Proposal for a COUNCIL REGULATION on the exercise of the right to take collective action within the context of the freedom of establishment and the freedom to provide services
Date: 2012-03-21
Institutions: European Commission
Subjects: collective bargaining, freedom to provide services, labour dispute, right of establishment, right to strike, social dumping

EUROPEAN COMMISSION 

Brussels, 21.3.2012  
COM(2012) 130 final 

2012/0064 (APP) 

Proposal for a 

COUNCIL REGULATION 

on the exercise of the right to take collective action within the context of the freedom of 
establishment and the freedom to provide services 

(Text with EEA relevance) 

{SWD(2012) 63} 
{SWD(2012) 64} 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

General context 

In  its  judgments  in  the  Viking-Line1  and  Laval2  case  the  Court  of  Justice  for  the  first  time 
recognised  that  the  right  to  take  collective  action,  including  the  right  to  strike,  as  a 
fundamental right forms an integral part of the general principles of EU law the observance of 
which the Court ensures3. It also explicitly stated that since the European Union has not only 
an economic but also a social purpose, the 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,  which  include  improved  living  and  working  conditions,  proper 
social  protection  and  dialogue  between  management  and  labour4.  Moreover,  it  equally 
acknowledged that the right to take collective action for the protection of workers constitutes 
a  legitimate  interest,  which,  in  principle,  justifies  restrictions  on  the  fundamental  freedoms 
guaranteed by the Treaty. The protection of workers is thus one of the overriding reasons of 
public interest recognised by the Court5. 

Despite this clarification, the Court rulings triggered a wide-ranging, intense debate on their 
consequences for the protection of the rights of posted workers, and more generally the extent 
to  which  trade  unions  can  continue  to  protect  workers’  rights  in  cross-border  situations.  In 
particular, they sparked controversy on the adequacy of existing EU rules to protect the rights 
of  workers  in  the  context  of  the  freedom  to  provide  services  and  the  freedom  of 
establishment6. 

This  debate  has  attracted  a  wide  range  of  stakeholders  including  the  social  partners, 
politicians,  legal  practitioners  and  academics.  While  some  participants  in  the  debate 
welcomed the rulings as a needed clarification of the Internal Market rules, many perceived 
the  rulings  of  the  Court  as  acknowledging  the  primacy  of  economic  freedoms  over  the 
exercise of fundamental rights and entailing the risk of, if not a licence for, ‘social dumping’ 
and unfair competition. A particular aspect emphasised by the critics has been that the Court, 
while  recognising  that  the  right  to  take  collective  action,  including  the  right  to  strike,  as  a 
fundamental  right  forms  an  integral  part  of  the  general  principles  of  EU  law,  nevertheless 
explicitly acknowledged that ‘the exercise of that right may none the less be subject to certain 
restrictions’7. The latter would in particular hamper the ability of trade unions to take action to 
protect workers’ rights. 

1 
2 
3 
4 
5 
6 

7 

Judgment 11.12.2007, case C-438/05. 
Judgment 18.12.2007, case C-341/05. 
Points 44 (Viking-Line) and 91 (Laval). 
Points 79 (Viking-Line) and 105 (Laval). 
Point 77 (Viking-Line); cf. point 103 (Laval). 
Report  on  the  joint  work  of  the  European  social  partners  on  the  ECJ  rulings  in  the  Viking,  Laval, 
Rüffert and Luxembourg cases, 19 March 2010. 
Last part of the first sentence of point 44 (Viking-Line) and 91 (Laval). 

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According  to  Professor  Monti8,  the  Court  rulings  in  2007  and  20089  have  exposed  the  fault 
lines  that  run  between  the  Single  Market  and  the  social  dimension  at  national  level.  They 
‘revived  an  old  split  that  had  never  been  healed:  the  divide  between  advocates  of  greater 
market integration and those who feel that the call for economic freedoms and for breaking up 
regulatory  barriers  is  code  for  dismantling  social  rights  protected  at  national  level’.  He 
likewise  pointed  out  that  ‘the  revival  of  this  divide  has  the  potential  to  alienate  from  the 
Single  Market  and  the  EU  a  segment  of  public  opinion,  workers’  movements  and  trade 
unions, which has been over time a key supporter of economic integration’. 

The Lisbon Treaty 

According  to  Article  3(3)  of  the  Treaty  on  European  Union,  the  internal  market  shall  work 
towards  a  highly  competitive  social  market  economy,  aiming  at  full  employment  and  social 
progress. In defining and implementing its policies and activities, the European Union must 
take  into  account  requirements  linked  to  the  promotion  of  a  high  level  of  employment,  the 
guarantee  of  adequate  social  protection  and  the  fight  against  social  exclusion10.  Moreover, 
with  the  Treaty  of  Lisbon,  the  enshrinement  of  fundamental  rights  in  primary  law  has  been 
strengthened by the fact that the Charter of Fundamental Rights of the European Union now 
has the same legal value as the Treaty11. 

The social dimension is thus a core component of the internal market, which cannot function 
properly without a strong social dimension and the support of citizens12. 

The Court of Justice has also acknowledged that the Union has not only an economic but also 
a  social  purpose.  The  rights  under  the  provisions  of  the  Treaty  on  the  Functioning  of  the 
European Union (TFEU) on the free movement of goods, persons, services and capital have 
thus  to  be  implemented  in  accordance  with  the  objectives  pursued  by  social  policy,  which 
include, as is clear from the first paragraph of Article 151 TFEU, inter alia, improved living 
and  working  conditions,  proper  social  protection  and  dialogue  between  management  and 
labour. 

Furthermore,  under  Article  152  TFEU,  the  Union  aims  to  recognise,  promote  and  further 
strengthen  the  role  of  social  partners  at  EU  level,  and  to  facilitate  dialogue  between  them, 
taking  account  of  the  diversity  of  national  systems  and  respecting  the  autonomy  of  social 
partners. 

In  its  Solemn  Declaration  of  18/19  June  2009  on  workers’  rights,  social  policy  and  other 
issues,  the  European  Council  also  reiterated  that  the  Treaties  as  modified  by  the  Treaty  of 
Lisbon provide for the European Union to recognise and promote the role of social partners. 

