The place and mutual relationship of the right to free enterprise in the system of fundamental human rights and freedoms

Annotation

The right to free enterprise in the Republic of Azerbaijan is one of the fundamental human rights protected by the Constitution. This constitutional norm develops the principle of freedom for any individual's economic activity that is not prohibited by law [5]. However, this right is not recognized as a fundamental right in all countries. Although the right to free enterprise is not directly mentioned in the Constitution of the United States, elements of this right are reflected in it. In the legislation of the European Union, the right to free enterprise is recognized as a fundamental right. The relationship and position of this right with other rights and freedoms have been formed based on judicial practice.

The right to free enterprise falls under the category of economic rights and is implemented in connection with other rights within this category. At the same time, depending on the nature of its implementation, this right is also related to a number of social rights.

Keywords: right to free enterprise, restriction, European Union, Constitution of the Republic of Azerbaijan, state regulation.

Анотація

The Plenum of the Constitutional Court of the Republic of Azerbaijan, in its decision dated December 16, 2011, notes that property, an essential institution of civil society, is one of the most crucial factors in economic development. Thus, property is declared inviolable by Article 13 of the Constitution, protected by the state, and stands as the foundation of every individual's freedom in society, essential for personal development and free enterprise [4].

“The Constitution, by establishing property rights, also guarantees its effective provision through means. For this reason, property rights are listed among the basic human and citizen rights and freedoms.

The legal position formulated by the Plenum of the Constitutional Court regarding property rights is that its content should be understood taking into account the provisions of Article 13 of the Constitution. Property, a significant institution of civil society, is a crucial factor for economic development. Therefore, property is declared inviolable by Article 13 of the Constitution and protected by the state. Property rights stand as the foundation of every individual's freedom in society, essential for personal development and free enterprise. The state should refrain from illegal interventions in the effective implementation of property rights and should prevent them” [4].

The Plenum of the Constitutional Court of the Republic of Azerbaijan, in its decision dated February 28, 2020, notes that as a guarantee of free enterprise activity in the Republic of Azerbaijan, every individual and legal entity can freely direct their movable and immovable property, including national currency, foreign currency assets, etc., to entrepreneurial activity and other areas of economic activity not prohibited by law, and use them according to their considerations [2].

Based on the preamble of the “Law on Entrepreneurial Activity”, this law is aimed at implementing the principle of equality for all forms of property, choosing fields of activity independently, and making economic decisions, thereby creating conditions for the extensive manifestation of economic initiative and entrepreneurship [9, preamble]. The connection between the right to free enterprise and property rights can be better understood in Article 6 concerning the rights of entrepreneurs and in Article 8 based on the property responsibility of entrepreneurs. Specifically, according to Article 6, one of the rights of entrepreneurs is to fully or partially acquire the property, other property rights of institutions based on state and other forms of ownership, to participate in other institutions' activities with their property, and with the agreement of the parties, to use the property and intellectual property objects of other physical and legal persons.

In Article 12 of the law, legal norms related to the defense of the entrepreneur's rights and lawful interests by the state are reflected. That article guarantees state protection of the rights and lawful interests of entrepreneurs regardless of the form of ownership and asserts the inviolability of the entrepreneur's property.

The international recognition of the relation between the right to free enterprise and property rights is associated with the case of Mark Alemo-Herron. In this case, the state representative emphasized the close connection between these rights, stating that the right to free enterprise emerged from the necessity to protect economic entrepreneurship.

Even though they have a constitutional character, neither of them is an absolute right, meaning they can be restricted under conditions defined by legislation. Both the right to free enterprise and property rights can be limited under certain circumstances, provided they meet the requirements set out in the legislation.

The Right to Free Enterprise and Freedom of Expression

First and foremost, it should be noted that when referring to freedom of expression here, commercial speech is intended. Commercial speech, being one of the methods of implementing the right to free enterprise, is a new concept for our national legislation. This is because both natural persons and legal entities are involved as subjects. A comprehensive understanding of commercial speech has not been given either in Europe or in the US; however, the basic elements for such an understanding have begun to form.

