Handout 5

Seminar 5 (8 November 2012) Competition Law and Labour Law

In this seminar we look at a handful of cases that have taken on labour arrangements. The tension between the normative stance of labour lawyers and that of antitrust lawyers should be self-evident: the latter believe in market forces as a means of adjusting factors of production, the former are unconvinced that labour is such a malleable factor of production, and workers require protection. The cases show that the court has not quite worked out how to manage the intersection, what might be said to be puzzling is how in some cases the court ‘sees’ the issue (e.g. Albany) while in others it does not notice the point (e.g. Höfner).

 Reading

 Case C-67/96 Albany International [1999] ECR I-5751

 Case C-22/98 Criminal Proceedings against Becu [1999] ECR I-5665

 Case C-55/96 Job Centre [1997] ECR I-7119

 Brown v Pro Football, Inc. 518 US 231 (1996)

 Van den Bergh and Camesasca ‘Irreconcilable Principles? The Court of Justice Exempts Collective Labour Agreements from the Wrath of Competition Law’ (2000) 25 European Law Review 492

 Plus, one of the following three, which are papers written by labour lawyers reacting to competition law intervening in ‘their’ territory:

 Deakin ‘Labour Law as market Regulation: The Economic Foundations of European Social Policy’  in Davies et al (eds) European Community Labour Law: Principles and Perspectives (Oxford University Press, 1996)

 Giubboni Social Rights and market Freedom in the European Constitution: A Labour Law Perspective (CUP 2006) ch.3 (you can skip the part on internal market law)

 Sciarra ‘Job Centre: An Illustrative Example of Strategic Litigation’ in Sciarra (ed) Labour Law in the Courts (Hart, 2000)

 Further Reading

 Time permitting, have a look at Case C-438/05 International Transport Workers’ Federation and Finnish Seamen’s Union, ‘Viking Line’ [2007] ECR I-10779.  This is not an antitrust case (could it have been brought as such?) but have a look at how the ECJ refuses to apply Albany International.

 A very interesting debate in the US, which will no doubt reach the EU at some point, is the link between labour law/antitrust law and sport/entertainment industries. The EU case law above looks at hard core labour markets, but sport/entertainment markets have some different dynamics. The Brown case picks up on these matters in some way, but if you wish to follow these up more fully, see the following:

 LeRoy ‘The narcotic Effects of Antitrust Law in Professional Sports: How the Sherman Act Subverts Collective bargaining’ (2012) 89 Tulane Law review 859

 Perritt Jr. ‘Competitive entertainment: Implications of the NFL lockout litigation for sports, theatre, music, and video entertainment’ (2012) available at: http://ssrn.com/abstract=2116664

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3 comments on “Handout 5

  1. Karin Floistad says:

    I would like to leave a remark regarding the Viking Line and Laval cases. The ECJ took a different approach in both those cases regarding the question of whether collective labour agreements, including actions taken by trade unions, fall outside the scope of the free movement rules than the position taken by the Court in the Albany international case regarding the scope of competition law. The question is why and I am sure there are many answers. But one which I think one should never forget when analyzing case law is the fact that the Court never chooses the facts of the case. Both in Viking Line and in Laval the facts were not in favour of the position of the trade unions, namely to keep this field of law outside the scope of the the free movement rules. The consequences of the actions taken by the trade unions were such that it was difficult to envisage that the Court would not take take it under scrutiny. A concession from the Court, however, was to give the Member states a lot of freedom in balancing the competing interests under the proportionality test.

  2. Chloé says:

    As a preliminary point, it is true that competition law and labour law, have different aims and must remain clearly separated. While the latter aims at protecting workers and organising a social security system and social protection, the former ensures that competition within the common market is not distorted. Labour law protects workers while competition law aims at promoting and safeguarding undistorted competition between undertakings within the common market. Therefore, competition law and labour law are two different fields of law. In this respect, the Treaty of Rome originally provides for a complete autonomy of labour law with respect to competition law. While competition law became supranational law, labour law remained in the hands, the “exclusive preserve” (Giubboni) of Member States. There was indeed a presumption that an interference of the supranational competition provisions with national systems of labour law and social security law would affect social protection and social sovereignty. As a result, national labour law should at first sight, not fall under the scope of EU competition rules.