The  right  to  collective  bargaining  —  right  to  take  collective  action  —  right  or  freedom  to 
strike 

8 
9 

10 
11 
12 

Report ‘A new strategy for the single market’ to the President of the Commission, 9 May 2010, p. 68. 
Apart from the already mentioned Viking-Line and Laval rulings, see also the Rüffert and Commission 
v Luxembourg case. 
Article 9 TFEU. 
Article 6 TEU. 
Opinion  of  the  European  Economic  and  Social  Committee  on  ‘The  Social  Dimension  of  the  Internal 
Market’ (own initiative opinion) by Mr Janson, OJ 2011 C44/90. 

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Even  if  the  relevant  instruments  may  not  always  explicitly  refer  to  the  right  or  freedom  to 
strike,  the  right  to  take  collective  action,  which  is  the  corollary  of  the  right  to  collective 
bargaining, is recognised by various international instruments which the Member States have 
signed or cooperated in13. It is included in instruments developed by those Member States at 
EU  level14  and  in  the  Charter  of  Fundamental  Rights  of  the  European  Union  proclaimed  in 
Nice on 7 December 200015, as adopted at Strasbourg on 12 December 200816. It also enjoys 
constitutional protection in a number of Member States. 

In  this  context,  Article 28  of  the  Charter  of  Fundamental  Rights  of  the  European  Union 
expressly recognises the right to collective bargaining, which, in cases of conflicts of interest, 
includes the right to take collective action to defend interests, including strike action17. 

According to the European Court of Human Rights, the right to collective bargaining and to 
negotiate and enter into collective agreements constitutes an inherent element of the right of 
association, i.e. the right to form and join trade unions for the protection of one’s interests, as 
set out in Article 11 of the Convention for the Protection of Human Rights and Fundamental 
Freedoms18. 

The European Court of  Human Rights19 has equally acknowledged that, in the area of trade 
union freedom, in view of the sensitive character of the social and political issues involved in 
achieving  a  proper  balance  between  the  respective  interests  of  labour  and  management,  and 
given  the  wide degree  of  divergence  between national systems in  this field, the Contracting 
States enjoy a wide margin of appreciation as to how the freedom of trade unions to protect 
the  occupational  interests  of  their  members  may  be  secured.  However,  it  notes  that  this 
margin is not unlimited but goes hand in hand with European supervision by the Court, whose 
task  it  is  to  give  a  final  ruling  on  whether  a  restriction  is  reconcilable  with  the  freedom  of 
association as protected by Article 11 of the European Convention on Human Rights (ECHR). 

However, as recognised by the Court of Justice and the European Court of Human Rights20, 
the  right  to  strike  is  not  absolute  and  its  exercise  may  nonetheless  be  subject  to  certain 
restrictions,  which  may  also  result  from  national  constitutions,  law  and  practices.  As 
reaffirmed  by  Article  28  of  the  Charter,  it  is  to  be  exercised  in  accordance  with  European 
Union law and national laws and practices. 

Therefore, trade unions play an important role in this respect and should, as confirmed by the 
Court  of  Justice,  continue  to  be  able  to  take  action  to  protect  workers’  rights,  including  the 

13 

14 

15 
16 
17 

18 
19 
20 

Such  as  the  European  Social  Charter,  signed  at  Turin  on  18 October  1961  —  to  which,  moreover, 
express  reference  is  made  in  Article 151  TFEU  —  and  Convention  No  87  of  9 July  1948  of  the 
International  Labour  Organisation  concerning  Freedom  of  Association  and  Protection  of  the  Right  to 
Organise. 
Such as the Community Charter of the Fundamental Social Rights of Workers adopted at the meeting of 
the European Council held in Strasbourg on 9 December 1989, which is also referred to in Article 151 
TFEU. 
OJ C 364, 2000, p. 1. 
Cf. Article 6 of the Treaty on European Union. 
By the general reference to the Charter in Article 6 TEU the right to collective bargaining is thus now 
expressly  incorporated  in  primary  law  (cf.  Opinion  AG  Trstenjak  in  case  C-271/08,  Commission  v 
Germany, point 79). 
Judgment ECHR 12 November 2008, Demir, points 153/154 with 145. 
Judgment ECHR, 27 April 2010, case of Vördur Olaffson v Iceland, point 74/75. 
See for instance judgment 21.4.2009, Enerji Yapi-Yol Sen v Turkey (68959/01), point 32. 

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possibility  of  calling  their  members  out  on  strike  and  ordering  boycotts  or  blockades  to 
protect  the  interests  and  rights  of  workers  and  ensure  the  protection  of  jobs  or  terms  and 
conditions  of  employment,  provided  this  is  done  in  compliance  with  European  Union  and 
national law and practice. 

Economic freedoms — restrictions — Protection of workers’ rights 

The freedom of establishment and the freedom to provide services are part of the fundamental 
principles  of  EU  law.  A  restriction  on  those  freedoms  is,  according  to  the  case  law  of  the 
Court,  warranted  only  if  it  pursues  a  legitimate  objective  compatible  with  the  Treaty  and  is 
justified  by  overriding  reasons  of  public  interest.  If  that  is  the  case,  it  must  be  suitable  for 
attaining the objective which it pursues and not go beyond what is necessary in order to attain 
it. 

The  protection  of  workers,  in  particular  their  social  protection  and  the  protection  of  their 
rights, as well as the desire to avoid disturbances on the labour market have been recognised 
as constituting overriding reasons of general interest justifying restrictions on the exercise of 
the fundamental freedoms of EU law. 

Moreover, the Court has recognised that Member States enjoy a margin of appreciation and 
discretion when it comes to the prevention of obstacles to freedom of movement arising from 
the conduct of private actors. 

In summary, economic freedoms and fundamental rights, as well as their effective exercise, 
may thus both be subject to restrictions and limitations. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

2.1. 

Consultation with interested parties 

As  indicated  above,  the  rulings  of  the  Court  in  the  Viking-Line,  Laval,  Rüffert  and 
Commission v Luxembourg cases in 2007-2008 have  fuelled an intense debate in particular 
on the consequences of the freedom to provide services and freedom of establishment for the 
protection  of  workers’  rights  and  the  role  of  trade  unions  in  protecting  workers’  rights  in 
cross-border situations. 

The European trade unions see these judgments as anti-social. They want the legislation to be 
amended to clarify the legal situation and prevent judges ruling against what they perceive as 
workers’ interests in the future. To this end, they have put forward two key demands for: 

– 

– 

a  revision  of  the  Posting  of  Workers  Directive  (Directive  96/71/EC)  to  include  a 
reference to the principle of ‘equal pay for equal work’ and allow the ‘host Member 
State’  to  apply  more  favourable  conditions  than  the  core  terms  and  conditions  of 
employment in accordance with Article 3(1) of the Directive; 

the  introduction  of  a  ‘Social  Progress  Protocol’  in  the  Treaty  to  give  priority  to 
fundamental social rights over economic freedoms. 

