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HEADNOTES
1) In the settled opinion of the Constitutional Court (see findings file no. Pl. ÚS 24/99, Pl. ÚS 5/01, Pl. ÚS 39/01 – published in Collection of Decisions, vol. 18, p. 135 et seq., vol. 24, p. 79 et seq. and vol. 28) an essential component of a democratic state governed by the rule of law is protection of the freedom of contract, which is a derivative of constitutional protection of the right to property under Art. 11 para. 1 of the Charter (the fundamental component of which is ius disponendi). Tied to the very nature and purpose of collective bargaining, the institution of their extension, i.e. the possibility of extending the normative over the obligation-creating effect of a collective bargaining agreement, thus, from a constitutional law viewpoint, establishes conflict between the restriction on property rights under Art. 11 of the Charter and the public good under Art. 6 of the European Social Charter, published under no. 14/2000 Collection of International Treaties, in connection with Art. 1 of the Constitution and Art. 27 of the Charter.
If the starting point for constitutional acceptability of extending the
applicability of higher level collective bargaining agreements is
European democratic legal experience and the standards arising from it,
comparison with European Union law, as well as finding a procedural
mechanism to ensure a balance between legal protection of freedom and
guaranteeing the internal peace of human society, in the adjudicated
context the related aims can be achieved only at the price of
restricting property rights. However, the priority given to the public
good over the right to property must be conditioned on the legitimacy
(representativeness) of the collective bargaining system, so by the
relevance of the contracting parties’ market share in a given field.
Further, the requirement of minimizing the interference in a fundamental
right or freedom, which is part of the principle of proportionality,
also gives rise to the safeguard that this measure must be exceptional,
and the related maxims for the norm creator to accept extending the
applicability of a collective bargaining agreement only in
extraordinarily justified cases of the public interest.
2) Thus, an individual regulation contained in a legal regulation which deprives the addressees of the possibility of judicial review of whether the general conditions of a normative framework have been met concerning a particular entity, a regulation which lacks transparent and acceptable justification within the general possibility of regulation, must be considered inconsistent with the principle of a state governed by the rule of law (Art. 1 of the Constitution), to which the separation of powers and judicial protection of rights is immanent (Art. 81, Art. 90 of the Constitution). These derogatory grounds for judicial review of constitutionality apply fully to evaluating the constitutionality of § 7 of the Collective Bargaining Act. It is fully up to the legislature whether it sets the procedure for extending applicability in the form of administrative proceedings with the possibility of judicial review (as the Constitutional Court indicated in its resolution of 11 July 2002 file no. IV. ÚS 587/01) or in the form of a general normative definition of an entire group of employers to which the extension applies, with the possibility of judicial review of the fulfillment of subsumptive conditions (e.g. in a dispute on the exercise by an employee of claimed entitlements arising from a higher level collective bargaining agreement, or judicial review of administrative decisions concerning, e.g., inspection of working conditions).
2) Thus, an individual regulation contained in a legal regulation which deprives the addressees of the possibility of judicial review of whether the general conditions of a normative framework have been met concerning a particular entity, a regulation which lacks transparent and acceptable justification within the general possibility of regulation, must be considered inconsistent with the principle of a state governed by the rule of law (Art. 1 of the Constitution), to which the separation of powers and judicial protection of rights is immanent (Art. 81, Art. 90 of the Constitution). These derogatory grounds for judicial review of constitutionality apply fully to evaluating the constitutionality of § 7 of the Collective Bargaining Act. It is fully up to the legislature whether it sets the procedure for extending applicability in the form of administrative proceedings with the possibility of judicial review (as the Constitutional Court indicated in its resolution of 11 July 2002 file no. IV. ÚS 587/01) or in the form of a general normative definition of an entire group of employers to which the extension applies, with the possibility of judicial review of the fulfillment of subsumptive conditions (e.g. in a dispute on the exercise by an employee of claimed entitlements arising from a higher level collective bargaining agreement, or judicial review of administrative decisions concerning, e.g., inspection of working conditions).
CZECH REPUBLIC
CONSTITUTIONAL COURT
JUDGMENT
IN THE NAME OF THE CZECH REPUBLIC
The
Plenum of the Constitutional Court, after oral proceedings on 11 June
2003, decided in the matter of a petition from a group of 52 deputies of
the Chamber of Deputies of the Parliament of the Czech Republic, in
whose name deputy A. P. is authorized to act, to annul § 7 of Act no.
2/1991 Coll., on Collective Bargaining, as follows:
The provision of § 7 of Act no. 2/1991 Coll., on Collective Bargaining, is annulled as of 31 March 2004.
REASONING
I.
On
8 November 2002 the Constitutional Court received a petition from a
group of 52 deputies of the Chamber of Deputies of the Parliament of the
Czech Republic to annul § 7 of Act no. 2/1991 Coll., on Collective
Bargaining.
The petitioner
first recapitulates the content of the contested statutory provision,
which permits the Ministry of Labor and Social Affairs (the “Ministry”)
to provide by legal regulation that a higher level collective bargaining
agreement is binding on employers who are not members of the employer
organization which concluded the agreement. It points out that the legal
framework distinguishes between a collective bargaining agreement
concluded between the appropriate union body and an employer (a
“company” agreement) and a collective bargaining agreement concluded for
a greater number of employers between the appropriate union body and
the employer organization or organizations (a “higher level collective
bargaining agreement”), and it points to § 20 of the Labor Code and to
the Collective Bargaining Act. In terms of their content, it points out
that these agreements are of a partly normative character, in relation
to employee entitlements based on the employment relationship, and
partly of an obligation-creating nature, i.e. they set the mutual
obligations of the parties to the agreement. From the point of view of
evaluating the general character of collective bargaining agreements,
the petitioner classifies them with private law agreements, in which it
is typical that the parties to the agreement regulate their
relationships voluntarily, on the basis of an expression of their free
will. It considers a legal framework which would limit the free will of
contracting parties in private law agreements to be inconsistent with
Art. 1 of the Constitution of the Czech Republic (the “Constitution”),
which provides that the Czech Republic is a democratic state governed by
the rule of law. The petitioner includes the freedom to enter into
private law relationships among the attributes of a state governed by
the rule of law.
In the
petitioner’s opinion, inconsistently with this requirement that Art. 1
of the Constitution places on the legal regulation of the freedom of
contractual relationships, § 7 of the Collective Bargaining Act permits
the Ministry to provide by legal regulation (decree) that a higher level
collective bargaining agreement is binding on employers who are not
members of the employer organization which concluded the agreement. The
petitioner believes that this violates an age-old legal principle which
is part of European legal culture, the principle that a contract can
regulate only relationship between the parties to it, as the state is
assuming the right to extend the application of an entire higher level
collective bargaining agreement, in its own discretion, to subjects
other than those which concluded it, and which thus did not demonstrate
the intent to regulate their relationship in this manner. In this
regard, the petitioner also points to the practice of the Ministry
which, although it asks employers who are not members of employer
associations in writing for their position on extending the binding
effect of the agreement, goes ahead with extension regardless of the
position they express.
