Class struggle in the shadow of Luxembourg. The domestic impact of the European Court of Justice's case law on the regulation of working conditions

Abstract

In recent years, the European Court of Justice (ECJ) has extended the scope of the four fundamental freedoms to politically and economically highly sensitive areas such as the right to strike and the regulation of working conditions of posted workers. This article analyses the domestic impact of two of the most controversial judgments -Laval (C-341/05) and Rüffert (C-346/06) -in Denmark, Sweden and Germany. In order to explain the different outcomes of the national adaptation processes, the article connects the literature on judicial Europeanization with political economy perspectives on the role of employers in economic and social regulation. The findings show that the differences between the cases can be traced back to different preferences of employers towards wage competition. The reason for this is that the ECJ's case law has shifted the balance of power between labour and capital in the domestic arenas in favour of business.

Extra‐Institutional Changes under Pressure from Posting

“…For those arguing that national institutions can be maintained, Denmark has been highlighted as an exemplary case in performing regulatory reforms that accommodate pressure from EU law. This is a very diplomatic description compared to most assessments of the Swedish reform, which Seikel characterized as a case of 'regulatory surrender' (Bruun and Malmberg 2011; see also Rønnmar 2010;Seikel 2015Seikel : 1176Woolfson et al 2010). Luxembourg's response to the ECJ rulings 'was a step back' (Blauberger 2011: 123) from the initial implementation of the Posting of Workers Directive, and in Germany, Länders suspended existing demands for 'social considerations into public procurement legislation' and then gradually explored new ways to reintroduce them (Blauberger 2011: 121).…”

“…While Blauberger (2011) claims that member states can resolve challenges from above by performing regulatory reforms, closer scrutiny shows that this is illustrated only in the Danish case. As such, it appears that the strong 'societal consensus' (Blauberger 2011: 118) or 'cross-class coalition' (Seikel 2015(Seikel : 1176 has made Denmark the place where regulatory reforms have been most successful. Regarding Sweden and Denmark, Blauberger argued that both managed to preserve the autonomy of collective bargaining but acknowledged that Sweden pursued a more cautious and legalistic reform that granted less autonomy to collective bargaining.…”

“…This is not the impression one gets from reading Blauberger (2011) and Seikel (2015), who both rightly observe a swift compromise retaining much of the traditional Danish bargaining model after the Laval ruling. This is not the impression one gets from reading Blauberger (2011) and Seikel (2015), who both rightly observe a swift compromise retaining much of the traditional Danish bargaining model after the Laval ruling.…”

“…Seikel (2015) argues that it was pre-existing conflicts which caused posting to be politicized in Sweden and (to some extent) Germany. In the month leading up to the 2012 bargaining round, a major modernization of the collective agreement had been prepared by the social partners in construction.…”

“…Another strand of literature emphasizes a pressure from below caused by increasing use of posting. While these studies acknowledge the existence of pressures, they argue that some countries have been able to preserve their institutions through minor adaptations (Blauberger 2011;Menz 2005;Seikel 2015). Drawing on both strands of literature, Bosch and Weinkopf (2013) argue that posting has forced all host countries to change their wage-setting systems in various ways.…”