Definition
The term ‘collective bargaining’ refers to all negotiations between trade unions and employers to determine working conditions and terms of employment, including issues related to pay and working time, and to regulate relationships between employers and workers, as outlined in Convention No. 154 of the International Labour Organization.
Background and status
When social partners reach an agreement, it needs to be determined if the agreement must comply with EU competition law. Competition law prohibits anti-competitive agreements, in particular when agreements are concluded with self-employed people. Article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibits anti-competitive agreements and decisions of associations of undertakings that prevent, restrict or distort competition within the European single market. Collective agreements between employers and employee representatives aim to, among other things, eliminate wage competition among workers and employers by determining wages and conditions, thereby fixing the price of labour in a way that may bring the agreements into conflict with competition law.
Regulatory aspects
EU Court of Justice ruling on the Albany case
On 21 September 1999, the Court of Justice of the European Union (CJEU) gave its ruling on a case brought by the Dutch textile company Albany.
Albany was trying to exempt itself from a deal between the textile unions and employers in the Netherlands. This deal established a pension fund system for workers in the sector that was made compulsory for all companies in the sector by the Dutch Minister for Social Affairs and Employment. Albany used the competition rules (now Article 101(1) of the TFEU) as a basis for claiming that mandatory affiliation in the pension scheme compromised its competitiveness.
The court, in its ruling, emphasised the social policy objectives of the TFEU, which are given equal weight to those regarding competition. It focused on the provisions of Articles 151–154, which emphasise the importance of promoting social dialogue and collective bargaining between employers and workers, including at EU level. The court stated:
'It is beyond question that certain restrictions of competition are inherent in collective agreements between organisations representing employers and workers. However, the social policy objectives pursued by such agreements would be seriously undermined if management and labour were subject to Article 85(1) (now Article 101 TFEU) of the Treaty when seeking jointly to adopt measures to improve conditions of work and employment.'
Collective bargaining and the ‘false self-employed’
Since the decision of the CJEU in the Albany case, it has been recognised that collective agreements between organisations representing employers and workers are not subject to Article 101 of the TFEU when they seek to jointly adopt measures to improve the conditions of work and employment. However, the situation is different for self-employed workers.
Indeed, since self-employed workers are considered as ‘undertakings’, agreements concluded with them may conflict with EU competition rules. For instance, in a case from 2014 relating to minimum pay for self-employed musicians, the CJEU ruled that a union representing self-employed people was not representing the interests of workers and, therefore, should be considered an association of undertakings. Collective agreements concluded in this context did not benefit from automatic anti-trust immunity. However, the court stated that collective agreements involving service providers may be exempt from the rules in Article 101 of the TFEU if these service providers are ‘in fact 'false self-employed', that is, service providers in a situation comparable to that of employees’.
Collective bargaining and the self-employed
After these judgments, there was still some uncertainty regarding other self-employed workers. Furthermore, the previously fairly minor issue of access to collective bargaining for self-employed workers is becoming much more acute with the rise of the platform economy, which generally makes use of this type of worker. Therefore, in June 2020, the Executive Vice-President of the European Commission, who oversees competition policy, stressed that ‘competition rules are not there to stop workers forming a union’ and that there was therefore a ‘need to provide clarity to those who need to negotiate collectively in order to improve their working conditions’. Over two years later, on 29 September 2022, the Commission adopted guidelines on the application of EU competition law to collective agreements regarding the working conditions of solo self-employed people. These guidelines specify the circumstances in which certain self-employed workers who are in a situation comparable to that of employees can group together for collective bargaining purposes in order to secure better working conditions, without infringing EU competition law. The guidelines apply to solo self-employed people who (1) provide services exclusively or predominantly to one undertaking; (2) work side by side with workers; or (3) provide services to or through a digital labour platform. The Commission explains that it will not enforce EU competition rules against collective agreements made by solo self-employed people who are in a weak negotiating position.
Related dictionary terms
Collective bargaining ; coordination of collective bargaining ; derogation ; right of collective bargaining ; self-employed person ; social dialogue
Please note: the European industrial relations dictionary is updated annually. If errors are brought to our attention, we will try to correct them.