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Towards More Resilience for a Social EU – the Constitutionally Conditioned Internal Market

Published online by Cambridge University Press:  02 November 2017

Dagmar Schiek
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Abstract

Gap between the EU’s normative commitments to socio-economic justice and the practical workings of its integration project -- Potential for strengthening the social EU by recourse to the Charter of Fundamental Rights of the European Union – Charter normatively commits EU to a constitutionally conditioned Internal Market – Charter curbs property rights and entrepreneurial freedom specifically for the sake of social rights guarantees – Constructive response to legitimacy dilemmas emerging from cases such as Laval, Viking and AGET Iraklis – Reinstating socially embedded constitutionalism at EU levels as an alternative to relegating social integration to national levels

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Articles
Information
European Constitutional Law Review , Volume 13 , Issue 4 , December 2017 , pp. 611 - 640
Copyright
Copyright © The Authors 2017 

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Footnotes

*

Professor of Law, Queen’s University Belfast ([email protected]). This paper profited from reflections with other contributors to D. Schiek et al., EU Social and Labour Rights and EU Internal Market Law (European Parliament 2015), specifically Chris Forde, Liz Oliver, Michael Doherty, Kerstin Ahlberg, Consuelo Chacartegui Javega, discussion at the ETUI’s 2016 NETLEX conference, feedback by Dora Kostakopoulou (on presenting the full concept at the 2016 CES in Philadelphia), by Gordon Anthony, as well as by the referees and editors. The usual disclaimer applies.

References

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20 Ibid., p. 11.

21 These comprise the break-down of the Bretton Woods compromise through abandoning a global regime of currency coordination regulation of currency relations (see for a brief summary with further references Schiek, supra n. 10, p. 16-17), on the contribution of EU level economic integration to dismantling the preconditions of the practical emanation of embedded liberalism by the EEC see Hermann, Ch., ‘Crisis, structural reform and the dismantling of the European Social Model’, 35 Economic and Industrial Democracy (2014) p. 51 Google Scholar.

22 Abdelal, R. and Ruggie, J.G., ‘The Principles of Embedded Liberalism: Social Legitimacy and Global Capitalism’, in D. Moss and J. Cisernino (eds.), New Perspectives on Regulation (The Tobin Project 2009) p. 151 Google Scholar at p. 157, 159.

23 See Giubboni, St., Social Rights and Market Freedom in the European Constitution. A Labour Law Perspective (Cambridge University Press 2006)CrossRefGoogle Scholar.

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27 Schiek, supra n. 24.

28 Scharpf, , ‘The European Social Model: Coping with Challenges of Diversity’, 40 Journal of Common Market Studies (2002) p. 645 CrossRefGoogle Scholar.

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30 See, for more detail, Schiek, supra n. 10, p. 230-232.

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32 Joerges, Ch., ‘Rethinking European Law’s Supremacy: A Plea for a Supranational Conflict of Laws’, in B. Kohler-Koch and B. Rittberger (eds.), Debating the Democratic Legitimacy of the European Union (Rownan & Littlefield 2007) p. 311 Google Scholar, Dawson, M. and de Witte, F., ‘From Balance to Conflict: A New Constitution for the EU’, 22 European Law Journal (2016) p. 204 CrossRefGoogle Scholar.

33 Scharpf, F., ‘Legitimacy in the Multilevel European Polity’, 1 European Political Science Review (2009) p. 173 CrossRefGoogle Scholar.

34 This is implicitly linked to the assumption that EU citizens would not develop sufficient levels of transnational solidarity to construe an EU level social model (see Joerges, supra n. 26, p. 440).

35 Grimm, D., Europa ja - aber welches? (Beck, 2016)CrossRefGoogle Scholar chs. I, II and IV; for a critical assessment see NN (Editorial Comments), ‘A way to win back support for the European project?’, 54 CMLR (2017) p. 1.

