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The European Pillar of Social Rights: Effectively Addressing Displacement?

  • Sacha Garben

Abstract

An assessment of the ‘European Pillar of Social Rights’ by reference to its constitutional significance – Potential to significantly improve the social output of the EU by addressing the displacement of the Social Policy Title of previous years – Incapacity to redress the constitutional imbalance between ‘the market’ and ‘the social’ in the EU legal order – Continuing displacement of the (national and European) legislator in the internal market and economic governance

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Professor of EU Law, College of Europe, Bruges and on leave from the European Commission. The author wishes to thank Professor Claire Kilpatrick as well as three anonymous reviewers for their valuable feedback. The views expressed in this article are entirely personal and do not in any way reflect the position of the European Commission.

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1 European Commission, Communication of 8 March 2016 launching a consultation on a European Pillar of Social Rights, COM(2016)0127.

2 European Commission, Recommendation on the European Pillar of Social Rights, C(2017) 2600 final, and Communication of 26 April 2017 establishing a European Pillar of Social Rights, COM(2017) 250 final.

3 For a comprehensive discussion see Barnard, C., ‘EU Employment Law and the European Social Model: The Past, the Present and the Future’, 67(1) Current Legal Problems (2014) p. 199 , and Garben, S., ‘The Constitutional (Im)balance between “the Market” and “the Social” in the European Union’, 13 EuConst (2017) p. 22 .

4 For a general conceptual discussion of ‘social displacement’, see the contribution of C. Kilpatrick to this special issue.

5 Barnard has argued that ‘EU employment law is going nowhere very fast’ due to a crisis of regulation: supra n. 3, p. 199.

6 As regards European economic governance, the economic crisis of 2008 was the pivotal moment where important social questions became absorbed in the euro-crisis measures and the revised and strengthened regulatory framework that emerged afterwards. As regards the internal market, the ECJ initially applied a more deferential proportionality assessment to national labour rules that it considered potential ‘restrictions’ on the free movement provisions: see e.g. ECJ 27 March 1990, ECLI:EU:C:1990:142, Rush Portuguesa Lda v Office national d’immigration; ECJ 23 November 1999, ECLI:EU: C:1999:575, Criminal proceedings against Jean-Claude Arblade and Arblade & Fils SARL and Bernard Leloup, Serge Leloup and Sofrage SARL; ECJ 15 March 2001, ECLI:EU:C:2001:162, Criminal proceedings against André Mazzoleni and Inter Surveillance Assistance SARL, as the party civilly liable, third parties: Eric Guillaume. The situation changed with the Laval and Viking judgments in 2007: ECJ 18 December 2007, ECLI:EU:C:2007:809, Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet, Svenska Byggnadsarbetareförbundets avdelning 1, Byggettan and Svenska Elektrikerförbundet; ECJ 11 December 2007, ECLI:EU:C:2007:772, International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line ABP and OÜ Viking Line Eesti.

7 See also, on the displacement of the legislator in European integration, F. Scharpf, ‘De-constitutionalisation of European Law: The Re-empowerment of Democratic Political Choice’ and Garben, S., ‘Restating the Problem of Competence Creep, Tackling Harmonisation by Stealth and Reinstating the Legislator’, both in S. Garben and I. Govaere (eds.), The Division of Competences between the EU and the Member States Reflections on the Past, the Present and the Future (Hart 2017).

8 Garben, supra n. 3. The previous article provides the full theoretical framework for the analysis, which is applied to the Pillar in the present article. In order to avoid duplication, the present article discusses the general argument only in a summary manner.

9 For a recent study of the phenomenon see FitzGibbon, J. et al. (eds.), Euroscepticism As a Transnational and Pan-European Phenomenon: The Emergence of a New Sphere of Opposition (Routledge 2017).

10 On the impact of income inequality on Euroscepticism, see Kuhn, T. et al., ‘An ever wider gap in an ever closer union: Rising inequalities and euroscepticism in 12 West European democracies, 1975–2009’, 14 Socio-economic Review (2016) p. 27 .

11 On the increasing contestation of intra-EU mobility, see Ferrera, M., ‘The Contentious Politics of Hospitality: Intra-EU Mobility and Social Rights’, 22 ELJ (2016) p. 791 .

