The ‘normality’ of labour exploitation: The right to fair and just working conditions in the Union's social market economy

1. INTRODUCTION: THE ‘NORMAL’ EXPLOITATIVE SITUATIONS IN THE EUROPEAN UNION

Labour exploitation is a complex and ambiguous concept used to indicate a broad spectrum of conduct and material conditions. It has been described as ‘a wrongful gain for the exploiter’, determined by some weakness or vulnerability of an exploited person. ¹ According to some authors, it would be the ‘essence’ of the employment relationship, linked to structural properties of the economic systems. ² Others scholars have pointed out that ‘exploitation’ has been used as an umbrella notion, ‘a large tent covering all forms of trafficking in human beings, modern slavery, forced labour, bonded labour, child labour, forced prostitution, economic exploitation, and so on’. ³ In general terms, according to the International Labour Organisation (ILO), it would result in a working situation that differs significantly from ‘normal’ working conditions in terms of recruitment (unlawful or deceptive recruitment/intermediation), conditions of work (remuneration, hours of work, health and safety, supervision), and living conditions. ⁴ From the ILO's perspective, some of the fundamental parameters for a situation to be considered labour exploitation would essentially be drawn from the elements of the notion of ‘fair and just working conditions’ (FJWCs), as defined in Article 7 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). ⁵

However, due to its vagueness and general nature, many adjectives have been used to describe labour exploitation, such as ‘serious’ exploitation ⁶ or ‘indecent’ work. ⁷ In some juridical systems old terms are rediscovered, such as caporalato, a form of illegal recruitment and exploitation of workers through an intermediary. ⁸ The EU has introduced the concept of ‘particularly exploitative working conditions’, which are working conditions, including those resulting from gender based or other discrimination, ‘where there is a striking disproportion compared with the terms of employment of legally employed workers which, for example, affects workers’ health and safety, and which offends against human dignity’. ⁹ Labour exploitation has never been clearly defined in international and EU law. Nevertheless, if the exploitation phenomena are regarded as a spectrum, as a continuum ranging from the positive extremity (desirable situation) of decent work to the negative extremity of forced labour (the most serious form of labour exploitation), ¹⁰ it could be argued that the proliferation of pejorative adjectives to define the legal parameters of exploitation suggests that legal systems allow for a degree of exploitation that is ‘unserious’, ‘normal’, or ‘proportionate’. There would be intermediate and complex situations that violate some of the essential elements of Article 7 of the ICESCR that would not be crimes, or whose nature is ‘fluid’ and difficult to define and address effectively. ¹¹ From this perspective, they can be regarded as ‘normal’ exploitative situations, in the sense that they are generally tolerated and structurally allowed by legal systems.

In the EU context, posted workers have been subject to working conditions that fall below traditional International Labour Standards (ILS). While this is a legitimate practice and can benefit both employers and employees, there are cases where this category of workers is subject to differential treatment compared to local workers, which can result in wage differentials, lack of social benefits, and poor working conditions. ¹² The European Union Agency for Fundamental Rights (FRA), for its part, has evaluated a growing diffusion of the labour exploitation phenomenon, in all its forms, across its Members States, partly linked to the free movement of workers, freedom of establishment, and freedom to provide services. ¹³ Migrants and seasonal workers are the most affected categories, as clearly emerged during the COVID-19 crisis. ¹⁴ More generally, the European Committee of Social Rights (ECSR) of the Council of Europe (CoE) has noted a gradual erosion of labour standards in different EU Member States, describing an extremely varied framework of working rights, labour regulations, and socio-economic conditions. ¹⁵

The qualitative and quantitative dimension of the phenomenon raises several contradictions, not only in the complex national systems of worker protection, but also in the EU legal system. As is well known, the European Union Charter of Fundamental Rights (EU Charter) provides in its Title IV ‘Solidarity’ that every worker has the right to FJWCs. ¹⁶ Persistent violations of this right would then raise important legal and political questions: is it necessary (and possible) to implement social rights and improve the upward convergence of working conditions in the EU? What degree of difference in working rights within the EU is acceptable, and to what extent should companies be allowed to benefit from these differences to the (direct/indirect) detriment of the workforce?

