Domestic labour law does not escape the grip of EU law: national labour regulations have to comply with EU primary and/or secondary EU law. The Viking and Laval cases threw into sharp relief the complex relationship between labour rights and fundamental economic freedoms. The right to take collective action was seen to circumscribe the exercise of freedom of establishment (in Viking) and the freedom to provide services (in Laval).

In a new article published in the European Constitutional Law Review (Volume 13, Issue 4, pp. 724-743), I look at a new judgment delivered by the Court of Justice last year, AGET Iraklis (C-201/15). The Grand Chamber ruling in the AGET Iraklis case revisits the Viking/Laval case law and sheds new light on the uneasy relationship between labour law and the EU’s fundamental economic freedoms. The case concerns the ability of domestic authorities to control collective redundancies by means of prior authorisation and the compatibility of such a protective regime for workers with primary and secondary EU law. More specifically, the applicant company sought to reorganise its business and shut down one of its three plants, but the Minister of Labour refused to authorise the projected redundancies. The CJEU judgment addresses a combination of traditional concerns and new challenges, notably freedom of establishment (Article 49 TFEU), the freedom to conduct a business (Article 16 of the EU Charter of Fundamental Rights), and the protection of workers in the event of collective dismissal.

The article examines three sets of issues: the balance between the economic and the social in AGET Iraklis; the interplay between freedom to conduct a business (Article 16 of the EU Charter) and labour rights; and the Economic and Monetary Union dimension of the Court’s ruling in AGET Iraklis. The article makes three key claims. First, it is argued that the Court’s ruling marks a step towards a reconciliation between EU free movement law and labour law. Crucially, this was not a Viking/Laval moment for the Court, as it very carefully examined the merits and demerits of the opposing arguments and handed down a very measured judgment. Second, it is argued that Article 16 of the EU Charter of Fundamental Rights can be more ‘dangerous’ to labour rights when EU secondary law is interpreted in the light of that provision (such as in Alemo-Herron). In cases where both EU free movement law and Article 16 are engaged, the latter may not be equally influential. Third, it is argued that the margin of appreciation left to the domestic authorities might lead to further deregulation of the national labour law concerned, as Greece is still subject to an economic adjustment programme. As such, the margin of discretion left to the domestic authorities is de facto diminished.

The article is also available on SSRN.

Menelaos Markakis (MJur, DPhil, Oxon) is postdoctoral researcher at the European Research Centre for Economic and Financial Governance, Erasmus University Rotterdam.