How Juncker can make ‘The European Pillar of Social Rights’
deliver a powerful message that the EU is an area of dignity, autonomy and
social justice
Claire Kilpatrick (EUI), Elise Muir (Veni Fellow, Maastricht)
and Sacha Garben (College of Europe, Bruges)
Since the financial crisis began and the EU's response to it
included wider austerity in a number of countries, there have been doubts among
many citizens that the EU is still committed to prosperity and rising living
and working standards. The recently announced
‘European
Pillar of Social Rights’ is an attempt to address this concern. In our
view, the Pillar must include binding and high-profile pledges - on minimum
wage and minimum income - in order to address citizens' concerns and for the
EU to move on from austerity back to legitimacy.
The
‘European
Pillar of Social Rights’ is a Commission policy initiative launched in
March 2016. Our analysis reflects on the policy process and proposals to date.
It explains why a High-Level Conference on the Pillar held in late January 2017
is the most important staging-post to date. We make proposals for orienting the
Pillar initiative towards delivering dignity, autonomy and social justice in
the EU and evaluate the constitutional implications, especially in terms of EU
competence, of the commitments to introduce EU measures on minimum pay and
income, and to restrict the Pillar to the euro-area states. The Pillar
initiative seems likely to feed into the Commission
White Paper on
the Future of Europe launched in March 2017 which will be followed by a series
of reflection papers of which the first mentioned is developing the social
dimension of Europe. Accordingly it is an important new policy juncture for
Social Europe which deserves analysis and input.
The Pillar is an open
process with impressive civil society and EU institutional participation.
The High Level Conference organised by the Commission on 23
January 2017 on the European Pillar of Social Rights showed it attracts as much
attention as it is mysterious. Numerous stakeholders alongside at least ten
Commissioners, including President Juncker and Vice-President Dombrovskis,
representatives of various EU institutions including President Tajani of the
European Parliament and government ministers converged on Brussels to voice
their opinions on the European Pillar of Social Rights.
The many interventions left little doubt that the precise
legal shape and policy content of the Juncker Pillar remains undetermined and
thus open for discussion. Hence, rather than reading the Pillar consultation
document with its draft list of ‘principles’ as a quasi-finalised text with
just its legal status and scope to be determined, the Pillar consultation is best seen as providing a vehicle for a wide
range of proposals on resetting Social Europe.
Seen as such a process, the Pillar consultation has been a
success. Over 16,000 individuals and organisations filled in the questionnaire
issued as part of the Consultation and around 200 written contributions were
submitted to the Commission. In Autumn 2016,
national
consultation events were held across the EU Member States. The very
substantial NGO and union presence at the High-Level Consultation testifies to
civil society engagement and investment in the Pillar consultation. Amongst
these, the
Social Policy Platform
deserves to be highlighted. By bringing together since 1995 over 30 different
social NGOs, including Age Platform Europe, PICUM (Platform for International
Cooperation on Undocumented Migrants), EAPN (European Anti-Poverty Network),
Housing Europe, ILGA-Europe, European Youth Forum and the European Disability
Forum, it had an added legitimacy and voice in the process. It disseminated
well-defined proposals for the Pillar. In light of Juncker’s announcement in
his closing speech, it produced the most resonant proposal of a
minimum income directive and a proposal
on
minimum pay via the European
Semester.
The frames of
discussion failed to give EU social rights and values their central place in the
Pillar.
The European Pillar of Social Rights initiative comes after
a decade which has altered perceptions of the EU as a benign or mildly positive
force for social justice in Europe.
Sovereign debt and EMU governance are one important reason for this
shift. Another relates to concerns triggered by free movement after the 2004
and 2007 enlargements. Political developments make it vital for the EU to use
the Pillar to reassert the pursuit of social justice as a central part of its
mission. Yet the urgency and importance of recentring the EU’s social justice
roles and responsibilities was not fully acknowledged by many actors at the
High-Level Consultation. There is a risk of doing too little.