In order to answer these questions, this article examines the relationship between the right to FJWCs and the economic dimension of the integration process, starting with an analysis of its legal basis and the Union's competences for its implementation (Section 2). By taking into account the recent legislative initiatives, the need (and the possibility) to implement social rights and to improve the upward convergence of working conditions is interpreted in the light of the general duty to protect human dignity (Section 3) and to ensure fair competition in the Single Market (Section 4). The relationship between these two fundamental principles, human dignity and fair competition, is verified through the notion of ‘social market economy’ (Section 5). The aim is to illustrate what kind of measures could (or should) be taken to integrate the protection of human rights and market efficiency, and whether in practice there seems to be an articulation between these fundamental principles or, on the contrary, an insurmountable contradiction (Section 6).

2. LEGAL BASIS AND COMPETENCES: THE DOUBLE STANDARDS ON WORKING CONDITIONS

The right to FJWCs, as already outlined in the previous pages, is explicitly provided for in Article 31 of the EU Charter, in Title IV ‘Solidarity’. It should be understood in the sense of ‘working conditions which respect […] health, safety and dignity’, ¹⁷ and includes ‘the right to limitation of maximum working hours, to daily and weekly rest periods and to an annual period of paid leave’. ¹⁸

As the official explanations elaborate, ¹⁹ Article 31 is based on several provisions of EU secondary legislation ²⁰ and international Treaties such as the European Social Charter (ESC). ²¹ The ESC provides an important source of inspiration for European legislators in the social policy field ²² and it is used by the Court of Justice of the EU (CJEU) as a source of interpretation. ²³ However, the ESC is not a binding legal source for Union authorities, and the CJEU has traditionally refused to elevate it to the same status as the European Convention on the Human Rights (ECHR). ²⁴ At the same time, while maintaining a relationship of cooperation and collaboration with the ILO, the EU refers to ILO Conventions and recommendations by preserving its autonomy. ²⁵ The drafters of the EU Charter have then exercised a wide margin of appreciation in the transposition of the right to FJWCs into the Union's fundamental rights. ²⁶ For instance, the EU Charter is silent on the right to a fair remuneration ²⁷ provided for in Article 4 of the ESC ²⁸ and Article 7 of the ICESCR. ²⁹ By pointing out that the actual provision is limited to health, safety, and dignity at work in paragraph 1, and working times in paragraph 2, it has been argued that the EU Charter ‘does not grant a general right to FJWCs’. ³⁰

This right would then present gaps when compared to the protection provided by the ESC or the ICESCR, but these would not simply be linked to the exclusion of some traditional elements of the right to FJWCs, such as the right to a fair remuneration, or to the choice of wording, which is more concise and general in the EU Charter. These would also result from the limited competences attributed to the European institutions in social matters, which have traditionally attenuated the upward convergence of working conditions. ³¹ With a view to achieving the objectives of Union social policy contained in Article 151 of the Treaty on the Functioning of the EU (TFEU), Article 153(1) of the TFEU establishes that ‘Union shall support and complement the activities of the Member States in the […] field [of] working conditions’. ³² The only Union action legitimised should be complementary, co-ordinating, and supporting in nature. Accordingly, the EU Directives implementing some aspects of the right to FJWCs leave a critical role to the Member States in determining the scope and elements of certain rights, which could potentially limit the protection of workers’ rights defined by the ILS, as in the case of posted workers, migrants, and seasonal workers. ³³ In theory, the EU Charter would not be able to overcome this lack of competence, since it ‘does not extend the field of application of Union law beyond the powers of the Union or establish any new power or task for the Union, or modify powers and tasks as defined in the Treaties’. ³⁴

In light of the above, it could be argued that the right to FJWCs enshrined in the EU Charter would be mainly a ‘principle’ rather than a free-standing ‘subjective right’, to ‘be implemented by legislative and executive acts […] [and] shall be judicially cognisable only in the interpretation of such acts and in the ruling on their legality’. ³⁵ EU institutions and Member States would be bound by general programmatic obligations, which characterise social rights, ³⁶ in relation to certain labour standards set out in secondary legislation and interpreted autonomously by the CJEU. It should be noted that in the absence of an explicit link to the relevant international instruments on workers’ rights the CJEU's use of ILS has been limited and their impact on its judgments has been minimal. ³⁷ This has allowed the EU to maintain a double standard in relation to the ILO and the CoE criteria. ³⁸ It could therefore be assumed that situations that could be legally regarded as exploitation under ILO's and CoE's standards could potentially be considered as ‘normal’ and legal on the basis of EU labour law. This would confirm the idea of ‘normality’ of the labour exploitation, where situations that violate some of the essential elements of ILS are not considered crimes and are essentially tolerated and not effectively addressed. It would also suggest that this kind of labour exploitation is partly generated by ‘structural accounts rather than interpersonal relations’. ³⁹

