Friendly Fire in the European Union? AG Sharpston’s opinion on the validity of the revised firearms Directive

Niels Kirst (University Paris II – Panthéon-Assas)                             

The recent opinion by Advocate General Sharpston (hereafter: “AG”), which was released on 11th April 2019, concerned the validity of Directive 2017/853, the so-called firearms Directive. The Czech Republic claimed that the European Parliament and the Council used the wrong legal basis, the internal market harmonisation clause (Article 114 TFEU), for adopting this Directive.

The case is interesting for three reasons. First, the case deals with question of legal basis, and has therefore gained significant attention from EU lawyers. Second, it is yet another case in which the Czech Republic is acting jointly with Hungary and the Republic of Poland (which intervened to support the Czech Republic) to defend their common interest (see also the pending Case C-715/17 Commission v Poland, on relocation of asylum-seekers). On the other side, France and the Commission intervened to support the Council and the European Parliament. Third, Directive 2017/853, which was contested by the Czech Republic, amended Directive 91/477, which was the first legislative measure setting a minimum standard regarding civilian firearms acquisition and possession in the European Union (hereafter: “EU”). (The 1991 Directive had been previously amended in 2008)

There is a specific prehistory to the case. After the terrorist attacks in Paris and Copenhagen, the Juncker Commission proposed tightening the gun laws in the European Union. This was met by much scepticism on the Czech side. Why is this the case? The Czech Republic’s gun laws differ tremendously from those of most Member States of the European Union. The history of liberal gun possession in the Czech Republic stretches back to the 18th century. Therefore, the Czech Republic had a great interest to oppose the Directive, also given the fact that it is the 7th largest post-war arm exporter in the world.

Having said that, the Directive was finally approved under the ordinary legislative procedure on the 25th April 2017 with qualified majority voting in the Council, with only the Czech Republic, Luxembourg and Poland voting against the Directive. Beforehand it had been approved in the first reading by the European Parliament. While Poland voted against the Directive, due to stringent norms, Luxembourg voted against the Directive, since it wanted a stronger regulation of firearms. (Note that the Directive only sets minimum standards, so Member States can opt unilterally for higher standards, as the UK does, for example) Among other things, the revised Directive prohibits many semi-automatic weapons.

The first plea: wrong legal basis

Preliminary remarks

The first claim of the Czech Republic was that the Directive infringes the principle of conferral of powers upon the European Union, which is enshrined in Article 5(2) TEU. This Directive was adopted on the basis of the EU’s internal market powers (Article 114 TFEU), but the Czech Republic alleged that the aim of the Directive was not minimum harmonisation in the internal market concerning guns, but instead the prevention of crime and terrorism. Therefore, the Directive had to be adopted under Article 84 TFEU, which deals with crime prevention, and forms part of the Treaty provisions on the area of freedom, justice and security. Article 84 TFEU does not allow harmonisation of national law.

Article 114 TFEU

In a first step, the AG analysed the particularities of Article 114 TFEU, which is designed to allow the EU legislator to adopt legislation with the aim of achieving the objectives of the internal market. The precedents which are highly relevant for this case were British American Tobacco and Philip Morris Brands. Both cases concerned the question, if consumer health may be protected on a European Union level by means of legislation with Article 114 TFEU as legal basis. In analogy, the AG draws attention towards Article 114 (3) TFEU, which defines that questions of consumer safety shall be taken into account when harmonising the laws (para 47).

Having said that, the AG also drew attention to Germany v Parliament and Council in which the Court found that such a harmonisation under Article 114 TFEU is not without limits, as regards a ban on advertising of tobacco products.

The yardstick question for the AG was whether the Directive eliminates obstacles to free movement, while not exceeding the competences under Article 114 TFEU (para 50). The AG rejected the argument by the Czech Republic, Hungary and Poland that recitals 2 and 23 in the preamble to the Directive, which mention crime prevention as an objective, alter the scope in a way that it cannot be regarded as falling under the auspices of the internal market any longer (para 54).

Directive 2017/853

In a second step the AG analyzed the substantive legal purpose and the provisions of the Directive. The AG clarified that what matters are the ultimate legal effects of the Directive and not the recitals (para 65). Further, the AG laid out, by citing Digital Rights Ireland (discussed here), that the fight against serious crime constitutes an objective of general interest of the EU (para 66).

In her analysis the AG followed a four-pronged approach. First, the AG found that firearms are intrinsically dangerous goods, therefore any legislation concerning firearms must contain a security aspect (para 67). Second, the Directive enhances mutual confidence among the Member States in cross-border trade (para 68). Third, the Directive aims to harmonize technical barriers to trade, which may include technical specifications (para 69). Fourth, the Directive provides for a improved cooperation among Member States (para 70).

By this analysis, the AG derived the conclusion that the content of the Directive does not harmonize crime prevention in any material sense (para 71), clarifying that the Directive has to be assessed in the light of the 1991 Directive and that a mere change of recitals does not indicate that the aims of the internal market are removed.

The second plea: proportionality

The second plea of the Czech Republic was the alleged lack of proportionality of the Directive. The Czech Republic argued that the measures adopted are manifestly disproportionate to the objectives pursued, on two grounds. First, the Commission failed to conduct an impact assessment, event though the Commission pledged to do so in an interinstitutional agreement on better law-making. Second, the Directive interferes disproportionately with the right to property, which is a fundamental right in the EU legal order.

The question arose, if an interinstitutional agreement, as far as it concerns an impact assessment obligation, is legally binding on EU institutions. This question is general importance for the EU. Hungary argued in support of the Czech Republic that an interinstitutional agreement shall be legally binding, while the Parliament, the Council and the Commission maintained that the obligation to carry out an impact assessment in an interinstitutional agreement is not binding.

The AG dissected these questions starting by lying out that firearms are intrinsically dangerous, and that the EU legislator decided to regulate the entire lifecycle of a weapon in the internal market (para 87). This is important to keep in mind, when verifying if the articles of the Directive are proportionate to the aims. The arguments of the parties were among others that without an impact assessment it cannot be assessed, if the provisions of the Directive are actually proportionate.

Impact assessments are referred to in the inter-institutional agreement on better law-making, adopted on the basis of Article 295 TFEU, and the Court had earlier found, in Commission v Council (para 49), that such agreements among the institutions can be binding on them. However, in this case the AG found that there are no such obligations to conduct an impact assessment in each and every case. An omitted impact assessment cannot be a valid ground to annul a fully lawful Directive.

In case of urgent actions, the AG argued, an impact assessment is not always possible. Further, the Court had already confirmed, in the case of Poland v European Parliament and Council (para 159), that an impact assessment itself is not binding on either the Parliament or the Council. The key take-away is that an omitted impact assessment should not restrict possible actions by the institutions.

The second argument by the parties concerned the right to property. The AG determined that there is no fundamental right to own firearms in the EU, nor does such a right form part of the ‘common constitutional traditions’ of the Member States. The AG went on by stating that the right to property as laid out in Article 17 of the Charter is a qualified right, and not an absolute right. Therefore, the Directive does not deprive citizens of the Union of their right to property.

The third plea: legal certainty

In its third plea the Czech Republic argued that the Directive infringed the principle of legal certainty. Its two main arguments were that i) some of the Directive’s provisions are not sufficiently clear and precise enough and ii) the Directive would force Member States to adopt domestic legislation, which will have a retroactive effect, infringing the principle of legitimate expectations.

The AG reiterated that the principle of legal certainty is a general principle of EU law, as seen in the case of Spain v Council (para 124). Having said that, the AG regarded the wording of the Articles as sufficiently clear and precise enough to meet the requirements of legal certainty. Concerning the possible retroactive effects of the Directive, the AG first reiterated that also the principle of legitimate expectations is a general principle of EU law, as seen in Agrargenossenschaft Neuzelle. However, since there was no assurance by the administration that the classifications of weapons would not be changed in the future, the requirements to invoke that principle are not fulfilled.

Finally, the AG reiterated that these principles cannot be stretched to the point of preventing a new rule to apply to situations which arose under earlier rules (para 132). Consequently, the AG rejected the claims of the Czech Republic concerning legal certainty and legitimate expectations.

The fourth plea: equal treatment

In its last plea, the Czech Republic argued that Article 6(6) of the Directive (the so-called Swiss exception) should be annulled, since it violates the principle of non-discrimination. Switzerland is a Schengen associate; therefore, all Schengen-related legislation (such as the Directive) also applies to Switzerland. Having said that, there are certain areas in which Switzerland enjoys an exception from Schengen-related rules. This Directive is one of those cases, since Switzerland has a reserve army based on conscription, and there is an exception for States which have had such a system for more than 50 years.

In a preliminary step the AG reiterated that the principle of equal treatment is a general principle of EU law, as seen in Arcelor Atlantique et Lorraine and Others. However, the AG concluded its common ground that only Switzerland has such a system of conscription, further, Member States (and Schengen associates) differ in their culture and tradition, therefore, this article cannot be regarded as discriminatory towards other Member States and Schengen associates.

Comments

The opinion gives much food for thought and discusses numerous general principles of EU law. Surely, the opinion will not be welcomed in the Czech Republic. As a key take-away, it is important to note that the institutions might be capable to act without an impact assessment in urgent situations, even when they have subscribed to an inter-institutional agreement under Article 295 TFEU.

Furthermore, the opinion, if followed by the Court, can be seen as a further integration in the area of European Union criminal law. Guns are one of the predominant tools for committing criminal acts, and by tightening the requirements for gun holders in the Member States, the EU legislator aims to impact upon on crime prevention in the European Union.

Finally, the opinion gives guidance on the importance of the right to property in the EU’s legal order, confirming that the right to property as laid down in Article 17 of the Charter is a qualified right and not absolute. Further, the AG illustrates that there is no such thing as a fundamental right to possess guns in the European Union legal order (para 104). It will be interesting to see if the Court follows the opinion of the AG.

Barnard & Peers: chapter 11, chapter 12, chapter 25

Photo credit: EuropeWord

EU Motor Insurance Law in the UK: Accidents on the road and responsibilities off it

James Marson (Reader in Law, Sheffield Hallam University), Katy Ferris (Assistant Professor in Business Law, Nottingham University Business School) and Neil Fletcher (Senior Lecturer, Sheffield Hallam University)

Introduction

Remedies for a Member State’s breach of EU law includes liability in damages. State liability has experienced notable successes in UK jurisprudence, but, generally, has also demonstrated limitations in holding the State to account for losses suffered by individuals. Establishing a ‘sufficiently serious’ breach of the law is frequently the limiting factor. However, in motor vehicle insurance law several state liability successes have been achieved, principally due to the UK’s flagrant breach of the Motor Vehicle Insurance Directives (MVID). The UK’s transposing laws in this area include provisions in the Road Traffic Act 1988 (RTA88) and two agreements concluded between the UK and the Motor Insurers’ Bureau (MIB) - the Untraced Drivers Agreement 2017 and the Uninsured Drivers Agreement 2015 (along with its Supplementary Agreement 2017). The UK has been, and continues to be in breach of both Agreements. There are also aspects of the RTA88 where English law has not caught up with developments in the MVID. The most recent breach has been the requirement, established in the 2014 judgment of the Court of Justice of the European Union (CJEU) in Vnuk, that vehicles used exclusively on private land are subject to compulsory third party motor insurance. The MIB has, since the ruling, rejected the view that compulsory insurance extends to vehicles on private land. However, the High Court has recently ruled in Lewis v Tindale that the CJEU decision must be applied in the UK despite the restrictive wording of the RTA88.

The Lewis ruling applies until Brexit day when, if the UK leaves without an agreement to remain in the Single Market, national law will lawfully be able to retain its literal and restrictive reading of the RTA88. Contrasting approaches, and the inconsistency present in the interpretation of the RTA88 through national courts, can be seen in the most recent case on the subject. In R & S Pilling v UK Insurance the Supreme Court considered the issue of the ‘use’ of a vehicle. Whilst its conclusion was reasonable and pragmatic in the circumstances of the case, the decision of the Supreme Court was interesting in its refusal to apply EU law and to extend the reading of the RTA88. This, we have argued previously, would be possible without a breach of national law, and indeed according to EU law, is a requirement of national courts. The ruling did lead Lord Hodge, providing the only judgment, to remark that in relation to accidents on private property, national law must apply despite an expansive interpretation being provided by the CJEU. Lord Hodge did continue, however, that those CJEU rulings did ‘demonstrate a need for Parliament to reconsider the wording of section 145(3)(a) of the RTA to comply with the Directive.’

Given the UK’s reluctance to comply with EU law in this area, Brexit will remove many crucial protective rights enjoyed by third party victims of motor vehicle accidents. The only safeguard against the UK’s continuing breach of EU law is membership of the EU. There are so many breaches of the law (some highlighted in the Roadpeace case and accepted by the High Court, others dealt with in cases including Delaney v Pickett at the Court of Appeal) that those protections that should be available at present, but which are not, will never be achieved once Brexit has been concluded. Further, the remedy which has at least provided some scope for redress, state liability, will also be lost following the UK’s withdrawal from the EU.

Motor Vehicle Insurance Extending its Reach?

It is well known that under English national law owners must possess, as a minimum, third party motor vehicle insurance. This applies to vehicles used on a road or other public place. For the purposes of the law, a public place includes campsites and caravan parks, pay and display car parks, and even dockyards. This seems reasonable. If you use a motor vehicle in a place where people may visit and share the facility with you, for everyone’s safety its owner should ensure there is insurance coverage in case of injury following an accident. The law of England (the Road Traffic Act 1930 being the inspiration for the First MVID) originally made provision for insurance to be held for vehicles used on a road. This was then, begrudgingly, extended through amendment of the RTA88 to include those ‘public places’ (as mentioned previously) following a decision of the Court of Appeal. However, the courts rejected the application of compulsory insurance to vehicles used exclusively on private land (vehicles used, for example tractors on farm land, which did not travel on a road or other public place). However, in late 2018, the High Court ruled that the requirement for compulsory motor insurance does now apply to vehicles used exclusively on private land.

The European Union Interpretation

In its 2014 judgment in Vnuk, the CJEU held that a farmworker in Slovenia could claim compensation when he was injured as a result of the negligent driving of a tractor and trailer. This was despite Slovenian law not requiring such vehicles to be insured (here the tractor was used exclusively on the farm and was never used on a public road). Slovenia considered that the term ‘vehicle’ in its laws did not include a tractor for the purposes of its statutory interpretation. The Court of Justice considered that in reference to the MVID, the phrase ‘use of vehicles’ (Art 3(1)) meant any use of a vehicle consistent with its ‘normal function.’ Thus the requirement for which ‘vehicles’ are, across the EU, subject to compulsory insurance was significantly widened.

The issue relating to the requirement to insure vehicles on private land is not new (the Vnuk judgment having been issued in 2014). In 2006 two cases heard in references by courts in Portugal addressed this issue. In the first (Juliana), a driver killed himself and his two passengers whilst using his mother’s (Mrs Juliana’s) car. The vehicle had been taken without the mother’s consent. The insurance cover had lapsed following the deterioration of the mother’s health and, whilst it was still registered under the mother’s name and in working condition, it had been stored on private land. Given the lack of insurance, the Portuguese national insurance body paid the compensation due to the victims’ families and then brought civil proceedings against Mrs Juliana, as owner of the vehicle, to recover its costs. The case before the CJEU was whether a vehicle, kept on private land and not intended to be used, was subject to the requirement to be insured.

The second case (Andrade) involved the use of a tractor, stationary at the time of the accident, but being used to spray herbicide. The tractor slipped down a hill in a vineyard - having itself caused a landslip - and this led to an employee working at the site being crushed to death. The Portuguese law only required insurance to cover accidents caused by the movement of the vehicle. The CJEU was called upon to address the issue of whether EU law necessitated the insurance of vehicles even when they were stationary but with the engine running.

In Juliana, the CJEU, issuing its ruling in late 2018, held

a vehicle which is not formally withdrawn from use and which is capable of being driven must be covered by motor vehicle insurance against civil liability even if its owner, who no longer intends to drive it, has chosen to park it on private land.

This was a reasonably foreseeable interpretation of the law. In Andrade, decided in 2017, the CJEU looked again at Vnuk and the determination of the ‘use of vehicles’. It reiterated the concept of a vehicle’s ‘use’ but also explained that such a concept was not dependent on the characteristics of the terrain where the vehicle is used. It further included any use of it as a means of transport (whether stationary, moving, its engine running or off). On the issue of where a vehicle may be used as both a means of transport and a machine for the purposes of carrying out work, it had to be determined if, at the time of the accident, it was being used principally as a means of transport.

In Andrade, it was not contested that the tractor, when used normally as a means of transport, was a ‘vehicle’. Instead, the CJEU considered that at the time of the landslip the tractor was not a ‘vehicle in use’ as it was not being ‘used principally as a means of transport.’ This was because its engine was not being used to create power to provide transport but instead to ‘drive the pump of the herbicide sprayer.’

The CJEU concluded that damage caused by vehicles which are also intended to be used as machines for carrying out work must only be covered by compulsory motor-vehicle insurance against civil liability when such vehicles are being used principally as a means of transport. Accordingly, the widower of the deceased was unable to recover compensation from the motor-vehicle insurers of the tractor.

English law has not caught up with the Vnuk ruling through changes to the RTA88. The protection of third-party victims of non-road registered vehicles (such as quad-bikes or vehicles used in purely agricultural, construction, industrial, motor sports or fairground activities) remain beyond the scope of compulsory insurance. Many of these vehicles are being used for the purposes of transport, and not necessarily for work (although it is important to note that the MVID do not impose a requirement of the use of vehicles for transport and presumably further cases will be needed to determine ‘work’ and ‘transport’ – motor racing for instance). The EU and national laws in this respect are, as a consequence, misaligned and this is significant. The UK Department for Transport does not report on statistics of accidents occurring on private land involving motor vehicles. What has been reported upon in the UK Parliament is the consequence of this omission for the possible prosecution of individuals who evade current laws – such as driving whilst under the influence of alcohol.

The UK Approach

English law is clear on the requirement for third party victims of motor vehicle accidents to be protected. Not only was the original Road Traffic Act the source of inspiration for the first MVID, the UK has a compensatory body (the MIB) established to satisfy claims where the at-fault driver is not insured or cannot be traced. The UK does permit some vehicles to use a road or public place without insurance. Such exclusions are, of course, very limited and typically apply to those owned and used by a State body and thus would have recourse to funds to satisfy claims by the victims of accidents. Vehicles currently exempted from the RTA88 (through Art. 5 MVID) and its requirement to hold compulsory motor vehicle insurance will now fall within the category of ‘vehicles’ following Vnuk and will have to carry insurance. Further, the UK, under s.185 RTA88, provides a definition of the meaning of ‘motor vehicle’ which is too restrictive to comply with the MVID.

That there is clear direction from the CJEU as to the interpretation of an EU Directive, and Member States (even those subject to withdrawal) are required to consistently apply such an interpretation, has not stopped the UK courts from being dismissive of rulings they don’t like. To extend the issue of motor vehicle insurance in question for just a moment, consider the inclusion within the RTA88 of a list which, if used by an insurer in an attempt to exclude the cover of the policy, will be held void. This includes ‘matters’ such as the age of the vehicle, its weight or horsepower etc. Its aim was to stop insurers shirking their responsibilities to compensate victims of road traffic accidents. The list was a common sense approach to preventing insurers from escaping responsibility if, for instance, a car with five seats was involved in an accident whilst at the time containing six individuals (Houghton v Trafalgar Insurance Company, Ltd. [1953] 2 Lloyd's Rep. 18). Any third-party victims of an accident involving this vehicle should not find themselves unable to seek compensation because of such a transgression. However, in EUI v Bristol Alliance Partnership the Court of Appeal interpreted this provision restrictively and held the list as exhaustive. Hence any exclusion not expressly contained in s. 148(2) RTA88 was, by definition, permissible under English law. This granted significant scope to motor insurers to escape responsibilities outside of the s. 148(2) list.

This is particularly worrisome due to the jurisprudence of the CJEU on this issue, and which was available to the Court when making its judgment. The CJEU had in Bernaldez, Correia Ferreira v Companhia de Seguros Mundial Confiança SA, Candolin v Vahinkovakuutusosakeyhtio Pohjola, Farrell v Whitty, and Churchill v Wilkinson and Tracey Evans been consistent that there exists only one permissible reason for excluding a third party’s right to claim against a policyholder’s insurers. This is where the third party knew (and this knowledge may not be inferred) that the vehicle in question was stolen. The CJEU purposively interpreted the list of void exclusions provided in Art.2(1) of the Second MVID (now contained in Art.13(1) of the Sixth MVID) as being illustrative. This allowed for the extension of the scope of the civil liability insurance requirements contained in Art.3(1) of the First MVID.

This is but one example of an inconsistent approach to the interpretation and application of EU law and principles by English courts. Some are favourable to a consistent application of EU laws (see Allen v Mohammed and Allianz Insurance (2016), Lawtel, LTL 25/10/2016) whilst others, heard at the same time but in a different part of the country, are not and adhere steadfastly to national provisions.

This lack of consistency and legal certainty left the implications of the Vnuk ruling, along with effects of Brexit hanging over the legal system, in a state of paralysis. At least until towards the end of 2018.

‘New’ Rights and Obligations in 2019?

In September 2018, the High Court delivered its judgment in Lewis v Tindale where the claimant suffered very serious injuries having been run over by a driver on private land. The driver of the vehicle was uninsured and therefore the claimant had to seek compensation from the MIB. The MIB acts as the insurer of last resort and a percentage of every motor policy-holder’s insurance premium is paid into its funds to satisfy claims. The High Court considered the MIB to be an ‘emanation of the State’ and therefore subject to the requirements of EU law – beyond what national law may provide. A consequence of the judgment is that the MIB is responsible for compensating the third-party victims of motor vehicle accidents occurring on private land and, where it refuses due to adherence to the RTA88, will be subject to state liability claims and the vertical direct effect of the MVID. This situation is likely to be untenable and thus legislation will be necessary – if for no other reason than to prevent the MIB being called upon to satisfy claims. As mentioned previously, insurance will also extend to a whole new suite of vehicles which previously have never been required to possess liability cover.

It also calls into question the role that the police will have to enforce the cover of vehicles which are not on the road or necessarily subject to regulation (as applies to vehicles which access roads and public places). It will allow for prosecutions of drivers of vehicles where injuries (and deaths) have occurred on private land but are, at present, excluded from the scope of criminal sanctions. Further, the requirement for compulsory insurance means that at present those vehicles in public places are subject to the rules relating to the use of a vehicle. This is to be insured and a criminal offense is committed by the owner allowing the car to be uninsured. This should now be applied to private land. This indirect consequence of Vnuk and Lewis may give greater protection to vulnerable pedestrians and improve safety measures which seem to have a loophole in protection. However, as Lewis does not include use of a vehicle for ‘work’, it will bypass the Andrade hurdle relating to compulsory insurance. That being said, clearly the vehicle’s use as ‘transport’ was surely merely ancillary to its main purpose for catching and injuring the victim. Thus, is this the normal use of a vehicle (Vnuk)? Is the vehicle being used as a means of transport (Andrade)? There are perhaps bigger questions to this case than covered by the High Court.

At the very least, the law as developed through Vnuk is due to be clarified by the Court of Appeal when the case is heard in May 2019. The UK’s future relationship with the EU will also largely determine what happens next. If the UK remains in the EU, or strikes a deal to remain in the Single Market, then owners of motor vehicles will be required to have these insured against third-party liability. If the UK leaves or, for instance, establishes a deal with the EU on the basis of a Customs Union arrangement, this may be an area which is changed under the Government’s plans post-Brexit.

Whatever the eventual outcome, at the EU level and through the ruling of the High Court, whether driving a buggy on a golf course, or perhaps even a fork-lift truck (until Vnuk and Andrade are reconciled), you as the owner of the vehicle should possess liability cover. In its absence, the MIB will have to settle compensation claims. Either way, insurance premiums will be affected.

Photo credit: Insurance Times

‘We *aren’t* the world’: the CJEU reconciles EU law with international (investment) law

Professor Steve Peers, University of Essex

Background

In recent years, investor-state dispute settlement (ISDS) has become a political minefield. Its critics argue that ISDS is a secret court system designed to allow multinational corporations to thwart any progressive legislation approved by democratically elected governments. Its defenders argue that these claims are exaggerated, and that ISDS performs a useful function attracting investment and securing property rights.

The arguments about ISDS are worldwide, but they have increasingly arisen within the particular framework of EU law. From 2009, the Treaty of Lisbon gave the EU exclusive competence over foreign direct investment as part of its common commercial (trade) policy, alongside goods, services and trade-related aspects of intellectual property. EU trade policy developed to include negotiations for ISDS as part of trade negotiations (although pre-existing investment treaties between EU Member States and non-EU countries were grandfathered, with a process in place to regulate negotiation of such treaties in future).

However, this led to political and legal difficulties in negotiating trade agreements: the former because of public concern about ISDS in both the EU and the non-EU countries, and the latter because of uncertainty about whether the EU had sole competence to negotiate treaties with ISDS provisions, or shared it with the Member States. Shared competence means that Member States have to become parties to the treaties concerned, meaning unanimity is required to agree them and there is a process of national ratification, although in practice the EU and the non-EU countries concerned often agree to provisional application of the trade-related parts of the treaty pending such national ratification.

The legal position was clarified when the CJEU ruled in 2017 that ISDS, like 'portfolio' investment (ie non-controlling shares in companies) did not fully form part of the common commercial policy (CCP), but was rather a shared competence between the EU and its Member States. (There’s EU legislation dividing up responsibility between the EU and its Member States in the event of successful investor claims.) Otherwise the Court took a broad view of the scope of the CCP. Coupled with the political concerns about ISDS, this was an opportunity to rethink the role of ISDS in trade policy, either leaving it out of talks completely (Australia and New Zealand, along with the mandate for stripped back trade negotiations with the USA), concluding a trade agreement without insisting on an investment agreement (Japan), or separating the issues into two distinct treaties (Singapore and Vietnam). This revised approach, splitting up trade and investment on a case by case basis, was confirmed more broadly by a Commission communication of 2017 and subsequent Council conclusions in 2018.

In parallel to these developments, the EU responded to concerns about the legitimacy of ISDS by seeking to reform it into a system more palatable to Main Street, rather than Bay Street, as a centre-left Canadian politician might say. A discussion paper of 2015 sums up the Commission’s approach, in particular securing greater transparency, limiting the scope of controversial provisions of investment law, confirming the ‘right to regulate’, and transforming investment tribunals into a quasi-judicial system, with the longer-term intention of establishing a multilateral investment court. Subsequently, the Commission tabled a proposal for such court, and the Council approved a negotiation mandate to that end. (For further details of the negotiations, see here).

Many EU trade and investment policy disputes came to a head early in 2017, when there was a delay in approving the Canada-EU Free Trade Agreement (CETA) because of concerns about ISDS and other issues in one Belgian region. (There were also national constitutional court proceedings challenging CETA in France and Germany, as well as an EU General Court judgment on whether a European Citizens’ Initiative could be launched to stop its ratification). This kerfuffle, coming shortly before the CJEU ruling clarifying the scope of the EU’s common commercial policy, partly prompted the move to downgrade investment objectives in EU trade policy, as discussed above. And part of the overall settlement of the dispute over CETA was the Belgian government asking the CJEU whether the CETA ISDS rules – renegotiated in light of the reformed approach to ISDS – were compatible with EU law. 

The Belgian government’s request – submitted on the basis of Article 218 TFEU, which allows the CJEU to rule on proposed international treaties – was answered by the Court of Justice this week (Opinion 1/17).  In the meantime, in its judgment in Achmea (discussed here) the CJEU had found that investment treaties between Member States were potentially incompatible with EU law.  Those treaties were duly wound up, but it remained to be seen if the Court would have the same concerns about investment treaties with non-EU countries. More generally, the Court has always had concerns about protecting the autonomy of EU law from international courts (see, for instance, Opinion 2/13 on accession to the ECHR, discussed here). Could these concerns about autonomy possibly be reconciled with the nature of ISDS tribunals?

The judgment

First of all, the CJEU ruled that the case was admissible. Although the Court only has jurisdiction to rule under Article 218 as long as a treaty has not yet entered into force, the provisional application of the trade provisions of CETA did not stand in the way of the Court’s jurisdiction. (Indeed, it appears that the Court would have found the case admissible even if the whole of CETA, including the investment disputes section, was in force provisionally).

The Court then examined the compatibility of the CETA investment provisions with EU law from three angles: the autonomy of the EU legal order; equal treatment and effectiveness; and the right of access to an independent tribunal. In each case, the Court set out the principles and then applied them to CETA.

On the the autonomy of the EU legal order, the Court first recalled its case law that in principle, the EU could sign up to an international treaty which created an international court which could give rulings binding the EU. However, the Court also recalled that any such planned international court cannot infringe the autonomy of EU law. (In practice, the Court has usually been quick to complain that such courts do raise an autonomy problem). This autonomy is, in particular, guaranteed by the EU’s judicial system, which provides for ‘national courts and tribunals and the Court to ensure the full application of that law in all the Member States and to ensure effective judicial protection, the Court having exclusive jurisdiction to give the definitive interpretation of that law’.

For the Court, the crucial factor was that ‘the envisaged ISDS mechanism stands outside the EU judicial system’. The CETA investment court system created by CETA is not part of the domestic court system of Canada, the EU or its Member States. This did not necessarily mean that the ISDS system ‘adversely affects the autonomy of the EU legal order’, because as regards international treaties, the EU judicial system ‘does not take precedence over either the jurisdiction of the courts and tribunals of the non-Member States with which those agreements were concluded or that of the international courts or tribunals that are established by such agreements’. While those treaties form part of EU law and ‘may therefore be the subject of references for a preliminary ruling’ to the CJEU, they ‘concern no less those non-Member States and may therefore also be interpreted by the courts and tribunals of those States’. The ‘reciprocal nature’ of international treaties means that the EU can sign up to treaties creating an international court that is not bound by the interpretations of that treaty given by the courts of any of its parties.

But while EU law did not prevent the creation of such courts, it did place limits on what they could do: ‘they cannot have the power to interpret or apply provisions of EU law other than those of the CETA or to make awards that might have the effect of preventing the EU institutions from operating in accordance with the EU constitutional framework’. It was therefore necessary to address two points: (a) no power for the CETA bodies ‘to interpret or apply EU law other than the power to interpret and apply the provisions of that agreement having regard to the rules and principles of international law applicable between the Parties’; and (b) no power to impact EU law indirectly, by issuing ‘awards which have the effect of preventing the EU institutions from operating in accordance with the EU constitutional framework’.

On the first point, CETA explicitly specifies that its bodies will not have jurisdiction ‘to determine the legality of a measure, alleged to constitute a breach of this Agreement, under the domestic law of a Party’. This was different from treaties which the CJEU had criticised in the past, which would have given an international court the power to interpret EU law. In particular, it was different from an investment treaty between Member States only (which the Court criticised in Achmea), because the EU law ‘principle of mutual trust’…. ‘is not applicable in relations between the Union and a non-Member State’.

Furthermore, the Court was pleased that the CETA investment bodies could not determine the division of powers between the EU and its Member States, unlike the treaty on accession of the EU to the ECHR (on the Court’s ruling in the latter case, see my discussion here).  This distinction between the international and domestic systems was consistent with the lack of a prior role for the CJEU, or any power of the CETA bodies to send a reference for a preliminary ruling to the CJEU. It was also consistent with the lack of any national court review of an investment body decision.

On the indirect impact point, several Member States were concerned that a CETA tribunal might rely on the EU Charter ‘freedom to conduct business’ to rule on whether an EU measure is ‘fair and equitable’ under investment law, or ‘whether it constitutes indirect expropriation’, or it is ‘an unjustified restriction on the freedom to make payments and transfers of capital’ as defined in CETA. The CJEU noted that the provisions of CETA were broad and the EU could not block a decision being made against it or an obligation to pay damages, and that a challenger under the CETA investment rules could concern an EU measure ‘of general application’. There was a risk that a series of damages awards might mean that the EU decides to give up the level of protection concerned. Such an indirect impact could, in principle, be incompatible with EU law:

150    If the Union were to enter into an international agreement capable of having the consequence that the Union — or a Member State in the course of implementing EU law — has to amend or withdraw legislation because of an assessment made by a tribunal standing outside the EU judicial system of the level of protection of a public interest established, in accordance with the EU constitutional framework, by the EU institutions, it would have to be concluded that such an agreement undermines the capacity of the Union to operate autonomously within its unique constitutional framework.

In this context, the Court asserted that ‘EU legislation is adopted by the EU legislature following the democratic process defined in the…Treaties’, subject to EU ‘principles of conferral of powers, subsidiarity and proportionality’, and subject to judicial review by the CJEU ‘to ensure review of the compatibility of the level of protection of public interests established by such legislation with, inter alia, the…Treaties, the Charter and the general principles of EU law’.

However, the Court was satisfied that there were enough safeguards against this indirect impact upon EU law. One provision of CETA states that the investment rules:

…cannot be interpreted in such a way as to prevent a Party from adopting and applying measures necessary to protect public security or public morals or to maintain public order or to protect human, animal or plant life or health, subject only to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between the Parties where like conditions prevail, or a disguised restriction on trade between the Parties.

So the CETA Tribunal ‘has no jurisdiction to declare incompatible with the CETA the level of protection of a public interest established by the EU’ in such cases. Therefore it could not ‘order the Union to pay damages’. The Court was also reassured by provisions that state that parties can ‘regulate within their territories to achieve legitimate policy objectives, such as the protection of public health, safety, the environment or public morals, social or consumer protection or the promotion and protection of cultural diversity’, and that regulation which ‘negatively affects an investment or interferes with an investor's expectations, including its expectations of profits, does not amount to a breach of an obligation under this Section’. It also relied upon the Joint Interpretative Instrument to CETA, which states that CETA ‘will … not lower [the standards and regulations of each Party] related to food safety, product safety, consumer protection, health, environment or labour protection’, that ‘imported goods, service suppliers and investors must continue to respect domestic requirements, including rules and regulations’, and that the CETA ‘preserves the ability of the European Union and its Member States and Canada to adopt and apply their own laws and regulations that regulate economic activity in the public interest’.

The Court summed up its view that the CETA bodies’ powers: ‘do not extend to permitting them to call into question the level of protection of public interest determined by the Union following a democratic process’. This was also confirmed by another provision confirming that ‘except in the rare circumstances when the impact of a measure or series of measures is so severe in light of its purpose that it appears manifestly excessive, non-discriminatory measures of a Party that are designed and applied to protect legitimate public welfare objectives, such as health, safety and the environment, do not constitute indirect expropriations’.

While the CETA Tribunal has jurisdiction to apply the broad ‘fair and equitable treatment’ test of investment law, the CJEU was satisfied that this power was limited, only applying to ‘inter alia, situations where there is abusive treatment, manifest arbitrariness and targeted discrimination’. So again, in the Court’s view ‘the required level of protection of a public interest, as established following a democratic process, is not subject to the jurisdiction conferred on the envisaged tribunals to determine whether treatment accorded by a Party to an investor or a covered investment is ‘fair and equitable’.’

More generally, the CETA tribunals ‘have no jurisdiction to call into question the choices democratically made within a Party relating to, inter alia, the level of protection of public order or public safety, the protection of public morals, the protection of health and life of humans and animals, the preservation of food safety, protection of plants and the environment, welfare at work, product safety, consumer protection or, equally, fundamental rights.’ So they did not ‘adversely affect the autonomy of the EU legal order’.

The Court then moved on to the principle of equal treatment and effectiveness. Here, the issue was whether CETA had to be compatible with Article 20 of the Charter (‘equality before the law’) and Article 21(2) of the Charter (non-discrimination on grounds of nationality). On this point, the Court first confirmed long-standing case law that treaties which the EU signed up to had to be compatible with fundamental rights. This issue could also be examined in an Article 218 proceeding, and extended to the Charter. (Indeed, see a 2017 CJEU ruling on another treaty with Canada, concerning the exchange of passenger data, discussed here).

In the Court’s view, Article 21(2) of the Charter did not apply, since it banned discrimination on grounds of nationality only as between EU citizens. However, Article 20 could apply, as its personal scope was not limited. While Article 20 does not oblige the EU to treat all non-EU countries the same (ie, the EU has no internal equivalent to the WTO’s Most Favoured Nation rule), it could apply if there is a difference of treatment within the EU of non-EU citizens on the one hand and EU citizens on the other. As for the principle of effectiveness, it only arose where a CETA Tribunal might find that a fine implementing EU competition law was a breach of the investment guarantees.

Applying these principles, the equal treatment issue was that EU citizens and companies could not invoke the investment provisions in the EU, whereas Canadian citizens and companies could. However, the Court ruled that these two groups were not comparable. The principle of effectiveness was not breached because if the EU or national competition authorities overstepped the limits of EU competition law, their decision could be struck down by the courts anyway.

Finally, as for the right of access to an independent tribunal, the principles were that Article 47 of the Charter bound the EU when entering into international treaties. In the Court’s view, the CETA bodies were very similar to courts, and bound by similar principles of independence. Although the Court was concerned about the accessibility of ISDS for small and medium-sized businesses, it was ultimately satisfied by a statement by the Commission and Council that the issue would be addressed, given that approval of CETA by the EU depended upon that commitment. On the independence of CETA bodies, the Court was satisfied that there was sufficient protection against removal of members, and the rules on payment of members would not preclude their independence. It was unproblematic that the parties could issue a binding interpretation of CETA, since this was a usual feature of international law. In any event, the EU could only agree to interpretations that were compatible with the principles set out in the Court’s opinion, and such interpretations could not have retroactive effects.

Comments

First, the Court’s confirmation that the case was admissible is useful. This means that the EU and non-EU countries can decide to apply a treaty provisionally while an Article 218 case is pending before the CJEU. However, this does risk legal complications in the event that the CJEU ultimately finds that the treaty concerned is incompatible with EU law – by analogy with the Council’s statement (no. 20 in the list of statements for the Council minutes) that if a national constitutional court or parliament objects to ratification of CETA, provisional application must be terminated.

As for the substance of the Court’s ruling, its analysis of the equal treatment and effectiveness rules was rather brief. Like the French constitutional court ruling on CETA, there was no clear explanation of why Canadian investors in the EU were in a different position than EU investors. (Possible answers are that the ISDS offers equivalent protection for EU investors in Canada, and that EU investors in the EU can rely on EU internal market law). The assessment of effectiveness takes it for granted that an ISDS body and the EU or Member States’ national courts will reach the same conclusions about the correct application of EU competition law, which is hardly a foregone conclusion. As for the independence of the ISDS system, the Court largely follows its usual approach to defining judicial independence.

The heart of the Court’s judgment is its reconciliation of the autonomy of EU law with the ISDS system. There’s an unusually strong acceptance by the Court of the EU legal system’s co-existence with international law – rather than supremacy over it. But that acceptance is conditional upon the safeguards which the Court then sets out. Here, there is a fundamental tension between the procedural aspect of the ruling (separate court system) and the substantive aspect of preserving the ‘right to regulate’. What if an ISDS body does issue a ruling that arguably infringes the capacity of the EU to decide on the appropriate level of regulation? Given that it’s essential that the ISDS system stands outside the national and EU court systems, how can the boundaries – also essential – which the Court insists must be set upon that system be enforced? The division between ISDS and national courts systems is simultaneously part of the solution and part of the problem.

In short, in British English, the key question for the Court was whether it was willing to throw a spanner into the works of the international investment system. The Court’s answer, in Canadian English, is like having a black fly in your chardonnay.

Is there a way to square this circle? The power of the CETA Joint Committee to issue interpretative rulings would arguably not go far enough to ‘fix’ the problem of an ISDS body ‘running wild’, as such rulings cannot be retroactive and Canada might not agree to them anyway. So let’s return to the courts. The Court rules out a national court review of an ISDS decision. However, it also refers to the possibility of national courts asking the CJEU questions about CETA.  Arguably, then, it’s possible to enforce the limits on ISDS bodies by a Member State or the EU refusing to pay a damages award ordered by an ISDS body, leading to a court challenge of that refusal to pay by the winning party – which is technically not a court review of the ISDS body’s decision as such. It would be similar to the well-known case of Kadi, in which the CJEU did not rule on the validity of a UN Security Council measure as such, but on the legality of its application in the EU legal order.

Is the judgment relevant to Brexit? At first sight the judgment is encouraging for those who would like to avoid any role for the CJEU as regards the UK after Brexit, given the Court’s willingness to reconcile the EU legal order with international law. However, that was not the sole factor in the Court’s reasoning, which distinguishes (rather than overturns) prior case law on the autonomy of EU law. A key part of the Court’s reasoning is that the ISDS body, unlike previous international courts which the Court objected to, does not have power to interpret EU law. The position is quite different under the Brexit withdrawal agreement (as I discuss here), and it remains to be seen if it might also be different as regards EU/UK future relationship treaties.

Finally, given that the new ruling concerns a reformed ISDS, how can it be enforced as regards unreformed bilateral investment treaties between EU Member States and non-EU countries (see the most recent list of such treaties here), to the extent that they do not comply with the standards set out by the Court and may apply to issues falling within the scope of EU law? Here the 2012 Regulation grandfathering pre-existing treaties, which also puts in place a process to regulate negotiation of such treaties in future, may be relevant. The review of pre-existing treaties, and control of future treaties, which that Regulation provides for may be applied taking account of the criteria in the Court’s judgment, so as to coordinate updating such treaties to ensure that they are compatible with EU law. This could be similar to the earlier process of updating bilateral aviation treaties between EU Member States and non-EU countries, in light of a series of CJEU judgments on their EU law compatibility.

It's too soon to say whether the reforms of the ISDS, as endorsed by the CJEU in its ruling, will satisfy a sufficient number of critics of the system to reduce the political opposition which ISDS has attracted in the past. Maybe the Court's judgment will turn out to be a death row pardon, two minutes too late. But it's striking that unlike many prior rulings, the CJEU does not appear intrinsically hostile to an international court, but willing in principle to find a way to accommodate it. Furthermore, the constraints the Court insists upon are not justified (as is usually the case) in terms of the Court's own institutional interests in the autonomy of EU law, but in terms of the EU's political institutions' accountability to the democratic process. To adapt the Canadian term, this is a judgment for Main Street, rather than the Kirchberg plateau. 

Barnard & Peers: chapter 24

Photo credit: cbc.ca

Workers’ rights in the gig economy: is the new EU Directive on transparent and predictable working conditions in the EU really a boost?

Bartłomiej Bednarowicz, PhD Researcher at the Faculty of Law of the University of Antwerp

Last week, the European Parliament approved the Directive on Transparent and Predictable Working Conditions in the European Union, which interestingly is the very first legally binding instrument that has been fleshed out from the European Pillar of Social Rights (EPSR) proclaimed by the European Commission, European Parliament and the Council in 2017. [Update: the Directive was published in the EU Official Journal in July 2019]

In short, the Pillar, which consists of a set of 20 principles and rights, is to serve as a way to deliver new and more effective rights to the citizens in 3 main categories: equal opportunities and access to the labour market, fair working conditions and social protection and inclusion. It is designed as ‘a compass for a renewed process of upward convergence towards the future of social Europe’. However, it lacks any solid enforceability vis-à-vis the Member States, so at least for the time being it is more of symbolic value, yet with a fully-fledged boosting potential to become a catalyst for the Court of Justice while interpreting the Directive on Transparent and Predictable Working Conditions.

Background

The Directive, proposed by the Commission as a Christmas present in 2017, is to repeal the archaic Directive 91/533/EEC on an employer's obligation to inform employees of the conditions applicable to the contract or employment relationship (‘Written Statement Directive’) which dates back from 1991 when no one supposed that the world of work would undergo such a transition and that people will be using apps like Uber or Deliveroo on a daily basis. The new Directive’s primary objective is to improve the working conditions by promoting more transparent and predictable employment while ensuring labour market adaptability. It covers all workers in all forms of work, including those in the most flexible non-standard and new forms of work such as zero-hour contracts, casual work, domestic work, voucher-based work or even platform work. According to the Impact Assessment presented by the Commission, the coverage will extend up to 2-3 million workers, including 3% of platform workers, overall impacting 200 million workers in the EU.

The adopted Directive

The Directive guarantees that all workers within its scope, regardless of the specific working arrangements they are engaged in, should be provided with more thorough and complete information regarding the essential aspects of their work, which are to be received by the worker – depending on the nature of the information, either within first 7 days or within a month since the employment commences. Workers will also have a right to be informed within a reasonable period in advance when exactly their employment will start, which is especially important for those with very variable working schedules that are to be determined by the employer in cases of on-demand work or zero-hours contracts. Workers ought to also have a right to seek additional employment by having widespread exclusivity clauses prohibited. Probation periods are limited to 6 months and can be extended only in exceptional circumstances. The Directive comes also with substantiated provisions on enforcement and introduces the reversed burden of proof to ensure that workers will effectively benefit from these rights and will not be subject to adverse treatment or consequences because they have exercised their rights.

More importantly, the Directive has a broad personal scope of application, although the initial proposal foresaw a wider ambit. For the first time in the history of EU employment law, the Commission presented a codified concept of a worker derived from the CJEU case-law. However, some Member States were far from being happy with the new proposal, so heated discussions in the Council were to be expected soon after the reasoned opinion came in from the Swedish Parliament asserting that the draft does not comply with the principle of subsidiarity.

As suspected, the proposal underwent some serious modifications in the Council which undercut its most ambitious proviso relating to the introduction of a Union definition of a worker. What is left in this regard, is ‘an employment contract or employment relationship as defined by the law, collective agreements or practice in force in each Member State with consideration to the case-law of the Court of Justice’. This severely undermined the Commission’s initial intentions to safeguard a unilateral personal scope of application that would preclude Member States from policing that very definition rigidly.

The case-law on free movement identifies that ‘the essential feature of an employment relationship is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration’ (Case 66/86 Lawrie-Blum) provided ‘the pursued activity is genuine and effective, to the exclusion of activities on such a small scale as to be regarded as purely marginal and ancillary’ (Case 53/81 Levin). Member States can nevertheless decide not to apply the Directive to workers whose predetermined and actual working time is equal to or less than an average of three hours per week in a reference period of four consecutive weeks. However, for those engaged in zero-hours contracts, i.e. contracts that do not stipulate guaranteed working hours and do not create any obligations for the employer to offer the job and for the worker to accept the offered job, do not enjoy such an exclusion, so the Directive applies in full.

The reasoning behind it is that such workers constitute the most vulnerable workforce prone to experience precarity dictated by low income and unstable employment. On top of that, in cases of irregular work patterns, workers on zero-hours contracts or else engaged in on-demand work can be only called into work within the time frames they have made themselves available to the employer. If they are called in outside their reference hour period, workers are allowed to refuse the job assignment and cannot be subject to any adverse consequences by the employer, i.e. not calling the worker in again. In situations where the employer cancels a previously agreed work assignment, workers will be also entitled to compensation. This surely gives certain stability for the workers who are working on contracts with a variable working pattern.

What is more, special provisions are addressed to the Member States to prevent abusive practices of employers when it comes to on-demand work. Therefore, Member States can take measures to fight abuse such as setting limitations to the use and duration of such contracts or introduction of a rebuttable presumption of an existence of an employment contract stipulating a minimum amount of paid hours. It remains to be seen how this provision will be actually implemented in practice.

Perhaps the most far-reaching provision of the Directive is the workers’ right to transition for another form of employment that is more predictable and secure. If requested, the worker must receive a written reply from the employer with clear reasons for the decision within one month. The Directive also prescribes a legal presumption in cases when a worker has not received in due time partially or all of the mandatory information. In such situations, the worker is to enjoy the favourable presumptions that are to be defined in national law, which the employer has a right to rebut. Finally, Member States have 3 years to implement the Directive.

Comments

The Directive is to be warmly welcomed as it introduces a nuanced approach towards the mandatory information obligation regime for every employment relationship, regardless of its form. The only (narrow) inclusive criterion is the personal ambit of application to be decided pursuant to national law. However, a clear reference to the case-law of the CJEU on the concept of a worker gives certain hope that the Directive is capable of being interpreted broadly to attain its overarching objective of social policy. It is a shame that the Council decided not to include the full codified definition of a worker in the final text but at least placing an explicit reference to CJEU case-law boosts the EU legal awareness by hinting where to search for sources, especially for national judges or employment lawyers.

In any case, simple information rights are far from combating precarious employment and social exclusion so widely present nowadays in the gig economy. The Directive nonetheless is to be seen as a stepping stone in paving the winding road leading to high-quality jobs. The major bulk of responsibility lies now on the Member States to properly implement it. Once that is done, the national employment judges would have to step up their game and take charge of the sincere enforcement of the rules in the full spirit of EU law.

Indeed, the biggest pitfall is that the Directive has a different target group which is certainly not all platform workers. For them to enjoy the rights, they need to be first reclassified from bogus (false) self-employment and that might be an easier case for on-demand work (e.g. Uber, Deliveroo), but definitely not for crowdworkers who perform their tasks solely online (e.g. Amazon Mechanical Turk, Upwork, Clickworker). This will not be done automatically by virtue of the Directive, which nonetheless mentions in the recitals that false classification of a self-employed person under national law does not preclude the person from being a worker under EU law (Case C-413/13 FNV).

This will be up to the national courts to decide but while faced with that exercise, judges can and in fact, should, rely on CJEU case-law and elements that already echoed in Luxembourg such as degree of power of management, supervision, margin of discretion in the performance of assigned duties, capability to be dismissed and merely notional general independence; recruitment procedure and nature of the entrusted duties; freedom to choose the time, place and content of the work; extent of rights and duties vested upon the individual. Only then, platform workers can fall under the scope of the Directive and be protected against unpredictable work patterns which will enhance the transparency of their jobs. To put in short and bluntly, the principle of sincere cooperation and effet utile simply demands it.

On the bright side, the major accomplishment is that the Commission has actually delivered a new legal instrument in the long-forgotten field of employment as social policy is back on the agenda again. The European Pillar of Social Rights, albeit not binding, is therefore not an empty set of profound Eurojargon. Explicit references made in the Directive to the EPSR (thanks to the Parliament’s amendments) will allow the Court of Justice to elaborate on the Pillar’s value and status, just as it was with the EU Charter before it came into force. Frankly, more initiatives arising from the EPSR are coming up: the European Labour Authority has been set up, the Council Recommendation (not binding) for access to social protection for workers and the self-employed has been agreed and the Proposal for a Directive on work-life balance for parents has been negotiated successfully. It seems that the Commission’s hands are finally full with mainstreaming material social rights for the sake of social Europe and its future.

To conclude, in the wake of the centenary of the International Labour Organization, let us not forget about the apt statement from the 1944 Declaration of Philadelphia that ‘labour is not a commodity’. Thankfully, the Commission, after a period of stagnation taken in the name of flexicurity, seems to have finally gotten that forsaken memo. Point for the Commission, a win for the workers but still a loss for some platform workers who struggle to make ends meet in the gig economy.

Barnard & Peers: chapter 20

Photo credit: Manchester Evening News