12 See in general on the effects of the crisis on Eurosceptic voting, Hobolt, S. and de Vries, C., ‘Turning against the Union? The impact of the crisis on the Eurosceptic vote in the 2014 European Parliament elections’, 22 Electoral Studies (2017) p. 504 . On the rise of Euroscepticism in the debtor counties see della Porta, D. et al., ‘Left’s Love and Hate for Europe: Syriza, Podemos and Critical Visions of Europe During the Crisis’, in M. Caiani and S. Guerra (eds.), Euroscepticism, Democracy and the Media (Parlgrave 2017) p. 219 .

13 European Parliament, Report on a European Pillar of Social Rights (2016/2095(INI)) p. 25.

14 Ibid., p. 21.

15 Ibid., p. 26.

16 See Barnard, supra n. 3, p. 199; Kilpatrick, C. and de Witte, B., ‘Social Rights in Times of Crisis in the Eurozone: The Role of Fundamental Rights’ Challenges’, EUI Working Paper LAW (2014); de Witte, F., ‘EU Law, Politics and the Social Question’, 14 ELJ (2013) p. 581 ; Koukiadaki, A. and Kretsos, L., ‘Opening Pandora’s Box: the Sovereign Debt Crisis and Labour Market Regulation in Greece’, 41 Industrial Law Journal (2012) p. 276 ; Augusto Costa, H., ‘From Europe as a Model to Europe as Austerity: the Impact of the Crisis on Portuguese Trade Unions’, 14 ELJ (2012) p. 397 .

17 The 2015 ILO Report provides a comprehensive overview. ILO, World Social Protection Report, 2015, pp. xxv, 9, 24 and 137.

18 For discussion see Rocca, M., ‘Enemy at the (flood) gates, EU “exceptionalism” in recent tensions with the international protection of social rights’, 7 European Labour Law Journal (2017) p. 52 .

19 For instance, as regards the austerity measures in Greece, the first Memorandum of Understanding did provide that Greece was ‘following dialogue with social partners, government to adopt legislation on minimum wages to introduces sub-minima for groups at risk such as the young and long term unemployed’, but it did not specifically require the adoption of the apprenticeship contract with its regressive terms for which Greece was condemned by the Committee of Social Rights. Similarly, while the Memorandum did specify that Greece was to ‘extend the probationary period for new jobs to one year’, it did not require these to be without any protection against unjustified dismissal, which was the basis of the condemnation.

20 Laval supra n. 6; Viking supra n. 6; ECJ 3 April 2008, ECLI:EU:C:2008:189; Dirk Rüffert v Land Niedersachsen; ECJ 19 June 2008, ECLI:EU:C:2008:350, Commission v Luxembourg.

21 See, for instance, the letter from seven EU Member States ministers to EU Employment Commissioner on the exploitation of posted workers, 18 June 2015, <www.gmb.org.uk/about/gmb-in-europe/european-policy-issues/posting-of-workers>, visited 27 December 2017.

22 While in the Pillar’s explanations the common currency and the internal market are staunchly defended, and the Commission’s narrative continues to carry a streak of ‘economic growth equals social outcomes’, it is also clearly stated that ‘the social consequences of the crisis have been far-reaching – from youth and long-term unemployment to the risk of poverty – and addressing those consequences remains an urgent priority’. See European Commission, Proposal for a Interinstitutional Proclamation on the European Pillar of Social Rights, COM(2017) 251 final, p. 3 and 4.

23 Proposal for a Directive amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services, COM(2016) 128 final. The Council reached agreement in October 2017, see <www.consilium.europa.eu/en/press/press-releases/2017/10/23/epsco-posting-of-workers/>, visited 27 December 2017.

24 European Commission, Reflection Paper on the Social Dimension of Europe, COM(2017) 206, available at <ec.europa.eu/commission/sites/beta-political/files/reflection-paper-social-dimension-europe_en.pdf>, visited 27 December 2017.