The effects of such ‘structural’ gaps in ILS protection can be observed, for example, in the case of the austerity measures adopted by Greece under the programmes negotiated in the loan agreements with the Troika in 2010 and 2012. These measures have been clearly condemned by the ECSR on the basis of Article 4 ESC, ⁴⁰ but have not been subject to judicial review by the juridical institutions of the Union in terms of their impact on workers’ rights. ⁴¹ This would be a case of ‘double standards’ in the protection of human rights, where the guarantees provided by the Conventions signed within the CoE would be higher and more extensive than those provided by the EU. ⁴² The measures envisaged by the ECSR as a generalised violation of labour rights were apparently considered legal and consistent with the controversial transformations of the constitutional architecture at both national and European level triggered by the sovereign debt crisis – a crisis in which ‘the agony of a pensioner who cannot live with 350 Euros per month [was] opposed to the agony of Greece who cannot live with 350 billion of debt’. ⁴³ The double standards on working conditions enshrined in EU law would reflect the controversial disparity between ‘the market’ and ‘the social’ in the European integration process, as highlighted by several authors, ⁴⁴ and which could be counterbalanced by taking into account the protection of human dignity as part of the right to FJWCs.

3. THE GENERAL DUTY TO RESPECT HUMAN DIGNITY: FAIR AND JUST WORKING CONDITIONS AS AN OPEN SCOPED RIGHT

Respect and protection of human dignity is one of the essential objectives of the FJWCs standards, which can easily be deduced from the traditional components of the right under analysis. Fair and just remuneration, safe and healthy working conditions, rest, leisure, and reasonable limitation of working hours are all essentially aimed at ensuring a decent standard of living. ⁴⁵ The non-exhaustive list of fundamental elements for the guarantee of FJWCs and the specific topics closely linked to them could be interpreted as functional and instrumental rights for the protection of human dignity. They would be part of the rights needed to implement the notion of decent work, based on the idea that work is a source of personal dignity, family stability, community peace, democracy, and economic growth. ⁴⁶ These elements would be fundamental guarantees for ‘work with dignity’. In the words of the Professor Randy Hodson,

Working with dignity is a fundamental part of achieving a life well-lived […]. Defending dignity and realizing self-respect through work are key to workers’ well-being; ensuring the dignity of employees is equally important for organizations as they attempt to make effective use of their human capital […]. ⁴⁷

It could therefore be argued that the principle of human dignity would have introduced a positive obligation for the Union to protect workers’ rights, overcoming the traditional lack of recognition of positive duties for the European institutions in relation to the human rights and their implementation. ⁵⁴ The scope of EU law could thus be extended through the fundamental principle of human dignity. By strengthening the dignitarian-social dimension of EU integration, this principle would serve as a ‘seismograph’ for changing social values in society; ⁵⁵ it would be a ‘portal through which the egalitarian and universalistic substance of morality is imported into law’. ⁵⁶ The obligation to respect human dignity would support the juridification of a minimum core of workers’ rights, which are all the more necessary in an era of precarious, underpaid, and exploited work. Indeed, the legal recognition of workers’ rights – based on human dignity – is a means, in many cases the only one, by which workers can defend themselves and their rights at work.

This idea of an ‘open’ scope of the right to FJWCs, based on its functional and instrumental nature towards human dignity, is partly suggested by the analysis of the recent Union's acts on working conditions. For instance, while not explicitly covered by Article 31 of the EU Charter, and de facto and de jure excluded by Article 153(5) of the TFEU, ⁵⁷ fair remuneration represents an important element of the recent European Pillar of Social Rights (EPSR). The right to fair wages is actually enshrined in the Chapter II ‘fair and just working conditions’ in Principle 6, ⁵⁸ which is essentially based on the ILO and the CoE definition. ⁵⁹ As is well known, the EPSR is not legally binding; as it has been argued, it does not resolve the constitutional disparity between ‘the market’ and ‘the social’ in the Union, ⁶⁰ but it is

able to put a surprising social spin on an Agenda that was threatening to erode the social acquis, it has rekindled the EU's relationship with the ILO and CoE, and it helps rebalance the EU's output by reviving the use of the Treaty's Social Title […]. ⁶¹

In this context, the idea introduced in the previous discussion according to which ‘normal’ labour exploitation is partly generated by structural accounts rather than interpersonal relations would be confirmed. Workers’ rights violations would not simply be ‘a wrongful gain for the exploiter’ determined by some weakness or vulnerability of an exploited person, in line with the interpersonal approach that characterises the focus of human rights law, ⁶⁴ they would also be partly determined by a structural legal vacuum, understood as a lack of upward convergence, implicitly recognised by the Union institutions. The difficulties in enforcing international working standards envisaged by the ILO and the CoE underpin arguments of authors who highlight the ‘structural bias in favour of liberalisation [determining the] structural economic bias fatefully and destructively affecting social policy both at the EU - and, crucially, at the domestic level’. ⁶⁵ As has been argued, structural or systemic exploitation ‘cannot be so neatly separated from interpersonal exploitation. In other words, it is doubtful whether the latter could truly materialise without being embedded in larger structural formations’. ⁶⁶

The ‘structural’ origin of labour exploitation is also partly suggested by the FRA, according to which the concept of ‘labour exploitation occurring within the framework of an employment relationship is not well understood […], resulting from a combination of risk factors [concerning] legal and institutional framework; worker's personal situation and background; workplace; behaviour of the employer’. ⁶⁷ Gaps in the protection of workers’ human dignity would be a structural risk factor that would foster structural economic problems affecting fair competition in the Single Market, as the following discussion will demonstrate.

4. THE NEED (AND DUTY) TO GUARANTEE FAIR COMPETITION: THE RIGHT TO FAIR AND JUST WORKING CONDITIONS AS A PRIOR CONDITION

Workers’ rights and fair competition are linked by a ‘born-natural’ relationship, which is reflected in the ILO Constitution ⁶⁸ and the Philadelphia Declaration. ⁶⁹ This close relation, which has been widely emphasised by several authors, ⁷⁰ is clearly linked to the ‘traditional’ concern that low labour standards may be unfair to the extent that they distort international competition, leading to the so-called phenomenon of ‘social dumping’. ⁷¹

As known, social dumping refers to the policies of exporting countries that artificially lower production costs by depressing labour rights in order to export goods to importing countries that cannot compete with the exporter's low costs. ⁷² In this context, countries with higher working standards tend to adopt ‘countermeasures’, such as countervailing duty, to protect the competitiveness of their domestic production ⁷³ or they in turn are inclined to depress national labour standards. ⁷⁴ Since trade countermeasures and countervailing duties are prohibited in the Single Market, the absence of harmonisation (or significant divergences) in labour standards could put Member States under pressure to lower their labour standards. From this perspective, the ‘structural’ nature of the recent proliferation of labour exploitation phenomena, considered as working situations that differ significantly from ILS, appears more evident. This would be an undesirable side-effect of the constitutional imbalance between ‘the market’ and ‘the social’ in the Union, jeopardising the efficiency and fairness of the Single Market by allowing companies and firms to gain a competitive advantage by paying and/or providing substandard working and living conditions. ⁷⁵

Social competition in the Single Market is a traditional issue which was first raised after the enlargement in 1973 when the UK and Ireland joined the European Communities. ⁷⁶ This would be a sensitive issue, made increasingly ‘structural’ and politically sensitive by the free movement of services, as the case of the posting of workers well demonstrates. The competitive advantage of having lower production costs, partly due to less protective labour standards, has led some companies to relocate their headquarters and/or main workplace from more expensive to cheaper Member States and to post their employees to other Member States, including the one from which they moved from. ⁷⁷ As it has been argued, the European integration would be characterised by a constant infiltration of internal market rules towards the social spheres of the Member States, which would put pressure on labour standards. ⁷⁸ With the adoption of the Posting of Workers Directive (PoW Directive), the European institutions attempted to strike a balance between free competition across borders and the protection of working standards in the host Member States. ⁷⁹ However, abuses of the posting have increased exponentially in recent years, ⁸⁰ requiring new legislative interventions such as the so-called ‘Enforcement Directive’ ⁸¹ and the recent revision of the PoW Directive. ⁸² The revised PoW Directive reinforces the nucleus of mandatory rules for minimum protection to be respected in the host country, ⁸³ confirming the idea that adequate protection of workers’ rights is ‘structurally’ linked to the safeguard of fairness in the market. ⁸⁴

