COLLECTIVE AGREEMENTS WITHIN THE LIMITS OF EUROPE Collective Autonomy as Part of the European Economic System* Claudia Schubert

Abstract Collective bargaining, meaning the self-determined and independent negotiation of collective agreements, is subject to multifarious limitations imposed by EU law. In the light of recent developments, this contribution asks which role the sovereignty of collective bargaining plays in the framework of the European economic order and how it relates to EU laws. The decisive questions are: To which extent is collective bargaining protected in Europe and to which extent may the EU limit collective bargaining? The issue concerns nothing less than the scope and limits of the power of collective bargaining. Keywords: collective agreements; collective bargaining; European economic order; European Union law

1.

INTRODUCTION

Collective bargaining law is no longer a national affair. The law of the EU has an impact on the national law through its social policy and even more its anti-discrimination laws and the fundamental freedoms, which are directly binding for trade unions. Recalling that collective bargaining and collective agreements are historical achievements in the Member States explains why every restriction will cause resistance. Even more so as the EU, since its establishment, aims at the reduction of trade obstacles and the establishment of the Single Market. Social policy came up gradually and *

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Dr. Claudia Schubert, Professor for civil, labour law, commercial and company law at the Freie Universität, Berlin. The article is a shortened version of the inaugural lecture held on the 13 April 2012 and was published at length in Zeitschrift für Arbeitsrecht 2013, p. 1–40. Support for this work was provided by Laura Schmitt, LL.M. (Connecticut).

Intersentia

Collective Agreements Within the Limits of Europe

slowly.1 In the beginning, the protection of employees served as a means to regulate competition. In the 1970s the first steps were taken towards a genuine social policy, but it was not before the treaty of Amsterdam in 1999 that it was implemented as an objective in the treaty itself.2 The right of collective bargaining was not a general principle of the EU.3 It was implemented first through the Charter of Fundamental Rights (CFR), which became legally binding in 2009. Now the EU, more particularly the Court of Justice of the European Union (CJEU), has to interpret the content and to determine the significance of the right of collective bargaining. In a Union focussing on the establishment of a Single Market one has to ensure that the functioning of private autonomy, as a precondition hereof, is safeguarded by law. The protection of employees can be achieved through statutes but also through the work of trade unions and collective agreements. Collective bargaining is one alternative in order to compensate for the lack of private autonomy for employees. That must not be disregarded by EU law because otherwise it attacks the foundation of this system. Unlike commercial law, anti-trust law in particular, the law on collective bargaining does not pursue the functioning of the market for the employees. The social partners form a cartel in order to protect the employees’ interest.

2.

STATUS QUO: THE BOUNDARIES OF COLLECTIVE BARGAINING UNDER EU LAW

Collective bargaining, meaning the self-determined and independent negotiation of collective agreements, is subject to multifarious limitations imposed by EU law. Unions and employers’ organizations are – according to CJEU jurisprudence – bound by the free movement of workers, the freedom of establishment and the free movement of services,4 as well as the principle of equal pay.5 Additionally, there is a tension with the cartel ban (Article 101 TFEU).6 1

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See Maximilian Fuchs and Franz Marhold, Europäisches Arbeitsrecht (3rd ed. Springer 2011) 3ff; Linda Hantrais, Social Policy in the European Union (3rd ed. Palgrave 2007) 2ff; Eberhard Eichenhofer in Rudolf Streinz (ed.), EUV/AEUV (2nd ed. Beck 2012) Art. 151 AEUV, paras 11ff. Sebastian Krebber in Christian Calliess and Matthias Rufferts (eds.), EUV/EGV (4th ed. Beck 2011) Art. 151 AEUV, para 3; Hantrais (n 1) 4ff; Eichenhofer (n 1) Art. 151 AEUV, paras 12f. CJEU Case 67/96 Albany [1999] ECR I-5751, Opinion of AG Jacobs, paras 132ff, 158ff. Art. 45 TFEU: CJEU Case 15/96 Schöning-Kougebetopoulou [1998] ECR I-60, paras 23, 28; Case 400/02 Merida [2004] ECR I-8471, paras 19, 21; Case 325/08 Olympique Lyonnais [2010] ECR I-2177, paras 30f; Case 379/09 Casteels [2011], para 19; art 49 TFEU: CJEU Case 438/05 Viking [2007] ECR I-10779, paras 33ff; Art. 56 TFEU: CJEU Case 341/05 Laval [2007] ECR I-11767, paras 86ff, 98. CJEU Case 43/75 Defrenne [1976], paras 21, 24, 38f; Case 399/92 Helmig [1994] ECR I-5727, paras 12, 18; Case 400/93 Royal Copenhagen [1995] ECR I-1275, para 13; Case 236/98 JämO [2000] ECR I-2189, para 41. CJEU Case 67/96 Albany [1999] ECR I-5751; Case 115/97 Brentjens [1999] ECR I-6029; Case 219/97 Drijvende Bokken [1999] ECR I-6121; Case 180/98 Pavlov [2000] ECR I-6451; Case 437/09 AG2R Prévoyance [2011].

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Besides the primary EU law, secondary legislation imposes restrictions on the sovereignty of collective bargaining, whereas the directives take effect for the collective bargaining parties through their transposition into national law.7 In more recent times, the anti-discrimination laws in particular have gained relevance.8 The AntiDiscrimination Directive 2000/78/EC, upon which the German Equal Treatment Act (AGG) is based, has not only challenged mandatory retirement provisions in collective agreements9 but has also targeted age brackets in the payment scheme in the collective agreement for the public sector (Bundesangestelltentarifvertrag)10 and age brackets in the corresponding holiday leave scheme.11 The latter two could not withstand scrutiny. The directives and regulations, which constitute part of the EU’s social policy, contain minimum standards with the result that collective agreements can regulate favourable working conditions. Depletion is only permissible under the condition that the directive provides a margin of discretion or exemptions for the bargaining parties or for the Member States, which they may use to allow derogation rules in collective agreements. As an example, the Working Time Directive allows for collective agreements to foresee different daily and weekly rest periods, break periods and weekly maximum working times of various durations. This overview shows that EU law imposes boundaries on two levels: On the level of primary law, with the consequence that collective agreements are targeted on the basis of the fundamental liberties, the equal pay principle and the cartel ban; and on the level of secondary law, which limits the regulatory margin to protect employees and outlaw discriminatory conduct. The desideratum for EU law protecting employees’ rights arises due to the different impact of collective bargaining in the Member States when it comes to the regulation of working conditions. Whilst in Scandinavia collective agreements are traditionally of great importance, their influence is limited in central and eastern European Member States.12 The secondary legislation therefore provides for a common minimum standard aiming at the realization of a common European social model. Simultaneously, it reduces the advantages in competition that Member States with low social standards enjoy, thus preventing a race to the bottom with regard to working conditions.13

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See Gabriele Britz in Gabriele Britz and Uwe Volkmanns (eds.), Tarifautonomie in der Europäischen Union (Mohr Siebeck 2003) 34, 48f. CJEU Case 267/06 Maruko [2008] ECR I-1757, paras 60f; Case 45/09 Rosenbladt [2010] ECR I-9391; Case 132/11 Tyrolean Airways Tiroler Luft fahrt Gesellschaft [2012]. CJEU Case 447/09 Prigge [2011]. CJEU Case 297/10, 298/10 Hennigs [2011]. See Federal Labour Court (Bundesarbeitsgericht) 20.3.2012 – 9 AZR 529/10, [2012] NZA 803. Robert Rebhahn [2010] EuZA 62, 65, 67, 68f. Fuchs and Marhold (n 1) 10f; Hantrais (n 1) 3.

Intersentia

Collective Agreements Within the Limits of Europe

So, what is left for collective bargaining? It applies all the more so against the background of the possible developments within the EU resulting from the crisis in the financial markets and the Euro crisis. Sluggish or even negative economic growth, declining gross national products and state budget deficits can lead to a further development of the EU, that is attended by restrictions to the sovereignty of collective bargaining.14 Framework provisions regulating wages are as cogitable as a cap for holidays or a floor for the weekly working time. These ideas are not farfetched: In Belgium, Italy and Portugal intersectoral government conducted collective negotiations are customary.15 In the Netherlands the government introduced leeways for wage negotiations, with which the bargaining partners had to comply, from the mid-1970s until the early 1980s.16 Similar measures were taken in Belgium during the 1990s.17 Today one could enact legislation on the basis of Article 121, para 6, 136 TFEU and the Council could propound recommendations admonishing Member States to intervene in collective bargaining under Article 126, para 7 TFEU.18 As yet, the EU does not have regulatory powers concerning wages. However, it seems possible that Member States might adopt a self-imposed obligation in order to meet the requirements under the Stability and Growth Pact (Wachstumsund Stabilitätspakt) and fight budgetary and macroeconomic aberrations.19 The failure to meet these requirements will be sanctioned.20 Hereby the EU exerts indirect influence on the Member States’ wage policies. In the light of these fi ndings, one wonders which role the sovereignty of collective bargaining plays in the framework of the European economic order and how it relates to EU laws. The decisive questions are: To which extent is collective bargaining protected in Europe and to which extent may the EU limit collective bargaining? The issue is nothing less than the scope and limits of the power of collective bargaining.

