Article 16 - Freedom to conduct a business
Article 27 - Workers' right to information and consultation within the undertaking
Article 30 - Protection in the event of unjustified dismissal
Article 52 - Scope and interpretation
Key facts of the case:
Reference for a preliminary ruling — Directive 98/59/EC — Approximation of the laws of the Member States relating to collective redundancies — Article 49 TFEU — Freedom of establishment — Charter of Fundamental Rights of the European Union — Article 16 — Freedom to conduct a business — National legislation conferring upon an administrative authority the power to oppose collective redundancies after assessing the conditions in the labour market, the situation of the undertaking and the interests of the national economy — Acute economic crisis — Particularly high national unemployment rate.
Outcome of the case:
On the basis of the foregoing, I consider that
the questions referred ought to be answered to the effect that, on a proper construction, Article 49 TFEU, interpreted in the light of Article 16 of the Charter of Fundamental Rights of the European Union, precludes a provision such as Article 5(3) of Nomos No 1387/1983 Elenchos omadikon apolyseon kai alles diataxeis (Law No 1387/1983 on the review of collective redundancies and other provisions), of 18 August 1983 (FEK A’ 110/18-19.8.1983), which requires employers to obtain administrative authorisation prior to carrying out collective redundancies and which makes such authorisation dependent on the conditions in the labour market, the situation of the undertaking and the interests of the national economy. The fact that the Member State concerned might be going through an acute economic crisis, accompanied by very high unemployment rates, does not affect this conclusion.
49) Moreover, the provisions of EU law must be interpreted in accordance with the fundamental rights as set out in the Charter. ( 20 ) Hence, Article 49 TFEU must be interpreted in accordance with Article 16 of the Charter, laying down the freedom to conduct a business. As is apparent from the explanations provided as guidance to the interpretation of the Charter ( 21 ) which, in accordance with the third subparagraph of Article 6(1) TEU and Article 52(7) of the Charter, have to be taken into account for its interpretation, the freedom to conduct a business encompasses (i) freedom to exercise an economic or commercial activity; (ii) freedom of contract; and (iii) free competition. ( 22 )
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52) Moreover, it follows from Article 52(1) of the Charter and the case-law of the Court that the freedom to conduct a business guaranteed under Article 16 of the Charter is not absolute, and may be regulated. ( 24 )
53) The rule at issue applies in a non-discriminatory way. Therefore, it is necessary to consider whether the remaining criteria — relating to justification, suitability and necessity — are met, given that this exercise, in my view, is basically one and the same under Article 49 TFEU and Article 16 of the Charter.
57) Next, from the outset, I must point out that, when verifying whether the three criteria mentioned in Article 5(3) of Law No 1387/1983 are appropriate and do not go beyond what is necessary in order to achieve the objective of protection of workers, the Court must carry out a balancing exercise. In other words, the Court must strike a balance between the protection of workers and the freedom of establishment of employers. Similarly, this involves balancing the freedom to conduct a business enshrined in Article 16 of the Charter against other provisions contained in Title IV of the Charter (‘Solidarity’). In what follows, I will attempt to provide some guidance thereon.
58) To begin with, although Article 27 of the Charter, which concerns workers’ right to information and consultation within the undertaking, appears relevant at first glance, in fact it does not add anything to the equation: according to Association de médiation sociale, Article 27 of the Charter must be given more specific expression in EU law or national law for that article to be fully effective. ( 28 ) On that point, it follows from the authoritative explanation relating to that provision (see point 49 above) that such specific expression can be found, inter alia, in Directive 98/59. However, as stated initially, that directive has no bearing on the lawfulness of the rule at issue. Therefore, Article 27 of the Charter is irrelevant for the purpose of the balancing test which the Court must perform. In any event, although the Workers’ Union argues otherwise in its written observations, the order for reference appears to indicate that attempts have been made to inform and consult with the workers concerned on the Programme.
59) Next, the Commission’s mention of Article 30 of the Charter does seem relevant, as that provision provides for protection of the workers in the event of unjustified dismissal. However, as held by the General Court, that provision does not lay down specific obligations. ( 29 ) In point of fact, the Court’s finding in Association de médiation sociale seems in many ways equally applicable to Article 30 of the Charter. All that I can infer directly from the wording of Article 30 of the Charter is, on the one hand, that it does not guarantee a right to permanent employment and, on the other hand, that the essential question is to ascertain what amounts, for the purpose of a restructuring exercise, to a ‘justified dismissal’.
60) More specifically, besides referring to EU legislation on the protection of employees in the event of employer insolvency and of a transfer of undertakings, neither of which is of direct relevance to the matter under consideration, the explanations relating to Article 30 of the Charter (see point 49 above) state that this provision ‘draws on Article 24 of the [European Social Charter (Revised)]’. ( 30 ) In the Appendix to the Social Charter — which, according to Article N of that charter, forms an integral part thereof — paragraph 3 of the section relating to Article 24 sets out a non-exhaustive number of unlawful grounds for dismissal. None of those grounds concern dismissal for purely economic reasons, nor can they be likened to such reasons. ( 31 )
63) First, Directive 98/59 represents a compromise reached at EU level between the need to protect workers and the consideration to be given to employers (see point 23 above). That compromise takes the form of a protective procedure (a stand-still obligation coupled with a cooling off period) which does not affect the employer’s right to reorganise the employing undertaking. Unilaterally imposing additional obligations on the employers, thereby removing the workers’ incentive to take part in negotiations with the employers, without providing for any compensatory safeguard mechanisms which take into account the employers’ situation, risks upsetting that equilibrium from the point of view of Article 49 TFEU and Article 16 of the Charter.
64) Second, and to follow up on that point, even in a situation of ‘over-implementation’, in Alemo-Herron and Others, the Court recently had to weigh up the protection of workers against the rights of employers in relation to EU rules on the safeguarding of employees’ rights in the event of a transfer of undertakings. The issue was whether those EU rules precluded a Member State from requiring a private employer taking over employees from a public employer to follow the applicable public sector collective agreements stipulated in the original employment contract (‘dynamic’ protection), while not having a voice at the negotiating table. The Advocate General had suggested adopting an approach which would leave it to the national court to decide whether this breached Article 16 of the Charter. However, the Court did not hesitate: it held that it did, as such a requirement seriously reduced the employer’s freedom of contract in a way which adversely affected the very essence of the freedom to conduct a business. ( 32 )
81) From the reasons stated above it follows that I consider that Article 49 TFEU, interpreted in the light of Article 16 of the Charter, precludes a provision such as the rule at issue. The fact that the Member State concerned might be going through an acute economic crisis, accompanied by very high unemployment rates, does not affect this.
82) On the basis of the foregoing, I consider that the questions referred ought to be answered to the effect that, on a proper construction, Article 49 TFEU, interpreted in the light of Article 16 of the Charter of Fundamental Rights of the European Union, precludes a provision such as Article 5(3) of Nomos No 1387/1983 Elenchos omadikon apolyseon kai alles diataxeis (Law No 1387/1983 on the review of collective redundancies and other provisions), of 18 August 1983 (FEK A’ 110/18-19.8.1983), which requires employers to obtain administrative authorisation prior to carrying out collective redundancies and which makes such authorisation dependent on the conditions in the labour market, the situation of the undertaking and the interests of the national economy. The fact that the Member State concerned might be going through an acute economic crisis, accompanied by very high unemployment rates, does not affect this conclusion.