In 1976, the US Supreme Court extended constitutional protection to commercial speech as well. As emphasized in the US Supreme Court's decision in Valentine vs. Chrestensen (1942), commercial speech has historically not been considered protected under the First Amendment [24]. Advertisements, promises, and solicitations that make up this category of expression have been heavily regulated to protect consumers and to prevent fraud. However, since the 1970s, the Supreme Court has progressively deemed this type of speech worthy of First Amendment protection [26].

In the case law regarding the First Amendment to the US Constitution, commercial speech has been defined as “speech proposing a commercial transaction” [17, paragraph 153]. This type of freedom raises issues distinct from those created by pure freedom of expression, as it is an integral part of the underlying commercial transaction [23, paragraph 6]. At the same time, whether the protection of commercial speech advances the same values as the constitutional guarantee of mere freedom of expression is a matter of debate.

In the Central Hudson Gas & Electric Corp. vs. Public Service Commission case, commercial speech is defined as speech guided by the economic interests of the speaker and their audience [22, paragraph 54]. Similarly, in another court case, State Attorney Fennely describes commercial speech as: “the right to receive, submit information, express ideas, or present visuals as part of the recognition of commercial activity” [17, paragraph 153].

In the case of the Virginia State Board of Pharmacy vs. Virginia Citizens Consumer Council, the US Supreme Court stated that “consumers can best pursue their own interests only when they are adequately informed, and the best means to achieve this is not to close off communication channels but to open them” [25, p. 770]. Justice Blackman has quite emphatically stated that “a specific consumer's interest in the free flow of commercial information might be even more pressing for him than the day's most crucial political debate” [25, p.763].

In the legislation of the European Union, commercial speech freedom is considered as an integral part of general freedom of speech. The European Court of Human Rights has several times stated that statements made in a commercial context are included in the protection envisaged by Article 10 of the European Convention on Human Rights and Fundamental Freedoms. Article 10 of the ECHR states that everyone has the right to freedom of expression. Since this provision does not specify which types of statements are protected, it has a very general character. The ECHR has noted that there should be no distinction between different forms of expression and, regardless of their content, all expressions fall within the scope of Article 10 of the ECHR [14, paragraph 27].

It should be noted that Article 47 of the Constitution of the Republic of Azerbaijan guarantees everyone's freedom of thought and speech, but it is not clear which category of information is covered by freedom of thought and speech. Therefore, our Constitution does not directly protect commercial speech freedom. Commercial freedom of expression forms the basis of economic freedom and is an essential component of the right to free entrepreneurship. Therefore, examining and refining the legislative base for this freedom in our country is of great importance.

The right to free enterprise and labour rights

The relationship between the right to free enterprise and labour rights is somewhat complex. For example, in some foreign countries' legislation and international documents, the right to free enterprise is considered a component of labour rights. When we talk about labour rights here, we mostly mean everyone's freedom to engage in the type of work they desire. For instance, in the United Kingdom, workers are allowed to have legal relations as independent contractors, but in the Czech Republic, this is not permitted due to potential adverse impacts on worker protection and labour relations.

The right to free enterprise at the United Nations level is regulated within the framework of the right to work, called Article 6 of the International Covenant on Economic, Social, and Cultural Rights, where everyone has the right to engage in the profession of their choice. Here, the right to work means both independent and salaried jobs, and the entrepreneurial right is included in the independent work category.

It should be noted that ensuring a balance between the right to free enterprise and labour rights is of great importance. This is manifested by certain restrictions applied to the implementation of the right to free enterprise in the state's labour law regulations. From this perspective, reviewing the decisions of the European Court of Justice is essential to determine the relationship between these two rights. It should be noted that the labour law model is primarily based on the idea put forward by Otto Kahn Freund. Namely, according to Otto Kahn Freund, the main objective of lab or law has always been to fight against the imbalance of bargaining power inherent in labour relations [18, p.6].