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Cf Euro-Plus Pact, see below VII.3; Council Conclusions [2011] EUCO 10/1/11-CO EUR 6 CONCL 3, annex; Council ‘Recommendation for a Council Recommendation on the National Reform Programme 2011 of Belgium and delivering a Council opinion on the uptdated Stability Programme of Belgium 2011–2014’ SEC (2011) 802 fi nal, 7; about the impact of EMU on collective bargaining in the Member States, Niklas Bruun, ‘The autonomy of collective agreement’ (2002) 5, 17ff , accessed 12 November 2013. Wolfgang Goos in Horst Konzen (ed.), Festschrift für Rolf Birk zum siebzigsten Geburtstag (Mohr Siebeck 2008) 135, 137; Robert Rebhahn [2010] EuZA 62, 70, 71. Conclusions X-1, 72f; Conclusions XII-1, 80f; Andrzej Świątkowsk, Charter of Social Rights of the European Union (Kluwer 2007) 218; Lammy Betten, International Labour Law (Kluwer 1993) 98f. Bruun (n 14) 5, 17. E.g. Council ‘Recommendation for a Council Recommendation on the National Reform Programme 2011 of Belgium and delivering a Council opinion on the updated Stability Programme of Belgium 2011–2014’ SEC (2011) 802 final, 7. Reg (EU) 1176/2011 [2011] OJ L306/25, Art. 8, para 1. Reg (EU) 1174/2011 [2011] OJ L306/8, Art. 3; Reg (EU) 1173/2011 [2011] OJ 306/1, Arts. 4–7.

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3.

SCOPE OF ARTICLE 28 CFR

The importance of the right to bargain collectively is not only dependent on its material area of protection and the applicable limitations but also on its scope. The CFR is not only binding for the EU institutions but also for the Member States insofar as they apply Union law (Article 51, para 1, s. 1 CFR). Therefore, the EU is bound by fundamental rights when making and interpreting secondary Union law.21 Indirectly the Member States are bound by fundamental rights in transposing directives.22 In this context, attention should be paid to whether the Member States are granted a margin of discretion for the transposition. The fundamental rights are binding insofar as the Member States’ actions are determined by the directives. However, the Member States are limited by the fundamental rights granted under national law when exercising their discretion.23 Nonetheless, the directives and their interpretation conforming to fundamental rights remain the yardstick for defining this discretionary margin.24 Additionally, fundamental rights are employed by the European Commission when making decisions. This is particularly the case in anti-trust proceedings according to Article 101, para 1 TFEU. The Commission is obliged to resolve the conflict between competition law and Article 28 CFR. The same applies to the Council, when making recommendations regarding the corrective action plan of a Member State to realize the Economic and Monetary Union, to meet the requirements of the Stability Pact or to balance macroeconomic instabilities.25 Even though the recommendations are not binding, they need to comply with EU law. This applies all the more, since sanctions are linked to the lack of attention hereto.26 According to the express wording of Article  51, para 1, s. 1 CFR, the Member States are only bound by fundamental rights when ‘implementing Union law’. Taken literally, the Charter’s level of protection would fall short of the level of protection guaranteed through general legal principles before its enactment. According to the 21

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Hans-Werner Rengeling and Peter Szczekalla, Grundrechte in der Europäischen Union (Heymann 2004) paras 269, 274; Georg J Schmittmann, Rechte und Grundsätze in der Grundrechtecharta (Heymann 2007) 34. Thomas v Danwitz, in Matthias Herdegens (ed.), Festschrift für Roman Herzog zum 75. Geburtstag (Beck 2009) 19, 28; Martin Borowsky in Jürgen Meyer (ed.), Charta der Grundrechte der Europäischen Union (3rd ed, Nomos 2011) Art. 51, para 24; Schmittmann (n 21) 35. Federal Constitutional Court (Bundesverfassungsgericht) BVerfG [1990] NJW 974; [1993] NVwZ 883; [2007] NVwZ 937, 938; [2008] NVwZ 543; [2010] NJW 833, 835; [2012] NJW 45; Juliane Kokott and Christoph Sobotta [2010] EuGRZ 265, 270; Rudolf Streinz in Streinz (n 1) Art. 51 GRC, para 8. Interpretation of Directives according to fundamental rights Hans Jarass, EU-Grundrechte (Beck 2005) para 4, subpara 12; Juliane Kokott and Christoph Sobotta [2010] EuGRZ 265, 270; Jürgen Kühling [1997] EuGRZ 296, 300; Matthias Ruffert [2004] EuR 165, 177; Streinz in Streinz (n 1) Art. 51 GRC, para 7. Reg (EU) 1176/2011 [2011] OJ L306/25, Art. 8, para 1. Cf Federal Constitutional Court (Bundesverfassungsgericht) [1990] NJW 974; [1993] NVwZ 883; [2007] NVwZ 937, 938; [2008] NVwZ 543; [2010] NJW 833, 835; [2012] NJW 45.

Intersentia

Collective Agreements Within the Limits of Europe

CJEU case law, the Member States are not only obligated to respect fundamental rights and general principles when implementing Union law, but in the entire scope of the application thereof.27 However, the CFR did not intend to limit the scope of protection through the formulation of Article 51, para 1, but to codify the Court’s case law.28 The Charter aimed to increase the visibility of the fundamental rights and heighten their level of protection. Consequently, Article 51, para 1 CFR should be interpreted with the result that fundamental rights are binding when a state action falls in the scope of Union law, even if it is not aimed at implementing it. The CJEU also adheres to its position when holding in the Åkerberg Fransson case that fundamental rights “are applicable in all situations governed by European Union law” and are relevant for all legislation that “falls within the scope of European Union law”.29 Th is interpretation of Article 51, para 1 CFR results in the fundamental rights directly limiting the fundamental freedoms or at the least in them concretising their boundaries. The CJEU considers the impact of fundamental rights in the context of its proportionality assessment.30 Th is case law has been criticized on the grounds that the Member States are acting within the framework of their own competencies and not within the competence sector of the EU when limiting fundamental freedoms.31 Th is objection is not sustainable if a restriction is imposed on a fundamental freedom by a union exercising its right to collective bargaining. 32 According to the CJEU judiciary, unions, as intermediary powers, are bound by the fundamental freedoms.33 However, unlike the Member States, they are protected by fundamental rights themselves. This cannot be ignored because fundamental freedoms are binding for unions. Otherwise their legal status would be planished.

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CJEU Case 260/89 ERT [1991] ECR I-2925, para 42; Case 157/90 Society for the Protection of Unborn Children Ireland [1991] ECR I-4685, para 31; Case 2/92 Bostock [1994] ECR I-955 para 16; Case 309/ 96 Annibaldi [1997] ECR I-7493, para 13; Case 347/07 Sopropé [2008] ECR I-10369, para 34; Brian Bercusson, European Labour Law (2nd ed, Cambridge Univ Press 2009) 394; Juliane Kokott and Christoph Sobotta [2010] EuGRZ 265, 268; Siegfried Magiera [2000] DÖV 1017, 1021; Nina Philippi, Die Charta der Grundrechte der Europäischen Union (Nomos 2002) 37. Stefan Barriga, Die Entstehung der Charta der Grundrechte der Europäischen Union (Nomos 2003) 61 f; v Danwitz (n 22) 27; Christoph Grabenwarter [2004] EuGRZ 563, 564; Juliane Kokott and Christoph Sobotta [2010] EuGRZ 265, 268; Schmittmann (n 21) 36; Albrecht Weber [2003] DVBl. 220, 223; else Christian Calliess [2001] EuZW 261, 266; Wolfram Cremer [2003] NVwZ 1452, 1456f; Peter M Huber [2008] EuR 190, 196f, 198; Martin Borowsky in Meyer (n 22) Art. 51, para 24; Jürgen Schwarze in Jürgen Schwarze (ed.), Der Verfassungsentwurf des Europäischen Konvents (Nomos 2004) 489, 508; see Proposesed Amendments to Draft Charter of Fundamental Rights of European Union [2000] Charte 4372/00 Convent 39 Guy Braibant 375, Jürgen Gnauck 377. CJEU Case 617/10 Åkerberg Fransson [26.2.2013], para 19. CJEU Case 260/89 ERT [1991] ECR I-2925, para 42; v Danwitz (n 22) 27. Thorsten Kingreen in Calliess and Ruffert (n 2) Art. 51 GRC, para 12; Werner Schaller, Die EUMitgliedsstaaten als Verpflichtungsadressaten der Gemeinschaftsgrundrechte (Nomos 2003) 50. Cf v Danwitz (n 22) 30. CJEU Case 438/05 Viking [2007] ECR I-10779; Case 341/05 Laval [2007] ECR I-11767.

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A consideration of the fundamental right does not result in the fundamental freedom being assessed against the background of the fundamental right, thereby disregarding its congeniality.34 On the contrary, fundamental rights and freedoms need to be balanced within the framework provided by their inherent limitations, which boils it down to the establishment of a practical concordance. Further, consideration of fundamental rights guarantees a homogeneous application of Union law.35 The same must apply where Member States interfere with collective bargaining or collective actions when exercising their obligation to protect (positive obligation, obligation positif), which stems from the fundamental freedoms.36 Therefore, a conflict arises between securing fundamental freedoms and fundamental rights, resulting in a restriction of the positive obligation by fundamental rights.37 Furthermore, the fundamental freedoms in Article  51 CFR do not have third party effects.38 Whilst deliberating upon the content of the CFR, the Convention considered binding the social partners by several fundamental rights, when drafting the Charter, but this idea was thrown out after careful consideration.39

4.