At the same time, it could be argued that flexibilisation and digitalisation have increased geographical and occupational mobility, making physical detachment less and less necessary for different services and in different economic sectors. Consequently, the promotion of a common upward social convergence seems urgent to ensure that the competitive advantage of each national system is based on its efficiency and not distorted by the downgrading of labour rights. This would be a general and ‘structural’ need, not clearly limited to the traditional cross-border situations, ⁸⁵ as is partly suggested by the recent proposal for a Directive ‘on improving working conditions in platform work’. ⁸⁶ Indeed, the European Economic and Social Committee (EESC), in its opinion on this proposal, has argued that

different forms of labour relations, and of low individual and collective protection at national level are multiplied at EU level, thus creating conditions for social dumping and unfair competition that threaten the very effectiveness of European and national labour protection standards […]. ⁸⁷

In this context, the promotion of a common upward convergence of working conditions is not simply an implementation of the traditional workers’ rights, but an important condition for ensuring efficiency and fair competition in the Single Market. In this sense, it would be transversal, affecting social rights and market efficiency at the same time, and it could be approached from different angles and theoretically supported by different legal bases. Indeed, the purpose of the proposal for a Directive ‘on improving working conditions in platform work’, as well as that of the Minimum Wages Directive, is presented as a real synthesis of two objectives enshrined in Article 3 of TEU, namely ‘to promote the well-being of its peoples [Article 3(1) TUE] and to work for the sustainable development of Europe based on a highly competitive social market economy [Article 3(3) TUE]’. ⁹⁰ The balance should therefore be sought between the well-being of the peoples of the Union (including workers, posted workers, and service providers) and fair competition in the economic market, as suggested by the notion of ‘social market economy’.

5. THE SOCIAL MARKET ECONOMY: ENLARGING AND ALTERING THE SCHEME AND THE SUBSTANCE OF THE INTEGRATION PROCESS

The Union concept of ‘social market economy’, enshrined in Article 3(3) TEU, has its origins in the German ordoliberalism. ⁹¹ Its explicit introduction with the Lisbon Treaty, which binds the EU ⁹² and it is used as a yardstick by the CJEU, ⁹³ has been interpreted as a notion that would turn the market into an instrument of social integration. ⁹⁴ It would represent the ‘European way’ of protecting the dignity of the individual that could be annulled by the market completion interests. ⁹⁵ On the basis of the idea that objectives serve to bolster arguments for shaping the Union's powers, founding competences, and obligations for positive action, ⁹⁶ it could then be assumed that the traditional lack of competences on working conditions could be overcome with the additional support of the Article 3(3) TEU.

While there is no consensus on its effective impact on the European institutions’ competences, ⁹⁷ some authors have interpreted the explicit introduction of the social market economy's notion as a new basis for positive action. ⁹⁸ It would be a limiting principle able to break any further development of European integration in one-sided direction. ⁹⁹ At the same time, it would contain the idea that European integration should not be pursued at the expense of the integrity of the Member States’ social systems, ¹⁰⁰ which has been widely expressed during the eastward enlargement of the Union. ¹⁰¹ As it has been argued, the inclusion of the concept of a social market economy confirms the desire to find a new equilibrium and to fight the social deficit of the Union. This would imply a double operation: enlarging the scheme of integration and altering the substance of integration. ¹⁰² The analysis of the secondary Union law in the previous discussion, whereby we argued for an open scope of the right to FJWCs, would suggest that this double operation is currently being carried out by European institutions.