Concerning
the obligations arising for an employer from higher level collective
bargaining agreements, the petitioner states that these are, in
particular, the setting of wage conditions, lengthening of convalescence
leave and setting other, as a rule above-standard, labor law
entitlements of employees, and these obligations are set by a mere
sub-statutory act (a decree), yet they are enforceable in judicial
proceedings (§ 20 par. 3, § 207 of the Labor Code). In the petitioner’s
opinion, this procedure, established by § 7 of the Collective Bargaining
Act, also establishes inconsistency with Art. 2 para. 4 of the
Constitution and with Art. 2 para. 2 and 3 and Art. 4 para. 1 of the
Charter of Fundamental Rights and Freedoms (the “Charter”), which set
constitutional limits on the ability to statutorily limit freedom, and
also with Art. 11 para. 1 and 4 of the Charter, in connection with
restriction of property rights tied to extension of the binding nature
of higher level collective bargaining agreements.
The
petitioner also points to the fact that the institution of
overextending the binding effect of a higher level collective bargaining
agreement may also have unfavorable effects on employees, because under
§ 4 para. 2 let. c) of Act no. 2/1991 Coll., a (company) collective
bargaining agreement is invalid if it guarantees employees wage
entitlements in a scope greater than that set by a higher level
collective bargaining agreement as the highest permissible, i.e. invalid
in the amount exceeding this highest permissible scope.
The
petitioner considers another deficiency of the contested statutory
regulation to be the fact that an employer to which the binding effect
of an agreement is extended has practically no opportunity to defend
itself against that step. When extending the binding effect of
collective bargaining agreements the Ministry does not issue any
decision which would apply to individual employers (i.e. a decision of
the nature of an administrative decision), against which means of
redress exist. From the point of view of protecting the right to
possible procedural means, the petitioner points out that issuing a
decree can not be considered a measure under the Act on the
Constitutional Court, and the process which takes place before issuing a
decree extending the binding effect of a higher level collective
bargaining agreement is a legislative process, and thus, from the
position of those on whom obligations are imposed, it is not subject to
possible legal review. The petitioner points out that including a
particular employer on a list which is an appendix to the decree under §
7 of the Collective Bargaining Act is, by its nature, de facto a
decision which can interfere in the rights of an employer which,
however, is not provided procedural protection under Art. 6 para. 1 of
the Convention on Protection of Human Rights and Fundamental Freedoms
(the “Convention”).
From an
empirical point of view, the petitioner states that in 2001 alone
decrees no. 238/2001 Coll., no. 300/2001 Coll., no. 303/2001 Coll. and
no. 417/2001 Coll. extended the binding effect of seven higher level
collective bargaining agreements to a total of 3,860 employers – legal
entities and natural persons. In 2002, as of the day the petition was
filed, decrees no. 81/2002 Coll., no. 223/2002 Coll., no. 300/2002
Coll., no. 301/2002 Coll., no. 302/2002 Coll., no. 409/2002 Coll. and
no. 410/2002 Coll. did so to a total of 2,282 employers. Thus, according
to the petitioner, some higher level collective bargaining agreements
are, on the basis of a sub-statutory legal regulation, binding on a
greater number of employers than the number for which they were
concluded. In the petitioners opinion, a minority of employers thus
forces its will on the majority in a given sector or field, which the
petitioner considers inconsistent with the rights arising from Art. 26
of the Charter.
In this
regard, the petitioner points to the fact that, although under § 7 para.
2 of the Collective Bargaining Act the binding nature of a higher level
collective bargaining agreement can be extended only to an employer
with similar activities and similar economic and social conditions, the
procedure applied by the Ministry does not guarantee that this rule will
be observed, because – with such a great number of affected employers –
the individual conditions of individual employers are not reviewed, nor
can they be. Due to the foregoing, a number of them may find themselves
in a difficult economic situation, which applies particularly to small
businesses.
In terms of the
certainty and understandability of the text of the contested statutory
provision, the petitioner considers the expression “employers with
similar activities and similar economic and social conditions, with
their registered address in the appropriate republic,” to be disputable,
in view of meeting the elements contained in it.
The
petitioner also argues with the purposes of extending the applicability
of collective bargaining agreements. It points out that they consist of
an effort to create the same of comparable conditions in a competitive
environment, as well as the same or comparable social conditions for
employees. However, in the petitioner’s opinion, extending the binding
effect of a higher level collective bargaining agreement, in the manner
provided in § 7 of Act no. 2/1991 Coll., not only does not support
competition, but, on the contrary, restricts it, by setting conditions
for the conduct of business for employers who are not members of the
relevant employer association – regardless of their specific
possibilities. If the state subjects employers who are not members of
the relevant employer association to a legal regime which is the result
of collective bargaining, then, according to the petitioner, it
discriminates against these employers and also indirectly pressures them
to join the employer association, which the petitioner considers
inconsistent with the right of the freedom of association under Art. 27
para. 1 of the Charter.
In
view of all these arguments, the petitioner proposes that the
Constitutional Court annul § 7 of the Collective Bargaining Act due to
inconsistency with Art. 1 and Art. 2 para. 4 of the Constitution, Art. 2
para. 3, Art. 4 para. 1, Art. 11 para. 1 and 4, Art. 26 para. 1 and
Art. 27 para. 1 of the Charter, as of the day this finding is
promulgated in the Collection of Laws.
II.
Under
§ 42 para. 3 and § 69 of Act no. 182/1993 Coll., on the Constitutional
Court, as amended by later regulations, the Constitutional Court sent
the petition at issue to the Chamber of Deputies of the Parliament of
the Czech Republic. In the introduction to his position statement of 17
December 2002, the Chairman of the Chamber of Deputies of the Parliament
of the Czech Republic, PhDr. Lubomír Zaorálek, states that the
International Labour Organization Convention no. 98, concerning the
Application of the Principles of the Right to Organise and to Bargain
Collectively, (1948) provides the right to state support of voluntary
bargaining on collective agreements between employers and employer
organizations, on the one hand, and employee organizations on the other
hand, so that conditions of employment can be regulated in this manner.
Similarly, the European Social Charter (1961) requires the parties to
support, where necessary and suitable, mechanisms for voluntary
negotiation between employers or employer organizations and employee
organizations for purposes of setting employment conditions through
collective agreements. International Labour Organization Recommendation
no. 91, concerning Collective Bargaining Agreements, (1951) presumes
that the binding effect of a collective bargaining agreement will be
extended to other employers an employees, even if they did not
themselves sign the collective bargaining agreement; some conditions are
to be met, specifically, that the collective bargaining agreement
already binds a representative number of employers and employees, that
the application for extension will be filed by one or more employee or
employer organizations which are parties to a given agreement, and that
employers and employees to whom the binding effect of a collective
bargaining agreement is to be extended will be invited to state their
positions.