36 Garben, supra n. 1.

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39 Weiler, J., ‘In defence of the status quo: Europe’s constitutional Sonderweg’, in J. Weiler and M. Wind (eds.), European Constitutionalism beyond the State (Cambridge University Press 2003) p. 7 Google Scholar. This is now referred to as the ‘Argument from Transnational Effects’ (A. Somek, ‘The Argument from Transnational Effects I: Representing Outsiders through Freedom of Movement’, 16 European Law Journal (2010) p. 315; Mulder, supra n. 25, p. 600-620, and harks back to classical expositions of the Court’s development of EU Internal Market Law (e.g. M. Poaires Maduro, We the Court (Hart Publishing 1998)).

40 See, for a summary of my deliberations on this so far, Schiek, D., ‘A constitution of social governance for the European Union’, in N. Ferreira and D. Kostakopoulou (eds.), The Human Face of the European Union (Cambridge University Press 2016) p. 17 CrossRefGoogle Scholar.

41 This is a consequence of the principled indeterminacy of any law. Notwithstanding profound differences in detail, there is some agreement between linguists, positivists and different jurisprudential schools. Linguists agree on the existence of imbued meaning and the necessity of drawing on circumstantial knowledge when understanding textual language, which is also the starting point of critical discourse analysis (Th. van Leeuwen, ‘Discourse as Recontextualisation of Social Practice: A Guide’, in R. Wodak and M. Meyer (eds.), Methods of Critical Discourse Analysis (Sage 2009) p. 144 at p. 147). Positivist legal theorists acknowledge the open texture of law as described above (H.L.A. Hart, The Concept of Law, with a postscript by Penelope Bulloch and Joseph Raz, 2nd edn (Oxford University Press 1997) p. 118 at p. 123-126), including ‘uncertainty’ (Hart) or judicial discretion and choice (D. Leczykiewicz, ‘Why Do the European Court of Justice Judges Need Legal Concepts?’, 14 European Law Journal (2008) p. 773 at p. 774); from the perspective of a former constitutional court judge see Grimm, supra n. 35, p. 8.

42 On models for judicial deliberation see Gerstenberg, O. ‘Negative/positive constitutionalism, “fair balance,” and the problem of justiciability’, (10) Int J Const Law (2012) p. 904 Google Scholar; see also de Witte, B., ‘Democratic Adjudication in Europe – How Can the European Court of Justice be Responsive to the Citizen?’, in M. Dougan, N. Nic Shuibhne and E. Spaventa (eds.), Empowerment and Disempowerment of the European Citizen (Hart Publishing 2012)Google Scholar.

43 See, on the term, Schiek, supra n. 10, at p. 235-237.

44 For the European Court of Justice, see for example Sweet, A. Stone, ‘The European Court of Justice and the judicialization of EU governance’, 5 Living Reviews in European Governance (2010) p. 7-9 Google Scholar; see also Bengoetxea, J. et al., ‘Integration and Integrity in the Legal Reasoning of the European Court of Justice’, in G. de Burca and J. Weiler (eds.), The European Court of Justice (Oxford University Press 2001) p. 43 CrossRefGoogle Scholar, who question whether a clear line between law and politics really exists, as the critique of the Court’s activism asserts.

45 Text surrounding nn. 15-17.

46 For more detail see Tuori, supra n. 11, p. 146-330; Schiek, supra n. 10, p. 79-112.

47 ECJ 4 June 2009 C-142/05 Åklagaren v Percey Mickelsson (Watercrafts), 10 February 2009 C-11/05 Com v Italy (Trailers).

48 See Joerges, supra n. 34, p. 419-421; for an extended analysis of ordo-liberal thinking, see Tuori, supra n. 11, p. 143-148.

49 See Schiek, supra n. 10, p. 23, on principles countering a constitution only based on economic liberties for entrepreneurs. For a recent exposition of the economic neutrality of the Treaties see Kaupa, supra n. 12; see also Tuori, supra n. 11, p. 162-185.

50 See, on the lack of a critical alternative to ordo-liberal thought in this area, Tuori, supra n. 11, p. 171-175. For an early discussion of the interaction of free movement and competition with some coverage of social policy, see Cruz, J. Bacquero, Between Competition and Free Movement (Hart 2002)Google Scholar, partial coverage on social services of general interest by U. Neergaard et al. (eds.), Social Services of General Interest in Europe (Springer 2013), on the higher education sector, see Gideon, A., Higher Education Institutions in the EU: Between Competition and Public Service (Springer 2017)CrossRefGoogle Scholar. Some aspects of competition law are also covered in Schiek et al., supra n. 7, p. 90-91.

