Op-Ed: “The European Commission has the capacity to reject a social partners’ proposal for a Directive under Article 155 TFEU” by José María Miranda Boto
The issue of the EU’s social deficit has been on the floor in recent decades. The participation of social partners − ‘management and labour’ in the language of the TFEU − in the legislative procedure was one of the mechanisms that was created to improve this situation. First through the Maastricht Protocol, then consolidated in Amsterdam, the dialogue between them at the highest European level is currently regulated in Articles 154 and 155 TFEU.
Since Maastricht, this procedure led, at first, to the passing of such important pieces of legislation as Directive 97/81 on part-time contracts and Directive 1999/70 on fixed-term contracts, among others. Then came a decade of sector-based law-making, that dealt mainly with transnational transport, with legislation such as Directive 2005/47 on the railway sector, and work at sea and fishing emerging. And then there was silence, as the social partners apparently lost interest in the issue.
However, in 2016 an agreement entitled ‘General framework for informing and consulting civil servants and employees of central government administrations’ was submitted to the European Commission, in order to start the legislative procedure to establish a Directive. In 2018, the Commission rejected the proposal. The refusal was challenged by the workers’ representatives that were part of the agreement, the European Federation of Public Service Unions (EPSU). The General Court, in EPSU (T-310/18), declared that the decision of the Commission was a challengeable act under Article 263 TFEU, and not a preparatory one, but nonetheless dismissed the action . The core of this judgment was that the Commission is not bound to give effect to a joint request under Articles 154 and 155 TFEU.
The decision was appealed in EPSU v European Commission (C-928/19 P). In his Opinion, released earlier this year, Advocate General (AG) Pikamäe had proposed the dismissal of the appeal. Now, the judgment of the Court of Justice’s Grand Chamber on the case, handed down last week on 2 September 2021, has followed that proposal.
The main part of the judgment, assessing the second ground of appeal put forward by EPSU, deals with the powers of the Commission at the time the joint request has been received. According to a majority of scholarly opinions, the Commission would have the duty to transmit the proposal to the Council, once it has verified the respect of the requirements concerning the representativeness of its authors and the lawfulness of the agreement. This interpretation is based on a literal reading of Article 155 (2) TFEU, which uses the wording ‘shall be implemented’. Following this interpretation, the exercise of political control would be a responsibility of the Council. On the other hand, nobody had ever seriously defended an obligation on the Council to implement the agreement: that would have been a complete misunderstanding of the political workings of the EU.
The Court of Justice’s judgment in EPSU v Commission strongly rejects the existence of any such obligation on the Commission’s part. Its literal interpretation of Article 155(2) TFEU, following the previous judgment from the General Court, is the exact opposite: those words ‘may have the function of specifying that an agreement concluded at EU level between management and labour must necessarily be implemented by means of one or other of two alternative procedures’. The presentation of the proposal would therefore be a power, but not a duty, for the Commission. It would thus fit in the general framework of Article 17 TFEU. Article 155 (2) TFEU would be an equivalent of Article 225 TFEU, the lack of effectiveness of which is well known in the area of Labour Law after the Cercas report issue.
The third ground of appeal, also rejected, dealt with some details of this political control and its limited review by the General Court. According to the Court of Justice, ‘judicial review must be limited in that way in particular when the EU institutions, as in the present instance, have to, first, take account of potentially divergent interests, such as the general interest of the European Union and that of the social partners, and, second, take decisions that involve policy choices’ (paragraph 96).
The clash between EU law and EU labour law is easy to perceive in the Court’s reasoning. The arguments of the Court of Justice are built to support the independence of the Commission in a way that knows no exception, controlling the procedure. There are no social nuances in its reasoning, no assimilation of the ideas of collective autonomy or horizontal subsidiarity, nor of a strong participation of social partners in the creation of EU labour law.
One can even say that management and labour are little more than qualified lobbyists in the perception of the Court of Justice, rather than real agents of law-making. Remarkable in this regard is the opposition drawn by the judgment between the ‘interests of the management and labour signatories to an agreement alone [that] would prevail over the task, entrusted to the Commission, of promoting the general interest of the European Union’ (paragraph 49). The role of social dialogue and collective bargaining in most EU countries, and in Article 151 TFEU, is being here misinterpreted as a limited interest.
This approach can also be seen in the comparison with the powers of the European Parliament and the Council of the EU: ‘management and labour would exert a greater influence over the content of legal acts adopted in relation to social policy on the basis of Articles 154 and 155 TFEU than that which may be exerted by the Parliament, which, pursuant to Article 155(2) TFEU, must merely be informed before legal acts are adopted’ (paragraph 73). This could have been a political choice in the TFEU, but the Court has decided another reading. The legislative procedure in the EU has never been symmetrical and there are still situations, many of them in the labour law field, where the Parliament is a seconda donna. The idea of horizontal subsidiarity is built, indeed, on the expression of different legitimacies and they could have found their place in the TFEU. That was not, however, the interpretation of the Court of Justice.
On the other hand, the Court of Justice did not tackle the issue of whether the products of Article 155 TFEU have a legislative nature or not. That was the first ground of appeal put forward by EPSU, as the General Court had declared that the resulting acts were not legislative measures, within the meaning of Article 289(3) TFEU. The Court followed the Opinion of AG Pikamäe that this declaration did not affect the core of the issue and rejected the ground of appeal. Clearly, the Court of Justice was avoiding a minefield.
The last ground of appeal concerned the formal procedure of rejection. In EPSU’s opinion, the Commission had not clearly stated its reasons for it. Once again, the Court of Justice followed the path of the General Court and of AG Pikamäe. According to the Grand Chamber’s judgment, the information provided had been enough. The Court of Justice did not examine its content thoroughly, which had been criticised, on the other hand, by legal labour scholarship.
The dismissal of this appeal puts the procedure under Article 155 TFEU at a serious crossroads. The first reactions from EPSU and ETUC, on the very day of the judgment, have been very strong. Once the control of the Commission has been firmly established through this Grand Chamber judgment, it is easy to think that social partners will be sceptical about future developments. In this moment of reconstruction, the role of social partners in the building of the new, socially stronger Europe is necessary. The Commission must forcefully think about a strategy for making them join forces in the procedure, once their legislative capacity has been strongly curtailed.
Paraphrasing Winston Churchill’s words about Lord Curzon, the morning of this form of social dialogue had been golden; its noontide was bronze; and, after this ruling, the evening may be lead.
José María Miranda Boto is Professor of Labour Law at the University of Santiago de Compostela. He has edited ‘El Derecho del Trabajo español ante el Tribunal de Justicia: problemas y soluciones’, dealing with the influence of the Court of Justice’s case law in Spanish Labour legislation.