Other stakeholders take a different view. BusinessEurope has welcomed the clarification the 
Court’s rulings have brought and does not  consider that the Directive needs revising. Many 

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Member  States  have  expressed  similar  views.  Some  Member  States  (SE,  DE,  LU  and  DK) 
have modified their legislation in order to conform to the rulings. 

In October 2008, the European Parliament adopted a resolution calling on all Member States 
to  properly  enforce  the  Posting  of  Workers  Directive  and  asking  the  Commission  not  to 
exclude  a  partial  review  of  the  Directive  after  assessing  in  depth  the  problems  and 
challenges21. At the same time, it emphasised that the freedom to provide services as ‘one of 
the  cornerstones  of  the  European  project  should  be  balanced,  on  the  one  hand,  against 
fundamental rights and the social objectives of the Treaties and on the other hand, against the 
right of the public and social partners to ensure non-discrimination, equal treatment and the 
improvement  of  living  and  working  conditions’22.  On  2  June  2010,  the  Employment  and 
Social Affairs Committee organised a hearing of three experts (representing the Commission, 
ETUC  and  BE)  where  S&D,  Left  and  Green  MEPs  called  for  action  to  be  taken  by  the 
Commission very much along the same lines as proposed by ETUC. 

On a joint invitation from Commissioner Špidla and Minister Bertrand (acting as President of 
the Council) at the October 2008 Forum, the European social partners agreed to carry out a 
joint  analysis  of  the  consequences  of  the  Court  rulings  in  the  context  of  mobility  and 
globalisation.  In  March  201023,  the  European  Social  Partners  delivered  a  report  on  the 
consequences  of  the  ECJ  rulings.  The  document  exposed  their  wide  divergences.  While 
Business Europe is opposed to revision of the Directive (but accepts the need for clarification 
of certain aspects related to enforcement), ETUC wants it thoroughly amended. 

In  2010,  the  European  Economic  and  Social  Committee  adopted  an  opinion  on  the  ‘Social 
Dimension  of  the  Single  Market’24,  asking  for  more  effective  implementation  of  Directive 
96/71 and expressing support for a Commission initiative to clarify the legal obligations for 
national  authorities,  business  and  workers,  including  a  partial  revision  of  the  Directive.  The 
opinion  further  encourages  the  Commission  to  exempt  the  right  to  strike  from  the  Single 
Market and to explore the idea of a ‘European Social Interpol’, supporting the activities of the 
labour inspectorates of the various Member States. 

Recognising the controversy fuelled by the Court rulings in his report ‘A new Strategy for the 
Single Market’, Professor Monti recommended to: 

– 

– 

21 

22 
23 

24 

Clarify  the  implementation  of  the  Posting  of  Workers  Directive  and  strengthen 
dissemination  of  information  on  the  rights  and  obligations  of  workers  and 
companies,  administrative  cooperation  and  sanctions  in  the  framework  of  the  free 
movement of persons and the cross-border provision of services; 

Introduce  a  provision  to  guarantee  the  right  to  strike,  modelled  on  Article  2  of 
Council  Regulation  (EC)  No  2679/98  (so-called  Monti  II  Regulation)  and  a 
mechanism for informal resolution  of labour disputes concerning the  application of 
the Directive. 

Resolution  of  22  October  2008  on  challenges  to  collective  agreements  in  the  EU  (2008/2085(INI)), 
points 25 and 30. 
Point 1; see also points 17 and 31. 
The  text  was  presented  during  the  Oviedo  conference  in  March  2010,  organised  by  the  Spanish 
Presidency. The debates once again showed divided opinions among stakeholders. 
Opinion 2011/C 44/15. 

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In October 2010, the Commission launched a public consultation on how to reinvigorate the 
Single  Market  with  its  Communication  ‘Towards  a  Single  Market  Act  —  For  a  highly 
competitive  social  market  economy  —  50  proposals  for  improving  our  work,  business  and 
exchanges with one another’25. It put forward two proposals (numbers 29 and 30) designed to 
restore  confidence  and  support  among  citizens,  one  on  the  balance  between  fundamental 
social rights and economic freedoms and one on the posting of workers. 

– 

– 

Proposal  29:  ‘Pursuant  to  its  new  strategy  for  the  effective  implementation  of  the 
Charter of Fundamental Rights by the European Union, the Commission will ensure 
that the rights guaranteed in the Charter, including the right to take collective action, 
are taken into account. …’ 

Proposal  30:  ‘In  2011,  the  Commission  will  adopt  a  legislative  proposal  aimed  at 
improving the implementation of the Posting of Workers Directive, which is likely to 
include or  be  supplemented  by a clarification of the exercise of  fundamental  social 
rights within the context of the economic freedoms of the Single Market.’ 

The  public  consultation  showed  huge  interest  and  support  for  these  actions  from  unions, 
individual citizens and NGOs. 

Proposal  29  on  the  effective  implementation  of  the  Charter  of  Fundamental  Rights  and  the 
social  impact  assessment  is  considered  one  of  the  most  important  issues  by  the  740 
respondents (out of the more than 800). 

The  European  social  partners  responded  to  the  consultation  along  their  established  lines. 
ETUC  reiterated  its  request  for  a  ‘Social  Progress  Protocol’  amending  the  Treaty  and 
maintained that the Commission should not only clarify and improve the implementation of 
the Posting of Workers Directive, but also thoroughly revise it. BusinessEurope supported the 
Commission’s approach for better implementation and enforcement of the existing Directive. 

The idea of a so-called Monti II regulation was seen by ETUC as a positive step in the right 
direction  (and  also  expressly  mentioned  in  several  replies  from  national  trade  unions)  in 
addition to a Social Progress Protocol. BusinessEurope’s contribution does not make a clear 
statement, but seems to question its added value, clearly indicating that it should not call into 
question the exclusion of the right to strike from EU competences. 

Following the wide-ranging public debate and on the basis of the contributions made during 
the  public  debate,  the  Commission  adopted  the  Communication  ‘A  Single  Market  Act  — 
Twelve  levers  to  boost  growth  and  strengthen  confidence’  on  13  April  201126.  Legislative 
initiatives regarding the posting of workers are among the twelve key actions included under 
the  social  cohesion  chapter:  ‘legislation  aimed  at  improving  and  reinforcing  the 
transposition,  implementation  and  enforcement  in  practice  of  the  Posting  of  Workers 
Directive, which will include measures to prevent and sanction any abuse and circumvention 
of the applicable rules, together with legislation aimed at clarifying the exercise of freedom 
of establishment and the freedom to provide services alongside fundamental social rights’. 