The Regulation (EU) 2019/1149 establishing a European Labour Authority (ELA) ¹⁰³ and the Directive (EU) 2019/1152 on transparent and predictable working conditions ¹⁰⁴ would confirm the current enlargement of the integration scheme, which could alter its substance. The Commission justified the establishment of the ELA on the basis of the obligation to protect the human rights of mobile workers, who are ‘vulnerable to abuse or being denied their rights,’ and to address concerns involved in ‘businesses operating in an uncertain or unclear business environment and unequal playing field.’ ¹⁰⁵ Referring emphatically to Articles 3(3) of the TEU, ¹⁰⁶ Regulation (EU) 2019/1149 envisages the ELA as a key first step towards a European network for the governance of the European labour market, requiring significant action by national authorities in terms of services to vulnerable workers and support to businesses. In addition to inspection and information tasks, Regulation 2019/1149 stresses that the ELA should cooperate in other relevant Union initiatives and networks. ¹⁰⁷ The ELA will be fully operational with effect from 2024. Its contribution therefore remains to be verified. However, Article 3(3) of the TEU would have justified a positive and operational intervention of the European institutions, according to which the protection of human rights and market efficiency would be cornerstones of the European social market economy. These would be two principles of the Union's social market economy, the consistent application of which would have to be guaranteed by a centralised action of the European authorities. ¹⁰⁸ This would mark a clear extension of the integration scheme, capable of altering its substance, confirming that the Union is not necessarily a mere reflection of market completion interests.

The possibility of expanding the integration scheme, altering its substance, could also be linked to the obligation to interpret the fundamental freedoms ‘in the light of the social provisions introduced by the Lisbon Treaty’. ¹⁰⁹ One of these is the ‘cross-cutting’ social protection clause, contained in Article 9 of the TFEU, also known as the ‘horizontal social clause’ (HSC), which requires the institutions ‘to take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health’. ¹¹⁰ While not introducing an ad hoc legal basis for the realisation of its objectives, ¹¹¹ Art 9 of the TFEU establishes a link between the general integration objectives set out in the introductory articles of the TEU and the specific tasks and powers conferred to the EU in the following Titles of the TFEU. ¹¹² It would namely integrate objectives into each policy and activity that go beyond those specifically established by each legal basis, thus allowing for the adoption of an integrated and holistic approach to economic and social policies. ¹¹³

In the light of the above, the idea of guaranteeing social rights only in the areas where competences have been attributed to the Union seems questionable for at least two reasons: first, it could be argued that a commitment to respect a right does not necessarily entail the power to take measures to fulfil that right, but could simply imply a non facere obligation, that is a general obligation to refrain from taking measures that could (directly or indirectly) undermine it. ¹¹⁴ Second, the instrumental rights to FJWCs could be understood as transversal rights, which relate to other fundamental rights, such as human dignity, and fundamental principles, such as fair competition. The possibility of addressing working conditions issues on the basis of different rights or principles, together with Article 153(1) of the TFEU, is partly suggested by the case law of the CJEU on the application of the principle of non-discrimination between workers. In the famous Del Cerro Alonso case, for example, the CJEU stated that ‘the pay exception cannot be extended to any question involving any sort of link with pay; otherwise some of the areas referred to in Article 137(1) EC [actual Article 153(1) of the TFEU] would be deprived of much of their substance’. ¹¹⁵ This position was partly confirmed in the Impact case, ¹¹⁶ where the Court underlined that the national competence on pay issues must nevertheless be exercised ‘consistently with Community law’. ¹¹⁷ In this context, it could be deemed that a common action aimed at integrating ILS into the Union's legal order should, in theory, be consistent with the distribution of competences between the Member States and the Union as long as it defines a ‘general yardstick’ for assessing, on a case-by-case basis, whether European and national measures undermine human dignity or jeopardise fair competition.

According to the settled case-law of the CJEU, the regulation of FJWCs can therefore be founded on the various corresponding legal bases, ¹¹⁸ including the legal bases for the approximation of laws (Articles 114–118 of the TFEU). In light of above, it could be argued that the adoption of harmonisation acts on working conditions contributes to the objective of eliminating the existing or potential obstacles to the functioning of the internal market; the divergences between national laws, which could trigger social dumping, could clearly cause significant distortions of competition. ¹¹⁹ Furthermore, it could be noted that the use of Article 114 of the TFEU in conjunction with Article 9 of the TFEU and other legal bases that only allow for supporting, coordinating, or complementary actions has been admitted by the CJEU. ¹²⁰ The use of Article 114 of the TFEU would mark a creeping erosion of the Member States’ competences, by allowing the circumvention of the limits laid down in Article 153 of the TFEU.

