Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

Greek Glass Half-Full: The CJEU And Europe’s ‘Highly Competitive Social Market’ Economy

Nicola Countouris and Aristea Koukiadaki 13th February 2017

Nicola Countouris

Nicola Countouris

The European Union is not only to establish an internal market but is also to work for the sustainable development of Europe, which is based, in particular, on a highly competitive social market economy aiming at full employment and social progress, and it is to promote, inter alia, social protection.

This is what the Court of Justice of the European Union (CJEU) recently proclaimed in Case C-201/05, Aget Iraklis. The case, which was referred to the CJEU by the Greek Council of State (Supreme Administrative Court), concerned the question of whether the powers of the Minister for Labour to refuse planned collective redundancies under certain circumstances are compatible with EU Law. The reluctance of Greece to abolish this restriction on collective redundancies has acquired a totemic significance in the negotiations between the Greek government and its creditors and in particular the International Monetary Fund (IMF).

Aristea Koukiadaki

Aristea Koukiadaki

The emphasis of the CJEU on a ‘highly competitive social market economy’ stands in sharp contrast to Advocate General (AG) Wahl’s Opinion, which was delivered in June 2016. In its opening line, the AG had declared: ‘The European Union is based on a free market economy, which implies that undertakings must have the freedom to conduct their business as they see fit’. The Opinion, perhaps predictably, had concluded that the Greek rules were indeed in breach of Article 49 of the Treaty for the Functioning of the European Union (TFEU) and of Article 16 of the Charter of Fundamental Rights of the EU (Charter).

On 27 December 2016, the CJEU delivered a judgment that offered some reassurances but also cautioned the Greek authorities that some aspects of their national laws on collective redundancies may indeed be incompatible with EU Law. In terms of offering reassurances, the CJEU reached four key conclusions. Firstly the judges, correctly in our view, inferred from ‘Article 5 of Directive 98/59 that that directive is intended […] to provide minimum protection with regard to informing and consulting workers in the event of collective redundancies and that the Member States remain free to adopt national measures that are more favourable to those workers’. What this means in the case at present is that the Greek legislation allowing a public authority the power to prevent collective redundancies is not, as often argued, incompatible in principle with Directive 98/59 that regulates collective redundancies at European level.

Secondly and equally importantly, the CJEU held that the mere fact that a Member State stipulates a requirement that any projected collective redundancies must be notified to a national authority, which has simultaneously the right to oppose these redundancies on grounds relating to the protection of workers and of employment, ‘cannot be considered contrary to freedom of establishment as guaranteed by Article 49 TFEU or the freedom to conduct a business enshrined in Article 16 of the Charter’ either.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

Thirdly, while the CJEU re-affirmed its Alemo Herron understanding of Article 16 of the Charter as establishing a fundamental freedom to conduct a business, it then went on to stress that ‘the freedom to conduct a business may be subject to a broad range of interventions on the part of public authorities that may limit the exercise of economic activity in the public interest’. Unlike in Alemo, where the CJEU took the view that Member States cannot take measures, which, while being more favourable to employees in transfers of undertaking, are liable to adversely affect the very essence of the freedom to conduct a business, the CJEU held in Aget Iraklis that the veto by public authorities in collective redundancies was solely designed to impose a framework on the ability of companies to proceed to collective redundancies.

Finally, the CJEU accepted the arguments of the Greek government that the veto right of the public authorities could both be justified, as its objective was to protect workers (expressly referring to Article 30 of the Charter), and be proportionate. It went as far as suggesting that ‘it is not apparent that measures of a less restrictive kind would ensure attainment of the objectives thereby pursued as effectively as the establishment of such a framework’.