25 In particular the scenario ‘nothing but the single market’, supra n. 24, p. 23.

26 SWD(2017) 201 final.

27 Such as the Proposal for a Council Directive on implementing the Principle of equal treatment between persons irrespective of religion or belief, disability, age or sexual orientation, the Proposal for a Directive of the European Parliament and of the Council on the approximation of the laws, regulations and administrative provisions of the Member States as regards the accessibility requirements for products and services, COM/2015/0615 final and the Proposal for a Directive aimed at further ensuring greater equality among management positions in the corporate sphere, COM(2012) 614.

28 COM(2017) 252 final.

29 COM(2017) 253 final.

30 The Commission has launched the first-phase consultation of the Social Partners required on the basis of Art. 154 TFEU, C(2017) 2610 final.

31 The Commission has launched the first-phase consultation, C(2017) 2611.

32 While the flexibility clause in its post-Lisbon manifestation provides that ‘measures based on this Article shall not entail harmonisation of Member States’ laws or regulations in cases where the Treaties exclude such harmonization’, it is an open question whether this would include the stipulation in Art.153(5) TFEU that ‘[t]he provisions of this Article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs’, which is not a traditional prohibition of harmonisation as found elsewhere in the Treaties concerning the EU’s complementary competences. Similarly, wording of the stipulation in Art. 153(4) TFEU that ‘the provisions adopted pursuant to this Article shall not affect the right of Member States to define the fundamental principles of their social security systems and must not significantly affect the financial equilibrium thereof’ does not seem to indicate that that same limit applies to EU action on other legal bases.

33 The regulation of minimum wages in particular could be argued to facilitate the functioning of the internal market. The use of an internal market legal basis for social measures entails some disadvantages, however. For discussion, see C. Kilpatrick et al., ‘From Austerity Back to Legitimacy? The European Pillar of Social Rights: A Policy Brief’, EU Law Analysis Blogpost, 20 March 2017.

34 While it is unlikely that any sanctions would be issued for non-compliance with social standards, the fact remains that the European Semester and its Country Specific Recommendations are a particularly coercive form of soft law. For discussion, see Garben, supra n. 3.

35 Including through the European Fund for Strategic Investments for social housing investments, the European Regional Development Fund for housing infrastructure, the European Social Fund for social services and the Fund for European Aid for the Most Deprived for food assistance to homeless persons.

36 For recommendations, this is stated explicitly in Art. 288 TFEU. Proclamations are not mentioned as a legal instrument in the Treaties and their legal status is therefore somewhat more ‘obscure’. See on this point Z. Rasnača, ‘Bridging the gaps or falling short? The European Pillar of Social Rights and what it can bring to EU-level policymaking’ ETUI Working Paper 2017.05, p. 14.

37 See, for a more elaborate analysis, Rasnača, supra n. 36.

38 The original European Social Charter was signed in 1961 and was ratified by all the then Member States of the EEC, and currently by 23 of the 28 EU Member States. A revised European Social Charter was adopted in 1996, ratified by 20 of the current EU Member States. All Member States are party to either the 1961 or 1996 Social Charter.

39 European Commission, Staff Working Document accompanying the Commission Communication establishing a European Pillar of Social Rights, pp. 2 and 3.

40 European Commission, Communication to the Parliament, Council, the EESC and the Committee of the Regions, Establishing a European Pillar of Social Rights, COM(2017) 250 final.

41 European Commission, Staff Working Document accompanying the Commission Communication establishing a European Pillar of Social Rights, p. 3.

42 The Commission draws this comparison itself, stating that ‘[a]s it was done for the Charter of Fundamental Rights, the proposal for an interinstitutional proclamation will be discussed with the European Parliament and the Council’. See Commission Communication establishing a European Pillar of Social Rights.

43 For a discussion see Watson, P., ‘The Community Social Charter28 CMLRev (1991) p. 37 .

44 The Community Charter is a proclamation devoid of legal effect. See Opinion of AG Jacobs in ECJ 21 September 1999, ECLI:EU:C:1999:28, Albany, para. 137.

45 E.g. ECJ 11 December 2007, ECLI:EU:C:2007:772, International Transport Workers’ Federation, Finnish Seamen’s Union v Viking Line ABP, OÜ Viking Line Eesti, paras. 43-44; Opinion of AG Trstenjak of 24 January 2008 in ECJ ECLI:EU:C:2008:37, Gerhard Schultz-Hoff v Deutsche Rentenversicherung Bund, para. 38.