In the case of Alemo-Herron and Others v. Parkwood Leisure Ltd, which was referred to by the Supreme Court of the United Kingdom for consideration, the CJEU determined that Article 16 should be applied in such a way that the rights of workers and the employer's right to engage in entrepreneurship are balanced [11].

In this regard, Spain and Finland were concerned about the repeal of the Directive No. 2002/15 of the European Parliament and the Council of the EU regulating the organization of working hours of people carrying out road transport activities. In this matter, both member states argued that the rules established by this Directive should not apply to self-employed individuals, as it could infringe on the freedom of economic activity and the right to entrepreneurship. The European Court of Justice ruled that these rights are general principles of EU legislation and should be interpreted considering their social function [16]. Therefore, these rights can be limited under two conditions:

1) the limitation must proportionately protect general interests and

2) such a limitation should not weaken or obstruct the nature of the right.

As part of the first condition, the Court determined that working hour restrictions can also apply to self-employed individuals because the purpose of such measures is to create better safety conditions [96].

An important point here is that the right to entrepreneurship, ensured by Article 16, is not an absolute right. In other words, member states can establish norms concerning the restriction of this right in certain cases. Thus, the stronger the protection of labour rights provided by national labour legislation, the stronger the pressure on national systems to justify the adoption of rules restricting entrepreneurial freedom [21, p. 180]. By “pressure,” it is understood that the requirements of the proportionality test must be met by the states when restricting the right to free entrepreneurship in the field of labour relations. Such a result suggests that labour laws in the European Union might need to pass the proportionality test and could be exceptions to market freedom and competition laws [15, p. 464].

On the other hand, it should be noted that ensuring the right to free enterprise can also facilitate the implementation of labour rights. Supporting entrepreneurship, promoting favourable market conditions for small and medium entrepreneurs, as well as foreign investors, leads to the creation of new jobs, thereby reducing unemployment and expanding opportunities for everyone to engage in their desired profession. Notably, the 8th of the 17 Sustainable Development Goals reflected in the “2030 Agenda for Sustainable Development” adopted by world leaders at the historic summit of the United Nations General Assembly in September 2015 is defined as “Promoting inclusive and sustainable economic growth, employment for all, and decent work.” The opportunity to implement labour rights is directly linked to the pace of economic development within this goal. It should be noted that the second part of Article 35 of the Constitution of the Republic of Azerbaijan protects everyone's right to choose their activity type, profession, occupation, and workplace based on their ability to work. This article, in its protection of “activity type and occupation,” can be considered as part of the constitutional defence of the right to free enterprise.

Also, by examining the “Law on Entrepreneurial Activity” regarding the rights and duties of entrepreneurs in lab or relations, we can analyse the relationship between these two rights. The 6th article of this law states that entrepreneurs have the right to hire and dismiss workers, determine the form and system of their labour payment, the amount of their property, and other types of income. However, these rights should be implemented considering the imperative requirements of labour legislation. The law also specifies the responsibilities of entrepreneurs in labour relations, which plays a crucial role in the mutual protection of the mentioned rights. The 7th article regulating the duties of entrepreneurs specifies the following:

• To fulfil all the obligations arising from the current legislation and the contracts it concludes;

• To sign contracts (agreements) with citizens who are hired, and if necessary, to conclude collective agreements with trade unions acting on behalf of labour collectives in accordance with the legislation of the Republic of Azerbaijan;

• Not to prevent workers from joining trade unions;

• To pay workers' wages at a level not less than the minimum amount set by the legislation of the Republic of Azerbaijan;

• To allocate the specified amounts to the body (institution) determined by the relevant executive authority, as well as to other funds created for the social protection of workers in the manner and volume specified;

• To pay taxes as defined in the legislation;

• To provide workers with working conditions in accordance with the current legislation and contracts (agreements) [9, p.7].

