The Novel Viking/Laval? Ag Wahl Argues That Requirement For Prior Authorization Of Collective Redundancies Breaches Article 49 Tfeu
November 23, 2018
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Menelaos Markakis⃰
⃰ DPhil Candidate, University of Oxford. Academy of Athens in addition to Modern Law Review scholar.
The Advocate-General’s recent opinion inwards CJEU Case C-201/15 AGET Iraklis is both interesting intellectually in addition to important politically. AGET Iraklis, which is a subsidiary of LafargeHolcim, is active inwards the fields of manufacturing, distribution in addition to marketing of cement in addition to has iii plants inwards Greece. As the structure sector took a heavy blow from the economical crisis, AGET Iraklis’ sales plummeted in addition to the companionship sought to reorganise its business. Under Greek law, a companionship seeking to send out collective redundancies has to consult amongst the workers’ representatives prior to taking action. It was disputed during the hearing whether the companionship had indeed done so. More importantly, the Minister of Labour is given the powerfulness to extend the deadline for such consultations or to decline to authorise closed to or all of the projected redundancies. It was the exercise of the latter powerfulness yesteryear the Greek Minister of Labour which gave rising to the dispute inwards the master copy proceedings (Greek Council of State (Fourth Chamber) Decision no 1254/2015).
Baca Juga
- From Austerity Dorsum To Legitimacy? The European Pillar Of Social Rights: A Policy Brief
- Case C-201/15 Aget Iraklis: Tin Governments Command Volume Layoffs Past Times Employers? Economical Freedoms Vs Labour Rights
- From Austerity Dorsum To Legitimacy? The European Pillar Of Social Rights: A Policy Brief
The companionship sought to struggle that the impugned national dominion was non compatible amongst Council Directive 98/59/EC on the approximation of the laws of the Member US relating to collective redundancies in addition to Articles 49 (freedom of establishment) in addition to 63 (free movement of capital) of the TFEU. The Greek Council of State, which is inwards many ways the supreme administrative courtroom of the land, asked the CJEU whether the contested dominion contravened the aforementioned rules in addition to inwards illustration the respond to the preceding query was inwards the affirmative, whether it could perhaps live on justified ‘if at that topographic point [were] serious social reasons, such equally an shrewd economical crisis in addition to rattling high unemployment’.
The Advocate General opinion
AG Wahl delivered his opinion on the illustration on ix June 2016. He argued that the impugned national dominion was ‘wholly unconnected’ to Directive 98/59, insofar equally that directive ‘[did] non regulation the employer’s liberty (or lack thereof) to upshot collective redundancies’. As such, Directive 98/59 did non preclude, said he, the enactment of the contested provision (paras 23-34 of the opinion).
As regards European Union primary law, AG Wahl opted to examine the contested national dominion from the standpoint of the liberty of institution (paras 35-45). He argued that a requirement for prior authorisation of collective dismissals constituted a restriction on liberty of institution (para 47). ‘Indeed, inwards the master copy proceedings the dominion at number limits an employing undertaking’s liberty to brand collective redundancies since, unless the dominion is complied with, those redundancies volition live on invalid. Such a dominion thus direct interferes amongst the internal organisation of undertakings in addition to amongst the direction of their staff, perhaps exposing undertakings to the adventure of operating at a loss.’ He farther argued that Article 49 TFEU should live on interpreted inwards the low-cal of Article sixteen of the European Union Charter of Fundamental Rights (freedom to behaviour a business) in addition to that the impugned national dominion restricted the exercise of the latter liberty (paras 49-50).
The Greek Government sought to struggle that the contested dominion was justified on the Earth of the protection of workers, which is an overriding requirement inwards the populace interest. The impugned police line provides that applications to send out collective dismissals are to live on considered on the footing of the next criteria: ‘the weather condition inwards the labour market’; ‘the province of affairs of the undertaking’; in addition to ‘the interests of the national economy’. Authorisation is a status for the validity of the redundancy measures.
