Source: http://eulawanalysis.blogspot.com/2018/01/
Timestamp: 2018-06-20 07:19:10
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EU Law Analysis: January 2018
Posted by Steve Peers at 03:24 No comments:
Does EU law protect gig economy workers? Tensions in the CJEU’s case law
Dr Maria Tzanakopoulou, Teaching Fellow, King's College London and University College London
The gig economy is on the rise precipitating much discussion about working conditions –from working time to remuneration and from maternity and paternity protection to the all important classification of individuals working in the gig economy pool (see, eg, here and here). The case of King marks the debut of CJEU judgments related to the regulation of business conduct and worker’s rights in the gig economy. Here, the CJEU upholds the right of a self-employed worker to indeterminately carry over entitlements deriving from unexercised paid leave, while it protects Mr King’s right to an effective remedy before the courts. The story continues with the Court’s much debated Uber decision (discussed here), which reportedly blows in the face of businesses and becomes a stepping stone to more comprehensive protection of the gig economy worker (here). Perhaps somewhat surprisingly for those familiar with the Court’s often dismissive approach to labour rights (see, eg, here), the CJEU now seems, at least at first sight, reluctant to leave the gig economy unregulated and to turn its back on gig economy labour forces.
Very briefly, the Court in Uber classifies the company as a provider that ‘offers urban transport services’ [para 38] rather than as a mere intermediary between drivers and clients, as the company itself maintains. The tangible effect of this decision is the subordination of Uber to national regulatory measures. A less visible corollary of the case will be Uber’s increased responsibilities towards its drivers. The case of King, touching as it does upon the crucial matter of paid leave, has a more visible effect on workers. So much so, that the press was quick to present the decision as a breakthrough for gig economy workers at large (here). However, the extent to which the case makes headway in bringing gig economy workers as a whole under the protective ambit of employment rights is a matter that is not entirely straightforward.
Mr King worked as a salesman for a company installing doors and windows (SWWL) from 1999 until his dismissal, brought into effect on the day of his 65th birthday, in 2012. According to his contract, a self-employed commission-only contract, Mr King was paid on the basis of the sales he concluded. His right to paid leave was unclear, as the contract was silent on that matter. In his Opinion, AG Tanchev reports that Mr King was in the meantime offered an employee contract, which would bring him into the sphere of full-blown worker protection, but he opted for carrying on his work on a self-employed basis. (Mr King later objected that the AG misunderstood the particular incident, but we lack further clarification, as the Court did not consider it necessary to reopen the oral procedure for what it apparently saw as a matter of secondary importance.)
Upon his dismissal in 2012, Mr King brought his case to the Employment Tribunal. Mr King succeeded in his claims that the dismissal was grounded upon discrimination on the basis of age and that he satisfied the definition of ‘worker’ for the purposes of the UK Working Time Regulations, implementing Directive 2003/88 (the ‘working time Directive’. The Employment Tribunal further found that Mr King was entitled to recover the sum of his untaken paid leave for his final year with SWWL, as well as the sum amounting to holiday he had taken from 1999 until 2012 and which had remained unpaid throughout his thirteen years of work.
So much remained undisputed by SWWL. However, the Employment Tribunal’s final finding, namely that Mr King was further entitled to recover the sum for any leave not actually taken during his work with SWWL, was appealed to the Employment Appeal Tribunal (‘EAT’). The latter accepted the appeal and passed the case back on the Employment Tribunal for reconsideration. According to the EAT’s line of argument, King would have to first take (unpaid) leave and subsequently raise a claim related to payment of that leave. This finding was primarily based on Regulation 13(9) of the domestic implementing legislation, which establishes that leave can only be taken in the relevant leave year and, if not, it cannot be replaced by payment in lieu, unless employment has been terminated. Regulation 30 further establishes that ‘[a] worker may present a complaint to an employment tribunal that his employer’ has either not allowed him annual leave or ‘has failed to pay him the whole or any part of any amount due to him’ in respect of annual leave. Logically then, failure to pay shall precede any complaint presented. The time limit for the complaint, laid down in Regulation 30(2)), is set at three months after the claim arises or at whatever period the tribunal considers appropriate where ‘it was not reasonably practicable for the complaint to be presented’. When that complaint is not presented in time then any entitlement, and in this case Mr King’s entitlement, shall be lost.
