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Business Freedoms and Employment Rights in the European Union

Published online by Cambridge University Press:  03 September 2015

Jeremias PRASSL*
Affiliation:
Faculty of Law and Magdalen College, University of Oxford

Abstract

In this article, I explore the substance and operation of Article 16 of the European Union’s Charter of Fundamental Rights, which recognises ‘the freedom to conduct a business’, in order to determine the extent to which the constitutionalisation of commercial interests as fundamental rights could pose a threat to the Union’s worker-protective acquis. Having surveyed three important Directives which regulate employees’ rights in transfers of undertakings, collective redundancies, and the organisation of working time, I argue that future challenges based on Article 16 CFR are unlikely to succeed: even in situations where the Directives limit employers’ economic freedoms, such interference is justified and proportionate.

Type
Articles
Copyright
© Centre for European Legal Studies, Faculty of Law, University of Cambridge 

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Footnotes

*

I am grateful to Catherine Barnard, Mark Freedland, Amy Ludlow, Jonathan Morgan and an anonymous reviewer, as well as the participants at a CELS lunchtime seminar in February 2015 for earlier discussion. The usual disclaimers apply.

References

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3 Ibid, p 215.

4 Alemo-Herron And Others v Parkwood Leisure Ltd, C-426/11, EU:C:2013:521.

5 Charter of Fundamental Rights of the European Union [2000] OJ C364/01 (‘CFR’), Art 16.

6 For an important early analysis, see Everson, M and Gonçalves, R Correia, ‘Article 16’ in S Peers et al (eds), The EU Charter of Fundamental Rights: A Commentary (Beck/Hart, 2014)Google Scholar.

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8 See note 4 above.

9 Weatherill, S, ‘Use and Abuse of the EU’s Charter of Fundamental Rights: On the Improper Veneration of ‘Freedom of Contract’’ (2014) 10 European Review of Contract Law 157, p 157 CrossRefGoogle Scholar; Prassl, J, ‘Freedom of Contract as a General Principle of EU Law? Transfers of Undertakings and the Protection of Employer Rights in EU Labour Law (Case C-426/11 Alemo-Herron v Parkwood Leisure)’ (2013) 42 Industrial Law Journal 434 CrossRefGoogle Scholar.

10 See S Weatherill, note 9 above, p 157.

11 See eg Österreichischer Gewerkschaftsbund, C-328/13, EU:C:2014:2197.

12 Bercusson, B et al ‘Legal prospects and legal effects of the EU Charter’ in B Bercusson (ed) European Labour Law and the EU Charter of Fundamental Rights (Nomos, 2006) p 49 Google Scholar.

13 These questions are made more pressing by the fact that at least one such reference has only very recently been lodged before the Court: AGET Iraklis, C-201/15 (pending).

14 See eg Bercusson, B (ed), European Labour Law and the EU Charter of Fundamental Rights (Nomos, 2006)Google Scholar.

15 Though this potential is not necessarily always realised: C-176/12, Association de Mediation Sociale (AMS), EU:C:2014:2.

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17 Art 26ff of the Consolidated Version of the Treaty on the Functioning of the European Union [2008] OJ C115/49 (‘TFEU’); International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line APB, C-438/05, EU:C:2007:772 and Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet, C–341/05, EU:C:2007:809; Freedland, M and Prassl, J (eds), EU Law in the Member States: Viking, Laval and Beyond (Hart, 2014)Google Scholar.

18 Though it does of course have other limits, as explored in the subsequent sections.

19 Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie, C-67/96, EU:C:1999:430. For a powerful defence of this approach, see Bogg, A, ‘ Viking and Laval: The International Labour Perspective’, in M Freedland and J Prassl (eds), EU Law in the Member States: Viking, Laval and Beyond (Hart, 2014) pp 7172 Google Scholar.

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21 Cf Article 51 CFR, and the Court’s decision in Fransson, C-617/10, EU:C:2013:280.

22 See in particular the evidence of Lord Goldsmith, the UK representative to the convention tasked with drafting the Charter: HC European Scrutiny Committee, The Application of the EU Charter of Fundamental Rights in the UK: a State of Confusion (43rd report, HC 979 2013-14) p 13ff, and materials cited there.