AG Wahl argued (para 66) that the interests of the national economic scheme ‘involve[d] a purely economical objective which [could not] justify restricting the liberty of institution (nor the liberty to behaviour a business)’. As regards the weather condition inwards the labour marketplace in addition to the province of affairs of the undertaking, these criteria were, said the Advocate General, ‘neither appropriate for achieving the objective of protecting workers, nor limited to what [was] strictly necessary inwards society to accomplish that objective’ (para 67).
As regards the weather condition inwards the labour market, AG Wahl noted that, inwards the trial of an administrative refusal to authorise the planned redundancies, the workers would fare fifty-fifty worse, since ‘that task would receive got a clear incentive to commence proceedings for its dissolution in addition to winding-up, later which it would no longer live on leap yesteryear Directive 98/59 … and, presumably, would non receive got the funding required to remunerate the workers concerned inwards the trial that the dominion at number were to maintain to apply to such a situation’ (para 68). ‘That would, incidentally, also endanger the jobs of those workers who receive got non been made redundant.’ As such, AG Wahl expressed his ‘doubts’ equally to whether ‘the dominion at number powerfulness contribute, inwards whatever meaningful way, to lowering the unemployment rate’. In whatever event, this measure was non suitable, said he, for achieving the objective pursued, equally ‘it [did] non remedy the problems which [had] made the occupation province of affairs of the workers concerned uncertain’ in addition to essentially ‘amount[ed] to denying the employers’ correct to terminate an occupation human relationship on the Earth that it [was] to a greater extent than oft than non not desirable to receive got to a greater extent than unemployed persons’ (para 69).
As regards the possibility to rely on the province of affairs of the task for the purposes of blocking collective dismissals, AG Wahl noted that the contention that the government of a Member State powerfulness live on amend suited than the direction of that task to decide what is well-nigh appropriate inwards its province of affairs struck him equally ‘nothing less than remarkable’ (para 70). ‘At whatever rate, I produce non discovery it appropriate to protect workers yesteryear letting an authorization overrule the line of piece of work concern decisions ultimately taken yesteryear the employing undertaking.’ He added that:
Moreover, equally argued yesteryear the Company, the statutory criteria are unclear in addition to afford excessively wide discretion to the administration, to the detriment of the legal certainty of the employers. This, inwards fact, appears to frustrate from the outset whatever possible attempts at reaching a friendly village betwixt the employers in addition to the workers yesteryear doing away amongst the demand for negotiations – equally witnessed inwards the affair nether consideration. An choice powerfulness receive got consisted inwards listing the types of dismissals considered to live on unjustified, equally inwards the illustration of the listing which appears inwards paragraph 3 of the department of the Appendix to the Social Charter relating to Article 24 thereof (para 71).
Furthermore, the Greek Government failed to show, said the Advocate General, that the impugned mensurate complied amongst the regulation of proportionality, nor did it furnish inwards his thought specific show substantiating the arguments raised (para 72). He added that:
Indeed, yesteryear restricting the employer’s powerfulness to dismiss the workers collectively, the dominion at number precisely gives the impression of beingness protective of workers. To get with, that protection is exclusively temporary until the employer becomes insolvent. Even to a greater extent than importantly, workers are best protected yesteryear an economical surroundings which fosters stable employment. Historically speaking, the thought of artificially maintaining occupation relationships, inwards spite of unsound full general economical foundations, has been tested in addition to has utterly failed inwards for sure political systems of yesteryear. That provides confirmation that, inwards laying downward an effective yet flexible protective procedure, Directive 98/59 affords genuine protection for workers, whereas a scheme of prior authorisation such equally that at issue, which tellingly falls exterior its scope, does non (para 73).