46 COM(89)568.

47 European Commission, Proposal for a Interinstitutional Proclamation on the European Pillar of Social Rights, COM(2017) 251 final, p. 4.

48 Recital 13 of the Commission Recommendation and the Inter-Institutional Proclamation, respectively.

49 The Rome Declaration of the leaders of 27 EU Member States on 25 March 2017 outlined the importance of a strong social Europe, based on sustainable growth, which promotes economic and social progress as well as cohesion and convergence, upholding the integrity of the internal market and taking into account the diversity of national systems and the key role of social partners, for the EU27 going forward.

50 At the same time, it should be noted that the right to a maximum weekly working time, adequate rest periods and paid annual leave, laid down in Art. 31(2) of the EU Charter and which the Court has held to constitute ‘social rights of fundamental importance’ and which are laid down in the General Working Time Directive 2003/88/EC and further sector-specific legislation, is conspicuously absent from the Pillar. This is all the more noteworthy, because the decision not to revise the Directive and to issue an interpretative Communication instead is presented as part of the Pillar’s implementation.

51 On the basis of Art. 51, the EU Charter of Fundamental Rights is primarily addressed to the EU Institutions and only binds the member states when they act in the scope of EU law.

52 No such indication of making use of enhanced cooperation under Title III of the TFEU has been given in the first-stage consultations launched on the new initiatives.

53 According to the European Parliament, only ‘around 9% of the CSR’s were fully implemented by the Member States in 2013’, European Parliament resolution of 11 March 2015 on the European Semester for economic policy coordination: Annual Growth Survey 2015.

54 Term borrowed from Barnard, who has used it to describe the EU Charter of Fundamental Rights in the context of social policy: supra n. 3, p. 207.

55 In particular, EU legal measures in this area are limited to the objectives listed in Art. 153(1) TFEU, and there are several exclusions, such as the issues of pay, the right of association and the right to strike. They are also limited to the setting of minimum standards.

56 Barnard, supra n. 3; Rasnača, supra n. 36.

57 See Countouris, N. and Horton, R., ‘The Temporary Agency Work Directive: Another broken promise?’, 38 Industrial Law Journal (2009) p. 329 .

58 An exception being the platform on undeclared work, Decision (EU) 2016/344 of the European Parliament and of the Council of 9 March 2016 on establishing a European Platform to enhance cooperation in tackling undeclared work, OJ L 65, 11.3.2016, p. 12.

59 See E. Muir, ‘Drawing Positive Lessons from the Presence of “The Social” outside of EU Social Policy Stricto Sensu’ in this issue of EuConst.

60 Scharpf, F., ‘The Asymmetry of European Integration, or Why the EU Cannot Be a “Social Market Economy”’, 8 Socio-Economic Review (2010) p. 211 ; Scharpf, F., ‘The European Social Model: Coping with the Challenges of Diversity’, 40 Journal of Common Market Studies (2002) p. 645 , Copeland, P., ‘EU enlargement, the clash of capitalisms and the European social model’, 10 Comparative European Politics (2012) p. 476 .

61 Scharpf (2010), supra n. 60.

62 See Dawson, M., ‘Better Regulation and the Future of EU Regulatory Law and Politics’, 53 Common Market Law Review (2016) p. 1209 , and Garben, S. and Govaere, I. (eds.), The EU Better Regulation Agenda: Critical Reflections (Hart Publishing forthcoming).

63 European Commission (2016): Commission Work Programme 2017 – Delivering a Europe that protects, empowers and defends, point 11.

64 European Commission, C(2017) 2610 final.

65 The Commission’s consultation document refers to Eurofound’s definitions for these terms, as given in the report ‘New forms of employment’ (Publications Office of the EU 2015) p. 46.

66 This corresponds to the protection provided by the Dutch courts in the case of ‘nul-uren contracten’ (zero-hours contracts), developed in the national case law.

