Embedding employment rights in europe

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ARTICLES

EMBEDDING EMPLOYMENT RIGHTS IN EUROPE

Franck Lecomte*

The most recent European employment law saga arising from

Viking, Laval , and subsequent decisions has commonly beenunderstood as perpetuating the infiltration of economic provisions

into labor legislation. It has also been asserted, however, that

these cases contain contradictory arguments, which offer a

multifaceted narrative. The new construction of Article 151 TFEU

(ex Article 136 EC) is of particular interest. Considered to be thecornerstone of European employment policy, this provision had generally been regarded as programmatic. During the past few

years, however, it has progressively metamorphosed into a

substantive rule and now plays a latent, but crucial, role in the

court's reasoning. In combination with the new social clause

introduced by the Lisbon Treaty, these elements provide normative

arguments that can create an opening in the material constitution

of the EU. This article contends, for the most part, that they

provide tools that may be applied towards embedding employment

rights in Europe.

INTRODUCTION ........................................................................................................... 2I. IT MAY TAKE TWO TO LABOR BUT IT TAKES THREE TO ELABORATE

EMPLOYMENT POLICIES .................................................................................. 5A. From Labor to Employment Law ......................................................... 6B. 3F v. Commission ................................................................................ 7

II. THE COURTS REASONING AND THE CONSTRUCTION OF ARTICLE 151TFEU ........................................................................................................... 11

A. The Chain Around Article 151 TFEU ................................................ 12B. The Narratives Within the Chain ....................................................... 14

III. THE CONSTITUTIONALIZATION OF EMPLOYMENT RIGHTS.............................. 15

*

Teaching Fellow, Labour Studies Institute, Lyon, France; Ph. D. Candidate, EuropeanUniversity Institute, Florence, Italy. I would like to thank Professors S.F. Deakin, B. De Witte, J. Fudgeand M-A. Moreau for earlier discussions and Professors H. Collins, F. De Witte and V. Kosta forcomments on a previous draft. The usual disclaimer applies.


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2 COLUMBIA JOURNAL OF EUROPEAN LAW [Vol. 17

A. The Economic Programming ............................................................. 16B. The Constitutional Meaning of Article 151 TFEU ............................ 18C. The Horizontal Social Clause ............................................................. 20

IV. CONCLUSION .................................................................................................. 22

INTRODUCTION

The Treaty of Rome elaborated a fairly strict separation between the economicand social spheres. As a consequence of the continuous consolidation of aneconomic and monetary union, the economic provisions of the Treaty have prevailed over others1 to the extent that they have become embedded in the EUedifice.2 This predominance is singularly instanced in what has been metaphoricallyframed within the terminology of the economic constitution.3 In striking contrastto the economic sphere, social matters, particularly employment, were to be left upto the Member States.4 Since in the beginning there was next to no social policy inthe E.E.C. Treaty,5 the European polity has been struggling with an uneven balance

between the economic and social spheres.6

The subsequent infiltration of theeconomic provisions into labor legislation,7 i.e. utilizing the economic provisions asa basis for European judicial review of domestic labor legislation, progressivelycollapsed the strict separation between the economic and social spheres. Despitesubsequent developments, the primacy of the European economic provisions overdomestic employment measures perpetuated the disparity between the spheres.8

1 Carlos A. Ball, The Making of a Transnational Capitalist Society: The Court of Justice, SocialPolicy and Individual Rights Under the European Communitys Legal Order, 37 HARV.INTL L.J. 307,309 (1996).

2 STEFANO GIUBBONI,SOCIAL RIGHTS AND MARKET FREEDOM IN THE EUROPEANCONSTITUTION 7 (2006).

3 See generally JULIO BAQUERO CRUZ,BETWEEN COMPETITION AND FREE MOVEMENT (2002);MIGUEL POIARES MADURO,WE THE COURT:THE EUROPEAN COURT OF JUSTICE AND THE EUROPEAN

ECONOMIC CONSTITUTION (1998); David J. Gerber, Constitutionalizing the Economy: German Neo-liberalism, Competition Law and the New Europe, 42 AM.J.COMP.L. 25 (1994); Wolf Sauter, TheEconomic Constitution of the European Union, 4 COLUM.J.EUR.L. 27 (1998); Manfred E. Streit &Werner Mussler, The Economic Constitution of the European Community: From Rome to Maastricht,1 EUR.L.J. 5 (1995). For an inspection of this notion from a labor law perspective, see GUIBBONI,supranote 2.

4 JEFF KENNER,EUEMPLOYMENT LAW,FROM ROME TO AMSTERDAM AND BEYOND 12 (2003);SOCIAL LAW AND POLICY IN AN EVOLVING EUROPEAN UNION (Jo Shaw ed., 2000); Simon Deakin,

Labour Law as Market Regulation, in EUROPEAN COMMUNITY LABOURLAW:PRINCIPLES ANDPERSPECTIVES 63 (Paul Davies et al. eds., 1996).

5 Catherine Barnard, Social Policy Revisited in the Light of the Constitutional Debate , in THEFUNDAMENTALS OF EULAW REVISITED:ASSESSING THE IMPACT OF THE CONSTITUTIONALDEBATE 109,109 (Catherine Barnard ed., 2007).

6 Miguel Poiares Maduro,Europe Social-Self: The Sickness Unto Death,in SOCIAL LAW ANDPOLICY IN AN EVOLVING EUROPEAN UNION,supra note 4, at 325.

7 Grard Lyon-Caen,Linfiltration du Droit du travail par le Droit de la concurrence, DROITOUVRIER, Sept. 1992, at 31321. For a recent discussion of this question, see GIUBBONI,supra note 2, at

153. 8 Catherine Barnard & Simon Deakin, Negative and Positive Harmonization of Labor Law inthe European Union, 8 COLUM.J.EUR.L. 389 (2002); Paul Davies, Market Integration and Social Policyin the Court of Justice, 24 INDUS.L.J.49 (1995); Phil Syrpis, Smoke Without Fire: The Social Policy

Agenda and the Internal Market, 30 INDUS.L.J. 271, 285 (2001).


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2011] EMBEDDING EMPLOYMENT RIGHTS IN EUROPE 3

Furthermore, it is generally acknowledged that the recent employment law saga9followed a similar track. As far as the protective dimension of employmentregulation is concerned, it is acknowledged that this economic versus socialparadigm10 has progressively led to a normative conundrum.11 Theaforementioned paradigm, however, builds upon the distinction between economicand social rights, which, it has been argued, is not definitive.

As far as employment law is concerned, economic rights are conventionallysynonymous with employers prerogatives, while social rights are equivalent toworkers rights. Following the UN International Covenant on Economic, Social andCultural Rights, however, it is acknowledged that economic and social rights are notmutually exclusive. Thus, the economic and social distinction appears to becontingent upon whether the discussion is situated within the employment lawliterature or viewed from a human rights perspective. Moreover, legal narratives areambivalent12 and this is particularly true in the context of employment relations, 13since any piece of legislation dealing with labor jointly regulate[s] . . . support[s]and . . . restrain[s] the power of management and the power of . . . labour. 14 Thus,even in the employment sphere, economic and social rights are not mutually

exclusive but, rather, are interpenetrated.

9 The term saga has been used in the literature to denote the situation where a single policyattracts litigation over a period of time through a series of attacks. Richard Rawlings, The EurolawGame: Some Deductions from a Saga, 20 J.L.&SOCY 309, 309 (1993) (referring to the Sunday Tradingsaga). In the present case, it designates the following cases: Case C-438/05, Intl Transp. Workers Fednv. Viking Line ABP, 2007 ECR I-10779; Case C-341/05, Laval un Partneri Ltd. v.Byggnadsarbetarefrbundet, 2007 ECR I-11767, noted in A.C.L. Davies, One Step Forward, Two Steps

Back? The Viking andLaval Cases in the ECJ, 37 INDUS.L.J.126 (2008); Case C-346/06, Rffert v.Land Niedersachsen, 2008 ECR I-1989, noted in Paul Davies,European Developments Case C-346/06,Rffert c. Land Niedersachsen [2008] IRLR 467 (ECJ), INDUS.L.J.293, 295 (2008); Case C-319/06,Commn v. Luxembourg, 2008 ECR I-4323, noted in Catherine Barnard, The UK and Posted Workers:The Effect of Commission v Luxembourg on the Territorial Application of British Labour Law: Case C-

319/06 Commission v Luxembourg, Judgment 19 June 2008, 38 INDUS.L.J. 122 (2009), andAravind R.Ganesh, Note,Appointing Foxes to Guard Henhouses: The European Posted Workers' Directive, 15COLUM.J.EUR.L.123 (2008). For an indicative list of the literature, see Articles in Academic Literatureon the Judgments Viking - Laval - Rffert - Luxembourg, EUR.TRADE UNION INST.,http://www.etui.org/en/Headline-issues/Viking-Laval-Rueffert-Luxembourg/2-Articles-in-academic-literature-on-the-judgements/%28offset%29/60 (last modified Apr. 1, 2009).

10 Catherine Barnard, British Jobs for British Workers: The Lindsey Oil Refinery Dispute andthe Future of Local Labour Clauses in an Integrated EU Market, 38 INDUS.L.J. 245, 277 (2009); PhilSyrpis & Tonia Novitz,Economic and Social Rights in Conflict: Political and Judicial Approaches totheir Reconciliation, 33 EUR.L.REV. 411 (2008).