25 
26 

COM(2010) 608 final/2, 11.11.2010. 
COM(2011) 206 final. 

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Following  the  adoption  of  the  Single  Market  Act,  the  European  Parliament  adopted  three 
resolutions  on  6  April  201127.  However,  unlike  the  more  general  issue  of  mobility  (and 
portability  of  pension  rights),  the  posting  of  workers  was  not  among  the  key  priorities 
identified. 

In contrast, the posting of workers and the economic freedoms do figure among the priorities 
identified by the European Economic and Social Committee28. 

In its Conclusions on the priorities for relaunching the Single Market, the Council: 

‘14.  CONSIDERS  that  proper  implementation  and  enforcement  of  the  Posting  of  Workers 
Directive  can  contribute  to  a  better  protection  of  posted  workers’  rights  and  ensure  more 
clarity regarding the rights and obligations of service providing businesses as well as national 
authorities  and  can  help  to  prevent  circumvention  of  the  applicable  rules;  moreover 
CONSIDERS  that  more  clarity  in  the  exercise  of  the  freedom  of  establishment  and  the 
freedom to provide services alongside fundamental social rights is necessary;’29 

The Conference on Fundamental Social Rights and the Posting of Workers (27-28 June 2011) 
gathered ministers, social partners, representatives of EU institutions and academics in order 
to  discuss  the  regulatory  options  available  and  the  possible  content  of  legislative  initiatives 
and  to  help  identify  feasible  solutions30.  It  was  intended  to  contribute,  through  an  open 
constructive debate, to a more shared vision and to present the results of recent studies. 

Moreover, the Krakow declaration31 reiterated that the cross-border provision of services and 
the  mobility  of  posted  workers  are  essential  elements  of  the  Single  Market.  Facilitating  the 
temporary  cross-border  provision  of  services  should  go  hand  in  hand  with  guaranteeing  an 
adequate and appropriate level of protection for workers posted to another Member State to 
provide these services. 

2.2 

Impact assessment 

In line with its policy on better regulation, the Commission conducted an impact assessment 
of policy alternatives based on an external study32.  

The  problem  drivers  identified  are  grouped  around  four  headings,  problem  4  ('tensions 
between  the  freedom  to  provide  services/establishment  and  national  industrial  relations') 
being  directly  relevant  for  the  present  proposal.  The  rulings  of  the  Court,  interpreting  the 
Directive  and  Treaty  provisions,  in  cases  Viking  and  Laval,  exposed  underlying  tensions 
between  the  freedoms  to  provide  services  and  of  establishment,  and  the  exercise  of 
fundamental rights such as the right of collective bargaining and the right to industrial action. 

27 

28 
29 
30 

31 

32 

for 

more 

On  a  Single  Market  for  Enterprises  and  Growth  [2010/2277(INI)],  a  Single  Market  for  Europeans 
[2010/2278(INI)], and on Governance and Partnership in the Single Market [2010/2289(INI)]. 
Opinion Ms Federspiel, Mr Siecker and Mr Voles, INT 548, 15 March 2011. 
3094th Competitiveness Council meeting, 30 May 2011. 
See 
http://ec.europa.eu/social/main.jsp?langId=en&catId=471&eventsId=347&furtherEvents=yes. 
Single Market Forum, Krakow, 3-4 October 2011, in particular the fifth paragraph of the Declaration 
and point 5 of the Operational conclusions. 
Multiple Framework Contract VT 2008/87, Preparatory study for an Impact Assessment concerning the 
possible  revision  of  the  legislative  framework  on  the  posting  of  workers  in  the  context  of  services, 
(VT/2010/126). 

information, 

documents: 

speeches 

keynote 

related 

and 

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In particular, the rulings were perceived by trade unions as imposing a screening of industrial 
action  by  EU  or  national  courts  whenever  such  action  could  affect  or  be  detrimental  to  the 
exercise of the freedom to provide services or the freedom of establishment. Such perceptions 
have led in the recent past to negative "spill-over" effects as illustrated by a few transnational 
industrial disputes. The importance of this problem has been highlighted in the 2010 Report of 
the  ILO  Committee  of  Experts  on  the  Application  of  Conventions  and  Recommendations 
which expressed ‘serious concern’ about the practical limitations on the effective exercise of 
the  right  to  strike  imposed  by  the  CJEU  rulings.  The  right  to  strike  is  enshrined  in  ILO 
Convention No. 87, which is signed by all EU Member States. 

The policy options to address the drivers underlying this problem contain a baseline scenario 
(option 5), a non-regulatory intervention (option 6) and a regulatory intervention at EU level 
(option 7).  

Options  6  and  7  were  assessed  against  the  baseline  scenario  in  view  of  their  capacity  to 
address the drivers underlying the identified problem 4 and to achieve the general objectives, 
namely  the  sustainable  development  of  the  Single  Market,  based  on  a  highly  competitive 
social  market  economy,  the  freedom  to  provide  services  and  promotion  of  a  level  playing 
field, the improvement of living and working conditions, respect for the diversity of industrial 
relation systems in the Member States, and the promotion of dialogue between management 
and labour. In addition, they were examined against the more specific and related operational 
objectives in particular improving legal certainty as regards the balance between social rights 
and economic freedoms, in particular in the context of the posting of workers. Based on the 
Strategy  for  the  effective  implementation  of  the  Charter  of  Fundamental  Rights  of  the 
European Union, the Impact Assessment was used to identify fundamental rights liable to be 
affected,  the  degree  of  interference  with  the  right  in  question  and  the  necessity  and 
proportionality of the interference in terms of policy options and objectives.33 

The  Impact  Assessment  identified  negative  economic  and  social  impacts  of  the  baseline 
scenario. Continuing legal uncertainty could lead to a loss if support for the single market by 
an important part of the stakeholders and create an unfriendly business environment including 
possibly protectionist behaviour. The risk of damage claims and doubts regarding the role of 
national  courts  could  prevent  trade  unions  from  exercising  their  right  to  strike.  This  would 
create a negative impact on the protection of workers' rights and Article 28 of the Charter of 
Fundamental  Rights  of  the  European  Union.  Option  6  and  7  would  have  positive  economic 
and social impacts since they reduce the scope for legal uncertainty. The positive impact of 
option 7 would be more significant since a legislative intervention (Regulation) provides for 
more  legal  certainty  than  a  soft  law  approach  (option  6).  An  alert  mechanism  would  have 
further  positive  impact.  In  addition,  a  legislative  intervention  would  express  a  more 
committed  political  approach  by  the  Commission  to  respond  to  a  problem  that  is  seen  with 
great concern by the trade unions and parts of the European Parliament. 

The preferred option to address the drivers underlying problem 4 is option 7. It is considered 
the  most  effective  and  efficient  solution  to  address  the  specific  objective  ‘reducing  tensions 
between national industrial relation systems and the freedom to provide services’ and the most 
coherent for the general objectives. It is therefore in essence the basis for the present proposal. 

33 

COM(2010) 573 final, p. 6-7 

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The  draft  impact  assessment  was  scrutinised  by  the  Impact  Assessment  Board  (IAB)  twice 
and  its  recommendations  for  its  improvement  were  integrated  within  the  final  report.  The 
opinion  of  the  IAB  as  well  as  the  final  Impact  Assessment  and  its  executive  summary  are 
published together with this proposal. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

General context — summary of the proposed action 

The  Court  of  Justice  cases  referred  to  above  exposed  the  fault  lines  that  run  between  the 
Single  Market  and  the  social  dimension  in  two  ways.  Firstly,  the  cases  brought  to  light  the 
need  to  ensure  setting  the  right  balance  between  the  exercise  of  the  right  to  take  collective 
action by trade unions, including the right to strike, and the freedom of establishment and the 
freedom  to  provide  services,  economic  freedoms  enshrined  in  the  Treaty.  Secondly,  they 
further  highlighted  the  question  whether  the  Posting  of  Workers  Directive  still  provided  an 
adequate  basis  for  protecting  workers’  rights  given  divergent  social  and  employment 
conditions  among  Member  States.  In  particular,  its  application  and  enforcement  in  practice 
were questioned. 

As  acknowledged  in  Professor  Monti's  report  mentioned  above,  the  two  issues  are  closely 
linked, but require different strategies to balance Single Market and social requirements. As 
highlighted  in  the  Strategy  for  the  effective  implementation  of  the  Charter  of  Fundamental 
Rights by the European Union, people must be able to effectively enjoy their rights enshrined 
in  the  Charter  when  they  are  in  a  situation  governed  by  Union  law.34  Clarification  of  these 
issues should also not be left to future litigation before the ECJ or national courts35. Moreover, 
the right or freedom to strike should not be a mere slogan or a legal metaphor. 

Therefore,  the  present  proposal  is  part  of  a  package.  Together  with  the  proposal  for  an 
Enforcement Directive, it constitutes a targeted intervention to clarify the interaction between 
the exercise of social rights and the exercise of the freedom of establishment and to provide 
services enshrined in the Treaty within the EU in line with one of the Treaty’s key objectives, 
a ‘highly competitive social market economy’, without however reversing the case law of the 
Court. 

The  present  proposal  aims  to  clarify  the  general  principles  and  applicable  rules  at  EU  level 
with  respect  to  the  exercise  of  the  fundamental  right  to  take  collective  action  within  the 
context  of  the  freedom  to  provide  services  and  the  freedom  of  establishment,  including  the 
need  to  reconcile  them  in  practice  in  cross-border  situations.  Its  scope  covers  not  only  the 
temporary  posting  of  workers  to  another  Member  State  for  the  cross-border  provision  of 
services  but  also  any  envisaged  restructuring  and/or  relocation  involving  more  than  one 
Member State. 

3.2. 

Legal basis 

Article 352 TFEU (reserved for cases where the Treaties do not provide the necessary powers 
to implement actions necessary, under the policies defined in the Treaties, to attain one of the 
objectives of the Treaties) is the appropriate legal basis for the proposed measure. 

34 
35 

COM(2010) 573 final 
The Monti report referred to above, p. 69. 

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A Regulation is considered to be the most appropriate legal instrument to clarify the general 
principles and applicable rules at EU level in order to reconcile the exercise of fundamental 
rights  with  the  economic  freedoms  in  cross-border  situations.  The  direct  applicability  of  a 
Regulation  will  reduce  regulatory  complexity  and  offer  greater  legal  certainty  for  those 
subject to the legislation across the Union by clarifying the applicable rules in a more uniform 
way. Regulatory clarity and simplicity is particularly important for SMEs. This could not be 
achieved  with  a  Directive,  which,  by  its  very  nature,  is  only  binding  as  to  the  result  to  be 
achieved, but leaves to the national authorities the choice of forms and methods. 

3.3. 

Subsidiarity and proportionality principles 

Given  the  lack  of  explicit  provision  in  the  Treaty  for  the  necessary  powers,  the  present 
Regulation is based on Article 352 TFEU. 

Article  153(5)  TFEU  excludes  the  right  to  strike  from  the  range  of  matters  that  can  be 
regulated  across  the  EU  by  way  of  minimum  standards  through  Directives.  However,  the 
Court rulings have clearly shown that the fact that Article 153 does not apply to the right to 
strike does not as such exclude collective action from the scope of EU law.  

The objective of the Regulation, to clarify the general principles and EU rules applicable to 
the  exercise  of  the  fundamental  right  to  take  industrial  action  within  the  context  of  the 
freedom to provide services and the freedom of establishment, including the need to reconcile 
them  in  practice  in  cross-border  situations,  requires  action  at  European  Union  level  and 
cannot be achieved by the Member States alone. 

Moreover, in line with the Treaty, any initiative in this area will need to respect not only the 
autonomy  of  social  partners  but  also  the  different  social  models  and  diversity  of  industrial 
relation systems in the Member States. 

As regards the contents of the proposal, respect for the subsidiarity principle is further ensured 
y recognition of the role of national courts in establishing the facts and ascertaining whether 
actions pursue objectives that constitute a legitimate interest, are suitable for  attaining  these 
objectives, and do not go beyond what is necessary to attain them. It equally recognises the 
importance  of  existing  national  laws  and  procedures  for  the  exercise  of  the  right  to  strike, 
including  existing  alternative  dispute-settlement  institutions,  which  will  not  be  changed  or 
affected.  Indeed,  the  proposal  does  not  create  a  mechanism  for  the  informal  resolution  of 
labour  disputes  at  national  level  with  a  view  to  introducing  some  form  of  pre-jurisdictional 
control  over  union  actions  (as  suggested  in  the  2010  Monti  report),  and  restricts  itself  to 
indicating  the  role  of  alternative  informal  resolution  mechanisms  that  exist  in  a  number  of 
Member States. 

