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Document 52012SC0063
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENTRevision of the legislative framework on the posting of workers in the context of provision of services
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENTRevision of the legislative framework on the posting of workers in the context of provision of services
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENTRevision of the legislative framework on the posting of workers in the context of provision of services
/* SWD/2012/0063 final - APP/2012/0064 */
COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENTRevision of the legislative framework on the posting of workers in the context of provision of services /* SWD/2012/0063 final - APP/2012/0064 */
TABLE OF CONTENTS 1........... Introduction.................................................................................................................... 7 1.1........ What is posting of workers in the
context of the provision of services?............................. 7 1.2........ The legal framework for the
Posting of Workers.............................................................. 8 1.2.1..... Primary law.................................................................................................................... 8 1.2.2..... Secondary law................................................................................................................ 9 1.3........ Developments since the adoption
of the Directive in 1996.............................................. 10 2........... Gathering information and
consulting stakeholders.......................................................... 11 2.1........ Gathering information.................................................................................................... 11 2.1.1..... Studies......................................................................................................................... 11 2.1.2..... Expert Committee on the Posting of
Workers (ECPW)................................................. 12 2.2........ Consultation................................................................................................................. 13 2.2.1..... Public consultations – Positions
of stakeholders............................................................. 13 2.2.2..... General context – the Single
Market Act....................................................................... 16 2.2.3..... Inter-Service Steering Group
(ISSG)............................................................................ 16 2.2.4..... Impact Assessment Board (IAB).................................................................................. 17 3........... Problem definition......................................................................................................... 17 3.1........ The phenomenon of posting.......................................................................................... 17 3.1.1..... Extent of the phenomenon............................................................................................. 17 3.1.2..... Flows of postings.......................................................................................................... 18 3.1.3..... Sector-specific breakdown........................................................................................... 19 3.1.4..... Relevant factors for posting........................................................................................... 19 3.1.5..... Effects of posting.......................................................................................................... 20 3.1.5.1.. Economic and social effects.......................................................................................... 20 3.1.5.2.. Effects on actors and
characterisation of patterns across Member States........................ 22 3.2........ The problems to be addressed...................................................................................... 27 3.2.1..... Problems related to the
implementation, monitoring and enforcement of the applicable working conditions
of posted workers, including the protection of worker's rights........................................................ 28 3.2.1.1.. Problem 1a: Deficiencies with
respect to information for employers and posted workers. 28 3.2.1.2.. Problem 1b: Deficiencies in
control, monitoring and enforcement action.......................... 29 3.2.1.3.. Problem 1c: Unnecessary
administrative requirements and control measures imposed on service providers 30 3.2.1.4.. Problem 1d: Deficiencies with
regard to administrative cooperation................................ 31 3.2.1.5.. Problem 1e: Posted workers are not
adequately protected in disputes concerning individual employment conditions.................................................................................................................................... 32 3.2.2..... Abuse of the posted workers status
in order to evade or circumvent legislation............... 34 3.2.2.1.. Problem 2a: Posting is no longer of
a temporary nature or has a rotational character....... 34 3.2.2.2.. Problem 2b: The employer has no
genuine link with the sending Member State............... 36 3.2.3..... Problems related to the unclear or
controversial interpretation of the terms and conditions of employment of the
Directive....................................................................................................................... 37 3.2.3.1.. Problem 3a: The scope and level of
the terms and conditions of employment.................. 37 3.2.3.2.. Problem 3b: Unclear level of
protection with regard to the notion of 'minimum rates of pay' 39 3.2.4..... Problem 4: Tensions between the
freedom to provide services/establishment and national industrial relation
systems.................................................................................................................................... 40 3.3........ Does the EU have the right to
act?................................................................................ 43 4........... Objectives.................................................................................................................... 43 4.1........ General objectives........................................................................................................ 43 4.2........ Specific and operational
objectives................................................................................ 43 4.2.1..... Better protecting the rights of
posted workers................................................................ 43 4.2.2..... Facilitating cross-border provision
of services and improving climate of fair competition.. 44 4.2.3..... Improving legal certainty as
regards the balance between social rights and economic freedoms, in particular
in the context of the posting of workers.................................................................................. 44 4.3........ Are these objectives consistent
with other EU policies?.................................................. 45 5........... Policy options............................................................................................................... 47 5.1........ Overview of the policy options...................................................................................... 47 5.1.1..... Options and sub-options related to
problems 1, 2 and 3................................................ 47 5.1.2..... Options related to problem 4........................................................................................ 47 5.1.3..... Packages of options...................................................................................................... 48 5.2........ Description of the policy options................................................................................... 48 5.2.1..... Option 1: Baseline related to the
posting of workers (problems 1, 2 and 3).................... 48 5.2.2..... Option 2: Non-regulatory
intervention re problems 1, 2 and 3........................................ 50 5.2.2.1.. Sub-option 2a (monitoring and
enforcement)................................................................. 50 5.2.2.2.. Sub-option 2b (abuses)................................................................................................ 50 5.2.2.3.. Sub-option 2c (terms and conditions
of employment)..................................................... 50 5.2.3..... Option 3: Regulatory intervention
re problems 1, 2 and 3............................................... 51 5.2.3.1.. Sub-option 3a (monitoring and
enforcement)................................................................. 51 5.2.3.2.. Sub-option 3b (abuses)................................................................................................ 52 5.2.3.3.. Sub-option 3c (terms and conditions
of employment)..................................................... 53 5.2.4..... Option 4: Repealing the Directive.................................................................................. 54 5.2.5..... Option 5: Baseline related to the
tensions between the freedom to provide services/ establishment and national
industrial relation systems (problem 4)........................................................................... 54 5.2.6..... Option 6: Non-regulatory
intervention re problem 4....................................................... 55 5.2.7..... Option 7: Regulatory intervention
re problem 4.............................................................. 56 6........... Analysis of the impact of the
policy options.................................................................... 56 6.1........ Overview..................................................................................................................... 56 6.2........ Option 1: Baseline posting of
workers........................................................................... 57 6.2.1..... Economic Impact.......................................................................................................... 57 6.2.2..... Social impact................................................................................................................ 57 6.2.3..... Positions of stakeholders............................................................................................... 57 6.3........ Package A (Regulatory measures to
deal with problem 1, combined with non-regulatory measures to deal with
problems 2 and 3)........................................................................................................ 58 6.3.1..... Economic Impact.......................................................................................................... 58 6.3.2..... Social impact................................................................................................................ 60 6.3.3..... Positions of stakeholders............................................................................................... 61 6.4........ Package B (Regulatory measures to
deal with problems 1 and 2, combined with non-regulatory measures to deal with
problem 3)............................................................................................................ 62 6.4.1..... Economic Impact.......................................................................................................... 62 6.4.2..... Social impact................................................................................................................ 62 6.4.3..... Positions of stakeholders............................................................................................... 63 6.5........ Package C (Regulatory measures to
deal with problems 1 and 3, combined with non-regulatory measures to deal with
problem 2)............................................................................................................ 63 6.5.1..... Economic Impact.......................................................................................................... 63 6.5.2..... Social impact................................................................................................................ 64 6.5.3..... Positions of stakeholders............................................................................................... 65 6.6........ Package D (Regulatory measures to
deal with problems 1, 2 and 3)............................... 65 6.7........ Option 5: Baseline tensions
between the freedom to provide services/establishment and national industrial
relation systems (problem 4)..................................................................................................... 65 6.7.1..... Economic Impact.......................................................................................................... 65 6.7.2..... Social impact................................................................................................................ 65 6.8........ Option 6: Non-legislative
intervention............................................................................ 66 6.8.1..... Economic Impact.......................................................................................................... 66 6.8.2..... Social impact................................................................................................................ 66 6.8.3..... Positions of stakeholders............................................................................................... 66 6.9........ Option 7: Legislative
intervention................................................................................... 66 6.9.1..... Economic Impact.......................................................................................................... 66 6.9.2..... Social impact................................................................................................................ 67 6.9.3..... Positions of stakeholders............................................................................................... 67 7........... Comparison of the options............................................................................................ 67 7.1........ Effectiveness with regard to the
specific objectives......................................................... 67 7.1.1..... Option 1....................................................................................................................... 67 7.1.2..... Package A................................................................................................................... 68 7.1.3..... Package B.................................................................................................................... 68 7.1.4..... Package C................................................................................................................... 68 7.1.5..... Package D................................................................................................................... 69 7.1.6..... Option 5....................................................................................................................... 69 7.1.7..... Option 6....................................................................................................................... 70 7.1.8..... Option 7....................................................................................................................... 70 7.2........ Efficiency (cost-effectiveness)
with regard to the specific objectives............................... 70 7.2.1..... Option 1....................................................................................................................... 70 7.2.2..... Package A................................................................................................................... 70 7.2.3..... Package B.................................................................................................................... 71 7.2.4..... Package C................................................................................................................... 71 7.2.5..... Package D................................................................................................................... 72 7.2.6..... Option 5....................................................................................................................... 72 7.2.7..... Option 6....................................................................................................................... 72 7.2.8..... Option 7....................................................................................................................... 72 7.3........ Coherence with the general
objectives........................................................................... 73 7.4........ Overview table:............................................................................................................ 73 8........... The preferred option..................................................................................................... 74 8.1........ Combination of package B and
option 7........................................................................ 74 8.2........ Legal form.................................................................................................................... 74 8.2.1..... Legal form of package B............................................................................................... 74 8.2.1.1.. Regulation.................................................................................................................... 74 8.2.1.2.. Amending the existing Directive..................................................................................... 75 8.2.1.3.. A separate new enforcement
Directive.......................................................................... 75 8.2.2..... Legal form of option 7.................................................................................................. 75 9........... Monitoring and evaluation............................................................................................. 76 9.1........ Monitoring.................................................................................................................... 76 9.2........ Evaluation..................................................................................................................... 77 COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT
Revision of the legislative framework on the posting of workers in the context
of provision of services Accompanying the document Proposal for a
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the
enforcement of Directive 96/71/EC concerning the posting of workers in the
framework of the provision of services
(Text with EEA relevance)
and
Proposal for a
COUNCIL REGULATION
on the exercise of the right to take collective action within the context of
the freedom of establishment and the freedom to provide services
(Text with EEA relevance) 1. Introduction 1.1. What
is posting of workers in the context of the provision of services? The free movement of workers is a fundamental
principle of the European Union enshrined in the Treaty. The freedom to provide
services includes the right of a service provider established in a Member State
to temporarily post its workers to another Member State in order to provide a
service. There are three different posting situations for the purpose of the
Directive 96/71/EC[1] (hereafter: 'the
Directive') defined in Article 1: (1) Contracting/Subcontracting: Undertakings
"post workers to the territory of another Member State on their account
and under their direction, under a contract concluded between the undertaking
making the posting and the party for whom the services are intended, operating
in that Member State, provided there is an employment relationship between the
undertaking making the posting and the worker during the period of posting." Example: An undertaking established in
Portugal specializing in construction works, enters into a subcontract with a
French undertaking for the carrying out of works for the construction of a railway
line in the west of France. For that purpose it brings its employees from
Portugal. (2) Intra-corporate transfers: Undertakings
"post workers to an establishment or to an undertaking owned by the group
in the territory of [another] Member State, provided there is an employment
relationship between the undertaking making the posting and the worker during
the period of posting." Example: A bank established in Austria
sends an employee from the headquarters to its branch in Slovenia for one year. (3) Assignment of temporary agency
workers: Undertakings, "being a temporary employment undertaking or
placement agency, hire out a worker to a user undertaking established or
operating in the territory of [another] Member State, provided there is an
employment relationship between the temporary employment undertaking or
placement agency and the worker during the period of posting." Example: A temporary work agency
established in Luxembourg hires out workers to a company in France. 1.2. The
legal framework for the Posting of Workers 1.2.1. Primary law The EU establishes an internal market which
is based on a highly competitive social market economy, aiming at full
employment and social progress (Article 3(3) TEU). The Treaty establishes the right for
companies to provide their services in other Member States. It provides that 'restrictions
on the freedom to provide services in the Union shall be prohibited in respect
of nationals of Member States who are established in a Member State other than
that of the person to whom the services are intended' (Article 56 TFEU). The
freedom to provide services may be limited only by rules which are justified by
overriding reasons of general interest, provided that these apply without
distinction, and insofar as that interest is not already protected by the rules
to which the service provider is subject in the Member State in which he is
established. The Treaty attributes to the Union shared
competences to promote employment, improved living and working conditions,
proper social protection, and the development of human resources with a view to
lasting high employment and the combating of exclusion. The Union recognises
and promotes the role of the social partners at its level, taking into account
the diversity of national systems. It facilitates dialogue between the social
partners, respecting their autonomy. (Articles 151 and 152 TFEU) The Charter of Fundamental Rights of the EU
has become legally binding with the Lisbon Treaty. When preparing EU
legislation, implications on a number of fundamental rights have to be taken
into consideration: in particular protection of personal data (Article 8), the
freedom to choose an occupation and right to engage in work (Article 15), the
freedom to conduct a business (Article 16), non-discrimination (Article 21), workers'
right to information and consultation within the undertaking (Article 27), the
right of collective bargaining and action (Article 28), protection in the event
of unjustified dismissal (Article 30), fair and just working conditions
(Article 31), family and professional life (Article 33), the right to an
effective remedy and to a fair trial (Article 47). There is no obligation under
the Charter for the EU legislator to provide for the conditions of exercise of
a right. According to its Article 51(2), the Charter does not extend the field
of application of Union law beyond the powers of the Union or establish any new
power or task for the Union, or modify powers and tasks as defined in the
Treaties. EU legislation must comply with the Charter
and Member States, when implementing Union law, must also respect the Charter[2].
According to Article 52(1) of the Charter, any limitation on the exercise of
the rights and freedoms recognised by this Charter must be provided for by law
and respect the essence of those rights and freedoms. Such limitations should
respect the principle of proportionality and may be made only if they are
necessary and genuinely meet objectives of general interest recognised by the
Union or the need to protect the rights and freedoms of others. 1.2.2. Secondary law The Directive facilitates the cross-border
provision of services while ensuring an adequate level of protection of
workers’ rights. It is based on an internal market legal basis (Article 53(1)
and 62 TFEU). The Directive defines the core of mandatory working conditions
which have to be respected by companies in the host country. This facilitates
the cross-border provision of services considerably as the service provider
does not have to know and apply the entire body of employment rules of the host
country. At the same time, the directive provides for a significant level of protection
of posted workers and avoids that working conditions in the host country are
undermined as an effect of competition. The Directive aims at promoting the
necessary climate of fair competition between all service providers in the
Internal Market by seeking to lay the conditions for a level playing field, as
well as legal certainty for service providers, service recipients, and workers
posted within the context of the provision of services. The 'hard core' of terms and conditions of
work and employment, as defined in Article 3.1 of the Directive, includes: ·
maximum work periods and minimum rest periods; ·
minimum paid annual holidays; ·
the minimum rates of pay, including overtime
rates; this point does not apply to supplementary occupational retirement
pension schemes; ·
the conditions of hiring-out of workers, in
particular the supply of workers by temporary employment undertakings; ·
health, safety and hygiene at work; ·
protective measures with regard to the terms and
conditions of employment of pregnant women or women who have recently given
birth, of children and of young people; ·
equality of treatment between men and women and
other provisions on non-discrimination. As far as these terms and conditions of
employment are laid down by law, regulation or administrative provision, Member
States must apply them to workers posted to their territory[3].
Member States must equally apply them to posted workers if they are laid down by
collective agreements or arbitration awards which have been declared
universally applicable within the meaning of Article 3(8), insofar as they concern
the activities referred to in the Annex of the Directive (building work).
Member States may apply terms and conditions of employment laid down by such collective
agreements or arbitration awards with regard to other activities than building
work (Article 3(10) second indent) and on matters other than those referred to
in Article 3(1) in the case of public policy provisions (Article 3(10) first
indent) in accordance with primary law. While the Directive does not apply directly
to undertakings established in third countries, according to Article 1(4)
Member States must not provide undertakings established in a third country with
a more advantageous competitive position in comparison to undertakings
established in a Member State, in particular with regard to working conditions
and wage costs. Consequently, this implies that the Directive indirectly sets
the minimum level of protection for these workers, and at least the nucleus of
mandatory rules needs to be applied. Moreover, the Directive includes in
Articles 4, 5 and 6 provisions on information, administrative cooperation, enforcement
and jurisdiction. The concept of posted workers is also known
in the field of coordination of social security systems. The applicable legal
framework in this field is provided by Regulation (EC) No 883/2004 and
Regulation (EC) No 987/2009, adopted on the basis of Article 48 TFEU. 1.3. Developments
since the adoption of the Directive in 1996 The Commission evaluated the implementation
and application of the Directive and adopted a report in 2003.[4]
This report identified several problems of deficient or incorrect implementation
and application of the Directive in specific Member States. Furthermore, the Commission adopted in 2006[5] several guidelines aimed
at clarifying the extent to which certain national control measures could be
justified and proportionate in view of prevailing Union law as interpreted in
the Court’s jurisprudence. In a second Communication in 2007[6] the Commission, after
having carried out an inquiry, concluded that some Member States carried out
forms of control that were not justified or proportionate and that the quality
of administrative cooperation and access to information as provided by Member
States was often insufficient. In 2008, the Commission adopted a
Recommendation[7] calling on
Member States to take urgent action to improve the situation of posted workers
through better cooperation between national administrations, for more effective
exchange of information between Member States and better access to information
and exchange of best practice. It also established in 2008 an Expert Committee on
Posting of Workers, composed by Member States and social partners, with the aim
of discussing and clarifying problems of implementation of the Directive. Starting at the end of 2007, the judgments
of the European Court of Justice in the Viking-Line, Laval, Rüffert and
Commission vs Luxembourg cases[8]
(a summary of the judgments is provided in Annex 10) triggered an intense
debate among EU Institutions, academics and social partners which focused on two
major issues: Firstly, how to set the right balance
between the exercise of the right to take collective action by trade unions,
including the right to strike, and the economic freedoms enshrined in the TFEU,
in particular the freedom of establishment and the freedom to provide services.
Secondly, how to interpret some key provisions in the Directive concerning the
posting of workers in the framework of the provision of services, such as the
concept of public policy, the material scope of the terms and conditions of
employment governed by the Directive and the nature of mandatory rules, in
particular the minimum wage. At the presentation of his political
priorities before the European Parliament on 15 September 2009, President
Barroso recognised the need to address the concerns and issues raised by
several stakeholders during such debate and announced a legislative initiative
to resolve the problems of implementation and interpretation of the posting of
workers Directive. The report that Prof. Monti submitted on
9th May 2010 on the relaunching of the Single market[9]
addressed such concerns. He recognized that the controversy fuelled by the
rulings "has the potential to alienate from the Single Market and the EU a
segment of public opinion, workers' movements and trade unions, which has been
over time a key supporter of economic integration". He further added that
"the Court's cases have exposed the fault lines that run between the
single market and the social dimension at national level". 2. Gathering
information and consulting stakeholders 2.1. Gathering
information 2.1.1. Studies Since 2009, the Commission launched four
ex-post evaluation studies: ·
Study on the economic and social effects
associated with the phenomenon of posting of workers in the European Union[10] ·
Study on the legal aspects of the posting of workers
in the framework of the provision of services in the European Union (covering
12 Member States)[11] ·
Complementary study on the legal aspects of the
posting of workers in the framework of the provision of services in the
European Union (covering 15 Member States)[12] ·
Study on the protection of workers' rights in
subcontracting processes in the European Union[13] In order to prepare the Impact Assessment
an ex-ante evaluation study has been carried out by an external consultant in
2011: ·
Preparatory study for an Impact Assessment
concerning the possible revision of the legislative framework on the posting of
workers in the context of the provision of services[14] Following two calls for proposals in 2009
and 2010[15] the Commission financed
several pilot projects concerning the working and living conditions of posted
workers. One of the projects is the study Information provided on the posting
of workers[16] which
assessed in particular the information provided via Internet on the applicable
working conditions to posted workers of seven Member States. Further projects
concern the transport sector, the agricultural sector and the bilateral
administrative cooperation between labour inspectorates. These latter projects
are currently ongoing. Furthermore, the Impact Assessment builds
on information gathered on previous occasions such as the implementation report
of 2003, the Communications of 2006 and 2007, as well as the Recommendation of
2008. 2.1.2. Expert
Committee on the Posting of Workers (ECPW) The main thrust of the work of the ECPW has
been the discussion of several provisions of the Directive, in particular the
concept of minimum rates of pay as well as the notion of 'public policy
provisions' in Article 3(10) of the Directive (see below section 3.2.3). The
ECPW is currently finalising several detailed notes on these issues. A sub-group of the ECPW assessed the
possibilities to facilitate the exchange of information between the responsible
national authorities by electronic means. As a result of this work and related
Council Conclusions of 7 March 2011[17] a pilot project on
electronic information exchange using a separate and specific application of
the Internal Market Information System (IMI) in the area of posting of workers
started on 16 May 2011. Its aim is to test an IMI module used for the
implementation of the administrative cooperation provisions of the Directive.
The Commission will report to the Council on the results of the use of the
module at the latest within one year after the launching of the pilot project. The ongoing pilot project of IMI indicates
that working cooperation between national administrations is needed in order to
obtain data on the ownership or representation of the posting company as well
as on the activity of posted workers (lawfulness and duration of the activity,
record of hours worked or of wages paid for work, employment contracts). First
statistics as well as user feedback of the pilot project are provided in Annex 4. 2.2. Consultation 2.2.1. Public consultations – Positions of stakeholders On 27 October 2010, the Commission issued a
Communication "Towards a Single Market Act"[18]
putting forward for debate 50 proposals to re-launch the single market,
including the following two proposals: ·
Proposal 29: "Pursuant to its new strategy
for the effective implementation of the Charter of Fundamental Rights by the
European Union, the Commission will ensure that the rights guaranteed in the
Charter, including the right to take collective action, are taken into account.
The Commission will first of all conduct an in-depth analysis of the social
impact of all proposed legislation concerning the single market." ·
Proposal 30: "In 2011, the Commission will
adopt a legislative proposal aimed at improving the implementation of the
Posting of Workers Directive, which is likely to include or be supplemented by
a clarification of the exercise of fundamental social rights within the context
of the economic freedoms of the single market." These two proposals were amongst those
which received the largest number of suggestions and comments from respondents
(particularly unions, citizens and civil society organizations). The main
cross-industry European social partners replied to this consultation in line
with the positions held during the debate triggered by the Court rulings.[19] The replies are
summarised in Annex 9. According to ETUC the Court rulings may
have as a consequence that industrial actions launched in situations where
cross-border aspects are involved are screened and judged by EU or national
tribunals as contrary to fundamental economic freedoms, and therefore illegal.
ETUC perceives therefore the rulings in question as establishing a
jurisprudence that gives primacy to internal market objectives. They propose to thoroughly amend the
legislation in two key aspects: 1. To revise the Posting of Workers
Directive (Directive 96/71/EC) by including a reference to the principle of
'equal pay for equal work' and allowing the host Member State to apply more
favourable conditions (in particular beyond the minimum rates of pay) or to
extend the applicable conditions beyond the nucleus of terms and conditions of
employment that is established in Article 3(1) of the Directive; 2. To introduce a "social progress
clause/Monti clause" in the legislation or a 'Social Progress Protocol' in
the Treaty with the aim of giving priority to fundamental social rights over
economic freedoms. In response to the consultation on the
re-launch of the Single Market, ETUC and several trade unions explicitly welcomed
the intention to clarify the exercise of fundamental social rights within the
context of the economic freedoms of the single market, but considered
insufficient the measures envisaged to review the legal framework on posting of
workers. BUSINESSEUROPE (BE) and employers'
organizations have welcomed the Court rulings which they consider as an
important contribution to the clarification of the legislation and the
consolidation of the Single Market. They support the Commission's approach for
better implementation and enforcement of the existing Directive, and recognize
that several aspects can be improved by legislative action. Furthermore, BE indicated
that the exclusion of the right to strike from EU's competence should not be
touched. The Council has not expressed so far any
formal position during the debate triggered off by the rulings. Apart from
Luxembourg in 2008, no Member State has explicitly demanded the reopening of the
Directive. An informal debate took place in 2010 in the Council Working Group
under Belgian Presidency. On this and other occasions, government
representatives have expressed a negative view about a revision of the
Directive. Furthermore, individual Member States directly or indirectly
affected by the rulings amended their legislation - Denmark, Sweden, Luxembourg,
Germany (several Länder) in order to comply with the rulings. Several Member
States (FI, FR, DE, SE, PT, PL, LT, IE, AT) support the Commission's approach
on the Directive, except UK (against any new legislation); UK, CZ and LT were also
against proposal 29. Debates about the issues raised by the implementation of
the Directive have also taken place in the European Parliament which has
adopted several resolutions[20]. In a resolution dealing
specifically with posting of workers that was adopted in 2008[21],
after intense internal debate, the EP called on the Commission to continue
examining the implementation, correct application and enforcement of the
Directive and suggested that this 'should not exclude a partial revision of the
Directive' after assessing in depth the problems with its implementation, and
propose modifications, if appropriate. In its resolution on the Single Market
Act from April 2011, the EP welcomed the announcement made by the Commission to
adopt rules improving the implementation, application and enforcement of the
Directive, but did not express a call for a revision of the Directive 96/71. The European Economic and Social Committee
adopted in 2010 an Opinion on the "Social Dimension of the Single
Market"[22] asking for more
effective implementation of the Directive and expressing support for a
Commission initiative which clarifies the legal obligations for national
authorities, business and workers, including a partial revision of the
Directive. The opinion further encourages the Commission to exempt the right to
strike from the internal market and to explore the idea of a "European
Social Interpol", supporting the activities of labour inspectorates of the
various Member States. The Commission organised a Conference on
fundamental social rights and the posting of workers in the framework of the
provision of services on 27/28 June 2011 in Brussels gathering key stakeholders
(Member States, social partners at EU and national level, EU institutions and
international organisations as well as academics and researchers). On this
occasion stakeholders and key political actors had an additional opportunity to
express their views on Commission ideas regarding the possible content of the
legislative initiatives announced in the Single Market Act: a so-called 'Monti
II Regulation' and an Enforcement Directive (see sections 5 and 8). At the Conference, BE was open-minded with
regard to the so-called 'Monti II Regulation' provided that it helps removing
unjustified obstacles to the freedom to provide services. It puts emphasis on
the need for alternative ways of dispute resolution in order to avoid strikes,
and on the respect of the exclusion of the right to strike from EU's competence
(Article 153 (5) TFEU); the application of the concept of proportionality in
the case of strikes should be left to the national level in full respect of the
diversity of the industrial relation systems in Europe. With regard to the
posting of workers BE asked for legislative action to focus on administrative
cooperation between the responsible national authorities, and proposed to
address the existing deficiencies in a Regulation based on Article 197 TFEU
(see below sections 3.2.1.4 and 8.2.1.1). At the Conference, ETUC supported to the
idea of a 'Monti II Regulation' and welcomed the initiative to propose an
enforcement Directive which would help to define more clearly the scope of the
Directive so as to ensure the temporary nature of posting and prevent abuses of
the use by letter box companies. Such an enforcement Directive should allow
Member States and social partners to use effective monitoring instruments and
introduce joint and several liability mechanisms. Without prejudice to the
'Monti II Regulation', the enforcement Directive should also contain provisions
ensuring the respect of the fundamental right to collective bargaining and
collective action. For ETUC its preferred option was a comprehensive revision
of the Directive (described below as package D including in particular
sub-option 3c) and a Social Progress Protocol.[23] 2.2.2. General
context – the Single Market Act The Single Market Act of 13 April 2011
includes among the 12 'levers to boost growth and strengthen confidence' under
the social cohesion chapter 'legislation aimed at improving and reinforcing the
transposition, implementation and enforcement in practice of the Posting of
Workers Directive, which will include measures to prevent and sanction any
abuse and circumvention of the applicable rules, together with legislation
aimed at clarifying the exercise of freedom of establishment and the freedom to
provide services alongside fundamental social rights'.[24] On 30 May 2011
the Competitiveness Council adopted its priorities for re-launching the Single
Market[25], considering "that
proper implementation and enforcement of the Posting of Workers Directive can
contribute to a better protection of posted workers’ rights and ensure more
clarity regarding the rights and obligations of service providing businesses as
well as national authorities and can help to prevent circumvention of the
applicable rules". It also stated "that more clarity in the exercise
of the freedom of establishment and the freedom to provide services alongside
fundamental social rights is necessary". 2.2.3. Inter-Service
Steering Group (ISSG) An ISSG composed of SG, SJ, MARKT, ENTR,
ECFIN, JUST, HOME, MOVE and EMPL met four times between November 2010 and 29
September 2011. The ISSG was consulted on the terms of reference, the
inception, the interim and the draft final report of the external Impact Assessment
Study. In the final meeting the ISSG was consulted on the first draft of this
Impact Assessment. 2.2.4. Impact
Assessment Board (IAB) The IAB examined this Impact Assessment and
issued an opinion on 11 November 2011. The recommendations for improvement have
been taken into consideration. The main problems have been better explained,
supported with further anecdotal evidence and stakeholder's views have been
included (section 3). The problem related to the 'tensions between the freedom
to provide services and of establishment and national industrial relation
systems' (problem 4) is now presented separately (section 3.2.4) and further
respective policy options have been included (section 5.2.5, 5.2.6 and 5.2.7).
The intervention logic has been strengthened by designing packages of
sub-options which address the full set of problem drivers and correspond to the
specific and operational objectives (section 4 and5). On that basis the
assessment of the impacts and proportionality of the policy options (including
packages of sub-options) has been improved, particularly with respect to
compliance costs and impact on SMEs (section 6). Monitoring indicators and more
concrete evaluation arrangements have been identified (section 9). The IAB issued a second opinion on the
revised Impact Assessment on 21 December 2011. As far as justified, the
recommendations for improvement have been taken into account. The evidence base
has been further strengthened. The analysis of costs resulting form the policy
options has been improved. A new Annex on the distribution of costs and
benefits across Member States has been included. The alert mechanism and the
necessity and proportionality of EU action with regard to the problem of
tensions between national industrial relation systems and the right to strike
have been better explained. The intervention logic of corresponding problem
drivers, objectives and policy options has been illustrated in a chart. It has
been better explained to what extent the objectives are not only specific,
achievable and realistic but also measurable and time-dependent. A new Annex on
competitiveness proofing has been added. The possible general impacts on
consumers have been removed from the text. Further stakeholder's views have
been added in the Impact Assessment and the executive summary. 3. Problem
definition 3.1. The
phenomenon of posting 3.1.1. Extent
of the phenomenon The analysis of posting as an economic and
social phenomenon, as distinct from anecdotal evidence, is hampered by poor
quality data. There are no standardised data at EU level. At national level,
sources of data exist in a limited number of countries (e.g. SOKA-BAU data in
Germany, declarations collected by the French Labour Inspectorate, LIMOSA in
Belgium or RUT in Denmark). However, these sources respond to different aims
and contain data which are not directly comparable.[26] The only available data source at EU-level
is based on the systematic data collection of E101 certificates (2005-2009) in
the field of social security, carried out by DG EMPL in cooperation with
national authorities[27]. However, this data base
has several limitations. It measures the number of postings, not the number of
posted persons (the same person can be posted several times). Furthermore, the
E101 social security form is not issued to all posted workers, either because it
is not required (postings of over 12 months are not considered for social
security purposes) or because some companies do not apply for E101 forms when
workers are posted, especially in the cases of very short-term postings. With these caveats, it can be estimated
that around one million workers are posted each year by their employers from
one Member State to another. Table 1 in Annex 1 shows the number of postings
from every EU-27 or EFTA country to another EU-27 or EFTA country as well as the
number of postings received by each country of the EU-27 or EFTA from another
EU-27 or EFTA country[28]. In relation to labour mobility within the
EU, the number of postings represented 18.5% of non-national EU-27 citizens in
the labour force in 2007. However, posting concerns only a small share of the total
active population (0.4% of the active population of EU-15 sending countries and
0.7% of the active population of EU-12 sending countries). Therefore, it can be
concluded that, while posting is a significant phenomenon in terms of labour
mobility, especially in some countries and sectors, it remains a relatively
small observable phenomenon in the EU labour market. [29] Over time, a trend analysis is made
difficult by the increasing size of the country coverage of the data set.
However, this seems to have been stabilised after 2007, which allows the
conclusion that posting tends to vary strongly with the economic cycle. Figure
1 in Annex 1 suggests that the number of postings has declined in 2008 in
line with economic activity but has recovered in 2009. 3.1.2. Flows of postings Regarding flows of posted workers different
groups of countries can be distinguished: some Member states seem to be 'specialised'
in sending (PL, SI, SK, HU, EE, PT, LU), some in receiving (CY, MT, EL, SE, FI,
NL, BE, DK, IT, AT, IE, ES ) and others seem to be equally sending and
receiving countries and therefore ‘not specialised’ (DE, FR, UK, BG, CZ, LT,
LV, RO) (see Table 6 in Annex 1). The available data regarding the absolute
numbers of postings in 2008 and 2009 suggest that the main sending countries
are Poland, France, Germany, Luxembourg, Belgium and Portugal (in declining
order). The most important receiving countries are Germany, France, Belgium,
the Netherlands, Spain and Italy. (See Figure 1.2 in Annex 1) In relative terms, postings represent a
very small part of the employment in the private sector (except in LU).