Mr King was of a different opinion. As failure to take annual leave was a direct result of his employer’s refusal to pay, the relevant rights were carried over from year to year until his termination of employment. His claim was therefore brought in time.
The EAT’s decision was, thus, appealed to the Court of Appeal, which referred five questions, of both a procedural and a substantive nature, to the CJEU. In a nutshell, the Court of Appeal asked whether the ‘use it or lose it’ approach of the Regulations is compatible with the right to an effective remedy. The question targeted the EAT’s interpretation that a worker can bring a complaint only upon taking leave, which the employer refuses to pay. The Court further asked if the right to paid leave carries over beyond the relevant leave year, in cases where non-exercise of that right is caused by the employer’s refusal to pay. If so, how long does that right carry over for?
The CJEU commenced on its assessment by emphasising the social significance of the right to paid leave. The Court was quick to bring the EU Charter of Fundamental Rights into its reasoning, referring in particular to article 31(2), which lays down the right to paid annual leave. The purpose of Directive 2003/88 read in the light of the Charter is to allow the worker to enjoy annual leave under conditions of remuneration comparable to those of working periods: the right to paid leave cannot be ‘subject to any preconditions whatsoever’ [para 33]. If leave itself or remuneration become uncertain as a result of the employer’s conduct, then the right is in jeopardy.
On the basis of the above, the CJEU rejected the EAT’s interpretation of the Regulations as incompatible with the Directive: ‘in the case of a worker in a situation such as that of Mr King, if the national remedies are interpreted as indicated [by the EAT], it is impossible for that worker to invoke, after termination of the employment relationship, a breach of Article 7 of Directive 2003/88 in respect of paid leave due but not taken, in order to receive the allowance referred to in paragraph 2 of that article. A worker such as Mr King would thus be deprived of an effective remedy’ [para 46]. As such, a complaint cannot be exclusively available after the employer has refused to pay for a leave already taken. This is so, despite the fact that the Directive itself is silent on remedies, not least because the Charter enshrines the right to an effective remedy in article 47 [para 41].
With respect to a worker’s ability to carry over paid annual leave rights, the Court first recognised that Mr King did not exercise his rights for reasons beyond his control. Whether or not Mr King was in the meantime offered employee status was irrelevant for the CJEU, which looked at the worker’s status as it ‘existed and persisted’ until retirement, whatever the reason for that status may be [para 50]. According to the Court’s settled case law on absence due to sickness, allowance in lieu should be available to those unable to exercise paid leave rights for reasons beyond their control. However, a carry over limit of fifteen months should be equally acceptable, given that the Court also has regard to ‘the protection of employers faced with the risk that a worker will accumulate periods of absence of too great a length and the difficulties in the organisation of work which such periods might entail’ [para 55]. The question thus came down to whether Mr King’s situation was comparable to absence due to sickness.
The Court here noted that ‘protection of [Mr King’s] employer’s interests does not seem strictly necessary’ [para 59], especially in light of the need for the right to paid leave to be interpreted broadly:
‘It must be noted that the assessment of the right of a worker, such as Mr King, to paid annual leave is not connected to a situation in which his employer was faced with periods of his absence which, as with long-term sickness absence, would have led to difficulties in the organisation of work. On the contrary, the employer was able to benefit, until Mr King retired, from the fact that he did not interrupt his professional activity in its service in order to take paid annual leave’ [para 60].
The Court concluded that ‘an employer that does not allow a worker to exercise his right to paid annual leave must bear the consequences’ [para 63], which in this case amounted to the sum due for all leaves untaken by Mr King over the years.
At the outset, King is a case that gives recognition to a significant employment right and should be welcome on that ground alone. The Court did not shy way from stretching the outer limits of the right to paid leave and fired straight at the employer. In symbolic terms, the case seems equally interesting, with the CJEU’s diction hinting at a robust defence of what the Court calls ‘EU social law’ against the interests of the employer.
Reliance on the Charter as a leg-up in the Court’s broad interpretation of the right is also interesting, albeit, I think, not necessarily decisive for this case. The point of a purposive interpretation, like the one pursued by the Court here, is precisely that it needs not rely on text (see here). The Court could have decided much the same without the Charter’s assistance. That said, the decision is a harsh message to businesses engaging freelancers or generally workers that lack employee status.
Nevertheless, the significance of King for gig economy worker rights at large should not be overestimated. The grand scheme of things suggests that, whereas workers in the gig economy can win the small individual battles before the Court, the CJEU is unwilling to open up the way to wide-ranging protection.
