promoted by the EU institutions. It will then consider the recommendations addressed to a selection of countries within the framework of the EEG, analysing the results generated by them. Finally, it will focus on a possible and desirable change of course compared to the trend promoted by the EEG so far.