However, for some countries such as Poland, Slovakia, Slovenia, Estonia,
Portugal, France and Hungary, as sending countries, and Belgium, Netherlands
and Malta, as receiving countries, the phenomenon has a certain relevance in
terms of employment (between 1.5% and 4%). Information regarding the duration
of postings is only available for Belgium (construction) and France based on
national data. In the construction sector in Belgium posting seems to be mainly
used for short term projects. The average sending duration per project is 65
days (decrease from 140 since 2002) whereas the average receiving duration is
23 days (decrease from 32 since 2007). These data are collected with regard to
concrete work projects, and not to the duration of time a posted worker spends
in Belgium or abroad. The estimated average duration of postings to France was
44 days in 2008 varying significantly from sector to sector (e.g. construction:
34 days; HORECA: 99 days).[30] 3.1.3. Sector-specific
breakdown The available data suggest that on average in
2009, around 55% of posted workers were sent to the industrial sector (NACE C
to F). Most important among these sectors is the construction sector which
represented 24% of overall postings. The service sector (NACE G to P)
represented on average 44% of postings of which the most important is financial
and business activities (NACE J and K) (16%) as well as transport, storage and
communication (NACE I) (7%) (see Table 7 in Annex 1). Agriculture represented
only 0.7% on average. It should be highlighted that in the
construction sector there is a strong presence of SMEs in posting, mainly as
subcontractors in sometimes extended subcontracting chains.[31]
As a consequence, in a sending perspective, the
benefits of posting may be enjoyed especially by SMEs. 3.1.4. Relevant
factors for posting The findings of two studies[32]
which assessed the relevant factors/drivers for posting, based on country by
country data (2007-2009) (see Annex 1, Tables 2-4) suggest that the following
factors can be considered as the most relevant: ·
Geographical proximity seems to be the most
relevant factor able to explain the distribution of flows of posting (the
direction and the extent of the phenomenon), as it is also associated to
business and historical links; ·
Labour costs for receiving countries; ·
Labour and skill shortages as well as specialisation:
in particular for posting from high labour cost countries to other Member
States; ·
Unemployment rate for sending countries (in
particular in low labour cost countries); ·
Level of market integration (however less
relevant). 3.1.5. Effects
of posting 3.1.5.1. Economic and social effects Despite its small size as compared to the
overall workforce, the posting of workers plays an important role in the
cross-border provision of services, in particular sectors. The possibility to
provide services internationally represents an opportunity for business
expansion across Europe, particularly for SMEs. Posting provides business and
job opportunities, and is a source of additional income in sending countries;
it contributes to the improvement of competitiveness and efficiency in receiving
countries. Posting has implications for the labour
markets of both sending and receiving countries. It offers job opportunities in
sending countries and fills skill and labour shortages in the receiving
countries. Therefore, posting contributes to a more efficient allocation of
labour across boundaries. However, it can have ‘displacement’ effects in the
receiving labour markets, whereby local workers are substituted by posted ones.
The strength of this effect will depend on the existence of an oversupply of
labour in particular sectors and professions. At the same time, it should be
underlined that, since employment creation in the EU relies heavily on the
development of an integrated market for services, posting may effectively contribute
to support job creation. In labour-intensive sectors, such as
construction, low-labour cost countries tend to hold a comparative advantage which
can be problematic for SMEs in receiving high labour countries. Small firms in
the construction industry, but also in the temporary employment sector, complain
that foreign undertakings often exert a strong competitive pressure only by
virtue of using posted workers with lower wages and social security
contributions[33]. Whereas SMEs tend to feel
more directly the cost pressure from competition with foreign service
providers, large firms in receiving countries are advantaged by their use of posted
workers since they can reduce costs and fill up labour and skill gaps. Wage differentials between local and posted
workers seem to be quite substantive. In France, a report delivered by the
French Senate in 2006 estimated wage differences between foreign posted workers
and French workers to be around 50%. In Denmark, a study of the construction
sector indicated that, in the mid-2000s, workers from Eastern European
countries were paid on average 25-28% less than Danish building workers. A
similar difference has been estimated for Germany by comparing the minimum wage
levels with the actual wage levels in the construction sector. The average
hourly gross salary in the building sector – EUR 17,11 (Federal Statistical
Office) – is in fact 32% higher than the minimum wage for skilled workers and
as much as 56% for the minimum wage of unskilled workers in West Germany.[34]
The actual pay differences can be even higher, as suggested by the reports
about common infringements of minimum wage rules in the German construction
industry.[35] Actual differences in wages between local
and posted workers depend on national systems of setting minimum rates of pay.
While some Member States only set one general minimum wage, other Member States
apply several levels of minimum wages according to skill and/or occupation of
the worker. In the latter case wage differences between posted and local workers
tend to be less significant. Where no minimum wage is set by law or universally
applicable collective agreement this favours a 'race to the bottom' of wages.
The meat processing sector in Germany is a prominent example in this respect. In high unemployment sending countries,
posting may contribute to reduce joblessness although to a limited extent. As
the applicable minimum wage in host countries is often higher than the wages
normally paid in low wage sending countries, posting creates additional income
in such countries and may, in certain cases contribute with learning new
skills. Conflicts with local workers and trade
unions have arisen in the past. Some cases attracted strong public attention
(e.g. Laval, Lindsey, ‘Struik Foods’ or Flamanville). There does not seem to be
a single origin for such conflicts. In some cases, it is the difference in
treatment between posted and local workers which is at stake; in other cases,
it is the abusive practices by employers operating at the margins of the law;
conflicts can also be due to more or less justified fears of job displacement.
Some cases also exposed the risk of protectionism and xenophobia.[36]
Findings in the literature and anecdotal
evidence from case studies suggest that minimum employment and working
conditions set by law in the host Member State are not respected in a number of
cases, particularly with regard to wages, working hours and health and safety
regulations. Disproportionate wage deductions for poor housing facilities have
been reported. Given the total number of posting operations per year (close to
1 million) such situations as described in the literature have little
statistical significance. However, they illustrate the most frequent problems
of abuse and breach of posted worker's rights, more prevalent with low skilled
workers and in labour intensive sectors. Example 1 – construction sector: The European Migrant Worker Union (EMWU) has
information on 39 cases on its website concerning more than 900 posted workers
from Rumania and Poland in the construction sector in Germany which have not
been paid according to German minimum wage provisions (2005-2011). EMWU
supported these workers in order to enforce their wage claims against their
employers or the main contractor. EMWU enforced about 1.5 million Euro mainly
against the main contractor in judicial proceedings or by settlement out of
Court. The cases represent only a small part of the cases dealt with by the
EMWU. According to the case handler for Rumanian posted workers, there have been
cases concerning approximately 4.000 to 5.000 posted workers since 2007. None
of these workers have been paid the German minimum wage. (See Annex 8) Example 2 – road haulage sector: In France, several cases have been reported of the establishment of ‘fake’
foreign subsidiaries or transnational contractual relationships with the sole aim
to provide ‘low-cost’ labour. Such practices recently acquired prominence in
the public debate due to media reports on the activities of the Norbert
Dentressangle group. In one case a French transport operator set up a
subsidiary in Poland which recruited one hundred drivers to perform road
haulage in France. The usual schedule of Polish drivers included six weeks of
work in France and one week of rest in Poland. The Polish drivers were working
six days per week and, during their stay in France, they stayed in flats
provided by the French company. The vehicles were owned by the French mother
company; the Polish subsidiary rented the trucks from the mother company and
then it rented them back while providing the posted drivers. The French courts established
that a proper but disguised employment relationship existed between the French
company and the Polish drivers, as the former organised and directed in detail
the work of the latter. A similar case involved another French company which
established a subsidiary in Slovakia. Slovak drivers were actually working for
up to 15 weeks in France and were part of the mother company workforce. In
particular, the French company entrusted the Slovak subsidiary to carry out its
own transport contracts, while the foreign firm did not have any independent
activity in Slovakia and all of its trailers were provided by the mother
company. Again the foreign subsidiary did not show any independent
entrepreneurial activity and was established with the only purpose to provide
drivers at a lower cost to the French mother company. In other cases, the
provision of drivers for on-going operations in France is organised through
agencies. (See Annex 3) Example 3 – temporary agency work: The construction of a nuclear site in Flamanville involved Polish
workers posted from a Cypriot subsidiary of an Irish temporary work agency
specialised in construction engineering and related trades. The workers were
found to have wages around half of those of French workers. The company was
also accused of covering 38 undeclared accidents out of the 112 declared
accidents. The investigation of the case by the French authorities is currently
on-going. (See Annex 3) Example 4 – meat processing industry: Trade union reports about this industry in Germany point to a situation
where a significant part of direct employment has been replaced by a variable
combination of subcontractor posted workers, temporary agency posted workers,
and self-employed foreign subcontractors. In practice, abattoirs and meat
processing plants employ directly a minority of the overall workforce while the
majority of workers on site are part of the transnational provision of
services. Long working hours, increased workload, deteriorating working
conditions, including growing MSDs, are reported as emerging features of the
sector in Germany. Wages of posted workers are much lower than for domestic
workers (allegedly down to EUR 3 per hour).As a result Germany has become a
low-wage location in the meat processing industry. Competitors in neighbouring
countries such as France and Belgium complain about unfair competition from
German-located firms.[37] The use of posted workers in order to
reduce labour and social costs seems also to be common in French
slaughterhouses, including illegal practices such as deductions for housing and
travel costs from the minimum wage by agencies involved.[38] 3.1.5.2. Effects on actors and characterisation of patterns across Member States The findings of an impact assessment study[39]
suggest that posting has the following effects on the actors involved: Actors || Benefits || Costs MS sending || Business opportunities and job creation (through market integration) Upgrading of skills and know-how Higher income (in low wage countries) || Costs of monitoring and enforcement related to the PWD, especially coordination with receiving MSs Upward wage pressures; occasional shortage of skills MS receiving || Competitiveness (through productive efficiency induced by reduction in labour costs) Allocative efficiency related to reduction of labour and skill shortages || Conflicts between different groups of workers Institutional and legal disputes Costs of monitoring and enforcement related to the PWD Risk of unfair competition related to abuse and distortions Firm sending || Business development; international contacts Entry foreign markets || Organisational, administrative, and compliance costs related to posting Firm receiving || Competitiveness (through productive efficiency induced by reduction in labour costs) Upgrading of skills and know-how (through improved skill and specialisation matching) || Organisational, administrative, and compliance costs related to posting Conflicts with local workers and trade unions Workers receiving || Job creation (through economic growth and competitiveness) || Potential job displacement Potential downward wage pressures Social dumping related to abuse and distortions Workers sending || Employment Upward employment and working conditions Upgrading of skills and know-how || Mobility costs (monetary and non-monetary) Exploitation related to abuse and distortions Trade unions sending || Spill-over on trade union membership and practices || No significant costs Trade union receiving || Extension to posted workers of union representation || Weakening of trade union role in setting employment conditions The findings of the same study suggest that
the following patterns can be discerned across Member States: ·
Specialised receiving countries with relatively
low labour costs (MT, CY, EL): Posting generally concerns skilled workers to
fill supply shortages. ·
Specialised receiving countries with high labour
costs (FI, NL, SE, BE, DK, IT, AT, IE, ES): Posting is typically used in labour
intensive and low skilled sectors. Reduced labour costs can increase
competitiveness of utilising firms. However, this puts pressure on local labour
markets and working conditions in particular in high unemployment regions.
Compared to other phenomena such as migration and undeclared work, however,
impact seems to be limited. Local conflicts may arise and posting may acquire a
negative public image often associated to undeclared work. ·
Specialised sending countries with low labour
costs (PL, PT, HU, EE, SI, SK): Postings usually concern unskilled or medium
skilled workers. Posting has positive effects on local employment, business
development and local wages. In general posting does not seem to be a source of
conflict in these countries, however, if posted workers are exploited abroad by
unscrupulous employers this throws a bad public image on posting. ·
Due to its size and geographical specificity
Luxembourg is a highly specialised sending country: Mainly skilled workers are
posted in the financial or business services sector with positive effects on
employment and business development. ·
Non-specialised countries with high labour costs
(FR, DE, UK): These countries have a broad labour market and large in- and
outflows of posting. From a sending perspective impacts are close to
Luxembourg. From a receiving perspective impacts are close to specialised
receiving countries with high labour costs. ·
Non-specialised countries with low labour costs
(BG, CZ, LT, LV, RO): From a sending perspective impacts are similar to
specialised sending countries with low labour costs; from a receiving
perspective impacts are similar to specialised receiving countries with low
labour costs. Specialisation || Labour costs || Examples || Most relevant drivers || Most relevant sectors || Main social and economic impacts || Legal and administrative problems || Main social and economic issues Specialised receiving || Low || CY, MT, GR || Skill and labour shortage || Bank Finance Transport Construction || Positive on job matching Economic integration || Weak monitoring and enforcement || Integration and development of the single market of services Specialised receiving || High || SE, FI, NL, BE, DK, IT, AT, IE, ES || Reduction in labour cost Labour shortage || Construction HORECA Food processing Transport Health Social work Cleaning || Positive on job matching Economic integration Higher competitiveness Higher productivity (advantages for consumers) Potential downward pressure on wages and salaries Potential job displacement || Ambiguities in the definition of posting Ambiguities in the definition of conditions applicable to posted workers Protectionist extension of national legislation Administrative barriers Weak monitoring and enforcement || Integration and development of the single market of services Employment and labour market Industrial relations Protection of workers’ rights Specialised sending || Low || PL, SI, SK, HU, EE, PT || Economic integration Business opportunit. Job opportunit. || Construction HORECA Food process Transport Health Social work Cleaning || Positive effects on employment, Economic integration Business development Potential upward pressure on wages and salaries || Weak monitoring and enforcement || Integration and development of the single market of services Protection of workers’ rights Specialised sending || High || LU || Economic integration Job opportunit. || Banking Finance Business services || Positive effects on employment Economic integration Business development || Protectionist extension of national legislation Administrative barriers Weak monitoring and enforcement || Integration and development of the single market of services Specialisation || Labour costs || Examples || Most relevant drivers || Most relevant sectors || Main social and economic impacts || Legal and administrative problems || Main economic and social issues Unspecialised || High || DE, FR, UK || Receiving Reduction in labour cost || Construction HORECA Food processing Transport Health Social work Cleaning || Higher competitiveness Higher productivity (advantages for consumers) Potential downward pressure on wages and salaries Potential job displacement || Ambiguities in the definition of posting Ambiguities in the definition of conditions applicable to posted workers Protectionist extension of national legislation Administrative barriers Weak monitoring and enforcement || Integration and development of the single market of services Employment and labour market Industrial relations Protection of workers’ rights Sending Economic integration || Manufacturing Banking Finance Business services || Positive effects on employment, economic integration, business development || || Integration and development of the single market of services Unspecialised || Low || BG, CZ, LT, LV, RO || Receiving Skill shortage || Banking Finance Business services || Positive job matching Economic integration || || Integration and development of the single market of services Sending Economic integration Job opportunit. || Construction HORECA Food process. Transport Health Social work Cleaning || Positive effects on employment, Economic integration Business development Potential upward pressure on wages and salaries || Weak monitoring and enforcement || Integration and development of the single market of services Protection of workers’ rights 3.2. The problems to be addressed The problems are grouped under four
headings: ·
Problems related to the implementation, monitoring
and enforcement of the applicable working conditions, including the protection of
posted worker's rights ·
Problems related to the abuse of the posted
workers status in order to evade or circumvent legislation ·
Problems related to the controversial or unclear
interpretation of the terms and conditions of employment of the Directive ·
Tensions between the freedom to provide services/establishment
and national industrial relation systems The problems grouped under the 1st
heading share a common main driver: Articles 4 and 5 of the Directive are
formulated in a rather general manner and do not state precisely enough Member
States' obligations with respect to the implementation, monitoring and
enforcement of the Directive. With regard to some aspects (national control
measures and the mechanisms to protect worker's rights) the respective
provisions are missing in the Directive or they are not sufficient (Article 6). The main driver of the problems grouped
under the 2nd heading is the lack of legal clarity with regard to
the notion of posting, in particular the two key aspects of temporariness and
the existence of a genuine link of the employer with the sending Member State.
There are no indicative criteria in order to enable the responsible authorities
in the Member States to identify real posting situations and distinguish them
from other situations (self-employment, migration). As a result frequent cases
of abuse of the posted workers status occur, with the aim of evading or
circumventing legislation. Legal clarity is therefore a precondition for
effective monitoring and enforcement activities. Problems under 3 are related to the
interpretation of Article 3 of the Directive. With regard to problem 3a the
case law of the ECJ has clarified a number of important aspects of Article 3,
but this interpretation is not shared by stakeholders. With regard to problem
3b the notion of minimum rates of pay is still not clear. Respective
jurisprudence did not bring sufficient clarity. Problem 4 concerns the exercise of the
right to strike in the context of the freedom to provide services and of
establishment. Therefore this problem is linked to the Directive but goes
beyond The ECJ tried to bring clarity to this problem, in two cases, dealing
respectively with the freedom to provide services and the freedom of
establishment - Laval and Viking. 3.2.1. Problems
related to the implementation, monitoring and enforcement of the applicable
working conditions of posted workers, including the protection of worker's
rights 3.2.1.1. Problem
1a: Deficiencies with respect to information for employers and posted workers Article 4 (3) of the Directive obliges
Member States to take the appropriate measures to make the information on the
terms and conditions of employment in the host State generally available.
Despite this obligation, information concerning the applicable working
conditions in the host Member State is often difficult to obtain, uneven, and
of insufficient quality. However, this information is crucial for service
providers in order to guarantee the minimum working conditions and for posted
workers in order to claim their rights. Previous attempts to solve this problem by
non-legislative means have not reached their objectives. The issue has been
addressed by interpretative guidelines in 2006. The monitoring exercise in 2007
showed that there were a number of deficiencies in this respect. The respective
Communication provided further clarifications for Member States.[40]
Recent studies analysing the situation in 2010 and 2011 confirmed that
deficiencies still exist.[41] The driver of this problem is composed of
the following elements: ·
Provisions of the Directive are rather general
and not detailed enough. ·
Information is in particular missing concerning
working conditions set by collective agreements. Responsible authorities often
focus on working conditions laid down by law or regulation. As far as
collective agreements are concerned, social partners are involved at national
level. Their role in this respect is however not specified in the Directive. ·
Insufficient quality of information: A number of
Member States provide only general information with regard to minimum working
conditions which is not focused on posted workers. Websites in all seven Member
States analysed , with the exception of Germany, merely enumerate the rules
applicable by virtue of the transposition of the Directive in the host Member
State.[42] ·
Untargeted dissemination of information: A
detailed analysis of websites in seven Member States showed that information is
split over 14 websites. Moreover, not all posted workers have access to the
internet. Therefore, information on paper (leaflets) and awareness raising
campaigns remain necessary. Less than half of the Member States provide
information on paper and awareness raising campaigns have only been reported
from Belgium, the Netherlands and Germany.[43] ·
Information in the sending country: Only part of
the Member States as well as trade unions target information on workers/service
providers in the country of origin (LU, BE, NL, SE, DE, RO, CY) with regard to
their own nationals. Information of posted workers about their rights should be
provided as early as possible. ·
Inaccessible language: Information is not always
provided in a language understood by the service provider and/or worker.
Information is mostly available in the language(s) of the host Member State and
English. SMEs are in particular affected by this
problem since they have little capacity to investigate the applicable working
and employment conditions in the host Member State themselves. Both ETUC and
employers' organizations agree that the improvement of information on posting
would facilitate the implementation of the legal rules. 3.2.1.2. Problem
1b: Deficiencies in control, monitoring and enforcement action According to Article 5 of the Directive,
Member States have to ensure compliance with the provisions of the Directive by
taking appropriate measures, in particular to ensure adequate procedures for
enforcement of the core working conditions under the Directive. The 'how' of
monitoring and enforcement of the rights conveyed in the Directive is left to
the national level. Previous attempts to solve this problem by
non-legislative means have not reached their objectives. The issue has been
addressed by interpretative guidelines in 2006. The monitoring exercise in 2007
showed that there were a number of deficiencies in this respect. The respective
Communication provided further clarifications for Member States.[44]
Recent studies analysing the situation in 2010 and 2011 confirmed that
deficiencies continue to exist.[45] The driver of this problem is composed of
the following elements: ·
the provisions of the Directive are not detailed
enough; ·
the involvement of multiple authorities without
appropriate coordination or the absence of responsible authorities in some
Member States; ·
the unclear role of social partners in this
respect; ·
relying on private law enforcement only; ·
low frequency of controls; ·
monitoring activities are often not focused on
the specific legal and factual situation of posted workers; ·
absence of notification systems in a number of
Member Stats and therefore a lack of reliable data about the presence of posted
workers; ·
absence of sufficiently dissuasive
administrative and/or penal sanctions; ·
lack of cross-border enforcement of sanctions
due to missing legal framework at the EU level; ·
the application of the terms and conditions of
employment in certain sectors in the host Member State is alleged to be
difficult (e.g. cabotage activities). There are no specific provisions tackling
these difficulties; ·
difficulties in identifying bogus
self-employment. These deficiencies in control, monitoring
and enforcement action cause a serious risk that minimum working conditions in
the host state are not respected, in particular with respect to wages, working
time and health and safety conditions. They may also facilitate
anti-competitive behaviour. Such gaps are compounded by the short-term nature
of much of the posting taking place, which makes the task of controlling
authorities more difficult. The existence of these deficiencies is supported by
anecdotal evidence (see the examples from the construction, road haulage,
temporary work agency, and meat processing sectors in section 3.1.5.1). ETUC recognizes the importance of these
deficiencies and considers action on EU level necessary in order to allow
Member States and social partners to use effective monitoring and enforcement
mechanisms.[46] BUSINESSEUROPE also
considers action in this domain necessary in order to ensure a climate of fair
competition between national and foreign companies. However, the main
responsibility for such mechanisms would belong to Member States in accordance
with their national judicial and administrative practices. Example 5 – lack of cross-border enforcement: The Spanish labour inspectorate imposes a
fine on a German service provider for violation of the Spanish health and
safety at work regulation. It is not possible for the Spanish authorities to
enforce the fine against the service provider that returned to Germany.
Framework Decision 2005/214/JHA[47] is not applicable since
the Spanish fine cannot be appealed to a penal Court. There is no other
legislative framework which would allow for the cross-border enforcement of
such a fine.[48] 3.2.1.3. Problem
1c: Unnecessary administrative requirements and control measures imposed on
service providers Member States should comply with the
obligation inscribed in Article 5 of the Directive in line with prevailing EU
law, in particular the freedom to provide services as interpreted by the Court
of Justice. The guidelines adopted by the Commission in 2006 tried to introduce
clarity, by non-binding means, with regard to the compatibility of
administrative requirements and control measures imposed by host State
authorities on service providers. The monitoring exercise in 2007 showed that
several Member States impose administrative requirements and control measures
on service providers which are incompatible with prevailing EU law.[49]
Examples are the obligations to have a representative established on the
territory of the host Member State; to obtain a prior authorisation in the host
Member State; or to obtain a work permit for posted workers who are nationals
of third countries. The driver of this problem is composed of
the following elements: ·
insufficiently detailed and precise provisions in
EU secondary law in respect of administrative requirements and control measures
which are in conformity with prevailing EU law; ·
lack of knowledge, or insufficient awareness, of
EU law protecting the rights of cross-border service providers; ·
excessive reliance on national control measures instead
of administrative cooperation, considered as too cumbersome and/or unreliable; ·
absence of uniform documents on EU level
regarding information duties.[50] Previous attempts to solve this problem by
non-legislative means have not reached their objectives. The current situation
still leads to different obligations for service providers in different Member
States. A level playing field is not sufficiently achieved. Service providers
face unnecessary administrative burden in some Member States due to the use of
disproportionate national control measures. SMEs are especially affected by types of
administrative controls that create excessively onerous obligations for foreign
undertakings and may discourage the posting of workers abroad. ETUC considers certain national control
measures and respective administrative requirements indispensable to
effectively monitor and enforce the working conditions applicable to posted
workers. 3.2.1.4. Problem 1d: Deficiencies with regard to administrative
cooperation Article 4(1) and (2) of the Directive
imposes obligations as regards cooperation between national administrations,
and makes it the responsibility of Member States to create the necessary
conditions for such cooperation. The proper functioning of administrative
cooperation among Member States is an essential instrument for compliance
control; its virtual absence referred to in COM(2007) 304 undermines the
operation of the Directive and may at least partly explain other problems like
disproportionate national control measures. Previous attempts to solve this problem by
non-legislative means have not reached their objectives. The issue has been
addressed by interpretative guidelines in 2006. The monitoring exercise in 2007
found justified concerns regarding insufficient administrative cooperation[51]
and the Legal Studies in 2011 still confirmed 'serious shortcomings' in this
respect.[52] The driver of this problem is composed of
the following elements: ·
the provisions of the Directive are not detailed
enough; ·
the lack of mutual trust and understanding
between the very different national actors involved; ·
insufficient resources committed by some
national authorities to administrative cooperation[53];
Another important driver of the problem is
the absence of an effective cooperation tool, in particular regarding the
information exchange through electronic means. Following the Recommendation of
2008[54] and the work of the
Expert Committee on Posting of Workers (ECPW) a pilot project for the use of a
separate and specific application of the Internal Market Information System
(IMI) was launched in May 2011. However, the Directive does neither provide for
the use of IMI nor for the rules on the exchange of information (e.g. deadlines
for replies). For further details on IMI see Annex 4. According to BUSINESSEUROPE and ETUC
insufficient administrative cooperation is an important problem which needs to
be addressed at EU level. 3.2.1.5. Problem
1e: Posted workers are not adequately protected in disputes concerning
individual employment conditions Article 6 of the Directive contains a
jurisdiction clause allowing the posted worker to enforce his rights granted by
the Directive in the host state. However, anecdotal evidence indicates that posted
workers are not adequately protected in disputes concerning individual
employment conditions (see examples 1-4 in section 3.1.5.1 and Annexes 3 and 8). A number of drivers contribute to this
problem: ·
Since no further detailed provisions are included
in the Directive, the jurisdiction clause alone does not enable posted workers to
enforce their rights in practice when disputes about individual employment
conditions arise during the posting.[55] ·
There is no specific complaint mechanism
regarding the non-respect of working conditions for posted workers.[56]
There is no legal obligation for service providers and/or recipients to inform
posted workers about the existing (non-targeted) complaint mechanisms.[57]
·
Posting of workers in the context of subcontracting
causes particular problems. Violations of minimum working conditions
established by the Directive have been reported in cases where e.g. the posting
subcontractor has defaulted on its contractual obligations.[58]
·
The fear of losing their jobs and their
vulnerable situation during the posting prevents posted workers from acting
against their employers and enforcing their rights. This structural obstacle
resulting from the economic imbalance between the employer and the employee can
only be challenged by the involvement of third parties who also have an
interest in enforcing the application of minimum working conditions, in
particular trade unions. In many Member States such third parties do not have
an independent right to bring cases before the Courts.[59]
·
Absence of mechanisms that allow posted workers
to recover excessive costs for accommodation. ·
Many posted workers do not see the host Member
State public authorities as their natural allies because they feel that these
authorities are more interested in protecting their labour market than in
helping workers from abroad. As a result there is a lack of enforcement
of posted workers’ rights stemming from the Directive. This may contribute to
deteriorate working conditions particularly among the most vulnerable
categories of workers, and may lead to unfair competition. Anecdotal evidence supports these findings.
In particular the analysis of the information provided by EMWU (Annex 8)
suggests that the right of third parties to intervene in Court proceedings is
important to enforce posted workers rights and that the role of trade unions
and joint bodies of social partners is crucial in this respect. In all cases presented
on the EMWU website subcontractors have been involved. Almost all wage claims
have been enforced against the main contractor. In the few cases in which
enforcement against subcontractors was successful the main contractor was
involved in the negotiations. A system of joint and several liability seems to
be an effective and appropriate tool in order to enable posted workers to
enforce their rights in the host Member State. Regarding the magnitude of the
problem the introduction of such a tool would be proportionate. Example 6 – enforcement of minimum wage against the
main contractor: 120 Romanian
workers were employed by a Rumanian subcontractor on a construction site in
Germany. The subcontractor ran out of money and stopped paying his workers who
subsequently reported that they were asked by their employer to work for less
than the German minimum wage. Some of the same workers indicated that they encountered
the same situation three times in the last twelve months. With the help of EMWU
the workers reached an agreement with the main contractor who paid around
173.000 Euro for wages in arrears. ETUC agrees that the Directive is not
precise enough as to the judicial and extra-judicial means allowing posted
workers to defend their rights, and considers joint and several liability
indispensable to deal with the specific problems arising in the context of
subcontracting chains. BUSINESSEUROPE opposes a system of joint and several
liability.[60] 3.2.2. Abuse
of the posted workers status in order to evade or circumvent legislation In many situations, the difference in
labour costs (including social security contributions) caused by the different
status of migrant and posted workers is sufficiently important to encourage
less scrupulous employers to use the posted workers status improperly with the
only purpose to evade the law and reduce costs. Posted workers and migrant workers are in a
different situation and are governed by a different legal regime in the EU. Posted
workers are temporarily present in another Member State in the context of the
provision of services whereby their respective employer provides services therein.
Posted workers as such do not seek access to the labour market in the host
Member State and are supposed to return to the sending Member State once the
service has been provided. In contrast, migrant workers move on their
own to another Member State for the purpose of finding or carrying out work
there. They have full access to the labour market in this country. The right to
live and work there derives from the free movement of workers granted in
Article 45 TFEU.[61] Therefore, the situation
of these two categories of workers is different. The Court of Justice stated
this fact on several occasions.[62] Migrant workers enjoy full equal treatment
with nationals, with regard to working conditions and social security, in the
Member State in which they are employed. Posted workers are normally working in
the sending country and enjoy full equal treatment with nationals while hey
work there. During their posting they are protected by the mandatory hard core
provisions fixed by Article 3 of the Directive, in line with the law or
the universally applicable collective agreements of the host country, as far as
they are more favourable to the worker than the provisions of the sending
country. They remain covered by social security provisions in the sending
country (provided the duration of posting does not exceed two years). 3.2.2.1. Problem
2a: Posting is no longer of a temporary nature or has a rotational character In order to justify the difference in
treatment between posted workers (core protection) and migrant workers (equal
treatment) the posting has to be of temporary nature. If the duration of the
posting is excessive the presumption behind the difference in legal status
between these two categories of workers is no longer valid. The same situation occurs
if the same or different employees are repeatedly recruited by an undertaking
with the purpose of being posted to another Member State for carrying out the
same job (rotational postings). The problem is mainly driven by the absence
of criteria which would enable Member States authorities to determine if a
posting is of temporary nature. The Directive defines the posted worker as
a worker who, for a limited period of time carries out his work in the
territory of a Member State other than the State in which he normally works.
There is no indication as to the temporary nature of the posting.[63]
The Directive neither provides for a fixed time limit[64]
nor other criteria to determine the temporary character of the stay in the host
State[65]. There is no reference
either to the possibility of repeated posting for the same job. The Rome I Regulation[66]
which would be applicable if the Directive did not apply does not clarify the
notion 'temporary' either It only states that work carried out in another
country should be regarded as temporary if the employee is expected to resume
working in the country of origin after having carried out his tasks abroad. According to the case law of the Court the
temporary nature of the activity of the person providing the service in the
host Member State has to be determined in the light not only of the duration of
the service but also of its regularity, periodical nature or continuity. An
activity carried out on a permanent basis, or at least without foreseeable
limit to its duration, does not fall within the freedom to provide services.[67] In contrast, social security rules (Regulation
883/2004) set a limit of two years, which if exceeded obliges the employee to be
covered by the social security regime of the host country. They also exclude
the possibility of repeated postings for the same job. ETUC is in favour of a strict time limit
for posting. BUSINESSEUROPE opposes such a time limit considering that the
specific circumstances of each case may determine the need for longer posting
periods. Example 7 – rotational posting: An Irish temporary work agency posted 93
Polish workers with Irish E101 certificates, stating that they were covered by
Irish social security law, to work on a big infrastructure project in Sweden.
The certificates indicated that the workers had been living in Ireland two
months before the posting. However, it was discovered that 45 of them have
earlier been posted from Poland to Sweden to work for the same Swedish company.
38 of them had moved to Ireland during the same period in which they had been
working in Sweden and had been posted from Poland. The 93 workers were residing
at six addresses in Ireland – 46 of them at one single address, which was not
an apartment block. Swedish authorities called into question the certificates
before the Irish authorities. In the meantime the same workers received new
E101 certificates from Cyprus.[68] Example 8 – replacement of permanently employed
workers by 'posted' workers:
A Belgium food-processing undertaking dismissed its workers and concluded a
service contract with a Dutch ‘posting agency’, which posted a considerable
number of German-Polish workers to the Belgium undertaking. They were paid on
average 10 Euros less than the company’s dismissed Belgium workers before.