51 The imbalance is not quite as dramatic as portrayed by authors such as Scharpf, Joerges, Höppner and Schaefer though – see for analyses of swathes of case law Schiek, supra n. 21, p. 113-214 (content analysis of all 144 Grand Chamber rulings on the EU’s economic and social constitution between 2004 and 2011 from socio-legal perspectives), Martinsen, D. Sindbjerg, An Ever More Powerful Court? The Political Constraints of Legal Integration in the European Union (Oxford University Press 2015)CrossRefGoogle Scholar, screening 1025 ECJ rulings on social policy since 1959 while analysing the impact of case law on social policy from political science perspectives.

52 Tuori, supra n. 11.

53 Kilpatrick, C. and de Witte, B., Social Rights in Times of Crisis in the Eurozone: The Role of Fundamental Rights Challenges (European University Institute 2014)Google Scholar.

54 Ashiagbor, supra n. 29; St. Evju (ed.), Cross-Border Services, Posting of Workers and Multilevel Governance, (University of Oslo 2013); Hermann, supra n. 21; Höpner and Schäfer, supra n. 29; Scharpf, F.W., ‘Das Dilemma der supranationalen Demokratie in Europa’, 43 Leviathan (2015) p. 11 CrossRefGoogle Scholar.

55 Discussed further below.

56 See Kaupa, supra n. 12.

57 Schiek, supra n. 7.

58 Proposal for a (sic) Interinstitutional Proclamation for a European Pillar of Social Rights of 26 April 2016, COM (2017) 251 final.

59 The Great Transformation (Beacon Press 1957 (first published 1944)). For a revival for positive visions of EU integration, see Caporaso, J.A. and Tarrow, S., ‘Polanyi in Brussels: Supranational Institutions and the Transitional Embedding of Markets’, 63 International Organization (2009) p. 593 CrossRefGoogle Scholar; for more critical views see Joerges, Ch. and Falke, J. (eds.), Karl Polanyi, Globalisation and the Potential of Law in Transitional Markets (Hart Publishing 2011)Google Scholar.

60 Joerges, Ch., Between Jürgen Habermas and Carl Schmitt: Flaws old and new in the project of European Integration (Hertie School of Governance 2013)Google Scholar.

61 Hodgson, G., ‘Karl Polanyi on economy and society: a critical analysis of core concepts’, Review of Social Economy (2016) p. 1 Google Scholar.

62 See above text to nn. 18-22.

63 Habermas, J., Between Facts and Norms (Polity Press 1996) p. 66-78 CrossRefGoogle Scholar; Silver, H., ‘The Social Integration of Germany since Unification’, 28 German Politics and Society (2010) p. 165 CrossRefGoogle Scholar; Trenz, H.-J., ‘Social Theory and European Integration’, in A. Favell and V. Guiraudon (eds.), Sociology of the European Union (Palgrave MacMillan 2011) p. 193 CrossRefGoogle Scholar.

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66 See Schiek, D., ‘Fundamental Rights Jurisprudence between Member States’ Prerogatives and Citizens’ Autonomy’, in H. Micklitz and B. de Witte (eds.), The European Court of Justice and the Autonomy of Member States (Intersentia 2012) p. 219 Google Scholar at p. 220-227.

67 The approach differs from Olivier de Schutter’s proposal to provide for an external constitutionalisation of the EU’s social dimension by the European Charter of Social Rights (‘The European Social Charter at the Social Constitution of Europe’, in N. Bruun (ed.), The European Social Charter and Employment Relations (Hart Publishing 2017) p. 11. It shares the common aspiration of constitutionalising the Internal Market, but provides a more optimistic assessment of the Charter with regard to social rights guarantees. Neither is it limited to an observation of the Court’s use of the Charter in its Internal Market case law (see on this N. Nic Shuibhne, ‘Fundamental rights and the framework of internal market adjudication: is the Charter making a difference?’, in P. Koutrakos (ed.), Research Handbook on European Internal Market Law (Edward Elgar 2017) p. 215).

68 Jääskinnen, N., ‘Fundamental Social Rights in the Charter - Are They Rights? Are They Fundamental?’, in S. Peers et al. (eds.), The EU Charter of Fundamental Rights: A Commentary (Hart 2014) p. 1703-1724 Google Scholar; Lazarus, L. et al., The Evolution of Fundamental Rights, Charters and Case Law (European Parliament 2011)Google Scholar. The contrasting view that economic freedoms and human rights are now co-original (S. de Vries, ‘The Protection of Fundamental Rights within Europe’s Internal Market after Lisbon - An Endeavour for More Harmony’, in S. de Vries et al. (eds.), The Protection of Fundamental Rights in the EU After Lisbon (Hart 2013) p. 57) is not convincing, although it is reflected in the ECJ’s post Lisbon case law (Nic Shuibhne, supra n. 67, p. 234 in particular).

69 See Lazarus et al., supra n. 68, p. 34-37.

70 Dupré, C., ‘Article 1 - Human Dignity’, in S. Peers et al. (eds.), The EU Charter of Fundamental Rights. A Commentary (Hart 2014) p. 2-24 Google Scholar.

71 Lazarus et al., supra n. 68; Veldman, A. and de Vries, S., ‘Regulation and enforcement of economic freedoms and social rights: a Thorny Distribution of sovereignty’, in T. van den Brink, M. Luchtman and T. Scholten (eds.), Sovereignty in the Shared Legal Order of the EU (Intersentia 2013) p. 65 Google Scholar at p. 91.

72 ECJ 4 July 2013, Case C-233/12, Gardella, para. 39.

73 ECJ 30 April 2014 C-390/12 Pfleger, para. 57.

74 On the parallel application of freedom of establishment and Art. 16 TFEU, see ECJ 13 February 2014, Case C-367/12, Sokoll-Seebacher, para. 22, as well as ECJ 21 December 2016, Case C-201/15 Anonymi Geniki Etairia Tsimenton Iraklis (AGET Iraklis) v Ypourgos Ergasisa Koinonikis Asfalsis kaiKoinoniikis Allilengysi, discussed below.

75 ECJ 22 February 2002, Case C-94/00, Roquette Frères SA para. 22-29, confirmed in ECJ 16 May 2017, C-682/15, Berlioz Investment Fund, para. 51.

76 ECJ 17 December, Case 157/14, Neptune Distribution SNC, para. 67.

77 ECJ 1 March 2011, Case C-239/09, Association Belge des Consommateurs Test-Achats ASBL and Others v Conseil des ministres, para. 17.

78 On this see Schiek, supra n. 10, p. 225-227.

79 In summary see Schiek, D., ‘The EU’s socio-economic model(s) and the crisi(e)s - any perspectives?’, in D. Schiek (ed.), The EU Economic and Social Model in the Global Crisis (Ashgate 2013) p. 8-30 Google Scholar.

80 Mutual maximisation is an established principle of constitutional law, inter alia referred to as the optimisation principle (R. Alexy, A Theory of Constitutional Rights (Oxford University Press 2002)) and praktische Konkordanz (M. Schladebach, ‘Praktische Konkordanz als verfassungsrechtliches Kollisionsprinzip’, 53 Der Staat (2014) p. 263).

81 ECJ 18 June 1991, C-260/89, Elliniki Radiophonia Tiléorassi AE and Panellinia Omospondia Syllogon Prossopikou v Dimotiki Etairia Pliroforissis et al. This line of reasoning has been reaffirmed in ECJ 30 April 2014, C-390/12, Pfleger, para. 35-36.

82 Shuibhne, N. Nic, ‘The Court of Justice and fundamental Rights: if margin of appreciation is the solution, what is the problem?’, in O. Mjöll Arnardóttir (ed.), Shifting Centres of Gravity in Human Rights Protection (Routledge 2016) p. 137 Google Scholar at p. 148.

83 Whether this regulation must be brought about by public actors such as the EU or its Member States, or whether scope must be left for social governance is not the theme of this paper. On this see Schiek, supra n. 40.

84 The ‘quartet’ consists of ECJ 17 December 2007, Case C-341/05 Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet, Svenska Byggnadsarbetareförbundets avdelning 1; ECJ 11 December 2007, Case C-438/05 Viking; ECJ 3 April 2008, Case C-346/06, Rüffert v Land Niedersachsen and ECJ 19 June 2008, Case C-319/06, Commission v Luxembourg. On some follow up cases, which do not revisit the conflict between collective labour rights and economic freedoms pursued here, see Pecinovsky, P., ‘Evolutions in the Social Case Law of the Court of Justice’, 7 European Labour Law Journal (2016) p. 294 CrossRefGoogle Scholar, and Schiek et al., supra n. 7, p. 41-45.

85 Supra n. 74.

86 E.g. Barnard, C. and Deakin, S., ‘European Labour Law after Laval’, in M.-A. Moreau (ed.), Before and After the Economic Crisis. What Implications for the European Social Model (Edward Elgar 2011) p. 252-269 Google Scholar; Freedland, M. and Prassl, J. (eds.), Viking, Laval and Beyond (Hart 2015)Google Scholar; Supiot, A., ‘Under Eastern Eyes’, 73 New Left Review (2013) p. 29 Google Scholar; for more details and further references see Schiek, supra n. 10, p. 133-135, 164-168, 206-207, Schiek et al., supra n. 7, p. 31-32, 36, 41.

87 ECJ 12 December 1974, Case 36/74, B.N.O. Walrave and L.J.N. Koch v Association Union cycliste internationale, Koninklijke Nederlandsche Wielren Unie and Federación Española Ciclismo, para. 18.

88 ECJ 9 December 1997, Case C-265/95, COM v France (Strawberries).

89 Orlandini, G., ‘The free movement of goods as a possible “Community” limitation on industrial conflict’, 6 European Law Journal (2000) p. 341 CrossRefGoogle Scholar.

90 Both supra n. 84.

91 One could doubt whether the transnational element in this case was sufficient for triggering Art. 56 TFEU, see Deakin, S., ‘Regulatory Competition after Laval’, 10 Cambridge Yearbook of European Legal Studies (2007-2008) p. 581 CrossRefGoogle Scholar.

92 See the careful analysis by Woolfson, and Sommers, , ‘European Mobility in Construction’, 12 European Journal of Industrial Relations (2006) p. 54 Google Scholar.

93 Directive 96/71/EC of 16 December 1996 concerning the posting of workers in the framework of the provision of services, [1996] OJ L 018, 21.01.1997.

94 The ILO Committee of Experts on the Application of Conventions and Recommendations expressed concern that Swedish trade unions are barred from taking action in support of their members who work for employers posting them (ILO CEACR, Report 2013, 178); and the potentially deterrent effect of high damages being awarded to employers in cases of infringement of their rights under Art. 49 TFEU by UK courts led to a complaint by the Union and subsequent mentioning of the affair in the report for the ILO (ILO Session 2010, Report III Part I A, p. 209 <www.ilo.org/wcmsp5/groups/public/---ed_norm/---relconf/documents/meetingdocument/wcms_123424.pdf> visited 6 October 2017.)

95 ECtHR 12 November 2008, Case No. 34503/97, Demir and Baykara v Turkey and ECtHR 21 April 2009, Case No. 68959/01, Enerji Yapi-Yol Sen v Turkey. The slightly more restrictive ruling ECtHR, 8 April 2014, App No 31045/10 RMT v United Kingdom still maintained the rule that Art. 11 ECHR guarantees the right to collective bargaining and collective industrial action, though it did not hold the restrictive UK legislation on balloting incompatible with Art. 11 ECHR.