RECOGNITION AND PROTECTION OF THE RIGHT OF COLLECTIVE BARGAINING AS AN ENTITLEMENT

Collective bargaining has gained momentum after the enactment of the CFR in 2009. The Charter is a co-equal part of primary EU law, and does not only guarantee the freedom of association but also – under Article 28 CFR – the right to bargain collectively. Advocate General Jacobs stated in his opinion in the Albany case in 1999 that European law and the constitutions of the Member States did not support a right of collective bargaining as a general legal principle of EU law.40 For the recognition of collective bargaining and for its significance for the protection of

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On the equal rank of fundamental freedoms and fundamental rights, VI.3. Anna Große Wentrup, Die Europäische Grundrechtecharta im Spannungsfeld der Kompetenzverteilung zwischen Europäischer Union und Mitgliedsstaaten (Duncker & Humblot 2003) 59f, 70. Deduction of positive obligations from fundamental freedom CJEU Case 265/95 Kommission/ Frankreich [1997] ECR I-6959; cf Peter Szczekalla, Die sogenannten grundrechtlichen Schutzpflichten im deutschen und europäischen Recht (Duncker & Humblot 2002) 602ff, 1051f, 1056. On the confl ict between positive obligation arising out of the free movement of goods and the right to strike, Jeff Kenner in Tamara K Herveys and Jeff Kenner (eds.), Economic and Social Rights under the EU Charter of Fundamental Rights: A legal perspective (Hart 2003) 67, 79f. Jarass (n 24), para 29, subpara 11. See statement of delegate Gnauck (Germany) and Tarschys (Schweden) in the Convent’s session on 28–30 June 2000 in Norbert Bernsdorff and Martin Borowsky, Die Charta der Grundrechte der Europäischen Union (Nomos 2002) 297f. CJEU Case 67/96 Albany [1999] ECR I-5751, Opinion of AG Jacobs, paras 132ff, 158ff.

Intersentia

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employees, the Advocate General and the CJEU referred to the aims of the former European Community and its social policy.41 The CJEU thus far had not recognized the right to bargain collectively as part of the unwritten primary law. It had only been included in the 1989 Community Charter of the Fundamental Social Rights of Workers,42 which was not legally effective. Therefore the CJEU, in its judgments, initially referred to the former EC Treaty’s rules concerning social policy, in order to justify restrictions on fundamental freedoms.43 In 2007 the CJEU recognized a right of collective bargaining, including a right to strike.44 However, the CJEU only started mentioning the right of collective bargaining explicitly after the enactment of the CFR.45 One can doubt the indication of the Advocate General by reason of the factual importance of collective bargaining in the Member States,46 even if its design is not coherent in detail.47 Now, at least, there is an individual right to negotiate collective agreements, which is binding for the EU as well as the Member States.48 Conceptually, Article  28 CFR is the EU law equivalent of the sovereignty of collective bargaining in German law. Nonetheless, it would be hasty to blindly assume a sameness of content. Aiming to assess the relevance of the right to negotiate collective agreements, one has to determine its scope of protection. It dictates to which extent and with which intensity collective bargaining is protected under primary law. Intrusions on the part of the EU legislature therefore require justification.

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CJEU Case 67/96 Albany [1999] ECR I-5751, Opinion of AG Jacobs paras 54ff; CJEU Case 67/96 Albany [1999] ECR I-5751, paras 166ff; also CJEU Case 115/97 Brentjens [1999] ECR I-6029, paras 51ff; Case 219/97 Drijvende Bokken [1999] ECR I-6121, paras 41ff. Commission, ‘Community Charter of Fundamental Social Rights of Workers’ COM (89) 248 fi nal. E.g. CJEU Case 67/96 Albany [1999] ECR I-5751, paras 55ff; Brentjens [1999] ECR I-6029, paras 51ff; Case 219/97 Drijvende Bokken [1999] ECR I-6121, paras 41ff; Case 180/98 Pavlov [2000] ECR I-6451, paras 63ff; Case 411/05 Palacios de la Villa [2007] ECR I-8531, para 68. CJEU Case 438/05 Viking [2007] ECR I-10779, para 44; Case 341/05 Laval [2007] ECR I-11767, para 91; else Hans Jarass, Charta der Grundrechte der Europäischen Union (Beck 2010) Art. 28, para 1. CJEU Case 271/08 Kommission/Deutschland [2010] ECR I-7091, paras 37ff; Case 447/09 Prigge [2011], para 47; else CJEU Case 297/10, 298/10 Hennigs [2011], para 67. Recognition of a right to collective bargaining before the CFR, Rolf Birk in Reinhard Richardi (ed.), Münchener Handbuch zum Arbeitsrecht, vol 1 (2nd ed. Beck 2000) para 19, subparas 432ff, 436; Thomas Blanke [2000] AuR 28, 29; Wolfgang Däubler in Peter Hanaus (ed.), Festschrift für Thomas Dieterich zum 65. Geburtstag  (Beck 1999) 489, 495; Deinert (n 45) 430f; Christian Hilbrandt in Sebastian Heselhaus and Carsten Nowaks (eds.), Handbuch der Europäischen Grundrechte (Beck 2006) para 35 subparas 30f; Dieter Krimphove, Europäisches Arbeitsrecht (2nd ed, Beck 2001) paras 594ff. On the variety of the laws on collective bargaining in the Member States, Olaf Deinert, Der europäische Kollektivvertrag (Nomos 1999) 289ff, 432f. Thorsten Kingreen in Dirk Ehlers (ed.), Europäische Grundrechte und Grundfreiheiten (3rd ed., De Gruyter 2009) para 18, subpara 12; Christoph Grabenwarter [2004] EuGRZ 563, 565; also Jarass (n 24) para 29, subpara 10; Jarass (n 43) Art. 28, para 2; Schmittmann (n 21) 114.

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5.

SCOPE OF PROTECTION OF ARTICLE 28 CFR

5.1.

MATERIAL SCOPE OF PROTECTION

Opinions concerning the material scope of the right of collective bargaining are scarce and differ vastly. Some de facto deprive Article  28 CFR of an innate significance, arguing that the norm refers to EU law and the laws and practises of the Member States with regard to the ‘if’ and ‘how’ of collective bargaining.49 Others regard Article 28 CFR as an individual right whose dogma resembles the German doctrine on fundamental rights.50 The reference to ‘Community law and national laws and practices’ has even been regarded as a violation of Article  11 ECHR.51 Though the scope of protection of Article 11 ECHR still needs interpretation, the European Court of Human Rights (EctHR) has not made clear whether Article 11 ECHR guarantees a certain model of collective bargaining and collective action, disregarding the variety of law within the Member States. The emptiness of the guarantee in Article 28 CFR was based on the competence for collective bargaining and collective action remaining with the Member States.52 The relation of competence of the EU and the scope of protection of the fundamental rights was a point of discussion when drafting the Charter.53 Indeed, the EU is only authorized by Article 153, para 1, litera f TFEU (regarding Article 153, para 5 TFEU) and Article 336 TFEU to regulate collective bargaining.54 This allows for legislation on the representation and collective defence of interests of workers and employers, as long as it does not concern the right of association and the right to strike and have lock-outs and also the regulation of collective bargaining in the public sector. Besides, EU legal acts can be based on cross-section competences such as Article 19 TFEU or Article 121, para 6 TFEU. Hereby, the right of collective bargaining is not defined, but restricted. The referral to EU law and the laws and practises of the Member States in Article 28 CFR would – if comprehensively effective – result in the right to negotiate collective 49

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Krebber (n 2) Art.  27 GRC paras 10ff; Art.  28 GRC para 3; Yvonne Dorf [2005] JZ 126, 130f; Günter Hirsch in Schwarze (n 28) 111, 124; Jan T Petersen, ‘Der Schutz sozialer Grundrechte in der Europäischen Union’ (dissertation, University of Würzburg 2005) 74; Thomas Schmitz [2004] EuR 691, 705; reluctant Eckhard Pache [2001] EuR 475, 481; similar Britz (n 7) 42. Walter Frenz [2011] RdA 199, 202; Jarass (n 24) para 29, subpara 10; Eibe Riedel in Meyer (n 22) Art. 28, para 27; see also Bercusson (n 27) 394 and 326f. cf Stephan Rixen in Peter J Tettinger and Klaus Sterns (eds), Kölner Gemeinschaftskommentar zur Europäischen Grundrechte-Charta (Beck 2006) Art. 28, para 14. Brian Bercusson, ‘Trade union movement and the European constitution’ (2004) 24ff accessed 13  September 2012; else Adam Sagan, Das Gemeinschaftsgrundrecht auf Kollektivmaßnahmen (Duncker & Humblot 2008) 113. See n 49. Barriga (n 28) 51ff; Schmittmann (n 21) 23f; critically Christian Caliess [2001] EuZW 261, 264f; Ingolf Pernice [2000] DVBl. 847, 852. On the divergency of EU competence and CFR: Barriga (n 28) 51ff; Schmittmann (n 21) 23f; critically Christian Calliess [2001] EuZW 261, 264f; Ingolf Pernice [2000] DVBl 847, 852.

Intersentia

Collective Agreements Within the Limits of Europe

agreements following national laws.55 As a consequence, this fundamental right would have a different content in each Member State. From the perspective of the EU legislator, for whom the fundamental rights are binding when making law applicable throughout the EU, such a finding would likely be unsustainable. Further, this emptiness of the guarantee in Article  28 CFR contradicts the legislative context of the provision and the purpose of the caveat. The referral to the laws of the Member States was carried over from the 1989 Community Charter of the Fundamental Social Rights of Workers.56 Its deletion has been criticized for two reasons: Firstly, due to a concern that this could cause opposition during the legislative procedure, and secondly, because the EU possesses no comprehensive competence in the area of collective bargaining. Thus, the referral should ensure that no further competences can be derived from the Charter. This is in accordance with Article 51, para 2 CFR. Despite of the lack of competence on the EU’s part, the fundamental right has its own significance. The employees’ and employers’ organizations are bound by the fundamental freedoms. Furthermore, secondary EU law is imposing boundaries on their regulatory possibilities. In the absence of the fundamental right, their activities would remain unprotected under EU law. Article  28 CFR is of crucial importance because it acknowledges that the right of collective bargaining is a fundamental right, protected on the level of primary EU law. The Article thereby protects it against contravening EU law and its implementation in the Member States. The incorporation of Article  28 became necessary since all Member States are bound by several international agreements that recognize a right of collective bargaining.57 The explanation relating to the CFR refers to Article 6 of the European Social Charter and No. 12–14 of the Community Charter of the Fundamental Social Rights of Workers.58 Additionally, the meaning and scope of Article 28 shall be the same as those in the ECHR. Article 11 ECHR – according to the ECtHR recent case law – includes an individual right to bargain collectively. The CFR must not fall short of the ECHR being the minimum standard for the scope of protection in this Convention (Article  52, para 3 and Article  53 CFR). The explanations relating to Article 28 CFR do not refer to Article 11 ECHR,59 but at that time the ECtHR had not recognized a right of collective bargaining yet. It was not before its 2008 judgment in the cases of Demir and Baykara that the ECtHR deduced such right.60 However, this is no obstacle to an interpretation of Article 28 against this background. On the contrary, 55 56

57 58

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See n 49. Declarations Concerning Provisions of the CFR [2004] OJ C310/442 = Charte 4473/00 Convent 49, 27. Similar Streinz in Streinz (n 1) Art. 28 GRC, para 5. Declarations Concerning Provisions of the CFR [2004] OJ C310/442 456 = Charte 4473/00 Convent 49, 27; also Barriga (n 28) 118; critically about the comments Kenner (n 36) 67, 74ff. See note 58. Demir and Baykara App no 34503/97 (ECHR, 12 November 2008) para 154.

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the Charter demands it because it establishes a nexus between the fundamental rights of the Charter and the ECHR.61 Coherence can only be achieved by taking the cases of the ECtHR into account.62 The ECHR is subject to an evolutionary and dynamic interpretation.63 Therefore, it is not only its express terms, that are relevant for its understanding.64 The explanations on Article 28 CFR do not mention Article 8 of the International Covenant on Economic, Social and Cultural Rights, though it contains the right of collective bargaining.65 This applies also to the ILO Conventions Nos. 98, 151 and 154, committing the contracting states to promote collective bargaining of employees’ and employers’ organizations. They shall be part of a systematic interpretation of the Charter if they are ratified by all Member States of the EU. Due to this legal standard in the Member States, the caveat has – up to the internationally guaranteed standard – no effect. In conclusion, Article  28 contains a separate material scope of protection. The provision is to be interpreted against the background of the relevant international conventions. Such a historical and systematic interpretation corresponds with Article  52, para 3 and Article  53 CFR. Hereby the sovereign rights of the Member States are not restricted because they themselves are bound by the treaty regulations. The fundamental right recognizes collective bargaining and forms it as part of Union law protecting employers, employees and their organizations against restrictions by conflicting EU law and its enforcement or implementation in the Member States. The caveat is part of the definition of Article 28 CFR, but a restriction of the guarantee. There is no consensus on the qualification of the caveat as a definition or a restriction.66 Without further implementation of collective bargaining, 61

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Ulrich Everling in Alfred Söllners (ed.), Gedächtnisschrift für Meinhard Heinze (Beck 2005) 157, 168; Jonas B Liisberg [2001] 38 CMLR 1171 (on legislation 1172 ff.); Borowsky in Meyer (n 22) Art. 53, para 2. Declarations Concerning Provisions of the Constitutions [2004] OJ C310/420 456 = Charte 4473/00 Convent 49, 48f. Eg Demir and Baykara App no 34503/97 (ECHR, 12 November 2008) paras 146, 153; also Tyrer App no 5856/72 (ECHR, 25 April 1978) para 31; Soering App no 14038/88 (ECHR, 7 July 1989) para 102; Selmouni App no 25803/94 (ECHR, 28 July 1999) para 101; Christoph Grabenwarter and Katharina Pabel, Europäische Menschenrechtskonvention (5th ed. Beck 2012) para 5, subpara 13; Angelika Nußberger, Sozialstandards im Völkerrecht (Duncker & Humblot 2005) 273ff. Referring to art 11 ECHR Jarass (n 24) para 29, subpara 9. International Covenant on Economic, Social and Cultural rights (entered into force 3  January 1976) 993 UNTS I-14531 (ICESC) art 8, para 1 lit c; International Covenant on Civil and Political Rights (entered into force 23  March 1976) 999 UNTS I-14668 (ICCPR) Art. 22, para 1; on the deduction of the right to collecitve bargaining Patrick Macklem, ‘The Right to Bargain Collectively in International Law’ (2004) 10ff accessed 12 November 2013. For restriction Sagan (n 50) 114ff, 129; for defi nition Jarass (n 32) para 6, subpara 29; Borowsky (n 22) Art. 52, para 16; cf Carsten Herresthal [2011] EuZA 1, 16; Gregor Thüsing and Johannes Traut [2012] RdA 65, 70; Fabienne Turpin [2003] RTDeur 615, 629f; also Horst Konzen in Detlev Joost and others (eds.), Festschrift für Franz Jürgen Säcker zum 70. Geburtstag (Beck 2011) 229, 237; Robert Rebhahn in Alfred Söllners (n 60) 654f; Rixen (n 49) Art. 28, para 14.

Intersentia

Collective Agreements Within the Limits of Europe

the fundamental right is of little effect, as it lacks rules on the negotiation procedure or the legal effect of collective agreements. These have to be defined by the EU or the Member States within the limits of proportionality. Hereby is not referred to Article 52 CFR, as proportionality is a general legal principle in EU law. The material scope of Article  28 CFR is not determined by the reference to the law and practice in the Member States and the Union law. The fundamental right as protection against the EU bodies and institutions as well as the Member States implementing and enforcing EU law is relevant when and where legal acts of the EU restrict collective bargaining or collective agreements in their content. Social policy and measures on the basis of cross-sectoral competence limit collective bargaining as well as the fundamental freedoms directly binding for trade unions. Article 28 CFR preserves collective bargaining and collective agreements on the level of primary EU law.

5.2.

SUBJECT MATTER AND SCOPE OF THE RIGHT TO COLLECTIVE BARGAINING

The right of collective bargaining protects – according to its wording – the negotiation and the closing of collective agreements on an appropriate level. It does not contain information concerning the procedure, the manner of the closing of the collective agreement, to what extent the contractual relationships are binding, a possible derogation and the agreements’ effects on the individual employment contracts.67 With regard to these topics, the margin to play lies with the Member States. The possible subject matters are also determined by the scope of the right to collective bargaining. It outlines the area for which employers, employees and their respective organizations can form a collective agreement. Article 28 CFR – as opposed to Article 9, para 3 German Constitution – does not refer to the working and economic conditions of employees. The wording ‘collective agreement’ only hints at the nature of the agreement as a collective contract rather than an individual agreement. Additional precision can be derived from the legal ownership of unions and employers’ organizations. According to Article  12 CFR, their purpose is the representation of their members’ interests. Therefore, collective agreements as an expression of the exercise of the right of collective bargaining must represent the interests of the employees and employers and regulate the organizations’ own matters, as long as the agreements do not contradict national laws. Subject matters of the right to collective bargaining are agreements concerning the formation, the content and the termination, as well as the execution of employment contracts. This includes operational standards and regulations in the field of social protection, to the extent that they are connected to the ceasing of the employment relationship. 67

Also Bruno Veneziani in Bercusson (n 27) 298, 300.