Trade unions called for strike because of the dismissal.[69] 3.2.2.2. Problem
2b: The employer has no genuine link with the sending Member State The Directive provides that the posting
undertaking has to be ‘established’ in a Member State. This requires the
existence of a genuine link between the undertaking and the sending Member
State. However, the Directive does not set the criteria in order to determine if
there is a genuine link. The social security legislation applying to
posting is more explicit, as it establishes criteria that allow a more precise
definition of posting: an undertaking must ordinarily carry out substantial
activities in the territory of the Member State in which it is established in
order to be authorised to post its workers to another Member State.[70] In order to evade or circumvent employment
or social security legislation, unscrupulous employers may direct their posting
operations exclusively towards the market of another Member State without
having in fact any relevant economic activity in the country where they are
formally registered. The use of 'letter-box' companies is
particularly problematic in this respect. These companies are opened in the
sending country only for the purpose of evading social security and labour
legislation of often one specific host Member State. Sometimes workers already
reside in the host Member State before they are recruited. The worker might
actually be made to work under the direct supervision of the user undertaking,
thus creating a situation of bogus subcontracting or illicit provision of
manpower. The absence of genuine activities in the country of origin may be
combined with repeated postings, in which the ‘posted’ worker is working in a
specific Member State on an (almost) permanent basis. This is a problem that is
jointly recognized by the European Social Partners.[71] The temporary work agency sector seems to
be particularly susceptible to such abusive practices. This is confirmed by the
two legal studies. A significant number of cases of abuse of the posting rules was
found.[72] However, the Directive
does not contain any provision to prevent or sanction such abuses. ETUC and BUSINESSEUROPE agree that the
phenomenon of letter-box companies needs to be tackled. Example 9 – letter-box companies: A company has its office which basically
consists of a letterbox in Ireland and its registered office in Cyprus. The
company has neither economic activity in Ireland nor in Cyprus. Workers are
recruited in Poland and receive an Irish employment contract. They work on a
construction site in France and receive their orders from the foreman of
another company working on the construction site as well. After having
terminated the work on the construction site they move on to other sites in
France. Afterwards the employment contract is terminated and the workers return
to Poland. Example 10 – no connection with sending country, case
of 'les sexeurs de poussins':
Seven Chinese nationals holding a German visa as 'independent' chicken sexers
were sent by a German company to a related French company. The company claimed
that this would have been an intra-company posting. Work was directed and
housing was organised by the French company. The work was carried out at the
site of a second French company. There was no proof of any payment of wages.
Social security contributions were neither paid in France nor in Germany.[73] 3.2.3. Problems related to the unclear or controversial
interpretation of the terms and conditions of employment of the Directive 3.2.3.1. Problem
3a: The scope and level of the terms and conditions of employment The 'hard core' of mandatory terms and
conditions of employment (Article 3) as well as the legal instruments in which
these are laid down represent the heart of the political compromise struck at
the time of the adoption of the Directive. The case law of the CJEU in Laval,
Rueffert and Commission vs Luxembourg[74] clarified a number of
important questions regarding the interpretation of certain key provisions of
Article 3, in particular Article 3(1), 3(7), 3(8) and 3(10) (for further
detail on the case law see Annex 10). The case law has contributed to improve
legal certainty for service providers and Member States. However, the diversity
of industrial relations systems across the EU still poses problems in
implementing the rules set by the Directive and continues to feed divergent
views between social partners and sometimes Member States themselves. The driver of this problem is composed of
the following elements: ·
While in countries where minimum wages are set
by law or by universally applicable collective agreements, their application to
posted workers is straightforward, in countries where no such tools exist, an
uncertain situation is created for undertakings and workers; ·
The authorities of the countries deprived of statutory
or conventional minimum wages have not, by the time of the transposition of the
Directive, recognized the full scale of the consequences of the absence of
provisions regarding posted workers' wages, or were eager to maintain their
traditional industrial relations systems unaffected by the application of the
Directive[75]. Furthermore, the Court’s interpretation of
Article 3(7) in Rueffert as well as Article 3(8) raises questions with regard
to the compatibility of ILO Convention No. 94 concerning the use of social
clauses in public procurement with prevailing EU law. ILO Convention No. 94 is classified
as an up-to-date Convention by the responsible ILO bodies.[76]
In 2008, the Commission called upon its Member States to ratify and implement
the ILO up-to-date Conventions (COM(2008)412 final). However, if the
incompatibility of the Convention with EU law was established Member States
might be required to denounce the Convention in order to comply with EU law.[77] As stated above (see section on
stakeholders’ positions) part of stakeholders welcomed the clarifications
brought by the Court's jurisprudence: parts of European Parliament, in
particular EPP, BUSINESSEUROPE and several Member States. Especially trade
unions in high-wage receiving countries, ETUC and parts of European Parliament,
in particular S&D, disputed the Court's interpretation of Article 3. The
latter see the rulings as a 'licence for social dumping'. They criticize what
they perceive as being a too narrow interpretation of the Directive, which leaves
little room for host Member states or trade unions to improve workers' rights
in cross-border situations. The most problematic aspects of the rulings in
their view are: ·
The Court’s interpretation of the concept of
universally applicable collective agreements in Article 3(8) excluding the
Swedish and Danish system of de facto generally binding collective agreements
from the scope of this provision, at least, as far as such collective
agreements do not clearly define the applicable minimum wage.[78] ·
The Court’s narrow interpretation of the public
policy provisions (Article 3(10)) limiting Member States possibility to apply a
number of employment conditions beyond the conditions enumerated in Article
3(1) to posted workers. ·
The Court’s interpretation of ‘terms of
employment more favourable to workers’ (Article 3(7)) limiting the application
to more favourable conditions in the sending state and preventing the host
Member States from applying more favourable provisions to posted workers beyond
and above the conditions set in accordance with Article 3(1). Other aspects of the Directive that may
call for clarification are: ·
The implications of Article 1(4) of the
Directive on the working conditions of workers posted by undertakings
established in third countries . Even if the Commission has a clear view on the
issue (see section 1.2.2) the European Parliament requested clarity with regard
to these implications during the negotiations of the proposal for a so-called
single permit Directive[79]. ·
The link with the recent Directive on temporary agency
work (Directive 2008/104/EC). The conditions of hiring-out of workers, in
particular the supply of workers by temporary employment undertakings, is among
the core terms and conditions of employment in Article 3(1) lit. d of Directive
96/71/EC. This allows Member States also to apply restrictions to the use of
temporary agency workers. According to Article 4 of Directive 2008/104/EC
prohibitions or restrictions on the use of temporary agency work shall be
justified only on grounds of general interest relating in particular to the
protection of temporary. A review of these provisions is foreseen. Article 3(9)
of Directive 96/71/EC could have become redundant since Article 5 of Directive
2008/104/EC provides for the applicable working conditions of temporary agency
workers. 3.2.3.2. Problem
3b: Unclear level of protection with regard to the notion of 'minimum rates of
pay' The driver of this problem is composed of the
following elements: ·
It is legally unclear which components of the
wage paid form part of the minimum rate of pay in the host Member State. The
Directive leaves the concept of the minimum rate of pay to the host Member
State. ·
The Directive does not specify the method of
comparison between the minimum rate of pay in the sending and the host Member
State. The definition of the concept of minimum
rates of pay is in principle a matter for the host Member State, which is
explicitly referred to in the last sentence of Article 3 (1), however, within
the limits of the jurisprudence of the Court of Justice (see in this respect:
case C-341/05, Laval, in particular points 60 and 68). The definition may thus
vary from one Member State to another. Member States may determine the various
allowances and bonuses which are included in the minimum pay applicable. Some
Member States restrict it to the minimum wage as such others include different
kinds of bonuses, allowances or contributions to funds. In the case Commission v. Germany
(C-341/02) the Court decided that allowances and supplements which are not
defined as being constituent elements of the minimum wage by the legislation or
national practice of the Member State to the territory of which the worker is
posted, and which alter the relationship between the service provided by the worker,
on the one hand, and the consideration which he receives in return, on the
other, cannot, under the provisions of the Directive, be treated as being
elements of that kind. In particular quality bonuses and bonuses for dirty,
heavy or dangerous work were not considered to be part of the minimum wage. While
the judgement gave indications with respect to several allowances it left a
number of questions open. The Legal study identified the following
issues as problematic: contribution to funds; exchangeability of special
benefits; special payments related to the posting and the distinction between
pay and reimbursements of costs; complications caused by taxes and premiums
(the gross/net problem); withholding of costs from the wages due to the worker;
the possibility to combine benefits from different systems, leading to a level
of protection that is higher than that envisaged under either the home state or
the host state law.[80] 3.2.4. Problem 4: Tensions between the freedom to provide
services/establishment and national industrial relation systems The rulings of the Court, interpreting the
Directive and Treaty provisions, exposed underlying tensions between the
freedoms to provide services and of establishment, on one hand, and the
exercise of fundamental social rights such as the right of collective
bargaining and the right to industrial action (see also section 2.2.1). Example 11 – the Viking Line case: The case concerned a dispute between
Viking Line, a Finnish ferry company and the International Transport Workers
Federation (ITF). It centres on the attempt by Viking Line to reflag one of its
ferries, the Rosella, which was operating at a loss on a route between Talinn
and Helsinki. Viking Line intended to register it in Estonia in order to employ
an Estonian crew at a lower level of pay than in Finland. Following a request
from the Finnish Seaman’s Union (FSU), ITF sent a circular to all its
affiliates requiring them to refrain from entering into negotiations with
Viking Line. Viking Line brought an action against ITF and FSU before a Court
in the UK which referred several questions concerning the freedom of
establishment and the right to the CJEU. (see also Annex 10) In the Viking case the Court for the first
time recognised that the protection of social rights should be put on an equal
footing with the protection of economic freedoms. However, it also recognised
the direct effect of the provisions in the Treaty safeguarding fundamental
economic freedoms vis-à-vis trade unions, despite these being private actors.
Hence the need to carry out a proportionality test by the pertinent
jurisdiction, to determine in each particular situation whether the action
engaged by the unions is proportionate to the purpose of defending the
collective interests of workers. The fact that the case could be brought to a
UK Court whereas the conflict at stake was in Finland lead to legal uncertainty
for trade unions. [81] Example 12 – the Laval case: Laval un Parteri Ltd, a Latvian company,
was hiring out labour from Latvia to an affiliated company in Sweden. The
company hired out building workers to construction sites in Vaxholm and
Danderyd in the Stockholm area where L&P Bygg AB (L&P Baltic
Construction Ltd, a subsidiary) is in charge. Laval had signed collective
agreements in Latvia with the Latvian building-sector trade union
previously/shortly before and refused to sign any collective agreement on
working conditions and remuneration in Sweden, so the Swedish Builders’ Union
had been blockading the construction site. The Swedish Electricians’ Union
started action in sympathy, blocking all electric-related work and services
until the company signed a collective agreement with the Swedish Builders’
Union. Laval initiated proceedings against the Construction Trade Union before
the Swedish Labour Court, seeking a declaration that the trade unions’
industrial actions (both the blockading and the sympathy action) were unlawful,
and an order for compensation for the damages suffered. Wishing to ascertain
whether Article 49 EC and Directive 96/71/EC preclude trade unions from
attempting, by means of collective action, to force a foreign undertaking which
posts workers to Sweden to sign and apply a Swedish collective agreement, the
Swedish Labour Court referred the matter to the Court of Justice for a
preliminary ruling. (see also Annex 10) In the Laval case the Court applied the
proportionality test to the exercise of the right to strike under the specific
conditions created by the state of transposition of the Directive in Sweden and
decided on the incompatibility of collective action such as launched by the
construction union and the freedom to provide services. The perceptions of the implications of the
Laval-Viking jurisprudence among social partners and economic agents led in the
recent past to negative "spill-over" effects as illustrated by two
industrial disputes. Example 13 – The Lindsey oil refinery dispute in the early
Spring/Summer of 2009[82]. At the genesis of the
dispute was the award of a contract to IREM, an Italian company, following a
competitive tendering procedure in the context of the completion works for a
new de-sulphurisation unit of the Lindsey oil refinery in Lincolnshire. IREM
announced its intention to use its own Italian and Portuguese workforce to
fulfil the contract by means of posting and accepted on a voluntary basis that
it would apply to all of its workers the terms and conditions laid down in the
National Agreement for the Engineering Construction Industry. As a consequence
it decided not to use any local (British) labour, despite the fact that,
according to the union, they had the relevant skills and experience. It was in
particular this decision that prompted workers at the Lindsey refinery to stage
a series of 'wildcat' strikes. According to press reports the disputes was
resolved only with an agreement to hire at least 100 'British' workers at the
site. This case illustrates the current debate on the need
to reconcile the social with the economic dimension of the EU[83],
and highlights the need for clarifying the relationship between the Treaty
provisions on the economic freedoms and the social provisions of the Charter. Example 14 – BALPA (British Airline Pilots Association): This industrial
dispute arose out of a proposal from British Airways to launch a wholly owned
subsidiary airline operating from Paris to operate between various European
airports and the USA under the Open Skies Treaty concluded between the EU and
the USA. A vote by the BALPA trade union members indicated an overwhelming
support to go on strike. The latter was however effectively hindered by BA's
decision to request a preventive injunction if it called for any industrial
action pursuant to the ballot alleging that any strike action would be unlawful
by virtue of Viking-Line and Laval and threatened to sue the Pilots Association
for its losses, which, had there been a one-day strike of pilots, would,
according to BA, amount to £100 million. Faced with such a claim for damages,
the union dropped its threat of strike action. The BALPA case[84]
is an example of the possible negative "spill-over" effects of the
judgment in the Viking-Line case on the possibilities and practical limitations
on the effective exercise of collective action by trade unions. The importance of this problem has been
highlighted in the 2010 Report of the ILO Committee of Experts on the
Application of Conventions and Recommendations which expressed ‘serious concern’
about the practical limitations on the effective exercise of the right to
strike imposed by the ECJ rulings in the cases Viking and Laval (p. 208 f.). The
right to strike being considered as enshrined in ILO Convention No. 87, it is
part of the core labour standards on freedom of association and recognized by
all Member States. Furthermore it has been be argued that the limitations to
the right of strike as embedded in the Viking-Laval jurisprudence run against
the constant interpretation by the European Court of Human Rights (ECHR) of
Article 11 of the European Convention of Human Rights[85]. The problem is driven by the following
factors: ·
Trade unions allege that the case law
establishes a primacy of economic freedoms over fundamental rights and fear
that, as a result of the rulings, they will not be able to defend workers'
rights in case of cross-border conflicts effectively. ·
Article 153(5) TFEU explicitly excludes the
right to strike from the field of competence of EU Law. For this reason there
is no EU legislation setting the conditions for the exercise of this right in
situations where eventually it could lead to a conflict with the fundamental
economic freedoms. ·
The conditions of the exercise of the right to
strike differ from one Member State to another. The possibility of being sued
for damages in a Member State following collective action in another Member
State creates legal uncertainty.[86] ·
The risk of damage claims could prevent trade
unions from exercising their right to strike. ·
There is no information and notification
obligation (alert mechanism) for situations causing serious damage or grave
disruption, or creating social unrest in the Member States concerned. Such a
mechanism was introduced in the so called Monti (or 'strawberries') Regulation[87]
in order to provide for an early warning system intended to alleviate to the
extent possible negative consequences of serious breaches or obstacles to the
free movement of goods. For ETUC, this is a major problem, that
would justify adding a Social Protocol to the Treaty with the aim of stating
unambiguously that the respect of fundamental social rights should prevail in
all circumstances over the exercise of economic freedoms. They also see the
need for legislative action designed to reverse ECJ jurisprudence[88].
BUSINESSEUROPE is against reversing the case law. Both consider that this
issue, while related to the Directive, is wider since it also concerns the
freedom of establishment. Providing more legal certainty could ease
existing tensions and reinforce stakeholders’ confidence in the single market. 3.3. Does
the EU have the right to act? The problems identified (section 3.2) are
linked to the objectives set out by Article 3(3) TEU and Articles 56 and 151
TFEU (see also section 1.2.1). Lack of clarity of the existing legal framework
on EU level is at the origin of the problems identified. The existing Directive leaving Member
States wide margin with regard to implementation, application and enforcement
in practice as well as previous attempts to address existing problems by the
way of non-binding measures have not been sufficient to solve the identified
problems. Therefore, it is necessary to address problems 1, 2 and 3 at EU level
in order to better achieve the objectives of the Treaty. Problem 4 is related to the interpretation
of the current EU legal framework. The freedom to provide services and the
freedom of establishment are fundamental principles of the Treaty. The right to
strike is protected by Article 28 of the Charter. It is also protected by
international conventions that are signed by all Member States and to which the
EU will become a contracting party (in the case of the ECHR). Action to be
taken by providing further guidance is justified under a precautionary approach
with the aim of avoiding that EU law is used as an unconditional justification
for making industrial action illegitimate in the case of future major social
conflicts with a strong transnational dimension. Such action is necessary and
proportionate in order to better achieve the objectives of the Treaty. 4. Objectives 4.1. General
objectives The initiative should
contribute to the following Treaty-based policy objectives: ·
The sustainable development of the internal
market, based on a highly competitive social market economy (Article 3 TEU); ·
The freedom to provide services across borders
and the promotion of a level playing field (Article 56 TFEU); ·
The improvement of living and working
conditions, so as to make possible their harmonisation while the improvement is
being maintained (Article 151 TFEU); ·
The respect for the diversity of industrial
relation systems in the Member States and the promotion of dialogue between
management and labour (Article 152 TFEU). 4.2. Specific
and operational objectives 4.2.1. Better
protecting the rights of posted workers Provide for a high level of protection of
posted workers, for fair and just working conditions and proper enforcement of
their rights. The following operational objectives are
related to this specific objective: ·
Improving information regarding the applicable
working conditions for posted workers ·
Enabling posted workers to better defend their
rights, including in subcontracting chains ·
Clarifying the role of social partners in
enforcement activities ·
Improving monitoring and enforcement of working
conditions ·
Providing for more clarity regarding the
interpretation of the terms and condition of employment of the Directive 4.2.2. Facilitating
cross-border provision of services and improving climate of fair competition Provide for clarity and legal certainty for
firms and administrations, reducing circumventions of the applicable rules and
contributing to a more level playing field. The following operational objectives are
related to this specific objective: ·
Providing for a more precise definition of
posting ·
Improving information regarding the obligations
of undertakings in respect of applicable working conditions for posted workers ·
Providing for clarity regarding administrative
requirements and national control measures ·
Improving administrative cooperation between the
responsible national authorities ·
Improving monitoring and enforcement of the
applicable working conditions ·
Providing for more clarity regarding the
interpretation of the provisions concerning the terms and conditions of
employment of the Directive 4.2.3. Improving
legal certainty as regards the balance between social rights and economic
freedoms, in particular in the context of the posting of workers The following operational objectives are
related to this specific objective: ·
Clarifying that no primacy exists between the
freedom to provide services/freedom of establishment and the right to take
collective action, including the right to strike. ·
Clarifying that worker's rights may continue to be
defended either individually or collectively through trade union action in
cross-border situations. All operational objectives are defined as
specific, achievable and realistic. According to the nature of the objectives
some are also measurable and time-dependent, in particular the objectives
regarding better information and improved administrative cooperation.
Evaluation (section 9.2) will assess if the objectives have been reached, using
the indicators identified (section 9.1). 4.3. Are
these objectives consistent with other EU policies? The objectives are consistent with the EU's
fundamental rights strategy.[89] The objective of the
Commission's policy following the entry into force of the Lisbon Treaty is to
make the fundamental rights provided for in the Charter as effective as
possible. The objectives of this initiative aim at improving the respect of the
fundamental rights set out in the Charter[90]. In particular through facilitating
cross-border provision of services and improving the climate of fair
competition this initiative allows for untapping the potential of growth of
posting of workers as a key element of the provision of services in the
Internal market. In addition, it may contribute to mitigate the social and
political tensions raised by controversies around the Court rulings and their
perceived effects on industrial relations systems. It is therefore one key
component of the Single Market Act. To the extent that most undertakings
posting workers are SMEs, and that the present initiative envisages
facilitating the provision of services by harmonising the implementation and
enforcement of the Directive, thereby creating favourable opportunities for
business across borders, it is in line with the Small Business Act.[91] These objectives
are also in line with the Smart Regulation agenda, designed to achieve
regulation which is of the highest quality possible, in full respect of the
principles of subsidiarity and proportionality. The present proposals are based
on a full evaluation of existing legislation and policies, covering legal,
economic and social aspects. They aim at making legislation clearer and more
accessible and drive Member States and social partners' efforts to ensure more
effective and coherent enforcement of legislation. It takes into account the
outcome of consultation with stakeholders, especially the European social
partners. Chart on intervention logic illustrating the correspondence of problem
drivers, objectives and policy options Drivers underlying problem… || || Corresponding objective(s)… || || Addressed by policy option… || || || || 1a: information || || improving information || || 2a or 3a 1b: monitoring/enforcement || || improving monitoring/enforcement; clarifying role of social partners || 1c: administrative requirements || || clarity regarding administrative requirements || 1d: administrative cooperation || || improving administrative cooperation || 1e: protection posted workers || || enabling posted workers to defend rights || || || || || 2: abuses of posted workers status || || more precise definition of posting || || 2b or 3b || || || || 3: unclear or controversial interpretation of the terms and conditions of employment || || clarity regarding interpretation of terms and conditions of employment || || 2c or 3c || || || || 4: tensions between economic freedoms and national industrial relation systems || || clarifying that no primacy exists between the two; clarifying that workers right's may continue to be defended in cross-border situations || || 6 or 7 5. Policy options 5.1. Overview
of the policy options 5.1.1. Options and sub-options related to problems 1, 2 and 3 Option 1: No
policy change (baseline scenario) Option 2:
Non-regulatory intervention ·
Sub-option 2a: Clarifying Member States'
obligations with regard to implementation, monitoring and enforcement of the
Directive, including the protection of posted worker's rights (addressing the
drivers underlying problems under heading 1) ·
Sub-option 2b: Clarifying the constituent
elements of the notion of 'posting' to better fight circumvention and abuses of
the rules (addressing the drivers underlying problems under heading 2) ·
Sub-option 2c: Clarifying certain issues related
to the interpretation of different aspects of the terms and conditions of employment
of the Directive (addressing the drivers underlying problems under heading 3) Option 3:
Regulatory intervention ·
Sub-option 3a: Introducing more precise
provisions regarding the implementation, monitoring and enforcement of the
Directive, including the protection of posted worker's rights (addressing the
drivers underlying problems under heading 1) ·
Sub-option 3b: Introducing further criteria by
legislative means to clarify the constituent elements of the notion of posting
by so as to better fight circumvention and abuses of the rules (addressing the
drivers underlying problems under heading 2) ·
Sub-option 3c: Modifying the scope and level of
terms and conditions of employment under the Directive (addressing the drivers
underlying problems under heading 3) Option 4:
Repealing the existing regulatory intervention (the Directive) 5.1.2. Options
related to problem 4 Option 5: No
policy change (baseline scenario) Option 6:
Non-regulatory intervention ·
Clarifying the exercise of freedom of
establishment and the freedom to provide services alongside fundamental social
rights by the way of a Communication Option 7:
Regulatory intervention ·
Introducing by legislative means rules designed
to clarify how the exercise of the fundamental social right to collective action
cab be made compatible with the freedom of establishment and the freedom to
provide services 5.1.3. Packages
of options The sub-options of options 2 and 3 can be
combined to form packages that address simultaneously the underlying drivers of
problems under headings 1, 2 and 3. The packages vary with regard to the nature
of the means used to intervene (legislative or non-legislative). All packages
could be combined with options 6 or 7 in order to address the drivers
underlying problem 4 (tension between economic freedoms and the right to
strike). The packages are further explained in section 6 (Assessment of the
policy options). || Sub-option addressing drivers underlying problems under heading 1 || Sub-option addressing drivers underlying problems under heading 2 || Sub-option addressing drivers underlying problems under heading 3 Package 1 || 2a || 2b || 2c Package 2 || 3a || 2b || 2c Package 3 || 2a || 3b || 2c Package 4 || 2a || 2b || 3c Package 5 || 3a || 3b || 2c Package 6 || 3a || 2b || 3c Package 7 || 2a || 3b || 3c Package 8 || 3a || 3b || 3c intervention by non-legislative means; intervention by legislative means 5.2. Description
of the policy options 5.2.1. Option
1: Baseline related to the posting of workers (problems 1, 2 and 3) Under the current setting, posting is
expected to increase slightly in the medium term (next 5 years). This
assumption is based on a simulation which is explained in detail in Annex 2.
The main results of the simulation are the following: ·
Posting will increase following the economic
cycle. It keeps similar features in terms of level, drivers and structure. ·
A likely convergence of labour cost will reduce
the motivation for the posting of low skilled workers. This leads to a slower
growth rate of posting and an increase in the relative weight of postings
driven by skill and labour shortages, job opportunities, internationalisation
and market integration. ·
Irrespective of labour cost convergence,
postings will tend to grow, but at a slow pace (slightly lower than GDP
growth), and remains an economic phenomenon of limited significance at aggregate
level (see Figure 1 in Annex 2). ·
The country breakdown of the simulation carried
out for this Impact Assessment shows that Germany, France, Poland, Portugal,
Belgium and Luxembourg will continue to be the countries which post most
workers and Germany, France, Belgium, Spain, Italy and the Netherlands will
remain the most relevant recipients of postings (see Figure 2 Table B3 in Annex
2). ·
The simulation on detailed country by country
inflows and outflows (see Table B4 and Table B5 in Annex 2) confirms that
posting will not change substantially in terms of relative extent and features.
Therefore, we can conclude that the critical issues related to the posting of
workers continue to characterise a restricted number of high labour cost
countries which receive a relatively high number of posted workers driven by
the differences in labour costs. ·
Other significant drivers of posting such as
geographic proximity (frontier areas) are unlikely to change. ·
The end of transitional measures specifically
geared to posting on 1 May 2011 (only practiced by DE and AT) may trigger an
increase in posting flows to these countries. However, the end of transitional
measures for free movement of workers may also make less appealing the use of
posting as an alternative to normal migration flows. In the absence of any initiative to address
the problems as identified, the Commission would continue to have the option of
launching infringement procedures against Member States who are failing their
obligations under the Directive and/or the freedom to provide services (Article
56 TFEU). However, as we saw above in Section 3, Articles 4 and 5 of the
Directive, related to implementation, monitoring and enforcement are formulated
in a rather general manner resulting in obligations that are not sufficiently
clear. Therefore, on the basis of the existing provisions, it is difficult to
see how the Commission would gather sufficient arguments to steer Member states
towards a more harmonised implementation and enforcement of the Directive. Infringement
procedures could only be envisaged in cases of very obvious violation of the
Directive. The situation is different with respect to
problem 1c (unnecessary administrative requirements). The Commission could
address this problem to a certain extent by infringement procedures on the
basis of Article 56 TFEU by identifying unnecessary or non-proportionate
restrictions to the freedom to provide services. It is then up to the Member
State to justify why a certain national measure is justified by overriding
reasons of general interest. However, this solution creates legal clarity and
certainty only on a case by case basis. One of the main drivers of problem 2
(abuses) is that the notion of posting lacks legal clarity. This driver cannot
be addressed by infringement procedures. Continuing lack of clarity on the
question 'what is posting and what is not posting' will provoke further
complaints and Parliamentary Questions. The underlying drivers of problem 3a
(implications of case law on national industrial relation systems and ILO
Convention No. 94) and problem 3b (unclear legal provision regarding the notion
'minimum rates of pay') can not be addressed by infringement procedures. The Expert Committee on the Posting of
Workers will continue to exchange good practices between Member States as well
as to work on a more common understanding of the Directive. 5.2.2. Option
2: Non-regulatory intervention re problems 1, 2 and 3 The different sub-options would not touch
on the existing legislative framework and operate with non-binding measures. 5.2.2.1. Sub-option
2a (monitoring and enforcement) Sub-option 2a would aim at addressing the
drivers underlying problems grouped under heading 1 by non-legislative means.
The drivers underlying problem 1a (information), 1b (deficiencies in controls
and monitoring), 1c (national control measures) and 1d (administrative
cooperation) have already been addressed by Communications in 2006 and 2007[92]
and a Recommendation in 2008. This approach has not been effective since the
identified problems continue to exist, as confirmed by the legal studies
reporting on the situation in 2010 and 2011 (see section 3.2.1). This is
probably due to the fact that most of the drivers are linked to the absence of
legislative provisions. The drivers underlying problem 1e (protection of
worker's rights) have not yet been addressed by the Communications or the
Recommendation. A Communication could identify best practices in order to
encourage Member States to adopt national provisions to address these drivers
on a voluntary basis. This could be complemented by a Recommendation setting
out more precise orientations. 5.2.2.2. Sub-option
2b (abuses) Sub-option 2b would aim at addressing one
of the main drivers underlying problem 2 by non-legislative means: the lack of
legal clarity about the constituent elements of the notion of posting. A
Communication could indicate and explain these elements building upon the
existing case law of the CJEU[93] in this respect, as well
as the criteria currently applied in social security coordination. These
criteria would however not be legally binding. 5.2.2.3. Sub-option 2c (terms and conditions of employment) Sub-option 2c would address the drivers
underlying problem 3 by non-legislative means. With regard to the drivers of
problem 3a, interpretative guidelines could provide more clarity regarding the
Court's interpretation of the different aspects of the terms and conditions of
employment applicable to posted workers (Article 3). This would in particular
include the interpretation of the notion of ‘public policy provisions’ in
Article 3(10) concerning Member State's competence to apply other terms and
conditions of employment than those listed in Article 3(1). However, such
guidelines could not address the drivers related to the transposition of the
Directive into national law and possible difficulties to reconcile it with the
respective national industrial relation systems, where these do not contemplate
the setting of minimum wages. With regard to the drivers of problem 3b,
interpretative guidelines could provide more clarity regarding the constituent
elements of the minimum rates of pay, taking into account the existing
jurisprudence. However, such guidelines could not change the fact that the
concept of the minimum rates of pay is left to the host Member State and that
the Directive does not explicitly establish a method of comparison between the
pay received in the sending Member State and the minimum rates of pay to be due
in the host Member State. Furthermore, it could be clarified that there is no
conflict between ILO Convention No. 94 and EU law. This sub-option could also clarify the
effect of the non-favourable clause of the Directive (Article 1(4)) to workers
posted by undertakings established in a non-Member State.[94] 5.2.3. Option
3: Regulatory intervention re problems 1, 2 and 3 5.2.3.1. Sub-option
3a (monitoring and enforcement) Sub-option 3a would address the drivers
underlying problems listed under heading 1 by legislative means trough the
following measures: ·
Problem 1a (deficiencies with respect to
information) ·
Clarify the rules on access to information on
the terms and conditions of employment to be respected in the host Member State
not only for foreign companies and workers but also service recipients in the
host Member State; ·
Request Member States to provide this
information by internet and in a summarised leaflet as well as to provide it in
other languages than the national language; ·
Problem 1b (deficiencies with respect to
controls, monitoring and enforcement) ·
Prescribe effective and adequate inspections[95]
to verify compliance in accordance with national law and/or practice, including
the requirement to base inspections on a risk assessment; ·
Clarify how the respect of the rules applicable
to postings in certain sectors/activities (e.g. cabotage activities in the
transport sector and mobile staff in civil aviation) can be improved and/or
monitored; ·
Provide solutions for existing cross-border
enforcement problems of fines; ·
Introduce standard provisions regarding administrative
sanctions in case of failure to comply or non respect of the provisions of the
Directive; ·
Problem 1c (unnecessary administrative
requirements and national control measures) ·
Establish more clearly the possibilities of the
host Member State acknowledged by the CJEU to require a simple prior
declaration before the posting, the documents that should be kept for
inspection purposes as well as the requirement to designate a representative or
contact person with legal capacity to present and negotiate (if need be) with
relevant social partners in accordance with national law/practice; ·
Problem 1d (administrative cooperation) ·
Prescribe in more detail the rules on
administrative cooperation and exchange of information, including its
operational rules, cooperation standards etc. (describing its role, importance
and main responsibilities and tasks). This includes prescribing deadlines for
replies to information requests; ·
Provide for a proper legal basis for the use of
a separate and specific application of the Internal Market Information System
(IMI);[96] ·
Provide for a possibility to deal with questions
of interpretation arising from the Directive and to facilitate the uniform
application of the rules applicable by promoting exchange of experience and best
administrative practices (cf. the tasks of the Administrative Commission for
the Coordination of Social Security Systems under Regulation 883/2004 which may
also issue decisions and recommendations[97]); ·
Provide for the possibility to file or
facilitate complaints; ·
Allow trade unions and other third parties having
a legitimate interest to engage in judicial or administrative proceedings on
behalf or in support of the posted worker with his/her approval; ·
Provide for mechanisms that allow posted workers
to recover excessive costs for accommodation; ·
Introduce a system of joint and several
liability of contractor and subcontractor with respect to the minimum rates of
pay[98]; 5.2.3.2. Sub-option
3b (abuses) Sub-option 3b would address the drivers
underlying problems listed under heading 2 by legislative means trough the
following measures: ·
Indicate the conditions to be verified for posting
to take place (such as the temporary nature of services to be provided and
establishment of the undertaking); ·
Provisions aiming at better preventing abuses or
disrespect of law such as the use of letterbox companies to post workers
abroad[99]; ·
Aligning certain provisions of the Directive
with the set of rules in force for posted workers in the field of social
security, particularly as regards duration and respect of conditions in the
home State; 5.2.3.3. Sub-option 3c (terms and conditions of employment) Sub-option 3c would address the drivers
underlying problem 3 by legislative means trough the following measures: ·
Problem 3a (scope and level of employment
conditions of posted workers) ·
Modifying the core of terms and conditions of
employment laid down in Article 3 (1); ·
Modifying Article 3 (7) in order to provide for
the possibility of a more favourable treatment of the posted worker in the host
Member State (beyond Article 3(1)) or even introduce an obligation of equal treatment
in comparison to a local worker; ·
Modifying the instruments to be used in imposing
terms and conditions of employment (Article 3(8)) and limits to be respected (Article
3(10)). ·
Indicating more explicitly the objective of
guaranteeing the protection of workers in the Directive and adding Article 153
of TFEU as a legal base of the Directive, in addition to Articles 53 and 62 (or
instead of). However, in view of the case law of the Court of Justice, it is
doubtful that a revised Directive could be based on such a combination of
Treaty provisions.[100] ·
The monitoring of the terms and conditions of
employment in certain sectors, such as cabotage activities, is alleged to be
difficult (see problem 1b). Instead of tackling the issue by specific
monitoring arrangements (see policy sub-option 3a) it would also be possible to
modify the scope of the Directive in order to exclude these sectors from the
application of the Directive.[101] ·
Clarifying the link with the recent Directive on
interim agency work (Directive 2008/104/EC). ·
Problem 3b (notion of minimum rates of pay) ·
Indicating the different constituent elements of
the notion of minimum rates of pay; ·
Clarifying the method of comparison between the
pay received in the sending Member State and the minimum rates of pay to be due
in the host Member State. 5.2.4. Option
4: Repealing the Directive Repeal of the existing Directive would
imply that there would be no more mandatory protection of posted workers by law
and/or collective agreements in the host Member State provided by EU law. The
law applicable to the employment contract would be determined by the Rome I
Regulation. The applicable law would be assessed on a case by case basis,
leading to an increase in legal uncertainty. In principle the law of sending
Member State would apply. Host Member States could provide for additional
protection of posted workers by mandatory rules under national law. However,
the burden of proof regarding the applicable law would be with the posted
worker in case of dispute with his employer or with the service provider in
case of dispute with national authorities in the host Member State. The case
law of the Court of Justice predating the adoption of the Directive would again
become applicable.[102] The boundaries of the
level of protection to be respected with regard to posted workers would be set
on a case by case basis by the Court. This option would increase legal
uncertainty. It would create more ground for conflicts and tensions between
management and workers and also between posted and domestic workers in host
countries. It would negatively affect the protection of posted workers sent
from low labour cost countries to high labour cost countries and disrupt
competition in the host Member State as well as between Member States.