As such, the Advocate General concluded that the impugned dominion was non suitable for the attainment of the objective pursued in addition to that, inwards whatever event, it went beyond what was necessary to accomplish that role (para 76). Moreover, ‘the presence of an shrewd economical crisis accompanied yesteryear odd in addition to extremely high unemployment rates’ was said to live on incapable of justifying the impugned restriction (para 77). This was, said the AG, because ‘[t]hose circumstances, although clearly rattling serious, [could not] justify restricting the freedoms of institution in addition to to behaviour a line of piece of work concern when the statutory criteria [could not] produce so on their own’; ‘an shrewd economical crisis in addition to rattling high unemployment rates amount[ed] inwards themselves – at to the lowest degree inwards business office – to purely economical factors’; ‘the socio-economic effects resulting from collective redundancies [were] felt inwards a given local context in addition to social environment, non at the national level’; in addition to ‘there [was] no ground to believe that a severe economical crisis would non behave upon businesses precisely equally much equally workers’ (paras 78-79). The AG farther noted that ‘as the Commission state[d], inwards times of crisis, it [was] precisely equally of import to trim down all the factors which deter[red] novel undertakings from investing, equally economical efficiency [might] aid get task creation in addition to economical growth’ (para 80). ‘That, I presume, is the ground why Greece, equally a status for the fiscal assistance provided yesteryear the European Stability Mechanism, accepted to “undertake rigorous reviews in addition to modernisation of collective bargaining, industrial activeness and, inwards line amongst the relevant European Union directive in addition to best practice, collective dismissals, along the timetable in addition to the approach agreed amongst the Institutions. On the footing of these reviews, labour marketplace policies should live on aligned amongst international in addition to European best practices, in addition to should non involve a homecoming to yesteryear policy settings which are non compatible amongst the goals of promoting sustainable in addition to inclusive growth”.’
Commentary
The AGET Iraklis illustration arose from the Greek crisis in addition to gave rising to the showtime Article 267 TFEU preliminary reference from the Greek Council of State to the CJEU inwards this context. Although the impugned dominion was non used equally a ‘vehicle’ for indirectly challenging the bailout price agreed betwixt Hellenic Republic in addition to its creditors, the illustration could yet live on said to cast business office of a grouping of cases brought earlier the CJEU concerning the legality of national economical policy measures that were enacted inwards reply to the economical crisis. These include the Romanaian MoU cases (Cases C-434/11, C-462/11, C-134/12, in addition to C-369/12); the Portuguese MoU cases (Cases C-128/12, C-264/12 in addition to C-665/13); a pair of Greek cases concerning a Council determination adopted inside the framework of the excessive deficit physical care for (Cases T-541/10 in addition to T-215/11); in addition to a number of cases arising from the Cypriot banking crisis (Case T-327/13; opinion inwards Joined Cases C-8/15 P, C-9/15 P in addition to C-10/15 P; opinion inwards Joined Cases C-105/15 P to C-109/15 P; encounter comments yesteryear René Smits).
There is no dubiety that the impugned national dominion inwards AGET Iraklis powerfulness hinder or homecoming less attractive the exercise of the liberty of establishment, which includes the correct of deviation from a Member State. It powerfulness farther constitute a restriction on the liberty to behaviour a line of piece of work concern which is enshrined inwards Article sixteen of the European Union Charter. The application of the Charter is triggered insofar equally Hellenic Republic could live on said to derogate from the liberty of establishment. The human relationship betwixt the liberty to behaviour a line of piece of work concern in addition to workers’ rights is clearly complex (see the report yesteryear the European Union Agency for Fundamental Rights, Freedom to Conduct a Business: Exploring the Dimensions of a Fundamental Right (pages 9-10), in addition to exigencies of infinite forestall detailed analysis of this. However, it should live on noted inwards this connection that Article sixteen of the Charter tin live on in addition to indeed is used yesteryear corporations to challenge diverse regulatory requirements which are seen to stand upward inwards their way, equally evidenced yesteryear the factual background to the recent Lidl judgment (in which the declaration was unsuccessful).
The Court rulings inwards Viking Line in addition to Laval ready the stair for the human relationship betwixt cardinal economical freedoms, on the 1 hand, in addition to collective labour rights, on the other. Depending on what the Court’s ruling volition be, AGET Iraklis powerfulness equally good presently cast business office of this grouping of cases in addition to could also live on said to live on linked to the Court’s ruling inwards Alemo-Herron. The reader powerfulness perhaps live on struck yesteryear the tone of the AG opinion, but the reality is that the AG undertakes a careful in addition to balanced analysis of the relevant noun issues. This is perforce conjecture, but the Court powerfulness equally good follow the AG opinion, albeit amongst slightly dissimilar wording.
