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The Commission is entitled to refuse to implement an agreement signed by European social partners: A couple in need for a good therapist

Author: Jean-Philippe Lhernould, Professor, University of Poitiers

Readers surely remember that the European Commission had refused to submit a proposal for a decision implementing the sectoral collective agreement laying down “the general framework for informing and consulting civil servants and employees of central government administrations [of the Member States]”. This agreement was signed on 21 December 2015 by the Trade Unions’ National and European Administration Delegation (TUNED) and European Public Administration Employers (EUPAE).

From a legal point of view, did the Commission have the right to refuse to submit a proposal or, as the signatories argued, was it bound by their request? In a decision of October 24, 2019, the General Court of the European Union, interpreting Article 155 TFEU, ruled unsurprisingly against them. For the Court, "the objective of promoting the role of the social partners and the dialogue between them, respecting their autonomy, does not mean that the institutions, namely the Commission and then the Council, are bound to give effect to a joint request presented by the signatory parties to an agreement seeking the implementation of that agreement at EU level" (para. 90). 

The present. On appeal by the European Federation of Public Service Unions (EPSU), the Court of Justice upheld the decision of the General Court. Who seriously thought the result could be otherwise? The heart of the dispute concerned the meaning of Article 155 TFEU, according to which "Agreements concluded at Union level shall be implemented either in accordance with the procedures and practices specific to management and labour and the Member States or, in matters covered by Article 153, at the joint request of the signatory parties, by a Council decision on a proposal from the Commission”.

Proceeding to a thorough literal, teleological and contextual interpretation, the CJEU highlights the requirements of institutional balance, which serve as a guideline for resituating the powers vested in the European Commission by the Treaties. In essence, as holder of the general power of initiative laid down in Article 17(2) TEU for the adoption of legislative acts, the Commission's role "consists in the present context in determining, in the light of the general interest of the European Union, whether it is appropriate to submit a proposal to the Council on the basis of an agreement between management and labour, for the purpose of its implementation at EU level" (para. 47). Put more directly, giving precedence to the interpretation of EPSU would entail "that the interests of the management and labour signatories to an agreement alone would prevail over the task, entrusted to the Commission, of promoting the general interest of the European Union" (para. 49). Such situation "would jeopardise that [institutional] balance and could well hinder the Commission’s pursuit of its task". Similarly, compelling the Commission to submit a proposal for a decision "would be contrary to the principle, as laid down in the third subparagraph of Article 17(3) TEU, that the Commission is to carry out its responsibilities independently" (para. 50).

Would there be any clearer way to recall the central role played by the Commission in the EU construction?

This solution, the Court adds, does not affect either the social dialogue or the right to negotiate and conclude agreements as objectives of the Treaty and the Charter of Fundamental Rights. Indeed, "That autonomy, enshrined in the first paragraph of Article 152 TFEU, means (…) that, during the stage of negotiation of an agreement by the social partners, which ‘exclusively involves’ the latter, they may engage in dialogue and act freely without receiving any order or instruction from whomsoever and, in particular, not from the Member States or the EU institutions" (para. 61). Therefore, to accept the interpretation of the EPSU “would effectively confuse the stage of negotiation of the agreement concerned, when the social partners enjoy total autonomy, which was respected in the present instance, with the stage of implementation of that agreement at EU level, when they no longer have an active role, because(…) under Article 155(2) TFEU ‘the Council acts on a proposal by the Commission" (para. 65).

In the end, the scope of the Commission's prerogatives when having to deal with a request from the European social partners to transpose an agreement into a decision is precisely defined: "the Commission carries out a legal assessment when it is called upon to examine the representativeness of the signatories to that agreement and the legality of its clauses, in accordance with Article 155(2) TFEU. However, (…) when the Commission receives from the social partners concerned a request to implement that agreement at EU level, it must also assess whether, in the light inter alia of political, economic and social considerations, implementation of the agreement at EU level is appropriate" (para. 98).

The future. This legal reading of Article 155(2) TFEU which grants the Commission the right to exercise a threefold control of representativity, legality and appropriateness, does not mean that the relationship should remain as it is in the future.

As was explained by an actor in the social dialogue who first worked as a Commission staff before joining the ETUC, the real debate is not about the possibility for the Commission not to follow up on a request for legislative implementation from the signatories of an agreement, as this possibility has already been mentioned in a Commission Communication (COM(93) 600 final, 14 déc. 1993), but about how to promote European social dialogue within the institutional framework set by EU law.

The need to clarify the processes is all the more necessary because the Commission's constant practice has long been to promote collective bargaining. In the 1990s and 2000s, the Commission not only systematically incorporated sectoral and cross-sectoral European agreements into directives, but also stimulated collective bargaining. The spirit changed radically at the beginning of the 2010s when the European Commission built the "REFIT" strategy, which, without saying so clearly, announced the freezing of a dynamic negotiated social policy. The blunt refusal to implement an agreement in the hairdressing sector, largely explains the very negative reaction of the European social partners. It is however true that the latter are confronted with their own internal operating problems which have led to a form of sterility.

While the action plan of the European Pillar of Social Rights now again aims to promote European social dialogue, the status quo seems unthinkable. It is true that the institutional balance is imposed on the actors of the Union, with the Commission emerging strengthened from the dispute with the European social partners. However, the treaties do not prevent the establishment of criteria and a procedure aimed at adjusting the conditions under which the Commission would exercise its control over the appropriateness of European agreements within the framework of its duty to promote the general interest. It is therefore essential that the Commission clarify its action and be more transparent, in contrast to what happened with the two agreements (including the one debated in the dispute before the Court) that were rejected.

It is understandable that any European agreement, even if it has been signed by representative social partners and does not contain illegal provisions, does not deserve to be implemented in a directive, either because the agreement is not necessary in view of the existing European regulation, or because it does not fit into the European social strategy. It is still necessary to give a framework for action to the European social partners so that they do not make futile efforts or, worse, refrain from negotiating for fear of a subsequent rejection by the Community executive.

In this work on processes, the Commission will hopefully seek the views of the social partners. It is not obliged to do so, but a true social dialogue requires it. The social partners have already been consulted by the Commission on a review of the sectoral social dialogue (The review of the EU sectoral social dialogue: consultation of social partners, 12 May 2021), which is a sign of goodwill. More broadly, the Commission has all the means to guide, support and inspire social dialogue, in particular through the social dialogue committee which is in place. It must intervene upstream through an activity of exchange and influence to avoid the non-transposition of signed agreements.   

In this process of trade-off, the Commission is both a party and the therapist. It has all the cards in hand, but it will also be necessary for the European social partners to rise to the level of their expectations and take responsibility. 

CJEU, 24 Oct. 2019, case T-310/18, European Federation of Public Service Unions (EPSU)

CJEU, 2 Sept. 2021, case C-928/19 P European Federation of Public Service Unions (EPSU)