Therefore, this option can be excluded from further assessment at this stage. 5.2.5. Option 5: Baseline related to the tensions between the
freedom to provide services/ establishment and national industrial relation
systems (problem 4) The Court rulings triggered a wide ranging,
intense debate on their consequences for the protection of rights of posted
workers, and more generally the extent to which trade unions would continue to
be able to protect workers' rights in cross-border situations through
collective action, including strike. The rulings have been perceived by unions as
acknowledging a primacy of economic freedoms over the exercise of fundamental
rights leading to a risk of unfair competition and possibly 'social dumping'. According to Prof. Monti[103]
the Court rulings in 2007 and 2008[104] have exposed the fault
lines that run between the single market and the social dimension at national
level. They "revived an old split that had never been healed: the divide
between advocates of greater market integration and those who feel that the
call for economic freedoms and for breaking up regulatory barriers is code for
dismantling social rights protected at national level". He equally pointed
out that "the revival of this divide has the potential to alienate from
the Single Market and the EU a segment of public opinion, workers' movements
and trade unions, which has been over time a key supporter of economic
integration". As illustrated by the examples given in
section 3.2.4, not addressing the underlying drivers of this problem implies
continuing legal uncertainty when new strikes occur. The risk of damage claims
could prevent workers and trade unions to exercise their right to strike in
situations involving the delocalisation of production units or the provision of
services across the borders. This could be considered as running against ILO
Convention 87, at least in accordance with ILO Committee of experts' opinion,
Article 11 of the ECHR and Article 28 of the EU Charter of Fundamental Rights. The impact of the baseline scenario goes
far beyond purely legal questions related to the right to strike. The
Commission's envisaged re-launch of the Single Market is of utmost importance
to reach the EU2020 goals for growth and employment. It requires broad support
among all important stakeholders. Not acting on this issue would endanger the
support for this strategic project from an important part of stakeholders. 5.2.6. Option 6: Non-regulatory intervention re problem 4 Option 6 would address the drivers
underlying problem 4 by the way of a Communication which would clarify the balance
between the use of the right to strike in cross-border situations and the
freedom to provide services or establishment. It would draw inspiration from
the so-called Monti clause in Regulation 2679/98.[105] This option could: ·
explicitly state that there is no inherent
conflict between the exercise of the right to take industrial action, including
the right or freedom to strike, and the freedoms of establishment and to
provide services, or primacy of one over the other; ·
recognise the key role of social partners to
take action to protect workers and workers' rights, including through
industrial actions; ·
stress the important role of national courts[106]
in applying the proportionality test on a case-by-case basis, while reconciling
the exercise of fundamental social rights and economic freedoms; ·
confirm the role and contribution of established
alternative dispute resolution mechanisms (such as mediation, conciliation
and/or arbitration) at national level, also in case of disputes in
trans-national situations. 5.2.7. Option 7: Regulatory intervention re problem 4 Option 7 would address the drivers
underlying problem 4 by legislative means. It would include all the measures
mentioned in option 6 and in addition it would contain a clause establishing an
information and notification obligation (an alert mechanism) for situations
causing serious damage or grave disruption, or creating social unrest in the
Member States concerned. Such an initiative would not establish
rules regarding the exercise of the right to strike which should continue to be
regulated at national level. 6. Analysis
of the impact of the policy options 6.1. Overview With regard to the policy options
concerning the posting of workers the impact of different packages (combinations
of sub-options) is assessed against the baseline scenario (option 1). The
packages address all drivers underlying problems listed under headings 1, 2 and
3 either by legislative or non-legislative means in order to ensure
comparability. Packages which address the drivers underlying problems grouped
under 1 by non-legislative means (see section 5.1.1) will not be considered for
further analysis since previous attempts to address such problems by
non-legislative means have not reached their objectives. Therefore, the
following packages will be taken into consideration. || Sub-option addressing drivers underlying problem 1 || Sub-option addressing drivers underlying problem 2 || Sub-option addressing drivers underlying problem 3 Package A || 3a || 2b || 2c Package B || 3a || 3b || 2c Package C || 3a || 2b || 3c Package D || 3a || 3b || 3c intervention by non-legislative means; intervention by legislative means With regard to the policy options
concerning the tensions between the freedom to provide services/establishment
and national industrial relation systems (problem 4) option 6 (intervention by
non-legislative means) and option 7 (legislative intervention) are assessed
against the baseline scenario (option 5). The analysis focuses on economic impacts,
including impacts on SMEs and administrative burden, and social impacts,
including the impact on fundamental rights. However, there is no significant
impact on the environment. The impact on consumers is not measurable and would
only take place if the different options would bring more competition among
service suppliers. Option 4 (repealing the Directive) has been excluded from
further assessment since the expected impact is clearly negative. 6.2. Option
1: Baseline posting of workers 6.2.1. Economic
Impact Functioning of the internal market: Posting is expected to slightly increase over the next 5 years
mainly following the economic cycle. Through exchange of best practice between
Member States there might be slight improvement in administrative cooperation
with positive effects on enforcement. However, the identified problems will in
principle remain. Continuing deficiencies regarding information, monitoring and
enforcement as well as abuses and circumvention of the applicable rules will
continue to have negative effects on fair competition and the functioning of
the single market. Some aspects of the problems may increase since they are
interconnected and might mutually reinforce each other. Unnecessary,
non-proportionate administrative requirements could be addressed by
infringement procedures with slight positive impact on the single market. Impact on SMEs: SMEs are in particular sensitive to unfair competition on
labour costs. This is confirmed by anecdotal evidence.[107]
Therefore, continuing deficiencies with respect to fair competition will in
particular affect SMEs. SMEs will benefit from infringement procedures leading
to less administrative requirements. However, the impact is less significant
than in packages A, B, C and D since infringements can only provide legal
clarity on a case by case basis. 6.2.2. Social
impact Employment and labour market: Negative impact on fair competition will indirectly affect labour
markets and job opportunities in sectors and regions where posting is
concentrated in receiving countries. Due to wage convergence this effect will
slightly decrease. Worker’s rights and job quality: Negative impact on fair competition will indirectly affect working
conditions and job quality in sectors and regions where posting is concentrated
in sending and receiving countries. Due to wage convergence this effect will
slightly decrease. Participation/industrial relations: Continuing problems regarding abuses, monitoring and enforcement
as well as insufficient protection of posted workers in case of conflicts with
their employers will reinforce tensions between workers and management or even
between posted and local workers, and decrease the acceptance of posting and
the single market as such. Fundamental rights: Article 31 is indirectly affected by the non-respect of the
applicable working conditions, in particular in case of abuses and
circumvention, the existing gaps in monitoring and enforcement as well as in
the protection of posted workers in case of conflict concerning the individual
employment conditions. 6.2.3. Positions
of stakeholders The baseline option is not supported by any
of the EU social partners. Most member States agree that the current legal
framework for posting needs to be improved. However, the UK has shown
reservations to the idea of introducing new regulation. 6.3. Package
A (Regulatory measures to deal with problem 1, combined with non-regulatory
measures to deal with problems 2 and 3) 6.3.1. Economic
Impact Functioning of the internal market: Package A (sub-option 3a) will contribute to fair competition and
a more level playing field by providing for more clarity regarding monitoring,
controls, enforcement (including joint and several liability), and
administrative cooperation. It will facilitate the cross border provision of
services by clarifying the administrative requirements Member States may impose
on service providers. Increased regulatory certainty and cooperation between
Member States will reduce barriers to the provision of services and create
positive effects on the development of the single market. Facilitated cross
border provision of services will increase competition in the internal market
for services. Additional costs for cooperation and enforcement measures do not
imply relevant barriers to the development of the transnational provision of
services since these additional costs are limited (see below and Annexes 5 and
6 on costs and administrative burden). Package A (sub-option 2b) would positively
impact on the functioning of the single market and fair competition by
providing for more clarity regarding the notion of posting by non-legislative
means in order to fight abuses. Clarifications would support Member States
monitoring and enforcement activities. However, these clarifications would not
be legally binding and therefore not guarantee the uniform application of the
notion. It would not include specific provisions aiming at reducing abuses. Therefore,
the impact on reducing abuses will be less significant than in packages B and D
(including sub-option 3b) compared to the baseline scenario. Interpretative guidelines regarding the
interpretation of the terms and conditions of employment (sub-option 2c)
including the interpretation of Article 3(10) and the notion of minimum rates
of pay would have a positive impact on facilitating service provisions and
indirectly contribute to a more integrated market for services. Public authorities: This package will increase involvement of public authorities in
providing information, monitoring and control activities as well as
administrative cooperation. Specific regions and sectors: As posting is concentrated in specific regions (e.g. border areas)
and sectors (e.g. construction, temporary agency work) these will be more
affected than others. (See in this respect country taxonomy in section 3.1.5.2 and
evidence on posting flows in section 3.1.2) Costs/administrative burden: Improving information regarding the applicable working conditions
will increase costs for Member States. The current Directive does not specify
how information on terms and conditions of employment should be made generally
available. Therefore, information via websites in the national language can be
considered the status quo (business as usual). Additional costs for required
translation and a leaflet are about 90,000 EUR (one-off costs) and 180,000 EUR
(repetitive costs per year) in total for 27 Member States.[108]
Translation and leaflets are necessary since not all posted workers/companies
speak the language of the host Member State and not all posted
workers/companies are used to find information on the internet (i.e. SMEs).
Transparent and easy accessible information will reduce costs for service
providers. Posted workers will be better informed about their rights and Member
States will benefit from better compliance with the applicable working
conditions. Across Member States, one-off costs vary within a very close range
(3,000 – 5,000 EUR). The maximum amount per year is estimated to occur in
Germany (33,000 EUR). 18 Member States have very low annual costs (less than
5,000 EUR). Clarifying that only some administrative
requirements may be imposed by Member States on service providers (prior
notification, obligation to keep certain documents for inspections or
obligation to designate a responsible person in order to negotiate with social
partners) will limit Member States possibilities for imposing administrative
requirements and should reduce administrative burden for service providers. Providing for more effective and adequate
inspections does not imply necessarily an increase in the number of controls
and visits. Therefore, resource costs may not increase compared to the status
quo. It depends very much on the specific situation of each Member State and on
how effective and adequate inspections can be ensured (organisation of labour
inspectorates, priority of tasks etc.).[109] Basing
inspections on a risk assessment will make inspections more effective and
reduce costs for companies in non-risk sectors/situations. Reinforced controls
under risk assessment might increase compliance costs for firms in problematic
sectors or with a bad record. Derogations are foreseen in accordance with
national law and practice as far as national labour inspectorates may not be responsible
for the controls in some Member States. Such Member States should establish or
maintain (alternative) arrangements (e.g. in collaboration with social
partners) which guarantee the respect of working conditions of posted workers. The use of an IT tool such as IMI could
have a significant cost-reducing impact, facilitating direct contacts between
competent administrations and reducing the need for translation of
correspondence and documents. In addition, if it is decided to use IMI, the
benefits could be reaped without additional up-front development cost. Better
administrative cooperation may replace controls to a certain extent and hence
equally reduce costs. Furthermore, Member States will benefit from the
possibility to enforce fines in the sending Member State. Introducing a system of joint and several
liability will not create information obligations and therefore not create
administrative burden for firms. However, such a system may encourage companies
to adopt preventive measures aimed at a risk selection of subcontractors.
Companies might wish, for instance, to carry out a more detailed market
research in order to reduce the risk of engaging a subcontractor that will not
comply with its minimum wage obligations in the host Member State. Possible
change in behaviour of companies while selecting subcontractors, in those
Member States that have no joint and several liability system in place, may
lead to additional indirect compliance costs of 2 million EUR per year for the
whole EU. Such costs can amount to more than 100,000 EUR in five Member States
(Belgium, Denmark, Luxembourg, Sweden and United Kingdom). These costs may be
mitigated however by the fact that all Member states, while implementing
Directive 2009/52/EC providing for minimum standards on sanctions and measures
against employers of illegally resident immigrants, introduced or will (have
to) introduce a joint and several liability mechanism. The introduction of a
system of joint and several liability may equally have a preventive or
deterrent effect on the non respect of workers' rights and thus further
increase the positive impact on the creation of a fair level playing field.[110]
For further details see Annexes 5 and 6 on
costs and administrative burden. For details on the distribution of costs and
cost-related benefits across Member States see Annex 7. Impact on SMEs: SMEs are in particular sensitive to unfair competition. Therefore,
they will benefit from better enforcement of the existing Directive, a more
level playing field and fairer competition. With regard to unfair competition
on labour costs the positive impact on SMEs in receiving countries will be even
more significant. Effective and adequate inspections including risk assessment,
improved administrative cooperation, cross-border execution of fines and joint
and several liability will contribute to better enforcement of the Directive.
However, the positive impact will be less significant than in packages B and D
since package A will not provide for binding legal clarity regarding the
definition of posting as well as provisions aiming at reducing abuses. SMEs especially in sending countries will
benefit from improved information regarding the applicable working conditions
and legal clarity regarding administrative requirements in the host Member
State. They will particularly benefit from the removal of some disproportionate
forms of control measures which imply extra costs. SMEs that so far benefitted from
subcontractors not abiding to the applicable working conditions or e.g. the use
of letter-box companies will have to find new business models. Impact on competitiveness: There is a positive impact on cost and price competitiveness,
international competitiveness and competitiveness of SMEs and micro-SMEs (for
details see Annex 11). 6.3.2. Social
impact Employment and labour market: Reducing non-respect of the applicable working conditions and
better enforcement of posted workers rights will have a positive impact on
existing tensions in receiving high labour cost countries with regard to
posting. However, the impact will be less significant than in packages B and D
since package A will not provide for binding legal clarity regarding the
definition of posting as well as provisions aiming at reducing abuses.
Transparent information and clarity regarding administrative requirements will
positively affect market opportunities for sending firms. Worker’s rights and job quality: Working and employment conditions of posted workers will improve
due to better information, monitoring and enforcement. At the same time
downward pressure on working condition of local workers in receiving countries
will decrease. However, these effects will be less significant than in packages
B and D since package A will not provide for binding legal clarity regarding
the definition of posting as well as provisions aiming at reducing abuses. Protection of particular groups: Posted workers are vulnerable given their particular situation:
temporary employment in a foreign country, difficulty to obtain proper
representation, lack of knowledge of local laws, institutions and language.
Their protection will improve due to better information, monitoring and
enforcement and due to better protection of their right in case of conflicts
about their employment relationship. Participation: Clarification of the role of social partners in providing
information, monitoring, enforcement and administrative cooperation will
strengthen their involvement. The explicit right for third parties to intervene
in Court proceedings concerning the rights of posted workers will improve
social partner’s involvement. Access to justice: This package will improve access to justice and relations with
responsible public authorities by providing more detailed provisions with
regard to the jurisdiction clause in the Directive and a complaint mechanism
for posted workers. Fundamental rights: Freedom to choose an occupation and right to engage in work
(Article 15 of the Charter of Fundamental Rights) and freedom to conduct a
business (Article 16): Transparent information regarding the applicable working
conditions for posted workers in the host Member State and legal certainty
regarding administrative requirements for foreign service providers will have a
positive effect on these rights. In general, better enforcement of the law can
be considered as favourable to the development of business and as impacting
favourably on the freedoms protected under Article 15. Fair and just working conditions (Article
31): This option has a positive impact on Article 31 by providing for better
information, monitoring and enforcement of the applicable working conditions of
posted workers. Better protection of posted workers in case of disputes about
individual employment condition will also positively affect Article 31. Better
protection and enforcement of working conditions of posted workers indirectly
contributes to better protection of local workers and reduces downward pressure
on working conditions in high labour cost receiving countries. Right to an effective remedy and to a fair
trial (Article 47): Better protection of posted workers in case of disputes
about individual employment condition has a positive impact on rights protected
under Article 47. Non-discrimination (Article 21) and equality
between women and men (Article 23): This option has a positive impact on
non-discrimination and equality between women and men by providing for better
information, monitoring and enforcement of the applicable working conditions of
posted workers. Better protection of posted workers in case of disputes about
individual employment condition will also positively affect these rights. Prohibition of child labour and protection
of young people at work (Article 32): As above, better information, monitoring
and enforcement has a positive impact on the protection of children and young
people. However, the positive impact on Articles
15, 16, 21, 23, 31 and 32 will be less significant than in package B since
package A will not provide for binding legal clarity regarding the definition
of posting as well as provisions aiming at reducing abuses. 6.3.3. Positions
of stakeholders ETUC welcome the regulatory measures
included in this package, but finds insufficient the "soft law"
approach for dealing with the issues of interpretation of the current
Directive. Employer organizations favour measures leading to improved
information and administrative cooperation but do not support the introduction
of any form of several and joint liability. They approve the approach consisting
in keeping with the Court jurisprudence on Article 3. Most Member states will
welcome the greater transparency brought with the clarification of rules on the
definition of posting. In general they will be willing to reinforce
administrative cooperation, but host Member States will wish to maintain their
capacity to enforce national forms of control. Some Member states may find
excessive the measures required for the protection of posted workers' rights to
the extent that they may not be easily transposed, or require extra costs. 6.4. Package
B (Regulatory measures to deal with problems 1 and 2, combined with
non-regulatory measures to deal with problem 3) Package B provides for binding rules regarding
the definition of posting and additional provisions aiming at reducing abuses
and circumvention of the applicable working conditions. Therefore, even if
impacts are similar to those of package A (i.e. no changes in costs) they are
more significant regarding certain aspects. 6.4.1. Economic
Impact Functioning of the internal market: The positive impact on fair competition and a more level playing
field is more significant against the baseline scenario than in package A since
package B will reduce abuses and circumvention of the applicable rules by
providing for binding legal clarity regarding the definition of posting and
provisions aiming at reducing abuses. It gives more leeway for the Commission
in its role to control EU law. Impact on SMEs: SMEs in receiving countries are sensitive to unfair
competition on labour costs. Therefore, they will in particular benefit from
the positive impact on fair competition and a more level playing field. The
positive impact in this respect is more significant against the baseline
scenario than in package A since package B will reduce abuses and circumvention
of the applicable rules by providing for binding legal clarity regarding the
definition of posting and provisions aiming at reducing abuses. Impact on competitiveness: The positive impact on competitiveness is more significant than in
package A since package B will reduce abuses and circumvention of the
applicable rules more effectively (for details see Annex 11). 6.4.2. Social
impact Employment and labour market: Reducing abuses and circumvention of the applicable working
conditions and better enforcement of posted workers rights will have a positive
impact on existing tensions in receiving high labour cost countries with regard
to posting. Worker’s rights and job quality: The positive impact on worker’s rights and job quality as well as
reducing potential downward pressure on local wages is more significant against
the baseline scenario than in package A since package B will better reduce
abuses and circumvention of the applicable rules by providing for respective
provisions and binding legal clarity regarding the definition of posting. Fundamental rights: The positive impact on Articles 15, 16, 21, 23, 31, 32 and 47 of
the Charter is more significant against the baseline scenario than in package A
since package B will reduce abuses and circumvention of the applicable rules by
providing for binding legal clarity regarding the definition of posting and the
prevention of abuse in the provision of cross-border services. 6.4.3. Positions
of stakeholders While ETUC is in favour of more binding
rules, employers' organisations may adopt a more nuanced position. Binding
rules on the definition of posting may favour competing undertakings in
receiving countries, but will limit the activity of some companies in sending
countries. For Member States, the fact that similar criteria are already
applied in the context of social security coordination will act as a
facilitating factor in implementation. Host Member States will tend to favour
stricter criteria for the definition of posting. 6.5. Package
C (Regulatory measures to deal with problems 1 and 3, combined with
non-regulatory measures to deal with problem 2) The impact of package C regarding problems
1 and 2 is close to package A. However, the overall impact is fundamentally
different since package C includes sub-option 3c. 6.5.1. Economic
Impact Package C (sub-option 3c) would give the
host Member State the possibility to impose a wider set of employment
conditions to foreign undertakings than currently foreseen in Article 3 of the
Directive. It would also allow for establishing wages for posted workers in
excess of the minimum wage rate set by law or collective agreement. Functioning of the internal market: Like package A and B this sub-option will facilitate the cross
border provision of services by clarifying the administrative requirements
Member States may impose on service providers. Increased regulatory certainty
and cooperation between Member States will reduce barriers to the provision of
services and create positive effects on the development of the single market.
However, the economic incentive for posting and therefore for cross-border
provision of services would be greatly reduced in this package. Foreign
undertakings would have to know in detail the entire body of labour law of all
Member States they intended to post workers to. Equal treatment of posted
workers as regards wages would suppress the wage cost difference that is an
incentive for posting. Indeed, it would create a disincentive given the extra
costs incurred by posting (transport, accommodation, administrative
formalities). Therefore, this option will decrease competition in the internal
market for services in some sectors and regions. Local firms in high labour
cost countries will benefit from reduced competition on labour costs. However,
firms in sending countries would lose business opportunities. Public authorities: Raising significantly the level of protection of posted workers
may encourage abuses and circumvention of the applicable rules as well as undeclared
work with negative impact on fair competition. Therefore, in order to maintain
similar positive impacts with regard to fair competition as package A, package
C would need additional efforts regarding monitoring, controls and enforcement.
Therefore this option will increase involvement of public authorities in
providing information, monitoring and control activities as well as
administrative cooperation. This impact will be more significant than in
package A and B in order to compensate the more complex structure of applicable
working conditions. In particular, the information to be provided via internet
or leaflet would have to cover the entire employment legislation. Specific regions and sectors: Beyond the impact in package A, this sub-option will particularly
affect sectors and regions where postings from low to high labour cost
countries are concentrated. (See in this respect country taxonomy in section 3.1.5.2
and evidence on posting flows in section 3.1.2) Costs/administrative burden: Beyond the impact described in package A, additional compliance
costs for service providers will be caused by less transparency of the
applicable working conditions. They will have for instance to hire legal
experts in order to give advice on the obligations imposed by the full
employment legislation of the host country. Or they will have to face
obligations for which they were not prepared, after contracts have been
concluded. Impact on SMEs: SMEs are in particular sensitive to competition on labour costs.
Therefore, sending SMEs in low labour cost countries will be negatively
affected by this package. The effect on local SMEs in high labour cost
countries is less clear: while they would in principle benefited due to reduced
(legal) competition, they might be affected negatively by an upsurge in
undeclared work and other illegal practices. As SMEs in sending countries are in
particular sensitive to administrative burden, they will be particularly
affected by increased costs regarding better monitoring and enforcement. At the
same time, such SMEs will benefit from improved information regarding the
applicable working conditions and legal clarity regarding administrative
requirements in the host Member State. 6.5.2. Social
impact Employment and labour market: Extending the protection of posted workers beyond the core of
mandatory working and employment conditions and/or providing for equal pay with
local workers might reduce posting flows and have a negative impact on job
opportunities for workers in low labour cost countries. Local firms and workers
in receiving high labour cost countries will in principle benefit from less
competition on labour costs. Better enforcement of posted workers rights will
have a positive impact on fair competition in receiving high labour cost
countries with regard to posting. However, the positive impact on fair
competition is less significant against the baseline scenario than in package B
or D since package C will not reduce abuses and circumvention of the applicable
rules by providing for binding legal clarity regarding the definition of
posting and provisions aiming at reducing abuses. The impact in this respect is
similar to package A. At the same time, raising significantly the
level of protection of posted workers may increase abuses and circumvention of
the applicable rules as well as undeclared work if not compensated by
additional efforts regarding monitoring, controls and enforcement. Equal
working conditions for local and posted workers will greatly reduce the flows
of legal posting. Worker’s rights and job quality: There will be a positive impact on worker’s rights and job quality
of posted workers, to the extent that legal posting continues to take place.
Potential downward pressure on local wages in high labour cost countries could
be reduced. Protection of particular groups: Beyond the positive impact of package A and B this sub-option will
raise the level of protection of posted workers. Participation: Beyond the positive impact of package A and B this package would
strengthen the role of unions in setting working conditions trough collective
agreements by providing for equal treatment on local level. Fundamental rights: Fair and just working conditions (Article 31): compared to package
A and B, this option would raise the level of protection of posted workers with
regard to working conditions. A higher level of protection of posted workers
would have a positive impact on Article 31 of the Charter, as it would
contribute to better protection of local workers and reduce downward pressure
on working conditions in high labour cost receiving countries. 6.5.3. Positions
of stakeholders Packages C and D would deserve support by
ETUC, as sub-option 3c corresponds to the solution long advocated by this
organisation. They would be strongly opposed however by employers'
organisations. Member States have not shown to favour this approach either, and
especially sending Member states will strongly oppose sub-option 3c. 6.6. Package
D (Regulatory measures to deal with problems 1, 2 and 3) The impact of package D is close to the
impact of package C. However, the positive impact of package D on fair
competition and a more level playing field is more significant against the
baseline scenario than in package C since package D will reduce abuses and
circumvention of the applicable rules by providing for binding legal clarity
regarding the definition of posting and provisions aiming at reducing abuses.
In this respect impacts are similar to package B. 6.7. Option
5: Baseline tensions between the freedom to provide services/establishment and
national industrial relation systems (problem 4) 6.7.1. Economic
Impact Functioning of the internal market: Regulatory uncertainty in case of conflicts will negatively impact
on the functioning of the internal market. Possible loss of support for the
single market of an important part of stakeholders would have a significant
negative impact. It would create an unfriendly environment for service
providers and could include protectionist behaviour. 6.7.2. Social
impact Worker’s rights and job quality: Regulatory uncertainty in case of conflict between the right to
strike and fundamental economic freedoms creates a risk of damage claims;
doubts regarding the jurisdiction and the role of national courts with regard
to the exercise of the proportionality test concerning strikes in cross-border
conflicts may prevent trade unions from playing their role in protecting
worker’s rights. This creates a negative impact on the protection of worker’s
rights. Participation: As above. There will also be an indirect negative effect on the
functioning of national industrial relation systems. Fundamental rights: Fair and just working conditions (Article 31): There is an
indirect negative effect on Article 31, since regulatory uncertainty in the
present context may prevent trade unions from playing their role in protecting
worker’s rights in case of cross-border social conflict. Right of collective bargaining and action
(Article 28): There is a direct negative impact on Article 28 since regulatory
uncertainty in this context will weaken trade union involvement in protecting
worker’s rights. 6.8. Option
6: Non-legislative intervention 6.8.1. Economic
Impact Functioning of the internal market: Clarifying the extent to which trade unions can make use of the
right to strike in cross-border situations involving the freedom to provide
services and the freedom of establishment would have a positive impact on the
functioning of the single market, to the extent that it would reduce the scope
for legal uncertainty. 6.8.2. Social
impact Worker’s rights and job quality: There is an indirect positive effect on the protection of worker’s
rights, since this option would clarify social partner's role in protecting
worker’s rights in case of cross-border social conflict as well as providing
for more legal clarity in case of conflict between the right to strike and
fundamental economic freedoms. Participation: This option will imply trade union involvement in protecting
worker’s rights by providing more legal clarity in case of conflict between the
right to strike and fundamental economic freedoms. There might be an indirect
positive effect on the functioning of national industrial relation systems.
Since the material content of the right to strike differs between the Member
States, stressing the important role of national courts in applying the
proportionality test on a case-by-case basis while reconciling the exercise of
fundamental social rights and economic freedoms, should positively affect
national industrial relation systems. 6.8.3. Positions
of stakeholders An interpretative Communication may not
tackle the perceived lack of social dimension of the single market in an
entirely satisfactory way. It would not satisfy major stakeholders and certain
parties in the European Parliament (see also section 6.9.3). Moreover, the contents of the
interpretative Communication could equally continue to be the source of
criticism (such as that the Commission did not correctly reflect the contents
and/or consequences of the case law of the Court) as happened with respect to
the 2006 Communication (see also under 1.3 above) which provided guidance on
the compatibility with Union law, as interpreted in the Court's jurisprudence,
of national control measures but remained the object of continued criticism by
a number of Member States. 6.9. Option
7: Legislative intervention Option 7 has the same positive impacts as
option 6, to the extent that it pursues the same objective of clarifying the
jurisprudence of the Court of Justice. Impacts should be more significant since
a Regulation provides for more legal certainty than a soft law approach (option
6). An alert mechanism would have additional positive impacts. A legislative
intervention would express a more committed political approach by the
Commission to respond to a problem that is seen with great concern by the
unions and parts of the European Parliament. 6.9.1. Economic
Impact Functioning of the internal market: Establishing an alert mechanism for situations causing serious
damage or grave disruption, or creating social unrest will have an indirect
positive impact, to the extent that it would increase transparency and provide
timely information to Commission, national authorities and stakeholders of
concerned Member states allowing them to intervene in a more coordinated way if
necessary. Public authorities: Providing for an alert mechanism Member States and the Commission
would be involved. However, there are no significant costs and/or
administrative burden. 6.9.2. Social
impact Fundamental rights: There is an indirect positive effect on Article 31 (Fair and just
working conditions), since this option will underline the key role of social
partners in protecting worker’s rights as well as providing for more legal
certainty in case of conflict between the right to strike and fundamental
economic freedoms. This option will have a positive impact on Article 28 (Right
of collective bargaining and action) clarifying the jurisprudence of the Court
of Justice that there is no inherent conflict between the exercise of the right
to take industrial action, including the right or freedom to strike, and the
freedoms of establishment and to provide services, or primacy of one over the
other. Recognising the key role of social partners to take action to protect
workers' rights, including through industrial actions will positively affect
Article 28. 6.9.3. Positions of stakeholders A legislative intervention is the favoured
option of ETUC. However, this organization has expressed the view that the
principle of primacy of social rights over economic freedoms should be
explicitly stated in primary or secondary law. The envisaged initiative would
not go as far and would instead re-state the principle of "equal
footing" with no primacy of one right over the other. Employers' organizations will insist on the
role of national institutions. Member states show in general a reserved
position towards a legislative intervention and will analyse carefully the
extent to which the competences established by the Treaty have been respected.
Some national Parliaments may evoke the subsidiarity aspect and take a negative
stand. 7. Comparison
of the options The options have been compared with regard
to their effectiveness in achieving the specific objectives of the initiative,
their efficiency (cost-effectiveness) in achieving these objectives and
coherence with the general objectives of the EU. 7.1. Effectiveness
with regard to the specific objectives 7.1.1. Option
1 (a) Better protecting the rights of posted
workers: Option 1 is not effective in achieving this objective. Since the
existing problems remain unaddressed better protection will not be achieved. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Option 1 is not effective
in achieving this objective. There will be a slight positive impact resulting
from slight improvement in administrative cooperation, with regard to
unnecessary administrative requirements and wage convergence. However, most of
the existing problems remain unaddressed. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Option 1 does not address the existing tensions and is therefore
not effective in this respect. 7.1.2. Package
A (a) Better protecting the rights of posted
workers: Package A is effective in achieving this objective. Better
information, monitoring, enforcement and protection of posted workers in case
of conflict with their employers increase the protection of posted workers.