96 As here Veldman, A., ‘The Protection of the Fundamental Right to Strike within the Context of the European Internal Market: Implications of the Forthcoming Accession of the EU to the ECHR’, 9(1) Utrecht Law Review (2013) p. 104 CrossRefGoogle Scholar; see also Barnard, C., ‘Article 28: Right of Collective Bargaining and Action’, in S. Peers et al. (eds.), The EU Charter of Fundamental Rights - A Commentary (Hart 2014) p. 773 Google Scholar, implied at marginal note 12, and F. Dorssemont, ‘Article 12(1) Freedom of Association’, ibid, p. 341, marginal note 14 (suggesting that ‘the right to take collective action is less stringent under the Charter’ than under the ECHR).

97 This has long been recognised in national law, e.g. for Germany by Bundesarbeitsgericht 10.12.2002 case 1 AZR 96/02.

98 See above, text to nn. 80-83.

99 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 (2016) p. 52 CrossRefGoogle Scholar; on the relevance to rely on the Charter (interpreted in the light of international guarantees of social and labour rights) see Schlachter, M., ‘Stärkung sozialer Rechte durch Grundrechtsschutz im europäischen Mehrebenensystem?’, 54 Europarecht (2016) p. 478 CrossRefGoogle Scholar.

100 Supra n. 74; see also M. Markakis, ‘Can Governments Control Mass Layoffs by Employers? Economic Freedoms vs Labour Rights in Case C-201/15 AGET Iraklis’ in this edition of EuConst.

101 The Memorandum of understanding can be accessed at <http://ec.europa.eu/economy_finance/assistance_eu_ms/greek_loan_facility/pdf/01_mou_20150811_en.pdf>; the report of the Expert Group was delivered in September 2016, and is available at <www.capital.gr/Content/RelatedFiles/68/6898c2f55b6f4348828383f331261304.pdf>; see also the opinion by AG Wahl in the case, who supports his final finding with the necessity to ‘reduce all factors which deter new undertakings from investing’ in ‘times of crisis’ (para. 80).

102 Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies (OJ 1998 L 225/16, corrigendum OJ 2007 L 59/84).

103 Para. 44 of the judgment, and 49 of AG Wahl’s Opinion.

104 ECJ 18 July 2013, Case C-426/11, Alemo Herron and Others v Parkwood Leisure Ltd, see Weatherill, S., ‘Use and Abuse of the EU’s Charter of Fundamental Rights: on the improper veneration of freedom of contract’, 10 European Review of Contract Law (2014) p. 157 CrossRefGoogle Scholar; Prassl, J., ‘Freedom of Contract as a General Principle of EU Law? Transfers of Undertakings and the Protection of Employer Rights in EU Labour Law’, 42 Industrial Law Journal (2013) p. 434 CrossRefGoogle Scholar.

105 Art. 63 TFEU was also relied upon, but any impact on investment would only be ancillary to the impact on freedom of establishment and conducting a business (paras. 58-60 of the ruling).

106 See text to nn. 53 and 54.

107 Para. 53 of the judgment, referring to para. 65 of the AG’s Opinion.

108 Para. 54, 55.

109 ECJ 27 January 2000, Case C-190/98, Volker Graf v Filzmoser Maschinenbau GmbH, paras. 24-25.

110 Para. 47 of the judgment.

111 Para. 67 of the judgment, para. 49 of the Opinion, references omitted.

112 Para. 57 of his Opinion.

113 Paras. 71-78.

114 Paras. 73-75.

115 Para. 89.

116 Paras. 96-103.

117 Markakis, supra n. 100).

118 M. Schmitt derives from ECSR case law that only economic difficulties, not a mere change of strategy, can justify collective redundancy, and points to a pending case where the legitimacy of collective dismissal in order to increase profit is questioned (‘Article 24 The Right to Protection in Cases of Termination of Employment’, in N. Bruun (ed.), The European Social Charter and Employment Relation (Bloomsbury 2017) p. 412-438).

119 See Nic Shuibhne, supra n. 67, p. 230-231, with further references.

120 Barnard, C., ‘Restricting Restrictions: Lessons for the EU from the US?’, 68 Cambridge Law Journal (2009) p. 575 CrossRefGoogle Scholar; Garben, supra n. 1, p. 35.