11 Ian H. Eliasoph,A Switch in Time For the European Community? Lochner Discourse andthe Recalibration of Economic and Social Rights in Europe, 14 COLUM.J.EUR.L. 467, 494 (2008); ClaireKilpatrick, Laval's Regulatory Conundrum: Collective Standard-Setting and the Court's New Approach to

Posted Workers, 34 EUR.L.REV.844, 845 (2009).12 For a theoretical discussion on the ambivalence of legal narratives, see D.J. GALLIGAN,LAW IN

MODERN SOCIETY 193 (2007).13 Mark Freedland,Rethinking the Personal Work Contract, 58 CURRENT LEGAL PROBS. 517,

52526 (2005); Antoine Jeammaud,Le droit du travail dans le capitalisme, questions de fonction et defonctionnement, in LE DROIT DU TRAVAIL CONFRONTE A LECONOMIE 15, 1726 (Antoine Jeammaud ed.,2005); Mauro Zamboni, The Social in Social Law An Analysis of a Concept in Disguise , J.L. INSOCY,Summer 2008, at63.

14 OTTO KAHN-FREUND,LABOUR AND THE LAW 4 (2d ed. 1977).


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This not only confirms that the familiar division between the social and theeconomic is blurred,15 but it also, for the most part, corroborates the view that nolegal relationship exists that does not have both an economic and a socialdimension.16 Empirically, social rights have an indisputable economic feature;matters conventionally defined as being essentially social also reflect economicconnotations. From the very beginning, industrial relations, as echoed by domesticlegal systems, equally concerned economic and social matters. In Britain, forinstance, immunity from tort liability in the event of an industrial action is granted ifthe act is done in contemplation or furtherance of a trade dispute.17 In the samemanner, rights to collective bargaining, which are widely regarded as social rights,predominantly concern an economic issue: remuneration. It is equally demonstrablethat European economic rights have a social dimension. Even if the provisionsdealing with the free movement of persons mainly concern a limited number ofpersons,18 a comparative and historical legal analysis demonstrates that the freemovement of persons is first and foremost a social freedom: workers that cannotcirculate may well face difficulties in earning a sufficient living.19 The currentconstruction of Article 157 of the Treaty on the Function of the European Union(TFEU) (ex 141 EC) also confirms that the understanding of provisions, with

regard to the economic and social spheres, does evolve.20 This provision wasoriginally regarded as a purely economic one. Starting from Defrenne,21 Barnardconvincingly illustrated the evolution:22 in Deutsche Post, the Court held that theeconomic aim pursued by Article 119 of the Treaty, namely the elimination ofdistortions of competition between undertakings established in different MemberStates, is secondary to the social aim pursued by the same provision, whichconstitutes the expression of a fundamental human right.23 What is now Article 157TFEU thus evolved to jointly include both the economic and social aims of theUnion. As a consequence, although the material constitution has been used tosupport the employers prerogatives and to limit the workers rights,24 it does notequal the employers set of prerogatives. Thus, it is possible to recognize theconflicts of interests between management and labor, which is inherent to theemployment relations, and, at the same time, to observe that the economic and social

spheres are interpenetrated.

15 Simon Deakin, Social Rights in a Globalized Economy, in LABOURRIGHTS AS HUMAN RIGHTS25,52(Philip Alston ed., 2005).

16 [I]l nest pas de lien de droit qui nait la fois une dimension conomique et une dimensionsociale. ALAIN SUPIOT,CRITIQUE DU DROIT DU TRAVAIL, at XXIII (1st. ed., 4th prtg. 2002) (Translation

provided by the author).17 Trade Union and Labour Relations (Consolidation) Act, 1992, c. 52, 219 (Eng.).18 IAN WARD, ACRITICAL INTRODUCTION TO EUROPEAN LAW 143 (3d ed. 2009).19 SIMON DEAKIN &FRANKWILKINSON, THE LAW OF THE LABOURMARKET 110200 (2005);

JACQUES LE GOFF, DU SILENCE LA PAROLE:UNE HISTOIRE DU DROIT DU RAVAIL DES ANNES 1830 NOS JOURS218 (2004);see also GRUNDGESETZ FUR DIE BUNDESREPUBLIKDEUTSCHLAND[GRUNDGESETZ][GG][BASIC LAW], May 23, 1949, BGBl. I at 2, art. 11 (Ger.) (dealing with the freedomof movement); id. at 2, art. 12 (concerning the right for each person to freely choose his occupation).

20 Consolidated Version of the Treaty on the Functioning of the European Union, Art. 9, Mar. 30,

2010, 2010 OJ (C83) 47 [hereinafter TFEU].21 Case 80/70, Defrenne v. Belgium (Defrenne I), 1971 ECR 445.22 CATHERINE BARNARD, ECEMPLOYMENT LAW 433 (3d ed. 2006).23 Joined Cases C-270 & C-271/97, Deutsche Post AG v. Sievers, 2000 ECR I-929, 57.24 See, e.g., the previous Sunday trading saga.


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Among the various ways for social values to be inserted into the process ofmarket integration and the European Economic Constitution, Maduro hasunderscored the necessity of expanding the circle of those participating in thejudicial elaboration of the European edifice.25 This assertion invites joint elaborationon both procedural and substantial aspects. In these regards, there are alreadyelements in the EU legal edifice that are increasingly enhancing employmentconcerns to the extent of embedding them in the EU polity. The first section of thisarticle focuses on the procedural dimension. It examines the workers representativesright to participate in the determination of employment policies in light of the caselaw of the Court, and in particular Case C-319/07 3F v Commission, where a tradeunion is held to have standing to review domestic legislation as to its compatibilitywith EU state aid provisions. The subsequent sections describe the substantialdimensions of the embedment of employment rights. The second section scrutinizesthe Courts reasoning and the evolving construction of Article 151 TFEU (ex Article136 EC). Considered to be the cornerstone of the European Employment policy, thisprovision was generally regarded as a programmatic one. During the last years, thisprovision has metamorphosed into a substantive rule and now plays a crucial role inthe machinery of the Court. In the third and final section, it is contended that the

constitutionalization of employment legislation, through the renewed construction ofArticle 151 TFEU and the social clause introduced by the Lisbon Treaty, contributesto embedding employment rights into the EU legal edifice.

I. IT MAY TAKE TWO TO LABOR BUT IT TAKES THREE TOELABORATE EMPLOYMENT POLICIES

Notwithstanding the implicit acknowledgment of the trilateral dimension ofemployment policies, the early case law of the Court26 reflects the variousdifficulties faced by workers representatives27 in participating in employmentrelated deliberative processes.28 In addition, recent cases narrowed down the varietyof instruments available to dispute managerial decisions.29 It is thus particularlyworth exploring the extent to which EU law permits trade unions to institute proceedings against public decisions, resulting from both the EU as well as thenational level, that concern employment measures. However, to do so, it is firstnecessary to re-evaluate the concept of labor law so as to integrate publicauthorities activities, as their role is often overlooked.

25 Miguel Poiares Maduro,Never on SundayWhat Has (EU) Law Got to Do with It? , inLABOURLAW IN THE COURTS:NATIONAL JUDGES AND THE EUROPEAN COURT OF JUSTICE 273,290(Silvana Sciarra ed., 2001).

26 Case C-106/98, Comit dEntreprise de la Socit Franaise de Production v. Commn, 2000ECR I-3659; Case T-12/93, Comit Central d'Entreprise de la Socit Anonyme Vittel v. Comm n, 1995ECR II-1247.

27 K.D. Ewing, The Function of Trade-Unions, 34 INDUS.L.J. 1 (2005); Bruno Caruso, Verso uninsolito (evitabile?) destino: La postdemocrazia sindacale (Centro studi di Dirritto del Lavoro

Europeo Massimo dAntona, Working Paper No. 28/2005, 2005), available athttp://www.lex.ex.unict.it/eurolabor/ricerca/wp/it/caruso_28-2005it.pdf.

28 Francesca Bignami, Three Generations of Participation Rights Before the EuropeanCommission, 68 LAW &CONTEMP.PROBS. 61 (2004).

29 Viking, 2007 ECR I-10779.


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A. From Labor to Employment LawThere are various perspectives about the legal discipline whose object is labor.30

Conventionally, labor law is confined to the relations between management andlabor.31 This view leaves, by and large, public authorities (be they national, local or

supra-national) out of the picture. They are, however, central characters inemployment matters and, legally speaking, their role is at least threefold. First, theyhave regulatory functions in structuring both the employment relationship andindustrial relations.32 Second, as illustrated by recent European cases,33 publicauthorities are uncommon or non-ordinary employers.34 Third, legislationconcerning labor is, both at the European and domestic level,35 increasinglyintegrated into a broader cluster of employment policies.36 Irrespective of the meritsof public intervention,37 the employment market is predominantly shaped by avariety of public policies, which, for the most part, favor the offer side of theemployment relationship.38 Thus, public authorities are fully part of the employmentlandscape.39

Though retaining a bilateral layout undoubtedly seizes the peculiarity of laborlaw, these evolutions in legal policies symmetrically call for a methodologicalchange, and the employment law approach offers different advantages.40 To beginwith, employment law may well be a more accurate term. It is indeed paradoxical

30 Hugh Collins,Labour Law as a Vocation, 105 L.Q.REV.468(1989).31 KAHN-FREUND,supra note 14, at 4.32E.g., Lord Wedderburn,Freedom of Association and Philosophies of Labour Law, 18INDUS.