Starting with
this outline, the party to the proceedings concludes that international
agreements give precedence to the regulation of minimum wages and other
working conditions being secured by collective bargaining agreements
(their normative provisions), i.e. precedence over a framework provided
by statutory or sub-statutory regulations; the role which collective
bargaining agreements are to fulfill, in particular as sources of law,
is tied to an important rule, the extension of the applicability of a
collective bargaining agreement. This rule, according to the statement
of the Chairman of the Chamber of Deputies, makes it possible to
guarantee a uniform standard of labor law and wage conditions for groups
of companies with similar activities, economic and social conditions,
usually for a certain economic sector or field, and the rule also
prevents speculative behavior by certain employers, who could avoid the
binding effect of a collective bargaining agreement on their business by
not becoming members of an employer organization.
For
these reasons, the party to the proceedings concludes that extending
the applicability of a higher level collective bargaining agreement, is
not, in and of itself, inconsistent with international treaties by which
the Czech Republic is bound.
According
to the Chairman of the Chamber of Deputies, a legal regulation which
extends the binding effect of a collective bargaining agreement differs
from other labor law regulations in that its content is not the actual
regulation of labor law relationships, but in fact only the extension of
the binding effect of an already existing legal regulation (source of
law) to other labor law subjects, and thereby also relationships. Thus,
according to him, this regulation does not take the provisions of a
collective bargaining agreement as its own provisions; the collective
bargaining agreement, vis-à-vis affected third parties, does not change
into a ministerial regulation issued independently on the basis of a
statute and within its bounds, but remains a collective bargaining
agreement.
The position
statement further states, critically, that unlike international treaties
and International Labour Organization Recommendation no. 91, the legal
framework contained in § 7 of the Collective Bargaining Act is very
terse and does not correspond to the requirements of the Recommendation.
The party to the proceedings believes it is undisputed that the Act
itself should set certain conditions for extension and not leave the
matter to the absolutely free and unrestrained discretion, that an
obligation should be provided for the state administration to evaluate
the need for extension, set criteria for evaluating that need, also
criteria for evaluation the representativeness of a given collective
bargaining agreement, as well as criteria for setting the general
interest in extending its binding effect with the aim of ruling out
economic detriment to some employers. For this purpose the statutory
framework, according to the Chairman of the Chamber of Deputies, should
ensure that the necessary determinations will be made, in particular
determination of the positions of those subjects which are to be
affected by the extension; the framework should also contain at least
the most basic procedural rules, in particular concerning the discussion
of the legal regulation which is to extend the binding effect of a
collective bargaining agreement, beyond the usual legislative
discussion. Despite these reservations, the party to the proceedings
considers the contested statutory provision of § 7 of the Collective
Bargaining Act to be consistent with international treaties (with
Convention no. 98, concerning the Application of the Principles of the
Right to Organise and to Bargain Collectively and with the European
Social Charter), as well as with Art. 2 of the Constitution and Art. 2
and Art. 4 of the Charter.
The
position statement’s conclusion states that it is up to the
Constitutional Court to evaluate the cited provision in connection with
the filed petition and to issue an appropriate decision.
Under
§ 42 para. 3 and § 69 of Act no. 182/1993 Coll., as amended by later
regulations, the Constitutional Court also sent the petition in question
to the Senate of the Parliament of the Czech Republic. In his position
statement of 19 December 2002, the Senate Chairman, doc. JUDr. Petr
Pithart, states, concerning the petitioners’ reservations about the
purpose of extending the binding effect of higher level collective
bargaining agreements, that the main purpose is to create a comparable
competitive environment for employers which are active in similar fields
of activity, which means creating comparable conditions in their
economic competition. In this regard, in his opinion, the public law
nature of higher level collective bargaining agreements completely
predominates, which arises from the fact that a collective bargaining
agreement (both a company agreement and a higher level agreement), in
terms of its normative content, is a source of law, and always applies
to all of the relevant employer’s employees, including those who are not
members of the union organization which concluded the collective
bargaining agreement. Because of the foregoing, he expresses doubts
about the arguments of the petitioner, which derives the
unconstitutionality of this institution from something which is
characteristic of private law relationships and private law contracts.
The
position statement points to the fact that extending the binding effect
of higher level collective bargaining agreements was already done in
the Czech Republic – after developing somewhat roughly from the
beginning of the 20th century – in the period of the “pre-Munich”
republic, when collective bargaining agreements as understood today were
called collective employment agreements. These agreements were first
applied on the basis of the principle of subsidiarity (i.e. wage and
other agreed conditions applied to the parties’ employees unless
something else was agreed upon in individual employment agreements), and
subsequently became binding (if individually agreed upon conditions
were worse than the conditions in the collective work agreement, the
more favorable framework contained in the collective work agreement
applied). During a certain period the legal framework permitted a
collective employment agreement – under specified conditions – to be
declared binding in a particular area, if the employer or employee, or
both, were not members of the organizations which negotiated the
collective employment agreement. That was the situation, for example
under government directive no. 102/1935 Coll. of Laws and Directives,
which regulates the working conditions of workers in textile
manufacturing for a transitional period, or under government directive
no. 141/1937 Coll. of Laws and Directives, on the binding effect of
collective employment agreements.
From
a comparative legal viewpoint, the Chairman of the Senate states that a
similar institution is also applied in other European countries. For
example, in Germany, the Act on Collective Bargaining, in § 5, contains a
regulation which permits extending the binding nature of collective
bargaining agreements under the specified conditions to employees and
employers who are not members of any of the organizations which
concluded the collective bargaining agreement.
A
procedure which, according to the party to the proceedings, to a
certain extent can be compared to extending the binding effect of
collective bargaining agreements is also applied in European Union law.
Art. 139 of the Treaty of Amsterdam provides that “Should management and
labour so desire, the dialogue between them at Community level may lead
to contractual relations, including agreements. Agreements concluded at
Community level shall be implemented either in accordance with the
procedures and practices specific to management and labour and the
Member States or, in matters covered by Article 137, at the joint
request of the signatory parties, by a Council decision on a proposal
from the Commission.” In recent years, a European Community Council
directive was thus passed in a number of cases, the content of which was
a framework agreement containing regulation of the relevant area of
labor law, which was concluded by labor and management, the European
Trade Union Confederation (ETUC), the Union of Industrial and Employers’
Confederations of Europe (UNICE), and the the European Centre of
Enterprises with Public Participation (CEEP). On the basis of the
directive thus passed, member states must, in their own jurisdiction,
pass legal regulations or other measures which will be in accordance
with the directive, i.e. ensure the validity and effectiveness of the
framework agreement in their territory. In the opinion expressed in the
statement from the Chairman of the Senate, in this manner, basically the
binding effect of framework agreements concluded between management and
labor is extended to all employers in the member states. As an example,
the party to the proceedings cites European Council Directive 96/34/EC,
on the framework agreement on parental leave concluded by UNICE, CEEP
and the ETUC, European Council Directive 97/81/EC concerning the
Framework Agreement on part-time work concluded by UNICE, CEEP and the
ETUC, and European Council Directive 1999/70/EC of 28 June 1999
concerning the framework agreement on fixed-term work concluded by ETUC,
UNICE and CEEP. The reasons for this procedure are expressed in detail
in the preambles to the directives, which indicate, among other things,
that in certain cases such a procedure is considered suitable and
desirable in the European Union. In this regard, the position statement
states that one of the reasons mentioned in the preambles to the
directives is the fact that the Council did not decide (i.e. a consensus
was not reached) on the draft of the relevant directive in the area of
employment relationships, submitted with regard to interference with
economic competition, and it called on management and labor to conclude
relevant agreements “with the aim of increasing the competitiveness of
companies.” The party to the proceedings concludes from this that the
aspect of comparable conditions in economic competition is also
accentuated within the European Union, in the area of employment
relationships. The Chairman of the Senate points out that these
framework agreements between management and labor at the European Union
level will also bind all of our employers, or in some cases already do,
because, for example, Directive 96/34/EC, on the framework agreement on
parental leave concluded by UNICE, CEEP and the ETUC was reflected in
the Labor Code when it was amended by Act no. 155/2000 Coll., as part of
the harmonization of our legal order with European Union law.
