Introduction
The balancing of economic and social rights and interests has provoked an almost perennial discussion within the context of the deepening and widening of European Union (EU) integration. In my forthcoming monograph, Business Freedoms and Fundamental Rights in European Union Law (OUP 2024), I explore further the fundamental rights implications of this debate, with an emphasis on the freedom to conduct a business as a fundamental right, not in isolation, but rather within its wider constitutional and fundamental (social) rights context. I argue that there are underexplored ‘social’ dimensions to business freedoms as fundamental rights within EU law. This is the argument that I want briefly to sketch in this blogpost, with the overarching suggestion being that there should be nothing inherently or necessarily deregulatory in the Court of Justice of the European Union’s (CJEU) application of the freedom to conduct a business as a fundamental right within Article 16 of the Charter of Fundamental Rights (CFR). Rather, it is suggested that the CJEU’s existing ‘deregulatory’ jurisprudence—particularly in the labour law context—is a consequence of that Court’s reluctance properly to articulate and appreciate the social dimensions of business freedoms, notably freedom of contract.
Concern has long been directed at freedom of contract as a regulatory device within the labour law context, particularly with regard to the granting of fundamental rights status to that freedom. At the same time, freedom of contract lacks a clear definition within EU law. As Advocate General Szpunar explained in his Opinion in Case C-261/20 Thelen Technopark, para 76: ‘[o]ne can sometimes get the impression that freedom of contract is the elephant in the room. In my opinion it has not yet found its rightful place in the system of EU law’. The text of Article 16 CFR makes no reference to freedom of contract, providing instead that ‘the freedom to conduct a business in accordance with Union law and national laws and practices is recognised’, with freedom of contract merely being specified as one element of the freedom to conduct a business in the Charter’s Explanations.
It is argued that it is only through an examination of its relationship to fundamental social rights that the true nature of EU conceptions of business freedoms as fundamental rights can be ascertained. It will be explained that the relationship between the freedom to conduct a business and fundamental social rights is composed of interrelated ‘internal’ and ‘external’ aspects, and which in turn allows for the social dimensions of business freedoms to be explored in (at least) three (again interrelated) ways and which can be mapped onto the division between the internal and external social dimensions of the freedom to conduct a business. From an internal perspective, there is first, the long recognised but largely indeterminate notion of the ‘social function’ of business freedoms. Second, there is the recognition of the ‘social value’ of economic concepts such as freedom of contract. The external perspective involves the proper application of potentially competing social rights as counterweights to business freedoms as fundamental rights and which constitutes the starting point of the discussion here.
The external social dimension of business freedoms
Competing fundamental social rights can provide for compelling ‘counterweights’ to liberal or economic conceptions of business freedoms. For example, Article 28 CFR provides for the right to collective bargaining and action and which has the capacity to reinforce collective autonomy in the face of the individual autonomy concepts around which freedom of contract is traditionally conceived. The Charter also contains social rights with potentially more compelling normative weight than the freedom to conduct a business, which after all remains a ‘freedom’ that is merely ‘recognised’. For example, Article 31(2) CFR on the right to fair and just working conditions has been found to constitute a ‘right’ (as opposed to a principle), and which thereby acts as a potent corollary to the existing judicial treatment of the freedom to conduct a business which continues to exhibit rights features, despite not (explicitly) being categorised as such within the Charter.
A perhaps even more significant counterweight is the right to (engage in) work found within Article 15 CFR, particularly given its connection to the freedom to pursue a trade, profession, or occupation as general principles of EU law. The common origin of the freedom to conduct a business and the right to work within the general principles provides for potential mutual normative interdependence between those concepts. The right to work bridges the ‘economic’ (liberal) and the ‘social’ aspects of freedom of contract, with the employment relationship also being unusual in that it is (typically) constructed on a contractual foundation while also being heavily influenced by competing social or solidarity (rights) concepts. Moreover, employment legislation has significantly encroached upon the principle of freedom of contract in part due to the recognition of the weaker bargaining power of employees, and with social rights remaining dependent on legislation to elaborate their substantive and normative content.
The ‘values’ encapsulated by the Charter, notably ‘freedom’ and ‘solidarity’ can also be utilised in ascertaining the relationship between economic freedoms and social rights, as well as in determining their competing normative weight. Indeed, competing ‘values’, ‘freedoms’ , ‘rights’ and ‘principles’ lie at the foundation of the conceptual, legal, and normative tensions that exist between business freedoms and fundamental social rights. The cross-fertilisation between the Charter’s values leads to potentially competing (social) conceptions of the freedom to conduct a business, notably in relation to its social function and which can be internalised within business freedoms themselves.
The internal social dimension of business freedoms
The internal approach recognises that there are ‘social’ dimensions of the freedom to conduct a business, including freedom of contract, and which inhere within those freedoms. Existing conceptualisations of freedom of contract tend to view the relationship between that freedom and potential competing social rights as antagonistic. This is despite the fact that the CJEU continues to hold that freedom of contract—and related business freedoms—must be limited in relation to their ‘social function’, a theory originating within the field of property rights. According to this social functional approach, rather than being exclusionary of others, the general interest can be legitimately acknowledged in the delimitation of property rights. This ‘relativist’ approach allows (other) economic and social rights to be accounted for in the delimitation of business freedoms which can only properly be understood in terms of our relations with others.
I suggest that the (rather indeterminate) ‘internal’ dimension must also now be informed by external conceptions of fundamental social rights found (elsewhere) within the Charter, namely those social rights contained within its Solidarity Title as well as the right to work found in Article 15 CFR, both of which lend normative content to the social dimensions of the freedom to conduct a business (internal dimension) while simultaneously offering an avenue for resisting the application of those same freedoms (external dimension). Notably, the right to property can be viewed as guaranteeing the individual’s ability to ‘sell’ their labour through participation in the market. This reflects the view that workers have a proprietary interest in their labour ‘power’ or ‘job security’—as opposed to rights in or to a particular job—which they are able to alienate in exercise of their freedom of contract.
The right to work in its incarnation as the freedom to choose freely and to practise a profession emerged from the wider context of the exercise of business freedoms. The parallel evolution of the freedom to conduct a business and the right to work within the Charter, provides for a potential avenue for the socialisation of business freedom concepts, i.e. their infusion with social, as opposed merely to economic liberty values. The right to work can thereby provide an entryway for legal reasoning based on a social conception of freedom of contract and one that is reflective of the CJEU’s earlier recognition of the ‘social function’ of business freedom principles. At the same time, reliance on fundamental social rights allows for this social function to be operationalised in legal reasoning, and assists in mitigating some of the potential risks associated with reframing the right to work as a ‘worker friendly’ conception of freedom of contract, namely that the worker is in a weaker bargaining position, thereby undermining their consent.
The ‘socialisation’ of property rights or business freedoms therefore necessitates legislative intervention, reinforced for example through the recognition of the intimate connection between employment legislation and the social rights found in the Charter’s Solidarity Title. In this way, the ‘commodification’ of the right to work can be avoided by allowing its liberty-right dimensions to be infused with fundamental social rights concepts and values, as perhaps most evidenced in the right to work’s reformulation as the right to ‘decent’ work. Freedom of contract can thereby be instrumentalised to achieve economic and social goals. In particular, a more substantive view of freedom of contract envisages legislative intervention to ensure that the weaker party to a contract may enjoy ‘genuine’ contractual autonomy. Workers have a social interest in exercising their own freedom of contract to obtain—or to continue in—employment. The right to work, viewed as a legitimate exercise of workers’ contractual autonomy, is capable of offering a strong counterweight to employers’ freedom of contract as encapsulated in Article 16 CFR.
Legislative implementation of the Charter’s social rights also serves to decrease their indeterminacy, thereby reinforcing their normative value in the face of competing business freedoms. This necessitates an end to the conceptualisation of legislative intervention as an exception to—or as a limitation on—freedom of contract, with the right to work also essentially constituting a form of ‘socialised’ freedom of contract for workers. This approach is supported by normative arguments advanced in favour of freedom of contract more generally, namely the autonomy-enhancing nature of that freedom. The traditional normative underpinnings of freedom of contract are evidently undermined when contractual arrangements are not reflective of the wishes of the parties.
Conclusion
This blogpost has outlined the argument that, understood within its proper constitutional and social dimensions, business freedoms, such as freedom of contract, are capable of encapsulating social—as opposed merely to liberal economic—rights, interests, and values, which demonstrates the normative interdependence of the freedom to conduct a business with fundamental ‘social’ rights concepts. In other words, an understanding of freedom of contract as encapsulated within the freedom to conduct a business will only ever remain ‘partial’ in the absence of a consideration of its relation to wider fundamental social rights concepts. The proposed reconceptualisation of the freedom to conduct a business in relation to its social (rights) function, provides for an understanding of that freedom that does not necessarily imply deregulatory consequences. Moreover, ‘social’ rights themselves can be constructed around the normative foundation of ‘freedom’ or ‘autonomy’ in the sense of the positive freedom to make choices, which reinforces the argument that business freedoms such as freedom of contract can be internally (re)conceived in social (rights) terms. In particular, the right to work spans the (contested) dichotomy between economic and social rights on the one hand, and civil and political rights on the other and may therefore serve to bridge the normative gap between business freedoms and the social rights found in the Charter’s Solidarity Title.
Art by Tomoko Nagao
Il quarto stato with motta, campari, pirelli, armani, prada, chicco, alitalia and visa at piazza duomo
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