DIRECTORATE-GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT ECONOMIC AND SCIENTIFIC POLICY A Economic and Monetary Affairs EmploymentEmployment and Social and Social Affairs Affairs Environment, Public Health and Food Safety Industry, Research and Energy Internal Market and Consumer Protection EU Social and Labour Rights and EU Internal Market Law EU Social and Labour Rights and EU Internal Market Law STUDY for the EMPL Committee EN 2015 DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT A: ECONOMIC AND SCIENTIFIC POLICY EU Social and Labour Rights and EU Internal Market Law Abstract EU Social and Labour Rights have developed incrementally, originally through a set of legislative initiatives creating selective employment rights, followed by a non-binding Charter of Social Rights. Only in 2009, social and labour rights became legally binding through the Charter of Fundamental Rights for the European Union (CFREU). By contrast, the EU Internal Market - an area without frontiers where goods, persons, services and capital can circulate freely – has been enshrined in legally enforceable Treaty provisions from 1958. These comprise the economic freedoms guaranteeing said free circulation and a system ensuring that competition is not distorted within the Internal Market (Protocol 27 to the Treaty of Lisbon). Tensions between Internal Market law and social and labour rights have been observed in analyses of EU case law and legislation. This report, provided by Policy Department A to the Committee on Employment and Social Affairs, explores responses by socio-economic and political actors at national and EU levels to such tensions. On the basis of the current Treaties and the CFREU, the constitutionally conditioned Internal Market emerges as a way to overcome the perception that social and labour rights limit Internal Market law. On this basis, alternative responses to perceived tensions are proposed, focused on posting of workers, furthering fair employment conditions through public procurement and enabling effective collective bargaining and industrial action in the Internal Market. IP/A/EMPL/ST/2014-02 September 2015 PE 563.457 EN This document was requested by the European Parliament's Committee on Employment Affairs (EMPL). AUTHORS Professor Dagmar SCHIEK, (Queen’s University Belfast, CETLS, Principal Investigator) Dr Liz Oliver, Professor Christopher Forde, Dr Gabriella Alberti (all University of Leeds, CE- RIC – coordination of research for chapter 3, report for EU level) COUNTRY REPORT AUTHORS Ireland: Professor Michael Doherty (University of Maynooth) Poland: Dr Joanna Unterschütz (University of Business Administration, Gdynia) Spain: Professor Consuelo Chacartegui Jávega, Professor Julia Lopez Lopez (University Pompeu Fabra, Barcelona, GRETDISS) Sweden: Dr Kerstin Ahlberg, Professor Niklas Bruun (University of Stockholm, REMARKLAB) WITH CONTRIBUTIONS BY Dr Pinar Akman, Dr Peter Whelan (University of Leeds, CBLP, CCJS) RESPONSIBLE ADMINISTRATOR Marion SCHMID-DRÜNER Policy Department A: Economic and Scientific Policy European Parliament B-1047 Brussels E-mail: [email protected] Editorial assistant: Iveta OZOLINA LINGUISTIC VERSIONS Original: EN ABOUT THE EDITOR Policy departments provide in-house and external expertise to support EP committees and other parliamentary bodies in shaping legislation and exercising democratic scrutiny over EU internal policies. To contact Policy Department A or to subscribe to its newsletter please write to [email protected] Manuscript completed in September 2015 © European Union, 2015 This document is available on the Internet at: www.europarl.europa.eu/supporting-analyses DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the publisher is given prior notice and sent a copy. EU Social and Labour Rights and EU Internal Market Law CONTENTS LIST OF ABBREVIATIONS 6 LIST OF BOXES 9 LIST OF FIGURES 10 EXECUTIVE SUMMARY 11 1. A GROWING TENSION? 13 1.1. Introduction 13 1.2. The EU’s socio-economic model from Rome to Lisbon and beyond 13 1.3. EU social and labour rights after the Treaty of Lisbon 15 1.3.1. Values underpinning social and labour rights 15 1.3.2. Social and labour rights in the Charter of Fundamental Rights 16 1.3.3. Social and labour rights included in this study 17 1.3.4. Relevance of legally binding social and labour rights 19 1.4. EU Internal Market law: economic freedoms and competition rules 20 1.4.1. A holistic concept of the Internal Market 20 1.4.2. Economic freedoms 20 1.4.3. Specifically: free movement of workers and equal treatment 21 1.4.4. Competition rules 24 1.4.5. Approximation of economic freedoms and competition rules 24 1.5. EU social and labour rights and Internal Market Law 25 1.5.1. Contradictory interrelations 25 1.5.2. Economic freedoms for business and social and labour rights 26 1.5.3. Relevance of tensions for regulatory actors (EU and national level) 27 1.6. How the investigation has been conducted and how the report is structured 28 2. SELECTED SOCIAL AND LABOUR RIGHTS AND EU INTERNAL MARKET LAW 30 2.1. Introduction 30 2.2. Rights to collective bargaining & industrial action 30 2.2.1. Introductory remarks 30 2.2.2. Freedom to provide services 31 2.2.3. Freedom of establishment 35 2.2.4. Competition rules 37 2.3. Fair and just working conditions – economic freedoms 39 2.3.1. Free movement of posted workers: workers versus services? 39 2.3.2. Posted workers: secondary law and freedom to provide services 40 2.3.3. Hiring out workers (agency work) and posting in secondary law 42 2.3.4. Public procurement and fair and just working conditions 44 2.3.5. Mobile business and low wage work 45 2.4. Social security and social assistance 46 2.4.1. Notions, EU competences and scope of study 46 2.4.2. Competition rules – impacting on social security 47 2.4.3. Economic Freedoms as business rights and social security 48 2.4.4. Free movement of workers - established case law up to 2012 49 PE 563.457 3 Policy Department A: Economic and Scientific Policy 2.4.5. Reducing the compelling force of equal treatment rights? 50 2.5. Chapter conclusion 53 3. POLICY RESPONSES AT NATIONAL AND EU LEVEL 55 3.1. Introduction 55 3.2. Context of responses and debates at national and EU levels 55 3.2.1. Ireland 55 3.2.2. Poland 56 3.2.3. Spain 57 3.2.4. Sweden 58 3.2.5. The EU level 59 3.2.6. Expectations for the evidence by expert interviews 60 3.3. Posted workers 61 3.3.1. Posting: dependent migration; precarious, low-waged employment 61 3.3.2. Fair working conditions for posted workers 62 3.3.3. Posted workers and collective bargaining 63 3.3.4. Hiring out of workers (agency work) and posting 67 3.3.5. Abuse of posting and enforcing the Posted Workers’ Directive 67 3.3.6. Social security for posted workers 68 3.4. Public procurement 69 3.5. Freedom of establishment 71 3.6. Collective bargaining and EU competition law 71 3.7. Equal treatment of free movers 72 3.7.1. Ensuring factual equal treatment, facilitating free movement 72 3.7.2. Social security coordination 74 3.7.3. Equal treatment in the field of social assistance 74 3.8. Conclusions 76 4. A CONSTITUTIONALLY CONDITIONED INTERNAL MARKET - A NEW NORMATIVE FRAMEWORK 78 4.1. Introduction 78 4.2. A constitutionally conditioned Internal Market 79 4.2.1. The general concept 79 4.2.2. Adieu to traditional divisions in human rights protection 80 4.2.3. Social and Labour Rights in the Charter 81 4.2.4. Rights underpinning Internal Market law in the Charter 81 4.2.5. Tensions within the Charter 82 4.2.6. Rights and Principles 83 4.2.7. Different quality of rights and conflict solutions 84 4.2.8. Conflicts between Charter rights of equal rank 85 4.2.9. Interim conclusion on a constitutionally conditioned Internal Market 86 4.3. Some practical consequences 87 4.3.1. Collective labour rights and economic freedoms 87 4.3.2. Collective labour rights and competition rules 90 4.3.3. Rights to conduct a business and equal treatment of workers 91 4 PE 563.457 EU Social and Labour Rights and EU Internal Market Law 4.3.4. Equal treatment of free movers versus national prerogatives (social security and social assistance) 91 4.4. The role of legislation and collective regulation at EU and national levels 92 4.5. Chapter conclusion 92 5. CONCLUSIONS AND RECOMMENDATIONS 94 5.1. Introduction 94 5.2. Workers moving in the Internal Market 95 5.2.1. Factual relevance of labour mobility throughout the EU 95 5.2.2. Equal employment conditions for posted workers 96 5.2.3. Moving workers and social security 97 5.2.4. Enforcing rights of workers who move 99 5.3. Public procurement and fair working conditions 99 5.4. Collective bargaining in the Internal Market 100 5.4.1. The EU needs to mature to adapt to transnational industrial conflict 100 5.4.2. Competition law as sword of Damocles? 100 5.4.3. Collective bargaining and social security 101 5.4.4. Enforcing workers’ rights and collective representation 101 5.4.5. Specific opportunities of collective bargaining for posted workers 102 5.5. Conclusion 103 ANNEX 1: FREE MOVEMENT IN THE EU – SOME DATA 104 ANNEX 2: METHODOLOGY 104 ANNEX 3: SUMMARY INTERVIEW SCHEDULE FOR THE PRIMARY RESEARCH IN CHAPTER 3 108 Collective bargaining and industrial action / freedom to provide services 108 Collective bargaining and industrial action / freedom of establishment