L.J. 1 (1989).33E.g., Case C-486/08, Zentralbetriebsrat der Landeskrankenhuser Tirols v Land Tirol, 2010

ECJ EUR-Lex LEXIS 626 (Apr. 22, 2010); Joined Cases C-378, C-379 & C-380/07, Angelidaki v.Organismos Nomarchiakis Autodioikisis Rethymnis, 2009 ECR I-3071;see also TFEU Art. 45(4).

34 SANDRA FREDMAN &GILLIAN S.MORRIS, THE STATE AS EMPLOYER:LABOURLAW IN THEPUBLIC SERVICES (1989); Gillian S. Morris,Employment in Public Services: The Case for SpecialTreatment, 20 OXFORD J.LEGAL STUD. 167 (2000).

35 For the European dimension, see BARNARD,supra note 22, at 45. For the domestic dimension,

see PAUL DAVIES &MARKFREEDLAND, TOWARDS A FLEXIBLE LABOURMARKET (2007); DEAKIN &WILKINSON,supra note 19. For a European-wide perspective, see Niklas Brunn & Bob Hepple, EconomicPolicy and Labour Law,in THE TRANSFORMATION OF LABOURLAW IN EUROPE 31 (Bob Hepple & BrunoVeneziani eds., 2009). Lastly, for an interaction between the EU and the Member States, see PHIL SYRPIS,EUINTERVENTION IN DOMESTIC LABOURLAW(2007).

36 Mark Freedland,Employment Policy, in EUROPEAN COMMUNITY LAW:PRINCIPLES ANDPERSPECTIVES 275(Paul Davies et al. eds., 1996).

37 Hugh Collins,Against Abstentionism in Labour Law,in OXFORD ESSAYS IN JURISPRUDENCE79 (John Eekelaar & John Bell eds., 1987).

38 Vassilis Hatzopoulos,A (More) Social Europe: A Political Crossroad or a Legal One-Way,Dialogues between Luxembourg and Lisbon, 42 COMMON MKT.L.REV. 1599, 1600 (2005). A 2008directive issued by the European Parliament intended to review [p]rohibitions or restrictions on the useof temporary agency work provides a more recent example of this trend. Parliament and CounselDirective 2008/104, On Temporary Agency Work, Art. 4(1), 2008 OJ (L 327) 9 (EC); see alsoSpecialSection: Atypical Employment, 25 EUR.SOC.REV.(2009).

39 Ruth Dukes, Otto Kahn-Freund and Collective Laissez-Faire: An Edifice without a Keystone? ,72 MOD.L.REV. 220 (2009). On the landscape metaphor, see Harry Arthurs, Landscape and Memory:

Labour Law, Legal Pluralism and Globalization, in ADVANCING THEORY IN LABOURLAW ANDINDUSTRIAL RELATIONS IN A GLOBAL CONTEXT 21 (Ton Wilthagen ed., 1998).

40 For different reasons, mainly due to the North American distinction between labor relationsand employment relations, but with a similar conclusion, see C YNTHIA ESTLUND,REGOVERNING THEWORKPLACE:FROM SELF-REGULATION TO CO-REGULATION 9 (2010).


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to maintain the labor law label, while at the same time defining it as the legalregulation of employment relations41 or the rules which govern the employmentrelationship.42 If the goal is to examine every legal aspect of the legal regulation ofthe employment relation,43 the term employment law may well be more accurate.This is also true because it precisely points out the paradox between the sloganlabour law is not a commodity and the genuine ambivalence of the regulation ofemployment relations which, instead of solely protecting workers, display a jointconcern for production and distribution.44 A shift from labor law to employmentlaw further implies consideration of all the dimensions of the employment relations,which go beyond the conventional individual/collective and public/privatedichotomiesand not only their individual dimensions in what is usually coined asthe employment relationship. Additionally, thinking in terms of employmentopens up the discussion about employment matters,45 by, for instance, enabling topresent the interpenetrations of the economic and social spheres.46 An employmentlaw approach finally permits exploration of other legal fields (public or economiclaw, to name but two) typically set aside by the bilateral dimension of labor law.This evolution especially allows to unveil the trilateral dimension of the employmentrelations as well as to question both their respective roles (management, labor and

public authorities) and the singular interactions between them. As instanced in 3F v.Commission,47 this exploration proves particularly valuable with respect toexamining the public entities various interactions with the two other employmentnodes (management and labor).

B. 3F v. CommissionIn addition to the ordinary ship register (the D.A.S. register), the Kingdom of

Denmark created the Danish International Register of Shipping (the D.I.S.register) allowing ship-owners registered in the D.I.S. to employ third-countrynationals on terms and conditions in compliance with the law of the seamenscountry of origin.48 That same day, the Danish Parliament adopted a battery of laws

41 HUGH COLLINS,K.D.EWING &AILEEN MCCOLGAN,LABOURLAW 1 (2d ed. 2005).42 SIMON DEAKIN &GILLIAN S.MORRIS,LABOURLAW 1 (5th ed. 2009).43 COLLINS,EWING &MCCOLGAN,supra note 41, at 2.44 HUGH COLLINS,EMPLOYMENT LAW 5 (2nd ed. 2010); Eric Tucker,Renorming Labour Law:

Can We Escape Labour Law's Recurring Regulatory Dilemmas?, 39 INDUS.L.J. 99 (2010); Judy Fudge,Labour as a Fictive Commodity: Radically Reconceptualizing Labour Law (2010) (on file with author).

45 Gian Guido Balandi,Diritto del mercato del lavoro e diritto del lavoro, 2008 LAVORO EDIRITTO 217 (2008) (It.); Antoine Jeammaud, Mercato del lavoro e diritto del lavoro, 2008 LAVORO EDIRITTO 273 (2008) (It.); Fernando Valds Dal-R, Social Europe: Debates and Blows, inFUNDAMENTALSOCIAL RIGHTS IN EUROPE:CHALLENGES AND OPPORTUNITIES xi, xvi (Edoardo Ales et al. eds., 2009).Obviously, neither labor law nor employment law approaches are mutually exclusive. As far as a topic isconcerned, one or the other may prove more valuable.

46 DEAKIN &WILKINSON,supra note 19;see also Simon Deakin & Frank Wilkinson,Rights vsEfficiency? The Economic Case for Transnational Labour Standards, 23INDUS.L.J.289 (1994).

47 Case C-319/07, 3F v. Commn, 2009 ECR I-5963. For a full account of this case, see FranckLecomte, Un Autre Viking dans le Prtoire, 2010 REVUE INTERNATIONALE DE DROIT ECONOMIQUE

(2010) (Fr.).48 For similar facts, see Joined Cases C-72 & C-73/91, Firma Sloman Neptun Schiffarts AG v.Seebetriebsrat Bodo Ziesemer der Sloman Neptun Schiffahrts AG, 1993 ECR I-887. See also XavierLewis, The Employment of Foreign Seaman on Board Vessels of a Member State , 22 INDUS.L.J. 235(1993); P.J. Slot,Joined Cases C-72/91 and C-73/91, Sloman Neptun Schiffahrts AG v. Seebetriebsrat


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exempting seamen employed on D.I.S. registered vessels from various incometaxes.49 In 1998, 3F(formerly S.I.D., hereafter the TU) filed a complaint with theCommission against the Kingdom of Denmark to challenge the legality of the fiscalmeasures with respect to Articles 107 and 108 TFEU (ex Articles 87 and 88 EC),50and the Community guidelines on State aids to maritime transport (hereafter theguidelines). By an order of April 23rd, 2007, the Court of First Instance (CFI)51dismissed the trade unions application to annul the commissions refusal to open thefull examination procedure52 on the ground that the appellant and its members lackedstanding. On appeal, the Court dismissed the plea of inadmissibility raised by theCommission and upheld the trade unions application.53

In accordance with Article 263 TFEU (ex Article 230 TEC), a decisionaddressed to another person may only be reviewed if that decision is of direct andindividual concern to that person.54 For a long time, the Court has considered that:

[P]ersons other than those to whom a decision is addressed may onlyclaim to be individually concerned if that decision affects them by reasonof certain attributes which are peculiar to them or by reason ofcircumstances in which they are differentiated from all other persons and

Bodo Ziesemer der Sloman Neptun Schiffahrts AG, Judgment of 17 March 1993, 31 COMMON MKT.L.REV. 137 (1994).

49 This is where the facts of the present case differ fromFirma Sloman Neptun. 1993 ECR I-887.50 InFirma Sloman Neptun, the Court had previously refused to consider the adoption of an

international ship register as State aid.Id.The present case evidences it did not necessarily exclude thepossibility of including any piece of legislation from within the scope of State aidsthe main criterion forallowing such examination lies in contribution from State resources. Davies,supra note 8; Lewis,supranote 48;see Andrea Biondi, Some Reflections on the Notion of State Resources in European Law, 30FORDHAM INTL L.J.1426, 142848 (2007) (discussing the significance of State resources to classify ameasure of State aids). The Court reads the notion of State aids to embrace . . . not only positive benefits,such as subsidies themselves,but also interventions which, in various forms, mitigate the chargeswhicharenormally included in the budget of an undertaking and which, without, therefore,being subsidies inthe strict meaning of the word, are similarincharacter and have the same effect. Case 30/59, De

Gezamenlijke Steenkolenmijnen in Limburg v. High Auth. of the European Coal & Steel Cmty., 1961ECR 1, 3. The Court held it equally covers tax exemptions. Joined Cases C-182 & C-217/03, Belgium v.Commn, 2006 ECR I-5479, 87; Case C-387/92, Banco Exterior de Espaa v. Ayuntamiento deValencia, 1994 ECR I-877, 14. In the present case, the action brought by the trade union was not aimedat the register but at the coupled fiscal relief.