To begin with, Mr King’s worker status was not under dispute, thus disburdening the CJEU of examination of the personal scope of the right to paid leave. In other words, the Court did not discuss applicability of that right to gig economy workers as such. As the AG notes in his Opinion, the case was effectively concerned with the essence, rather than the existence, of the right [para 30]. In light of this, it could be argued that the Court’s primary concern was to interpret the right and only at a secondary level to protect the gig economy worker. Certainly, the specificities of the case, and of Mr King’s situation, render this a consequential decision for many workers in the gig economy. Nevertheless, the extent to which the relevant legislation will cover a gig economy worker remains contingent upon each individual worker’s exact employment status.
What is perhaps more important is that, once King is compared to the Court’s approach to collective labour rights in the gig economy, the picture becomes even less promising.
Indeed, the social dimension of employment rights emphasised in King appears to be neglected in cases dealing with collective labour rights of the gig economy worker. It is now established case law of the Court that collective bodies representing self-employed workers pursue an economic activity and are therefore caught by the restrictive framework of competition law rules (see Pavlov). This is so, the Court has aegued, despite these bodies’ pursuit of a social objective [Pavlov, para 118]. The importance of Pavlov is put down not to the specific facts of the case but to the Court’s refusal to invest a body representing self-employed workers with equal protection as, eg, collective bargaining agreements between employers and employees (see, eg, Albany).
On the contrary, the Court has noted that ‘the Treaty contains no provisions (…) encouraging the members of the liberal professions to conclude collective agreements with a view to improving their terms of employment and working conditions (…)’ [para 69]. Worse even, in the more recent FNW Kunsten, the Court declared in unequivocal terms that ‘in so far as an organisation representing workers carries out negotiations acting in the name, and on behalf, of those self-employed persons who are its members, it does not act as a trade union association and therefore as a social partner, but, in reality, acts as an association of undertakings’ [para 28] and therefore falls within the scope of competition law rules.
All things considered, the Court appears to be adopting double standards. It is ready to recognise the social significance of the right to paid leave of an individual freelancer, yet it stops short of shielding the right of the self-employed worker to collective bargaining.
One way forward, then, would be for the Court to recognise individual rights piecemeal, as in King. Another way would be for individuals to rely on the courts, European or domestic, for an inclusive approach to self-employed workers, as in Aslam. Here, the worker status of Uber drivers, recognised by the Employment Tribunal and upheld by the EAT, placed these individuals within the protective ambit of the National Minimum Wage Act and the Working Time Regulations. Like Mr King, the status of Uber drivers as workers for the purposes of these pieces of legislation is now beyond dispute. It is, however, doubtful whether any of the above would be able to negotiate their salary or pension through collective bargaining free from the burden of EU competition law rules. A third way forward would perhaps be for the CJEU to recognise the social significance of bargaining rights and to guarantee them for gig economy workers. Only then, I think, will it be justified to say that the war was won.
King wins a battle but the war is ongoing: when an employment right can be defended individually before the court, but not collectively in the field –even where that right is upheld– I shall remain hesitant to ring victory bell for gig economy workers.
Posted by Steve Peers at 02:13 No comments:
Labels: Directive 2003/88, gig economy, self-employment, Uber, working time
Posted by Steve Peers at 13:08 No comments:
Professors Elspeth Guild, Queen Mary University of London and Kingsley Napley, and Steve Peers, University of Essex
What happens if a non-EU citizen has a residence permit from one Member State, but another Member State wants to expel him? The Court of Justice addressed this issue for the first time in its ruling last week in the case of E.
This issue is complicated because there are two different relevant sources of EU law, which have not been linked very clearly. First of all, Article 25 of the Schengen Convention, as amended in 2010, states that if a Member State considers issuing a residence permit or long-stay visa, it shall search the Schengen Information System (SIS), which (among other things) contains a list of non-EU citizens banned from entry into the EU. Each listing is called an ‘alert’. If there is an alert on the person concerned, the Member State that wants to issue the residence permit or long-stay visa shall consult the Member State which issued the alert and ‘take account of its interests’, granting a residence permit or or long-stay visa only for ‘substantive reasons…notably on humanitarian grounds for by reason of international commitments’. If a residence permit or long-stay visa is issued, the alert in the SIS must be withdrawn, but the Member State which issued it can keep the person concerned on a national list of alerts. There’s also an obligation to check national records of long-stay visas or residence permits before issuing alerts.
