(38) The EU Charter of Fundamental Rights
Internal Market Derogations in Light of the Newly Binding Character of the EU Charter of Fundamental Rights
A “Right of Way” for the Fundamental Freedoms?
The first signs of internal market prioritisation date-back to the Wauchauf13 and ERT14 cases. Although the former extends the respect of fundamental rights to Member States’ implementation of EC law (now EU law) and the latter gives rise to a duty for derogations from the fundamentaleconomic freedoms to comply with fundamental rights,15 it is suggested that this does not imply that such rights are to be given priority. On the contrary, an analysis of the ECJ’s methodology shows that in Wachauf the Court’s reasoning discounts the protection of fundamental rights in the name of “community objectives” necessary for the common organization of a market.16 The former are therefore likely to be subordinated to EU acts giving effect to the latter.17 Similarly, in ERT the Court uses fundamental rights as an instrument to enforce the internal market, limiting the possibility for member State derogation to measures which comply with fundamental rights. The latter are thus subordinated to the demand of market integration and their protection is of a merely incidental nature.18
In a separate line of cases the Court has even gone as far as showing an unwillingness to deal with fundamental rights issues, concentrating solely on the free movement provisions of the Treaty. In Cinetheque,19 for example, the distribution of cinematographic works was appraised in light of the free movement of goods without considering, or attempting to reconcile it with, the freedom of expression. Analogous reasoning may be observed in Grogan,20 where the ECJ refused to examine whether the protection of the right to life, expressed by the Irish constitution, could limit the application of the freedom to provide services. The economic objective of the internal market thus seemed to outweigh the fundamental right in issue. Yet, it must be noted that the case was decided neither in favour of the former nor of the latter, with the Court resorting to a formal approach, claiming that the measure in issue could not be considered a restriction within the meaning of Art. 49 (ex Art. 59) TEC (now 56 TFEU). Nevertheless, the ruling still appears fundamentally flawed in so far as it also fails to recognise the freedom of expression, enshrined in Art. 10 of the European Convention on Human Rights. In this regard, a subsequent ruling of the European Court of Human Rights found the Irish prohibition on the distribution of information on clinics carrying out voluntary terminations of pregnancy in othermember States, i.e. the main issue brought before the Court in Grogan, to infringe such an Article.21
The Court’s willingness to consider fundamental economic freedoms and avoid dealing with fundamental rights is indicative of the consideration it gives the two competing interests. The objectives linked to the creation of the internal market are clearly guaranteed a privileged status which is no doubt a consequence of the unbreakable bond which exists between the ECJ and the founding treaties which created it. In fact, if one considers that the Court must act within the limits set by the treaties its rather dogmatic protection of the fundamental freedoms of the internal market is not surprising.
From Schmidberger and Omega to Laval and Viking: A Balancing Act
In Schmidberger22 and Omega23 the Union judges were for the first time called to deal with a straightforward reliance by member States on fundamental human rights24 as a limit to the fundamental economic freedoms.
In this context, the Court unequivocally confirmed that the protection of fundamental rights is a legitimate interest which, in principle, can justify a restriction of the obligations imposed by EC law.25 In each case it proceeded to determine whether such a justification could subsist by weighing the competing interests through the application of the proportionality test, ultimately ruling in favour of the fundamental rights invoked.26 That being so, it is difficult to affirm that such a balancing exercise ensures an adequate protection of the rights in issue. To begin with, there is a persisting presumption that the economic freedoms guaranteed by the treaties are supreme, whereas fundamental rights are mere justifications for breaches of those freedoms. A close analysis of the cases reveals a “mechanical application”27 of the concept of restriction of the free movement provisions, with the national action (Omega) and omission (Schmidberger) being considered a restriction regardless of the fact that fundamental rights were being pursued. Given the significance of such rights, should it notinstead be presumed that measures based upon them are prima facie compatible with the treaty rules on free movement, subsequently proceeding, if necessary, to balance the competing interests without any sort of bias?
As Brown states:
[. . .] using the language of prima facie breach or restriction of economic rights suggests that, even if the restriction is ultimately justified, it remains something which is at heart ‘wrong’, but tolerated.28
The outcome of the Court’s approach is once again clearly marketoriented. On the one hand, States are warned that measures not compatible with the internal market will need to be justified regardless of the legitimacy of the interest they pursue.29 On the other hand, the burden of proof rests with the party relying on fundamental rights, a stance which would not be conceivable if the Court adequately protected them as hierarchically superior norms. In this context, although language reminiscent of the European Court of Human Rights is used to conclude that fundamental rights are a primary concern which can, “in principle”,30 justify a restriction to the fundamental economic freedoms, the ECJ fails to take its analysis to a logical conclusion. Rather than finding that restrictions to fundamental rights are exceptional in so far as these are superior norms, it maintains its classic internal market approach re-focusing its attention on whether the restrictions placed upon intra-community trade are proportionate in light of the legitimate objective pursued.31
Thus, whilst giving effective protection to fundamental rights by finding, in both Schmidberger and Omega, that they justified restrictions to intra-community trade, the ECJ’s approach also highlights that it is fearful to confirm their independence and primacy. In fact, the theoretical protection of such rights vanishes in the Court’s multi-track endeavour to reconcile the constitutional traditions of member States, the normativesystems external to the EU (such as the ECHR) and the protection of the fundamental freedoms of the Treaty.
The Court’s discomfort is highlighted by the fact that neither the analysis adopted in Schmidberger nor that applied in Omega, establish the precise type of justification that fundamental rights embody in the complex framework of rules applicable to the free movement provisions. In the former case, reference is made to Art. 30 TEC (now 36 TFEU) and mandatory requirements alike without further clarifying the heading under which they fall.32 What seemingly results is the recognition of a new and “autonomous” justification.33 Contrariwise, in the latter case, the Court allows human dignity to be protected via recourse to the public policy heading of Art. 46 TEC (now 52 TFEU). Such reasoning is difficult to reconcile with the restrictive interpretation of the same, which pervades decades of case-law.34 Moreover, as is apparent from Bouchereau,35 public policy is a concept based on the collective and it is not easy to envisage how the protection of fundamental individual rights can be based upon it.36
Accordingly, as supported by wealth of literature the finding that the public policy exception can safeguard human dignity is probably best interpreted as not implying that all fundamental rights can be protected under it.
Although from a practical point of view the determination of whether fundamental rights are to be considered within one ground of justification, as opposed to another, is pointless (since effective protection is ensured either way), the lack of such a determination emphasises the Court’s unease when it comes to expressly recognising the independent status and importance to be attributed to fundamental rights.
It is suggested that the problem of internal market prioritisation or, more correctly, fundamental rights “ancillarity”, has not been solved by the recent Viking37 and Laval38 cases. Although expressly recognising that the right to strike is a fundamental right, these cases do so in a “defensive” 39 manner. In fact, the trade unions involved in the court proceedingswere found to be in breach of the fundamental freedoms of the Treaty and were allowed to invoke the right to strike as a justification. It should come as no surprise that the statement of principle made in Schmidberger and Omega, to the effect that fundamental rights may in principle justify restrictions to fundamental freedoms, is therefore expressly recalled.40
Similarly, when turning its attention to the justificatory phase, the ECJ followed the Schmidberger analysis, holding that the most appropriate way to reconcile the competing interests was through their “balancing” via the application of the proportionality test. In that context, it fell to the trade unions to demonstrate that their industrial action, carried out under the auspices of a legitimate interest (the right to strike), was proportionate in relation to the employer’s rights of free movement.
Without dealing with additional issues such as horizontal direct effect or the recognition that fundamental rights embody overriding requirements in the public interest, it is sufficient to note that in Viking and Laval - though with different outcomes for the two cases in issue41 - fundamental rights are once more subordinated to the economic objectives of the internal market.
In both cases the right to strike is treated as a mere justification which must comply with the principle of proportionality. Not only does this reconfirm the problems already verified in the framework of Schmidberger and Omega, but it is also raises some questions in the specific context of industrial action.
As noted by Davies:
When we think about proportionality in the context of the right to strike, we generally mean the proportionality of the State’s restrictions on that right.42 It is also generally acknowledged that the more strike action restricts the choices of an employer, the greater its effectiveness and chances of success. Nonetheless, in the cases in issue, the ECJ requested that the strike carried out by the relevant trade union’s be proportional with regard to the economic rights that employer’s were granted by virtue of the Treaty. By doing so, the Court effectively negates the inherent objective of the right to strike, subordinating it to the fundamental freedoms of the internal market. In fact, the greater the restrictions caused to the employer’s rights of free movement, the less likely will the strike action be justified. In this respect, striking without impinging on the free movement rights of employers may turn out to be a very hard task indeed.43
It is thus suggested that Schmidberger, Omega, Viking and Laval do not square the circle, leaving the problem of the relationship between rights and the internal market largely unaltered. The timidity of the Court to adopt a firm position to the protection of fundamental rights results in their inability to have direct effect as legal rules or to create direct legal effects, their application being limited by the medium of the fundamental freedoms. In adopting such an approach, however, the Court cannot be criticised for acting in bad faith. In fact, being an EU institution it must act within the scope of the Treaty and ought not operate outside the limits set. It is not surprising, therefore, that the court feels bound by those economic freedoms and objectives which have formed the basis of the European evolution and have been instrumental in the creation of the EU.
That being so, one must question whether, and to what extent, the newly binding character of the EU Charter of Fundamental Rights can modify the approach so far described. Section 5 is dedicated to the presentation of possible outcomes resulting from the entry into force of the Treaty of Lisbon.
13.Case C-5/88 Wachauf [1989] ECR 2609.
14.Case C-260/89 ERT [1991] ECR I-2925.
15.Ibid., para. 43. Such reasoning has been applied in numerous judgments: Case C-62/90 Commission v. Germany [1992] ECR I-2575; Case C- 459/99 MRAX [2002] ECR I-6591; Case C-60/00 Carpenter [2002] ECR I-6279.
16.See Case C-5/88 Wachauf, n. 13 above, para. 18.
17. Consequently it is likely that an EU measure will be found to be compatible with fundamental rights whilst the national implementing measure may not be (as in Wachauf).
18. From a legal point of view it also seems very odd that, once it has been established that a restriction is justified from the perspective of Community law that restriction can still be subject to a scrutiny as to the respect of fundamental rights. See A. Biondi, ‘Free trade, a mountain road and the right to protest. . .’, n. 4 above, 55.
19. Joined Cases C-60 and C-61/84 Cinéthèque [1985] ECR 2605. Also see Joined Cases 50–58/82, Administrateur des Affaires Maritimes, Bayonne and Procureur de la République [1982] ECR 3949 and Case C-168/91, Konstantinidis [1993] ECR 1191.
20. Case C-159/90 Grogan [1991] ECR I-468.
21. Appl. No. 14234/88, Open Door and Dublin Well Woman, (1992) ECHR 68.
22. Case C-112/00 Schmidberger [2003] ECR I-5659.
23. Case C-36/02 Omega [2004] ECR I-9609.
24. Respectively the freedom of expression/assembly and human dignity.
25. Case C-112/00 Schmidberger, n. 22 above, para. 74; Case C- 36/02, Omega, n. 23 above, para. 35.
26. Also see the recent Case C-244/06 Dynamic Medien [2008] ECR I-00505 confirming the Omega precedent.
27. See A. Alemanno, ‘Libertés fondamentales et droits fondamentaux’, n. 5 above, at 731.
28. C. Brown, ‘Case C-112/00, Eugen Schmidberger, Internationale Transporte und Planzüge v. Austria’, n. 5 above, at 1508.
29. This may lead a State to become so intent on complying with EU obligations that it neglects the protection of fundamental constitutional principles which it would otherwise have guaranteed.
30. For an analysis of what is meant by the words “in principle” see M. Avbelj, n. 5 above, at 64.
31. Case C-112/00 Schmidberger, n. 22 above, para. 82; Case C- 36/02 Omega, n. 23 above, para. 36. It must be noted, however, that the Court leaves a wide margin of discretion to member States as regards the determination of the level of protection to be applied. Such an approach, particularly apparent in Omega, is certainly a consequence of the Court’s cautiousness when dealing with the constitutional traditions of member States. Moreover, it implicitly acknowledges the fact that there are important differences in the catalogues of rights enshrined in national constitutions (for a similar reading see A. Alemanno, n. 5 above, at 740 and Opinion of Advocate General Jacobs in Schmidberger, at para. 97).
32. F.R. Agerbeek (n. 5 above), notes: “the advocate general is not entirely clear about the nature of the derogation either” (at 265). See, in this respect, paras. 86–89 of the Advocate General’s Opinion in Schmidberger (n. 22 above).
33. See A. Alemanno, above n. 5, at 736; C. Brown, ‘Case C-112/00, Eugen Schmidberger, Internationale Transporte und Planzüge v. Austria’, n. 5 above, at 1504.
34. Case C-154/85 Commission v. Italy [1987] ECR 2717; Case C- 239/90 SCP Boscher,
Studer et Fromentin [1991] ECR I-2023.
35. Case C-30/77 Regina [1977] ECR 1999, para. 35.
36. In support of such a statement it should be noted that the concept of public policy is enshrined in the European convention on Human Rights as a limit to fundamental rights.
37. Case C-438/05 Viking [2007] ECR I-10779.
38. Case C-341/05 Laval [2007] ECR I-11767.
39. A.C.L. Davies, ‘One step forward, two steps back? The Viking and Laval Cases in the ECJ’, (2008) 37 Industrial Law Journal 139.
40. Case C-438/05 Viking, n. 37 above, para 45, Case C-341/05 Laval, n. 38 above, para. 93.
41. In both cases the Court recognises the right to collective action represents a fundamental right capable of justifying a breach of Treaty provisions. As in Schmidberger and Omega the Court highlights that the exercise and scope of such a right must therefore be determined via a balancing of interests, namely against the fundamental economic freedoms of the Treaty. The difference between Laval and Viking is that whilst in the former the Court carries out the assessment itself, ruling that the actions of the Swedish trade union were not proportionate and thus contrary to Art. 49 TEC (notwithstanding the legitimate objective pursued), in the latter it merely sets out a series of guidelines, leaving the final determination to the referring Court.
42. See A.C.L. Davies, ‘One step forward, two steps back? . . .’, n. 39 above, at 145.
43. For a more detailed analysis see A.C.L. Davies ‘One step forward, two steps back? . . .’, n. 39 above.
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