However, package A is less effective than package B, C and D since these
options provide for additional protection. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Package A is effective in
achieving this objective by improving information, clarifying administrative
requirements as well as providing for better respect of the applicable working
conditions. However, it is less effective than package B since B provides for
anti abuse provisions as well as for binding legal clarity regarding the
definition of posting. It is more effective than package C and D since they
make the cross-border provision of services more complex. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Package A does not address the existing tensions and is
therefore not effective in this respect. 7.1.3. Package
B (a) Better protecting the rights of posted
workers: Package B is effective in achieving this objective. Better
information, monitoring, enforcement and protection of posted workers in case
of conflict with their employers increase the protection of posted workers. A
clearer definition of posting and preventing abuses and circumvention of the
applicable rules provides for additional protection compared to package A.
However, it is less effective than packages C and D since this option would
provide for a higher level of applicable working conditions. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Package B is effective in
achieving this objective by improving information, clarifying administrative
requirements, providing for better respect of the applicable working conditions
as well as for anti abuse provisions as well as for binding legal clarity
regarding the definition of posting. It is more effective than packages A, C
and D. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Package B would not address the existing tensions and is
therefore not effective in this respect. 7.1.4. Package C (a) Better protecting the rights of posted
workers: Package C looks more effective than packages A and B in achieving this
objective since it provides for a higher level of applicable working conditions
(equal pay for equal work). However, its effects are very uncertain to the
extent that the economic disincentive created for legal posting may seriously
reduce the flow of posting, job opportunities or encourage undeclared work. It
is less effective than package D since it does not provide for anti abuse
provisions as well as for a binding legal clarity regarding the definition of
posting. (b) Facilitating cross-border provision of
services and improving climate of fair competition: With regard to facilitating
cross-border provision of services package C is less effective, since service
providers would have to respect the full body of employment legislation in the
host country and provide for a higher level of working conditions. This clearly
would reduce the economic incentive for posting in many situations. The
existing problems concerning information and administrative requirements would
be addressed. With regard to improving fair competition
package C is effective. However, it would give more weight to the interests of
service providers in (high labour cost) receiving countries relatively to
competitors in (low labour cost) sending countries. Regarding abuses C is less
effective than B and D. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Package C does not address the existing tensions and is
therefore not effective in this respect. 7.1.5. Package
D (a) Better protecting the rights of posted
workers: Package D is apparently more effective in achieving this objective. It
looks more effective than packages A and B in achieving this objective since it
provides for a higher level of applicable working conditions (equal pay for equal
work). However, its effects are very uncertain to the extent that the economic
disincentive created for legal posting may seriously reduce the flow of posting,
job opportunities or encourage undeclared work. It is more effective than C
since it provides for anti abuse provisions as well as for a binding legal
clarity regarding the definition of posting. (b) Facilitating cross-border provision of
services and improving climate of fair competition: With regard to facilitating
cross-border provision of services package D is less effective, since service
providers would have to respect a higher level of protection with regard to
working conditions in the host Member State, and as a result many would be
discouraged from posting workers abroad in accordance legal with rules. The
existing problems concerning information and administrative requirements would
be addressed. However, the amount of information to be provided would increase
substantially at least for some Member States With regard to improving fair competition
package D is effective to the same extent than package B. However, it would
weight interests of service providers in particular in (low labour cost)
sending and (high labour cost) receiving countries differently. With regard to
abuses it is more effective than package C. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Package D does not address the existing tensions and is
therefore not effective in this respect. 7.1.6. Option
5 (a) Better protecting the rights of posted
workers: Option 5 does not address the existing tensions and is therefore not
effective in this respect. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Option 5 does not address
the existing tensions and is therefore not effective in this respect. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Option 5 does not address the existing tensions and is therefore
not effective in this respect. 7.1.7. Option
6 (a) Better protecting the rights of posted
workers: Option 6 is effective in achieving this objective, since it clarifies
that trade unions may continue to defend worker's rights in cross-border
situations through collective action, including the right to strike. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Option 6 indirectly
contributes to fair competition. However, compared to option 7 this indirect
effect is weaker and the option less effective since it falls short from
establishing an early alert system. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Option 6 is effective, however, less effective than
option 7. 7.1.8. Option
7 (a) Better protecting the rights of posted
workers: Option 7 is effective in achieving this objective, since it clarifies
that trade unions may continue to defend worker's rights in cross-border
situations through collective action, including the right to strike. It is more
effective than option 6 since a legal text provides for more legal certainty
than a interpretative documents from the Commission. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Option 7 indirectly
contributes to fair competition. It is more effective than option 6 since it
creates an alert mechanism in cases of grave disruption of the single market. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Option 7 is most effective option in this respect. 7.2. Efficiency
(cost-effectiveness) with regard to the specific objectives 7.2.1. Option
1 Option 1 is not efficient since it is not
effective. 7.2.2. Package
A (a) Better protecting the rights of posted
workers: Package A is efficient in achieving this objective. However, it is
less efficient than package B since costs are the same while package B is more
effective. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Package A is efficient in
achieving this objective. However, it is less efficient than Package B since
costs are the same while package B is more effective. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Package A is not efficient since it is not effective in this respect. 7.2.3. Package
B (a) Better protecting the rights of posted
workers: Package B is efficient in achieving this objective. It is more
efficient than package A. However, it is not clear if it is more or less
efficient than packages C and D. On the one hand, packages C and D provide
apparently for a higher level of protection of posted workers; on the other
hand, packages C and D produce higher compliance costs and create disincentives
that may reduce the flow of posting, job opportunities or encourage undeclared
work. Due to the lack of data regarding these costs and the degree of
disincentive thereby created, but also due to the difficulty to put these costs
in relation to a higher level of protection, it is impossible to decide which
option would be more efficient. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Package B is efficient in improving
climate of fair competition. It is more efficient than package A since costs
are the same while package B is more effective. It is also more efficient than
packages D since effectiveness is the same while package D produces higher
costs. Package C produces higher costs and is less effective than B. Package B is efficient in facilitating
cross-border provision of services to the same extent than package A. Package B
is more efficient than package C and D, since C and D are less effective and
produce higher costs. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Package B is not efficient since it is not effective in this
respect. 7.2.4. Package
C (a) Better protecting the rights of posted
workers: Package C is efficient in achieving this objective. However, it is not
clear if it is more or less efficient than package B. On the one hand, package
C provides for a higher level of protection and achieves more effective this
objective, on the other hand, option 5 produces higher compliance costs. Due to
the lack of data regarding these costs but also due to the difficulty to put
these costs in relation to a higher level of protection, it is impossible to
decide which package would be more efficient. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Package C is efficient in improving
climate of fair competition. It is less efficient than option package B since
package C produces higher costs. With regard to facilitating the cross-border
provision of services packages A and B are more efficient than package C since
package C is less effective and produces higher costs. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Package C is not efficient since it is not effective in this
respect. 7.2.5. Package
D (a) Better protecting the rights of posted
workers: Package D is efficient in achieving this objective. However, it is not
clear if it is more or less efficient than package B. On the one hand, package
D provides for a higher level of protection and achieves most effective this
objective, on the other hand, package D produces higher compliance costs. Due
to the lack of data regarding these costs but also due to the difficulty to put
these costs in relation to a higher level of protection, it is impossible to
decide which option would be more efficient. Package D is more efficient than
package C since costs are the same and it is more effective. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Package D is efficient in improving
climate of fair competition. It is less efficient than package B since
effectiveness is the same while package D produces higher costs. With regard to facilitating the cross-border
provision of services package A and B are more efficient than package D since
package D is less effective and produces higher costs. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Package D is not efficient since it is not effective in this
respect. 7.2.6. Option
5 (a) Better protecting the rights of posted
workers: Option 5 is not efficient in achieving this objective since it is not
effective. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Option 5 is not efficient
in achieving this objective since it is not effective. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Option 5 is not efficient in achieving this objective since it
is not effective. 7.2.7. Option
6 (a) Better protecting the rights of posted
workers: Option 6 is efficient in achieving this objective. It is less
efficient than option 7 since option 7 is more effective and additional costs
are not significant. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Option 6 is efficient in
achieving this objective. It is less efficient than option 7 since option 7 is
more effective and additional costs are not significant. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Option 6 is efficient in achieving this objective. It is less
efficient than option 7 since option 7 is more effective and additional costs
are not significant. 7.2.8. Option
7 (a) Better protecting the rights of posted
workers: Option 7 is most efficient in achieving this objective. (b) Facilitating cross-border provision of
services and improving climate of fair competition: Option 7 is most efficient
in achieving this objective. (c) Reducing tensions between national
industrial relation systems and the freedom to provide services/freedom of
establishment: Option 7 is most efficient in achieving this objective. 7.3. Coherence
with the general objectives Option 1 and 5 are not coherent with the
general objectives, since they are not effective regarding the specific
objectives. All the packages are coherent with the
general objectives. Package B better achieves the objectives than package A.
Packages C and D better contributes to the social side of the general objective
than packages A and B. D contributes more than C. However, packages C and D are
less coherent with regard to the economic side of the general objective.
Package B is most coherent with regard to the general objectives. Option 7 is more coherent with regard to
the general objectives than option 6. 7.4. Overview
table: || Option 1 || Package A || Package B || Package C || Package D || Option 5 || Option 6 || Option 7 Baseline posting || Sub-options 3a, 2b, 2c || Sub-options 3a, 3b, 2c || Sub-options 3a, 2b, 3c || Sub-options 3a, 3b, 3c || Baseline tensions || Non-regulatory || Regulatory Specific Objective 1 Better protecting the rights of posted workers || 0 || + || +/++ || +/++ * || +/++ * || 0 || 0/+ || + Specific Objective 2 Facilitating cross-border provision of services/ Improving climate of fair competition || 0 || + || +/++ || - || - || 0 || 0 || 0 Specific Objective 3 Reducing tensions between national industrial relations systems and the freedom to provide services/freedom of establishment || 0 || 0 || 0 || 0/+ || 0/+ || 0 || + || ++ Cost-effectiveness || 0 || + || +/++ || 0/+ || 0/+ || 0 || + || + Coherence with general objectives || 0 || + || +/++ || 0/+ || 0/+ || 0 || +/++ || ++ ++ very positive; + positive; 0 neutral; - negative; n/a option is not intended to contribute to this objective * Effects are uncertain, see sections 7.1.4 and 7.1.5. 8. The
preferred option 8.1. Combination
of package B and option 7 The preferred option is a combination of
package B and option 7. Package B is overall most effective and efficient
in addressing the specific objectives ‘Better protecting the rights of posted
workers’, ‘Improving climate of fair competition’ and ‘Facilitating the
cross-border provision of services’. It is also most coherent with regard to
the general objectives. Option 7 is most effective and efficient
with regard to the specific objective ‘Reducing tensions between national
industrial relation systems and the freedom to provide’. The option is most
coherent with regard to the general objectives. The preferred option is proportionate since
the costs are relatively small and well-contained while the benefits are
significant. The identified administrative burden for public authorities
implied by improved information is very low or even meaningless for the majority
of Member States. However, such action is instrumental in reducing the
probability of non-compliance with national law. While not involving direct
administrative burden for companies or authorities, the introduction of a
system of joint and several liability may induce additional compliance costs
for companies in those Member States that do not have such a system. However,
such costs are mostly moderate and the additional knowledge gained by main
contractors may help them taking safer decisions while reducing opportunities
for non-complying subcontractors. 8.2. Legal
form 8.2.1. Legal
form of package B 8.2.1.1. Regulation There are a priori several alternative
legal forms for implementing the policy actions contained in package B.
However, a closer examination excludes the possibility to use a Regulation for
that purpose. 1. The applicable Treaty
provisions with respect to the internal market on which the current Directive
is based (Articles 53 and 62 TFEU) do not allow for Regulations but only for
Directives under OLP. 2. The provisions concerning
the approximation of laws allow for either Directives by unanimity (Article 115
TFEU) or Regulations or Directives under OLP (Article 114 TFEU). The latter,
however, provides that the envisaged measures do not relate to the rights and
interests of employed persons (Article 114 paragraph 2 TFEU). In addition, it may
reveal difficult to reconcile the heterogeneous nature of control systems
across Member States with the uniformity of the solutions brought forward by a
Regulation. 3. Article 352 TFEU allows
for the adoption of Regulations as well as Directives. However, it can only be
used in those cases where the Treaty has not provided the necessary powers to
implement actions. Bearing in mind the above indicated available legal bases in
the Treaty, this Article would equally be impossible to use as legal basis for
a legislative proposal in the form of an enforcement Regulation. 4. Article 197 TFEU allows
for the use of Regulations, provided they are limited to the objective of improving
administrative cooperation between responsible national authorities, which
fails to address the large policy range of Package B. In addition, even the
existing problems in this area could not be adequately addressed, since such a
Regulation, in view of its legal base, would have to leave open the option of
individual Member States to opt out from the established scheme. This would
weaken considerably the effectiveness of any such scheme. The exclusion of
harmonisation also poses a problem. Even a basic requirement such as an agreed
deadline for handling information requests, already entails a form of
harmonisation and would not be allowed on the basis of this Article. Article
197 is only suited for accompanying measures (training, exchange programmes
etc.). It could improve awareness and competence of personnel of public
authorities 8.2.1.2. Amending
the existing Directive Package B could be realised by amending
Article 1, 2, 4, 5 and 6 of the Directive. The result would be one amended (consolidated)
Directive. 8.2.1.3. A separate
new enforcement Directive Package B could also be realised by a
separate new enforcement Directive.[111] Such an enforcement
Directive would express more clearly the policy objectives of the Commission –
improving and reinforcing the transposition, implementation and enforcement in
practice of the Directive, including measures to prevent and sanction any abuse
and circumvention of the applicable rules - than a proposal amending the
existing Directive. It would more clearly express the Commission's view that
the key problems lie with the enforcement of the Directive and not with the
established mechanism for the determination of terms of employment. The enforcement
Directive would repeal Articles 4, 5 and 6 of the existing Directive and stand
next to it. The enforcement Directive would be based on the same legal basis as
the Directive (Articles 53 and 62 TFEU). The ordinary legislative procedure
(OLP) would be applicable. Therefore, the most appropriate legal form
for package B would be a separate enforcement Directive. However, an amending
Directive could also be possible. The difference is one of policy approach and
message rather than legal substance. 8.2.2. Legal
form of option 7 A legislative initiative clarifying the
exercise of the fundamental right to collective action within the context of
the freedom of establishment and the freedom to provide services would have to
be adopted on the basis of Article 352 TFEU which is reserved for those cases
where the Treaty has not provided the necessary powers to implement actions
which 'should prove necessary to attain one of the Treaty objectives'. Such an
initiative would not establish rules regarding the exercise of the right to
strike. The Court stated clearly that Article 153(5) TFEU does not give the Union
the competence to regulate the right to strike, which thus should continue to
be regulated at national level. However, this does not mean that this right to
take industrial action falls outside the scope of EU law, or in other words,
that it renders EU law inapplicable, and that the exercise of this right may be
subject to certain restrictions. Article 352 TFEU allows for the adoption of
Regulations and Directives. The issue at stake requires legal clarity and legal
certainty. Therefore, the legislative initiative should take the form of a
Regulation. A possible alternative could be to present
option 7 and package B in the same legal instrument – be it under the form of
an enforcement Directive or of an amended Directive 96/71. However, since
Package B only concerns the freedom to provide services while option 7 also
covers the freedom of establishment, such an option would only cover potential
industrial conflict situations related to the posting of workers in the framework
of the provision of services (cf. Laval case) but not situations related to
envisaged restructuring and/or delocalisation involving more than one Member
State (cf. Viking-Line). Moreover, due to a lack of specific provisions in
Directive 96/71/EC, the inclusion of option 7 in an Enforcement Directive would
raise problems of legal consistency. In particular, the establishment of an
alert mechanism could be disputed by going beyond the scope of Directive
96/71/EC itself, which the former is supposed to clarify and enforce.
Therefore, such a combination would have a more limited scope and less
substantive element provisions. 9. Monitoring
and evaluation Monitoring and evaluation arrangements for
the preferred option consist of several inter-related aspects. 9.1. Monitoring Monitoring has already taken place
periodically via Implementation Reports issued by the Commission. This will
continue in the future. While not formally a monitoring mechanism,
the ECPW expert committee has discussed regularly problems of the Directive. It
should continue to play a role in the follow-up of the implementation of the
Directive, as well as the new legal framework. This role should be explicitly
recognized in the legal initiative. The preferred option implies the development
of a more effective information system associated with Posting of Workers. Once
the substance of future action is clarified, the Commission together with ECPW
will develop a strictly limited set of indicators which cover relevant aspects
of the operation of the Directive. The initial proposal for a list of
indicators to be tracked is the following (after each indicator the source of
the information is provided): (i) the number of searches of national posting
websites (provided by Member States); (ii) the number of inter-country
cooperation projects on posting promoted by national authorities or social
partners (Member States); (iii) the number of requests made through the special
IMI application for posting (Commission); (iv) number of litigation cases in
national courts (Member States); (v) percentage of inspections leading to
sanctions (Member States); (vi) number of cases reported under the alert
mechanism established for cross-border industrial conflicts (Commission). The
Commission will also continue to collect administrative data on posting based
on social security data. With regard to frequency of use, these indicators will
be regularly presented and discussed in the ECPW, and will also form part of
the set of indicators to be used in the evaluation mentioned below. 9.2. Evaluation Five years after the deadline for
transposition there will be a on-going evaluation. The main focus of this
evaluation will be to assess the initial effectiveness of the Directive as
modified. This will include an assessment if the operational objectives have
been reached. Emphasis will be placed on analysis of enhanced cooperation
arrangements between Member States and quality of information generated by
these arrangements. This evaluation will be carried out by the Commission with
the assistance of external experts. Terms of reference will be developed by
Commission services. Stakeholders will be informed of and asked to comment on
the terms of reference through the ECPW, and they will also be regularly
informed of the progress of the evaluation and its findings. The findings will
be made public. Annexes Annex 1: Data on posting of workers Annex 2: Simulation of future trends of
posting Annex 3: Summary of the case studies
carried out by Ismeri Europa Annex 4: Pilot project on the use of IMI Annex 5: Administrative burden and other
costs resulting from package B and option 7 (overview) Annex 6: Quantification of administrative
burden and other costs resulting from package B and option 7 Annex 7: Distribution of costs and cost-related
benefits across Member State Annex 8: Anecdotal evidence on the basis of
information provided by European Migrant Workers Union (EMWU) Annex 9: Summary of replies to the public
consultation on the Single Market Act Annex 10: Summary of CJEU cases: Viking
Line, Laval, Rüffert and Commission v. Luxembourg Annex 11: Expected impact on
competitiveness of EU industry (Competitiveness Proofing) Annex 12: Text of the Directive 96/71/EC ANNEX 1: Data on posting of workers[112] Table 1: Number
of postings (E101) from and to EU27 and EFTA countries || Postings by sending country || Postings from EU27/EFTA to receiving country Country || 2005 || 2006 || 2007 || 2008 || 2009 || 2005 || 2006 || 2007 || 2008 || 2009 AT || 11,146 || 10,563 || 12,978 || 16,177 || 18,757 || 32,475 || 30,517 || 39,142 || 37,417 || 44,806 BE || : || 51,889 || 46,212 || 51,173 || 50,774 || 123,080 || 127,627 || 112,766 || 109,000 || 95,589 BG || : || : || 4,743 || 3,817 || 4,366 || : || : || 2,800 || 3,877 || 5,096 CY || 292 || 584 || 143 || 76 || 29 || 3,591 || 3,300 || 2,368 || 2,048 || 1,524 CZ || 14,303 || 22,354 || 15,803 || 16,383 || 17,150 || : || : || 16,647 || 15,985 || 12,756 DE || 169,627 || 194,013 || 192,093 || 164,466 || 170,345 || 13,967 || 14,893 || 216,911 || 227,961 || 221,222 DK || 11,872 || 11,188 || 7,071 || 7,920 || 7,063 || 12,281 || 17,609 || 17,666 || 15,031 || 10,928 EE || 5,894 || 7,955 || 9,454 || 10,140 || 8,384 || 3,536 || 3,181 || 2,059 || 1,767 || 1,225 EL || 1,099 || 958 || 3,179 || 2,717 || 2,265 || 11,151 || 9,683 || 9,652 || 9,247 || 10,489 ES || : || : || 26,885 || 32,318 || 34,349 || 65,145 || 60,445 || 86,426 || 55,217 || 63,390 FI || 5,452 || 4,579 || 2,451 || 5,599 || 4,929 || 13,340 || 16,088 || 18,760 || 10,941 || 16,920 FR || 311,875 || 254,321 || 232,102 || 206,439 || 160,774 || 77,291 || 127,806 || 148,610 || 153,488 || 155,601 HU || 23,795 || 21,131 || 36,178 || 43,204 || 36,403 || 8,271 || 8,512 || 8,264 || 9,009 || 7,438 IE || : || 1,707 || 1,074 || 1,222 || 1,941 || 8,818 || 7,554 || 7,753 || 6,010 || 5,357 IT || : || 1,542 || 3,320 || 24,451 || 29,955 || 50,236 || 46,063 || 55,688 || 50,730 || 50,365 LT || 2,641 || 2,729 || 2,743 || 4,482 || 5,486 || 3,415 || 4,066 || 5,905 || 3,003 || 1,655 LU || 29,065 || 38,005 || 46,827 || 57,264 || 57,276 || 30,242 || 42,537 || 27,969 || 26,718 || 25,042 LV || 3,900 || 2,329 || 2,277 || 1,289 || 1,971 || 3,332 || 3,128 || 3,003 || 1,679 || 1,921 MT || : || 133 || 101 || 162 || 112 || 3,017 || 2,750 || 1,634 || 1,628 || 2,976 NL || 37,096 || 36,166 || 9,437 || 9,366 || 9,924 || 55,205 || 80,416 || 88,656 || 84,486 || 81,852 PL || 136,368 || 195,206 || 238,946 || 228,722 || 204,374 || 13,506 || 13,142 || 14,512 || 13,996 || 14,704 PT || 36,519 || 26,333 || 66,001 || 19,188 || 65,012 || 10,572 || 9,420 || 12,579 || 12,831 || 13,028 RO || : || : || 9,030 || 13,096 || 26,116 || : || : || 10,752 || 11,781 || 9,320 SE || 8,998 || 9,529 || 5,171 || 2,571 || 5,503 || 21,019 || 21,519 || 20,626 || 20,926 || 20,792 SI || 3,067 || 9,333 || 13,032 || 17,162 || 17,835 || 4,645 || 4,317 || 3,802 || 3,375 || 2,969 SK || 5,471 || 13,093 || 21,213 || 35,693 || 24,688 || 7,648 || 6,686 || 4,417 || 6,162 || 7,193 UK || 38,906 || 40,679 || 43,251 || 36,436 || 32,284 || 38,909 || 36,961 || 37,905 || 37,733 || 34,760 CH || : || 6,717 || 10,496 || 10,751 || 10,990 || 27,779 || 25,875 || 29,243 || 38,618 || 51,987 IS || 146 || 184 || 67 || 110 || 123 || 3,035 || 2,898 || 2,245 || 1,136 || 699 LI || 24 || 16 || 39 || 36 || 64 || 2,063 || 1,291 || 812 || 871 || 833 NO || 1,158 || 1,101 || 1,065 || 1,251 || 1,291 || 22,953 || 34,307 || 33,828 || 23,731 || 21,603 Total || 858,714 || 964,337 || 1,063,382 || 1,023,681 || 1,010,533 || 670,522 || 762,591 || 1,043,400 || 996,402 || 994,040 EU-15 || 661,655 || 681,472 || 698,052 || 637,307 || 651,151 || 563,731 || 649,138 || 901,109 || 857,736 || 850,141 EU-12 || 195,731 || 274,847 || 353,663 || 374,226 || 346,914 || 50,961 || 49,082 || 76,163 || 74,310 || 68,777 EFTA || 1,328 || 8,018 || 11,667 || 12,148 || 12,468 || 55,830 || 64,371 || 66,128 || 64,356 || 75,122 SOURCE: EC Reports (2009 and 2011), elaborated by Ismeri Europa. Annual data are not perfectly comparable because EC criteria of data collection were modified in 2007. Note that "Postings" refers to the number of E101 certificates issued for “posting according to Art. 14(1)(a), 14a(1)(A), 14b(1),14b(2), Council reg. 1408/71, sent to EU 27 or EFTA Countries. Differences in Total-sent and Total-received are due to the fact that in receiving countries postings are often not recorded. Sending countries, where the certificates are issued, better reflect the number of postings. Data for 2005 do not include postings from BE, BG, CZ, IE, ES, IT, LV, MT, RO, and CH. Data for 2006 do not include postings from BG, ES, RO and CH. Data for 2007, do not include postings from RO and CH, as both countries do not provide data. Figures for posting originating in the UK relate, for 2007 data to April 2007 to March 2008, for 2008 data to April 2008 to March 2009 and for 2009 data to April 2009 to March 2010. Figures for Germany relate, for 2008 data to 1 Jan. 2008 to 30 Nov. 2008 and for 2009 data to 1 Jan. 2009 to 30 Nov. 2009 Figures for Portugal in 2008 are underestimated since only 6 of the 18 district centres of social security provided the data. Figures for Sweden in 2008 are underestimated since they cover only the last six months of the year. For posting originated in Italy, the 2007 figures were underestimated as they covered only the last months of the year (the electronic processing of E1010 started in the second part of 2007) Figure 1: Postings sent from E-15,
EU-12, EFTA, and total in the period 2005-2009 Figure 2: Postings sent from and
received by EU27 and EFTA countries in the period 2007- 2009 Table 2: Posting (E101 certificates)
country by country 2007 (number of cases) Table 3: Postings (E101 certificates)
country by country 2008 (number of cases) Table 4: Postings (E101 certificates)
country by country 2009 (number of cases) Table 5: Evidence on the direction of
flows of postings (based on 2009 data) From || To France || Belgium, Germany, Italy, Spain, UK, Switzerland Poland, Czech Republic, Hungary, Slovakia, Slovenia and Bulgaria || Germany, France Belgium, the Netherlands, Austria and Italy Portugal || Spain Germany || Austria, the Netherlands, France, Belgium and Switzerland Belgium || France and, the Netherlands Luxembourg || France and, Belgium Estonia || Finland Latvia and Lithuania || Norway, Germany and Sweden The Netherlands || Belgium, Germany UK || France, the Netherlands, Spain Table 6: Posting specialisation index
and relevance of posting in terms of employment Country || Spec. index* average 07-09 || Sent postings as% of employment in private sector average 07-09 || Received postings as % of employment in private sector average 07-09 || AT || 43.6 || 0.6% || 1.5% || BE || 36.2 || 1.9% || 4.0% || BG || -5.8 || 0.2% || 0.2% || CY || 92.6 || 0.0% || 0.8% || CZ || -4.4 || 0.5% || 0.4% || DE || 11.7 || 0.7% || 0.9% || DK || 31.8 || 0.5% || 0.9% || EE || -69.7 || 2.2% || 0.4% || EL || 56.5 || 0.1% || 0.4% || ES || 36.1 || 0.2% || 0.5% || FI || 54.7 || 0.3% || 1.0% || FR || -12.8 || 1.3% || 1.0% || HU || -64.8 || 1.5% || 0.3% || IE || 62.9 || 0.1% || 0.5% || IT || 49.7 || 0.1% || 0.3% || LT || -12.3 || 0.5% || 0.4% || LU || -33.6 || 46.1% || 21.8% || LV || 8.5 || 0.3% || 0.3% || MT || 87.7 || 0.1% || 1.9% || NL || 79.7 || 0.2% || 1.8% || PL || -87.9 || 2.3% || 0.2% || PT || -51.5 || 1.6% || 0.4% || RO || -14.7 || 0.3% || 0.2% || SE || 65.4 || 0.2% || 0.8% || SI || -64.5 || 2.4% || 0.5% || SK || -63.7 || 1.6% || 0.3% || UK || -0.4 || 0.2% || 0.2% || EU-27 || || 0.75%** || 0.70%** || EU-15 || 14 || 0.6% || 0.8% || EU-12 || -66 || 1.6% || 0.3% || SOURCE: EC Reports (2009 and 2011) and Eurostat, elaborated by Ismeri Europa. || Note that "Postings" refers to the number of E101 certificates issued for "posting according to || Art. 14(1)(a), 14a(1)(A), 14b(1),14b(2), Council reg. 1408/71, sent to EU 27 or EFTA Countries || *The “posting specialisation index” is calculated as the net flow (received - sent) on total flows || (received + sent). It moves from -100 (max in sending) to +100 (max in receiving). || In the table, averages are calculated for the period 2007-2009. || ** Data on received postings underestimate the total number of received postings because of limits in || recording postings in receiving countries. For this reason there is a small discrepancy between the Totals in the second and third column. || Table 7: Sectoral breakdown of postings
(years 2007 and 2009) [1] Directive 96/71/EC of the European Parliament and of
the Council of 16 December 1996 concerning the posting of workers in the
framework of the provision of services. [2] With some restrictions in the case of the UK and
Poland. [3] The Directive does not entail an obligation for
Member States to set minimum wages. This is made explicit in a Declaration by
the Council and the Commission. See Council doc. 10048/96 ADD1 of 20 September
1996. [4] Report from the Commission services on the
implementation of Directive 96/71/EC of the European Parliament and of the
Council of 16 December 1996 concerning the posting of workers in the framework
of the provision of services, 2003. Available on the website:
http://www.ec.europa.eu/social/posted-workers [5] Communication from the Commission - Guidance on the
posting of workers in the framework of the provision of services, COM(2006)159
final; Commission staff working document, SEC(2006) 439. [6] Communication from the Commission to the Council, the
European Parliament, the European Economic and Social Committee and the
Committee of the Regions - Posting of workers in the framework of the provision
of services: maximising its benefits and potential while guaranteeing the
protection of workers, COM(2007)304 final; Commission staff working document,
SEC(2007) 747. [7] Commission Recommendation of 3 April 2008 on enhanced
administrative cooperation in the context of the posting of workers in the
framework of the provision of services, OJ C 85, 4.4.2008, p. 1–4. [8] CJEU cases of 11 December 2007, Viking (C-438/05),
of 18 December 2007, Laval (C-341/05), of 3 April 2008, Rüffert (C-346/06),
of 19 June 2008, Commission v Luxembourg (C-319/06). [9] A new strategy for the single market – at the service
of Europe's Economy and Society, Report to the President of the European
Commission José Manuel Barroso by Mario Monti, 9 May 2010. [10] Idea Consult and Ecorys Netherlands, Study on the economic
and social effects associated with the phenomenon of posting of workers in the
European Union, Brussels, 2011. Available on the website:
http://www.ec.europa.eu/social/posted-workers [11] Aukje van Hoek and Mijke Houwerzijl, Study on the legal
aspects of the posting of workers in the framework of the provision of services
in the European Union, 2011. Available on the website:
http://www.ec.europa.eu/social/posted-workers [12] The final report of this study has been taken into
account for this Impact Assessment. [13] The draft final report of this study has been taken
into account for this Impact Assessment. [14] The draft final report of this study has been taken
into account for this Impact Assessment. [15] Pilot Project - Working and Living Conditions of Posted
Workers, VP/2009/015 and VP/2010/011. [16] Fabienne Muller, Information provided on the posting of
workers, Strasbourg, 2010. Available on the website:
http://www.ec.europa.eu/social/posted-workers [17] Council Conclusions on further development of an
electronic exchange system facilitating the administrative cooperation in the
framework of the posting of workers Directive (st7395/11). [18] Communication, Towards a Single Market Act, For a
highly competitive social market economy, 50 proposals for improving our work,
business and exchanges with one another, COM(2010) 608 final/2; Commission
staff working paper, Overview of responses to the public consultation on the
Communication ‘Towards a Single Market Act’, SEC(2011) 467 final; Replies to
the public consultation are published on the website:
http://ec.europa.eu/internal_market/smact/consultations/2011/debate/index_en.htm
Proposal 29 and 30 partially endorse two recommendations made in the Monti
report on this matter. The report distinguishes two sets of issues. Firstly,
there are those "strains to which the current regulatory framework for
posting of workers is subject, in a context of divergent social and employment
conditions among Member States and acute sensitivity about the perceived risks
of social dumping and unfair competition". Secondly, "the Court's
decisions showed that the reach of the EU law extends to collective labour
disputes. This has brought social partners and collective action straight into
the heart of the economic constitution of the single market. (…) Both national
systems of industrial relations and the exercise of the right to strike might
have to adjust to fit with the economic freedoms established by the
Treaty". The report makes two recommendations in this context: (1) Clarify
the implementation of the Posting of Workers Directive and strengthen
dissemination of information on the rights and obligations of workers and
companies, administrative cooperation and sanctions in the framework of free
movement of persons and cross-border provision of services; (2) If measures are
adopted to clarify the interpretation and application of the Posting of Workers
Directive, introduce a provision to guarantee the right to strike modelled on
Art. 2 of Council Regulation (EC) No 2679/98 and a mechanism for the informal
solutions of labour disputes concerning the application of the directive. [19] On a joint invitation by the Commission and the acting French
Presidency of the EU, ETUC and Business Europe have delivered a report on the
consequences of the ECJ rulings in the Viking, Laval, Rüffert and Luxembourg
cases for workers' mobility and workers' rights. The document, while expressing
a number of common concerns and objectives, exposes their divergences on the
fundamentals. Report on joint work of the European social partners on the ECJ
rulings in the Viking, Laval, Rüffert and Luxembourg cases of 19 March 2010, http://www.etuc.org/a/7110
or http://www.businesseurope.eu. [20] European Parliament resolution on the implementation of
Directive in the Member States (2003/2168(INI), OJ C 92E, 16.4.2004, p.