Getting the frames of analysis right is crucial to guide the
Pillar and the decisions and actions on its implementation. The frames or
narratives which were very present during the High-Level Consultation were:
Social Europe was desirable
provided EMU debt and deficit limits were respected;
Social Europe, the EMU and the
internal market can or do happily co-exist;
Social Investment is the guiding
frame for the Pillar of Social Rights and is not incompatible with social
rights as human rights;
Adapting to new technologies and
work platforms is the main priority for Social Europe.
In our view, these frames should not be those guiding the
Pillar process or its implementation. Instead it is vital to make it explicit that the driving force for
legal and policy change is the desire to protect the dignity and autonomy of
individuals as well as social justice.
Dignity recognises the equal and intrinsic worth of every
human being while autonomy requires political institutions not to deprive
individuals of valuable options in areas of fundamental importance in their
lives. In the absence of such an explicit message in the Pillar, or if the
message is blurred by economic arguments in support for change, or made subject
to economic conditions, or wishing away hard choices between the economic and
the social, or attributing Social Europe’s malaise to new technologies and
platforms, the message and its delivery will be imperilled.
Protection of individuals and their dignity and autonomy has
a firm EU law basis bolstered by national constitutional and international
human rights law. Dignity is the foundational principle of the EU Charter of
Fundamental Rights and many of the rights it contains are specifications of
those foundational commitments. Hence ,for example, the Charter ‘recognises and
respects the right to social and housing assistance so as to ensure a decent
existence for all those who lack sufficient resources’ (Article 34(3)) and ‘the
right to working conditions which respect his or her health, safety and dignity’
(Article 31). Most closely related to the value of autonomy in Social Europe
are the EU Charter commitments to the right to engage in work and pursue a
freely chosen occupation as well as the freedoms of association (Article 15),
expression, information and consultation (Articles 11 and 27), to collectively
bargain and take collective action (Article 28).
Beyond the EU Charter and human and constitutional rights’
commitments, the EU’s social justice and progress objectives feature prominently
in the Treaties: in the TFEU’s preamble as the resolve to ensure the ‘social
progress of their States by common action to eliminate the barriers which
divide Europe’. Article 3 TEU conceptualises the EU as ‘a social market
economy’ aiming at full employment and social progress, and provides that it
‘shall combat social exclusion and discrimination, and shall promote social
justice and protection’. These objectives shall furthermore be mainstreamed
across all EU policies, in accordance with Article 9 TFEU, which provides that
‘in defining and implementing its policies and activities, the Union shall take
into account requirements linked to the promotion of a high level of
employment, the guarantee of adequate social protection, the fight against
social exclusion’.
A European Pillar of Social
Rights must be founded on these values and be concerned with their
promotion and guarantee in a changed EU membership and EMU context.
The EU constitutional
implications of a Eurozone pillar and minimum income and pay guarantees
The Commission President made a twofold announcement: an
initial focus of the Pillar on the Eurozone and a dual guarantee for minimum
pay and income.
We strongly endorse the proposals to focus on minimum pay
and income for those living and working in Europe. These proposals not only
address the preoccupation that the EU has threatened these protection floors,
they also enshrine the values of dignity and autonomy in the EU. Yet to
properly realise those values requires minimum pay and income instruments to apply to all EU Member States, not
simply Euro area states. Sovereign debt arrangements applied to three
non-euro area states and concerns that enlargement threatens the social floor
are not confined to euro area states either. Minimum pay and minimum income are
social guarantees of a fundamental nature that should apply across the EU.
Indeed the social acquis, other than the brief opt-out by the UK between Maastricht
and Amsterdam, has always applied to all those living and working in Europe and
should continue to do so.
Moreover, to make them tangible, these EU minimum income and
pay guarantees must be enshrined in visible and effective instruments. In both
cases, our preference would be for legally
binding Directives which should be complemented with soft law commitments
in the European Semester and programme commitments in sovereign debt loan
states.
This raises questions of EU competence to adopt such legally
binding measures.
For minimum income, we agree with the Social Policy Platform
that Article 153(1)(h) TFEU which
allows for binding measures to be adopted using the ordinary legislative
procedure for the integration of persons excluded from the labour market is
appropriate.
It is widely assumed that it is impossible for the EU to
adopt a minimum pay directive because Article
153(5) TFEU states that the social policy legal base ‘shall not apply to
pay’. However, the Commission may have in mind a creative literal reading of
the combination between Article 153(5) and Article 352 TFEU (the ‘residual
powers’ clause of the Treaties). Article 153(5) TFEU could be read as excluding
only the adoption of a minimum pay directive under the Social Policy Title of
the Treaty without excluding other possible legal bases.
Article 352 TFEU would
then be examined as a potential legal basis for a minimum pay directive. Article
352 can be used ‘where the Treaties have not provided the necessary powers’ but
cannot be used to harmonise Member States’ laws or regulations ‘where the
Treaties exclude such harmonisation’. However, this harmonisation exclusion could
be read as applying only in those cases where the Treaties clearly in terms
outlaws harmonisation such as in the areas of vocational training (Article 166
TFEU) and culture (Article 167 TFEU) (each allowing legislative measures to be
adopted ‘excluding any harmonisation of the laws and regulations of the Member
States’). It therefore would not apply to Article 153(5) TFEU. Following this
interpretation, a minimum pay directive could be adopted if it achieved the
unanimous Member State support required under Article 352 TFEU. It remains to
be seen if such a line of reasoning would be accepted by the EU legislator.
The question could be raised whether the internal market
legal basis of Article 115 TFEU
could be used for the adoption of a minimum pay directive (Article 114 TFEU
cannot be used, since Article 114(2) TFEU prevents reliance on Article 114(1)
to protect the rights and interests of employed persons). There is an argument
that such a measure, even if it would retain certain differences in minimum pay
levels among EU Member States, would help reduce distortions in competition.
Not only would it facilitate the application of the Posting of Workers Directive
in the area of cross-border service provision, having a certain minimum pay
level in all Member States could more generally help limit competition on
wages. Whether the expected reduction in distorted competition would be
sufficient to fulfil the conditions for use of the internal market legal basis
is an open question, and would depend in part on at what (relative) level the
wage would be set and whether this significantly decreases current differences
in pay among the Member States.
However, even if this would be accepted as possible in legal
terms, there are several reasons why Article 115 TFEU would not be the
advisable course of action. If the directive is about achieving genuinely
social objectives, the use of an internal market legal basis is unwise, as the
Court is then more likely to interpret the measure in a market-friendly way in
case of a conflict between ‘the social’ and ‘the market’ (which is arguably
what happened in the case of the Posting of Workers Directive, as well as the
Collective
Redundancies Directive). And as
Article 115 TFEU requires unanimity as much as Article 352 TFEU, there is
little strategic advantage in using it either.
Subsidiarity concerns will evidently be addressed by setting
pay and income levels appropriate to each state. EU respect for the Council of
Europe and commitment to social rights can be underlined by using that body’s
European Social
Charter commitments and elaboration of the right to a fair remuneration
(Article 4(1)) and to social assistance (Article 13) as base-lines.
The former provision requires States ‘to recognise the right
of workers to a remuneration such as will give them a decent standard of
living’, and the European Committee of Social Rights has ruled that the lowest
net wage must be above a minimum threshold, set at 50% of the net average wage,
while state conformity will be assumed above 60% of the net average wage. The
latter provision deems assistance appropriate where the monthly amount paid to
a person living alone is not manifestly below the poverty threshold (50% of
median equivalised income as established by Eurostat).
If it is decided necessary for transitional or political
reasons to proceed with the
nineteen
euro area states or some other subset of EU Member States, this opens a
further set of questions about the legal basis of measures for minimum pay and
income as the legal bases indicated are for all Member States. Although the
Lisbon Treaty added a new legal basis,
Article
136 TFEU, for measures addressed only to euro area states, we do not
consider this a suitable basis for minimum income and pay legislative proposals
for two reasons. The first is that, although used (questionably) to create
measures providing for EMU sanctions for euro area states (see C. Kilpatrick, ‘
The
New Economic Component of EMU: A Lawful and Effective Design?’ EUI Working
Paper, ADEMU Horizon 2020 Project Series, 2016), its centre of gravity lies in
strengthening coordination and surveillance under the European Semester. The
second is that legislative proposals for minimum pay and income, based on
dignity, autonomy and social justice, should not be grounded in a macro-
economic competence.
What then are the alternatives for legislative measures on
minimum pay and income covering only some EU Member States? One possibility is enhanced co-operation, a process
whereby some Member States adopt EU law without unwilling Member States (see Article
20 TEU and Articles 326-334 TFEU). This can be used only as a last resort where
the Council has established that the objective sought cannot be achieved within
a reasonable period by the EU as a whole and hence could provide an alternative
avenue for minimum income and pay proposals should EU-wide agreement prove
unattainable.
Another possibility is ‘going
outside’ the Treaties via an international agreement on these matters
between only the participating euro area states or those states and other
willing participants. The former was the model used in the sovereign debt
crisis to set up the European Stability Mechanism in 2012 and its predecessor,
the European Financial Stability Fund in 2010. The latter was the path chosen
for the Fiscal Compact Treaty of 2012. However, such parallel integration
however raises important legitimacy concerns: see S. Garben, ‘Restating the
Problem of Competence Creep, Tackling Harmonization by Stealth and Reinstating
the Legislator’, in: S. Garben and I. Govaere (eds.), The Division of Competences in the EU Legal Order: Reflections on the
Past, the Present and the Future (2017, Hart Publishing).
This is not to deny Mr Juncker’s welcome recognition that
the constraints imposed in the context of EU macro-economic governance justify
special attention to socializing the European Semester. It is also certainly
the case that EU legislative commitments can usefully be complemented by action
in the European Semester. We make proposals to do so in the next section.
Beyond the Juncker
announcement: the Pillar needs to strengthen, broaden the social acquis and
socialize the European Semester
At the time of the 60th anniversary of the Treaty of Rome,
it may be recalled that the TFEU enables
the adoption of EU legislation on a fairly broad set of social questions. For
instance, Article 153 TFEU allows for the adoption of legislation on workers’
health and safety, working conditions or information and consultation of
workers. A whole body of social legislation has been adopted at EU level and
begs for modernisation. As mentioned in this note already, the Charter of Fundamental Rights of the
European Union - that has the same legal value as EU primary law since the
entry into force of the Lisbon Treaty - also contains a set of provisions on
solidarity that have so far been little used.
Curiously, the ability for the EU to intervene through
legally binding instruments had been subject to little attention during the
High Level Conference. One could hence fear that the Commission will shy away from making hard law proposals. We
would thus like to underline the importance of anchoring the Pillar in EU
social policy and giving expression to the social provisions contained in the
Charter. This is necessary to ensure that the Pillar indeed enhances the
protection of the dignity and autonomy of individuals across Europe.
We have already made suggestions elsewhere to broaden and consolidate
the EU social acquis (see S. Garben, C. Kilpatrick and E. Muir,
Towards a
European Pillar of Social Rights: Upgrading the Social Acquis, College
of Europe Policy Brief #1.17). We suggested the adoption of (1) a Directive for
the Protection of Dependent Workers, ensuring the application of the existing
EU social and labour law measures to all dependent workers (2) a Protection
against Precarious Work Directive, (3) a Directive for the Enforcement of
Workers’ Rights. We also called for (4)
a Declaration safeguarding the integrity of the social acquis as an EU floor
for worker protection.
