The European Parliament has filed a legal challenge against the EU’s decision to locate its new European Labour Authority in Bratislava, raising potential problems for the agency’s functioning.

The case before the Court of Justice of the European Union marks an escalation in a power struggle between the Council and Parliament.

“It's not so much about the labor authority as it is a long-running dispute between Council and Parliament about how to allocate agencies,” said Dutch MEP Jeroen Lenaers, who oversaw the legislation creating the ELA in Parliament.

National governments picked Bratislava in a vote in June. The new seat of the ELA had to meet five criteria set out by member countries; Slovakia got 15 out of 28 votes. But Parliament argues it was actually the Council, and not member countries, that made the call.

With Parliament alleging that Council acted unlawfully in unilaterally choosing the location of the new seat for the labor authority, EU countries have until December 10 to respond to the challenge, according to an EU diplomat.

“I rely heavily on the labor authority to ensure that the system works, that abuses are fought, that the conditions of competition are as similar as possible" — Nicolas Schmit, incoming commissioner for jobs

In the meantime the legal uncertainty could throw a spanner in the works of the budding agency as it prepares to move to Bratislava. The authority is in charge of overseeing the EU’s efforts to protect workers rights and will have a major role in enforcing new stricter rules for truckers currently being negotiated. It’s already up and running in Brussels until its new headquarters in the Slovak capital are ready.

The European Commission on Friday published a job advert for the agency's executive director. The vacancy, available from January 1, is listed in Bratislava but the notice states “the successful jobholder may be required to take up duties for a limited period in Brussels, before the move of the Authority to its long-term premises.”

With the legislation creating the ELA only adopted in June, the agency has already claimed a key role in the EU's plans to coordinate social security systems and fight social dumping.

Incoming Commissioner for Jobs Nicolas Schmit told MEPs during his hearing in October that the agency should become fully operational as soon as possible. “I rely heavily on the labor authority to ensure that the system works, that abuses are fought, that the conditions of competition are as similar as possible,” he said.

A week later, on October 9, Parliament lodged its case with the CJEU against the decision. But MEPs insist that their lawsuit isn't aimed at the agency.

“We’re not unhappy with the decision itself — nobody is against Bratislava,” said German MEP Jens Geier, the rapporteur for Parliament’s Budget Committee.

Parliament’s sway

Commission President Jean-Claude Juncker set out plans for the agency in a 2017 address, telling MEPs that “it is absurd to have a Banking Authority to police banking standards, but no common Labour Authority for ensuring fairness in our single market.”

The legislation agreed by Council, Commission and Parliament did not specify the location of the agency. EU ministers in June chose Bratislava over the capitals of Bulgaria, Cyprus and Latvia.

MEPs say Parliament only agreed to leave the agency's location out of the legislation to save time and get the law approved before May’s European election. They also point to a joint statement by Council, Parliament and the Commission published in the EU’s Official Journal on July 12, in which “the three Institutions acknowledge the value of exchange of information from the initial stages of the process for the selection of the seat of the ELA.”

Just which institution should get to decide where the agency is located is pretty convoluted.

“Slovakia believes this is an inter-institutional matter — this is not about challenging Bratislava as a seat of the agency" — Senior Slovak diplomat

Under EU law, national governments have the sole right to determine the seat of institutions through the Council.

But according to Parliament’s reasoning in court, seen by POLITICO, the ELA was created on the basis of EU rules on free movement and social security — on which Parliament gets an equal say. “Council should not make this decision on its own,” said Geier.

However, a 2012 joint statement on decentralized agencies by the EU institutions also handed the right to EU governments. Parliament argues that was a "mere political indication," not a legally binding rule.

Following a September 25 vote behind closed doors in Parliament’s Legal Affairs Committee, MEPs recommended Parliament President David Sassoli take the claim to court.

Bratislava in the line of fire

The Commission said in a statement that all the institutions, including Parliament, want the ELA to be fully operational as soon as possible.

“The Commission respects the Parliament’s right to bring this issue before the Court of Justice. In the meantime, it will continue to take the necessary actions to ensure that the European Labour Authority can continue its work as planned,” a Commission spokesperson said.

Slovakia, one of the only member countries without an EU agency, sees no cause for panic. “Slovakia believes this is an inter-institutional matter — this is not about challenging Bratislava as a seat of the agency,” a senior Slovak diplomat said.

MEPs also want the agency’s work in Slovakia to start swiftly. During an October meeting, coordinators of Parliament’s employment committee agreed to ask Sassoli to request that the Commission revise the regulation creating the ELA to cement its seat in Bratislava “in a legally sound way,” according to conclusions from the meeting seen by POLITICO.

“Then we could honor the Parliament’s case against the delegates of the member states, which would have to shed light on the right procedures, while at the same time providing clarity about Bratislava, so they can get started there,” Lenaers said.

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