The Monti II Regulation:
reversing ECJ Decisions?
Professor Tonia Novitz
University of Bristol
The ECJ decisions: Viking, Laval…
Recent ECJ (now CJEU) cases
(alongside others decided subsequently)
raise the question:
WHAT HAPPENS WHEN WORKERS’ RIGHTS TO COLLECTIVE ACTION AFFECT
EMPLOYERS’ FREE MOVEMENT RIGHTS UNDER EU LAW?
Do labour rights (as human rights) prevail?
Or do employers’ economic freedoms prevail?
These cases show how a union (or unions) can be held liable for breach of
employers’ free movement rights under EU law.
See the impact not only of damages (the ultimate result of the Laval
litigation in Sweden – approx. EURO 55,000), but the ‘chilling effect’ of
injunctions in the UK (BALPA).
Note that Art. 153(5) TFEU excludes the right to strike from the legislative ‘social
policy’ competence of the EU.
What is the answer post-the ECJ
decisions?
The right to take collective action is a legitimate exception to EU free
movement (under inter alia Art. 28 of the EU Charter of Fundamental
Rights)
BUT

That exception does not apply to industrial action taken to determine
terms and conditions of ‘posted workers’, which can only be determined by
the setting of minimum terms and conditions in line with the provisions in
the Posted Workers’ Directive 96/71/EC: Laval – unless the action is to
address ‘social dumping’ – meaning?

That exception can only be applied in respect of freedom of establishment
(and we assume other free movement rights of the employer) if the
collective action is capable of ‘protection of workers’ AND is
‘proportionate’.
This enables the Court to determine what is in workers’ interests, e.g.
protection of jobs or terms and conditions – they cannot collectively
determine this themselves cf. Convention No. 87, Article 3. In terms of
what is ‘proportionate’, the union must show that it ‘did not have other
means at its disposal that were less restrictive in order to bring to a
successful conclusion the collective negotiations…’ and that if it did have
such means that they were ‘exhausted’ before initiating the action.
Reactions to the ECJ decisions
1.
2.
3.
Concerns as to ‘chilling effect’ by trade union movement,
see the BALPA case and ILO Committee on Freedom of
Association criticism of the EU/UK approach: ‘the doctrine
that is being articulated in these ECJ judgements is likely
to have a significant restrictive effect on the exercise of the
right to strike in practice’ (2010)
Commission in Work Programme 2010 (March 2010) said
wanted to present a legislative proposal with regard to the
Posted Workers’ Directive to improve its implementation
On 19 March 2010 the European Social Partners (ETUC,
CEEP, BusinessEurope and UEAPME) published a report on
their joint work relating to the ECJ case law. They differ on
treatment of the PWD and the scope of revision needed.
Both later (in May 2010) welcomed the Monti Report…
which as we shall see, is rather ambiguous.
The Monti Report 2010
In 2009, Mario Monti, the former Competition Commissioner (and currently
Prime Minister of Italy since November 2011) was requested by the
President of the European Commission Barroso) to draft a report in ‘A New
Strategy for the Single Market’. Barroso’s letter, commissioning the report,
asked that he ‘look at how the market and the social dimensions of an
integrated European economy can be mutually strengthened’…
The Monti Report was issued on 9 May 2010, which identifies the three
following needs:
- for a stronger internal market
- for a general and shared consensus on the single market and
- for better regulation of the market
In this context, he sees ‘transnational labour migration’ within the EU as
vital and wishes to counter obstacles to full development of free movement
of labour: linguistic, cultural, family-based, administrative etc. He accepts
that the Viking and Laval case law has ‘the potential to alienate from the
Single Market and the EU a segment of public opinion, workers’ movements
and trade unions, which has been over time a key supporter of economic
integration’ (p. 68).
His proposals are aimed at seeking balance….
Reform of the PWD
Reform of the Posted Workers’ Directive: (p. 70)
- reduce ‘the space for ambiguities in the
interpretation and implementation’
- facilitate access to information, strengthen
cooperation between national administrations and
better sanction abuses
- intensify ‘the fight against “letter box companies”
- strengthen ‘posted workers’ access to legal remedies
against abuses of their rights in the host countries’
Sarah Clarkson to discuss further …
‘Protecting the rights of workers,
rejecting protectionism’
This is the ‘balance’ proposed by Monti (at pp.70-72) which is to have two
components:
1. a provision to guarantee the right to strike modelled on Art. 2 of Council
Regulation (EC) No. 2679/98 (Monti I Regulation)
2. a mechanism for the informal solutions of labour disputes concerning
application of the Posted Workers’ Directive 2006/123
Problems with these solutions:
•
A differently worded provision for protection of labour rights was included in
the Services Directive. Monti refers to Art. 1(6), but surely what is relevant
is Art. 1(7): ‘This Directive does not affect the exercise of fundamental
rights as recognised in the Member States and by Community law. Nor does
it affect the right to negotiate, conclude and enforce collective agreements
and to take industrial action in accordance with national law and practices
which respect Community law.’ This places the right to strike subject to
Community law… will this have the rebalancing effect that Monti intends?
•
What role would the ‘informal solutions of disputes’ mechanism have on the
issue of ‘proportionality’ in terms of the union’s ability to take lawful
industrial action? How could this be reconciled with Art. 153(5) TFEU?
The draft Monti II Regulation
Art. 2: equating fundamental social rights and economic freedoms
(1)‘The exercise of the fundamental right to take collective action… should
fully respect the economic freedoms enshrined in the Treaty… and
conversely, the exercise of these economic freedoms shall fully respect
fundamental social rights. No primacy exists between the two.’
Cf. ECHR (as to be discussed by John Hendy) and issue of uncertainty:
injunctions and chilling effects
(2) enshrines principle of ‘proportionality’: ‘In specific circumstances, the
exercise of the right to take collective action may have to be reconciled with
the requirements relating to the rights and economic freedoms enshrined in
the Treaty, in particular the freedom of establishment and to provide
services cross border, in accordance with the principle of proportionality.’
(No Albany immunity for free movement… note restrictive interpretation of
‘proportionality’ in Viking NOT corrected here.)
(3) ‘When cross-border elements are lacking or theoretical…’ a presumption
arises that economic freedoms are not relevant and that therefore collective
action is lawful under EU law – but presumption ‘is rebuttable’ – HOW?
Problem of injunctions…
Supplementary aspects of draft
Monti II
Art. 3: National courts to assess objectives and ‘proportionality’
Art. 4: Alternative dispute resolutions to be decided by national
member states, as otherwise a violation of Art. 153(5) TFEU (as
admitted by Commission in introduction to draft)
Art. 5: Alert mechanism
(1) onus on Member States to ‘immediately inform and notify
other Member States and the Commission
(2) Member State concerned ‘shall take all necessary and
proportionate measures to remedy the situation and inform the
Commission of its actions…’
(3) Member State concerned is to ‘respond as soon as possible to
all requests for information from the Commission and other
Member States concerning the nature of the threat or obstacle and
the action which it has taken or proposes to take …
(4) The Commission may propose additional measures if
necessary…
Can Art. 3 and Art. 5 be reconciled?
Antagonistic to collective action?!
Monti II – as at March 2012
There is ongoing dispute over the terms of a
Monti II Regulation.
The release date for both Monti II and the
revised PWD has repeatedly been put back,
with ILO representatives speaking to the
European Parliament last week.
The date for formal publication is now 17
March 2012… The final text should be
available to discuss on 21 March…