23 Usai, A, ‘The Freedom to Conduct a Business in the EU, Its Limitations and Its Role in the European Legal Order’ (2013) 14 German Law Journal 1867, p 1868 Google Scholar; see also D Spielman, ‘Commentary of the Charter of Fundamental Rights’, available at: http://ec.europa.eu/justice/fundamental-rights/files/networkcommentaryfinal_en.pdf [last accessed 1 May 2015]. Union law had of course long recognised such freedoms implicitly: see the discussion of Nold KG v Commission, C–4/73, EU:C:1974:51, below.

24 See M Everson and R Correia Gonçalves, note 6 above, p 447.

25 Ibid, p 441.

26 S Weatherill, see note 9 above, p 166; Weatherill, S, ‘From Economic Rights to Fundamental Rights’ in S Weatherill et al (eds) The Protection of Fundamental Rights in the EU After Lisbon (Hart, 2013), p 11 Google Scholar.

27 Art 6(1) TEU.

28 Eg the Italian Constitution of December 1947 (as amended), Art 41: ‘Private-sector economic initiative is freely exercised. It cannot be conducted in conflict with social usefulness or in such a manner that could damage safety, liberty and human dignity. The law shall provide for appropriate programmes and controls so that public and private-sector economic activity may be oriented and co-ordinated for social purposes.’

29 Though note the important question as to the interaction between Union law and Member State law, which is beyond the scope of the present discussion: Ashiagbor, D, ‘Unravelling the Embedded Liberal Bargain: Labour and Social Welfare Law in the Context of EU Market Integration’ (2013) 19 European Law Journal 303 CrossRefGoogle Scholar.

30 Supiot, A, ‘Grandeur and Misery of the Social State’ (2013) 82 New Left Review 99, p 104 Google Scholar. See also Deakin, S, ‘Conceptions of the Market in Labour Law’ in Q Numhauser-Henning and M Rönnmar (eds), Normative Patterns and Legal Developments in the Social Dimension of the EU (Hart, 2013) 141, p 150 Google Scholar.

31 M Monti, ‘A New Strategy For The Single Market At The Service Of Europe’s Economy and Society’ Report to the President of the European Commission (9 May 2010), p 68.

32 M Everson and T Correia Gonçalves, see note 6 above, p 445.

33 Explanations Relating to the Charter of Fundamental Rights [2007] OJ C303/17.

34 Leczykiewicz, D, ‘Horizontal Effect of Fundamental Rights: In Search of Social Justice or Private Autonomy in EU Law?’ in U Bernitz et al (eds), General Principles of EU Law and European Private Law (Kluwer Law International, 2013), p 172 Google Scholar.

35 M Everson and R Correia Gonçalves, see note 6 above, p 440.

36 Nold KG v Commission, EU:C:1974:51, para 12.

37 Ibid, para 13.

38 Nold KG v Commission, EU:C:1974:51, paragraph 14.

39 SpA Eridiana and others, C-230-78, EU:C:1979:216, paragraph 31.

40 Weatherill, S, ‘After Keck: Some Thoughts on How to Clarify the Clarification’ (1996)Google Scholar 33 CMLR 885, 904.

41 J Prassl, ‘Freedom of Contract as a General Principle of EU Law?’ (n 9); building on S Whittaker, ‘The Optional Insutrument of European Contract Law and Freedom of Contract (2011) 7 ERCL 371, 372.

42 Spain v Commission, C-240/97, EU:C:1999:479, para 99.

43 M Everson and R Correia Gonçalves, see note 6 above, p 444.

44 See note 33 above.

46 The same is true for (increasingly frequent) situations where Article 16 CFR is used as a subsidiary or alternative ground of challenge.

47 With the notable exception of Scarlet Extended SA v Société Belge des Auteurs, Compositeurs et Éditeurs SCRL (SABAM), C-70/10, EU:C:2011:771. This decision, however, can be understood in the highly specialised context of Intellectual Property law and the proposed application of very onerous blanket obligations to Internet Service Providers.

48 Herbert Schaible Co, C-101/12, EU:C:2013:661.

49 Denise McDonagh v Ryanair Ltd, C-12/11, EU:C:2013:43.

50 Council v Kala Naft Co, C-348/12P, EU:C:2013:776.

51 Deutsches Weintor, C-544/10, EU:C:2012:526.

52 Regulation (EC) No 1924/2006 of the European Parliament and of the Council of 20 December 2006 on nutrition and health claims made on foods (OJ 2006 L 404, p 9), as last amended by Commission Regulation (EU) No 116/2010 of 9 February 2010 (OJ 2010 L 37, p 16; ‘Regulation No 1924/2006’).