404-407; Resolution on the application of Directive 96/71/EC on the posting of
workers (2006/2038(INI)), OJ C 313E , 20.12.2006, p. 452–457; Resolution of 11
July 2007 on the Commission Communication on the Posting of workers in the
framework of the provision of services: maximising its benefits and potential
while guaranteeing the protection of workers (P6_TA(2007)0340). [21] European Parliament resolution of 22 October 2008 on
challenges to collective agreements in the EU (2008/2085(INI)). [22] Opinion 2011/C 44/15. [23] Positions expressed in a letter addressed to
Commissioner Andor by the newly elected Secretary General of ETUC on
27/10/2011. [24] Communication from the Commission of 13 April 2011,
Single Market Act Twelve levers to boost growth and strengthen confidence
"Working together to create new growth", COM(2011)206 final. [25] Council conclusions on the priorities for relaunching
the Single Marker of 30 May 2011. [26] Comparison of national data with the number of data on
E101 certificates shows significant variability. In the case of Denmark and
France, the postings declared through national monitoring systems are
systematically lower than E101 certificates. This can be due to the start-up
phase in Denmark and to a narrower definition of the cases which must be
declared in France. In Belgium, LIMOSA data are remarkably higher than E101
(almost double). This can be linked to differences in coverage, but also to a
higher effectiveness and comprehensiveness of LIMOSA, which is a centralised
mandatory system, reinforced by sanctions in case of non-compliance. [27] European Commission (2011), “Posting of workers in the
European Union and EFTA countries: Report on E101 certificates issued in 2008
and 2009”; European Commission (2011), “Administrative data collection on E101
certificates issued in 2007”. [28] These data are not broken down by nationalities but it
should be noted that not only EU citizens but also third-country nationals
legally residing and working in a Member State can be and are subject to
posting. [29] Cf. Idea Consult (see footnote 10), executive summery. The
percentage provides only a rough indication of the weight of postings on non-nationals
EU-27 citizens in the labour force (it is likely to be an overestimation). On
the one hand, a E101 certificate does not represent a full-time one-year
equivalent worker, on the other, the Labour force survey which provides the
data on non-nationals EU-27 citizens in the labour force does not cover posted
workers. [30] Data were equally collected for posting per project.
See Idea Consult (footnote 10) on case studies on Belgium and France. [31] Idea Consult (footnote 10) on case study on the
construction sector, p. 164. This is also confirmed by the findings of Ismeri
(footnote 14): Although existing evidence is very
fragmented, data on the number of posted workers per posting available for
France and Denmark (3-4 posted workers per posting) indicate that small
companies are often involved in the posting of workers. [32] Ismeri (footnote 14), Idea Consult (footnote 10). [33] This has been documented in France and Denmark. Cf.
Annex 3. [34] Cf. Annex 3. [35] Cf. Annex 8. [36] European social partners are concerned about the rise
of protectionism and xenophobia observed in Europe recently. See
footnote 19. [37] Cf.
Annex 3. [38] Cf.
Le monde diplomatique, Bouchers roumains pour abattoirs bretons, November 2011. [39] Cf. Ismeri, footnote 14. [40] COM(2007)304 (footnote 6) and respective services
report SEC(2007)747. [41] Legal study (footnote 11), p. 105-112, p. 204-206 and recommendations
33-35; Complementary legal study (footnote 12); Fabienne Muller (footnote 16). [42] Fabienne Muller (footnote 16). [43] Complementary Legal study (footnote 12) [44] Cf. footnote 6. [45] Legal study (footnote 11), p. 199-202, recommendations
26, 28, 30-32; p. 206-207, recommendation 38; Complementary legal study
(footnote 12). [46] ETUC, A revision of the Posting of Workers Directive:
Eight proposals for improvement, 31 May 2010, proposal 8; letter of ETUC of 27
September 2011 to Commissioner Andor. [47] Council Framework Decision 2005/214/JHA of 24 February
2005 on the application of the principle of mutual recognition to financial
penalties. [48] In a reply of 12 August 2011 to a Parliamentary
Question in the Netherlands the Dutch Minister for Social Affairs and Employment
indicated difficulties regarding the cross-border enforcement of fines against
foreign service providers. The reply indicates that in 2010 administrative
fines of about 2.1 million Euro have been imposed on foreign service providers.
About 15% of these fines have been paid on a voluntary basis. It would not have
been possible to enforce the rest due to missing legal means. [49] COM(2007)304 (footnote 6). [50] Legal Study (footnote 11), p. 112-115. [51] COM(2007)304 (footnote 6). [52] Legal Study (footnote 11), p.209; Complementary legal
study (footnote 12). [53] Confirmed by Legal Studies (footnote 11 and 12). [54] Recommendation of 3 April 2008 (footnote 7). [55] Legal Study (footnote 11), p. 140. [56] Legal Study (footnote 11), p. 150. [57] Ibid. [58] Idea Consult (footnote 10), p. 154. [59] Legal Study (footnote 11), p. 211. [60] Cf. speech of Philippe de Buck at the Conference on
Fundamental Social Rights and the Posting of Workers in the Framework of the
Single Market of 27/28 June 2011 and letter of ETUC of 27 September 2011 to
Commissioner Andor. [61] Certain type of third-country nationals can also reside
and work in another Member State under EU law based on Article 79 of TFEU (Directive
2003/109/EC on log-term residents and Directive 2009/50 on Highly Skilled
Employment). The access to the labour market of these workers can be limited by
Member States but in any event their situation also differs from that of posted
workers. [62] CJEU, judgment of 27 March 1990, C-113/89, Rush
Portuguesa, pt. 12-17. [63] CJEU, judgment of 11 December 2003, case C-215/01, Schnitzer;
Legal study (footnote 11), p. 46-48, 187-189 (recommendations 1, 11, 12). [64] Contrary to Regulation (EC) No 883/2004 of the European
Parliament and of the Council of 29 April 2004 on the coordination of social
security systems. [65] Requested periods of previous employment in the sending
Member State in the context of posting of third country nationals of 6 or 12
months were considered as incompatible with Article 56 TFEU by the CJEU (cases
C-445/03, Commission v Luxembourg; C-168/04, Commission v Austria;
C-244/04, Commission v Germany. See also Legal study (footnote 11) recommendation
12 (reimbursement of expenditure for travel). [66] Regulation (EC) No 593/2008 of 17 June 2008 on the law
applicable to contractual obligations (Rome I). [67] CJEU judgments of 11 December 2003, case C-215/01, Schnitzer;
of 30 November 1995, case C-55/94, Gebhard; of 7 September 2004, case
C-456/02, Trojani. [68] Legal Study (footnote 11), p. 57 [69] Legal Study (footnote 11), p. 58 [70] Article 12 of Regulation (EC) 883/2004 in conjunction
with Article 14(2) of Regulation (EC) 987/2009 and Decision A2. [71] See footnote 19. In the joint paper by the social
partners produced in 2010, BusinessEurope recognized the need for EU action in
order to restrain the scope of activities of such letter-box companies. [72] Legal study (footnote 11), p. 54-60, Annexes I and II. [73] Cour
de Cassation de la France du 8 juin 2010. [74] CJEU cases (footnote 8) [75] For instance, in Sweden, the national legislation
transposing the Directive had not made it clear which mechanisms would be used
for the determination of the minimum wage for posted workers. [76] In a recent resolution of 25 October 2011 on
modernisation of public procurement (2011/2048(INI)) the European Parliament called
for an explicit statement in the public procurement Directives that they do not
prevent any country from complying with ILO Convention No. 94. [77] It follows from the case law of the Court (see, inter
alia, case C-203/03, Commission v. Austria, paragraph 57-65) that Member
States might be required to denounce from international agreements, including
ILO Conventions, if this is necessary to comply with their obligations under
Article 351 TFEU. However, in case C-203/03 Austria was explicitly allowed to
continue to apply the ILO Convention No. 45, and therefore not to comply with
EU law, for a transitional period until there was the next possibility to
denounce from this Convention (every ten years in this case). According to
paragraph 62 of the judgment the transitional period only starts if the
incompatibility of the Convention with EU law has been clearly established. [78] Cf. judgment in the Laval case (footnote 8), paragraph
68. [79] Proposal for a Directive on a single application
procedure for a single permit for third-country nationals to reside and work in
the territory of a Member State and on a common set of rights for third-country
workers legally residing in a Member State, COM(2007) 638 final. [80] Legal study (footnote 11), p. 192. [81] Apart from the Viking-Line case (in which the matter of
the UK court's jurisdiction was never raised in the request for a preliminary
ruling see also the judgment in case C-18/02, DFSD Torline in which a Swedish
trade union was sued for damages under Danish law in a Danish court in a
conflict concerning the lawfulness of an industrial action that had been called
against a Danish shipping company in Sweden. [82] See for further details: C. Barnard, 'British Jobs for
British Workers': the Lindsey Oil Refinery Dispute and the Future of Local
Labour Clauses in an Integrated EU Market", Industrial Law Journal, Vol.
38, no. 3, September 2009, page 245 – 277. [83] See also for instance: 'Informal Politics, Formalised
Law and the 'Social Deficit' of European Integration: Reflections after the
Judgments of the ECJ in Viking and Laval', C. Joerges and F.
Rödl, European Law Journal, vol. 15, Jan. 2009, p. 1-19. [84] See for further details the report issued by the ILO
Committee of Experts on tis case, available at http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---elconf/documents/meetingdocument/wcms_123424.pdf
as well as 'The dramatic implications of Demir and Baykara', K. Ewing and J.
Hendy QC, Industrial Law Journal, Vol. 39, no. 1, March 2010, p. 2-51, in
particular pages 44-47. [85] Demir and Baykara Application 34530/97 and Enerij
Yapi-Yol Application 68959/01. [86] In the Viking case trade unions have been taken
to Court in the UK while a Finish trade union was at the origin of the case.
See in this respect Draft opinion of Evelyn Regner, EP Employment Committee, 30
August 2011, COM(2011)748, PE469.974v01-00 (recast Brussels I Regulation). [87] Council Regulation (EC) No. 2679/98 of 7 December 1998
on the functioning of the internal market in relation to the free movement of
goods among the Member States, OJ L 337/8, 12.12.98. [88] ETUC resolution of 9-10 March 2010, The Posting of
Workers Directive: proposals for revision. [89] Communication from the Commission, Strategy for the
effective implementation of the Charter of Fundamental Rights by the European
Union, COM(2010) 573 final. [90] For a reference to the relevant articles of the
Charter, see above section 1.2.1 [91] Communication, “Think Small First” A “Small Business
Act” for Europe, COM(2008) 394 final. [92] Cf. footnote 5 and 6. [93] See footnote 67. [94] In relation to the provision of Article 1(4) of the
Directive which stipulates that undertakings established in a non-member State
must not be given more favourable treatment than undertakings established in a
Member State. This implies that Member States must not provide undertakings
established in a third country with competitive advantage in comparison to
undertakings established in a Member State, in particular with regard to
working conditions and wage costs. Consequently, the Directive indirectly sets
the minimum level of protection for these workers (see also section 1 b (2)). [95] Along the lines of provisions used in other policy
areas of Community law, such as the environment, transport or labour migration
policy. See in this respect for instance Recommendation (2001/331/EC, OJ 2001 L
118/41) providing for minimum criteria for environmental inspections in the
Member States, as well as the communication of 14 November 2007
(COM(2007)0707), in which the Commission announced that it would further
develop and improve the minimum rules included in the recommendation. Another
example can be found in the Common Position on the Proposal for a Regulation on
common rules and standards for ship inspection and survey organisations
(recast), June 2008, Doc Council 5726/2/08 REV 2. See also Article 14 of the
recently adopted Directive 2009/52 (employers' sanctions). [96] A pilot project on the use of IMI is currently ongoing
(see section 1). This pilot project will be evaluated after one year in May
2012. On the basis of first statistics and user-feedback (see Annex 4) the
Commission will provide for a respective legal base in its proposal for
revising the legislative framework on the posting of workers in case of policy
option 4a, b or 5. However, this is not prejudging the result of the pilot
project. The outcome of the pilot project will be reported to the Council in
May 2012 and can be taken into consideration during the negotiations of the
proposal. [97] Article 72 of Regulation (EC) 883/2004. [98] Cf. Article 8 of Directive 2009/52 (employers' sanction
in case of illegal employment); see also the CJEU judgments of 12.10.2004,
C-60/03, Wolff & Müller, of 9.11.2006, C-433/04, Commission v
Belgium and of 22.12.2010, C-245/09, Omalet. [99] Such provisions could draw inspiration from Articles 8,
13 and 14 of Directive 2009/52/EC on sanctions and measures against employers
of illegally staying third-country nationals, as well as from other pieces of
EU legislation. [100] See for instance case C-338/01, Commission v. Council,
paras. 55 – 57. [101] The current regime is limiting road freight cabotage to
3 times a week and with view of a possible full liberalisation when a
"social code" is applied. See in this respect "Roadmap to a
Single European Transport Area". COM (2011) 144 of 28.3.2011 (Measure 8). [102] See ECJ judgments in cases C-164/99 (Portugaia);
C-165/98 (Mazzoleni); C-49/98, C-50/98, C-52/98 - 54/98, 68/98, 71/98
(Finalarte); C-366/96 and C-369/96 (Arblade); C-272/94 (Guiot). In all these
rulings the facts of the case date from the period that the PWD was not adopted
yet or still subject to implementation and thus not (fully) applicable. [103] Report 'A new strategy for the single market' to the
President of the Commission, 9 May 2010, page 68. [104] Cf. footnote 8. [105] The purpose of this Regulation was to renew the
commitment to the free movement of goods while excluding any negative impact on
the exercise of the right to strike. It sets out a prohibition of actions that
"cause grave disruption to the proper functioning of the internal market
and inflict serious losses on the individuals affected" whilst recognising
that the right to strike is unaffected by that prohibition. A system of early
warning about obstacles to free movement of goods and exchange of information
between the concerned Member States is set up to build mutual confidence. The
Commission plays an arbitration role, as it can request the Member State
concerned to remove the identified obstacles to free movement of goods by a
given deadline. [106] As an illustration of the politically sensitive nature
of this question, the 2010 Report of the ILO Committee of Experts on the
Application of Conventions and Recommendations expresses serious concern about
the practical limitations on the effective exercise of the right to strike
imposed by the ECJ rulings in the cases Viking and Laval. This right is part of
the core labour standards recognized by all Member States. [107] Cf. Annex 3: Summary of case studies, section 1.2. [108] with respect to the situation in Member States in 2007
cf. Annex 2 of Commission staff working document, SEC(2007) 747. [109] With regard to concepts, competences and methods used by
labour inspectorates cf. Commission staff working document, SEC(2006) 439,
p.25. [110] Cf. draft final report of the Study on the protection of
workers' rights in subcontracting processes in the European Union, in
particular chapter 5 conclusions and recommendations, Gent University 2012. [111] Cf. Directive 1999/95 of 13 December 1999 concerning the
enforcement of provisions in respect to seafarers' hours of work on board ships
calling at Community ports, OJ 2000 L 14/29. [112] Ismeri Europa, Preparatory study for an Impact
Assessment concerning the possible revision of the legislative framework on the
posting of workers in the context of the provision of services, Draft final
report. COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT
Revision of the legislative framework on the posting of workers in the context
of provision of services Accompanying the document Proposal for a
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the enforcement of Directive
96/71/EC concerning the posting of workers in the framework of the provision of
services
(Text with EEA relevance)
and
Proposal for a
COUNCIL REGULATION
on the exercise of the right to take collective action within the context of
the freedom of establishment and the freedom to provide services
(Text with EEA relevance) ANNEX 2: Simulation of future trends of
posting[1] Figure 1: Simulation on postings from EU27 received in EU 27, years
2010-2015 Figure 2: Simulation of flows of posting in 2010 and 2015 (without
labour cost convergence) Under the assumption that nothing changes
in the regulatory framework both at EU and national level, it is possible to
use a simple model to simulate the expected evolution of posting in the medium
term (5 years). The model in based on the evidence that the growth of posting
is strongly correlated to the growth of GDP. In addition, the main drivers of
posting (unemployment, labour cost, trade union membership and market
integration) are mostly correlated to GDP[2].
Therefore the growth rate of GDP (GDP_gr) is used as variable which explains
the trend of posting. The model is built from a receiving
perspective, starting from data on posting in 2007. The receiving perspective
is chosen because the empirical analysis better support this perspective. The
use of 2007 data is due to the fact that they seem more reliable compared to
data on posting in 2008 and 2009, which have been strongly influenced by the
economic crises Two trends are simulated. The projection
from 2010 to 2015 distinguishes between a hypothesis of constant labour cost
differentials and a scenario of labour cost convergence (see Box B2 for a
discussion of the labour cost convergence hypothesis). In order to identify the expected trend of
sent postings at country level as well as the country by country breakdown of
sent and received posting, the country by country breakdown of 2007 has been
replicated. This approach allows preserving the relevance of the geographical
proximity in the country by country flows of posting. The aggregate level of
posting at EU-level is the sum of national postings (received and sent). The simulation is based on the model below: Postingt+1,
j = Posting t, j*[1+(GD_grt+1,j*CFj)] where: ·
Postingt+1, j is the expected value
of (received) postings in t+1 in country j, ·
Postingt, j is the expected value of
(received) postings in t in country j, the first year used for the
simulation is the number of actual – and not expected, of course – received
postings in 2007. ·
[1+(GD_grt+1,j*CFj)] is
the growth rate factor of posting in country j. This results from the
GDP growth rate expected for year t+1 in the country j (source:
IMF) and on the corrective factor CFj specifically calculated for
the country j (see the sub-section below). Tables B3-B5 shows the resulting country by
country flows of posting. Given the shortage of data, the model has some
methodological limitations. In particular, the growth rate factors of posting
(one for each country) are determined according to a number of hypotheses.
Therefore results must be interpreted very cautiously. In particular, the
extent of postings resulting from the model should be used to foresee a general
trend of the phenomenon and not as a precise forecast of the future number of
posted workers country by country. Finally, notice that the receiving
perspective results in a prudential underestimation of the future extent of the
phenomenon. The corrective factor To calculate the CF of each country the
statistic relevance of each driver (unemployment, labour costs, trade union
membership and market integration) as emerging from the econometric analysis
presented in Section 1 has been taken into account: ·
Every country, for each proxy representing a
driver, has been included in one of three clusters: i) cluster “high” which
includes countries with a relatively high values of the proxy of the driver,
ii) cluster “medium” which includes countries with medium values of the proxy,
iii) cluster “low” which includes countries with relatively low values of the
proxy. ·
According to the cluster of inclusion, for each
driver, a “driver-corrective factor” has been assigned to every country in
order to represent the statistic relevance and the direction of the driver.
These driver-corrective factors have been defined according to the empirical
evidence: –
The sign of weighs is based on the econometric
analysis. –
Unemployment and labour cost are the most
statistically significant drivers (see previous section). Therefore, their
relevance in relatively higher with respect to market integration and trade
union membership. For instance, since unemployment is a
driver which hinders posting from a receiving perspective, countries with high
unemployment rate receive a negative driver-corrective factor related to
unemployment (-0.2). On the contrary, since high labour cost favours posting
inflows, high labour cost countries receive a positive driver-corrective factor
related to labour cost (+0.2). Since market integration is a driver which
favours posting, a high integration corresponds to a high driver-corrective
factor related to market integration. Finally, since trade union membership is
a driver which hinders inflows of posting, a high trade union membership is
associated a negative driver-corrective factor. Table B.1 shows the values of
the driver-corrective factors (a.-d.) by driver and cluster. Table B1. Driver-corrective factors by
driver and cluster Driver corrective factors || Economic drivers || Social-institutional drivers || (a) Unemployment || (2) Labour cost || (3) Mkt integr. || (4) Trade union memb. Cluster “high” || -0.2 || +0.2 || +0.2 || -0.1 Cluster “medium || 0 || 0 || +0.1 || 0 Cluster “low” || +0.2 || -0.2 || 0 || +0.1 Given the driver-corrective factors
described above, the CF is calculated by adding to 1 the sum of the drivers
corrective factors (1+a+b+c+d). This means that, without any driver corrective
factor, the trend of posting exactly follows the trend of GDP. Table B2 shows
the CF of each country. Example: According to the empirical
evidence, Belgium belongs to the clusters “medium” for unemployment rate and
market integration while to the clusters “high” for labour cost and trade union
membership. Therefore Belgium received for unemployment a.=0, for labour cost
b.=+0.2, for market integration c.=+0.1, for trade union membership d.=-0.1. To carry out the trend simulation under the
hypothesis of labour cost convergence, CFj changes over the period
2010-2015 because the relevance of the driver of labour cost becomes smaller
year by year (see Table B2). This progressively reduces the relative
convenience of a number of phenomena such as posting driven by labour cost and
firm delocalization. Results The main results of the simulation can be
summarised as follows: ·
Given the current regulatory setting, posting
will increase following the economic cycle. Posting continues to follow a
cyclical pattern and keeps similar features in terms of level, drivers and
structure. ·
The potential convergence of labour cost reduces
the convenience of the posting of low skilled workers resulting in a smaller
growth rate of posting. In case of labour cost convergence, the reduction in
the role of differentials in labour cost as a driver of posting, leads to
increase the relative weigh of postings which are driven by skill and labour
shortages, job opportunities, internationalisation and market integration. ·
In both cases (with and without labour cost
convergence), postings grows, but at a slow pace (slightly lower than GDP
growth), and remains an economic phenomenon of limited significance at
aggregate level. ·
The country breakdown of the simulation shows
that Germany, France, Poland, Portugal, Belgium and Luxembourg continue to be
countries which send the most relevant number of postings and Germany, France,
Belgium, Spain, Italy and the Netherland remain the most relevant recipients of
postings (see Figure 4.2 and Table B.2). ·
The simulation on the inflows-outflows detailed
country by country (see Table B3 and Table B4) confirms that posting does not
change substantially in terms of relative extent and features. Therefore, we
can conclude that the limited critical issues related to the posting continue
to characterise a restricted number of high labour cost countries which receive
a relatively high number of posted workers driven by the differences in labour
cost. With converging labour cost, the relevance of these critical issues
becomes even more limited. Table B2.
Corrective factor, by country, with and without labour cost convergence || Driver corrective factors || CF without labour cost convergence 1+A.+B. || CF with labour cost convergence || a. || b. || c. || d. || || 2010 || 2011 || 2012 || 2013 || 2014 || 2015 BE || 0 || 0.2 || 0.1 || -0.1 || 1.2 || 1.2 || 1.15 || 1.1 || 1.05 || 1 || 1 BG || 0 || -0.2 || 0.1 || 0.1 || 1 || 1 || 1.05 || 1.1 || 1.15 || 1.2 || 1.2 CZ || 0 || -0.2 || 0.1 || 0.1 || 1 || 1 || 1.05 || 1.1 || 1.15 || 1.2 || 1.2 DK || 0.2 || 0.2 || 0.1 || -0.1 || 1.4 || 1.4 || 1.35 || 1.3 || 1.25 || 1.2 || 1.2 DE || -0.2 || 0.2 || 0 || 0 || 1 || 1 || 0.95 || 0.9 || 0.85 || 0.8 || 0.8 EE || -0.2 || -0.2 || 0.1 || 0.1 || 0.8 || 0.8 || 0.85 || 0.9 || 0.95 || 1 || 1 IE || 0 || 0.2 || 0.2 || 0 || 1.4 || 1.4 || 1.35 || 1.3 || 1.25 || 1.2 || 1.2 EL || -0.2 || 0 || 0 || 0.1 || 0.9 || 0.9 || 0.9 || 0.9 || 0.9 || 0.9 || 0.9 ES || -0.2 || 0 || 0 || 0.1 || 0.9 || 0.9 || 0.9 || 0.9 || 0.9 || 0.9 || 0.9 FR || -0.2 || 0.2 || 0 || 0.1 || 1.1 || 1.1 || 1.05 || 1 || 0.95 || 0.9 || 0.9 IT || 0 || 0.2 || 0 || -0.1 || 1.1 || 1.1 || 1.05 || 1 || 0.95 || 0.9 || 0.9 CY || 0.2 || 0 || 0.2 || -0.1 || 1.3 || 1.3 || 1.3 || 1.3 || 1.3 || 1.3 || 1.3 LV || -0.2 || -0.2 || 0 || 0.1 || 0.7 || 0.7 || 0.75 || 0.8 || 0.85 || 0.9 || 0.9 LT || 0 || -0.2 || 0 || 0.1 || 0.9 || 0.9 || 0.95 || 1 || 1.05 || 1.1 || 1.1 LU || 0.2 || 0.2 || 0.2 || -0.1 || 1.5 || 1.5 || 1.45 || 1.4 || 1.35 || 1.3 || 1.3 HU || -0.2 || -0.2 || 0.1 || 0.1 || 0.8 || 0.8 || 0.85 || 0.9 || 0.95 || 1 || 1 MT || 0 || 0 || 0.2 || -0.1 || 1.1 || 1.1 || 1.1 || 1.1 || 1.1 || 1.1 || 1.1 NL || 0.2 || 0.2 || 0.1 || 0 || 1.5 || 1.5 || 1.45 || 1.4 || 1.35 || 1.3 || 1.3 AT || 0.2 || 0.2 || 0.1 || 0 || 1.5 || 1.5 || 1.45 || 1.4 || 1.35 || 1.3 || 1.3 PL || -0.2 || -0.2 || 0 || 0.1 || 0.7 || 0.7 || 0.75 || 0.8 || 0.85 || 0.9 || 0.9 PT || -0.2 || 0 || 0 || 0.1 || 0.9 || 0.9 || 0.9 || 0.9 || 0.9 || 0.9 || 0.9 RO || 0 || -0.2 || 0 || 0 || 0.8 || 0.8 || 0.85 || 0.9 || 0.95 || 1 || 1 SI || 0 || 0 || 0.1 || 0 || 1.1 || 1.1 || 1.1 || 1.1 || 1.1 || 1.1 || 1.1 SK || -0.2 || -0.2 || 0.1 || 0.1 || 0.8 || 0.8 || 0.85 || 0.9 || 0.95 || 1 || 1 FI || 0 || 0.2 || 0 || -0.1 || 1.1 || 1.1 || 1.05 || 1 || 0.95 || 0.9 || 0.9 SE || 0 || 0.2 || 0.1 || -0.1 || 1.2 || 1.2 || 1.15 || 1.1 || 1.05 || 1 || 1 UK || 0 || 0 || 0 || 0 || 1 || 1 || 1 || 1 || 1 || 1 || 1 Table B3. Simulation of the number
of postings from and to EU27 (year 2010-2015) || Posting by sending country - Simulation || Posting by receiving country - Simulation Country || 2010 || 2011 || 2012 || 2013 || 2014 || 2015 || 2010 || 2011 || 2012 || 2013 || 2014 || 2015 || AT || 11,505 || 11,738 || 12,038 || 12,345 || 12,652 || 12,942 || 40,083 || 40,872 || 41,733 || 42,625 || 43,568 || 44,518 || BE || 46,260 || 47,271 || 48,382 || 49,568 || 50,822 || 52,082 || 114,972 || 117,335 || 119,663 || 122,183 || 124,894 || 127,792 || BG || 4,739 || 4,830 || 4,943 || 5,061 || 5,179 || 5,289 || 2,800 || 2,867 || 3,005 || 3,149 || 3,338 || 3,538 || CY || 143 || 146 || 152 || 157 || 163 || 169 || 2,381 || 2,433 || 2,507 || 2,594 || 2,685 || 2,781 || CZ || 14,244 || 14,577 || 15,012 || 15,488 || 15,991 || 16,508 || 16,988 || 17,437 || 18,178 || 18,932 || 19,717 || 20,537 || DE || 179,279 || 183,244 || 187,722 || 192,513 || 197,561 || 202,738 || 224,138 || 229,577 || 235,142 || 240,337 || 245,156 || 248,904 || DK || 3,774 || 3,845 || 3,942 || 4,054 || 4,171 || 4,291 || 18,149 || 18,653 || 19,142 || 19,620 || 20,080 || 20,546 || EE || 8,723 || 8,931 || 9,141 || 9,357 || 9,579 || 9,795 || 2,088 || 2,176 || 2,264 || 2,354 || 2,445 || 2,536 || EL || 3,224 || 3,298 || 3,377 || 3,454 || 3,529 || 3,593 || 9,307 || 9,013 || 9,131 || 9,365 || 9,601 || 9,909 || ES || 26,526 || 27,009 || 27,604 || 28,257 || 28,944 || 29,629 || 86,158 || 86,915 || 88,779 || 91,031 || 93,359 || 95,610 || FI || 2,146 || 2,196 || 2,259 || 2,331 || 2,404 || 2,478 || 19,260 || 19,714 || 20,163 || 20,623 || 21,093 || 21,549 || FR || 219,795 || 224,245 || 229,859 || 235,909 || 242,168 || 248,457 || 151,168 || 154,158 || 157,493 || 161,216 || 165,269 || 169,353 || HU || 36,377 || 37,207 || 38,189 || 39,157 || 40,112 || 40,977 || 8,302 || 8,504 || 8,812 || 9,131 || 9,462 || 9,802 || IE || 957 || 978 || 1,003 || 1,029 || 1,058 || 1,086 || 7,723 || 7,934 || 8,167 || 8,452 || 8,777 || 9,144 || IT || 2,687 || 2,738 || 2,807 || 2,883 || 2,963 || 3,043 || 56,302 || 56,979 || 57,936 || 58,885 || 59,832 || 60,736 || LI || 1,657 || 1,696 || 1,738 || 1,780 || 1,823 || 1,863 || 5,974 || 6,197 || 6,388 || 6,643 || 6,928 || 7,223 || LT || 913 || 935 || 959 || 983 || 1,006 || 1,027 || 2,982 || 3,102 || 3,250 || 3,407 || 3,571 || 3,741 || LU || 47,008 || 47,958 || 48,996 || 50,134 || 51,356 || 52,584 || 29,245 || 30,344 || 31,433 || 32,481 || 33,556 || 34,622 || MT || 102 || 105 || 107 || 110 || 114 || 117 || 1,664 || 1,697 || 1,737 || 1,785 || 1,838 || 1,894 || NL || 9,299 || 9,484 || 9,705 || 9,940 || 10,186 || 10,432 || 91,082 || 92,912 || 94,774 || 96,779 || 98,931 || 101,180 || PL || 227,672 || 232,932 || 238,524 || 244,183 || 249,809 || 254,943 || 14,853 || 15,512 || 16,244 || 17,064 || 17,943 || 18,862 || PT || 64,345 || 65,241 || 66,634 || 68,235 || 69,908 || 71,556 || 12,706 || 12,698 || 12,790 || 12,959 || 13,145 || 13,335 || RO || 9,078 || 9,258 || 9,469 || 9,681 || 9,891 || 10,081 || 10,585 || 10,779 || 11,354 || 11,931 || 12,539 || 13,177 || SE || 3,503 || 3,557 || 3,640 || 3,734 || 3,830 || 3,926 || 21,724 || 22,391 || 23,197 || 24,171 || 25,157 || 26,184 || SI || 12,908 || 13,178 || 13,478 || 13,782 || 14,087 || 14,374 || 3,838 || 3,946 || 4,086 || 4,243 || 4,383 || 4,516 || SK || 21,366 || 21,857 || 22,475 || 23,102 || 23,737 || 24,352 || 4,562 || 4,797 || 5,048 || 5,309 || 5,579 || 5,863 || UK || 39,354 || 39,973 || 40,829 || 41,795 || 42,817 || 43,859 || 38,550 || 39,484 || 40,566 || 41,753 || 43,011 || 44,343 || Total || 997,585 || 1,018,428 || 1,042,983 || 1,069,022 || 1,095,858 || 1,122,193 || 997,585 || 1,018,428 || 1,042,983 || 1,069,022 || 1,095,858 || 1,122,193 || Simulation elaborated by Ismeri Europa. Simulation is carried out without assuming labour cost convergence. The receiving perspective generally underestimates the extent of the phenomenon || Table B4. Simulation of the number of postings from and to EU27
country by country (year 2010) Table B5.
Simulation of the number of postings from and to EU27 country by country (year
2015) BOX B1. The dynamics of wages, labour costs and GDP in Europe The relation between labour costs and GDP growth stems from the
interplay between product and labour markets. Table B1.1 shows the GDP and the main indicators of labour markets
in Europe. Table B1.1. GDP and labour cost and compensation in Europe. We would generally expect an inverse relationship between unit
labour cost and real GDP: as national output expands and the economy heads
towards full capacity, supply bottlenecks and shortages may start to appear.
Workers require payment of overtime and bonuses to work longer hours and will
ask wage increases, furthermore as national output expands, older less
productive machinery may be used and less efficient workers hired. Higher wage
rates without any compensating increases in labour productivity means that unit
costs of production rise, leading businesses to produce less. The empirical
evidence across the EU27 countries shows that, while the relation between real
GDP growth and real unit labour cost is negative, the correlation between
(real) compensation per employees and GDP is strongly positive. Figure B1.1. The relationship between real GDP, RULC and real
compensation In the long run output may increase only with increases in: labour
supply; labour and capital productivity; the capital stock, business
efficiency; innovation. In dynamic terms the relevant variables is wage
flexibility (real and nominal), i.e. the speed at which real or nominal wages
adjust to real or nominal shocks (productivity shocks, or changed market
conditions, including changes in the terms of trade). In recent years intensified competitive pressures have increased the
pace of structural change in many economies and required a greater capacity to
rapidly adapt to structural changes including, among other things, a greater
wage flexibility. Wage flexibility depends on structural features of the labour
market, industrial relation systems and taxation systems: ·
Factors increasing employees’ bargaining power
in wage setting, like high minimum wages, strict work rules or extensive
employment protection, erga omnes provisions for mandatory collective
bargaining. ·
Factors improving the fall-back options of
employees, as high level and duration of unemployment benefits and other
welfare payments or by loosening the standards for receiving such benefits. ·
The degree of centralization and coordination of
wage setting is also an important factor. Very high (national) or very low
(plant level) centralization of wage setting generate less wage pressure than
intermediate levels (sector) (Calmfors and Driffill, 1988). Coordination
induces unions and employers organisations to internalize the negative effects
of higher wages and thus to moderate wage increases. Multiple bargaining levels
that set floors but not caps on wage increases tend, instead, to increase wage
pressure (Blanchard et al., 1995). ·
High tax wedges between workers’ marginal
productivity and their take home pay also reduce wage flexibility. The literature usually considers two different dimensions of wage
adjustment mechanisms: ·
Nominal wage and price flexibility in responding
to country-specific aggregate demand shocks, ·
Real wage flexibility to align real wages to
productivity developments at the regional, sectoral and occupational levels. World-wide shocks produce different effects on the labour markets on
the basis of the institutional mix of each specific country. Some institutions
may reduce/prolong the effects of shocks on unemployment. For example, a high
level of wage bargaining coordination may lead to a faster adjustment of real
wages in presence of a reduction in productivity growth. By contrast, if labour
market institutions affect negatively unemployment duration, adverse shocks are
more likely to increase the pool of long-term unemployed, thus reducing the
pressure of unemployment on wages. Empirical evidence shows that a model that
allows economic shocks and institutions to interact can explain both much of
the rise and much of the heterogeneity in the evolution of unemployment in
Europe (Blanchard and Wolfer, 2000). In recent years both common macroeconomic shocks and country
specific ones have tested the flexibility of the wage formation mechanism in
the euro area. There is a substantial agreement in the ample literature on
unemployment in Europe and on its causes: negative supply shocks were worsened
by an institutional setting which amplified and protracted their negative
effects. According to most commentators, EMU has increased the need for wage
flexibility and labour mobility in order to support adjustment processes among
territorial areas with very different economic and social structures
(Buti-Sapir, 2000). Given current large differences among member states and
regions and the still low labour mobility, both within and among member
states/regions, wage flexibility is an important factor to cushion the impact
of asymmetric shocks (Bertola, Boeri, Nicoletti, 2001). Price transparency should increase both cross-country arbitrage by
consumers and competitive pressures which should increase reform pressures. EMU
and economic integration should also impose more discipline on wage setters
(Dunthine and Hunts, 1994) and national policy makers (Bean, 1998; Burda,
1999), thus increasing the pressure for structural labour and product market
reform at the national level. However, other authors (Calmfors, 1998; Sibert
and Sutherland, 1997; Cukierman and Lippi, 1999) underline the risk that EMU
will lower such pressures. Wage bargaining may be characterised by a “wage
catching up” process due to greater wage and price transparency. Moreover,
unions and national authorities may adopt a “free-rider” behaviour in a
situation where it is the overall European inflation and unemployment which are
considered by the ECB in defining monetary policy. Finally, the restrictive
stance that the ECB has to adopt in order to assert its credibility and the
Fiscal and Stabilisation Pact do not consent to create the positive
macroeconomic conditions which are considered necessary in order to permit the
adoption of structural reforms in the labour market without social conflict. A stronger pressure for convergence in national wage and social
policies will however be exerted by economic forces and the monetary
integration process. In fact, the potential for divergent wage policies will be
reduced by higher product market competition and converging prices. Moreover,
spontaneous convergence will be led by multi-national firms, which will adopt
common human resources management policies (Brittan, 1994), and by capital and
labour mobility. This convergence process will be supported by institutional
competition. Industrial relations systems are already showing signs of
convergence across Europe and European integration by itself will reduce the
degree of corporatism and centralisation in wage bargaining (Danthine and Hunt,
1994; from an industrial relations perspective: Streeck, 1992). Indeed in the period ending before the current crisis, “for the euro
area as a whole the overall wage discipline has been preserved with no evident
signs of second round wage effects. Nominal wage growth per worker has been
remarkably stable since the beginning of EMU” (Arpaia, 2007), however European
countries show persistent cross-country differences in wage and labour costs
developments which do not reflect differences in productivity and thus indicate
insufficient degree of wage flexibility which ultimately may affect growth
potential. The reaction to the 2008 crisis has shown an adjustment in the
compensation per employee, led by a fall in the variable component together
with an increase in nominal unit labour costs due to labour hoarding (Arpaia,
Curci 2010). BOX B2. Economic integration and labour cost convergence in Europe In open economies, labour costs and wage differentials are among the
main factors firms consider in deciding to locate in or move out of regional
clusters of economic activities and to employ the local workers or workers from
other lower wage regions. To assess future trends in the posting of workers it
is then necessary to see if we may expect a convergence in wages and labour
costs across European countries and regions. According to neoclassical trade theory free trade in goods
and services and factor mobility should be strong drivers for factor price
convergence among countries resulting in the equalization of factors returns
across countries and in factor price equalization in the long run. Simply
stated the theorem says that when the prices of the output goods are
equalized between countries as they move to free trade, then the prices of the
factors (capital and labour) will also be equalized between countries.
This implies that free trade will equalize the wages of workers and the rents
earned on capital throughout the world. The theorem derives from the
assumptions of the model, the most critical of which is the assumption that the
two countries share the same production technology and that markets are
perfectly competitive. The more recent models on outsourcing for cross-country
wage differentials (Deardoff, 2011) have complemented this model. The process of factor price convergence should be stronger and
faster in optimum currency areasa, as the EMUb, where the
elimination of barriers to free trade and factor mobility, is expected to
increase pressures on labour costs of participating countries to be in line
with their productivity performance and accelerate the convergence of factor
prices. There is indeed empirical evidence that removing impediments to trade
(as with the creation of a free trade zone, a custom union and a common market)
and sharing a single is a strong driver for deeper trade and overall
integration. However the empirical evidence also shows that the heterogeneity
of policy preferences, institutions and economic structures diminish only
gradually. Factor price convergence in the long run is also modelled in growth
models. Barro and Sala-i-Martin (1992; 1995) introduced the concept of β-convergence, occurring in any dynamic
adjustment process across countries or regions. There is β-convergence in the cross-section of EU
countries or regions if the price of labour in low-wage regions tends to grow
faster than the one in high wage regions. The process of β-convergence thus requires a negative relation
between the growth rate of a variable and its initial level. According to
neoclassical growth models, in a long run perfectly competitive equilibrium
growth in real labour costs should equate growth in labour productivity in
every country so that growth differential in real unit labour costs should
converge toward zero. Combining these models it is possible to detect the
following drivers for convergence in factor prices: i) Free trade, ii) Cross-border
outsourcing, iii) Interregional labour mobility. The empirical evidence shows however a mixed picture on labour costs
convergence in Europe. Abraham (2001), combining the data sets for the
manufacturing sector from the OECD and the US Bureau of Labour Statistics
(covering the period 1975-1998 for all OECD countries and going back to 1960
for a small group of OECD countries), detects an overall convergence between
countries with higher and lower labour cost. But the process is slow and often
partial, so that cost-based advantages may in specific cases survive in the
short and sometimes even the medium run. Convergence is more pronounced when
the gap in labour costs between countries is larger. Productivity growth is the
main factor explaining labour cost convergence: to a significant extent labour
costs differentials reflect productivity differentials, so that differentials
in unit labour costs are lower than differential in total labour costs per
worker or per hour. However, not all the labour cost differentials can be
explained by productivity differential. Even if in the EU15 there is a close
relation between productivity and labour costs, productivity does not offset
labour cost differentials. Using unit labour cost (ULC) data from the Lander, Dullien and
Fritsche (2007) investigate inflation convergence and do not reject the
hypothesis of convergence of ULC growth in the EMU, although for some countries
there is evidence of relative rather than absolute convergence (Greece, Italy
and Portugal present permanently higher rates of ULC increases relative to
other EMU countries). Furthermore, country deviations from the rest of the
currency union are more pronounced and persistent in Europe. Lebrun and Perez
(2011) also show that nominal and real unit labour costs growth differentials
between euro area members have persisted since the introduction of the EMU and
even widened out until the crisis, because of divergent evolutions in
capital-output ratios, nominal effective exchange rates and country-specific
institutional features, coupled with an increased sensitivity of real unit
labour costs to fundamentals following the shift in the monetary regime. While
technological factors result as the main drivers of real unit labour costs
growth differentials, differences in product and labour market regulationsc
tend to amplify the dispersion, impairing convergence in real unit labour
costs. Arpaia and Pichelmann (2007) find out that persistent cross-country
differences in wages and labour cost development in the Euro area are
indicative of an eventually insufficient degree of nominal and real wage
flexibility in the euro area. Very interesting for the purpose of this study is a recent paper by
Šlander and Ogorevc (2010), examining spatial dispersion and the process of β-convergence of labour costs across NUTS2 EU
regions in the period 1996-2006. They find absolute β-convergence
in real labour cost across the EU regions’ labour markets the period 1996-2006,
with real labour costs growing faster in low-wage regions relative to high wage
ones. This can be attributed to international trade, cross border outsourcing
of production and interregional labour mobility. A faster pace of convergence
is found in nominal labour costs, one of the main factors companies consider when
deciding production location (3.3% per year relative to 1.9% per annum for real
labour costs). The estimated model also reveals a conditional convergence after
accounting for productivity growth and other factors: the gaps in nominal wages
and real labour costs between high- and low wage regions are slowly narrowing,
even after controlling for their different productivity growth rates. These
results suggest that in low-wage regions labour costs increase at a higher rate
than their productivity growth, and this may reduce their competitive position
relative to high wage regions. Another interesting result of the model is that
there is interdependency in wage growth in neighbouring regions: “a region’s
wage growth directly affect the growth of wages in the neighboring region
through a positive and significant lambda coefficient” (pg.43). Finally, using the average hourly labour costsd data
related to EU Member States Eurostat it is possible to compute a measure of
dispersion (i.e. the coefficient of variatione) of labour costs for
(unweighted) EU27, EA17 (Euro Area), EU15 averages as well as for the EU12
(i.e. for the Member States which accessed the EU in successive phases), in the
period 1997-2010, in order to verify -- in a descriptive way -- if hourly labour
costs converge across Europe (Figure B2.1). Hourly labour costs dispersion shows a decreasing trend in EU27,
EA17 and EU12, more pronounced in EU12 and stable in EU15. Therefore it seems
to be evidence of very slow “labour costs converging process” between the EU12
and EU15 countries. A similar pattern is found considering national minimum wages
(monthly national minimum wages)f. Minimum wages are less dispersed
in EU12 respect to EU27, EU15 and EA17 and the latest accession EU countries
are slowly closing the gap with EU15 countries (Figure B2.2). Figure B2.1. Average hourly labour costs in
EU27, EU15, EU 12 and EA17 (1997-2010) Not weighted average hourly labour costs
are computed for EU15, EU27, EA17 and EU12. Source: 1997 - 2007 Eurostat -
Labour Cost Annual Data (Average hourly labour costs, defined as total labour
costs divided by the corresponding number of hours worked); 2008 Eurostat
Labour Cost Survey 2008 (Labour cost per hour in the business economy); 2009
and 2010 Eurostat Estimations (Labour cost per hour in the business economy. Figure B2.2. Average minimum wages in EU27, EU15, EU12 and EA17
(1997-2010) Not weighted average minimum wages are
computed for EU15, EU27, EA17 and EU12. Source: Eurostat – Minimum wages. Notes a The OCA properties include: the mobility
of labour and other factors of production, price and wage flexibility, economic
openness, and diversification in production and consumption, similarity in
inflation rates, fiscal integration and political integration. The similarity
of shock and correlation of incomes was added later. b According to many authors the EMU cannot
be considered a real OCA, as it does not comply to all the requirement for a
OCA: i) The core group of EU countries are broadly similar (Germany + France +
Netherlands), but peripheral countries have big structural differences ; ii)
Response to interest rate changes varies across Countries; iii) there are still
barriers to the mobility of labour. The recent economic and financial turmoil
has exposed weaknesses in the currency union. c The labour market indicators include
indicators of workers’ bargaining strength in wage formation (bargaining
centralization, the replacement of unemployment benefits and the degree of
openness of the economy) and of employment protection. In addition the OECD
indicator of product market regulation is considered. d Average hourly labour costs, defined as
total labour costs divided by the corresponding number of hours worked.
http://epp.eurostat.ec.europa.eu/portal/page/portal/labour_market/labour_costs/main_tables e The coefficient of variation (CV) is
defined as the ratio of the standard deviation to the mean. The coefficient of
variation is a dimensionless number ranging from zero to one. f Minimum wage statistics published by
Eurostat refer to monthly national minimum wages. In some countries the basic
national minimum wage is not fixed at a monthly rate but at an hourly or weekly
rate. For these countries the hourly or weekly rates are converted into monthly
rates. The national minimum wage is enforced by law, often after consultation
with the social partners, or directly by national inter-sectoral agreement
(this is the case in Belgium and Greece). The national minimum wage usually
applies to all employees, or at least to a large majority of employees in the
country. Minimum wages are gross amounts, that is, before deduction of income
tax and social security contributions. Such deductions vary from country to
country (http://epp.eurostat.ec.europa.eu/portal/page/portal/labour_market/earnings/main_tables).
ANNEX 3: Summary
of the national case studies carried out by Ismeri
Europa[3] The national
case studies provide substantial and useful information on the present state of
posting in a number of relevant countries in terms of both the inward and
outward flows of posted workers and of the regulation and monitoring of
posting. In particular, the three main ‘receiving’ MSs have been included
(Germany, France and Belgium), which alone represent almost half of all inward
postings over the 2007-2009 and around 40% of all outward postings, as counted
by E101 forms (EC 2009, 2011). The other two
MSs fully integrated in the study, Denmark and UK, represent significantly
lower shares of posting – clearly for Denmark, also due to the relatively
smaller size of the economy. For these two countries, the interest of the case
studies is mainly linked to institutional factors. Both countries share a
system where industrial relations are mainly self-regulated, especially in the
field of collective bargaining, by the interplay of the two sides of industry,
with no intervention by the state in view of making collective agreements
generally binding, which is a key element in the discussion over the PWD. Beyond this
significant similarity, the two national institutional frameworks, in terms of
the regulation of labour, are quite different. Denmark belongs to the Nordic
model of ‘coordinated market economies’, whereas the UK is a prime example of
‘liberal market economies’ (Hall and Soskice 2001, Dølvik 2008). In terms of industrial
relations, this means that in Denmark the institutional support of trade union
representation and collective bargaining is widespread, whereas in the UK the
role of autonomous regulation of labour is fully recognised, but there are
limited promotional measures. Moreover, the structure of collective bargaining
is centred on industry-wide agreements in Denmark, even though with a
significant degree of flexibility at decentralised level; in the UK firm-level
bargaining prevails, with an important exception in the engineering
construction sector. It is exactly in this sector that our analysis will be
focused, since the presence of multi-employer and notably sectoral agreements
becomes relevant for posting, as a means to set the minimum protections covered
by Art. 3.1 PWD which is alternative to legislation. Indeed, other important
common features of the two countries are the importance that the question of
posted workers has gained in the public debate in the most recent years and the
actions autonomously undertaken by industrial relations actors to address the
issues raised by posting. Besides the
importance in terms of flows, Germany, France and Belgium present interesting
features for the regulation of posting. All countries share a system for
extending the coverage of collective bargaining and in Germany this is
specifically implemented through the regulation of posting. They all introduced
a system of prior notification of posting and Belgium developed an on-line
declaration tool, which is also meant to ensure an effective monitoring of the
phenomenon. This latter feature is shared by Denmark, which developed a similar
initiative in the recent years and therefore provides a significant comparative
case also in this respect. The case
studies have focussed on existing research and studies with a view to collect
all additional data and information available at national level to integrate
aggregate data which was collected using EU level sources. A special focus was
devoted to highlight existing problems and issues that had emerged at national
level on the posting of workers and to identify possible solutions put forward
by national actors. In this perspective, two case studies were particularly
devoted to analyse the experiences and the results of monitoring tools
introduced in Belgium (LIMOSA) and Denmark (RUT-Register). In consideration of
the lack of quantitative data sources, even at national level, a mainly
qualitative approach was followed. A number of interviews were carried out with
the main social actors and stakeholders in the field of posting: public
administrations, especially those responsible for regulating posting and for
the enforcement of the existing regulations; employers and employer
associations; and trade union representatives. The interviews cover the present
state of play regarding posting (both in terms of economic integration and
social cohesion), its regulation and enforcement; the issues raised by posting
and possible existing problems which needs to be tackled either at national or
at EU-level; the practice and the assessment of national answers to the issues
raised by posting; a discussion of the possible revision of the legislative
framework on posting at EU-level, with a view to address the issues related to posting
which have emerged in the 15 years since the PWD. The drivers of
posting The national
case studies carried out for this report provide important insights, which
supplement and better specify the analysis of aggregate data. Besides the
evidence used to clarify the problems and issues illustrated in Section 1.2,
the cases also show how the drivers of posting combine in a number of actual
experiences and how their relevance can change over time. Geographical
proximity The aggregate
analysis indicates that geographical proximity is one of the main determinants
which structure the distribution of inward and outward postings. This
fundamental factor clearly emerges in the case studies. In Denmark, an
important share of postings systematically concentrates in the southern regions
of Fynen and Southern Jutland, which are close to both Germany and Poland, the
main countries of origin of posted workers. In 2009, this area even surpassed
the capital region of Copenhagen, with almost 40% of postings, while in general
it is the second receiving area with more than 20% of posted workers. In
Germany, the meat processing industry, where the presence of posted workers is
reportedly high, has important locations in the Lander close to the eastern
borders, like Brandenburg and Saxony. In France, nearly 60% of the
pre-declarations submitted according to the French law on posting are
concentrated in the cross-border regions in the North, North-East and South-
East of France. This is linked to cross-border activities with Belgium,
Luxembourg, Germany and Italy. The main origin and destination of posted
workers to/from the UK is France, which accounts for around 40% of all postings
to the UK and one third of all UK postings abroad over the 2007-2009 period. Labour and
skill shortages Labour and
skill shortages are other highly significant drivers of posting. While they are
usually the main factors linked to outward postings from high labour cost
countries, such as France and Germany (for Germany, Dribbusch 2010), they are
also important in a receiving perspective. For instance, most of the relevant
cross border activities performed through posting in France are linked to these
divers and are associated with a well-established system of ‘cross-border’
firms, with a long lasting tradition of operation on the two sides of borders. In this
respect, the experience of Denmark seems particularly interesting. It must be
underlined that, in the wake of the 2004 enlargement, the posting of workers
was considered as a highly positive phenomenon because it helped to face labour
shortages, especially linked to the ageing indigenous workforce, and it
contributed to accommodate the economic boom, thereby avoiding inflationary
pressures on domestic wages and salaries. The yearly overall macroeconomic
positive contribution on the Danish GDP of migrant labour (which, it must be
underlined, in the Danish debate, includes posting) was estimated in 2006 at
DKR 4.2 billion, or some EUR 565 million (Tranæs et al 2009, p. 137). In
a sending perspective, Danish construction firms and workers took part and
could significantly benefit of the German post-reunification construction boom
in the 1990s and of the oil-driven Norwegian sustained economic growth. In sum,
the positive implications of both inward and outward posting were appreciated
by Danish actors. This was
reflected in a study on east European workers in the construction sector which
estimated that around 13,000 posted workers and some 100 self-employed workers
from central and eastern European MSs were working in building sites in the
second half of the 2000s (Hansen et Andersen, 2008), out of a total domestic
sectoral workforce of about 180,000 at that time. The research was based on
interviews with 236 Danish construction companies which had requested and
obtained the approval to employ eastern European residents, according to the
transitional measures then in place. Some 80% of the surveyed firms were using
foreign workers (both migrants and posted workers) with a view to face the
general labour shortage at that time (2005-2007). An additional benefit firms
were expecting was a reduction in labour costs. The majority of Danish firms
which employed foreign workers reported a number of advantages since these
workers were more willing to perform less attractive tasks and demonstrated
more flexibility. Some problems were reported in terms of lack of knowledge
both concerning health and safety regulations and practices and regarding
building standards, need for more control and supervision, and language difficulties
which made the organisation and the performance of work harder. The broad
appreciation of the contribution of migrant and posted workers to the Danish
economy changed with the start of the economic recession in 2008. Increasing
unemployment, especially in the construction sector, and the overall worsening
economy, shifted the focus of the public debate on labour cost differentials
and notably on the impact of the posting of workers on the ‘autonomous’ Danish
system of industrial relations. The alleged presence of ‘sub standard’ terms of
employment (with the meaning of terms of employment below the Danish collective
agreements) and the related lack of a level playfield between Danish and
foreign service providers emerged as key issues. Labour cost Labour cost
differentials are always underlined as a basic component of the phenomenon of
posting. Besides being identified as one of the main drivers of posting in
general, labour cost is relevant in connection with other drivers. This is an
important consideration, which has been highlighted in the aggregate analysis
and has been stressed in the cases studies. All drivers influence posting of
all countries at the same time, in both receiving and sending perspectives, and
they imply the level and structure of postings in combination. So, even if the
main driver of inward posting in certain situations is skill shortage,
nevertheless labour cost – in connection with other factors such as
geographical proximity – contributes to define and select the origin of this
posting. For instance, even the high skilled German posted workers tend to move
towards countries with relatively higher labour costs, so that the benefits of
filling skill (or labour) shortages combine with cost-related advantages for
utilising firms linked to comparatively lower labour costs. In the case
studies, there are indications on the wage differentials between indigenous and
posted workers. Of course, it is difficult to compare the situations of
workers, so that pay differences may reflect distinct characteristics of the
workers involved. However, the pay gaps are usually quite high, so that even by
taking into consideration the possible different situations in terms of skills
and productivity, wages of posted workers would remain lower. In France, a report delivered by the French Senate in 2006 estimated wage
differences between foreign posted workers and French workers to be around 50%.
In Denmark, a study on the construction sector
indicated that, in the mid-2000s, workers from Eastern European countries had
on average a salary lower than Danish building worker by 25-28% (Hansen et
Andersen 2008, p. 9). A similar difference has been estimated for Germany by
comparing the minimum wage levels with the actual wage levels in the
construction sector. The average hourly gross salary in the building sector –
EUR 17,11 (Federal Statistical Office) – is in fact 32% higher than the minimum
wage for skilled workers and as much as 56% for the minimum wage of unskilled
workers in West Germany. The actual pay differences can be even higher, as
suggested by the reports about common infringements of minimum wage rules in
the German construction industry (see for instance the German language section of
the web site of the European Migrant Workers Union, EMWU[4]) Despite such
large difference in estimated wage levels in Germany, it is important to stress
that in recent years a significant decrease in the number of postings was
recorded in the construction sector, which is now less than half of the level
of the late 1990s (source: SOKA Bau). This was due to the overall reduction in
construction works for both the end of the post-reunification building projects
and the impact of the recent recession. The total sectoral employment was 3.2
million workers in 1995 and declined to 2.2 million in 2010. As regards
inward posting, a compositional shift is apparently emerging in Germany, with
the share of low-labour cost countries diminishing to the benefit of
high-labour cost countries. Particularly striking is, for instance, the
decrease in postings from Poland, which slumped from more than 40,000 at the
end of the 1990s to significantly less than 20,000 in 2009. In the same period,
the relevance of postings from some high-wage countries has increased, like
Belgium, the Netherlands and Denmark (Eichhorst 2005). These trends seem to
signal a relative weakening of the labour cost driver apparently in favour of
geographical proximity and possibly other drivers, such as skill and labour
shortages. It is
important to stress that the case studies clearly show that minimum wage
systems, neither those setting nation-wide minima (like in the UK) nor those
establishing sector specific collectively agreed minimum pay rates differentiated
by job classification levels (like in the case of Germany), are able to
eliminate the role of labour cost differentials in driving posting. Of course,
if effectively enforced, minimum pay rates represent a floor for wages and can
eliminate the most evident forms of wage competition, but the differences
between minimum and actual pay rates as well as the application of distinct
social security regimes do entail some room, at times significant, for labour
cost competition. As long as such minimum pay rates represent the only
mandatory constraints for domestic firms too, the same scope for wage
competition should be available even among national businesses. Market
integration The importance
of the link between market integration and posting (which is clearly a two-way
connection with self-reinforcing incremental effects) is forcefully depicted by
the role of geographical proximity outlined above. Most of postings occurs
precisely in the areas and between the economies which are better integrated.
The case studies refer to outward posting and external trade as complement,
especially on the case of capital goods and foreign direct investment for
Germany. The relationship with Norway and its oil-driven ‘booming’ economy is
mentioned to illustrate outflows of Danish construction workers. Another
example can be found in the UK, where the high share of posted workers in the
financial sector can be linked to the importance of London in the global
financial market. Problems and
issues The case
studies provide important indications about the problems and the issues linked
to posting, especially with reference to the economic and social dimensions and
to the problems of enforcement. It is
important to underline that all case studies highlight that the attention in
the national debate and the concerns of domestic stakeholders about posting are
exclusively concentrated on inward posting. Information on domestic workers
posted to other countries is even more limited than on foreign posted workers.
The few references that can be found at national level consider posting abroad
as an opportunity for businesses and workers and a sign of the dynamism and
strengths of the domestic economy. Another type of posting which does not seem
to be problematic is intra-group posting in well-established multinational
firms, especially in high-wage sectors. Therefore, the two types of posting
which are typically at centre of debate and tensions are those linked to the
provision of services through a contract with a user companies (which may entail
intra-group posting when the service provider has a local branch in the
receiving country) and temporary agency transnational posting. The issue of
unfair competition and ‘social dumping’ linked to inferior employment and
working conditions of posted workers emerges prominently. In each case there is
at least some reference to lower pay rates, longer working hours, poor working
conditions – also in terms of health and safety –, poor living conditions –
especially with reference to housing –, disproportionate deductions for
accommodation and other forms of exploitation. Such reference is usually
presented by trade unions in interviews and in union documents on specific
situations, but it is also mentioned by labour inspectors and is sometimes
identified in studies and official enquiries/documents. Unfair competition and
social dumping are seen as producing job – and company – displacement on one
side and highlight the need to strengthen protections for posted workers and
reduce the pressure on employment and working conditions of domestic workers,
on the other. It is
interesting to underline that the link between the posting of workers and
unfair competition and social dumping is sometimes stressed also by SMEs. For
instance in Denmark and France small firms in the construction industry, but
also in other sectors such a temporary employment agency, underline that
foreign undertakings can often exert a very strong competitive pressure only by
virtue of using posted workers with lower wage levels and lower social security
contributions obligations. In this respect, there seem to be a potential
divergence between the interests of SMEs and large firms in the receiving
perspective: whereas SMEs tend to compete directly with foreign service
providers, large firms are more often among the users of posted workers which
can obtain the advantages of posting in terms of increased allocative
efficiency and of filling labour and skill gaps[5]. The recent
economic downturn, with the connected increase in unemployment and the possible
reduction in the importance of skill and labour shortages, contributed to
exacerbate tensions around such issues. The concept of job displacement has a
very vivid and direct representation if we focus on individual cases, so that
we can see, for instance, that in tendering procedures in the civil engineering
and construction sector foreign subcontractors tend to be awarded contracts
while domestic firms have great difficulties in copying with that competition –
something which is in fact reported for France, Germany and UK. This effect is
similar to off-shoring, when a company closes down in a country to open/move
production abroad. In a dynamic perspective, the assessment is much more
difficult, because sectoral shifts and potential efficiency gains can in fact
lead to job creation which may (partly) offset the ‘static’ loss. Of course,
possible dynamic gains leave open the question on how to support the workers
who do not get or lose a job to find another one. Industrial
disputes The UK
provides a number of cases where there have been disputes on the utilisation of
posted workers in the engineering construction sector. In all cases, social
dumping and lately the restriction of job opportunities for domestic workers
were the issues at stake. Trade unions also contend the prevailing view that
foreign contractors bring in the UK labour and organisational skills which are
not available domestically. Drawing on their day-to-day practice in workplaces,
union representatives believe that posted workers often lack the special skills
required to operate on demanding and difficult building sites, like nuclear
power stations. However, if it were skill shortages to drive the posting of
workers, trade unions stress that particular attention should be devoted to develop
such skills locally. According to the unions, the disputes on posting should
not be regarded as contrasting the employment of foreign nationals, but rather
as the effort to enforce fair employment standards and a level playing field
between UK and foreign workers and contractors. In this perspective, the
importance of focusing on skill development at local level is also underlined
by UK employers. The
engineering construction sector represents a special case within the UK
industrial relations system because of the presence of an industry-wide
agreement[6]
(the National Agreement for the Engineering Construction Industry, NAECI) and
of a high unionisation rate of around 80%. The major sectoral employer
association, the Engineering Construction Industry Association (ECIA), is
committed to the application of the national agreement throughout the industry.
The NAECI 2010-2012 includes a set of guidelines for ensuring the application
of the terms of the agreement also to non-UK contractors and to encourage foreign
contractors to join ECIA. However, the national legislation implementing the
PWD does not provide for the application of collective agreements (which, in
any case, are not generally binding), but only of minimum legal standards,
including the national minimum wage. Since the national minimum wage is below
the minimum collectively agreed pay rates, this can give rise to significant
wage gaps between domestic and posted workers in the engineering construction
sector. The first
high-profile dispute on posted workers in the engineering construction sector
occurred in late 2003. It concerned a project at a power station at Cottam, in
the East Midlands, owned by the France-based EDF Energy. Through the
subcontracting chain (the German-based RWE was the main contractor) some
Portuguese companies were involved in the project and used Portuguese posted
workers. Workers took unofficial industrial action and demonstrated in protest
at UK workers being “unable to secure employment on the project due to being
undercut by non-UK contractors and posted workers”. Also sympathy action took
place at other sites (NECC 2004). While the unions criticised the unofficial
action, they shared the workers’ concerns. The National Joint Council for the
Engineering Construction Industry (NJC), a bipartite organism in charge of
negotiating the NAECI and ensuring its application, intervened to stop the
protest and guarantee that the agreement was correctly applied. The action
prompted the intervention of EDF, which stated that the industry-wide agreement
had to be applied throughout the site. An internal audit found some elements of
violation: as a consequence, the contract with a Portuguese supplier was
terminated and a second Portuguese contractor was given an advice to apply the
NAECI. Some extra work was given to tender and this gave the opportunity for UK
workers to be employed. A similar case occurred at the same site in 2006 when
another unofficial strike was staged in support of Hungarian workers who were
believed to be paid under the NAECI rate. The workers were posted by an
Austria-based firm, SFL. A quite
different outcome than the first Cottam dispute was reached at a site owned by
Castle Cement at Mold, in North Wales, where construction work was contracted
to a Belgium-based firm, Pirson, which used posted workers. According to the
unions, Castle Cement declined to implement the NAECI on “grounds of price”.