In addition to the above, entrepreneurs should also ensure their activities based on the requirements of the Labour Code and other regulatory legal acts in the field of labour relations. In conclusion, we can note that the complex relationship between labour law and free entrepreneurship is reflected in the legal science and experience of the Republic of Azerbaijan.

The right to free enterprise and the right to live in a healthy environment

The right to free enterprise should be implemented in such a way that such activity does not hinder the right of individuals to live in a healthy environment. According to Article 39 of the Constitution, everyone has the right to live in a healthy environment and no one can pose a threat or harm to the environment or natural resources beyond the limits set by law [1, p.39].

It should be noted that the protection of human health emerges as one of the reasons for restricting the right to free enterprise. According to the second part of Article 71 of the Constitution, everyone's rights and freedoms are limited by the Constitution and laws, as well as by the rights and freedoms of others [1, p.71.2].

To better understand the relationship between these two rights, we reviewed a series of court cases. In the Deutsches Weintor court case, with Directive No. 1924/2006, the CJEU decided that the ban applied to wine producers and distributors using “easy digestion” health claims, even if this claim was naturally true, was in line with the Charter. The court believed such a prohibition does not significantly restrict the freedom to choose a profession and/or engage in entrepreneurship, but it restricts the methods of producing and selling products for producers and distributors. The court then emphasized that these freedoms are not absolute and must be balanced with the requirements of Article 35 of the Charter, which requires all EU policies and activities to ensure a high level of human health protection. In this context, the court pointed out that alcoholic beverages, especially from an advertising perspective, represent a special category of foods that are subject to serious regulation due to the known harmful effects related to addiction and misuse risks and alcohol consumption, including relevant advertising. In this context, the CJEU decided that a complete ban on any health claim (digestion) for wines/alcoholic beverages could be considered necessary” [10].

“In Spain, local legislation prohibits the advertising of alcoholic beverages in places where their sale, supply, and consumption are forbidden”. In relation to a dispute that arose on this matter, the Supreme Court decided that the right to free enterprise is not superior to the right to health. If these rights intersect, then a balance is struck by determining the least restrictive measures that respect both interests, and an analysis of the interests is carried out. Restricting the right to free enterprise is considered legal if it is not proven that it can be ensured through less restrictive means. The Court decided that in this situation, the protection of consumers and their health takes precedence over the alleged infringement of the right to free enterprise, because the alcoholic beverages company could not prove that consumer health could be protected by less restrictive means [20].

In Portugal, when the installation of diagnostic medical devices was denied, the plaintiff applied to the court, alleging that the standards set for refusal were contrary to the constitution. The Central Administrative Court of Northern Portugal reported that this standard does not conflict with the right to establish a private company in the health sector. The right to free enterprise, including in the health sector, is not an absolute right; the state can impose restrictions based on the “public interest” and “ensuring appropriate quality and efficiency standards in health institutions,” and also based on requirements for “discipline and control regarding the production, distribution, marketing, and use of treatment and diagnostic tools”. The court concluded that the standards do not infringe on the freedom of enterprise because they are consistent with the implementation of rights and proportional restrictions [19].

Therefore, the right to free enterprise is non-absolute, while the right to live in a healthy environment is absolute. Hence, individuals must pay special attention to compliance with legal requirements aimed at protecting public health when carrying out entrepreneurial activities.

The right to free enterprise and the right to freedom of association

The right to associate is considered one of the main rights in the realization of the right to free enterprise. This right, established in Article 58 of the Constitution, reflects everyone's right to create a public association, to freely join (or not join) it, and to leave it [1, art. 58].