Concerning
the petitioner’s reservations concerning the inadequacy of the legal
regulation extending higher level collective bargaining agreements,
including the cited arguments, according to the Chairman of the Senate,
one can agree with them in principle, because no appeal can be filed
against the issuance of any legal regulation can be filed in
administrative proceedings or the administrative courts. In this regard,
as he states further, it would evidently be useful to define the
mechanism of extending higher level collective bargaining agreements
more closely in the legal framework, including defining the decisive
criteria for evaluating whether the conditions for extension have been
met in a particular case. However, it is an open question whether
unconstitutionality can be seen in the fact that the statutory framework
appears too concise, as the petitioner concludes. Such a statutory
framework can also be, in the opinion of the party to the proceedings,
applied in a constitutional manner (by a procedure preceding the
issuance of a legal regulation on extending the binding effect of a
higher level collective bargaining agreement so that the existing
statutory conditions of that extension will be fulfilled without any
further steps). Thus, according to the Chairman of the Senate, more
detailed legal regulation would make it possible to evaluate, either
within the total re-codification of labor legislation currently being
prepared (the new Labor Code being prepared and amendments to related
laws), or even earlier, in “routinely” executed amendments to labor law
regulations.
Beginning with
the possibilities given by § 49 para. 1 of Act no. 182/1993 Coll., and
because application of § 7 of the Collective Bargaining Act directly
affects the Ministry of Labor and Social Affairs, the Constitutional
Court turned to the Ministry with a request for a position statement on
the petition at issue.
In
its position statement of 23 December 2002, the Ministry states,
concerning extending the binding effect of higher level collective
bargaining agreements, that this has become a component of modern legal
orders of democratic European countries, and its use is widespread in
various forms in many states, e.g. in Austria, Belgium, France and
Germany (a detailed overview is contained in an appendix to the position
statement). The purpose of the institution of extending the binding
nature of collective bargaining agreements is, according to the
Ministry, an effort to prevent unjustified competitive advantage for
those employers who resist collective bargaining, or bargain
collectively but do not want to provide their employees the advantages
which are usual and appropriate at similar employers, whereby they
create for themselves a more advantageous cost of labor and a better
market position at the expense of their employees. At the same time,
extending the binding effect of higher level collective bargaining
agreements is recognized as a state measure to support collective
bargaining under International Labour Organization Convention no. 98,
concerning the Application of the Principles of the Right to Organise
and to Bargain Collectively (no. 470/1990 Coll.).
Concerning
the inconsistency, alleged by the petitioner, of the contested
statutory provision with Art. 2 para. 4 of the Constitution and Art. 2
para. 3 and Art. 4 para. 1 of the Charter, the Ministry states that the
state imposes obligations under the Charter through its bodies, and that
the expression “on the basis of law” must be understood so that
“obligations may be imposed by a statute or a norm other than that which
is expressed in a statute, but only if that norm where authorized
thereto by a regulation with at least the legal force of a statute.”
Likewise, “the bounds determining imposition of obligations may be,”
according to the Ministry, “set only by regulations with at least the
legal force of a statute.” The Collective Bargaining Act, which in § 7
para. 1 authorizes a legal regulation (decree) to extend the binding
effect of a higher level collective bargaining agreement, i.e. to impose
obligations, must be considered a statute which determines these
bounds; in § 7 para. 2 it provides the bounds for imposing obligations,
and permits extension only to employers who have similar activities and
similar economic and social conditions.
In
the Ministry’s opinion, the state does not proceed capriciously when
extending the binding nature of higher level collective bargaining
agreements if such extension must meet statutory conditions. The
position statement also states, with reference to Constitutional Court
resolution file no. IV. ÚS 587/01, that § 7 of the Collective Bargaining
Act is incomplete, and as a result the Ministry, in the recent period,
on the basis of dialogue with management and labor, has sought to
complete the wording of the Act by a procedure agreed upon in the
Council of Economic and Social Agreement. Applying the condition of
“similar activities” for extending the binding effect of a higher level
collective bargaining agreement is at present based on data from the
Administrative Register of Economic Subjects/Entities of the Ministry of
Finance, which gives the activities of economic entities under the
Industrial Classification of Economic Activities, maintained by the
Czech Statistical Office, which uses employers’ data as a basis. Another
criterion for the evaluation of individual entities by the Ministry is
the number of employees, which is verified from three independent
sources (data from the parties to the higher level collective bargaining
agreement in question, the Administrative Register of Economic Entities
of the Ministry of Finance, and the Register of the Czech Social
Security Administration), and the binding effect of a higher level
collective bargaining agreement is not extended to entities with fewer
than 20 employees.
In
practice, according to the Ministry, the process of extending the
binding effect of higher level collective bargaining agreements is begun
by at least one of the parties submitting a properly justified
petition. If both parties do not submit the petition jointly, the
position of the other party must be attached to it. If the other party
does not agree with the petition, this disagreement is submitted for
evaluation to the consulting body of the Ministry of Labor and Social
Affairs – the Commission for Extending the Binding Effect of a Higher
Level Collective Bargaining Agreement to Other Employers (the
“Commission”). The Commission is composed of three representatives of
employers and three representatives of the unions, who are appointed
after agreement and at the proposal of the top bodies of the
organizations of employers and the unions. It is presided over by the
deputy minister who, however, does not vote. Although in the current
practice the sides in the Commission have always agreed, if there is no
agreement, then the decision falls to the minister. The Ministry also
evaluates whether the higher level collective bargaining agreement
contains provisions which are inconsistent with legal regulations; if it
finds such inconsistencies, it conducts negotiations with the parties
to correct them.
The
Ministry calls on employers to whom extension of the binding effect of a
collective bargaining agreement has been proposed to take a position
which is evaluated by the Commission. It also informs them that if it
does not receive their position statement by a stated deadline, they are
presumed to have consented with the proposed extension of the binding
effect. The Ministry considers this mechanism a certain protection for
employers who may, for competitive reasons, hesitate to give information
about employees’ above-standard advantages or about their economic
intentions. If it is not proved that a request for a position has not
been duly delivered to a particular employer, the binding effect is not
extended to it. The Commission evaluates the fulfillment of conditions
required by the Collective Bargaining Act separately with each employer
to which the binding effect of a higher level collective bargaining
agreement is extended, and presents a recommendation to the minister.
In
the conclusion of its position statement, the Ministry states that the
draft decree on extending the binding effect of a collective bargaining
agreement goes through the usual legislative process, i.e. discussion
with all commenting parties and then in the bodies of the Government
Legislative Council, or in the Government Legislative Council, in
accordance with the government’s legislative rules.
III.
Under
§ 68 para. 2 of Act no. 182/1993 Coll., the Constitutional Court, in
decision making in proceedings to annul statutes and other legal
regulations, evaluation the content of these regulations from the
viewpoint of their consistency with the constitutional order, or with
statutes, in the case of a different legal regulation, and determines
whether they were passed and issued within the bounds of
constitutionally provided jurisdiction and in a constitutionally
prescribed manner. If the Constitutional Court, within its review of
norms, evaluates the constitutionality of the jurisdiction of a
norm-creating body and the constitutionality of the norm-creating
process, it takes as its basis § 66 para. 2 of the Act on the
Constitutional Court, under which a petition in proceedings to annul
statutes and other legal regulations is inadmissible if a constitutional
act or an international agreement with which the reviewed regulations
are inconsistent according to the petition, ceased to be valid before
the petition was delivered to the Constitutional Court. The foregoing
indicates that with legal regulations issued before the Constitution of
the Czech Republic, Act no. 1/1993 Coll., went into effect, the
Constitutional Court is authorized to review only their consistency with
the existing constitutional order, but not the constitutionality of the
procedure in which they were created and observance of norm-creating
jurisdiction. (See finding file no. Pl. ÚS 9/99, published in Collection
of Decisions, vol. 16, p. 13-14.)
This
interpretation of § 68 para. 2 of Act no. 182/1993 Coll., applies fully
to the adjudicated matter, where Act no. 2/1991 Coll. was approved by
the former Federal Assembly of the CSFR on 4 December 1990, and went
into effect on 1 February 1991, i.e. before the Constitution of the
Czech Republic went into effect; the contested § 7 of the Act was not
affected by any of the amendments to it (i.e. Acts no. 519/1991 Coll.,
no. 118/1995 Coll., no. 155/1995 Coll., no. 220/2000 Coll. and no.
151/2002 Coll.).
IV.
The text of § 7 of Act no. 2/1991 Coll., contested by the petition, is the following:
"§ 7"
"§ 7"
(1)
The Ministry of Labor and Social Affairs of the republic may provide,
by legal regulation, that a higher level collective bargaining agreement
is also binding on employers who are not members of the employer
organization which concluded the agreement.
(2)
The binding effect of a higher level collective bargaining agreement
can be extended under the previous paragraph only to employers with
similar activities and similar economic and social conditions with their
registered address in the territory of the relevant republic and for
which the higher level collective bargaining agreement is not binding.”
V.
The
legal institution of collective bargaining agreements is established in
the Czech legal order by, in particular, § 20 to 22, § 30, § 32, § 35, §
60a, § 73, § 74, § 83a, § 85, § 88, § 92, § 95, § 96, § 99a, § 102, §
105, § 111, § 119, § 120, § 124-126, § 128, § 129, § 131, § 140, § 143
and § 200 of the Labor Code and by Act no. 2/1991 Coll., on Collective
Bargaining, as amended by later regulations. Collective bargaining
agreements are the result of collective bargaining between management
and labor. The purpose of legal regulation of collective bargaining in
the European Context, and within that also of collective bargaining
agreements, is to ensure social conciliation and to create a mechanism
for on-going social communication and democratic procedural resolving of
possible conflicts between employers and employees. The system of
collective bargaining reflects the development of European democracy in
the second half of the 19th and first half of the 20th centuries; it
reflects the search for a mechanism for peaceful, non-violent resolution
of the tensions which endanger domestic peace.
The
realistic functioning of this mechanism comes from acceptance of the
result of social bargaining by the state (under certain conditions, in
Czech law contained in, e.g. § 4 of the Collective Bargaining Act), i.e.
giving the normative content of collective bargaining agreements the
status of being a source of law; the agreements then give rise to
entitlements which are exercisable in court.
The
mechanism of collective bargaining is also applied in areas other than
labor law relationships. An analogous example is § 17 para. 2 of Act no.
48/1997 Coll., on Public health Insurance, as amended by later
regulations, under which the regulation of substantive performance in
providing health care to insured parties is given by a framework
agreement which is the result of negotiations between representatives of
associations of health insurance companies and representatives of the
relevant group health facilities represented by their professional
associations, where the individual framework agreements are submitted to
the Ministry of Health, which evaluates them in terms of consistency
with legal regulations and the public interest and then issues them as a
decree.
In a free society,
in which neither employees or employers can be considered to have an
obligation to associate instead of the right to do so (Art. 27 of the
Charter), the institution of collective bargaining, resulting in
collective bargaining agreements, is regularly tied to the extension of
their normative applicability beyond the framework of an
obligation-creating jurisdiction. The mechanism of this extension can be
conceptually contained even in the collective bargaining agreement
itself, without such extension then requiring the passage of another
normative act (an example is the legal framework in Great Britain), or
this mechanism assumes that a special normative act will be issued which
establishes the extension of applicability. The European conceptual
standard in this regard is based on an assumption that the concept of
collective bargaining agreements in the sense of legal acts binding only
the parties would not make it possible to achieve the basic aim of
collective bargaining.
If
the aim of collective bargaining is to be a mechanism of social
communication and democratic procedural resolution of potential
conflicts which endanger domestic peace, then it is also tied to a
requirement of legitimacy (representativeness). This is considered to
be, for example in the German legal framework (§ 12 para. 1 of
Tarifvertragsgesetz) the limit of 50% of employers operating in a given
field. In other words, the minister of labor and social affairs of
Germany may proclaim a particular collective bargaining agreement
(Tarifvertrag) to be generally binding only if at least 50% of the
employers in the given field took part in concluding it within the
participating employer associations.
V./a
The
objections of the petitioner, the group of deputies, against the
constitutional deficiencies in § 7 of the Collective Bargaining Act can
be divided into four groups. The first are objections concerning the
restriction of contractual freedom of employers not participating in
higher level collective bargaining agreements, the second is the lack of
judicial protection for these employers, the third is the objection of
uncertainty of the contested statutory provision, and finally the fourth
is the restriction on the freedom of association.
V./b
In
the settled opinion of the Constitutional Court (see findings file no.
Pl. ÚS 24/99, Pl. ÚS 5/01, Pl. ÚS 39/01 – published in Collection of
Decisions, vol. 18, p. 135 et seq., vol. 24, p. 79 et seq. and vol. 28)
an essential component of a democratic state governed by the rule of law
is protection of the freedom of contract, which is a derivative of
constitutional protection of the right to property under Art. 11 para. 1
of the Charter (the fundamental component of which is ius disponendi).
