An extended Grand Chambers of the CJEU handed down judgment in C928/19 P EPSU v Commission on 2 September 2021.
The EPSU case
In EPSU, the European Federation of Public Service Unions challenged a decision of the European Commission refusing to propose to the Council that a social partners Agreement, made under Article 154 TFEU, be made in to a Directive which would protect the information and consultation rights of central government workers. EPSU has 8 million public service members across the EU.
The CJEU rejected EPSU’s challenge and upheld the General Court’s judgment of 24 October 2020. In that judgment the General Court had found that EPSU had standing to challenge the Commission and that the Commission were amenable to an action for annulment (the EU Treaty version of judicial review).
Standard of review
The CJEU found that the Commission had a wide margin of discretion when considering whether or not to propose that the Council decide whether to make a social partners Agreement into a Directive. The “institutional balance” of the Treaties required that they not be under a mandatory duty to propose a draft unless they, independently, considered it to be “appropriate” (paragraphs 49 and 58).
However, the CJEU did not derive this wide margin from case law concerning proposals in the legislative field, as the General Court had done, but did so principally under the CJEU’s general administrative law case law (paragraphs 96-99).
A new EU concept of “legislative in nature”
The Treaty of Lisbon had, for the first time, created a definition of “legislative acts” (Article 289 TEU). This had been intended to simplify the terminology used across EU law so that there was clarity on the nature of legal acts made by the Institutions. However, the social partners procedure, in Article 154-155 TFEU (referred to within the UK as the “Social Chapter” – which had led to Directives, such as the Part Time Workers Directive) did not directly refer to the terminology of Article 289 TEU.
In EPSU the CJEU has limited the significance of the terminology of “legislative acts” to the classification of the procedure under the TEU. For the first time, the CJEU held that it has no other significance (see ).
The CJEU coined a new phrase to distinguish between legislation and other legal acts of the institutions: Directives made under the social partners procedure are measures of a “legislative nature” (at ).
This classification of legal acts of a legislative nature is not the same as the wording used in the European Union (Withdrawal) Act 2020 (“EUWA”). “Direct EU legislation” is defined in section 3 EUWA, and does not include any directives at all (even though some are legislative acts, and, post EPSU, all will likely be acts of a “legislative nature.”) Directives may nevertheless be “retained EU law” under EUWA (see section 4(2)(b) EUWA)) or in some contexts, “relevant separation agreement law” for the purposes of sections 7A -7C EUWA (which has precedence over retained EU law). The CJEU judgment clarifies that there is no scope to argue that a Directive made following Article 154-155 TFEU after the Treaty of Lisbon, cannot be within the scope of “retained EU law.”
Collective bargaining in the EU
The CJEU held that the new provision in the TFEU, expressly recording the “role of the social partners” and the Union’s duty “respecting their autonomy” did not extend beyond the process during which social partners are collectively bargaining. It does not apply to the fate of any agreement reached.
This judgment has already been hailed by some as a blow for collective bargaining rights in the EU.
The CJEU also highlighted that Article 26 of the Charter of Fundamental Rights of the EU, already enshrined the “paramount importance in EU law of the right….to negotiate and conclude collective agreements” (paragraph 67). While the fate of those agreements at EU level, once agreed, has been determined, some may point to paragraph 67 as supporting a strengthening of collective rights at that earlier negotiation stage where those negotiations fall within the scope of EU law, “retained EU law,” “relevant separation agreement law” or the Trade and Cooperation Agreement.
Katherine Apps was instructed by Richard Arthur at Thompsons LLP to represent EPSU at the CJEU and in the General Court.