But there were also words of caution. The CJEU noted that the three criteria, which the Greek public authorities take into account for the purpose of deciding whether they oppose collective redundancies (‘interests of the national economy’, ‘situation of the undertaking’ and the ‘conditions in the labour market’) are not up to the job. The first one was considered to relate to an economic aim, which cannot constitute a public interest reason justifying a restriction on EU fundamental freedoms. As for the second two, while in principle these were found to be capable of relating to the public interest, the CJEU lamented the fact that the administrative authorities’ discretion was unfettered by their overly-generic wording. It then went on to express its expectation that the criteria relied upon by the public authorities be detailed and specific enough so as to allow employers a certain degree of predictability in terms of their application by public authorities and to allow courts to review how public authorities exercise their discretion.

The judgment is certainly to be celebrated, especially by those who read into Article 3(3) TEU’s ‘highly competitive social market economy’ a vision of Europe’s economic (and social) relations that is less straightforwardly committed to an unbridled freedom for undertakings to conduct their business ‘as they see fit’. Fundamental market freedoms remain…, well, fundamental, but they must be balanced against a range of social objectives recognised by the Treaties. While, methodologically speaking, this is a rehearsal of a well-established jurisprudence of the CJEU (the court often cites Viking, a controversial decision on industrial action), the balancing exercise it performed on this occasion is more sensitive to the fact that collective redundancies do not solely affect the rights and interest of undertakings, but also those of workers and, no less importantly, of society at large.

It is now up to Greece’s creditors to acknowledge the judgment and support the Greek government in its efforts towards ensuring the development of a ‘social market economy’ along the lines elaborated by the CJEU.

Nicola Countouris and Aristea Koukiadaki

Nicola Countouris is a Professor of Labour Law and European Law at the Faculty of Laws of UCL. His recent publications include Resocialising Europe in a Time of Crisis (CUP, 2013), co-edited with Mark Freedland. Aristea Koukiadaki is senior lecturer in employment law at the School of Law in the University of Manchester. Her recent publications include Joint Regulation and Labour Market Policy in Europe during the Crisis (ETUI, 2016), co-edited with Isabel Távora and Miguel Martínez Lucio.

You are here: Home / Politics / Greek Glass Half-Full: The CJEU And Europe’s ‘Highly Competitive Social Market’ Economy

Most Popular Posts

European civil war,iron curtain,NATO,Ukraine,Gorbachev The new European civil warGuido Montani
Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse

Most Recent Posts

HMPs,CMR,hazardous medicinal products,carcinogenic, mutagenic and reprotoxic,health workers Protecting health workers from hazardous productsIan Lindsley, Tony Musu and Adam Rogalewski
geopolitical,Europe Options for Europe’s ‘geopolitical’ futureJon Bloomfield
democracy,democratic Reviving democracy in a fragmented EuropeSusanne Wixforth and Kaoutar Haddouti
EU social agenda,social investment,social protection EU social agenda beyond 2024—no time to wasteFrank Vandenbroucke
pension reform,Germany,Lindner Pension reform in Germany—a market solution?Fabian Mushövel and Nicholas Barr

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Foundation for European Progressive Studies Advertisement

Discover the new FEPS Progressive Yearbook and what 2023 has in store for us!

The Progressive Yearbook focuses on transversal European issues that have left a mark on 2022, delivering insightful future-oriented analysis for the new year. It counts on renowned authors' contributions, including academics, politicians and analysts. This fourth edition is published in a time of war and, therefore, it mostly looks at the conflict itself, the actors involved and the implications for Europe.


DOWNLOAD HERE

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

Social policy in the European Union: state of play 2022

Since 2000, the annual Bilan social volume has been analysing the state of play of social policy in the European Union during the preceding year, the better to forecast developments in the new one. Co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), the new edition is no exception. In the context of multiple crises, the authors find that social policies gained in ambition in 2022. At the same time, the new EU economic framework, expected for 2023, should be made compatible with achieving the EU’s social and ‘green’ objectives. Finally, they raise the question whether the EU Social Imbalances Procedure and Open Strategic Autonomy paradigm could provide windows of opportunity to sustain the EU’s social ambition in the long run.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube