On Wednesday 21 December, the European Court of Justice ruled that EU Directive 98/59/EC on collective redundancies does not prevent member states from opposing such redundancies as a last resort, when conciliation fails, for overriding general interest such as protection of workers and jobs (Case C-201/15).
Such a decision would, however, need to take fair account of all interests involved and be based on clear, detailed criteria that eliminate any possible legal uncertainty for employers as far as possible.
In this case, the Greek council of state asked the European judges whether Greek rules allowing an administrative authority to oppose collective redundancies after considering three conditions – the state of the labour market, the company’s situation and the interests of the national economy – complied with EU Directive 98/59/EC and the freedom of establishment guaranteed by the treaties (the main cause concerns French cement manufacturer Lafarge). If not, it asks whether this Greek legislation could be considered compatible anyway because of the acute economic crisis and extremely high unemployment levels in Greece.
In its reply, the Court says firstly that the directive does not oppose the Greek rules as long as the latter do not remove the directive’s effectiveness by de facto depriving employers of the option of collective redundancies through over-broad criteria applied by the national authority. The Greek council of state needs to verify whether this is the case.
Secondly, the European judges say that the rule in question does in fact obstruct the freedom of establishment in that it is likely to dissuade foreign operators wishing to adjust their employee numbers from setting up in Greece. However, the judges say that the criteria laid down in the rule are such that the company’s situation and the state of the labour market can a priori be attached to legitimate general aims such as protection of workers and employment, objectives that can justify such a restriction on the freedom of establishment. The judges say, however, that these criteria are worded too vaguely and generally, placing employers in legal uncertainty and leaving the Greek authorities a margin of appreciation that is difficult to control.
Moreever, the third criterion used by the authorities – the interests of the national economy – is an economic condition that cannot justify restrictions on the freedom of establishment.
Finally, in answer to the second question, the Court says that the existence of an acute economic crisis and particularly high unemployment levels in Greece are not factors likely to justify a derogation to EU rules. (Original version in French by Francesco Gariazzo)