Tied to the very nature and purpose of collective bargaining, the
institution of their extension, i.e. the possibility of extending the
normative over the obligation-creating effect of a collective bargaining
agreement, thus, from a constitutional law viewpoint, establishes
conflict between the restriction on property rights under Art. 11 of the
Charter and the public good under Art. 6 of the European Social
Charter, published under no. 14/2000 Collection of International
Treaties, in connection with Art. 1 of the Constitution and Art. 27 of
the Charter.
The extension
of applicability of a higher level collective bargaining agreement, by
its generally economic nature, is price regulation, by regulating the
wages and work conditions of employees (the positive law definition of
the concept of price regulation under Act no. 526/1990 Coll., on Prices,
as amended by later regulations, is, however, narrower). The
Constitutional Court delineated a certain constitutional framework in
relation to the legislature for the permissibility of price regulation
in its previous case law. It considered the safeguards for this
permissibility in the context of the acceptability of setting the value
of a point in health insurance, the acceptability of rent regulation,
and finally the acceptability of production quotas for agricultural and
food products.
In the
finding in the matter file no. Pl. ÚS 24/99, in connection with setting
the value of a point in health insurance, the Constitutional Court
stated: “An essential component of a democratic state governed by the
rule of law is protection of the freedom of contract, which is a
derivative of the constitutional protection of property rights under
Art. 11 para. 1 of the Charter (whose fundamental component is ius
disponendi). Therefore, price regulation is an exceptional measure, and
is acceptable only under quite limited conditions. Although the
fundamental right contained in Art. 26 para. 1 of the Charter can be
exercised, under Art. 41 para. 1 of the Charter, only within the bounds
of an implementing statute, for the legislature, or for a norm creator,
this case too is subject to the limit set by Art. 4 para. 4 of the
Charter, under which, when applying provisions on limitations on
fundamental rights and freedoms their meaning and purpose must be
preserved. State (public) regulation, based on taking into account
important facts (in this area the amount of insurance premium collected,
the level of expenses in providing health care, etc.), must, when
setting the price, also take into account the opportunity to create
profits. The consequence of the absence of this maxim during price
regulation can be making a certain field of entrepreneurial activity
impossible and creating a state monopoly, i.e. affecting the meaning and
purpose of the fundamental right arising from Art. 26 of the Charter.”
In
the finding in the matter file no. Pl. ÚS 3/2000 – published in
Collection of Decisions, vol. 18, p. 287 et seq., the Constitutional
Court again addressed the question of price regulation, this time in
connection with evaluating the constitutionality of legal regulation of
rent. It took as its starting point Art. 1 para. 2 of Protocol no. 1 to
the Convention, which provides states the right to pass such laws as
they consider necessary for the regulation of the use of property in
accordance with the general interest, and also the case law of the
European Court for Human Rights. According to the case law, such
statutes are especially necessary and usually in the field of housing,
which, in modern societies, becomes a central issue of social and
economic policy, and for that purpose the legislature must have a wide
“margin of appreciation” (evaluation), both in determining whether a
public interest exists authorizing the application of regulatory
(control) measures, and concerning the selection of detailed rules for
applying such measures. As the European Court for Human rights
emphasized in the case James et al., state interference must respect the
principle of a “fair balance” between the requirement of the general
interest of society and the requirement to protect the fundamental
rights of the individual. There must be a reasonable (justified)
proportionality relationship between the means used and the aims
pursued. Thus, in this matter the Constitutional Court accepted possible
price regulation of rent, but on the condition of applying the
principle of proportionality (comprehensively, concerning all components
of the principle of proportionality, see Constitutional Court findings,
file no. Pl. ÚS 4/94, Pl. ÚS 15/96, Pl. ÚS 16/98 – published in
Collection of Decisions, vol. 2, p. 57 et seq., vol. 6, p. 213 et seq.
and vol. 13, p. 177 et seq.). Although the Constitutional Court
recognized the presence of the first component, i.e. the suitability of
the means used in relation to the aim pursued, it found that the
principle of necessity had not been met, i.e. the subsidiarity of the
means used in relation to other possible means, from the point of view
of the fundamental right limited thereby (in the given matter, property
rights): “In order for rental building owners to be able to meet their
stated obligations, and so that the right of the individual to adequate
housing under Art. 11 of the International Covenant on Economic, Social
and Cultural Rights (the “Covenant”) to thus have a realistic chance,
one could have chosen the path taken by the legislature of the First
Republic, which in § 9 para. 4 of Act no. 32/1934 Coll., as amended by
later regulations, permitted the raising of rent on the grounds of
compensation of expenses incurred for occasional or extraordinary
necessary repair and renovation of the building.” On the basis of the
cited arguments, the Constitutional Court concluded that Art. 4 para. 3
and 4 of the Charter, were violated, in connection with Art. 11 para. 1
of the Charter. From a general viewpoint, the Constitutional Court, in
the finding in question, also formulated another criterion for
evaluating the constitutionality of price regulation: “Price regulation,
if it is not to exceed the bounds of constitutionality, must not
evidently lower the price so much that the price, in view of all
demonstrated and necessarily incurred expenses, would eliminate the
possibility of at least recouping them, because in that case it would
actually imply denial of the purpose and all functions of ownership.”
Peripherally
to the constitutional safeguards for setting quotas for the manufacture
of food and agricultural products, in findings file no. Pl. ÚS 39/01
and Pl. ÚS 5/01 the Constitutional Court emphasized that neither the
constitutional order nor international agreements on human rights and
fundamental freedoms forbid the legislature from limiting the amount of
production, distribution or consumption of values. Therefore, the
legislature may (within the bounds of constitutionally guaranteed basic
principles, human rights and freedoms) in its discretion introduce price
or quantitative regulation of production in a certain branch of the
economy, define or influence the kind and number of entities operating
in it, or limit contractual freedom in the placement of production in
the market or in the purchase of raw materials and production
facilities. The Constitutional Court did not find the free market free
of all regulation to be a value of constitutional importance. It pointed
to the limits on the freedom to conduct business in the European Union,
where a market economy is directly declared to be a constitutional
principle in the establishment treaty. It emphasized that an entitlement
to achieve a certain price in the market is not, however, a fundamental
right. It pointed out that a production quota system is a form of
control of the use of property, which is introduced do to the public
interest. It also referred to the case law of the European Court of
Justice. In its judgment in Metallurgiki Halyps A.E. v Commission of the
European Communities (258/81), the Court emphasized that community
limitations on steel production, although they can endanger the
profitability of a company, are not a violation of the right to own
property. It pointed to the fact that the European Court for Human
Rights has never evaluated the general legal measures of member states
of the Council of Europe, which regulated the volume of economic
production, in view of the compatibility with the European standard of
the fundamental right to own property. It pointed out that the current
case law of constitutional and supreme courts of European Union member
states and other democratic states governed by the rule of law does not
indicate that limiting production for reasons of stabilizing market
prices at a certain level, if fairly imposed on all existing producers,
would be considered incompatible with the national standard of property
ownership. Of course, this statement does not rule out their receiving
political criticism, which is strong. However, the Constitutional Court
did not find a reason to interpret Art. 11 of the Charter differently.