A similar rule applies the other way around: if it turns out that an alert has been issued for a non-EU citizen who holds a residence permit or long-stay visa from another Member State, the Member State which issued the alert must consult the Member State which issued the residence permit or long-stay visa, to see if there are ‘sufficient reasons’ for withdrawing the permit. In these cases there is more discretion for the State which had already granted residence: there is no threshold to justify continuing the residence permit in force. If the residence permit or long-stay visa is not withdrawn, again the State issuing the alert must withdraw it from the SIS, but can keep the person on a national list of people banned from entry. It’s this second rule which was at issue in the E case.
But the Schengen rules concern only SIS alerts based on entry bans, not the issue of expulsion or the entry bans as such. Those issues are dealt with by the Returns Directive, which in principle requires Member States to expel non-EU citizens who are present irregularly. Usually they must be expelled to non-EU countries, but there’s an exception if they have a residence permit or other right to stay issued by a Member State. In that case they must go to that other Member State immediately. If they don’t comply, or if their immediate departure ‘is required for reasons of public policy or national security’, then they can be expelled directly to a non-EU country.
The Returns Directive also requires Member States to issue EU-wide entry bans in many cases where expulsion decisions have been issued. However, it does not expressly set out the obvious implication that this means an alert must be issued in the SIS. A Commission proposal from 2016 fills this gap. That proposal also incorporates the current rules on consultation where there is a conflict between an alert and a residence permit or long-stay visa, with some amendments. This proposal is likely to be agreed soon, as both the European Parliament and the Council adopted their negotiation positions on it late last year. A parallel proposal on use of the SIS at borders would also regulate the link between the Returns Directive and the SIS in its Article 24, and furthermore repeal Article 25 of the Schengen Convention. It remains to be seen whether the recent judgment might impact the discussions of the legislators on these proposals.
A Nigerian national, E, who held a valid residence permit issued by Spain and had lived there for 14 years (and had family ties there) was convicted of a narcotics offence in Finland and sentenced to five years imprisonment (subsequently commuted to a suspended sentence). The Finnish authorities ordered E’s immediate expulsion to Nigeria on grounds of public order and national security together with an entry ban on his return. In accordance with their obligations under Article 25 of the Schengen Convention, the Finnish authorities contacted their Spanish counterparts to consult on whether there were sufficient reasons to withdraw the residence permit. The Spanish authorities did not respond.
On a second request by the Finnish authorities, their Spanish counterparts asked for a copy of the judgment convicting E (which the Finnish authorities sent). Thereafter, and following two unsuccessful attempts to consult the Spanish authorities, it seems that the Finnish authorities sought to carry out their order. In the meantime, E became irregularly present in Finland as he had stayed there more than 90 days out of the previous 180, which is the limit on movement of non-EU citizens (including those holding a residence permit from another Member State) under the Schengen system. E appealed and the Finnish Supreme Administrative Court stayed the proceedings and asked the Court of Justice to clarify whether Article 25 CISA permits the expulsion to Nigeria of E without the completion of the mandatory consultations with the Spanish authorities.
The issue was complicated by the fact that Article 25 of the Schengen Convention on its face is designed to resolve conflicts between Member States regarding conflict between residence permits and SIS alerts. There is no obvious place for the individual in the process. So the Finnish court also asked whether E could rely on Article 25 CISA at all.
The first question the Court had to resolve was when consultations between States must take place. The Court had regard to the objective of Article 25 of the Schengen Convention. In its view this objective is ‘to avoid a contradictory situation in which a third-country national is both holder of a valid residence permit issued by a Contracting State and the subject of an alert for the purposes of refusing entry in the Schengen Information System’ (para 38). This objective must be read in conjunction with the principle of loyal cooperation in Article 4(3) TEU which means, according to the Court, that the consultation procedure should be initiated as quickly as possible (para 39). For this reason, the Court found that when a state is contemplating issuing an expulsion decision and entry ban on a third country national holding a valid residence permit from another Member State, the consultation should start as soon as possible and does not need to be delayed until a SIS alert has been made.