The relationship between the right to free enterprise and the right to associate was examined by the Constitutional Court in its decision dated September 20, 2004, concerning the examination of the compliance of Article 133.1 of the Civil Code of the Republic of Azerbaijan with the Constitution of the Republic of Azerbaijan:

“The issues related to the establishment of a legal entity and the conduct of relevant activities by it are closely related to Article 58 (right to associate) and Article 59 (right to free enterprise) of the Constitution of the Republic of Azerbaijan. The Constitution of the Republic of Azerbaijan attributes the right to associate to fundamental human and citizen rights and freedoms. In international legal acts, this right is referred to as freedom of assembly and association. This freedom is evaluated by the European Court of Human Rights specifically through the prism of freedom of expression and speech. In the modern European legal system, it is mainly accepted as political and humanitarian law. Although this right is not absolute, restrictions on it are allowed only if it is both defi ned by law and necessary in a democratic society, responds to a high public necessity, and corresponds to the purposes of the law” [5].

As can be seen from the above decision, the right to associate is defined as a form of realization of the right to free enterprise. In addition, in international documents, the right to associate is considered as a form of realizing the right to freedom of thought and speech. Like the right to free enterprise, the right to associate is not an absolute right and can be restricted provided it meets certain criteria”.

The Right to Free Enterprise and the Right to Petition

The right to petition is considered one of the primary rights in the constitutional provision of the right to free enterprise. Article 57 of the Constitution grants entrepreneurs the right to directly address state bodies as well as send individual and collective written petitions. It is also specified that citizens of the Republic of Azerbaijan have the right to criticize the activities or work of state organs, their responsible individuals, political parties, trade unions, other public associations, and individual citizens [1, p. 57].

Thus, summarizing the points expressed in this article, we can arrive at the following conclusions:

1. The relationship between the right to free enterprise and the right to property can be generalized as follows:

a) The right to property is the foundation for the realization of the right to free enterprise;

b) Even if they possess a constitutional character, neither is an absolute right, meaning they can be restricted under specified legislative circumstances;

c) Property is the factor that causes responsibility in the right to free enterprise.

2. The term “commercial freedom of expression” is a new concept for our national legislation, representing one of the methods for implementing the right to free enterprise. This includes both individuals and legal entities as subjects.

3. The relationship between the right to free enterprise and labor rights has a somewhat complex character. For instance, in some foreign countries' legislations and international documents, the right to free enterprise is considered a component of labor rights. Additionally, the regulations introduced by the state in the field of labor rights manifest as certain types of restrictions when implementing the right to free enterprise. On the other hand, it should be noted that ensuring the right to free enterprise can also facilitate the implementation of labor rights.

Conclusion

The right to free enterprise belongs to the category of economic rights and is realized in mutual relation with the rights within this category. At the same time, depending on the character of the relationships that arise from its implementation, it is also related to a range of social rights. The current article examines the place of the right to free enterprise in the system of fundamental human rights and freedoms, especially in relation to property rights, intellectual property rights, freedom of expression, labour rights, the right to live in a healthy environment, the right to associate, and the right to petition, comparing and analysing from both national and international legislative perspectives.

References Used

1. Constitution of the Republic of Azerbaijan. November 12, 1995. Legislation Collection of the Republic of Azerbaijan, July 31, 1997, publication number: 01.

2. Plenum of the Constitutional Court of the Republic of Azerbaijan's decision dated February 28, 2020, on the “Article 430.4 of the Administrative Offenses Code of the Republic of Azerbaijan and “Rules for Operations in Foreign Currency of Residents of the Republic of Azerbaijan, as well as in National and Foreign Currency of Non-residents” clause 4.3.1.3.” Baku: Azerbaijan newspaper, 2020.

3. Plenum of the Constitutional Court of the Republic of Azerbaijan's decision dated December 21, 2012, on the “explanation of Articles 1, 5, and 12 of the Law of the Republic of Azerbaijan on the specialization of the housing fund.” Republic Newspaper, February 7, 2013, publication number: 28.

4. Plenum of the Constitutional Court of the Republic of Azerbaijan's decision dated December 16, 2011, on the “explanation of Articles 107-2.1 and 107-5.1 of the Civil Code of the Republic of Azerbaijan.” Republic Newspaper, December 29, 2011, publication number: 283.

