The Freedom to Provide Services and the Right to Establishment -V- The Right to Strike

Abstract

The purpose of this thesis is to describe and analyse the problems surrounding the conflict between fundamental rights and common market freedoms, as they appear in the Laval and Viking judgements. The overall question that this work intends to answer is when a collective action undertaken by trade unions of a Member State for curbing the freedom of an undertaking to enter the market of another Member State is legitimate or illegitimate under Community law. The Laval and Viking cases raise a number of legal questions regarding the scope of Article 43 and 49 EC as well as the Posted Workers Directive. This thesis starts with a background of the fundamental rights as general principle of EC law. It is shown how the ECJ developed the concept of fundamental rights in its case law, even though there were no provisions of fundamental rights enshrined in the founding European Community Treaties. Since the recognition of a particular right ultimately comes from the fact that it has been invoked before the Court, it is thus the accident of litigation that has decided the rights, which have been expressly recognised by the ECJ thus far. The ECJ derives the fundamental rights from the national constitutions of the Member States and international treaties to which the Member States are parties. In Viking and Laval, the ECJ also referred to the Charter of fundamental rights of the European Union. This is the first time that the ECJ has used the Charter for confirming a right not previously elevated to a fundamental right, which in turn implies that it is no longer the accident of litigation that decides which rights that are fundamental, but rather the Charter itself. On the other hand, the constitutional analysis in this thesis clearly shows that the right to strike does not enjoy constitutional protection in all the Member States, which could explain why the ECJ referred to the Charter in the first place. The question of direct horizontal effect concerns the extent to which the provisions of the Treaty are binding for private subjects, acting either as individuals or in a group. In that regard, the ECJ established the horizontal direct effect of Articles 43 and 49 EC. There are however also certain differences between the right to establishment and the freedom to provide services. The right to establishment has, for instance, more in common with the freedom of workers in Article 39 EC than it has with the freedom to provide services. This comes from the fact that when the individual leaves the home state in order to establish himself in another state, the home state loses regulatory control to the new host state. Reversely, the service provider continues to be based in the home state, which has primary regulatory control, while providing services in the host state. In this respect, the freedom to provide services has more in common with the free movement of goods than with the right to establishment, because both services and goods are primarily subject to home state control. The freedom to provide services, the right to establishment and the free movement of workers have all strong points of similarity, as the principle of equal treatment lay behind all three. However, even though the ECJ initially interpreted Articles 43 and 49 EC in line with those suggestions, it gradually moved away from its emphasis on unequal treatment. The discrimination model was thus to a large extent replaced by an emphasis on market access. The market access approach means that a restriction will fall within the scope of Community law and require objective justification, if the effect on an individual's access to the market of a Member State can be shown. This holds true regardless of the equally restrictive marketing effect on situations internal to a Member State. The case law of the ECJ allows for exceptions to the common market freedoms on grounds of public interest. This is motivated by the idea that there are certain national interests worthy of protection that should take precedent over the free movement. The protection of workers and the prevention of social dumping are recognised as public interest exceptions, albeit the early case law of the ECJ referred only to the individual interest of the posted workers and not the collective or individual interest of the workers in the host Member States. The prevention of social dumping is, however, by definition the extension of certain national interests to posted workers, but for the benefit of the workers of the host Member State. National labour laws that are, in the words of the Court, ''liable to hinder or make less attractive'' the exercise of rights enshrined in the Treaty have to fulfil certain conditions in order not to breach the Treaty, in that they must: -be applied in non-discriminatory manner&semic -be justified by imperative requirements in the general interest&semic -be proportional. The provision of services in Article 49 EC has an additional requirement to those listed, for account must also be taken of the extent to which the imperative requirement in the general interest is already protected in the home state of the service provider. This is thus a reflection of home state control. Although the right to establishment has played a relatively small role in relation to national employment laws, that cannot be said regarding the right to provide services, where the case law is quite well developed. In respect of the extension of national host state laws to posted workers, the case law on the provisions of services can be summed up in three general rules concerning administrative requirements, minimum remuneration and social security charges respectively. First, the scope of the provisions of services naturally presupposes that service providers may depart from the home state with their own personnel in order to temporary pursue the providing of services in a host state without being subject to supplementary administrative requirements concerning either immigration or labour market regulations. Second, there are legislative requirements in the host state, concerning minimum remuneration and other working conditions, with which service providers may have to comply. This is equally true for national measures that are appropriate for monitoring such requirements. Third, service providers do not have to comply with all the social security obligations for workers who are already insured in their home state, except when they add up for the protection of workers. The same holds true regarding other formalities linked to social security obligations. The case law concerning minimum remuneration is in many ways codified in the Posted Workers Directive. Article 3(1) of the Directive obliges the Member States to ensure certain protective rules from their own labour systems to posted workers. If a Member State has provisions on minimum wage, it is in fact mandatory that it extend those rules to posted workers as well. This is in contrast to Article 3(8), which makes it optional for Member States to extend terms and conditions from generally applicable collective agreements. Furthermore, Article 4.3 PWD specifically stipulates that the terms and conditions of employment referred to in Article 3 PWD must be generally available. The importance of Article 4.3 EC can be seen in Laval, where the Court ruled out the case-by-case negotiations inherent in the Swedish system in favour of pre-existing collective agreements with minimum wages. The special characteristic of the provision of services necessarily implies that it will be difficult to persuade the Court that national laws do in fact confer benefits on the posted workers, if the home state already provides essentially similar protection. As a rule, this means that the national authorities have to check the rules of the home state before extending national legislation. This is in part in contrast with the PWD, because Article 3(7) PWD seems to provide for this solution only when the home state rules are more favourable to the workers. This means that trade unions cannot undertake a collective action without first making sure whether the terms and conditions in the home state are more favourable. The broad list of justifications based on the overriding public interest is in turn a response to the equally broad scope of the market access approach. The term comes from the Court's gradual departure from an emphasis on unequal treatment, i.e. discrimination, towards an emphasis on whether an individual's access to the market of another Member State is restricted. The Laval and Viking judgements make it clear that a restrictive collective action can be justified if it pursues a legitimate objective compatible with the Treaty, it is justified by overriding reasons of public interest and it is proportional in the sense that it is suitable for securing the attainment of the objective which it pursues and it does not go beyond what is necessary in order to attain it. The conclusion made in this thesis is that it is lawful for a trade union to take industrial actions for the protection of workers from the consequences of the relocation of an undertaking that intends to move from one Member State to another, if it can be determined that the interests of the workers are, as the Court puts it, ''jeopardised or under serious threat'' from the relocation. Furthermore, an industrial action with the specific aim of preventing social dumping cannot seek terms and conditions for the workers concerned that go beyond those provided for by Posted Workers Directive. In practical terms, the PWD requires that there must be a law implementing its results. The general case law on labour law restrictions is however problematic in this regard, as there are situations in which a breach of the PWD can be justified with reference to Article 49 EC, and other situations where measures implemented in accordance with the PWD can be in breach of Article 49 EC. However, even if pursuing a legitimate aim, the collective action would still have to be proportional in order to be legitimate under Community law. The proportionality assessment is in itself problematic in especially two respects. First, the application of the principle of proportionality presupposes that the more effective the industrial action restricts the relevant common market freedom, the harder it will be to justify. Second, there is an inherent risk in allowing national courts to assess whether there are less restrictive means to end the collective negotiation successfully, as it can create uncertainty regarding the outcome of collective disputes. Moreover, the Viking judgement seems to indicate that the suitability of a collective action needs to be assessed in a marginal way, whereas the necessity assessment presupposes a strong review with regard to other less restrictive possibilities for resolving the conflict, which seems to indicate that collective action is accepted only as the last resort in an industrial confrontation.

• author: Welin, Thomas
• supervisor: Henrik Norinder
• organization: Department of Law
• year: 2009
• type: H3 - Professional qualifications (4 Years - )
• subject: Law and Political Science
• keywords: EG-rätt
• language: English
• id: 1562914
• date added to LUP: 2010-03-08 15:55:30
• date last changed: 2010-03-08 15:55:30