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The CJEU has already correlated the restriction of Article 101 TFEU to this core of collective bargaining due to the social policy of the EU.68 Employees’ and employers’ organizations do not have a general political mandate. As a result, the organizations cannot claim the protection of Article 28 CFR, even if attending to legitimate interests of the general public. The same applies to management decisions, that indirectly obstruct working conditions, such as the relocation of a production site. The impact on the employees, however, may be made a subject of collective bargaining. This conclusion is confirmed by a systematic analysis of the relevant international Conventions.69 The Community Charter of the Fundamental Social Rights of Workers (No. 12) and Article  6  European Social Charter give employees and employers a right to negotiate collective agreements. The same is true for the organizations that represent their economic and social interests (Article  5  European Social Charter). Consequently, they must exercise their rights in the interest of their members.70 This finding is confirmed by Article  6, para 2  European Social Charter, which imposes upon the contracting parties an obligation to promote the negotiation of collective agreements. According to the European Social Charter’s expert committee, collective agreements are negotiated outside the scope of the state’s influence, and deal with topics in which both parties are interested, such as working conditions, vocational education and training and social affairs.71 Further topics may be productivity and efficiency referring to the relationship between employees and employers.72 There can be no other conclusion drawn from the ILO Conventions.73 After these, collective agreements mainly refer to working conditions and terms of employment contracts.74 This is coherent with Article 11 ECHR, ensuring the coalition’s right to defend the professional interests of their members.75

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Eg CJEU Case 67/96 Albany [1999] ECR I-5751, para 59; Case 115/97 Brentjens [1999] ECR I-6029, para 56; Case 219/97 Drijvende Bokken [1999] ECR I-6121, para 46. Riedel (n 22) Vorbem zu Kapitel IV para 35 (reference to art 53 CFR); by contrast Krebber (n 2) Art. 27 GRC, para 10; Sebastian Krebber [2009] RdA 224, 235; similar Robert Rebhahn in Söllner (n 60) 652. Europarat, Europäische Sozialcharta (Springer 2002) 136; David Harris and John Darcy The European Social Charter (2nd ed. Ardsley 2001) 99; Andrzej Świątkowski Charter of Social Rights of the European Union (Kluwer 2007) 217, 200. Conclusions I, 34f, Conclusions V, 42f; Conclusions XIII-3, 274; Conclusions XIV-1, vol 2, 306 (UK); in addition Europarat (n 69) 136; Harris and Darcy (n 69) 99; Świątkowski (n 69) 217. Conclusions XIV-1, vol 2, 306 (UK); in addition Harris and Darcy (n 69) 99. Art. 4 ILO Convention No 98; similar art 7 ILO Convention No 151; also art 2 ILO Convention No 154; Art. 2, para 1 ILO Recommandation No 91; cf Andrzej Świątkowski in Konzen (n 15) 843f, 853f; Veneziani (n 27) 295f. Syndicat national de la police belge App no 1/1974/12/19 (ECHR, 27  October 1975) para 39; Svenska Lokmannaförbundet App no 2/1974/13/20  (ECHR, 6  February 1976) para 40; Schmidt and Dahlström App no 4/1974/15/20 (ECHR, 6 February 1976) para 36; Wilson App no 30668/96, 30671/96, 30678/96 (ECHR, 2 August 2002) para 42. See n 74.

Intersentia

Collective Agreements Within the Limits of Europe

Only within this scope of protection article  28 CFR guarantees a right to collective bargaining.76 Thus, the union in the Viking case could not take collective action against the registration of the ship under a Finnish flag as an Estonian ship. Management decisions cannot be the subject of a collective agreement protected by Article  28 CFR. The agreement can only serve to protect the employees’ working conditions, particularly their preservation, even if the costs could lead to the revision of the decision to register the ship in another country. Regulations protecting legitimate interests of the general public can only be included in a collective agreement under the condition that these interests are simultaneously employees’ interests. Therefore, trade unions and employers’ associations can pursue their employment policies using Article 28 CFR and have a margin of appreciation as autonomous social partners.77 This is true for the protection of civil aviation safety, which became relevant in the Prigge case, in which the CJEU had to assess the legality of an age limitation clause requiring pilots to retire at the age of 60.78 Civil aviation safety is an issue of general public interest, but is also an interest of the employees profiting thereof, namely the pilots. However, the union, as Advocate General Cruz Villalón rightfully underlined, cannot justify the introduction of a mandatory retirement clause for the protection of public safety, but has to refer to the risks for the pilots.79 Regulations protecting legitimate public interests are reserved for the state, if the legislature has not authorized the social partners to introduce such provisions.80 Insofar as collective agreements include corresponding clauses, they do not realize the rights conferred by Article 28 CFR.

6.

GENERAL STATEMENTS ABOUT THE BOUNDARIES OF THE RIGHT OF COLLECTIVE BARGAINING

6.1.

RIGHT OF COLLECTIVE BARGAINING IN THE LIMITS OF THE CFR

Limitations of the right of collective bargaining not only arise from the material scope of the fundamental right. In order to determine the influence of collective bargaining on the European economic system, its boundaries have to be taken into account. The conflict with other fundamental rights and the cartel ban has to be resolved 76

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78 79 80

Cf Jarass (n 43) Art.  28, para 16 (restrictions of the fundamental right if working conditions unaffected). CJEU Case 411/05 Palacios de la Villa [2007] ECR I-8531, para 68; Case 45/09 Rosenbladt [2010] ECR I-9391, paras 67 ff; Case 297/10, 298/10 Hennigs [2011], para 65. With reference to the autonomy of social partners CJEU Case 447/09 Prigge [2011], Opinion of AG Cruz Villalón, para 42. CJEU Case 447/09 Prigge [2011], paras 58ff. CJEU Case 447/09 Prigge [2011], Opinion of AG Cruz Villalón, paras 52f. E.g. Art. 2, para 5 Directive 2000/78/EC, see CJEU Case 447/09 Prigge [2011], para 61; CJEU Case 447/09 Prigge [2011], Opinion of AG Cruz Villalón, paras 52 f.

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according to their parameters. They mark the limits of the margin of appreciation for the bargaining parties that derives from secondary EU law. The right to collective bargaining – as any other fundamental right guaranteed by the Charter – can be restricted in accordance with Article 52. This rule combines all restrictions and interpretation rules, but is not exactly one of the clearest and most stringent provisions of the Charter. Just as Article 53, it shows traces of a political compromise.81 For this Article, I rely on an understanding according to which the right to collective bargaining is limited through Article 5282 under the condition that these limitations do not go further than the boundaries imposed under Article 11, para 2 ECHR (Article 52, para 3 CFR).83 The application of Article 52, para 3 CFR fails only if Article 11 ECHR is irrelevant for the application of Article 52 CFR justifying restrictions of Article 28. The explanations relating to the CFR do not schedule Article 28 CFR as limited by the ECHR.84 But the ECtHR judgments recognizing a right of collective bargaining were not handed down before 2008. Since then, Article 11 ECHR has been relevant for the scope of protection and the limitations of the right of collective bargaining. Article 52, para 3 CFR aims at a coherence of CFR and ECHR, as well as Article 53 CFR. In this context a comparison between the restrictions of the ECHR and the CFR is particularly difficult in multipolar relationships of two or more persons protected by fundamental rights and the state, in which the favouritism of one holder of the fundamental right leads to the restriction of the other.85 In order to ensure coherence between the ECHR and the CFR, one – simplistically – has to ask, whether a restriction of the sovereignty of collective bargaining on the basis of the ECHR would have been possible and feasible. However, this standard is not easy to apply because of a distinct shortage of case law addressing the justified restriction of the right of collective bargaining. For the least, only a law can impose a restriction on this fundamental freedom. The restriction must pursue a goal of general interest and 81

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Kingreen (n 2) Art. 52 GRC, para 1; Thomas v Danwitz and Clemens Ladenburger in Tettinger and Stern (n 49) Art. 52, paras 1ff. Christian Calliess [2001] EuZW 261, 264; Kingreen (n 2) Art. 52, para 59; Bengt Beutler in Hans v der Groeben and Jürgen Schwarzes, EU/EG-Vertrag (6th ed. Nomos 2003) Art. 6 EU, para 119; Jarass (n 43) Art.  52, para 25; Koen Lenaerts and Eddy de Smijter 38 [2001] CMLR 273, 293; Magiera in Dieter Scheuing, Europäische Verfassungsordnung (Nomos 2003) 117, 125; Philippi (n 27) 42; v Danwitz and Ladenberger (n 80) Art. 52, paras 28, 29f; according to Art. 28 CFR Jarass (n 43) Art. 28, para 14; else (Art. 52, paras 2, 3 CFR leges speciales) Christoph Grabenwarter [2011] DVBl 1, 3; Juliane Kokott in Detlef Merten and Hans-Jürgen Papier, Handbuch Grundrechte, vol 1 (Beck 2004) para 22, subpara 11; Borowsky (n 22) Art. 52, paras 13, 24, 29; Thomas Schmitz [2001] JZ 833, 838; Streinz in Streinz (n 1) Art. 52 GRC, paras 5, 11. Declarations Concerning Provisions of the Constitutions [2004] OJ C310/420 456 = Charte 4473/00 Convent 49, 48; see also Jarass (n 24) para 6, subpara 34; Albrecht Weber [2003] DVBl. 220, 224f; cf Dieter Kraus in Oliver Dörr and others (eds.), EMRK/GG: Konkordanzkommentar (2nd ed., Mohr Siebeck 2013) chap 3 para 105; Koen Lenaerts and Eddy de Smijter [2001] 8 MJ 90, 97; else Kingreen (n 2) Art. 52, para 59; Jarass (n 24) para 6, subpara 33 (Art. 52, para 3 CFR no lex specialis). Declarations Concerning Provisions of the CFR [2004] OJ C310/442 = Charte 4473/00 Convent 49, 48f; Koen Lenaerts and Eddy de Smijter [2001] 8 MR 90, 99. Jarass (n 24) para 6, subpara 34.

Intersentia

Collective Agreements Within the Limits of Europe

adhere to the principle of proportionality, without giving away the essential elements of the fundamental right at stake.86

6.2.