5. Plenum of the Constitutional Court of the Republic of Azerbaijan's decision dated September 20, 2004, on the “check of the compliance of Article 133.1 of the Civil Code of the Republic of Azerbaijan with the Constitution of the Republic of Azerbaijan.” Baku: Law, 2005.

6. Plenum of the Constitutional Court of the Republic of Azerbaijan's decision dated July 9, 2014, on the “examination of the compliance of the decision of the Civil Chamber of the Supreme Court of the Republic of Azerbaijan dated June 4, 2013, based on the complaint of M. Xocaliyev, with the Constitution and laws of the Republic of Azerbaijan.” Republic newspaper, 2014.

7. Plenum of the Constitutional Court of the Republic of Azerbaijan's decision dated June 12, 2017, on the “examination of the compliance of the decision of the Civil Chamber of the Supreme Court of the Republic of Azerbaijan dated November 11, 2016, based on the complaint of M. Muradov and others, with the Constitution and laws of the Republic of Azerbaijan.” Baku: Law Publishing House, 2017.

8. Civil Code of the Republic of Azerbaijan. Baku: “Law Publishing House”, 2018, 884 p.

9. Law of the Republic of Azerbaijan “On Entrepreneurial Activity” dated December 15, 1992. Information of the Supreme Council of the Republic of Azerbaijan, December 15, 1992, publication number: 23.

10. Court of Justice of the European Union. Deutsches Weintore G. v. Land Rheinland-Pfalz, C-544/10, 6 September 2012

11. Court of Justice of the European Union. Mark Alemo-Herron v Parkwood Leisure Case C-426/11 ECLI:EU: C: 2013:82, 19 February 2013

12. Court of Justice of the European Union, Scarlet Extended SA v. Societe belge des auteurs, compositeurs et editeurs SCRL (SA- BAM) C-70/10, CJEU, C-314/12, 24 November 2011

13. Court of Justice of the European Union. UPC Telekabel Wien GmbH v. Constantin Film Verleih GmbH and Wega Filmproduk- tionsgesellschaftmbH, C-314/12, 27 March 2014

14. European Court of Human rights. Muller v. Switzerland [1988] 13 EHRR 212, para 27.

15. Hugh Collins (2011) The impossible necessity of European labour law. In: Muller, Sam, Zouridis, Stavros, Frishman, Morly and Kistemaker, Laura, (eds.) The Law of the Future and the Future of Law. Forum for international criminal and humanitarian law series. Torkel Opsahl Academic EPublisher, Oslo, Norway, p. 453-468

16. Judgment of the Court (First Chamber). Spain and Finland v Parliament and Council. 9 September 2004 in joined cases C-184/02 and C-223/02

17. Opinion of Advocate General Fennelly, case C-376/98, Germany v European Parliament and Council, 15 June 2000, EU:C:2000: 324

18. Paul Davies, M.A., LL.M. Otto Kahn Freund's Labour and the Law. 3rd edition. London Steven and Sons. 1983, p. 412

19. Portugal Central Administrative Court of Northern Portugal, No. 00382/07.3 BECBR, 9 November 2012

20. Spain, Supreme Court - Civil Division (Sala Civil del Tribunal Supremo), Decision STS 891/2010, 3 January 2011

21. Stefano Giubboni. Freedom to conduct a business and EU labour law. Eu Const 14, 2018, p.172-190

22. Supreme Court of the United States. Central Hudson Gas and Electricity Corporation v. Public Service Commission, 447 US 557, 561, 1980

23. Supreme Court of the United States. Nike, Inc., et al. v. Marc Kasky, On Writ of Certiorari to the Supreme Court of California, Brief of Amicus Curiae, Centre for Individual Freedom in support of Petitioners, February 28, 2003, N02-575, p. 6.

24. Supreme Court of the United States. Valentine v. Chrestensen, 316 U.S. 52, 1942.

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