The
privileging of economic freedoms over social rights by the European
Court of Justice could be reversed by a thorough harmonisation of
European social law.
Susanne Wixforth
In 2014, the European Court of Justice (ECJ) ruled
that the obligation to pay minimum wages due to national regulations
was an inadmissible economic burden and therefore incompatible with the
EU single market. Five years later, the ECJ’s advocate general argued that ‘what is “social dumping” for some is, quite simply, “employment” for others’. Any jobs, anywhere cannot be the summit of social ambition.
Through
such case law the ECJ has contributed for years to the dominance of
economic freedoms over social rights in the European Union. But the
relation of the court to social regulation is not as straightforward as
is often depicted. Apart from all its risks and side-effects, the ECJ
poses great opportunities in the arena of social policy, which must be
fully understood and eventually taken. If the member states have the
political will to realise change, the ECJ can become the guardian of social rights in Europe.
Lukas Hochscheidt
Due
to the settled case law of the ECJ, the economic freedoms—of services
and establishment as well as of goods and capital—have a constitutional
status against which social rights are to be measured. The latter are
anchored in primary legislation through title IV of the Charter of
Fundamental Rights but they are hardly ever applied by the court to
justify restrictions on the economic freedoms.
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This
leads to a functional dominance of economics over social issues, which
ultimately turns the ECJ into a driver of liberalisation. Referring to
national protective rights of workers and consumers as barriers to trade
within the single market, actors interested in deregulation use the ECJ
to undermine social policies of member states ‘through the back door’
of European law.
Impact analysed
In light of this case law, one could assume that the ECJ is biased towards the economic freedoms of the single market—consciously
deciding in favour of economic deregulation and against social
protection. To examine this assumption, we analysed the impact of the
case law on member states from the different welfare-state traditions
within the EU. If the ECJ really did favour economic freedoms
structurally, then some welfare models should ‘suffer’ more under its
case law than others, depending on how strongly social rights were
enshrined in their respective systems.
Taking four member states
which each represent one of the four major welfare-state models in
Europe—Nordic universalist, core-European insurance-based,
market-oriented Anglo-Saxon and minimal southern-European—we tried to
identify correlations between welfare regimes and the impact of ECJ case
law on social regulation (reported in Soziale Sicherheit,
volume 10, 2019, pp 378-82). But a robust, structural correlation
between the effects of the case law and the welfare-state regime could
not be established.
We therefore hypothesised that the decisive
factor was the relevant legal field and whether this was harmonised at
EU level. To test this new assumption, we compared the case law in areas
of social policy which had been harmonised with those where EU
harmonisation had been firmly excluded by the treaties.
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The
non-discrimination principle (regarding nationality, sex, age and so
on), the guarantee of claims and benefits of social security for migrant
workers, working conditions and occupational safety, as well as the
rights of posted workers and the regulation of weekly working time, paid
leave and rest periods, are all matters of EU-level regulation.
In each of these areas, the ECJ has proved a stern admonisher and defender of the European acquis
against solo national efforts. In particular, on the enforcement of the
non-discrimination principle concerning nationality and equal pay for women and men, the judges have made significant contributions to the assertion of social rights throughout Europe.
On
the other hand, there are non-harmonised areas of social
policy—particularly the rights of association and withdrawal of labour,
wages and salaries, and the amounts of social benefits (including
minima). As several cases show, here the court acts as a driver of
liberalisation where there is insufficient harmonisation at EU level to
prevent it from doing so. Therefore, the existence of European minimum
standards for social regulation is decisive for the direction ECJ case
law will take in this domain.
Sharp weapon
To
‘tame’ or socialise the ECJ, we must introduce European standards in
more socially-related legal fields. Put differently, in an EU in which
social law is harmonised at EU level, the ECJ can become a sharp weapon
against social inequality between member states.
This being said,
how can we ensure that any EU-wide harmonisation of social policies does
not lead to agreement on the lowest common denominator? From a
trade-union point of view, the answer to this legitimate concern is the
implementation of a ‘social progress protocol’.
Social rights
should not be subordinated to economic freedoms but given priority. This
would require that the ECJ no longer consider wage regulations and the
protection of social and collective labour rights as a violation of
economic freedoms. A requirement for upward convergence would need to be
combined with a non-regression clause on social issues, to prevent good
standards being downgraded.
The member states and the European Parliament have the possibility to turn this vision of a truly European
welfare model into reality. Implementation is a question of political
will. If the new European Commission were to adopt this agenda, it could
make a historic contribution: the competition between welfare states
could turn into a common quest for solutions.
Instead of fighting social dumping, we could then focus on shaping a more socially just union.
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