NO RULE-MAKING MONOPOLY OF THE EMPLOYEES’ AND EMPLOYERS’ ORGANIZATIONS

The limitations of the right of collective bargaining imply that unions and employers’ organizations have no monopoly with regard to their legislative power. Nonetheless, the question remains, whether the coalitions have a norm-making prerogative, a consequence of which would be that the legislature could only regulate the relevant areas insofar as there existed no (sufficient) collective agreements. A normative prerogative does not directly arise from the material scope of the fundamental right itself. How far the right to bargain collectively is able to assert itself against state restrictions depends on the extent and scope of its inherent restrictions. A normative prerogative can only be argued for under the condition that governmental actions are either unnecessary or the importance of the collective autonomy granted through the objectives of the CFR outweighs state interests. Thus, it depends on the social partners’ ability to regulate working conditions within the EU. The EU’s objective is to realize a social policy that fights social exclusion and discrimination and facilitates social fairness and social protection (Articles 151 ff TFEU). Therefore it asks for a pan-European regulation or harmonization of social standards respectively. Further, one has to aim at a promotion of employment and an alignment of working conditions in order to improve conditions in the workplace and living conditions. Th is goal cannot be reached by means of collective bargaining only, as the social partners are fi rstly representing their members’ interests. They are not – with the exception of the social dialogue and the directives arising therefrom – creating unifying European legislation. To date, neither a European collective agreement nor a coordinated collective bargaining policy has been agreed upon.87 Additionally, the sovereignty of collective bargaining is organized differently in the EU Member States.88 A European social policy in the interest of all employees throughout the Union thus cannot exclusively refer to the social partners. The guarantee of collective bargaining in EU law and in Article 28 CFR does not allow for a different conclusion. A one-sided primacy of the right to collective bargaining would hinder the realization of a unitary social policy, especially in Member States, in which the social partners are only playing a minor role. 86 87

88

Kingreen (n 2) Art. 52 GRC paras 58ff; v Danwitz and Ladenburger (n 80) Art. 52, paras 32 ff. Eduardo Ales and others, Transnational Collective Bargaining: Past, Present and Future: Final Report (European Commission 2006); in addition, e.g. Eduardo Ales [2007] ZESAR 150ff; Abbo Junker, Internationales Arbeitsrecht im Konzern (Mohr 1992) 446ff; Rolf Kowanz, Europäische Kollektivvertragsordnung (Nomos 1999) 101ff; Dagmar Schiek in Wolfgang Däubler (ed.), Tarifvertragsgesetz (3rd ed. Nomos 2012) Einleitung G paras 706ff. Deinert (n 45) 432f.

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Lastly, one has to take into account, that the right of collective bargaining also gains importance for the creation and implementation of the EU directives. The collective agreement can deviate from the national law implementing the directive by improving the working conditions for the employees. Besides, the autonomy of the social partners has to be taken in account when interpreting directives constraining collective bargaining or the content of collective agreements. Article  28 CFR therefore shall prevent an erosion of collective bargaining. This is confirmed by the Charter’s essential content, even though its content is hard to capture. At the least collective bargaining cannot lose its essence, not even in the case of important general public interests.

6.3.

CONFLICT OF THE RIGHT TO BARGAIN COLLECTIVELY AND FUNDAMENTAL RIGHTS AND FUNDAMENTAL FREEDOMS

A restriction of the right of collective bargaining in primary Union law can arise from conflicting fundamental rights and fundamental freedoms.89 This can result in content requirements relating to the drafting of collective agreements. In the case of SchöningKougebotopoulou, e.g., a clause in a collective agreement, stating that only periods of service for the German employer would count towards an increase in wages, was void due to a violation of the right to the free movement of workers.90 In Royal Copenhagen, the CJEU controlled a collective agreement’s payment scheme against the background of the principle of equal remuneration for men and women.91 However, in neither of the aforementioned cases the CJEU referred to a conflict of fundamental rights and freedoms, since at the time of the judgements the right to collective bargaining had not yet been acknowledged as a fundamental right. Still, after the enactment of the CFR, fundamental rights and freedoms are in opposition to one another. Thus, this conflict can impose limitations on the right to collective bargaining. Against the background of German constitutional law, one might be tempted to assume an equality of status for the fundamental rights and freedoms, seeking to arrive at a practical concordance according to Konrad Hesse, with the result that both freedoms could unfurl fully.92 On the other hand, insofar as the principle of practical concordance is related to the German Constitution’s fundamental rights that contain no caveat for restrictions, and whose limitations have to be justified, there is no need for this under EU law due to a different starting point. 89 90

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Walter Frenz [2011] RdA 199, 201. CJEU Case 15/96 Schöning-Kougebetopoulou [1998] ECR I-60, para 28; similar Case 379/09 Casteels [2011], paras 30, 36; cf Case 325/08 Olympique Lyonnais [2010] ECR I-2177, paras 37, 38ff. CJEU Case 400/93 Royal Copenhagen [1995] ECR I-1275, paras 13ff; see also CJEU Case 43/75 Defrenne [1976] ECR 455, paras 21/24, 38/39; Case 165/82 Kommission/Vereinigtes Königreich [1983] ECR 3431, para 11; Case 33/89 Kowalska [1990] ECR I-2591, para 12; Case 184/89 Nimz [1991] ECR I-297, para 11; Case 333/97 Lewen [1999] ECR I-7243, para 26; Case 284/02 Sass [2004] ECR I-11143, para 25; Case 19/02 Hlozek [2004] ECR I-11491, para 43. Konrad Hesse, Grundzüge des Verfassungsrechts der Bundesrepublik Deutschland (20th ed, Müller 1999) paras 72, 317f.

Intersentia

Collective Agreements Within the Limits of Europe

According to Article  52 CFR, all fundamental rights are subject to restrictions and limitations. Thus, a confl ict of fundamental rights can be resolved, when defi ning and assessing their extrinsic and intrinsic boundaries. Particularly when examining proportionality, means and measure of the legitimate interest in a limitation of a fundamental right can and must be discussed. Consequently, as part of the proportionality test, the limiting legal positions must be balanced to ensure a realization of both rights.93 Th is reflects the optimising principle typical for the practical concordance principle.94 Thus, nothing has yet been said with regard to the co-relation of the fundamental rights or the relationships between fundamental rights and fundamental freedoms. In its judgements in Schmidberger and Omega Spielhallen – which were not related to the freedom of collective bargaining – the CJEU stated that both are equally important.95 This finding has been questioned after the Viking and Laval cases, in which the CJEU examined a violation of two fundamental freedoms – the freedom of establishment and the freedom to provide services.96 Therefore, their violation by means of a bargaining action required a justification. Some scholars concluded from this, that the CJEU has prioritized the fundamental freedoms.97 I personally consider this to be an over-/misinterpretation of the Court’s holdings.98 The CJEU was forced to first decide whether a fundamental freedom had been violated, as this was the first question brought before the court.99 With regard to 93

94

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96

97

98

99

CJEU Case 112/00 Schmidberger [2003] ECR I-5659, paras 74, 77ff; Case 36/02 Omega [2004] ECR I-9609, paras 35ff; Case 244/06 Dynamic Medien [2008] ECR I-505, para 42; Case 275/06 Promusicae [2008] ECR I-271, paras 64ff; suggesting only CJEU Case 438/05 Viking [2007] ECR I-10779, paras 45f, 77; Case 341/05 Laval [2007] ECR I-11767, para 103. Cf Juliane Kokott and Christoph Sobotta [2010] EuGRZ 265, 269; Hellmut Wißmann [2009] AuR 149f. For a transfer of the concept of practical concordance (praktische Konkordanz): CJEU Case 28/08 P, Bavarian Lager [2010] ECR I-6055, Opinion of AG Sharpston, para 95; Juliane Kokott in Christine Hohmann-Dennhardt and others (eds.), Grundrechte und Solidarität: Festschrift für Renate Jaeger (Engel 2011) 115, 124; also Thomas v Danwitz [2010] EuZA 6, 14f.; cf Beutler (n 81) Art. 6 EUV, para 64; Hilbrandt (n 46) para 35, subpara 37. CJEU Case 112/00 Schmidberger [2003] ECR I-5659, paras 74ff; Case 36/02 Omega [2004] ECR I-9609, para 35; similar CJEU Case 271/08 Kommission/Deutschland [2010] ECR I-7091, para 52; Francis G Jacobs [2008] 11 JIEL 5, 26f. CJEU Case 438/05 Viking [2007] ECR I-10779, paras 45, 75ff; Case 341/05 Laval [2007] ECR I-11767, paras 101ff. Wolfgang Däubler [2008] AuR 409, 411ff; Eva Kocher [2009] AuR 332, 333; Sebastian Krebber [2009] RdA 224, 235f; Bernhard Nagel [2009] AuR 155ff; Robert Rebhahn, [2008] ZESAR 109, 114f; Michael Sunnus [2008] AuR 1, 11; cf Ronnie Eklund [2009] 35 ILJ 202, 208; critically Abbo Junker [2008] SAE 209, 215; Ulrike Wendeling-Schröder, in Thomas Dieterich and others (eds.), Individuelle und kollektive Freiheit im Arbeitsrecht: Gedächtnisschrift für Ulrich Zachert (Nomos 2010) 147, 156f, 158f; Bertram Zwanziger [2008] DB 294, 295f. On the lack of clarity Horst Konzen in Detlev Joost and others (eds.), Festschrift für Franz Jürgen Säcker zum 70. Geburtstag (Beck 2011) 229, 235. Kokott in Hohmann-Dennhardt (n 93) 124f; Michael Holoubek in Schwarze (n 28) Art. 28 EGV, para 24; Vassilios Skouris [2009] RdA Sonderbeilage Heft 5, 25, 27f; suggesting CJEU Case 271/08 Kommission/Deutschland [2010] ECR I-7091, paras 44, 52.

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the relationship between fundamental rights and fundamental freedoms, it referred to its prior judgements, where it had held that they are of equal importance.100 However, it has to be critically mentioned that the CJEU did not consider the right to strike when applying the proportionality test but the protection of employee interests as a legitimate aim.101 This is supported by the fact that both are part of primary EU law. Additionally, Article 6, para 1 TEU explicitly equates the fundamental rights and the rest of primary EU law, thereby including fundamental freedoms. Furthermore, the preamble of the Lisbon Treaty mentions the social fundamental rights. Article  3 of the EU Treaty declares it one of the Union’s goals to create an internal market based on the values the EU stands for, including the fundamental rights. This contradicts an understanding according to which the fundamental freedoms rank above the fundamental rights. Both are rather equal, and need to be balanced to achieve proportionality.102 This understanding, according to a statement by the CJEU President, Vassilios Skouris, was the basis for the judgements in Viking and Laval.103 General Advocates Kokott and Trstenjak explicitly agreed with that.104

6.4.

PROPORTIONALITY TEST

The limitations resulting from the principle of proportionality are of crucial importance with regard to the boundaries of the right of collective bargaining.105 Regardless of the fact that it always calls for a legal regulation to be serving a legitimate purpose, appropriate and necessary to reach this goal, the imposed limitation must also be proportional.106 The qualification of the right of collective

100

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103 104

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CJEU Case 438/05 Viking [2007] ECR I-10779, paras 45f, 77; Case 341/05 Laval [2007] ECR I-11767, paras 93f; for room to manoeuvre for social partners Thomas Dieterich in Hohmann-Dennhardt (n 93) 112. Similiar Sebastian Krebber [2009] RdA 224, 233. Cf CJEU Case 438/05 Viking [2007] ECR I-10779, paras 77ff; Case 341/05 Laval [2007] ECR I-11767, paras 101ff. E.g. Frank Bayreuther [2008] EuZA 395, 400; Brian Bercusson [2007] 13 ELJ  279, 296ff;  Thomas v. Danwitz [2010] EuZA 6, 14f; Walter Frenz [2011] RdA 199, 201; Horst Konzen in Joost (n 97) 237; Sebastian Krebber [2009] RdA 224, 233; Rengeling and Szczekalla (n 21) para 1008; Alexander Schultz, Das Verhältnis von Gemeinschaftsgrundrechten und Grundfreiheiten des EGV (Duncker & Humblot 2005) 118; also Juliane Kokott and Christoph Sobotta [2010] EuGRZ 265, 269; cf Brian Bercusson (n 27) 394f; Giovanni Orlandini [2000] 6 ELJ 341, 358ff, 362; Stefan Kadelbach and Niels Petersen [2003] EuGRZ 693, 696f; Vassilios Skouris, [2006] DÖV 89, 95f. Vassilios Skouris [2009] RdA Sonderbeilage Heft 5, 25, 27ff. Kokott in Hohmann-Dennhardt (n 95) 124; CJEU Case 271/08 Kommission/Deutschland [2010] ECR I-7091, Opinion of AG Trstenjak  paras 177, 183ff; Case 341/05 Laval [2007] ECR I-11767, Opinion of AG Mengozzi paras 83ff; CJEU Case 354/04 Gestoras Pro Amnistía [2007] ECR I-1579, Opinion of AG Mengozzi paras 176f. Jarass (n 24) para 29, subpara 23; Jarass (n 43) Art. 28, para 15; Rixen (n 22) Art. 28, para 21; CJEU Case 271/08 Kommission/Deutschland [2010] ECR I-7091, Opinion of AG Trstenjak, para 189. Jarass (n 24) para 6, subpara 46ff, para 29, subpara 23.

Intersentia

Collective Agreements Within the Limits of Europe

bargaining as a fundamental right, however, does not limit the legislature to the introduction of minimum standard regulations, preserving the greatest possible margin for unions and employer organizations. The limitation’s proportionality depends on a number of factors. If multiple fundamental rights are affected, all of them need to be optimized. Regardless of the individual case or group of cases, one can only carve out rough parameters for the weighing up of interests. Thus, alternatives and their effects on the realization of the right to bargain collectively have to be taken into account, as well as the extent to which the restriction leaves room for discretion for the collective bargaining parties to pursue their members’ interests. Th is regulatory margin has a material dimension – to be determined against the background of the issue at stake – but also depends on the intensity of the limitation imposed by the statutory regulation. The European legislature can aim at fully harmonizing the Member States’ regulations, but may limit itself to partially harmonizing the laws by means of introducing minimum standards. The latter may be fully or partially dispositive. Lastly, the duration of measures taken by the EU legislator is relevant, when assessing the intensity of a limitation and its possible justification. Significant interferences in particular, such as setting conditions for wage schemes, can – as an exception – be justified under the condition that the pursued legitimate goal is important enough, especially if it is of macroeconomic relevance, and the limitation is only temporary.107 Further, an intrusion is less weighty, if the social partners have been included in the decision making process,108 e.g., if they could influence the norm-making process and thereby could advocate their members’ interests. The necessary requirements for the functioning of the right of collective bargaining must be included in the weighing up. Collective agreements are the result of a negotiation process, balancing numerous opposing interests.

7.

LIMITATIONS OF COLLECTIVE BARGAINING BY MEANS OF SELECTED SAMPLES

7.1.

LIMITATIONS OF COLLECTIVE BARGAINING BY ANTIDISCRIMINATION LAWS

In the meantime, anti-discrimination law has become a genuine part of Union law, restricting private autonomy and collective bargaining. At present, the ban on age discrimination through Directive 2000/78/EC and its implementation into national 107

108

Similar International Labour Conference, 69th Session, Report of  the  Committee  of  Experts on the Application of Conventions and Recommendations [1983] Report III, pt 4B, 102, para 314, 104, para 319; in addition, Andrzej Świątkowski in Konzen (n 15) 854f. Cf Andrzej Świątkowski in Konzen (n 15) 854.

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law is of crucial importance for collective agreements. Regulations concerning fi xedterm contracts in collective agreements in particular fall within the scope of the ban on age discrimination.109 Nonetheless, this does not result in a conflict of fundamental rights stricto sensu. Anti-discrimination laws ban certain collective agreements. In this case no conflict of at least two civil rights arises as it is merely a matter of the application of a ban on discrimination and a fundamental right. Therefore, the principle of practical concordance (praktische Konkordanz), that allows the affected persons to profit from their rights as far as possible, does not apply. For the exercise of a civil right there are gradations, whereas discrimination occurs or does not. The ban on discrimination admittedly pursues the purpose to protect the right of personality, especially the exercise of real freedom for the person discriminated against, but the structure of the ban differs from the structure of civil rights. It is the justification of the discrimination that balances civil rights and the ban on discrimination. The infringement of the right of collective bargaining by the anti-discrimination laws pursues a legitimate aim and is in principle suitable for fighting discrimination. Insofar – and with regard to the necessity of the measure – the legislator has a margin of appreciation. The proportionality of the ban therefore depends on the degree of restriction on collective bargaining. The ban on age discrimination does not exclude collective agreements or certain regulations within such agreements in general.  In principle, it imposes a restriction on the content of collective agreements, which must be possible against the background of the equal rights provision in the CFR (Article 21) and the possible justification for discrimination, under the condition that a proportional measure is taken to pursue a legitimate aim. The application of anti-discrimination laws has to take into account that a justification for discrimination – with reference to genuine and determining occupational requirements – possibly relies on uncertain facts or requires a predictive decision, which can neither be fully controlled by the parties nor be subject to full judicial review. Therefore, the right of collective bargaining demands a margin of appreciation, when determining the aim pursued and the measure chosen.110 Still, the employees’ and employers’ organizations must act on a rational basis regarding the facts of the case. The autonomy enables these organizations to act if uncertainty remains. Such a margin of appreciation was recognized by the CJEU in 2000 in its judgement in the Palacios de la Villa case, in which it upheld a mandatory retirement clause in a collective agreement, which linked the termination of employment contracts with 109

110

166

CJEU Case 411/05 Palacios de la Villa [2007] ECR I-8531; Case 45/09 Rosenbladt [2010] ECR I-9391; Case 447/09 Prigge [2011]; Case 141/11 Hörnfeldt [2012]. CJEU Case 45/09 Rosenbladt [2010] ECR I-9391, paras 67ff; Case 297/10, 298/10 Hennigs [2011], para 65, 73; cf CJEU Case 411/05 Palacios de la Villa [2007] ECR I-8531, para 68; Case 45/09 Rosenbladt [2010] ECR I-9391, Opinion of AG Trstenjak, para 68; Case 447/09 Prigge [2011], Opinion of AG Cruz Villalón, paras 75, 79ff.

Intersentia

Collective Agreements Within the Limits of Europe

pensionable age.111 The clause fell within this margin because the social partners pursued certain social policy objectives, particularly the promotion of employment.112 This was confirmed in the Rosenbladt case in 2010,113 whilst in the case of Prigge the CJEU seems to have chosen a different approach.114 In Prigge the employees’ and employers’ associations fi xed the age limit for pilots in a German company at the age of 60, although under national and international law licensed pilots may retain their licences until the age of 65, depending on their individual fitness.115 This legislation assumes a deterioration of resilience at the age of 60 and an increasing safety risk. The law does not prohibit professional practice at all. By contrast, the social partners expressed, in the collective agreement, their concerns that the aptitude for professional practise is lacking from the age of 60. This assessment was not based on specific medical findings; therefore the CJEU disapproved of this particular age limit because there was no sufficient justification to differ from the statutory rules. In this context, two things shall be highlighted: Firstly, the right of collective bargaining opens a margin of appreciation,116 even though this was not expressly held by the Court in this case. At least the CJEU referred to Article 28 CFR117 and constantly refers to that margin when scrutinizing justifications for age discrimination.118 Secondly, the guarantee of the right to collective bargaining in the CFR enables the employees’ and employers’ organizations to agree on higher standards for working conditions than the applicable statutes provide, if they hereby pursue legitimate aims.119 Such justification can result in specific demands for professional practises, especially if the statute contains more general regulations. Higher standards can be agreed upon to ensure the protection of employees and of third party interests if the social partners are authorized to regulate these areas.120 In each case a sufficient factual basis is necessary to deviate from the legislator’s assessments and to justify a discriminatory measure. This factual basis was missing in the Prigge case. Besides, the social partners had agreed upon different age limits for different companies of the same group and some of the collective agreements allowed pilots to work until 111 112 113 114 115

116 117

118 119

120

CJEU Case 411/05 Palacios de la Villa [2007] ECR I-8531, para 48. CJEU Case 411/05 Palacios de la Villa [2007] ECR I-8531, para 68. CJEU Case 45/09 Rosenbladt [2010] ECR I-9391, paras 41, 67. CJEU Case 447/09 Prigge [2011]. See Joint Aviation Requirements – Flight Crew Licensing 1.060; §4 der Ersten Durchführungsverordnung zur Verordnung über Luft fahrtpersonal, 15 April 2003. See n 110. CJEU Case 447/09 Prigge [2011], para 47; also Case 447/09 Prigge [2011], Opinion of AG Cruz Villalón, para 44. See note 110. Else CJEU Case 447/09 Prigge [2011], Opinion of AG Cruz Villalón, para 83; cf Felipe Temming, Altersdiskriminierung im Arbeitsleben (Beck, 2008) 614 (allows deviation from statutes only on the ground of medical fi ndings due to strict proportionality test). Cf Art. 2, para 5 Directive 2000/78/EC.

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the age of 65.121 This raised doubts as to whether the social partners had exercised their margin of appreciation according to urgent professional demands.122 Therefore, I agree with the CJEU judgement.

7.2.

LIMITATIONS OF THE RIGHT TO COLLECTIVE BARGAINING RESULTING FROM THE EU’S ECONOMIC AND FINANCIAL CRISIS

Limitations to the right of collective bargaining can arise as a result of economic and financial crisis. In November 2011 the EU enlarged the Economic and Monetary Union by introducing budgetary and macroeconomic regulations.123 The six new European legal Acts – i.e. the ‘Six-Pack’ – are based on the 1997 Stability and Growth Pact and aim at a reduction of public deficits and an improvement in budgetary discipline.124 Simultaneously, they shall establish an early-warning system for macroeconomic instabilities and corrective mechanisms. The regulations shall not be explained in detail in this context. With regard to the right of collective bargaining, two aspects are of interest. The regulations are based on the premise that the Member States submit themselves to a monitoring of their budgets and their macroeconomic risks, as well as to the application of corrective measures if irregularities occur.125 If, under the given circumstances, the European Commission or the Council deems this insufficient, they shall propose improvements.126 A potential corrective measure would be the suggestion of state influence on the social partners’ wage policy; this could affect a central element of collective bargains. Such measures of the Member States interfere with the right of collective bargaining and need justification according to Article 52, para 1 CFR. Article 28 CFR applies to recommendations of the Council, which – even though they are legally non-binding – have legal effects due to the sanctions.127 Besides, Member States are bound by the fundamental rights when executing European law within the Economic and Monetary Union. The EU does not determine the measures. The regulations and decisions of the Commission and the Council demand measures to be taken by the Member State. The co-ordination of the economic policy, pursuing a stabilization and consolidation of the Economic and Monetary Union, can justify a restriction of Article 28 CFR. 121 122 123

124

125 126 127

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CJEU Case 447/09 Prigge [2011], Opinion of AG Cruz Villalón, para 86. Felipe Temming [2012] EuZA 205, 215. Elaborately Carlino Antpöhler [2012] 72 ZaöRV 353ff; Jürgen Bast and Florian Rödl [2012] EuGRZ 269ff; Christian Calliess and Christopher Schoenfleisch [2012] JZ 477, 478ff; Hans Hoff mann and Christian Konow [2012] ZG 138ff; also Brun-Otto Bryde [2012] SR 2ff. Reg (EU) 1173/2011 OJ L306/1; Reg (EU) 1174/2011 OJ L306/8; Reg (EU) 1175/2011 OJ L306/12; Reg (EU) 1176/2011 OJ L306/25; Reg (EU) 1177/2011 OJ L306/33; Dir 2011/85/EU OJ L306/41. Reg (EU) 1176/2011 Art. 8, para 1. Reg (EU) 1176/2011 Art. 8, para 3. Reg (EU) 1174/2011 Art. 3; Reg (EU) 1173/2011 Arts. 4–7.

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In assessing the appropriateness and necessity of the measures taken, the Member States are to be granted a wide margin of appreciation due to the far-reaching macroeconomic consequences and the difficulties arising, when trying to assess macroeconomic instabilities. To guarantee its proportionality, the action may not impose excessive limitations on the right to collective bargaining. Additionally, it must be the least restrictive measure. The relevant regulations attempt to ensure the effective protection of fundamental rights by foreseeing a procedural participation of the social partners. The Member States are obliged to include the employees’ and employers’ organizations in the debates during the European semester, the budgetary monitoring process.128 Additionally, the relevant provisions determine that the social partners’ role has to be taken into consideration when addressing macroeconomic imbalances.129 The recommendation shall consider the national traditions and methods of wage calculation.130 A procedural participation of the social partners provides for the right of collective bargaining only if there is a hearing and there is an opportunity – when timing allows – to adjust the wage policy on their own. However, the inclusion of the social partners in the negotiation process only serves its purpose if they are actually able to exercise their right to be heard and are – to the extent it is feasible – granted the opportunity to adjust their wage policy. Due to the discretionary margin left to the Member States with regard to the selection and adaption of measures, the regulations do not define how and to what extent the social partners ought to be included. This decision lies with the Member States. Insofar as EU law does not provide procedural regulations, the gaps are to be fi lled by national law. Under German law there are no regulations addressing the participation of the social partners in the legislative process. There only is a hearing, as necessary under Article  28 CFR. Further, any measure taken affecting wages relates to the heart of any collective negotiation. Therefore, it will – mostly – only be proportional if there are profound macroeconomic reasons if it is determinable and if the continuity of its necessity is questioned regularly. This simultaneously guarantees the right to collective bargaining and prevents the erosion of its crucial parts.131 These requirements adhere to the requirements set by the ILO with regard to state imposed wage policy restrictions.132 Further, they allow the imposition of limitations on the right to collective bargaining in the general public’s interest and to balance macroeconomic irregularities, if there are relevant economic and social reasons for 128 129 130 131 132

Reg (EU) 1175/2011 Recital 16. Reg (EU) 1176/2011 Recitals 19, 25, Art. 1, para 3. Reg (EU) 1176/2011 Recitals 19, 25, Art. 1, para 3. Brun-Otto Bryde [2012] SR 2, 15. International Labour Conference, 69th Session, Report of  the  Committee  of  Experts on the Application of Conventions and Recommendations [1983] Report III, pt 4B, 102 para 314, 104 para 319; in addition Betten (n 16) 96ff.

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this.133 Nonetheless, all measures must constitute exceptions, may only be temporary and may not offset the employees’ protection.134

SUMMARY 1. The collective agreement and the right to bargain collectively are guaranteed as part of primary Union law through the CFR. Despite of the reference to the legislation and the practice of the Member States, the fundamental right has an independent legislative content, and thereby the ability to bring out the individual importance of the right to bargain collectively. 2. The material scope of Article 28 CFR is to be determined against the background of Article 11 ECHR and the content of the international treaties binding the Member States. The employers’, employees’ and their respective organizations’ power to bargain collectively only captures the employees’ and employers’ interests, as well as the affairs of their organizations. They have no normative prerogative. Also, they have no general political mandate. They only represent general interest objectives, insofar as the EU or the Member States have passed that task onto them. 3. Within the material area of protection, the Union and the Member States have – within the boundaries of their corresponding competencies and the principle of proportionality – the right to define the freedom to bargain collectively. Furthermore, the fundamental right is not immune to restrictions, but constitutes – due to its legal quality – a counterweight to other fundamental rights, and has to be taken into consideration when applying secondary EU law. The rights granted in Article 28 CFR may only be restricted as outlined in Article 52, paras 1 and 3 CFR. This is particularly true with regard to regulations exceeding minimum socio-political standards. 4. The EU’s social policy therefore is built upon two piers: the occupational safety laws and the principle of self-determination through collective bargaining, even if there is no European collective agreement. This duality – despite of all the differences – reflects the current structure in many of the Member States that is presupposed by Union law. The consideration of the right to bargain collectively contributes to the realization of a social union and a European community of values. Regardless of the different socio-historical developments in the Member States, it can be stated that the collective agreement and the sovereignty of collective bargaining are wellestablished elements of the economic constitution, allowing for a self-governed regulation of working conditions.

133

134

170

International Labour Conference, 69th Session, Report of the Committee of Experts on the Application of Conventions and Recommendations [1983] Report III, pt 4B, 102, para 314, 104, para 319. International Labour Conference, 69th Session, Report of the Committee of Experts on the Application of Conventions and Recommendations [1983] Report III, pt 4B, 102, para 314, 104, para 319.

Intersentia