It considered the introduction of production quotas in the adjudicated
cases to be justified, as it serves the public interest, which it
identified as a guarantee of a minimum price in an environment where
state subsidies contribute to an increase in production which demand
would not cause. State intervention in agriculture is motivated by its
social, economic and ecological idiosyncrasies. The Constitutional Court
acknowledged that production quota systems for agricultural products
exist in the European Union, and rejected the idea that the domestic
standard of human rights would require a pure market economy, free of
state intervention. It expressed restraint concerning the request that
it subject to strict control, from the point of view of its necessity
and real need, a legal framework whereby the state intervenes in the
economy. It emphasized that the Parliament of the Czech Republic, as the
political body which bears political responsibility vis-à-vis voters
for recognizing problems in the economy and selecting instruments to
resolve them, has jurisdiction to choose economic policy.
In
the matter of the constitutionality of § 7 of the Collective Bargaining
Act, the Constitutional Court concluded that it was justified to
diverge from the previous findings, file no. Pl. ÚS 5/01 and Pl. ÚS
39/01, and to test the acceptability of the priority of the public
interest, arising from protection of values protected by Art. 6 of the
European Social Charter, published under no. 14/2000 Collection of
International Treaties, in connection with Art. 1 of the Constitution
and Art. 27 of the Charter, in conflict with the right to own property
under Art. 11 of the Charter. In cases of conflict it is necessary to
set conditions under which, if met, priority goes to one fundamental
right or freedom, and others under which, if met, priority goes to
another fundamental right or freedom, or a particular public good (on
the principle of proportionality see the settled case law of the
Constitutional Court, in particular findings file no. Pl. ÚS 4/94, Pl.
ÚS 15/96, Pl. ÚS 16/98). Fundamental in this regard is the maxim under
which a fundamental right or freedom can be restricted only in the
interest of another fundamental right or freedom or a public good.
Measuring conflicting fundamental rights and freedoms or public goods
against each other is based on the following criteria: The first is the
criterion of suitability, i.e. evaluating whether the institution
restricting a certain fundamental right makes it possible to reach the
aim pursued (protection of another fundamental right or public good).
The second criterion for comparing fundamental rights and freedoms is
the criterion of necessity, consisting of comparing the legislative
means which restricts a fundamental right or freedom with other measures
which make it possible to reach the same aim, but which do not affect
fundamental rights and freedoms, or which affect them with a lower
intensity. The third criterion is comparing the gravity of both
conflicting fundamental rights or public goods. These fundamental
rights, or public goods, are prima facie equal. Comparing the gravity of
conflicting fundamental rights, or public goods (after the conditions
of suitability and necessity have been met) consists of weighing
empirical, systemic, contextual and value-based arguments. An empirical
argument can be understood as the factual gravity of a situation which
is tied to the protection of a certain fundamental right. A systemic
argument means weighing the purpose and classification of the affected
fundamental right or freedom in the system of fundamental rights and
freedoms. A contextual argument can be understood as the other negative
effects of restricting one fundamental right as a result of giving
priority to another. A value-based argument means weighing the positive
aspects of conflicting fundamental rights n view of the accepted
hierarchy of values.
Within
the structure of this principle, the Constitutional Court, in its case
law, does not apply only the postulates of suitability, necessity and
proportionality in the narrow sense, but also the postulate of
minimizing interference with fundamental rights (see finding Pl. ÚS
4/94): “Thus, one can state that if it is concluded that giving priority
to one over another of two conflicting fundamental rights is justified,
a necessary condition for the final decision is also to use all
possibilities to minimize the interference in one of them. This
conclusion can also be derived from Art. 4 para. 4 of the Charter, in
the sense that fundamental rights and freedoms must be preserved not
only when applying the provision on the bounds of fundamental rights and
freedoms, but also analogously in the event of their restriction as a
result of conflict.”
In the
adjudicated matter, the institution of collective bargaining and the
connected effect of extension of applicability of collective bargaining
agreements meets the conditions for acceptance arising from the
safeguards of suitability and necessity. It is an effective means for
achieving the aims pursued (social conciliation) and it also meets the
safeguard of analyzing multiple possible normative means in relation to
the intended aim and their subsidiarity from the point of view of
restricting constitutionally protected values – of a fundamental right
or public good (e.g., from the point of view of comparing the extension
of applicability of a collective bargaining agreement and state
regulation outside the system of collective bargaining, an example of
which is setting the minimum wage under § 111 para. 4 of the Labor
Code).
The comparison of
both conflicting constitutionally protected values, from systemic,
value-based, contextual and empirical points of view, in and of itself
makes it possible to reach a conclusion to accept the institution of
extension of applicability of collective bargaining agreements, although
only on the condition of meeting certain safeguards.
If
the starting point for constitutional acceptability of extending the
applicability of higher level collective bargaining agreements is
European democratic legal experience and the standards arising from it,
comparison with European Union law, as well as finding a procedural
mechanism to ensure a balance between legal protection of freedom and
guaranteeing the internal peace of human society, in the adjudicated
context the related aims can be achieved only at the price of
restricting property rights. However, the priority given to the public
good over the right to property must be conditioned on the legitimacy
(representativeness) of the collective bargaining system, so by the
relevance of the contracting parties’ market share in a given field.
Further, the requirement of minimizing the interference in a fundamental
right or freedom, which is part of the principle of proportionality,
also gives rise to the safeguard that this measure must be exceptional,
and the related maxims for the norm creator to accept extending the
applicability of a collective bargaining agreement only in
extraordinarily justified cases of the public interest.
From
the point of view of these conditions from the principle of
proportionality, § 7 of the Collective Bargaining Act must be considered
inconsistent with Art. 11 and Art. 26 of the Charter, in connection
with Art. 4 para. 4 of the Charter, as it did not meet the requirement
of defining the bounds of the representativeness of the collective
bargaining system as part of comparing conflicting fundamental rights
and public goods, and further, from the point of view of minimizing the
restriction of fundamental rights it did not meet the requirement that
such measures be exceptional.
V./c
The
provision of § 7 of the Collective Bargaining Act authorizes the
Ministry, by decree, to extend the binding effect of a higher level
collective bargaining agreement for employers who are not members of the
relevant employer associations if they conduct similar activities, have
similar economic and social conditions as the contracting parties to
the agreement, and have their registered address in the republic.
The
Ministry extends the applicability of a collective bargaining agreement
by decree in the entire period when the Collective Bargaining Act is in
effect by stating in it that, for a precisely identified higher level
collective bargaining agreement, its binding effect is hereby extended
for employers listed in an appendix, where the appendix contains a
precise enumeration of employers with their business name, address and
ID number (see, e.g., decree no. 410/2002 Coll.).
Thus,
in practice, fulfillment of the statutory authorization contained § 7
of the Collective Bargaining Act by a decree, i.e. by a generally
binding legal regulation, takes place by a regulation applied to
precisely individualized entities, which is typical for the application
of law.
The current practice
thereby deviates from one of the fundamental material elements of the
concept of a law (legal regulation), which is universality . Let us
remember that the requirement of the universality of a law is an
important component of the principle of the sovereignty of law, and thus
also of a state governed by the rule of law.