We could also assume that the European acts defining FJWCs would be fundamental legal parameters to define the notion of social dumping introduced by the famous Laval case. ¹²¹ As is well known, in this case the Court has included social dumping within the conceptual framework of the overriding reason of the public interest, thus without defining or specifying what is meant by ‘social dumping’. ¹²² The lack of legal parameters for assessing the manifestation of unfair social competition in practice is particularly dangerous for economic integration. As Advocate General Szpunar argued,

there is the inherent danger that social dumping becomes more of a political term, rather than a legal one, a political term typically resorted to in economies with a well-developed infrastructure [to protect] domestic industry against cheaper competition from another Member State […]. ¹²³

6. CONCLUSIONS

By answering the questions posed at the beginning of this article, it can be concluded that it is necessary and possible to implement social rights and improve the upward convergence of working conditions in the EU. The fundamental criteria for defining the acceptable degree of differences in working rights within the EU should, in theory, be the standards provided by the ILO and the CoE. Indeed, in the previous discussion it was emphasised that the absence of an explicit link to the relevant international instruments on workers’ rights would lead the EU law to tolerate and include situations that would be considered exploitation under ILO's and CoE's standards. The cited case of the austerity measures adopted by Greece during the sovereign debt crisis is the most famous case. However, there is a clear risk of conflict and divergent interpretations when the same situation is assessed under different sets of standards. ¹²⁴

As argued above, the need for common action is suggested by the recent legislative initiatives of the European institutions, which have implicitly recognised the existence within the Single Market of a legal vacuum, understood as a lack of upward convergence capable of tolerating as ‘normal’ a situation otherwise considered as exploitative. The Minimum Wages Directive, for example, could be seen as a genuine political manifesto acknowledging that working conditions are substandard at Union level and that a common solution should be adopted to guarantee human dignity and fair competition. It would also confirm the idea that the proliferation of labour exploitation phenomena, considered as working situations that differ significantly from ILO standards, is partly linked to this legal vacuum. In the absence of harmonisation of labour standards or in the case of significant divergences, Member States with higher working standards would be inclined to depress national labour standards in order to protect the competitiveness of their domestic production, as traditional measures against social dumping, such as trade countermeasures and countervailing duty, are prohibited in the Single Market.

The controversial case of social dumping in the Single Market illustrates how the phenomenon of the ‘normal’ labour exploitation is to some extent ‘structurally’ favoured by the controversial imbalance between ‘the market’ and ‘the social’ in the Union. The constant infiltration of internal market rules into the Member States’ social spheres, which is not supported by an effective harmonisation based on the ILS, makes individual countries reluctant to improve their working standards because of the perception that this could negatively affect their external cost competitiveness. As the Commission and the European Parliament (EP) have well argued on several occasions, competition in the Single Market risks being a ‘social competition’, based more on lowering social standards than on innovation and productivity. The current reality of the integration process would definitively refute the long-dominating idea formulated by the famous Ohlin Report, according to which ‘the improvement of living standards and labour conditions in the common market should essentially result from the functioning of the market itself’. ¹²⁵

Assuming that the current legal vacuum is potentially at odds with the principle of human dignity enshrined in Article 2 of the TEU, as partly shown in the previous discussion, the European institutions and Member States would be obliged to positively implement social rights and improve the upward convergence of working conditions. The cross-cutting social protection clause, embodied in Article 9 of the TFEU, requires institutions ‘to take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health’. ¹²⁶ The inclusion of the concept of social market economy in Article 3 of the TEU, based on the protection of social rights and market efficiency, would have introduced a general obligation to seek a new equilibrium and to combat the Union's social deficit. The two principles of the Union's social market economy, the protection of social rights and market efficiency, would not be mutually contradictory; on the contrary, the former appears to be a fundamental condition for market efficiency.