This proposal does not go beyond what is necessary to achieve the envisaged objectives. 

3.4. 

Detailed explanation of the proposal 

3.4.1. 

Subject matter and so-called Monti clause 

Apart  from  describing  the  objectives  of  the  Regulation,  Article  1  contains  what  is  often 
referred to as the ‘Monti clause’. It combines the text of Article 2 of Council Regulation No 

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2679/9836 and Article 1(7) of the Services Directive37. It is also in line with the text of similar 
provisions  in,  for  example,  in  the  recent  proposal  for  a  Regulation  on  jurisdiction  and  the 
recognition  and  enforcement  of  judgments  in  civil  and  commercial  matters  (recast  Brussels 
I)38 and the recently adopted Regulation on macroeconomic imbalances39. 

3.4.2.  Relationship  between  fundamental  rights  and  economic  freedoms  —  general 

principles 

While  reiterating  that  there  is  no  inherent  conflict  between  the  exercise  of  the  fundamental 
right  to  take  collective  action  and  the  freedom  of  establishment  and  the  freedom  to  provide 
services  enshrined  in  and  protected  by  the  Treaty,  with  no  primacy  of  one  over  the  other, 
Article 2 recognizes that situations may arise where their exercise may have to be reconciled 
in cases of conflict, in accordance with the principle of proportionality in line with standard 
practice by courts and EU case law40 

The general equality of fundamental rights and the freedoms of establishment and to provide 
services in terms of status implies that such freedoms may have to be restricted in the interest 
of  protection  of  fundamental  rights.  However,  it  equally  implies  that  the  exercise  of  such 
freedoms may justify a restriction on the effective exercise of fundamental rights. 

In order to prevent trade unions from being effectively hindered or de facto even prohibited 
from exercising effectively their collective rights due to the threat of claims for damages on 
the basis of the Viking-Line ruling on the part of employers invoking cross-border elements41 
it  should  be  recalled  that  in  situations  where  cross-border  elements  are  lacking  or 
hypothetical, a collective action shall be assumed not to constitute a violation of the freedom 
of  establishment  or  the  freedom  to  provide  services.  The  latter  is  without  prejudice  to  the 
conformity of the collective action with national law and practices. 

Indeed, such a broad risk of liability to damages on the basis of a rather hypothetical situation 
or one where there are no cross-border elements would render the use by trade unions of their 
right  to  strike  rather  difficult,  if  not  impossible,  in  situations  where  the  freedom  of 
establishment or the freedom to provide services does not even apply. 

36 

37 
38 
39 

40 

41 

Council Regulation of 7 December 1998 on the functioning of the internal market in relation to the free 
movement of goods among Member States, OJ L337/8, 12.12.98. 
Directive 2006/123, OJ L 376/36, 27.12.2006; cf. recital 22 of Directive 96/71/EC. 
COM(2010) 748 final, 14.12.2010, Article 85. 
Article 1(3), last sentence, Regulation (EU) No 1176/2011 of 16 November 2011 on the prevention and 
correction of macroeconomic imbalances, OJ L 306/25 of 23.11.2011. 
Opinion  AG  Cruz  Villalon  in  case  C-515/08,  dos  Santos  Palhota  e.a.,  point  53.  Cf  Judgment  ECJ  in 
case C-438/05, Viking-Line, par. 46, case C-341/05, Laval, point 94 and case C-271/08, Commission v 
Germany,  point  44.  See  also  Prof.  Dr.  M.  Schlachter’s  panel  speech  ‘reconciliation  between 
freedoms’ 
fundamental 
http://ec.europa.eu/social/main.jsp?langId=en&catId=471&eventsId=347&furtherEvents=yes. 
See  for  further  details  the  report  issued  by  the  ILO  Committee  of  Experts  on  tis  case,  available  at 
http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---
relconf/documents/meetingdocument/wcms_123424.pdf as well as 'The dramatic implications of Demir 
and Baykara', K. Ewing and J. Hendy QC, Industrial Law Journal, Vol. 39, no. 1, March 2010, p. 2-51, 
in particular pages 44-47. 

economic 

social 

rights 

and 

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3.4.3.  Dispute resolution mechanisms 

Article  3  recognises  the  role  and  importance  of  existing  national  practices  relating  to  the 
exercise  of  the  right  to  strike  in  practice,  including  existing  alternative  dispute  settlement 
institutions, such as mediation, conciliation and/or arbitration. The present proposal does not 
introduce changes into such alternative resolution mechanisms existing at national level, nor 
does it contain or imply an obligation to introduce such mechanisms for those Member States 
not having them. However, for those Member States in which such mechanisms exist it does 
establish the principle of equal access for cross-border cases and provides for adaptations by 
Member States in order to ensure its application in practice.  

The  proposal  does  not  propose  a  mechanism  for  the  informal  resolution  of  labour  disputes 
concerning  the  application  of  the  Posting  of  Workers  Directive  at  national  level42.  Such  a 
mechanism would introduce some form of pre-jurisdictional control over union actions, which 
not only could create or constitute an additional obstacle for the effective exercise of the right 
to strike but would also appear to be incompatible with Article 153(5) TFEU, which explicitly 
excludes legislative competences in this area at EU level. 

Furthermore, in accordance with Article 155 TFEU, the proposal acknowledges the specific 
role  of  management  and  labour  at  European  level,  inviting  them,  should  they  so  desire,  to 
establish  guidelines  for  the  modalities  and  procedures  of  such  alternative  resolution 
mechanisms. 

3.4.4.  Role of national courts 

Article 3 paragraph 4 further clarifies the role of national courts: if, in an individual case as a 
result of the exercise of a fundamental right, an economic freedom is restricted, they will have 
to  strike  a  fair  balance  between  the  rights  and  freedoms  concerned43  and  reconcile  them. 
According to Article 52 (1) of the Charter of Fundamental Rights of the European Union, any 
limitation on the exercise of the rights and freedoms recognised by it must respect the essence 
of those rights and freedoms. Furthermore, subject to the proportionality principle, limitations 
may  be  made  only  if  they  are  necessary  and  genuinely  meet  objectives  of  general  interest 
recognised by the Union or the need to protect the rights and freedoms of others44. The Court 
of Justice also acknowledged that the competent national authorities enjoy a wide margin of 
discretion in this respect. In line with the case law of the Court, a three-stage test is required 
where (1) the appropriateness, (2) the necessity and (3) the reasonableness of the measure in 
question  have  to  be  reviewed.  A  fair  balance  between  fundamental  rights  and  fundamental 
freedoms will in the case of a conflict only be ensured ‘when the restriction by a fundamental 
right on a fundamental freedom is not permitted to go beyond what is appropriate, necessary 
and reasonable to realise that fundamental right. Conversely, however, nor may the restriction 
on a fundamental right by a fundamental freedom go beyond what is appropriate, necessary 
and reasonable to realise the fundamental freedom.’45 

42 
43 

44 

45 

As recommendede in the Monti report . 
Cf. Opinion AG Trstenjak in case C-271/08, Commission v Germany, points 188–190. See also more 
generally C. Barnard, ‘Proportionality and collective action’, ELR 2011. 
Opinion  AG  Cruz  Villalon  in  case  C-515/08,  dos  Santos  Palhota  e.a.,  point  53.  Cf.  judgment  ECJ 
12.10.2004, case C-60/03, Wolff & Müller, point 44. 
Opinion AG Trstenjak in case C-271/08, point 190. 

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This is without prejudice to the possibility that the Court may itself provide indications and 
clarifications,  if  need  be,  to  a  national  court  with  respect  to  the  elements  to  be  taken  into 
consideration46. 

3.4.5.  Alert mechanism 

Article 4 establishes an early warning system requiring Member States to inform and notify 
the Member States concerned and the Commission immediately in the event of serious acts or 
circumstances that either cause grave disruption of the proper functioning of Single Market or 
create  serious  social  unrest  in  order  to  prevent  and  limit  the  potential  damage  as  far  as 
possible. 

4. 

BUDGETARY IMPLICATIONS 

The proposal has no implications for the EU budget. 

46 

Cf. judgment 11.12.2007, case C-438/05, Viking-Line, points 80 et seq. 

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2012/0064 (APP) 

Proposal for a 

COUNCIL REGULATION 

on the exercise of the right to take collective action within the context of the freedom of 
establishment and the freedom to provide services 

(Text with EEA relevance) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 352 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the consent of the European Parliament47, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

The  right  to  take  collective  action,  which  is  the  corollary  of  the  right  to  collective 
bargaining, is recognised both by various international instruments which the Member 
States  have  signed  or  cooperated  in,  such  as  the  European  Social  Charter,  signed  at 
Turin on 18 October 1961, Conventions No 87 and No 98 of the International Labour 
Organisation  concerning  Freedom  of  Association  and  Protection  of  the  Right  to 
Organise and Collective Bargaining, and by instruments developed by those Member 
States at EU level, such as the Community Charter of the Fundamental Social Rights 
of  Workers  adopted  at  the  meeting  of  the  European  Council  held  in  Strasbourg  on 
9 December  1989  and  the  Charter  of  Fundamental  Rights  of  the  European  Union 
proclaimed  in  Nice  on  7 December  2000,  as  adopted  at  Strasbourg  on  12  December 
2008  which  has  the  same  legal  value  as  the  Treaties.  It  also  enjoys  constitutional 
protection in a number of Member States. 

(2) 

The right to collective bargaining and to negotiate and enter into collective agreements 
constitutes an inherent element of the right of association, as set out in Article 11 of 
the Convention for the Protection of Human Rights and Fundamental Freedoms ('the 
Convention')48. 

47 
48 

OJ C , , p. . 
Judgment ECHR, 12 November 2008, Demir. 

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(3) 

(4) 

(5) 

The right to take collective action has also been recognised by the Court of Justice as a 
fundamental right which forms an integral part of the general principles of Union law 
the  observance  of  which  the  Court  ensures49.  However,  the  right  to  strike  is  not 
absolute and the exercise of that right may nonetheless be subject to certain conditions 
and restrictions, which may also result from national constitutions, law and practices. 

As  reaffirmed  by  Article 28  of  the  Charter  of  Fundamental  Rights  of  the  European 
Union, the right to take collective action is to be protected in accordance with Union 
law and national law and practices. 

In  accordance  with  Article  152  of  the  Treaty  on  the  Functioning  of  the  European 
Union,  the  role  of  the  social  partners  at  Union  level  should  be  recognised  and 
promoted,  and  dialogue  between  them  facilitated,  taking  account  of  the  diversity  of 
national systems and respecting the autonomy of social partners. 

(6)  Member States remain free to lay down the conditions for the existence and exercise 
of the social rights at issue. However, when exercising that power the Member States 
must comply with Union law, in particular the provisions of the Treaty on the freedom 
of  establishment  and  the  freedom  to  provide  services,  which  are  fundamental 
principles of the Union enshrined in the Treaty.  

(7) 

(8) 

(9) 

A restriction on those freedoms is warranted only if it pursues a legitimate objective 
compatible with the Treaty and is justified by overriding reasons of public interest. If 
that context, it must be suitable for attaining the objective it pursues and not go beyond 
what is necessary in order to attain it. 

The  protection  of  workers,  in  particular  their  social  protection  and  the  protection  of 
their rights against social dumping, as well as the desire to avoid disturbances on the 
labour  market  have  been  recognised  as  constituting  overriding  reasons  of  general 
interest  justifying  restriction  of  the  exercise  of  one  of  the  fundamental  freedoms  of 
Union law. 

Trade unions should continue to be able to take collective action to ensure and protect 
the interests, conditions of employment and rights of workers, provided this is done in 
compliance with Union and national law and practice. 

(10)  Both  fundamental  economic  freedoms  and  fundamental  rights,  as  well  as  their 

effective exercise, may thus be subject to restrictions and limitations.  

(11)  The  exercise  of  the  right  to  take  collective  action,  including  the  right  or  freedom  to 
strike, and the requirements relating to the freedom of establishment and the freedom 
to provide services may thus have to be reconciled, in accordance with the principle of 
proportionality,  which  often  requires  or  implies  complex  assessments  by  national 
authorities. 

(12)  Any limitation on the exercise of the rights and freedoms recognised by the Charter of 
Fundamental Rights of the European Union must be provided for by law and respect 
the  essence  of  those  rights  and  freedoms.  Subject  to  the  principle  of  proportionality, 

49 

Judgments  of  11  December  2007,  case  C-438/05,  Viking-Line,  point  44,  and  of  18  December  2007, 
case C-341/05, Laval, point 91. 