Arguments
in the favor of the universality of a law, or a legal regulation, as
the Constitutional Court has already pointed out in the finding in the
matter file no. Pl. ÚS 12/02 (to be published in Collection of
Decisions, vol. 29), are these: separation of powers, equality, and the
right to independent judge.
The
first of the arguments against laws, legal regulations, concerning
individual cases is the principle of the separation of powers, or the
separation of the legislative, executive and judicial power in a
democratic state based on the rule of law: “Passing laws concerning
individual cases meets the most resistance in the area of application of
rights. The right to a lawful judge and the independence of legal
protection also rule out individual legislative directives in areas
where they are not protected by the principle ‘nulla poena sine lege’
(and here lex can meaningfully be only a general and written statement
of law).” (H. Schneider, Gesetzgebung, 2nd edition, Heidelberg 1991, p.
32). Article I Section 9 of the Constitution of the USA states provides
in this regard: “No Bill of Attainder ... shall be passed.”
Thus,
an individual regulation contained in a legal regulation which deprives
the addressees of the possibility of judicial review of whether the
general conditions of a normative framework have been met concerning a
particular entity, a regulation which lacks transparent and acceptable
justification within the general possibility of regulation, must be
considered inconsistent with the principle of a state governed by the
rule of law (Art. 1 of the Constitution), to which the separation of
powers and judicial protection of rights is immanent (Art. 81, Art. 90
of the Constitution). These derogatory grounds for judicial review of
constitutionality apply fully to evaluating the constitutionality of § 7
of the Collective Bargaining Act. It is fully up to the legislature
whether it sets the procedure for extending applicability in the form of
administrative proceedings with the possibility of judicial review (as
the Constitutional Court indicated in its resolution of 11 July 2002
file no. IV. ÚS 587/01) or in the form of a general normative definition
of an entire group of employers to which the extension applies, with
the possibility of judicial review of the fulfillment of subsumptive
conditions (e.g. in a dispute on the exercise by an employee of claimed
entitlements arising from a higher level collective bargaining
agreement, or judicial review of administrative decisions concerning,
e.g., inspection of working conditions).
V./d
The
Constitutional Court has also addressed, in a number of its findings,
the question of the conditions under which the uncertainty and lack of
understandability of a legal regulation must be considered inconsistent
with the principle of a state governed by the rule of law, and thus
under what conditions these become grounds for annulment. In its finding
file no. Pl. ÚS 6/2000 (Collection of Decisions, vol. 21, p. 195 et
seq.), it stated in this regard: “If, under Art. 1 of the Constitution,
the Czech Republic is a democratic state governed by the rule of law,
that means – among other things – that its legal order is supposed to
follow the principle of the foreseeability of the consequences of a
legal regulation and that regulation’s certainty and understandability.
Only a law whose consequences can be clearly foreseen corresponds to the
cited concept of a democratic state governed by the rule of law.” The
court has already stated the factors for testing a legal provision’s
constitutionality with regard to the requirement of certainty and
understandability in finding file no. Pl. ÚS 9/95 (Collection of
Decisions, vol. 5, p. 107 et seq.): “the uncertainty of one of the
provisions of a legal regulation must be considered inconsistent with
the requirement of legal certainty and thus also with a legal state
governed by the rule of law (Art. 1 of the Constitution) only if the
intensity of that uncertainty rules out the possibility of setting the
normative content of that provision with the use of the usual
interpretative procedures.”
These
factors must be applied in connection to the requirements of
constitutionality, which the Constitutional Court imposes on the
legislature when it sets implementing legal provisions.
According
to the legal opinion contained in finding file no. Pl. ÚS 45/2000
(Collection of Decisions, vol. 21, p. 261 et seq.) constitutional
definition of derived norm creation by the executive rests on the
following principles: “Another legal regulation” must be issued by an
authorized entity, may not interfere n matters reserved to statute
(thus, it can not set primary rights and obligations), and must indicate
the clear will of the legislature to create a regulation which is over
the statutory standard (thus, room must be opened for the sphere of
“another legal regulation”). In finding file no. Pl. ÚS 3/95 (Collection
of Decisions, vol. 4, p. 91 et seq.) the Constitutional Court provided
the condition of certainty of the statutory bounds of “another legal
regulation” in the authorizing provision: “Fulfillment of conditions of a
special regulation which are not specified in more detail, and which
then become ex post constitutive elements of a legally protected
subject, creates the impression that it would be possible to formulate
the legislature’s authorization of the executive power in other areas of
the life of the society with equal uncertainty.”
The
provision of § 7 of the Collective Bargaining Act identifies the state
body whose norm creating authority it establishes, and defines a class
of possible extension of applicability of a collective bargaining
agreement by the elements of similar activities, similar economic and
social conditions, and a registered address in the Czech Republic.
Although very general, one can assume that this framework offers an
adequate interpretative framework for setting conditions for extension
in connection to a specific higher level collective bargaining agreement
with regard to the viewpoint of the similar position of employers who
are members of employer associations and those who are not.
From
the point of view of the petitioners’ objections concerning the
uncertainty of § 7 of the Collective Bargaining Act, the Constitutional
Court states that the wording of the contested statutory provision fails
to meet not the requirement of certainty, but the requirement of
completeness, which arises for statutory authorization of the extension
of applicability of a higher level collective bargaining agreement from
the principle of proportionality, by the deficiency in regulating the
representativeness of collective bargaining and the extraordinariness of
a measure restricting the fundamental right to property, and which
arises for it from the maxim of ensuring a fundamental right to judicial
protection.
V./e
The
petitioners’ objection concerning the restriction of the freedom of
association applies to restriction of the negative aspect of that
freedom, i.e. the right to freely decide not to be a member of a
particular association, and the corresponding ban on forcing anyone to
join an association.
If it
were possible to agree with this objection from the point of view of the
current wording of § 7 of the Collective Bargaining Act, which, in
terms of the proportionality principle suffers from the lack of a
definition of the bounds of representativeness of collective bargaining,
when these bounds are established the criticism that extending the
applicability of a higher level collective bargaining agreement is
inconsistent with the right to freedom of association loses its
relevance.
V./f
In
view of all the reasons laid out, the Constitutional Court annulled § 7
of the Collective Bargaining Act due to inconsistency with Art. 11
para. 1, Art. 26 in connection with Art. 4 para. 4 of the Charter and
Art. 1, Art. 81 and Art. 90 of the Constitution.
Aware
of the fact that annulment of the cited statutory provision without a
commensurate delay in effect vacantia legis would result in a
constitutionally undesirable incompleteness in the Act, by postponing
the effect of the annulment finding under § 70 para. 1 of Act no.
182/1993 Coll., to 31 March 2004, the Constitutional Court created
sufficient time for the democratic legislature to constitutionally
implement Act no. 2/1991 Coll., on Collective Bargaining, as amended by
later regulations.
Notice: Decisions of the Constitutional Court can not be appealed.
Brno, 11 June 2003
Notice: Decisions of the Constitutional Court can not be appealed.
Brno, 11 June 2003