53 Deutsches Weintor, EU:C:2012:526, para 46.

54 Deutsches Weintor, EU:C:2012:526, para 47.

55 Sky Österreich GmbH v Österreichischer Rundfunk, C-283/11, EU:C:2013:28.

56 Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (OJ 2010 L 95, p. 1, and corrigendum OJ 2010 L 263, p 15).

57 See note 55 above, paras 45–46; citing Deutsches Weintor, EU:C:2012:526, para 54.

58 See note 56 above, Art 15(6).

59 See note 55 above, para 49.

60 Wachauf v Germany, C-5/88, EU:C:1989:321, para 18.

61 Reich, N, General Principles of EU Civil Law (Intersentia, 2014), p 40 Google Scholar, and ch 2 more generally.

62 Nycomed Danmark ApS v European Medicines Agency (EMA), T-52/09, EU:T:2011:738, para 89.

63 See note 7 above, Art 3(1).

64 See note 4 above, para 20.

65 Ibid, para 25.

66 Ibid, para 31.

67 Ibid, paras 32–33, 35.

68 J Prassl, see note 9 above, pp 439–440.

69 For further criticism, see Zahn, R, ‘The Court of Justice of the European Union and Transfers of Undertakings: Implications for Collective Labour Rights’ (2015) 6 European Labour Law Journal 72 CrossRefGoogle Scholar.

70 Stauder v Stadt Ulm, C-29/69, EU:C:1969:57, para 7.

71 See note 4 above, para 35.

72 See note 55 above, para 49.

73 Barnard, C, EU Employment Law, 4th ed (Oxford University Press, 2012)Google Scholar, 581ff.

74 See note 4 above, para 28.

75 Foreningen af Arbejdsledere I Danmark v Daddy’s Dance Hall, C-324/86, EU:C:1988:72.

76 Opinion of Advocate General Cruz Villalón in Alemo-Herron, C-426/11, EU:C:2013:82, point 36.

77 Werhof v Freeway Traffic Systems GmbH & Co KG, C-499/04, EU:C:2006:168, para 24.

78 Council Directive 98/59/EC on the approximation of the laws of the Member States relating to collective redundancies OJ [1998] L 225/16 (‘Collective Redundancies Directive’).

79 See Council Resolution of 21 January 1974 concerning a social action programme, OJ [1974] 013/1.

80 See note 78 above, preamble 2.

81 See note 78 above, preamble 3.

82 Dansk Metalarbejderforbund v H Nielsen & Søn, C-284/83, EU:C:1985:61.

83 Ibid, para 10.

84 Rockfon A/S v Specialarbejderforbundet i Danmark, C-449/93, EU:C:1995:420.

85 Ibid, para 21.

86 Akavan Erityisalojen Keskusliitto AEK ry and Others v Fujitsu Siemens Computers Oy, C-44/08, EU:C:2009:533, para 59.

87 Ibid, para 59.

88 See note 78 above, Art 1(1).

89 This has drawn significant amounts of litigation. For full overview, see note 73 above, pp 635–640.

90 Junk v Kühnel, C-188/03, EU:C:2005:59, para 37.

91 Ibid, para 38.

92 See further Prassl, J, The Concept of the Employer (Oxford University Press, 2015), 96ff CrossRefGoogle Scholar.

93 See note 86 above, para 48.

94 See note 73 above, p 629.

95 See note 78 above, Art 2(2).

96 See eg note 90 above, para 44.

97 See note 78 above, Art 2(3)(b).

98 UK Coalmining Ltd v NUM EAT/0397/06; see further note 73 above, p 638 and the cases discussed there.

99 Varec SA v Belgium, C‑450/06, EU:C:2008:91, para 49.

100 Interseroh Scap Metal Trading, C-1/11, EU:C:2012:194, para 43.

101 See note 86 above, para 53.

102 See note 78 above, Art 3.

103 Ibid, Art 3(2).

104 See note 73 above, pp 640–641.

105 Freedland, MEmployment Protection: Redundancy Procedures and the EEC’ (1976) 5 Industrial Law Journal 24, p 27 CrossRefGoogle Scholar.

106 See note 78 above, Art 4(3).

107 See note 55 above, para 49.

108 Davies, ACL, EU Labour Law (Elgar, 2012) p 220 CrossRefGoogle Scholar.

109 Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organization of working time [1993] OJ L307/18.

110 Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time [2003] OJ L299/9 (‘Working Time Directive’).