    However, in some cases, competition law and labour law may be mutually supportive. See for example, the fundamental social right to equal pay enshrined in the Treaty which derives its existence from concerns over unfair competition (Deakin). To put it another way, the non-application of competition law to labour law may affect both competition law and labour law. As underlined by Camesasca and Van den Bergh, “collective agreements may well lead to labour prices above equilibrium levels, thus resulting in diminishing demand for labour supplied”. In such a case, a full exemption of collective agreements from competition law may raise the price of a particular product, thus affecting consumers and competition law and may raise labour prices, thus resulting in unemployment.
    I therefore think that national labour rules should not fall completely outside the scope of competition law. Certainly, some social rights such as working conditions and the genuine protection of workers should remain outside the ambit of competition provisions and should remain in the hands of Member States so as to avoid a ‘race to the bottom’ with regard to social rights. A full exemption may, nevertheless, encourage undertakings to conclude collective agreements to cover up agreements contrary to the competition provisions. Similarly, an undertaking may raise a labour law defence in order to escape the provisions of competition law. This might lead to abuse of rights, a misuse of social rights. As acknowledged by German law, competition law should apply when collective agreements are concluded solely with the intent of interfering with competition law (Camesasca and Van den Bergh).

    In this regard, I think that the Court of Justice should not have in Albany, Brentjens and Drijvende Bokken fully exempted collective agreements from the competition law provisions. Certainly, as set out by the Court of Justice, “the social policy objectives pursued by agreements would be seriously undermined if management and labour were subject to [Article 101(1) TFEU]”. Nonetheless, such exemption appears too far-reaching. National labour laws do not need to be fully exempted from EU competition law in order to be safeguarded. Social rights would remain protected as long as their development is not aimed at affecting competition law. In that respect, I agree with the view taken by German law.

  3. Argyri says:

    In general, what I find different to the intersections that we have studied thus far is that this session’s topic looks at two fields of law, which can be seen as traditionally having fundamentally different, even opposing, goals. The two fields seem to be more in conflict in their logic rather than intersecting.

    As regards Albany, I agree with Chloé that the Court didn’t need to fully exempt collective agreements from the competition law provisions. As Camesasca and Van den Bergh explain, the Court went further to the Advocate General’s recommendation, which indeed exempted only core subjects of collective bargaining and thus did give some room for competition rules to apply. In any case, if I understand correctly, the Court did see the pension fund as an undertaking, thus did, as Professor Monti points, “see” the issue of an intersection.

    The case that I found particularly interesting for its facts, however, was Job Centre Coop. This is because the facts connect to the core conflict between competition law and labor law as traditionally perceived in the civil law world; one trusts the market and the other does not. The rationale of the Italian law challenged was exactly that private enterprises couldn’t be entrusted to negotiate employment contracts as only the public authorities can be entrusted to play that role presumably being the only side trusted to ensure the rights of the workers (or job seekers) as weaker parties. And then the Court sees that this logic has simply proved inefficient in today’s “extensive and differentiated market” and the public authorities exclusively entrusted with such tasks have been also seen as “unable to satisfy” the real demands of today’s world (para. 34 of the case).
    Therefore, I don’t think that this is a case of an intersection between the two fields (competition and labor law) but rather a case of conflict in the very conceptual basis of the fields. One has to take a position with regard to his trust to the market or not in order to judge the Italian law under consideration.
    Indeed, I think that the Court takes a position when stating that “article 86 of the Treaty cannot obstruct the performance of the particular task assigned to those offices if they are manifestly not in a position to satisfy demand in that area of the market” (para 27). Even though the creation of legal monopolies is not as such violation of the Treaty (para. 31), it can be if the exercise of the exclusive right granted to the monopoly “cannot avoid abusing its dominant position” (para. 31).
    In the end of the day, I think that the Court suggests that if the monopoly proves to be inefficient (see again the reasoning under para. 34), then it not only is a wrong policy, but also is bitten by competition rules as contrary to the Treaty.

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