Industrial Relations' Tsunami: What Role for Fundamental Social Rights?

The European Court of Justice decisions in the "Laval" and "Viking" Cases concerning the right to strike and labour rights have caused great concern among EU Member States and Trade Unions. The concern is that the Court has altered the current balance of industrial relations by imposing disproportionate restrictions to the exercise of the employees' fundamental rights. If (almost) everybody recognises the problem, there is no consensus about a possible solution. Member States are pessimistic about the possibility of EU legislation on this matter and seek refuge in national solutions, while Trade Unions call for EU harmonisation.

Last October, the European Commission organised a Forum to discuss the conflict between laws on fundamental rights (among which the right to strike) and economic liberties (notably the freedom of establishment and the free provision of services). This conflict has become obvious after the European Court of Justice judgements in the cases Laval, Viking, Commission vs. Luxembourg and Rüffert.

The above legal cases concerned the legality of industrial actions (Laval and Viking cases), the level of social protection that Member States can impose to posted workers (Commission vs. Luxembourg), and companies participating in tenders for public procurement (Rüffert). The common point to all is the - sometimes conflicting - relation between the social and the economic legislation.

The majority of the participants agreed that the Court rulings have serious negative consequences for the social and industrial relations models of the EU and its Member States. The rulings were criticised for taking only an economic perspective when resolving the conflict of laws, and for restricting the possibilities to exercise fundamental social rights. On the other hand, the participants recognised that the EU and the Court don't yet have the legal basis to take a different decision because the EU Treaty is built around the economic liberties while leaving the industrial relations to the national level.

These legal cases provoked strong political reactions in the concerned Member States. The accession to the EU and ratification of the EU Treaties in Scandinavian countries had been made under the condition that their social models would not be affected by the EU. These countries consider the Court's judgement as an unacceptable interference in their national industrial relations model. However, the new Member States, represented by the Czech labour minister, see it differently. For them it is a battle won against the protectionism of old Member States and an opportunity for the commercial expansion of their companies.

For Trade Unions the Court cases represent an urgent crisis that needs to be resolved now. For them the Court has proclaimed the unlimited exercise of economic freedoms vs. the restricted use of labour rights. Following the Court, what had been previously considered as minimum social rights, have now de facto become the maximum social rights; Member States can no longer impose additional/stricter requirements. The Court therefore opens the door to social dumping within the EU and takes away the trade unions' rights to protect employees.

For the employers' association, the judgement will contribute to a better functioning of the internal market as it recognises the right to industrial action only in a proportionate way, not prevailing over the other economic rights. The notion of proportionality was the centre of the discussions as the Court subordinated the exercise of fundamental social rights to the proportionality of the actions. The way to define proportionality was welcomed by the employers and criticised by the others.

As to the way forward, the prospect is not bright. Most of the participants agreed that joint action at EU level would be the best solution. Alas, all 5 ministers present at this meeting were pessimistic about the success of any harmonised decision by the 27 Member States. Some Member States have established special committees to analyse the way to change their legislation to preserve their industrial relations model. This indicates that the solution to the problem caused by the Rulings is likely to be national rather than harmonised at EU level.

The participants indicated that the ratification of the Lisbon Treaty would improve the situation as it will clarify the status of fundamental rights in the EU legal system. Finally, the participants to the forum stated their conviction - or was it hope? - that the Court would "refine" its jurisprudence in future cases.

In reality, the Forum revealed a profound crisis in Europe. The ministers realise that there is a problem but also admit that they cannot reach an agreement. Europe is paralysed. There is some hope put into the Lisbon Treaty, but the date for its entry into force is far away. Meanwhile, each State tries to solve the issue nationally creating differences between them.