67 The Parliament is likely to support such a measure. In its Resolution on the Pillar, the Parliament has called for a framework directive on decent working conditions to include relevant minimum standards to be ensured in more precarious forms of employment, in particular fair working conditions for internships, traineeships and apprenticeships, a clear distinction between genuine self-employment and those in an employment relationship and limits regarding on-demand work. European Parliament resolution of 19 January 2017 on a European Pillar of Social Rights, para. 5.

68 For extensive discussion see Garben, S. et al., ‘Towards a European Pillar of Social Rights: upgrading the EU social acquis?’, 1 College of Europe Policy Brief (2017).

69 Garben, supra n. 3, p. 23.

70 Legislation on the basis of Social Partner Agreements.

71 Scharpf (2010), supra n. 60, p. 211; Scharpf (2001), supra n. 60, p. 645.

72 As was pointed out further above, the constraining impact of the European Semester’s Country Specific Recommendations has been questioned in light of their allegedly low (immediate and direct) take-up on the national level. This argument is in essence empirical and would need some further research to be reconfirmed. Furthermore, in the past years, the framework has become more coercive, with EU-level funding being increasingly conditioned on the Country Specific Recommendations. Perhaps most importantly, the Country Specific Recommendations may not be directly binding, but they provide national governments with leverage over other domestic actors, who may be less informed about the legal nature of Semester ‘obligations’, allowing governments to cherry-pick the recommendations they like and to side-step national democratic scrutiny for implementing them.

73 Such as proposed by Barnard, C. in ‘Restricting Restrictions: Lessons for the EU from the US?’, 68 Cambridge Law Journal (2009) p. 575 .

74 For an argument to de-constitutionalise the internal market provisions: Scharpf, F., ‘After the Crash: A Perspective on Multilevel European Democracy’, 21(3) ELJ (2015) p. 401 .

75 ECJ 12 February 2015, ECLI:EU:C:2015:86, Sähköalojen ammattiliitto ry v Elektrobudowa Spółka Akcyjna; ECJ 17 November 2015, ECLI:EU:C:2015:760, RegioPost GmbH & Co KG v Stadt Landau.

76 ECJ 17 March 2015, ECLI:EU:C:2015:173, Auto- ja Kuljetusalan Työntekijäliitto AKT ry v Öljytuote ry and Shell Aviation Finland Oy, where the Court rejected an interpretation of a provision in the Directive that would allow companies to contest ‘restrictions’ on the use of such atypical employment in national courts.

77 For overall discussion of the case law in this context, see Garben, supra n. 3, p. 23.

78 ECJ 11 December 2014, ECLI:EU:C:2014:2430. The Court held that the Spanish dock work system, which required all companies wishing to perform cargo handling services to register with the dock workers’ company and to hire, with priority, workers from that company, amongst whom a certain number on permanent contract, constituted an unjustified restriction of the freedom of establishment. Various legislative attempts at EU level to open cargo handling to the market had been unsuccessful. This judgment, rendered without an AG Opinion and available only in Spanish and French, does just that, showcasing the surreptitious power of negative integration, achieving outcomes that would be more difficult to procure in a democratic arena.

79 ECJ 21 December 2016, ECLI:EU:C:2016:972, AGET Iraklis.

80 Markakis argues that AGET ‘was not a Viking/Laval moment for the Court, as it very carefully examined the merits and demerits of the opposing arguments and handed down a very measured judgment’, see Markakis, M., ‘Can Governments Control Mass Layoffs by Employers? Economic Freedoms vs Labour Rights in Case C-201/15 AGET Iraklis’, 13 EuConst (2017) p. 743 .

81 Which the Court recognised in the judgment, but nevertheless did not accept as an overall justification.

82 E.g. in ECJ 18 July 2013, ECLI:EU:C:2013:521, Alemo-Herron v Parkwood Leisure Ltd. For more extensive discussion of this point, see Garben et al., supra n. 68.

83 J. Zeitlin and B. Vanhercke, ‘Socializing the European Semester? Economic Governance and Social Policy Coordination in Europe 2020’, SIEPS (2014).

* Professor of EU Law, College of Europe, Bruges and on leave from the European Commission. The author wishes to thank Professor Claire Kilpatrick as well as three anonymous reviewers for their valuable feedback. The views expressed in this article are entirely personal and do not in any way reflect the position of the European Commission.

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