EurWORK European Observatory of Working Life

Subsidiarity

The principle of subsidiarity is defined in Article 5 of the Treaty on European Union (TEU):

Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.

The institutions of the Union shall apply the principle of subsidiarity as laid down in the Protocol on the application of the principles of subsidiarity and proportionality. National Parliaments ensure compliance with the principle of subsidiarity in accordance with the procedure set out in that Protocol.

The underlying aim is to ensure that decisions are taken as closely as possible to the citizen and that constant checks are made to verify that action at EU level is justified in light of the possibilities available at national, regional or local level. Specifically, the principle asserts that the EU should refrain from taking action (except in the areas that fall within its exclusive competence) unless it is more effective than action taken at national, regional or local level. It is closely bound up with the principle of proportionality, which requires that any action by the EU should not go beyond what is necessary to achieve the objectives of the treaties.

The concept of subsidiarity was initially introduced as a result of pressure from certain regions (particularly the German federal states) to use subsidiarity as a way to protect their regional autonomy recognised at the national level, and also from certain Member States (particularly the UK) that saw in subsidiarity a tool to protect themselves against encroaching EU intervention. However, the concept as enshrined in the treaty has focused on the relations between the EU and Member States.

Key to this are two Protocols annexed to the Treaty of Lisbon. Protocol No 1 on the role of national parliaments encourages their involvement in EU activities, and requires EU documents and proposals to be forwarded promptly to the parliaments so that they can examine them before the Council takes a decision. Protocol No 2 requires the European Commission to take into account the regional and local dimension of all draft legislation and to make a detailed statement on how the principle of subsidiarity is respected. This Protocol allows national parliaments to object to a proposal on the grounds that it breaches the principle, as a result of which the proposal must be reviewed and may be maintained, amended or withdrawn by the Commission, or blocked by the European Parliament or the Council.

In the case of a breach of the principle of subsidiarity, the Committee of the Regions or EU countries may refer an adopted act directly to the Court of Justice of the European Union (CJEU).

‘Horizontal’ subsidiarity applies the concept of subsidiarity to the context of allocation and exercise of competences at the same level between the EU, the Member States and the social partners. Horizontal subsidiarity addresses the specific question of choices at the same level (whether the allocation and exercise of competences by the EU institutions or by the European social partners is preferable); and, similarly, at Member State level (whether action by the state or the social partners at national level is preferable).

In the fields of employment and industrial relations, Articles 154–155 of the Treaty on the Functioning of the European Union (TFEU) allow for EU-level action not only by EU institutions, but also by the European social partners. In addition, action at Member State level can be taken by the social partners as well as by Member State governments. The result is a choice of levels of action:

  • by the European social partners or by the EU institutions;
  • by Member State governments or by the social partners within the Member States;
  • by the social partners at either EU or national levels.

Horizontal subsidiarity is, therefore, a concept used to address the fundamental role of the social partners in the implementation of the social dimension of the EU. In 1993, in its Communication on the application of the Agreement on Social Policy, the Commission acknowledged the dual forms of subsidiarity in the social field:

on the one hand, subsidiarity regarding regulation at national and Community level; on the other, subsidiarity as regards the choice, at Community level, between the legislative approach and the agreement-based approach.

However, in its Opinion 94/C 397/17 on this Communication, the Economic and Social Committee emphasised that the criteria specified in Article 5 EC refer to vertical, not horizontal, subsidiarity. The Committee pointed out the criteria for choosing which set of actors at the same level is appropriate are not necessarily those of Article 5(3) TEU, which says:

Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.

In the case of horizontal subsidiarity, efficiency (‘sufficiently achieved’) may have to be weighed against other fundamental principles. For example, ‘efficiency’ might dictate EU or Member State action, but the long-standing hegemony of the social partners (at one or other levels of bargaining) over certain policy areas may dictate leaving it to management and labour to settle the substance of EU labour policy in that area.

Subsidiarity can be taken as a relative test between levels, so that if, for example, the social partners are unable to adopt measures, this will be a sign that the competence may be exercised at a different level. Similarly, if the EU institutions are unable to adopt measures, the social partners should exercise competence at the other level.

Since the Treaty of Lisbon came into force, national parliaments of EU Member States can object to pieces of draft legislation on the grounds of the principle of subsidiarity via the Yellow card procedure. Under Article 5(3) and Article 12(b) of the TEU, national parliaments monitor compliance with the principle of subsidiarity under the procedure set out in Protocol (No 2) on the application of the principles of subsidiarity and proportionality.

See also: Collective agreements as a mechanism for enforcement of EU law; Collective agreements implementing directives; Directives; Social competences; Treaty of the European Union.

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