Taking a stair dorsum from the pressing legal questions facing the Court inwards the AGET case, it is clear that the applicant inwards the master copy proceedings was caught betwixt a stone in addition to a hard place. Construction activity had come upward to a grinding halt, but AGET Iraklis failed to obtain the requisite ministerial authorisation in addition to thence could non send out collective dismissals, which were a vital business office of its restructuring plan. It could exclusively lay off its workers at a stair which would non live on caught yesteryear the national rules on collective dismissals, but the lay-offs inwards 1 of its plants were reportedly found yesteryear lower courts to live on invalid. On the other hand, the workers that would receive got been affected yesteryear the actions of the companionship would receive got been left without a task inwards a province where the unemployment charge per unit of measurement was, according to the society of reference, 27.3% inwards 2013. The charge per unit of measurement for 2014 was 26.5% (note 25 of the opinion), which was clearly non much amend either.
It is of import to banknote that the AG thought leaves closed to ambit for a to a greater extent than ‘balanced’ dominion which would non undermine the effectiveness of prior consultations (para 71 of the opinion).[i] What is yet noteworthy is that the AG concluded his thought amongst reference to the bailout price agreed betwixt Hellenic Republic in addition to its creditors. Had the Court been asked to dominion on the validity of these price from the standpoint of European Union law, it would receive got in all likelihood declined jurisdiction, equally it did inwards the Romanaian in addition to Portuguese MoU cases. It remains to live on seen whether ‘two-pack’ legislation volition receive got an impact inwards this respect. Be that equally it may, the indicate of contestation inwards AGET Iraklis powerfulness presently travel moot, equally the relevant number volition live on negotiated betwixt Hellenic Republic in addition to its creditors inwards the instant review of the ongoing ESM programme inwards the autumn of 2016.
Further reading:
On the legality of national economical measures on the economical crisis: encounter e.g., Federico Fabbrini, Economic Governance inwards Europe: Comparative Paradoxes in addition to Constitutional Challenges (OUP 2016) ch 2; Alicia Hinarejos, The Euro Area Crisis inwards Constitutional Perspective (OUP 2015) ch 8; Anastasia Karatzia (presenter) in addition to Theodore Konstantinidis, ‘Who Is Responsible? The Issue of Liability inwards the Context of European Union Macroeconomic Adjustment Programmes in addition to Austerity Measures’ (FIDE Doctoral Conference, Budapest, xviii May 2016).
On economical freedoms in addition to labour rights, encounter particularly, from the copious literature, Mark Freedland in addition to Jeremias Prassl (eds), Viking, Laval in addition to Beyond (Hart Publishing 2015).
For detailed give-and-take of the legal character of the bailout price in addition to the ambit of application of the European Union Charter, encounter Catherine Barnard, ‘The Charter, the Court – in addition to the Crisis’ (2013) University of Cambridge Faculty of Law Legal Studies Research Paper 18/2013; Paul Craig, ‘The Eurogroup, Political Power in addition to Accountability’ (Governing Finances inwards Europe: Shifting Regimes in addition to Shifting Powers conference, Uppsala, 27-28 May 2016); Alicia Hinarejos (above) 131-36; Claire Kilpatrick, ‘Are the Bailouts Immune to European Union Social Challenge Because They Are Not European Union Law?’ (2014) 10 EuConst 393; Koen Lenaerts, ‘Exploring the Limits of the European Union Charter of Fundamental Rights’ (2012) 8 EuConst 375; Steve Peers, ‘Towards a New Form of European Union Law? The Use of European Union Institutions exterior the European Union Legal Framework’ (2013) ix EuConst 37, 51-53; Napoleon Xanthoulis, ‘The Participation of Union Institutions inwards the European Stability Mechanism: Between International Law Competences in addition to European Union Treaties Restrictions’ (Jean Monnet Doctoral Workshop, City University of London, 23-24 June 2016).
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