The Court decided the third and fourth questions together – rephrasing them as the issue of the failure to respond by the authorities of another Member State and what if any inferences the expelling Member State is entitled to draw as a result. The first thing the Court noted is that the Schengen system only applies to short visits of 90 days out of every 180. Residence permits on the other hand are issued mainly under national law (para 41 – surprising considering how much of EU migration law has been made subject to Directives). As noted above, the Returns Directive in principle requires Member States to expel all non-EU citizens who are not (or no longer) lawfully present, but where the person concerned has a valid residence permit in another Member State, he or she must be entitled to travel to the Member State which issued the residence permit. He or she cannot be expelled to a third country (or his or her country of origin), except where he or she fails to return to the other Member State, or on grounds of national security or public policy (para 45).
So how to interpret the latter exception? The Court reminded the Finnish authorities that in determining whether a third country national is a public policy or national security risk, the ‘Member State is required to assess the concept of ‘risk to public policy’, within the meaning of Article 7(4) of Directive 2008/115 on a case-by-case basis, in order to ascertain whether the personal conduct of the third-country national concerned poses a genuine and present risk to public policy, bearing in mind that the mere fact that that national has been criminally convicted is not sufficient by itself to present such a risk’ (para 49). This refers to a prior judgment on the voluntary departure rules in the Returns Directive, discussed here; it’s striking that there’s a high threshold to apply the ‘public policy’ clause.
Clearly, although the facts are a matter for the national court, the EU Court possibly had doubts about whether the conviction of E met the requirements for expulsion to a non-EU country. The Court acknowledged that the Finnish authorities could issue an alert (entry ban) against E but they would have to withdraw it if the Spanish authorities did not withdraw E’s residence permit. The Court recognised that the Spanish authorities had failed to respond to the requests of their Finnish counterparts in a reasonable period of time. But the consequences of that failure are not meted out on the individual. Instead the Court held that so long as the residence permit had not been withdrawn, irrespective of the failure of the Spanish to comply with their duties under the consultation procedure, the Finnish authorities are under an obligation to withdraw their alert to stop re-entry. At that point the Finnish are free to put the third country national’s details on their own national alert system to prevent re-entry into Finland, but this does not have EU wide consequences. (Note that the proposed new legislation on returns and the SIS would set a deadline to reply to consultation requests, but would still not expressly determine what happens if the Member State does not reply in time).
Finally, the Court addressed the first question – could E rely on the provisions of the Schengen Convention to prevent his expulsion to Nigeria, or are those provisions only legally binding (and accessible) to States? The Court found in favour of E – he is entitled to rely on the consultation procedure which gives rise to legal effects of importance to him (para 57). The reasoning of the Court was that as the consultation procedure is set out in a clear, precise and unconditional manner it is capable of giving rise to rights for individuals. Further, if in the consultation procedure, the state which issued the residence permit decides to maintain it, that also gives rise to a clear, precise and unconditional obligation on the expelling Member State to withdraw any alert to prevent re-entry into the Schengen area which it may have put in place (though it can keep a national re-entry ban in place) (para 59).
This is a very interesting, if rather complex case. Three things are worth noting from it. First, as the Court has done in the case of the Dublin III Regulation, it has found that administrative provisions of EU laws which govern what states are supposed to do with people produce legal effects on which the affected people may rely. The individual can rely on EU law even where it is written in terms of inter-state procedures. The requirement is the same as that for direct effect – the provision must be clear, precise and unconditional.
Secondly, the Court gives priority to the residence permit which has not been withdrawn over the expulsion decision and entry ban. So long as a Member State does nothing to withdraw a residence permit, another Member State cannot expel outside the Union the third country national except on limited grounds (but can oblige him or her to go to the Member State which issued the residence permit). It does not matter that the Member State which issued the residence permit has failed to comply with the rules on consultation.
Thirdly, the complex intersection of the Schengen Convention, an agreement among Member States originally outside the scope of EU law and only integrated in an incomplete manner by the Amsterdam Treaty in 1999, and EU law proper – the regulations and directives – moves in the direction that the EU adopted measures are gradually replacing the provisions of the Convention. There is no ‘backward’ movement whereby Member States can ‘recover’ flexibility under the Convention which has been ruled out by subsequent EU law provisions. Indeed, this judgment demonstrates that EU law principles have prevailed over the intergovernmental nature of the Schengen Convention, not the other way around.
Photo credit: The Real Agenda
Labels: Directive 2008/115, entry ban, expulsion, irregular immigration, Returns Directive, Schengen Information System
Posted by Steve Peers at 05:48 9 comments: