The exercising of social rights

On June 19, delegates representing 50 million workers in 140 countries met to establish a new global union federation for the mining, energy and manufacturing sectors. The newly-established union, IndustriALL, will mainly represent workers employed by multinational corporations, operating on different continents with a view to gain traction in large-sized companies, in a bid to match collective rights for employees similar to those adopted in the EU.

The balancing act concerns the contrasting interests that run between the social dimension and the single market- Josette Grech

The founding of this new union comes in the wake of a proposal for a regulation on industrial action, whereby the Commission is seeking to reconcile the deepening of the EU’s single market with the protection of workers’ rights.

The balancing act concerns the contrasting interests that run between the social dimension and the single market. On the one hand one finds the employees’ rights to constitute and join trade unions of their choice for the defence of their economic and social interests, a fundamental right recognised in the Charter of Fundamental Rights of the EU. The attributes of industrial conflict, namely collective action including strike action, are also acknowledged at EU level but there is no clearly defined right to strike at EU level.

On the other hand, there is the freedom of establishment and the freedom to provide cross-border services, equally fundamental rights protected by the Treaty of the European Union.

The former right to take industrial action can hamper to varying degrees these fundamental freedoms.

The Commission’s proposal for a regulation is a response to a number of judgements delivered by the Court of Justice of the European Union (CJEU), concerning these two contrasting rights at issue.

Although the right to strike at national level received some protection from the EU in the form of the so-called Monti Regulation, this right has been limited as a result of the CJEU’s rulings in the Viking and Laval cases. In these two cases, the CJEU faced a confrontation of these two rights. The employers claimed that the right to take industrial action is subservient to the freedom of establishment and provision of cross-border services, while the trade unions argued that the right to collective industrial action falls outside the scope of the fundamental right to provide services.

The CJEU concluded that industrial action did constitute a restriction on the fundamental freedom to provide services and consequently held that restrictions justified by an interest to protect workers must be suitable for ensuring the attainment of that objective and should go no further. The court also ruled that industrial action to impose the terms of an existing collective agreement on an employer, based in another member state, amounted to a restriction of the employers’ fundamental freedom, which however could be justified by an interest to protect workers.

Following these two cases, trade unions voiced their concerns that the right to strike at transnational level was restricted, given that stringent limitations were held to apply in the exercise of social rights, including industrial action. They sparked controversy on the obstacles to organise transnational industrial action resulting from the different national systems, and the adequacy of existing EU rules protecting the rights of workers in the context of the freedom to provide services and the freedom of establishment.

The draft regulation on industrial action attempts to address these ongoing trade union concerns by clarifying the interaction between the exercise of social rights and the exercise of the fundamental freedoms of establishment and provision of services.

The Commission in its proposal affirms that there is no inherent conflict between these two rights, none of which takes over the other.

When conflicts do arise, reconciliation will have to be achieved in the knowledge that fundamental freedoms may have to be restricted in favour of social rights, and the exercise of such freedoms may likewise justify a restriction on the exercise of social rights. In this respect the draft invites national courts faced with such conflicts to strike a fair balance between the rights and freedoms concerned and reconcile them. The draft proposes a three-tier test based on appropriateness, necessity and reasonableness as a guideline for attaining a fair balance.

Twelve member states have, however, formally registered their objections to this proposed regulation. The Commission must now review its proposal and decide whether to maintain, amend or withdraw it, giving reasons for its decision.

jgrech@demarcoassociates.com

Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.