From this perspective, the right to FJWCs could be interpreted as a functional and open right covering all working conditions, even those not explicitly mentioned in the EU Charter, such as remuneration, sexual harassment, or offensive actions against workers, insofar as they may affect human dignity and fair competition. The general duty in Article 31(1) of the EU Charter to respect the dignity of workers, seen as a new and increasingly important social right of the individual worker, would be a specific application of the fundamental principle of human dignity enshrined in Article 2 of the TEU. This principle has been interpreted as a ‘seismograph’ for changing social values in society ¹²⁷ and as a ‘portal through which the egalitarian and universalistic substance of morality is imported into law’, ¹²⁸ capable of extending the scope of Union law and broadening its model of integration. As a result, it could be argued that Article 31 of the EU Charter can support the juridification of a minimum core of labour rights aimed at addressing the imbalance between ‘the market’ and ‘the social’ in the Union. In theory, the duty to respect the dignity of workers should counterbalance and mitigate, for example, the negative effects of the instrumentalisation of the posted workers as a ‘service’, which has essentially denied their fundamental status as workers under EU law and their right to equal treatment. At the same time, Article 31 of the EU Charter could be the legal basis for supporting the general improvement of some aspects of working conditions, such as the so-called ‘agency’, which contribute to ‘dignify’ workers, increasing job satisfaction, productivity, and the overall organisational success. ¹²⁹ This would clearly contribute to a strong reaffirmation of the tenet according to which ‘labour is not a commodity’ ¹³⁰ or a simple cost of production. ¹³¹

It has also been pointed out that the lack of assigned competences in a specific social field is not an insurmountable obstacle. First, respecting a right does not necessarily mean having the power to take measures to fulfil that right; it could simply involve a general obligation to refrain from adopting measures that could directly or indirectly undermine the right, known as a non facere obligation. Second, the instrumental rights of FJWCs could be regarded as transversal rights; these rights would be linked to other fundamental rights, such as human dignity, and to fundamental principles, such as fair competition. Indeed, it has been namely argued that a common action on working conditions could theoretically be founded on Articles 9 and 114 of the TFEU. The introduction of the notion of social market would imply an enlargement and alteration of the integrative scheme, based on the assumption that divergences between national laws, giving rise to social dumping phenomena, could clearly cause significant distortions of competition. This would efficiently complete the Union's shift in political-economic approach to social competition in the Single market, by essentially redefining the Union as an entity of general competence over working conditions in the spheres of the powers conferred. It would be possible to dynamically extend the scope of the Treaty by adopting acts in accordance with the powers provided for in the Treaty. In cases where the adoption of an act coordinating and complementary in nature is clearly insufficient to guarantee the worker's dignity and fair competition in the Single Market, it would be possible to establish a common action under Article 114 of the TFEU with the additional support of the HSC.

The EU legal order would provide tools and legal bases to limit and combat gaps in the protection of workers’ rights, which represent a structural risk factor favouring the proliferation of ‘normal’ labour exploitation phenomena and affecting fair competition in the Single Market. The promotion of common upward social convergence should be an urgent priority to ensure that the competitive advantage of any national system is based on its efficiency and is not distorted by the downgrading of labour rights. This contribution has shown how new European authorities, such as the ELA, and legal measures, such as the legislative actions taken under the EPSR, are emerging and are potentially altering the substance of the integration process. This would be consistent with the duty imposed by the EU Charter ‘to exercise whichever powers it has been attributed in such a way as to ensure the effective protection and promotion of the rights contained therein’. ¹³² While the interpretation put forward in this discussion would represent a significant change in the Union's traditional approach to working conditions, it would ask nothing of the Union that it cannot already give.

European institutions and Members States are currently confronted with a permanent and conflicting tension between the traditional position of the Ohlin Report and the growing understanding of the need to achieve similar working conditions in States competing in the same market. These positions probably reflect, on the one hand, the fear of States with lower working standards of a reduction in their comparative advantage and, on the other hand, the desire of States with higher working standards to protect their domestic industries. The creation of a social market economy calls for the reconciliation of these tensions by developing the social dimension of the Union. In a longer perspective, the aim should be to implement ILO's and CoE's working standards in the EU legal order in order to reduce the risk of tolerating and considering as normal different working conditions that, on the contrary, represent real labour exploitation phenomena.

The efficient application of international working standards is in line with the Treaties and the current spirit of the integration process, and it would help ‘to lay the foundations of an ever closer union among the peoples of Europe, […] to ensure the economic and social progress of their States, [and] the constant improvements of the living and working conditions of their peoples’. ¹³³