51 The Lisbon Treaty modified the name of the EU courts. Now the Court of Justice of theEuropean Union (CJUE) is comprised of the Court of Justice (CJ), the General Court (formally the Courtof First Instance) and the Civil Services Tribunal. Consolidated Version of the Treaty on European Union,Art. 19(1), Mar. 30, 2010, 2010 OJ (C 83) 27.

52 State aids are lawful as long as they comply with Articles 107 and 108 TFEU. While theformer states the substantial criteria, the latter determines the procedure whose details are framed in twosteps by Article 4 of Council Regulation 659/1999. Council Regulation 659/1999, Laying Down DetailedRules for the Application of Article 93 of the EC Treaty, art. 4, 1999 OJ (L 83) 1 (EC). The first stagecorresponds to a preliminary examination following which the Commission decides whether it isappropriate to open the full examination. In the present case, it is precisely the Commissions refusal toopen the full examination procedure that is contested. Though the procedure only concerns the MS andthe Commission, the possibility of filing a complaint, as in the present case, is always open to a third

party. 53 The merits of the case have been remitted to the General Court.54 The Lisbon Treaty has slightly modified the state of affairs as forregulatory acts. Action for

annulment no longer requires the issue being of individual concern. See Michael Dougan, The Treaty ofLisbon 2007: Winning Minds Not Hearts, 45 COMMON MKT.L.REV. 617, 675 (2008).


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by virtue of these factors distinguishes them individually just as in thecase of the person addressed.55

The cross-reference to the person concerned in both Articles 108 2 and 263TFEU may be a source of confusion. In order to protect the procedural rights of the

person concerned within the meaning of Article 108 2 TFEU, however, the ECJholds that any distinction between the two articles is pointless. 56 Hence, any third person falling within the meaning of Article 108 TFEU is considered to bepersonally and individually concerned within the meaning of Article 263 TFEU sothat he can challenge a decision of the Commission related to State aids.

The CFIs refusal to consider either the TU or its members as persons concernedis mainly based on two arguments.57 The CFI originally considers neither the tradeunion nor its members to be personally and individually concerned by thecommissions decision since they were not competitors of the aids beneficiaries.58The Tribunal holds ship-owners as beneficiaries of the second ship register whereasthe exonerations benefited the seafarers. The CFI particularly embraces a closereading ofAlbany,59 since it considers this precedent to exclude collective bargainingfrom the scope of competition law. As collective bargaining is excluded from the

competition sphere, neither the TU nor the workers can conclusively invoke analteration of their competitive positions. Under these circumstances, the TU has nostanding.

The reader should bear in mind that the policy was aimed at tackling flags-of-convenience practices.60 The Court considers that the TU is not only a competitor ofthe ship-owners, but that it also represents the workers.61 In this regard, a distinctionmust be made between the person exempted from various taxes and the beneficiaries

55 Case 25/62, Plaumann & Co. v. Commn, 1963 ECR 95 (English version). The page numbervaries depending on the language of the European Court Reports consulted. Plaumann & Co. v.Commission, EUR-LEX (July 15, 1963), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61962J0025:EN:HTML.

56 Case C-198/91, William Cook plc v. Commn, 1993 ECR I-2487.57

Case T-30/03, Specialarbejderforbundet i Danmark v. Commn, COURT OF JUSTICE OF THEEUR.UNION (Apr.23,2007), http://curia.europa.eu/jcms/jcms/j_6/ (search Case no for T-30/03; thenfollow the second hyperlink).

58 The question addressing who the beneficiaries of provisions are is not new in itself. SeeRffert, 2008 ECR I-1989, 36;Laval, 2007 ECR I-11767, 58, 7477; Paul Davies,Posted Workers:Single Market or Protection of National Labour Law Systems, 571 COMMON MKT.L.REV. 571602(1997); Simon Deakin,Regulatory Competition after Laval, 10CAMBRIDGE Y.B.EUR.LEGAL STUD. 581,597(2008).

59 Case C-67/96, Albany Intl v. Stiching Bedrijfspensioenfonds Textielindustrie, 1999 ECR I-5751, 60.

60 In spite of the significant normative activity of the ILO, Nathan Lillie, The ILO MaritimeLabour Convention, 2006: A New Paradigm for Global Labor Rights Implementation, in CROSS-BORDERSOCIAL DIALOGUE AND AGREEMENTS:AN EMERGING GLOBAL INDUSTRIAL RELATIONS FRAMEWORK?191 (Konstantinos Papadakis ed., 2008), the maritime sector is the scene of an important industrial disputewith regard to flags of convenience, D. Fitzpatrick, Transnational Collective Action: The FOC CampaignCase Study, in CROSS-BORDERCOLLECTIVE ACTIONS IN EUROPE:ALEGAL CHALLENGE 8592 (FilipDorssemont, Teun Jaspers & Aukje van Hoek eds., 2007). Whilst previous cases already instanced that

very conflict, e.g., Viking, 2007 ECR I-10779;Firma Sloman Neptun, 1993 ECR I-887, the presentdecision proves it is still a very contemporaneous issue.

61 3F, 2009 ECR I-5963, 100. Comparewith Opinion of Advocate General Sharpston, Case C-319/07, 3F v. Commn, EUR-LEX, 105 (Mar. 5, 2009), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62007C0319:EN:HTML.


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of such a measure. The seamen are the ones being exempted, but this certainly doesnot mean they are the only beneficiaries of those measures. Flags-of-conveniencepractices are measures decided by ship-owners; namely, they, as employers, benefitone way or another from this scheme. Hence, irrespective of the organization of thescheme (through direct subsidies to the firm or indirect subsidies by lightening tax pressure), employers are also beneficiaries. As far as the process of collectivebargaining is concerned,62 the TU is then a competitor of the second category ofbeneficiaries (ship-owners).

To overrule the Tribunals decision, the Advocate General (hereafter AG) andthe Court agree the CFIs reading ofAlbany is erroneous. As constructed inLaval,63Albany does not set apart collective bargaining from the economic constitution. Nevertheless, some social policy objectives may be eligible with the result, afterapplying a proportionality test, of excluding collective agreements fromconventional consequences of the competition law regime. These are, however, twoseparate matters. There is, on the one hand, the question of whether or not collectiveagreements with a social objective can be excluded from the competition law regimeand, on the other hand, the position of the parties taking part in such collective

bargaining processes. Disregarding this distinction, the court determined that the CFIwas mistaken and reversed its order.

In its application, the appellant relied on a number of precedents whereassociations had also filed complaints.64 However, the claimant could not decisivelyrely on those precedents because, unlike the applicants in those cases, negotiationswith the public authorities had not taken place beforehand. Nevertheless, the Courtsdismissal of those precedents does not amount to a rejection of the claim. On thecontrary, the Court recalls the particular position of the claimant, which is anorganisation representing workers which negotiates the terms and conditions onwhich labor is supplied to undertakings, including the ship-owners whose vessels areregistered in the D.I.S. register.65 The Court further elaborates by referring to theCommunity Guidelines on State Aids to the Maritime Sector, which acknowledgethe central position of the TU in collective negotiations.66 Associations and TUs are

therefore held to be concerned parties within the meaning of Article 108 TFEU.This ruling is undoubtedly informed by freedom of association.67 In contrasting

this case with applicable precedents,68 however, the decision mentions neither I.L.O.Convention n87 on the Freedom of association and protection of the right toorganize nor more general provisions such as Article 11 of the EuropeanConvention of Human Rights (ECHR) and Article 12 of the European Charter ofFundamental Rights (ECFR). Whilst the decision does confirm the European social

623F, 2009 ECR I-5963, 104, 107.63Laval, 2007 ECR I-11767, 74, 118.64 Case C-313/90, Comit International de la Rayonne et des Fibres Synthtiques v. Commn,

1993 ECR I-1125; Joined Cases 67, 68 & 70/85, Kwekerij Gebroeders van der Kooy BV v. Commn,1988 ECR 219.

65

3F, 2009 ECR I-5963, 100.66Id. 10406.67Comit International de la Rayonne, 1993 ECR I-1125;Kwekerij Gebroeders van der Kooy,

1988 ECR 219. The different quotations in relation to the applicants position are also informative.68Laval, 2007 ECR I-11767, 90; Viking, 2007 ECR I-10779, 43.


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models inclination towards tripartism,69 such an omission is preeminentlyregrettable.