111 See note 73 above, p 533.

112 UK v Council, C-84/94, EU:C:1996:431.

113 Especially as regards the opt-out: see note 73 above, 555–551.

114 See note 108 above, pp 203–204 and the sources cited there.

115 See note 61 above, p 41.

116 Lochner v New York 198 US 45, p 45. Though cf notably Justice Holmes’ dissent, ibid 74ff.

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119 For criticism of that distinction, see note 73 above, pp 537–538.

120 See note 110 above, Art 5.

121 Ibid, Art 3.

122 Ibid, Art 4.

123 Ibid, Art 6.

124 Ibid, Arts 8–11.

125 Ibid, Art 7. Financial payments in lieu are only allowed when the employment is terminated.

126 Ibid, Art 17(1)(a).

127 Though cf notably Pfeiffer v Deutsches Rotes Kreuz, C-397/01, EU:C:2004:584.

128 See note 110 above, Arts 15, 23.

129 See note 73 above, p 558.

130 Ibid, p 558.

131 Barnard, C et al, ‘Opting out of the 48 Hour Week: Employer Necessity or Individual Choice?’ (2003) 32 Industrial Law Journal 223, p 237 CrossRefGoogle Scholar.

132 Robinson-Steele v RD Retail Services Ltd, C-131/04, EU:C:2006:177.

133 Bogg, A, ‘The Right to Paid Annual Leave in the Court of Justice: The Eclipse of Functionalism’ (2006) 31 European Law Review 892, p 905 Google Scholar.

134 See note 131 above, p 238

135 Landeshauptstadt Kiel v Norbert Jaeger, C-151/02, EU:C:2003:437, para 66.

136 As C Barnard (see note 73 above, p 551) has suggested, ‘following Test-Achats (Case C-236/09 [2011] ECR I-nyr), the absence of a sunset clause on the opt-out might be challenged as contrary to Article 31(2) of the Charter’.

137 Not least because of the challenge in UK v Council, EU:C:1996:431. See further note 2 above, pp 59–61.

138 Mirroring the language in its predecessor provision, Art 118a TEC.

139 See note 110 above, Recital 5. As cited by the Court in R v Secretatory of State for Trade and Industry, ex parte Broadcasting, Entertainment, Cinematographic and Theatre Union (BECTU), C-173/99, EU:C:2001:356, paragraph 59.

140 R v Secretatory of State for Trade and Industry, ex parte Broadcasting, Entertainment, Cinematographic and Theatre Union (BECTU), EU:C:2001:356, para 57.

141 Ibid, para 59.

142 Ibid, para 60.

143 See note 61 above, p 41.

144 See note 7 above, preamble 2.

145 See note 108 above, p 217. When financial crises once more began to rear their head in recent years, however, the rhetoric had changed, with deregulation to achieve labour market flexibility as a new guiding star: Prassl, J, ‘Contingent Crises, Permanent Reforms: Rationalising Labour Market Reforms in the European Union’ (2014) 5 European Labour Law Journal 211 CrossRefGoogle Scholar.

146 See eg Commission Report on Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses (Brussels, 18 June 2007) COM (2007) 334 final.

147 A detailed discussion about the extent to which the constitutionalisation of commercial interests as fundamental rights could pose a threat to the Union’s established economic constitution lies beyond the scope of the present discussion. See Micklitz, HWIntroduction’ in HW Micklitz (ed), Constitutionalization of European Private Law (Oxford University Press, 2014)CrossRefGoogle Scholar.

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149 Maduro, M Poiares, ‘Striking the Elusive Balance Between Economic Freedom and Social Rights in the EU’ in P Alston (ed) The EU and Human Rights (Oxford University Press, 1999)Google Scholar.

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151 Herresthal, C, ‘Constitutionalisation of Freedom of Contract in European Union Law’ in K Ziegler and P Huber (eds) Current Problems in the Protection of Human Rights (Hart, 2013), pp 108 Google Scholar, 115.

152 Semmelmann, C, ‘The European Union’s Economic Constitution under the Lisbon Treaty: Soul-Searching Among Lawyers Shifts the Focus to Procedure’ (2010) 35 European Law Review 516, p 541 Google Scholar.

153 Syrpis, P and Novitz, T, ‘The EU Internal Market and Domestic Labour Law’ in A Bogg, C Costello, A Davies, and J Prassl (eds), The Autonomy of Labour Law (Hart, 2015) pp 291292 Google Scholar.

154 M Everson and R Correia Gonçalves, see note 6 above, p 449.