A further re-centring of EU competences in the social field
could lead to the re-adoption of Directives such as the
Collective Redundancies Directive and the
Directive
on the Transfer of Undertakings on
social
legal bases. Indeed, these Directives remain abnormally grounded in EU
internal market competences. It would be naïve to ignore the possibility of
tensions between the economic and the social dimensions of these instruments,
as illustrated by the recent
AGET case before the CJEU (freedom
of establishment v. domestic rules protecting against collective redundancies).
The social nature of these legislative instruments ought thus to be
consolidated. The assertion of such an autonomous mandate for social rights
would allow to better articulate economic and social concerns in cases of
tensions.
In the meanwhile, existing tools of economic governance
could be re-adjusted to make more space for genuine social priorities. In that
sense, the social platform
wisely
suggested to use the
infrastructures
of the European Semester to counter the current trend pushing Member States
to readjust wages downwards. The Commission could indeed support the
introduction of references to adequate minimum wages in the Annual Growth
Survey as well as in the Country Specific Recommendations and keep track of the
development of wage levels. This would give more bite to the employment policy
prong of the European Semester.
To that effect, it is important that Country Specific Recommendations continue to be adopted on the dual
legal bases of Articles 121(2) (economic policy) and 148(4) TFUE (employment
policy). Key players at European level are thus not only those in charge of
economic and financial affairs but also those responsible for employment and
social policy who are more likely to ensure that due attention is paid to employment
and social concerns indeed. Mark Dawson has usefully observed that the
involvement of the latest category of actors could be further enhanced in the Macroeconomic Imbalance Procedure (MIP;
see M. Dawson, ‘The European Semester: Displacing Social Policy in the New ‘New
Governance’’ in C. Kilpatrick (ed.) The
Displacement of Social Europe (forthcoming). On file with the author).
Indeed, to the extent that this procedure does result in
suggesting - if not imposing – changes in domestic social and employment
policies as part of the Country Specific Recommendations, the decision-making process
leading to their adoption shall be adjusted. This should allow for
a stronger involvement of actors
specialised in the field such as the Council configuration on Employment,
Social Policy, Health and Consumer Affairs. For instance, see the
Report
from the Council Employment Committee and Social Protection Committee on ‘Assessment
of the 2016 Country-specific Recommendations (CSRs) and the implementation of
the 2015 CSRs’ on labour market aspects (p 10) and on social protection and
inclusion (p 21).
Now, the Juncker Commission may be considering reserving, or
enhancing, the emphasis on minimum pay (and income) in recommendations specific to Euro area members. Although we would
regret a focus on Eurozone members only, if this approach was adopted it would
be all the more so important to refer to Article 148 TFEU (employment policy)
as a legal base besides Articles 136 (Eurozone) and 121(2) TFEU (economic
policy) in order to ensure adequate
representation of social players and interests.
Conclusion
The most concrete elements of information received during
the Conference are unquestionably the announcements made by Commission
President Juncker. Let us be clear, sending a message that the EU guarantees
(directly or indirectly) minimum income and wages would be most welcome; and
giving flesh to such guarantees through
tools available in the context of EU economic governance is understandable.
This however should be framed with appropriate conceptual and legal tools placing
individual protection at the core of the process and, to that effect, it ought
to be backed up with a solid effort to
modernise the EU social acquis.
In that sense, it is to be hoped – as hinted at by
President Juncker
himself - that the initiative for the European Pillar of Social Rights will
live up to the standards of the
ambitious social agenda called
for by Commission President Delors in the late 1990s. It may be
recalled that this had resulted in the Proclamation by 11 out of the 12 Member
states of the Community Charter of Fundamental Social Rights and came with a
strong impulse for the adoption of new legislation (point 28 of that
Charter).
In the new EMU and enlargement context, the legislative focus should be on providing
an updated and more comprehensive EU floor of social rights and should be
accompanied by proposals to socialise the European Semester both in its process
and its substance.
Barnard & Peers: chapter 20
Photo credit: Euranet Plus Inside