3Fprovides a supplementary tool for voicing industrial claims. In particular, itequips the TU with an additional avenue in the elaboration of employment policies

and acknowledges their legitimate right to challenge public decisions. On theEuropean scale, this judgment strengthens the formal and informal patterns of socialdialogue70 and confirms the social partners position in employment matters.Admittedly, the plaintiffs position does not equal that of the stakeholder, and thedecision, since it is limited to state aids, does not provide a full right of participationto the TU in the elaboration of employment policies. Nevertheless, two argumentsenhance the trilateral dimension of employment policies. To begin with, in times ofeconomic downturn, which have become increasingly common, measures amountingto state aids are not unusual. What the present decision underscores is the TUs rightto voice their expectations during those times. Also, were an objection to be raisedclaiming that State aid provisions are unable to cover each and every policy inrelation to employment matters, the centrality of the principle of effective judicialprotection71 may well provide an additional tool to enhance the participation of the

TU. Hence, it is highly unlikely that decision-makers are able to carry on holdingworkers representatives out of the employment policy elaboration processes withoutexposing themselves to proceedings. Finally, the particular diligence of the Court indismissing the exception of irrecevability before remitting the case instances theimportance of the Courts activity in the transformation of the European edifice onceagain.72 The renewed construction of Article 151 TFEU (ex Article 136 EC), in anycase, provides further evidence thereof.

II. THE COURTS REASONING AND THE CONSTRUCTION OF ARTICLE151 TFEU

As a matter of law,Lavaland Viking73 are not only decisions in which rights tocollective actions, whilst being formally recognized as fundamental rights, still donot enjoy equal status as the economic freedoms of movement; paradoxically, these

rulings also instance, through the reference to Article 151 TFEU,74

the socialdimension of the Courts reasoning, despite its narrowness.75 Whilst it has already been argued that those decisions and others76 are reshaping EU employment

69 BRIAN BERCUSSON, EUROPEAN LABOURLAW 257, 519 (2d ed. 2009).70 Sylvaine Laulom, The Flawed Revision of the European Works Council Directive, 39 INDUS.

L.J.202(2010).71 Case C-432/05, Unibet (London) Ltd. v. Justitiekanslern, 2007 ECR I-2271.72 LABOURLAW IN THE COURTS: NATIONAL JUDGES AND THE EUROPEAN COURT OF JUSTICE,

(Silvana Sciarra ed., 2001); Claire Kilpatrick, The European Court of Justice and Labour Law in 2009, 39INDUS.L.J. 287 (2010); Claire Kilpatrick, The ECJ and Labour Law: A 2008 Retrospective, 38 INDUS.L.J.180 (2009); Joseph H.H. Weiler, The Transformation of Europe, 100 YALE L.J. 2403 (1991).

73Laval, 2007 ECR I-11767; Viking, 2007 ECR I-10779.74

Laval, 2007 ECR I-11767, 105; Viking, 2007 ECR I-10779, 79.75 Inge Govaere, The Future Direction of The EU Internal Market: On Vested Values andFashionable Modernism, 16 COLUM.J.EUR.L. 67, 80 (2010); Phil Syrpis, The Treaty of Lisbon: MuchAdo But About What? 37 INDUS.L.J.219, 229 (2008).

76Luxembourg, 2008 ECR I-4323;Rffert, 2008 ECR I-1989.


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standards,77 full attention has yet to be paid to the role that Article 151 TFEUcurrently plays in the Courts machinery.

To assess the evolution of EU Employment law, Bercusson uses the termagenda.78 However, this idea implies a definite plan of action for the Court, which is

either uncertain or difficult to ascertain. In search of an analytical tool ofsubstitution, Dworkins notion of chain novel79 may well prove more appropriate.In contrast with the term agenda, the idea of a chain enables the gradual observationof these evolutions. Indeed, the various references to Article 151 TFEU areintelligible only so long as they are linked with each other. An evolutionaryperspective of these references highlights, therefore, the extent to which Article 151TFEU constitutes a reference-point in the reasoning of the Court. The metaphor ofthe novel also permits the exploration of the evolving narratives of this veryprovision in the Court's reasoning.

A. The Chain Around Article 151 TFEUReferences to Article 151 TFEU (ex Article 117, 136 EC) may be traced back to

Defrenne III,80in which the Court held the provision to be essentially in the nature

of a programme.81 The subsequent construction in Gimnez Zaera82 is lessstraightforward. On the one hand, the Court considered that:

[T]he fact that the objectives of social policy laid down in Article 117 arein the nature of a programme does not mean that they are deprived of anylegal effect. It constitutes an important aid, in particular for theinterpretation of other provisions of the Treaty and of secondaryCommunity legislation in the social field.

On the other hand, it deemed the attainment of those objectives mustnevertheless be the result of a social policy which must be defined by the competentauthorities, and concluded that Article 117 EC could not be used to review thecompatibility of a domestic measure with its social objectives. Deference tocompetent authorities was the justification given by the Court to restrain its judicialcontrol83 in Firma Sloman Neptun,84 and this construction then persisted as late as

77 Barnard,supra note 9 (Luxembourg); Paul Davies, Case C-346/06, Rffert c. LandNiedersachsen [2008] IRLR 467 (ECJ), 37 INDUS.L.J.293, 295 (2008) (Rffert); A.C.L. Davies, One StepForward, Two Steps Back? The Viking andLaval Cases in the ECJ, 37 INDUS.L.J.126 (2008).

78 BERCUSSON,supra note 69, at 655714.79 RONALD DWORKIN,LAWS EMPIRE 22838 (1986). For a stimulating critical appraisal of this

notion, see James Lee,Fidelity in Interpretation: Lord Hoffmann and the Adventure of the Empty House,28 LEGAL STUD.1 (2008).

80 Olivier de Schutter, The Balance Between Economic and Social Objectives in the EuropeanTreaties, in REVUE FRANAISE DES AFFAIRES SOCIALES 119, 122 (2006); Catherine Barnard, The United

Kingdom, the Social Chapter and the Amsterdam Treaty,26 INDUS.L.J.275, 276 (1997).81 Case 149/77, Defrenne v. Socit Anonyme Belge de Navigation Arienne Sabena (Defrenne

III), 1978 E.C.R 1365, 19.82 Case 126/86, Gimnez Zaera v. Instituto Nacional de la Seguridad Social, 1987 ECR 3697,

13. 83 A.C.L. Davies,Judicial Self-Restraint in Labour Law, 38 INDUS.L.J. 278 (2009). Though theterminology is different, but for a similar idea, see R.W. Rideout, Control of Management Prerogative, inCOMPARATIVE LABOURLAW 149 (William E. Butler, Bob A. Hepple & Alan C. Neal eds., 1987).

84Firma Sloman Neptun, 1993 ECR I-887, 25.


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2006.85 In Del Cerro Alonso,86 the Court slightly distanced itself, for the first time,from these previous understandings. In that case, the Court explicitly referred toArticle 136 EC but used it to narrowly confine the restriction to remunerationscontained in Article 137(5) EC. InLavaland Viking, the evolution is more apparent.The court held in these rulings that:

[S]ince the Community has thus not only an economic but also a social purpose, the rights under the provisions of the Treaty on the freemovement of goods, persons, services and capital must be balancedagainst the objectives pursued by social policy, which include, as is clearfrom the first paragraph of Article 136 EC, inter alia, improved living andworking conditions, so as to make possible their harmonisation whileimprovement is being maintained, proper social protection and dialoguebetween management and labour.87

As far as the legal reasoning and the substance of these decisions are concerned,this assertion is of particular interest. First, it clearly revives a conception of the EUthat was originally formulated in Defrenne II:88 the Community, which is notmerely an economic union, but is at the same time intended, by common action, toensure social progress and seek the constant improvement of the living and workingconditions of their peoples.89 Second, the Court lifts the restraint over the programmatic character of Article 151 TFEU and clearly states that the dualobjectives of the Union may be achieved by using this provision to interpret others.

From those rulings forward, the Court frequently states that the variousobjectives mentioned in Article 151 TFEU may actually be implemented ininterpreting other legal texts.90 In 3F, the court reiterates the importance of Article151 TFEU:

[S]ince the Community has not only an economic but also a social purpose, the rights under the provisions of the Treaty on State aid andcompetition must be balanced, where appropriate, against the objectives pursued by social policy, which include, as is clear from the first paragraph of Article 136 EC, inter alia improved living and workingconditions, so as to make possible their harmonisation while improvementis being maintained, proper social protection and dialogue betweenmanagement and labor (see, to that effect, with respect to the Treaty provisions on freedom of establishment, Case C438/05InternationalTransport Workers Federation and Finnish Seamens Union [2007] ECRI10779, paragraph 79).91

85 Article 13 EC and Article 137 EC, read in conjunction with Article 136 EC, contain only therules governing the competencies of the Community. Case C-13/05, Chacn Navas v. EurestColectividades SA, 2006 ECR I-6467, 55.

86 Case C-307/05, Del Cerro Alonso v. Osakidetza-Servicio Vasco de Salud, 2007 ECR I-7109.87Laval, 2007 ECR I-11767, 105; Viking, 2007 ECR I-10779, 79.88 Loc Azoulai, The Court of Justice and the Social Market Economy: The Emergence of an Ideal

and the Conditions for its Realization , 45 COMMON MKT.L.REV.1335, 1336 (2008).89

Defrenne II, 1976 ECR 455, 10.90Land Tirol, 2010 ECJ EUR-Lex LEXIS 626, 52; Case C-116/08, Meerts v Proost NV, 2009ECR I-10063, 37;Angelidaki, 2009 ECR I-3071, 112; Case C-268/06, Impact v. Minister for Food andAgric., 2008 ECRI-2483, 113.

91 3F, 2009 ECR I-5963, 58.


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Thus, across these precedents, the existence of a chain novel becomes apparent.Not only does this ruling invariably support the construction of Article 151 TFEUformerly elaborated inLavaland Viking, but the companion reference to Vikingalsoconfirms that it is both the starting point of and a crucial element in this chain. Ineffect, these rulings emphasize three points: the existence of dual objectives withinthe Community, the necessity to balance them, and the usefulness of Article 151TFEU in doing so.

It is thus particularly worth considering the breadth of cases referring to Article151 TFEU.Lavaland Vikingdeal with the freedoms of movement;923F, on the otherhand, concerns state aids, i.e. competition law.93 The centrality of this provision inthe reasoning of the Court is reflected by the fact that those cases combine referencesto two spheres of the economic constitution, namely competition and freedoms ofmovement.94 But there are also references outside the scope of the economicconstitution: synchronous decisions also include social policies95 and the court hascontinuously referred to this provision.96 Hence, those references constitute tangibleelements indicating that the reference to Article 151 TFEU is not incidental. Instead,it confirms the elaboration of a chain, whose narrative is hereafter to be explored.

B. The Narratives Within the ChainReferences to Article 151 TFEU may well have refreshed the Courts reasoning,

but the occasional differences in its decisions outcomes is equally noticeable andthe added value of Article 151 TFEU may thus come into question. Indeed, invokingArticle 3 EU (ex Article 2), which is already an element in the Courts practice,97may well produce similar results. These observations question the circumstances inwhich the Court, instead of relying solely on Article 3 EU, also refers to Article 151TFEU. The Courts use of this provision seems to be twofold.

To begin with, references to Article 151 TFEU provide supplementaryindications of the scope covered by employment matters in EU Law. Indeed, theallusion to the full employment and social progress contained in Article 3 EU asan objective is vague. Referring to Article 151 TFEU permits the additional coverageof the promotion of employment, improved living and working conditions, so as tomake possible their harmonisation while the improvement is being maintained, [the] proper social protection, [the] dialogue between management and labour, [the]development of human resources with a view to lasting high employment and thecombating of exclusion[.] 3Fis particularly illustrative of this variety of usage. Bystressing the applicants position with regard to the collective bargaining process, the

92 [T]he rights under the provisions of the Treaty on the free movement of goods, persons,services and capital must be balanced against the objectives pursued by social policy [.] Laval, 2007ECR I-11767, 105; Viking, 2007 ECR I-10779, 79.

93 The rights under the provisions of the Treaty on State aid and competition must be balanced,where appropriate, against the objectives pursued by social policy. 3F, 2009 ECR I-5963, 58.

94 CRUZ,supra note 3, at 85.95

Angelidaki, 2009 ECR I-3071;Impact, 2008 ECRI-2483.96 Joined Cases C-395 & C-396/08, Istituto Nazionale della Previdenza Sociale v. Bruno, 2010ECJ EUR-Lex LEXIS 657 (June 10, 2010);Land Tirol,2010 ECJ EUR-Lex LEXIS 626; Meerts, 2009ECR I-10063.

97Laval, 2007 ECR I-11767, 104; Viking, 2007 ECR I-10779, 78.


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Court points out the importance of collective bargaining in the EU and supports theinvolvement of social partners in the elaboration of employment policies:

[E]xclud[ing] a priori the possibility . . . that a trade union could show thatit is a party concerned within the meaning of Article 88(2) EC, by

relying on its role in collective negotiations and the effects on that role ofnational tax measures regarded by the Commission as aid compatible withthe common market, would be liable to undermine the very social policyobjectives.98

Furthermore, Article 151 TFEU has also been expressly99 or implicitly100 usedto interpret other provisions of the Social Policy Title and, in particular, to narrowlyconstruct the exceptions contained in Article 153 (5) TFEU (ex Article 137 (5)),which excludes pay, the right of association, the right to strike or the right toimpose lock-out from the EU's field of competence.

For many years, Article 151 TFEU was the black sheep of the EU employmentedifice. An analogy to the alternate European legal system is particularly valuable.Kahn-Freund called the European Social Charter a big footnote of the [ECHR].101By integrating the European Social Charter into the interpretative corpus of the

ECHRthe European Court of Human Rights jurisprudencethrough acomprehensive interpretation of Article 11 of the ECHR,102 the Courts illustrativefootnotes may well supply substantial resources towards the elaboration ofsignificant chapters of legal narrative. In a similar fashion, the renewedunderstanding of Article 151 TFEU in the Courts reasoning provides a tool toreprogram the EU in a more socially sensitive manner. As shown in the recentEuropean employment law saga, the formal acknowledgment of employment rights,such as the right to strike, does not imply that these rights are truly and fullyrecognized. Thus, the balance between the economic and social spheres within theEU legal edifice has yet to be thoroughly explored.

III. THE CONSTITUTIONALIZATION OF EMPLOYMENT RIGHTSConstitutionalism is a central topic of discussion of the literature of both EU

Law103 and Employment Law.104 On the one hand, notwithstanding the constitutional

98 3F, 2009 ECR I-5963, 57. Although collective bargaining also belongs to the Europeanfundamental rights, Charter of Fundamental Rights of the European Union, art. 28, Mar. 30, 2010, 2010OJ (C 83) 389; European Social Charter (Revised), art. 5, May 3, 1996, C.E.T.S. No. 163; Convention forthe Protection of Human Rights and Fundamental Freedoms, art. 11(1), Mar. 9, 1953, C.E.T.S. No. 5; cf.Demir v. Turkey, 2008 Eur. Ct. H.R. 1345; K.D. Ewing & John Hendy, The Dramatic Implications ofDemirandBaykara, 39 INDUS.L.J. 2 (2010), the decision unfortunately does not name it.

99 As for pay, seeImpact, 2008 ECRI-2483, 122;Del Cerro Alonso, 2007 ECR I-7109.100 In relation with the freedom of association, see Laval, 2007 ECR I-11767; Viking, 2007 ECR I-

10779.101 Otto Kahn-Freund,European Social Charter, in EUROPEAN LAW AND THE INDIVIDUAL 181,

182 (Francis Geoffrey Jacobs ed., 1976).102Demir, 2008 Eur. Ct. H.R. 1345; Enerji Yapi-Yol Sen v. Turkey (Application No.68959/01),

EUR.COURT OF HUMAN RIGHTS (Apr. 21, 2009), http://cmiskp.echr.coe.int/tkp197/view.asp?item=1&

portal=hbkm&action=html&highlight=Enerji%20%7C%20Yapi-Yol%20%7C%20Sen&sessionid=61281048&skin=hudoc-en.

103 The literature on this topic is vast. It is however always valuable to refer to JOSEPH H.H.WEILER,THE CONSTITUTION OF EUROPE (1999) andPaul P. Craig, Constitutions, Constitutionalism, andthe European Union, 7 EUR.L.J. 125 (2001). For a recent discussion, with another perspective, see


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Treatys fate and the well-worn comparison with municipal law, the verycontemporaneousness of that question may be disputed. Namely, the Courtsjurisprudence clearly states that the EU is an international legal order105 with a basicconstitutional charter, the Treaty.106 Any matter that falls within the scope of theTreaty could then be assumed to have been constitutionalized. On the other hand, asillustrated by the term economic constitution, the material constitution of theEuropean Union excludes non-economic matters from its material scope. It isneedless to say that the Court has not been as proactive in every legal sphere covered by the Treaty as in the economic sphere: the idea of an economic constitutionowes much to the Courts suggestion;107 a clear example of such a step back in theemployment sphere is the judicial self-restraint applied towards Article 151 TFEU.

As a matter of law, the uneasiness surrounding the recent employment law sagaexceeds the conventional primacy enjoyed by provisions belonging to the economicconstitution. It is indeed argued that it is tensely indebted to both the receptivenessand the responsiveness of the Courts reasoning towards economic arguments. Inother words, the Courts machinery appears to operate on a basis of economicprogramming. However, the renewed constructions of Article 151 TFEU as well as

the new horizontal social clause undoubtedly equip litigants to carve out space in theeconomic constitution and thus reprogram the material constitution of the EuropeanUnion.

A. The Economic ProgrammingLegal phenomena are acknowledged to be mainly argumentative.108 Such a

conception may be effectively summarized through the following axiom: to be heardin front of a court, one has to speak law.109 Framing a claim in legal terms is thus apre-condition of success. Yet, careful scrutiny of the Courts jurisprudence indicatesthat speaking law may well be insufficient; in practice, a claim is more likely to besuccessful if translated into economic terms.

Morten Rasmussen, The Origins of a Legal Revolution The Early History of the European Court ofJustice, 14 J.EUR.INTEGRATION HIST.,no.2,2008at 77, available athttp://www.lcd.lu/cere/journal/JEIH-28.pdf

104 Emilios Christodoulidis & Ruth Dukes,Dialogue & Debate: Labour, Constitution and ASense of Measure: A Debate with Alain Supiot, 19 SOCIAL &LEGAL STUDIES 217 (2010); Ruth Dukes,Constitutionalizing Employment Relations: Sinzheimer, Kahn-Freund, and the Role of Labour Law , 35J.L.&SOCY 341 (2008); Eliasoph,supra note 11; Florian Rdl, Constitutional Integration of LabourConstitutions , in LAW AND DEMOCRACY IN THE POST-NATIONAL UNION 289 (Erik Oddvar Eriksen,Christian Joerges & Florian Rdl eds., 2006); Judy Fudge, Constitutionalizing Labour Rights in Europe(on file with the author).

105 Case 26/62, NV Algemene Transport - en Expeditie Onderneming van Gend v. NederlandseAdministratie der Belastinjen, 1963 ECR 3. The English version of this case may be found at 1963 ECR 1in the English version of the European Court Reports.

106 Case 294/83, Parti Ecologiste Les Verts v. European Parliament, 1986 ECR 1339, 23.107 See e.g., MADURO,supra note 3.108 But it is a different matter to claim that the discursive process by which the rules are made,

here appellate adjudication has ideological content and significance in its own right. D UNCAN KENNEDY,

ACRITIQUE OF ADJUDICATION {FIN DE SICLE} 23 (1997);see alsoNEIL MACCORMICK,RHETORIC ANDTHE RULE OF LAW 122 (2005); DWORKIN,supra note 79, at 65.

109 David Schiff, Richard Nobles & G. Teubner, The Autonomy of Law: Introduction to LegalAutopoiesis, in INTRODUCTION TO JURISPRUDENCE AND LEGAL THEORY 899 (David Schiff & RichardNobles eds., 2003).


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In fact, a careful and detailed exploration of some rulings indicates that theCourt is particularly receptive to arguments that are translated into economic terms.The Court, for instance, calls into question the level of compensation that is derigueurin the construction sector: the casefile submitted to the Court contains noevidence to support the conclusion that the protection resulting from such a rate ofpaywhich, moreover, as the national court also notes, exceeds the minimum rate ofpay applicable pursuant to the AEntGis necessary for a construction sector workeronly when he is employed in the context of a public works contract but not when heis employed in the context of a private contract.110 In the same manner, the courtsdismiss the respondents claim in relation to the objectives of protecting the purchasing power of workers and good labour relations, on the grounds that therespondent has not adduced any evidence to enable the necessity for and proportionality of the measures adopted to be evaluated.111 In 3F, the Courtsimilarly invites the remitted Tribunal to consider the extent to which the tax reliefalters the competitive position of TU in relation to the collective bargainingprocess.112 However, compelling the TU to demonstrate the impairment of itscompetitive position may amount, as it does the present case, to requiring it to bringpieces of evidence that may well be impossible to produce or may be found to be

inconclusive even if presented. Fiscal relief may also be considered to have thiseffect, by its sole existence, of weakening the position of the TU Not only does itworsen the workers terms and conditions of employment, but it also reinforces the position of the employers in this sector, the immediate consequence being todisadvantage the TU in subsequent negotiations.

The economic sensitivity in the Courts reasoning is also noticeable outside thedomain of the economic constitution. In relation with health and safety and, in particular, the employers obligations, the Court has held, contrary to theCommissions position, that directive 89/391/EEC does not establish a no-faultliability system. The Court thus upheld the position of the Member State, whichadvocated that an employer could not be liable if it were able to demonstrate thatthere was a gross disproportion between, on the one hand, the risk to the safety andhealth of workers and, on the other hand, the sacrifice, whether in money, time ortrouble that the adoption of the measures required to prevent that risk from arisingwould have involved and that the risk itself was insignificant in relation to thatsacrifice.113

For the aforementioned reasons, it is asserted that the Courts machineryoperates on the basis of economic programming. In other words, claims are morelikely to be successful if framed through the economic semantic. The resonance ofthis notion originates in the autopoietic theory of law. This theory mayapproximately be summarized as follows: legal systems work along a binary divideworded in a legal/illegal code.114 The programming is the secondary code the legalsystem requires to differentiate the legal from the illegal.115 Namely, the original

110Rffert, 2008 ECR I-1989, 40.111

Luxembourg, 2008 ECR I-4323, 53.1123F, 2009 ECR I-5963, 95.113 Case C-127/05, Comm'n v United Kingdom, 2007 ECR I-4619, 31.114 Niklas Luhmann,Law as a Social System, 83 NW.U.L.REV.136, 140 (1989).115 NIKLAS LUHMANN, LAW AS A SOCIAL SYSTEM 209 (2004).


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binary code is the operating system, while the programming is the secondary code,i.e. the software used.116 This programming is an adequate tool to trigger theparticular machinery of the Court: it operates not only in the interpretation of thelegal texts,117 but also in the subsumptive process.118 And, as demonstrated in

Commission v UK, the economic programming may eventually be equivalent to theCourts judicial self-restraint.119

Obviously, the notion ofeconomic programmingdoes not provide a full accountof the judicial activity of the Court. All other things being equal it is, however, afruitful analytical device to give an account of the Courts frequent inclinationtowards economic reasoning, which goes beyond the mere primacy of the economicconstitution. The economic programming, as illustrated in Commission v. U.K.,operates within and alongside provisions usually identified as not belonging to theeconomic constitution. Such programming is not, however, definitive. Indeed, thenew construction of Article 151 TFEU and the new horizontal social clause insertedin Article 9 TFEU may reprogram the EU legal system by embedding employmentrights within the primary code of the European Union, i.e. its material constitution.

B.

The Constitutional Meaning of Article 151 TFEU

By combining the protection of fundamental social rights with the concerns of acompetitive economy, it has elegantly been argued that Article 151 TFEU representsthe European social model (hereafter ESM).120 Following these decisions, it is particularly valuable to explore the likely implications of the further use of this provision in the Court's machinery, especially the potential for a more sociallyresponsive ESM. In this regard, the renewed construction of Article 151 TFEUbrings three clarifications.

First, it is worth outlining that discussions of European constitutionalism arefrequently associated with the idea of constitutional pluralism.121 By the same

116

The parentage this notion owes to Luhmanns and his followers is acknowledged. For a primeuse of Luhmanian literature in European Studies, see Joseph H.H. Weiler, supra note 72, at 2410. Equally,the economic programmingas a device does not necessarily imply the complete acceptance ofLuhmannian theory. For other uses of theprogrammingmetaphor in legal studies, see Azoulai,supra note88, at 1342; Alain Supiot, Travail, droit et technique, DROIT SOCIAL,Jan. 2002, at 13.

117Comm'n v. United Kingdom, 2007 ECR I-4619.118See Laval, 2007 ECR I-11767, 111; Viking, 2007 ECR I-10779, 89.119 A.C.L. Davies,Judicial Self-Restraint in Labour Law, 38 INDUS.L.J. 278 (2009).120 COLLINS,supra note 44, at 20. In order to provide a more comprehensive picture of the ESM

and though it might be thought of as overly sophisticated, I would add Article 6 TEU, and Articles 154and 155 TFEU (ex Articles 138 and 139 EC) concerning the European Social Dialogue, as well as Article45 TFEU (ex Article 39 EC) with regard to the free movement of workers. The latter could alternatively

be conceived as a precondition or a full-fledged element of the ESM. It must be mentioned that concernsrelating to equality and non-discrimination would be covered through references to the fundamentalsocial rights mentioned in Articles 6 TEU and 151 TFEU. For a recent discussion on the topic of theEuropean Social Modelsee, e.g., Beryl Philine ter Haar & Paul Copeland, What are the Future Prospects

for the European Social Model? An Analysis of EU Equal Opportunities and Employment Policy, 16 EUR.

L.J. 273 (2010).121 Neil Walker, The Idea of Constitutional Pluralism, 65 MOD.L.REV. 317 (2002);see, e.g.,Julie Dickson,How Many Legal Systems? Some Puzzles Regarding the Identity Conditions of, and

Relations Between, Legal Systems in the European Union, 2 PROBLEMA 9 (2008) (providing a recentappraisal).


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token, employment law in Europe is spread through a variety of legal systems,including the Council of Europe and the European Union. In a similar fashion asArticle 6 EU, which formally grants the EU Charter of Fundamental Rights thesame legal value as the Treaties and asserts that the fundamental rights contained inthe European Convention on Human Rights amount to general principles of theUnions law, Article 151 TFEU contributes to identifying the cluster ofrelevantnorms122 in the EU legal system and thus operates, in the employment sphere, as anormative bridge. In particular, it gives normative strength to legal texts that had toooften been confined to a persuasive status.123 Article 151 TFEU expressly mentionsthe 1989 Community Charter of Fundamental Social Rights for Workers of theworkers of 1989 (CCFSRW) and the European Social Charter (ESC).References in Laval, Viking and Angelidaki

124 to the CCFSRW and the ESC

exemplify such a use of Article 151 in the Courts reasoning by acknowledging theirauthoritative dimension. Subsequent cases follow a similar path. Borrowing from theESC, the Court, for instance, refers to the right of all workers to a fair remunerationsufficient for a decent standard of living for themselves and their families125 or theright to parental leave.126

Second, as Article 151 TFEU stands, there is no subordination of any kind of theeconomic sphere to the social and vice versa. This is what Azoulai convincinglycalls a consensualist conception of the economic and social spheres relation.127 Itmust be emphasized that this assertion is both descriptive and normative. Withregard to the descriptive part, the Court recognizes the dual dimension of the EU,which has not only an economic but also a social purpose.128 The relation betweenthe economic and the social spheres thus evolves from a vertical perspective to ahorizontal one, which is the horizontalizationprocess. Yet, the outcome of the recentemployment law saga illustrates that the technique of reconciliation does not matchup the ideal which is announced.129 At that point, the argument shifts from adescriptive to a normative stance: were there any discrepencies in the balance between provisions belonging to the economic and social spheres, the constantmention of the word must130 indicates that they need be corrected. Hence,

irrespective of the current outcome of the Courts decisions, this renewedunderstanding provides a tool to alternatively construct forthcoming rulings.

The third clarification consistently builds upon this horizontalization andfollows from it. Article 151 TFEU emerges, in addition to Article 157 TFEU, as one

122 SANTI ROMANO, LORDINAMENTO GIURIDICO (2d ed. 1946). Romano is one of the first tohave found a solution to the problem of legal pluralism through the notion of relevance.

123See Hugh Collins,A Workers Civil Code? Principles of European Contract Law Evolving inEU Social and Economic Policy, in THE POLITICS OF A EUROPEAN CIVIL CODE 55, 69 (Martijn W.Hesselink ed., 2006); Sophie Robin-Olivier,Normative Interactions and The Development of Labour

Law: A European Perspective, 11 CAMBRIDGE Y.B.EUR.LEGAL STUD. 377 (2009).124Angelidaki, 2009 ECR I-3071, 112.125Bruno, 2010 ECJ EUR-Lex LEXIS 657, 31; Impact, 2008 ECR I-2483, 113.126Land Tirol, 2010 ECJ EUR-Lex LEXIS 626, 52; Meerts, ECR I-10063, 37.127

Azoulai,supra note 88, at 1348.1283F, 2009 ECR I-5963;Laval, 2007 ECR I-11767; Viking, 2007 ECR I-10779.129 Azoulai, supra note 88, at 1353.130 3F, 2009 ECR I-5963, 58;Laval, 2007 ECR I-11767, 105; Viking, 2007 ECR I-10779,

79.


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of the provisions that can and does operate as a bridge between the economic and thesocial spheres. The comparison with Article 157 TFEU may well be fruitful but isnonetheless limited. Contrary to Article 157 TFEU, there are still no cases where theCourt has held a claim admissible solely by invoking Article 151 TFEU. Properlyspeaking, the new understanding does not create a right with direct effect.131 Insteadit may be said, borrowing from Hohfeld's jural relations theory,132 that this newunderstanding creates leeway, which grants Member States directly applicableimmunity and allows them, if they wish to do so, and within the space designed bythis new construction, to adopt employment legislation enhancing the dual objectivesof the community.

Part of the solution, these developments illustrate, lies in adjudication. One ofthe characteristics of adjudication is that it operates on an incremental basis.Following Dworkins chain novelmodel, those elements corroborate anterior studiesthat demonstrate that legal texts are not only constraints but also resources at anyclaimants disposal. Under these circumstances, Article 151 TFEU offers a wealth ofpossibilities.133 Ultimately, increased use by parties and continuing references in theCourts jurisprudence are likely to send the narrative on a path that would be more

responsive to the social demands within the European Union. Although theeconomic and social spheres are presently being coupled once more, the substantialimpairment has still to be reversed. In comparison with the social sphere, theeconomic provisions require little support. For the time being, Article 151 TFEUdoes not provide a real direction in which social Europe can head. Nevertheless, thisshould not lead to the opposite shortcoming, which would fashion a formalconstruction of this provision. Article 151 TFEU is a significant mechanism in thetoolkit: not only because it highlights the unalterable interpenetration of theeconomic and social spheres, but also because it provides, with some help fromfundamental social rights,134 a (sound) device that may used to embed employmentrights in EU Law.

C. The Horizontal Social ClauseWith regard to employment matters, the former constitutional framework

135

andthe Lisbon amendments136 have been given a proper account. Still, very littleattention has been paid to the inclusion of the horizontal social clause in the LisbonTreaty.137 Indeed, the Lisbon Treaty amends the previous EU Treaties. While the

131 Jan A. Winter, Direct Applicability and Direct Effect, Two Distinct and Different Concepts inCommunity Law, 9 COMMON MKT.L.REV. 425 (1972).

132 WESLEYN.HOHFELD,FUNDAMENTAL LEGAL CONCEPTIONS AS APPLIED IN JUDICIALREASONING 28 (2001).

133 Collins,supra note 123, at 69;see also Etienne Pataut & SophieRobin-Olivier, Europe socialeou Europe conomique? in REVUE DE DROIT DU TRAVAIL 80 (2008) (Fr.).

134 Hugh Collins, The European Economic Constitution and the Constitutional Dimension ofPrivate Law, 5 EUR.REV.CONTRACT LAW 71, 84 (2009).

135

SeeBarnard,supra note 5, at 109.136 Brian Bercusson, The Lisbon Treaty and Social Europe, 10 ERAFORUM 87 (2009); PhilSyrpis,supra note 75.

137But seeid. at 10001. For references, en passant, see Barnard,supra note 10; DraganaDamjanovic & Bruno de Witte, Welfare Integration through EU Law: The Overall Picture in the Light of


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first article of the Lisbon Treaty revises the Treaty on European Union, Article 2modifies the Treaty establishing the European Community (now TFEU). It containsa seventeenth section that inserts a new Article 9 TFEU, which reads as follows:

In defining and implementing its policies and activities, the Union shall

take into account requirements linked to the promotion of a high level ofemployment, the guarantee of adequate social protection, the fight againstsocial exclusion, and a high level of education, training and protection ofhuman health.138

Without hypothesizing about the likely effects of this clause , however, somecomments may nevertheless be formulated. To begin with, employment is not theonly matter covered by a specific clause in the new Treaty on the Functioning of theEU. In Part I, the second title, named Provisions Having General Application,aims to ensure consistency between [the EUs] policies and activities, taking all ofits objectives into account and in accordance with the principle of conferral ofpowers.139 Several domains are referred to: equality between men and women,employment, anti-discrimination, environment, and consumption.140 Employment isthe latest matter introduced by the Lisbon Treaty and, slowly, it is reaching a more

fitting position in the EU legal order. Although this provision does not widen thecompetences of the EU, it does extend the prominence of employment concernswithin the EUs current scope of activity. In effect, the normative production, whilenot currently the EU's prime concern, is fully included among the various activitiesof the EU. The adoption of forthcoming legislation should thus take this intoaccount.

Evolution in employment considerations is likely to occur not only through theadoption of new legislation, but also through interpretation of past legislation.Indeed, Article 13 EU includes the Court of Justice of the European Union amongthe Unions institutions. The Court already acknowledges that legislation must beconstructed in light of the Treaties. As with any other EU institution, the Court, asfar as the construction of provisions in subsequent cases is concerned, is expected tofirst internalize this objective141 and second to reevaluate its golden rule of

teleological interpretation.The scope of the horizontal social clause must finally be briefly examined.

Kilpatrick has provided a useful typology of the way employment matters areusually divided in four objectives of EU Governance: worker protection, increasingthe employment rate and lowering employment; including excluded groups in thelabour market; increasing the competitive efficiency of employing enterprises[.]142Comparing Article 9 TFEU with this typology, the level of employment and the

the Lisbon Treaty, in INTEGRATING WELFARE FUNCTIONS INTO EULAWFROM ROME TO LISBON 53, 85(Ulla Neergaard et al. eds., 2009); Govaere, supra note 75, at 80.

138 TFEU Art. 9.139Id. Art. 7.140Id. Art. 712.141

For a similar account,see Opinion of Advocate General Cruz Villaln, Case C-515/08, SantosPalhota, EUR-LEX, 51 (May 5, 2010), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62008C0515:EN:HTML (link to English translation).

142 Claire Kilpatrick,New EU Employment Governance and Constitutionalism, in LAW ANDNEWGOVERNANCE IN THE EU AND THE US121,127 (Grainne de Brca & Joanne Scott eds., 2006).


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concern regarding social inclusion are still present, while initial education andlifelong training has been added. It must be noted that the concern for efficiencyhas been replaced by the guarantee of adequate social protection. This particularmention may eventually enhance the protective dimension of employment law,which, for efficiencys sake, has often been the neglected child of employmentpolicies.

The inclusion of this new social clause contributes to a re-designation of theTreaties equilibrium. Following the renewed construction of Article 151 TFEU,which negatively supplies immunity in the integrative process, Article 9 TFEUenables the EU institutions to positively integrate employment concerns within theiractivities. Both articles provide a consistent set of employment tools and contribute,as a whole, to the serious consideration of the idea of a material constitution of theEU, which includes employment rights.

IV. CONCLUSIONThe disparity between the economic and social spheres has played an important

role in elaborating Labor Laws sense of helplessness in relation to internal market

legislation in particular, as well as EU Law in general. Departing from theconventional economic versus social paradigm, this study has subsequentlyderived, from the jurisprudence of the Court and the recent amended Treaties, avariety of normative elements both in their procedural (first section) and substantial(successive sections) aspects that support the development of employment rightswithin the European edifice. With regard to both the negative and the positivedimensions of this integration process, the present construction of Article 151 TFEUand the horizontal Social Clause within the Lisbon Treaty undoubtedly offer aqualitative leap. In comparison with the initial separation between the economic andsocial spheres, and the subsequent infiltration of the economic constitution into theemployment sphere, these elements are creating an opening in the European Treaties.Incidentally, these instruments may enable to bring the European social model to amore satisfactory state by embedding employment rights in the EU edifice.

Embedding employment rights in europe

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