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limitations may be made only if they are necessary and genuinely meet objectives of 
general interest recognised by the Union or the need to protect the rights and freedoms 
of others.  

(13)  A fair balance between fundamental rights and fundamental freedoms will in the case 
of  conflict  only  be  ensured  when  a  restriction  imposed  by  a  fundamental  right  on  a 
fundamental freedom is not permitted to go beyond what is appropriate, necessary and 
reasonable  to  realise  that  fundamental  right.  Conversely,  a  restriction  imposed  on  a 
fundamental  right  by  a  fundamental  freedom  cannot  go  beyond  what  is  appropriate, 
necessary and reasonable to realise the fundamental freedom. In order to provide the 
necessary  legal  certainty,  avoid  ambiguity  and  prevent  solutions  being  unilaterally 
sought  at  national  level,  it  is  necessary  to  clarify  a  number  of  aspects  relating  in 
particular  to  the  exercise  of  the  right  to  take  collective  action,  including  the  right  or 
freedom to strike, as well as the extent to which trade unions may defend and protect 
workers’ rights in cross-border situations. 

(14)  The key role of social partners as the primary actors in resolving disputes concerning 
relations between employer and employee is well-established over time and should be 
acknowledged.  In  addition,  the  role  of  non-judicial  dispute  resolution  mechanisms, 
such as mediation, conciliation and/or arbitration, provided for in a number of Member 
States should be acknowledged and preserved. 

(15)  A notification and alert mechanism should allow for an adequate and rapid exchange 
of information between the Member States and the Commission in situations causing 
serious disruption to the proper functioning of the internal market and/or inflict serious 
losses on the individuals or organisations affected. 

(16)  This Regulation respects the fundamental rights and observes the principles recognised 
by the Charter of Fundamental Rights of the European Union, notably the freedom of 
assembly  and  of  association  (Article  12),  the  freedom  to  choose  an  occupation  and 
right to engage in work (Article 15), the freedom to conduct a business (Article 16), 
the  right  to  collective  bargaining  and  action  (Article  28),  fair  and  just  working 
conditions (Article 31), the right to an effective remedy and to a fair trial (Article 47), 
and has to be applied in accordance with those rights and principles.  

HAS ADOPTED THIS REGULATION: 

Article 1 

Subject matter 

1. 

2. 

This Regulation lays down the general principles and rules applicable at Union level 
with respect to the exercise of the fundamental right to take collective action within 
the context of the freedom of establishment and the freedom to provide services. 

This  Regulation  shall  not  affect  in  any  way  the  exercise  of  fundamental  rights  as 
recognised in the Member States, including the right or freedom to strike or to take 
other action covered by the specific industrial relations systems in Member States in 
accordance with national law and practices. Nor does it affect the right to negotiate, 
conclude  and  enforce  collective  agreements  and  to  take  collective  action  in 
accordance with national law and practices. 

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Article 2 

General principles 

The exercise of the freedom of establishment and the freedom to provide services enshrined in 
the Treaty shall respect the fundamental right to take collective action, including the right or 
freedom  to  strike,  and  conversely,  the  exercise  of  the  fundamental  right  to  take  collective 
action, including the right or freedom to strike, shall respect these economic freedoms.  

Article 3 

Dispute resolution mechanisms 

1. 

2. 

3. 

4. 

Member  States  which,  in  accordance  with  their  national  law,  tradition  or  practice, 
provide  for  alternative,  non-judicial  mechanisms  to  resolve  labour  disputes,  shall 
provide  for  equal  access  to  those  alternative  resolution  mechanisms  in  situations 
where such disputes originate from the exercise of the right to take collective action, 
including  the  right  or  freedom  to  strike,  in  transnational  situations  or  situations 
having  a  cross-border  character  in  the  context  of  the  exercise  of  the  freedom  of 
establishment  or  the  freedom  to  provide  services,  including  the  application  of 
Directive 96/71/EC of the European Parliament and of the Council of 16 December 
1996  concerning  the  posting  of  workers  in  the  framework  of  the  provision  of 
services50. 

Notwithstanding paragraph 1, management and labour at European level may, acting 
within  the  scope  of  their  rights,  competences  and  roles  established  by  the  Treaty, 
conclude  agreements  at  Union  level  or  establish  guidelines  with  respect  to  the 
modalities  and  procedures  for  mediation,  conciliation  or  other  mechanisms  for  the 
extrajudicial  or  out-of-court  settlement  of  disputes  resulting  from  the  effective 
exercise of the right to collective action, including the right or freedom to strike, in 
transnational situations or situations with a cross-border character. 

The modalities and procedures for out-of-court settlement may not deprive interested 
parties  from  recourse  to  judicial  remedies  for  their  disputes  or  conflicts  if  the 
mechanisms referred to in paragraph 1 fail to lead to a resolution after a reasonable 
period. 

Recourse  to  alternative  non-judicial  dispute  mechanisms  shall  be  without  prejudice 
to  the  role  of  national  courts  in  labour  disputes  in  the  situations  as  referred  to  in 
paragraph  1,  in  particular  to  assess  the  facts  and  interpret  the  national  legislation, 
and, as far as the scope of this Regulation is concerned, to determine whether and to 
what extent collective action, under the national legislation and collective agreement 
law  applicable  to  that  action,  does  not  go  beyond  what  is  necessary  to  attain  the 
objective(s) pursued, without prejudice to the role and competences of the Court of 
Justice. 

50 

OJ L 18/1, 21.1.1997. 

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Article 4 

Alert mechanism 

1. 

2. 

Whenever  serious  acts  or  circumstances  affecting  the  effective  exercise  of  the 
freedom of establishment or the freedom to provide services which could cause grave 
disruption to the proper functioning of the internal market and/or which may cause 
serious damage to its industrial relations system or create serious social unrest in its 
territory  or  in  the  territory  of  other  Member  States,  arise,  the  Member  State 
concerned shall immediately inform and notify the Member State of establishment or 
origin of the service provider and/or other relevant Member States concerned as well 
as the Commission. 

The  Member  State(s)  concerned  shall  respond  as  soon  as  possible  to  requests  for 
information  from  the  Commission  and  from  other  Member  States  concerning  the 
nature of the obstacle or threat. Any information exchange between Member States 
shall also be transmitted to the Commission. 

Article 5 

Entry into force 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 21.3.2012 

For the Council 
The President 

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