CELEX: 52012PC0130
Language: en
Date: 2012-03-21
Title: 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

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		52012PC0130
		
			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 /* COM/2012/0130 final - 2012/0064 (APP) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
General context
In its judgments in the Viking-Line[1] and Laval[2] 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 ensures[3]. 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 labour[4]. 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 Court[5].
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 establishment[6].
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.
According to Professor Monti[8], the Court rulings in 2007 and 2008[9]
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 exclusion[10]. 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 Treaty[11].
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 citizens[12].
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
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 in[13]. It is included
in instruments developed by those Member States at EU level[14] and in the Charter of Fundamental Rights of the European Union
proclaimed in Nice on 7 December 2000[15],
as adopted at Strasbourg on 12 December 2008[16].
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 action[17].
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 Freedoms[18].
The European Court of Human Rights[19] 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 Rights[20],
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 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 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 challenges[21]. 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 2010[23], 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:
–                        
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.
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 2011[26]. 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’.
Following the adoption of the Single Market
Act, the European Parliament adopted three resolutions on 6 April 2011[27]. 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 Committee[28].
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 solutions[30].
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 declaration[31] 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 study[32]. 
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. 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.
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 courts[35].
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.
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 2679/98[36] and Article 1(7) of the Services Directive[37].
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 imbalances[39].
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 law[40]
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 elements[41] 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.
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
level[42]. 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 concerned[43] 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 others[44]. 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]
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
consideration[46].
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.
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 Parliament[47],
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].
(3)       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 ensures[49].
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.
(4)       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.
(5)       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)       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.
(8)       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.
(9)       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, 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.           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.
2.           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.
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.           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 services[50].
2.           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.
3.           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.
4.           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.
Article 4
Alert
mechanism
1.           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.
2.           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
[1]               Judgment 11.12.2007, case C-438/05.
[2]               Judgment 18.12.2007, case C-341/05.
[3]               Points 44 (Viking-Line) and 91 (Laval).
[4]               Points 79 (Viking-Line) and 105 (Laval).
[5]               Point 77 (Viking-Line); cf. point 103 (Laval).
[6]               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.
[7]               Last part of the first sentence of point 44
(Viking-Line) and 91 (Laval).
[8]               Report ‘A new strategy for the single market’ to the
President of the Commission, 9 May 2010, p. 68.
[9]               Apart from the already mentioned Viking-Line and
Laval rulings, see also the Rüffert and Commission v Luxembourg case.
[10]             Article 9 TFEU.
[11]             Article 6 TEU.
[12]             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.
[13]             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.
[14]             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.
[15]             OJ C 364, 2000, p. 1.
[16]             Cf. Article 6 of the Treaty on European Union.
[17]             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).
[18]             Judgment ECHR 12 November 2008, Demir, points 153/154 with
145.
[19]             Judgment ECHR, 27 April 2010, case of Vördur Olaffson v
Iceland, point 74/75.
[20]             See for instance judgment 21.4.2009, Enerji Yapi-Yol
Sen v Turkey (68959/01), point 32.
[21]             Resolution of 22 October 2008 on challenges to
collective agreements in the EU (2008/2085(INI)), points 25 and 30.
[22]             Point 1; see also points 17 and 31.
[23]             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.
[24]             Opinion 2011/C 44/15.
[25]             COM(2010) 608 final/2, 11.11.2010.
[26]             COM(2011) 206 final.
[27]             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)].
[28]             Opinion Ms Federspiel, Mr Siecker and Mr Voles, INT
548, 15 March 2011.
[29]             3094th Competitiveness Council meeting, 30 May 2011.
[30]             See for more information, keynote speeches and related
documents:
http://ec.europa.eu/social/main.jsp?langId=en&catId=471&eventsId=347&furtherEvents=yes.
[31]             Single Market Forum, Krakow, 3-4 October 2011, in
particular the fifth paragraph of the Declaration and point 5 of the
Operational conclusions.
[32]             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).
[33]             COM(2010) 573 final, p. 6-7
[34]             COM(2010) 573 final
[35]             The Monti report referred to above, p. 69.
[36]             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.
[37]             Directive 2006/123, OJ L 376/36, 27.12.2006; cf.
recital 22 of Directive 96/71/EC.
[38]             COM(2010) 748 final, 14.12.2010, Article 85.
[39]             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.
[40]             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
fundamental social rights and economic freedoms’
http://ec.europa.eu/social/main.jsp?langId=en&catId=471&eventsId=347&furtherEvents=yes.
[41]             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.
[42]             As recommendede in the Monti report .
[43]             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.
[44]             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.
[45]             Opinion AG Trstenjak in case C-271/08, point 190.
[46]             Cf. judgment 11.12.2007, case C-438/05, Viking-Line,
points 80 et seq.
[47]             OJ C , , p. .
[48]             Judgment ECHR, 12 November 2008, Demir.
[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.
[50]             OJ L 18/1, 21.1.1997.