The NJC tried to obtain the application of the agreement by Castle Cement, but
without success. More recently,
other high-profile cases occurred at sites at the Isle of Grain in South-East
England in 2008, at Staythorpe, in the East Midlands, and at Lindsey in
Lincolnshire in 2009. The first two cases involved the construction of power
stations and Alstom was in both sites the general contractor; the third one
concerned the building of an oil refinery and the general contractor was the
US-based firm Jacobs Engineering. In all cases the issues at stake were both
the possibility to provide employment opportunities for UK-workers and
underpayment of posted workers employed by Polish (at the Isle of Grain) and
Italian (at the other two sites) subcontractors. Trade unions claimed they had
evidence that the posted workers at the Isle of Grain employed by a Polish
subcontractor were paid 30% less than the NAECI rate. There were unofficial
strikes and demonstrations. Eventually Alstom made a commitment that non-UK
employees would be paid the NAECI rate. According to the ECIA, underpayment was
due to involuntary misclassification of employees. The Polish subcontractor
reviewed and reissued the contracts. Moreover, local workers were interviewed
for jobs at the site. Unofficial strikes and demonstrations were also held at
Staythorpe in protest of the exclusion of UK workers, since the Italian
subcontractors had stated that they would use their workforce to carry out the
work. Also in that case, the foreign subcontractors agreed to recruit a number
of local workers. At the same site, the trade unions claimed that Somi, an
Italy-based subcontractor, did not pay the NAECI rates to some of its 400
posted workers, despite the firm’s commitment to do so. An independent audit of
Somi’s payroll found that some 20 workers had been underpaid by an average of
EUR 1,300 per month over a significant period. ECIA found the situation “not
acceptable” and reported that Somi had undertaken to take immediate corrective
action. ECIA said the Somi case
was an isolated incident and declared that there was “no evidence of widespread
undercutting” of agreed rates.” The 2009
dispute at Lindsey oil refinery in Lincolnshire, owned by the France-based
company Total, attracted most attention. The Italian subcontractor IREM planned
to post Italian and Portuguese workers to do most of the work under the
contract. The lack of employment opportunities for UK workers sparked an
unofficial strike in January 2009 and sympathy strikes at other engineering
sites. There were also allegations that IREM was paying lower pay rates than
provided by the NAECI. The UK Advisory, Conciliation and Arbitration Service
(Acas) helped solve the conflict and conducted an investigation on
circumstances surrounding the dispute. A deal was signed in February 2009 to
end the strike, which included the commitment to make available to UK workers around
100 jobs. Acas found no evidence that Total, Jacobs Engineering or IREM had
broken the law in relation to the use of posted workers or entered into
unlawful recruitment practices. Further, Acas received assurances from IREM
that it would abide by the NAECI (Acas 2009). Abuse and
violations The case
studies illustrate a number of situations where the working conditions of
posted workers appear as violations of the regulatory framework on posting. One
of the irregularities indicated in the case studies is the extension of the
weekly working hours, even beyond the legal maximum, without compensation, so
that hourly wages are pushed down compared to their nominal level. Harder
working conditions can also be reflected in higher accident rates. In this case,
references can be made to single high-profile cases. A relevant example is
provided by the Bouygues Travaux Publics in the construction of a nuclear site
in Flamanville concerning some Polish workers posted
from a Cypriot subsidiary of an Irish temporary work agency specialised in
construction engineering and related trades. The workers were found to have
wages around half of those of French workers. The company was also accused of
covering 38 undeclared accidents out of the 112 declared accidents. The same case was echoed in the public debate in the UK, where the
unions were worried that the same subcontractors could
be used in the construction of another nuclear site. Indeed,
the presence of large contractors and sub-contractors in the engineering sector
with EU-wide operations can facilitate the emergence of common practices
violating workers’ rights. At the same time, this also points to the
possibility of building a transnational system of monitoring and enforcement
and, in positive, it could help the diffusion of good practices. In this
respect, it interesting to note that the issues around posting do not only
refer to SMEs coming from low labour cost countries, but also involve large
MNCs based in high labour cost countries. Case studies
report other abuse undermining workers’ rights. For instance, bogus
self-employment represents a challenge to enforce the PWD and to effectively
protect workers. Besides the construction sector, where bogus self employment
is apparently frequent in most of the countries covered by the study (at least
Germany, France and UK) and a more effective enforcement should be strongly
ensured, the German case study shows that another sector where problems of
enforcement are emerging is the meat processing industry. Trade union
reports about the meat processing industry in Germany point to a situation
where in recent years a significant part of direct employment has been replaced
by a variable combination of subcontractor posted workers, temporary agency
posted workers, and self-employed foreign subcontractors (EFFAT 2011). In
practice, often abattoirs and meat processing plants employ only a minority of
the overall workforce while the majority of workers on site are part of the
transnational provision of services. Long working hours, increase in workload
and pace of work, deteriorating working conditions, including growing MSDs, are
reported as emerging features of the sector in Germany. Some of these
developments are linked to reorganisation and off-shoring of companies which
move to locations in Germany which allows exploiting this kind of workforce
composition based on posting and transnational service provision. Wage
differences with domestic workers are quite high and absolute wage levels so
low (allegedly down to around EUR 3 per hour) that Germany has become to be
regarded as a low-wage country in the meat processing industry and competitors
in neighbouring countries such as France and Belgium claim there are increasing
forms of unfair competition involving German-located firms (UECBV 2011). Public concern
about the employment and working conditions of posted workers in the meat
industry and its impacts on employment and the protection of workers’ rights
date at least back to the mid 2000s (Deutscher Bundestag
2005). Two cases cited in a recent conference involve the Germany’s largest
pig abattoir owned by B & C Tönnies in Rheda-Wiedenbrück, where
only around 800 workers of the 4,500 total workforce are employed directly,
while the remainder is provided by various eastern European service firms, and
the Westfleisch’s abattoir at Hamm in Westphalia, where of the about 1,200
workers only some 10% have a direct employment relationship (Klaus-Harald Güster, NGG, The
German meat industry, European Conference on “Investing in people – Fight
precarious work”, 3-4 May 2010). The related
deterioration of employment and working conditions contributes to the low
attractiveness of employment in the industry for the local workforce. This
encourages firms to further source workers abroad, while the role of industrial
relations and collective bargaining is significantly weakened by decreased
membership (and membership fees) and because of the (credible) threats by
employers to have recourse to reorganisation or off-shoring, if labour costs
are not sufficiently low. The absence of an industry-wide collective agreement
for the meat processing sector in Germany makes it particularly difficult to
refer to the protections granted by the national legislation on posting
(AEntG), which introduces minimum pay rates by extending the coverage of
sectoral agreements in certain industries. This is why one of the basic demands
of trade unions in the meat processing industry is to introduce a national
minimum wage. Other cases of
abuse are reported in the road haulage sector. These
involve for instance France and substantially include the establishment of
‘fake’ foreign subsidiaries or transnational contractual relationships with the
only aim to provide ‘low-cost’ workforce for French operations. Such practices
recently acquired prominence in the public debate due to media reports on the
activities of the Norbert Dentressangle group, a French major group in the road
sector. In one case a French transport operator set up a subsidiary in Poland
which recruited some one hundred drivers to perform road haulage in France. The
usual schedule of Polish drivers included six weeks of work in France and one
week of rest in Poland. The Polish drivers were working six days per week and,
during their stay in France, they stayed in flats provided by the French
company. The vehicles were owned by the French mother company; the Polish
subsidiary rented the trucks from the mother company and then it rented them
back while providing the posted drivers. The French courts could verify that a
proper but disguised employment relationship was present between the French
company and the Polish drivers, as the former organised and directed in all
details the work of the latter (TRANSPO 2011). A similar case, involved another
French company which established a subsidiary in Slovakia. The Slovak drivers
were actually working for up to 15 weeks in France and were in any respects
integrated in the mother company workforce. In particular, the French company
entrusted the Slovak subsidiary to carry out its own transport contracts, while
the foreign firm did not have any independent activity in Slovakia and all of
its trailers were provided by the mother company. Again the foreign subsidiary
did not show any independent entrepreneurial activity and was established with
the only purpose to provide drivers at a lower cost to the French mother
company (TRANSPO 2011). In other cases, the provision of drivers for on-going operations
in France is organised through agencies. For instance, the case of agencies
posting Turkish drivers to France for several months was reported in the
national case study. Also the very
high level of posting from Luxembourg, for instance to Belgium and France, has
been linked to the search of lower social security costs. The French national
case study illustrates that this practice mainly involves posting through
temporary work agencies. In 2010, the temporary work agency sector showed the
highest number of pre-declarations of posting in France (14,336 out of 38,651,
or 37% of the total – but it terms of working days it was only second to the
construction sector with 14% of total working days compared to 46% of
construction). It is interesting to note that 75% of pre-declarations in the
temporary work agency sector come from Luxembourg (10,844 pre-declarations or
some 80% of the total from Luxembourg) and that temporary agency transnational
posting concentrate in the bordering Moselle district (61%). According to the
interviews carried out for the French national case study, temporary work
agencies based in Luxembourg post mainly French workers who never worked in
Luxembourg in companies located in the Lorrain region. Such practice enables
firms to pay less social contributions and workers to get equivalent and
sometimes even higher benefits. In addition to the lower social security costs,
utilising firms can also benefit from the non application of provisions
introduced by collective bargaining in the temporary agency sector in France,
like the payment of the contribution for the vocational training of French
agency workers. Other
forms of abuse concern the accommodation provided to posted workers by
subcontractors. Apart from reports of very poor housing facilities and
disproportionate deductions, which are rather common, it is also highlighted
that housing expenses are often used to integrate the minimum pay rates that
must be granted to posted workers. In 2006, there was a case in France where
this kind of infraction was detected. At the electric power station building
site in Porcheville, following a report by trade unions, labour inspectors
found that a Polish subcontractor was in fact including housing benefits in the
minimum wage, which is against the rules. Since the company did not respond
immediately to an order by the French Labour inspectorate to pay integration,
the case was reported to court and compensation was eventually obtained in
2008. Enforcement According to
the case studies, the enforcement of the PWD represents a common concern of
stakeholders at national level. Labour inspectors explicitly refer to
widespread difficulties in checking the actual establishment of firms in
foreign MSs, to qualify the grounds of posting in terms of the foreign habitual
place of work and residence, and to verify terms of employment of posted workers, due to language problems,
difficulties with foreign documents, lack of a supervisor of posted-workers on
site, lack of information on conditions applicable in the sending MS, and slow
cooperation by corresponding authorities in the sending MSs. Trade unions,
and often employers, stress the importance of strengthening the enforcement of
rules on posting and demand stricter checks and controls. Such requests in many
cases have to consider the lack of resources of inspection services, so that
only a few controls can be made, even when, like in Germany, existing rules
would require much broader and deeper monitoring of posting. Scarcity of staff,
training and specialisation of inspection services on posting have been
reported in France and Germany. The German
case study highlights that Finanzkontrolle Schwarzarbeit, the public body
responsible for the monitoring the implementation of the Posted Workers Act,
finds it often difficult to verify whether a foreign company posting workers to
Germany is genuinely established in the country of origin or it was set up
solely for the purpose of illegally posting workers abroad. Other problems are
reported in the field of transnational cooperation. According to the
interviews, there is scope for improvement in terms of effective collaboration,
exchange of data and information and the transnational application of fines and
sanctions. In
France, one of the main issues concerning posting is the difficulty to
implement the provisions of the PWD. In this field, the public administration
has undertaken a number of actions to improve the capacity of monitoring
posting and with a view to improve transnational cooperation, especially
through the establishment of bilateral agreements. In particular, in recent
years the French Labour inspectorate stressed a number of difficulties in
carrying out controls on posting, especially concerning practical problems (language difficulties, different document formats, lack of a
reference person among posted workers, the short duration of posting), legal
issues (the qualification of the employment relationship with very few pieces
of information, knowledge of relevant foreign labour regulations), and administrative
aspects (administrative work, slow and insufficient cooperation by foreign public
administrations, problems in the transnational application of sanctions). It is
interesting to highlight that part of the difficulties of enforcement are
linked to the fact that posted workers lack information about their rights and
entitlements. As a consequence, measures aimed at improving the implementation
of the PWD should not be focused on public administrations only, but should aim
to involve and better integrate posted workers at workplace level. Addressing the
problems The case
studies present a number of ways to address the problems and the issues raised
by the posting of workers. Since most of the public concern is focused on the
protection of workers’ rights and the enforcement of the regulation on posting,
these are the two crucial areas where it is possible to identify potential
solutions developed at national level by both the social actors and public
authorities. Collective
bargaining Voluntarist
and autonomous industrial relations system are those where the activity of the
social partners have contributed to develop contractual tools to deal with the
challenges they face because posting represent an area which remains substantially
outside the direct regulatory capacity of national bargaining systems. In fact,
the full integration of posted workers would require the extension of
representation to posted workers and foreign service providers as well as their
direct coverage by collective bargaining. These inclusion strategies are
difficult and have limited success rates, as the Danish experience shows with a
trade union density rate of around 5% among migrants and posted workers and a
collective bargaining coverage rate of less than 15% of foreign service providers.
Therefore, in both UK and Denmark, beyond the pressure exerted by conflict in
specific cases, a general indirect response has been sought by committing
employers to subcontract work only under the provision that the industry-wide
collective agreement is applied by service providers, including foreign firms. In the UK, the
issue of posted workers was at the centre of the 2010-2012 renewal of the
industry-wide agreement for the engineering construction sector (NAECI). After
difficult negotiations, the renewal incorporated a number of trade union
demands on posted workers. In particular, the agreements includes an appendix
on “Non-UK contractors and non-UK labour on engineering construction sites”,
which is a development of previous guidelines for members introduced by ECIA,
the sectoral employer association. The Appendix states clearly that posted
workers must be paid the same rates as UK employees and strictly in accordance
with the NAECI. Moreover, it endorses another key request by trade unions and
it seeks to ensure equal employment opportunities for UK workers on building
sites, also in presence of foreign subcontractors. The measures
envisaged by the Appendix include early trade union involvement in tendering
processes and meaningful consultations in the appointment of contractors; the
obligation for main contractors to ensure that non-UK contractors observe the
NAECI for relevant workers; the active support for membership of ECIA by non-UK
contractors (and a number of them are indeed members of ECIA, notably some of the
foreign suppliers involved in the above mentioned disputes); the provision to
non-UK contractors of UK of information about health and safety legislation; the
involvement of the UK public employment services in the preparation of new
large projects in order to favour recruitment of local unemployed workers; the encouragement
of non-UK contractors to enrol UK workers in they need extra workforce; the
request to consider the possible special needs of non-UK workers. Moreover, the
2010-2012 NAECI provides for a stronger auditing process for terms and
conditions of employment on sites, in order to ensure greater transparency and
full compliance with the NAECI. Finally, the agreement includes a provision for
guaranteeing workers working away from home paid travel to return 12 times a
year. Similarly, in
Denmark, the 2010 bargaining round for the construction sector has seen the
request by the trade union to establish some sort or subcontracting-chain
liability system for the main contractors in order to ensure that all
subcontractors, including foreign service providers, apply the relevant
industry-wide agreement. The Danish Construction Association (Dansk Byggeri) rejected
the unions demand, maintaining that such system would be in contrast with EU
rules on competition. Some different points of view were also present within
the trade unions, since it was debated whether such kind of liability should be
introduced by legislation and whether a pre-requisite for subcontracting-chain
liability was the establishment of a national minimum wage. Both social
partners expect that the discussion on joint liability systems will emerge
again in the 2012 renewal. It is worth noting that, in the meantime, such a
provision has been effectively introduced in a small segment of the
construction sector as, at the end of January 2011, the agreement between the
United Federation of Danish Workers (3F) and the employer association Danish
Craft (DHV) introduced the obligation for the employer to contract out work only
to companies covered by a Danish collective agreement. This agreement covers
around 500 small and medium-size enterprises in construction, handicrafts, and
the wood industry (EIRO 2011, New agreement to combat social dumping,
DK1103019I). In line with
the basic features of the Danish autonomous industrial relations system, even
the Danish adaptation to the ECJ Laval judgement has relied on the
inclusion of foreign service providers in collective bargaining, despite the
limitations the ruling seems to entail for the utilisation of industrial
action. In 2008, an amendment of the national law on the posting of workers was
passed with a view to ensure the possibility for Danish unions to use
industrial conflict to put pressure on foreign service providers and obtain the
application of Danish collective agreements and thereby granting equivalent
conditions for posted workers. Industrial action is possible only if the
foreign company is aware of the specific content of the agreement to be applied
and if the deal was signed by the most representative organisations in the
relevant industry and covers the whole Danish territory. In order to fully
implement the legislative provisions, social partners should clearly identify
in collective agreements the regulations and benefits which are relevant for
posted workers. The employers have however declined to do so and the unions
have identified the parts of the collective agreements in the relevant sectors
which should be applied to posted workers. Information
provided by the Danish Ministry of Employment on Working
in Denmark clearly states that “foreign enterprises that post their
employees to Denmark should be aware that Danish trade unions will try to
obtain a collective agreement on the pay and working conditions for the work
that is carried out in Denmark” and that, if they refuse to sign an adoption
agreement or to negotiate a specific deal, the “enterprise should then be aware
that the trade union will take industrial action”, which may include strikes,
boycotts and sympathy actions. In fact, the Danish central social partners – LO
(the Danish Confederation of Trade Unions) and DA (the Confederation of Danish
Employers) – have agreed that “posted employees from other EU Member States
should have the same rights as their Danish colleagues in similar jobs with
regard to pay and working conditions”. Accordingly, most major contractors in
the Danish Building industry, when making agreements with subcontractors,
include a special clause which binds sub-contractors “to pay their employees in
accordance with the contractual terms laid down for the building and
construction sector in Denmark”. Indeed, the “social partners recommend that foreign
employers join the relevant Danish employers’ organisation, thus committing
themselves to respect Danish pay and working conditions”; for instance, “the
Danish Construction Association has many foreign enterprises among its members”
(Danish Ministry of Employment 2009, p. 8). Besides these
examples of regulation by collective bargaining, all the case studies
illustrate that monitoring by trade unions is very important and is a crucial component
in monitoring employment and working conditions at workplaces. It can become
particularly important in certain situations, but everywhere unions have proved
to be a key element in pointing to potentially illicit situations and they are
also important in supporting posted workers in individual disputes. A strengthened
role of trade unions in ensuring that posted workers are granted appropriate
employment and working conditions was suggested, for instance, in a recent
report by the European Affairs Committee of the French National Assembly
(Assemblée Nationale, Rapport
d’information sur le détachement des travailleurs, February 2011) Monitoring and administrative tools Monitoring tools in Belgium and Denmark were
introduced in order to improve the quality of the information on posting and
mainly to enhance the enforcement of regulation and better contrast abuse and
violations. The LIMOSA system provides an important and integrated dataset that
can be used by the different public administrations which are responsible for
the enforcement of labour and social security regulations in order to
concentrate inspections according to a risk assessment. This has reportedly
improved the cost-effectiveness of checks and controls and increased detection
rates of violations. In Denmark, the RUT-Register was eventually
introduced following the unsatisfactory results of other monitoring tools. The
recent introduction of the online system and of the joint liability of
utilising companies to check effective registration of the foreign service
providers, like in the case of LIMOSA, are considered important steps in the
direction of respectively reducing the administrative burdens for posting firms
and strengthening enforcement of rules. It is important to note that the RUT-Register is
also meant to enhance the autonomous capacity of social partners to regulate
the employment of posted workers. In fact, the RUT-Register allows trade unions
to access information on the activity of foreign service providers in Denmark,
in the same way as the CVR-system provide details on companies established in
Denmark. Trade unions are thus able to approach foreign service providers with
a view to demand the application of collective agreements. Whether this feature
can effectively support the inclusion of foreign service providers in the
autonomous Danish labour relations system or rather may discourage registration
by foreign operators, as some observers have underlined, will be seen in the
future. At this stage, it is interesting to see that
both public administrations and the social partners are quite confident that
the present regulatory and enforcement framework shall both preserve the Danish
autonomous system and effectively address the issues and problems raised by
posting. In fact, the changes in the Danish Act on Posting should, on one side,
ensure the viability of industrial action and therefore confirm the ‘Danish
approach’ to the regulation of the employment relationship of posted workers.
On the other side, the renewed RUT-Register, with the introduction of the
online procedure and the establishment of the joint liability of utilising
Danish firms, should enhance enforcement. The RUT-Register should in fact
provide relevant information to enforcing authorities with a view to
effectively fight abuse and violations and contrast illegal transnational
activities. In the stakeholders’ view, such promising national arrangements are
then complemented by the start of the pilot project of the IMI module on
posting which should improve transnational administrative cooperation and
contribute in this way to further strengthen the enforcement of the rules on
posting. Besides the potential of monitoring tools, the
case studies draw the attention on additional administrative initiatives which
can contribute to improve the enforcement of existing regulations. France, for
instance, has tried to develop specific measures and a methodological support
for labour inspection services especially devised for the posting of workers.
Special guidelines, the translation of relevant documents, the activation of
training initiatives and the implementation of European projects to exchange
best practices are measures which have been recently taken in France. Also a
network of regional liaison offices has been established alongside the central
national office (Strasbourg for Germany, in the North of France for Belgium, in
Perpignan and Bayonne for Spain, in Nancy pour Luxembourg and in Chambéry for
Italy) in order to improve the provision and exchange of information on
posting. Several bilateral agreements have been signed in recent years to
support information exchange and better enforcement with Germany (2001 and
2008), Belgium (2003), Netherlands (2007), Bulgaria (2008), and Spain (2010),
while some others are still under negotiation (notably with Luxembourg and
Poland) The
recent Rapport
d’information sur le détachement des travailleurs of February 2011
prepared by the European Affairs Committee of the French National Assembly and
mentioned above includes a number of proposals regarding possible interventions
in the regulatory framework on posting, in order to cope with the present
difficulties in protecting workers’ rights and ensure enforcement. Such
measures include interventions to strengthen the application of collective
agreements, the introduction of a social clause in public tenders, the
introduction of a joint liability scheme between main contractors and
subcontractors, clearer criteria to distinguish between employees and
self-employed workers, and the protection of human dignity in terms of working
conditions and housing. Besides such provisions, however, the report devotes
great attention to the administrative dimension of enforcement by underlining
the importance of closer and more effective cooperation between all the
relevant national enforcement bodies, of the circulation of information between
MSs, including with a view to fight letterbox companies, of improved information
systems for workers and firms on the conditions applicable to posted workers,
of the integration of a specific role for trade unions in the monitoring and
enforcement systems, and of the introduction of adequate sanctions which can be
applied at trans-national level. The position
of the stake holders and the policy options In general,
the case studies show that there is a widespread dissatisfaction with the
implementation and enforcement of the PWD and the need for action emerge as a
common element across cases and stakeholders, of course with varying degrees of
urgency and different focus. The only notable exception is the UK. Here trade
unions demand a change in the rules of posting and focus their attention on
national-level regulation, notably by asking the establishment of collective
agreements as a source of minimum protections as for Art. 3.1 PWD, and, as far
as the implications of ECJ rulings are concerned, they request that the
possibility to use strikes in disputes over posting be confirmed. The
employers, especially the Confederation of British Industry (CBI), are satisfied
with both the content and the implementation of the PWD, while the government is
especially concerned with avoiding further red-tape for companies and therefore
it is not particularly keen on intervening in the field of posting with new
regulations. Despite the
common demands for intervention, stakeholders maintain that any new measures
must be carefully considered, in order not to ‘worsen’ the present balance of
interest. While this position is generally voiced by employer representatives,
notably for fears of new restrictions and administrative burdens, in some
cases, like in Denmark, unions share such attitude, for the opposite concern
that the new interventions – including in the field of the right to strike –
may imply a reduction in the protections of workers and further challenges for
the Danish autonomous system of labour regulation. In fact, Danish
stakeholders, despite the relevance of posting in the national debate, are the
most cautious in supporting any legislative interventions, essentially because
they are confident that the present situation at national level enables the
social partners and the public authorities to effectively regulate posting. Turning to the
content of the possible legislative review of the PWD, trade union
representatives are more supportive of substantial interventions, also in the
areas covered by Art. 1-3 PWD; however, the strengthening of the enforcement of
the PWD is indeed a quite general request, with the qualification by the
employer representatives that it should take place with the lowest costs and
with the lowest possible barriers to transnational service provision and by the
trade unionists that it should be accompanied by strengthened worker protections. Concluding
remarks The case
studies underline that the posting of workers in the framework of the
transnational provision of services presents a number of critical aspects. This
is essentially because posting by definition lies, at least partly, outside the
scope of the regulatory capacity of national actors, both in legal and
practical terms. While it certainly brings important business opportunities for
posting and utilising firms, its peculiar regulatory framework, on one side,
confronts national actors with new challenges and, on the other, opens room for
opportunistic and elusive behaviours. This second
feature – the room for opportunistic behaviours basically linked to information
asymmetries and weak monitoring and enforcement tools – operates as a
multiplier of the concerns of social actors committed to protect the interest
of workers and of public authorities responsible for the enforcement of labour
and social security legislation. In order to redress such situation, irrespective
of whether changes in the substantive regulation of posting are considered
useful, it is important to act for closing such information asymmetries and
strengthening monitoring and enforcement tools. Infringements and violations in
the area of posting are not dissimilar of what happens with undeclared work and
irregular employment, sometimes involving migrant workers, but they are more
difficult to detect and sanction because of their often ‘social seclusion’ and
their special regulatory regime, which requires, among other things, the
cooperation of different public authorities, both within and across national
borders. More
information on posting is needed; a better integration of posted workers and
transnational service providers in the social and economic systems of the
receiving countries can be greatly useful to avoid abuse and violations,
strengthened cooperation between public administrations is essential to make
the regulatory framework effective. Not all the issues raised by posting can be
solved by such measures. The challenges represented by increased transnational
competition, which can also involve some degree of labour cost competition,
will remain, both for domestic production systems and for industrial relations
and the regulation of labour. But, as long as social actors and public
authorities have the instruments to monitor and ensure that common minimum
protections are effectively enforced, such competition will operate in an
environment where domestic and foreign service providers operate under
comparable and fair conditions. In this perspective, posting can play an
important role in the integration of European economies and societies. ANNEX 4: Pilot project on the use of a
separate and specific application of the Internal Market information System
(IMI) in the area of posting of workers – first statistics and user feedback In line with the Council Conclusions of 7
March 2011[7]
a pilot project on electronic information exchange using a separate and
specific application of the Internal Market Information System (IMI) in the
area of posting of workers started on 16 May 2011. The aim of the pilot project
is to test in practice the operability and usefulness of an IMI module used for
the implementation of the administrative cooperation provisions of the
Directive. The Commission will report to the Council on the results of and
experiences with the use of the module at the latest within one year after the
launching of the pilot project. After four and a half months, the following
preliminary information can be provided: ·
After a slow start, the use of IMI has picked up
considerably; ·
Until now, 15 Member States have send requests
and 24 Member States have received requests; ·
Response times are still relatively long
(compared to general IMI response times for the other modules) with 60% of all
requests taking more than 4 weeks to receive a reply; ·
The Commission received positive user feedback. 1. Statistics a. Number of requests for information
submitted per month - IMI Posting of Workers module b. Sending and recipient countries Member State || Number of requests sent || || Member State || Number of requests received BE || 71 || || RO || 31 FR || 53 || || HU || 25 AT || 47 || || PT || 24 FI || 22 || || PL || 23 IT || 13 || || DE || 17 ES || 5 || || SK || 16 LV || 3 || || EE || 14 SI || 3 || || ES || 13 NO || 2 || || NL || 10 DE || 2 || || CZ || 9 HU || 2 || || BG || 8 PT || 2 || || SI || 8 LT || 1 || || CY || 6 NL || 1 || || LT || 4 PL || 1 || || IT || 4 || || || LV || 4 || || || UK || 3 || || || LU || 2 || || || BE || 2 || || || DK || 1 || || || FI || 1 || || || FR || 1 || || || MT || 1 || || || SE || 1 Total: || 228 || || Total: || 228 c. Time to respond This graphic is based on 150 completed
requests. 2. User feedback From Finland: IMI made our lives
easier. Finland has been using the posting module since May 2011 and sent nine
requests via IMI so far, mainly to Estonia and Poland. Finland has not received
any requests of information yet. Finnish labour inspectors have occasionally
difficulties with foreign employers because the employers do not give the
needed documents to labour inspectors. The lacking documents are the basic
documents needed for the labour inspection purposes, for example, employment
contracts of posted workers, records of hours worked in Finland and records of
wages paid for work in Finland. In these cases Finland has used IMI to ask for
help from Estonian and Polish authorities. Estonian and Polish authorities have
contacted the employer and asked for the documents. Finland is very grateful
for the help it has got so far and thinks that IMI is a good system which makes
it easier to contact foreign authorities. It is great that the Commission is
developing IMI technically further. From Hungary: An Example: The Austrian
tax office wanted to check Hungarians working on construction in Austria, so it
sent us a request asking about the lawfulness and the duration of the
posting as well as about the activity and the contact details of the
posting enterprise. The Austrian authority also attached copies of
the identity cards of the workers, which helped us a lot in answering
their questions. We asked our local inspectorate to carry out control
on field and also contacted the National Health Insurance Fund Administration in
order to be able to answer all the questions. All the information exchange
took around 20 days, which is very fast compared to our previous methods. Positive experiences: The exchange of
information through IMI is a lot more efficient and faster then previous
methods based on exchange of letters. It is cheaper, the documents need only to
be scanned and attached without being registered. The request arrives to the
competent person immediately, because it is a lot easier to choose the
competent authority of the other Member State. Without knowing national rules
it had been very difficult to find out to whom send our questions, today it
becomes very easy to do through the searching facility of IMI. Even if we don't
choose the right authority, our partners can easily forward our request or
split it and forward only the half of it to the competent authorities. We are
very happy that since IMI we don't need to send several letters to several
authorities in other Member States. The controlling activity of IMI coordinators
ensures that our partner authorities don't forget about our requests and answer
them every time. From Austria: Our institution, the
Vienna Health Insurance Fund (wage and social dumping control centre) has
already sent ten requests to authorities in different countries via IMI. Due to
our field of action all the questions concerned posting companies. To meet our
legal obligations we need to know the owner of the enterprise respectively the
external representative of the enterprise. For example we have put this
question to the Hungarian authority and have received the answer within a few
days. Without this information we would not have been able to perform our task.
From our point of view IMI has made communication much easier and even quicker
as our experience shows that the authorities really make an effort to answer
the questions as quickly as possible. IMI has become an essential tool for our
work. From Austria: The financial police
of the Austrian tax administration controls many workers every day. Because of
increased mobility and the freedom to provide services more and more workers
from all regions of Europe are posted to Austria. IMI now offers an electronic
tool to check the information given by the posted workers. Recently, my team
checked Italian workers on a construction site. The workers claimed to have
worked for the Italian company for a while already, but not all workers could
provide the "A1"-document. Through an IMI-request we found out that
not all workers were employed by the Italian company. The big advantage of IMI
is that it overcomes the language barrier by offering structured and
pre-translated questions and answers. Using IMI we can ensure that workers get
their rights and employers can be held accountable. ANNEX 5: Administrative burden and other
costs resulting from package B and option 7 (overview) 1. Member States and/or social partners Content package B and option 7 || Relevant text of the existing Directive || General implementation costs || Administrative burden resulting from new Information Obligations (IO) in EU law (compared to existing Directive) || Costs which already occur (business as usual) 1. Access to information (package B) || || || || MS shall provide transparent and easy accessible information re applicable working conditions to posted worker set by law and collective agreements (to be provided by Member States or social partners). Information shall be provided: - via national websites - summarised leaflet - in languages other than national language || Each Member State shall take the appropriate measures to make the information on the terms and conditions of employment referred to in Article 3 generally available. || - || The existing Directive did neither foresee various means for dissemination of information nor various languages. Therefore, new IOs result from: - the leaflet - other language At the same time, improved information will reduce costs for companies since the necessary information will be easier accessible. || Some MS already provide information in other languages; as well as leaflets 2. Administrative cooperation (package B) || || || || Reply to information requests, carry out checks, inspections and investigations (if necessary) regarding compliance with Directive; as well as re good conduct and infringement of applicable rules in sending MS || Member States shall make provision for cooperation between the public authorities which, in accordance with national legislation, are responsible for monitoring the terms and conditions of employment referred to in Article 3. Such cooperation shall in particular consist in replying to reasoned requests from those authorities for information on the transnational hiring-out of workers, including manifest abuses or possible cases of unlawful transnational activities. || No significant new costs. Existing costs will be reduced through the use of IMI. || No new IO compared to the existing Directive. || To a large extent this seems to be business as usual; compared to the Directive this option specifies that checks/inspections/investigations have to be carried out in order to reply to requests. MS shall reply in 2 weeks; in 24 hours in case of urgency || - || No significant costs. || No new IO compared to the existing Directive. || The content of the obligation to investigate and to reply is the same than before. However, in a limited period of time. This may require specific arrangements by MS re organisation and staff of the liaison offices. MS shall use IMI to exchange information electronically || - || Implementation costs are not significant. The web-based application as well as part of the training is provided by the EC. Compared to the status quo IMI will facilitate work of national administrations (paperwork; predefined questions; translation) and reduce costs linked to replying to information requests. || No new IO compared to the existing Directive. || - 3. Inspections (package B) || || || || MS shall ensure that effective and adequate inspections are carried out; MS shall base inspections on a risk assessment. Derogations in accordance with national law/practice as far as national labour inspectorates are not responsible for the controls: - inspections can be delegated to social partners (e.g. Nordic MS) - establish or maintain (alternative) arrangements which guarantee the respect of working conditions of posted workers (e.g. UK) || 5 Member States shall take appropriate measures in the event of failure to comply with this Directive. They shall in particular ensure that adequate procedures are available to workers and/or their representatives for the enforcement of obligations under this Directive. || No significant new costs. The risk assessment – as far as it does not exist already in MS – will contribute to more effective and focused inspections and reduce implementation costs. || No new IO compared to the existing Directive. || The existing Directive implies that MS carry out inspections. 4. Protection of workers (package B) || || || || Complaint mechanism for posted workers || - || No significant costs, depending on implementation. || No new IO compared to the existing Directive. || Mechanism exists in some MS; requires nomination of responsible authorities dealing with complaints. 5. Execution of fines (package B) || || || || - Cross-border enforceability of administrative fines || - || No significant costs. || - || Nominating responsible authorities dealing with requests from other MS (existing bodies may be nominated). 6. Alert mechanism (option 7) || || || || Notification obligation for situations causing serious damage or grave disruption, or creating social unrest in the Member States concerned || - || - || New IO: Notification from MS to EC and other concerned MS No significant costs due to very limited number of expected cases. || - 2. Companies Content option 4 || Relevant text of the existing Directive || General compliance costs || Administrative burden resulting from new Information Obligations (IO) in EU law (compared to existing Directive) || Costs which already occur (business as usual) 1. Access to information (package B) || || || || MS shall provide transparent and easy accessible information re applicable working conditions to posted worker set by law and collective agreements (to be provided by Member States or social partners). Information shall be provided: - via national websites - summarised leaflet - in languages other than national language || Each Member State shall take the appropriate measures to make the information on the terms and conditions of employment referred to in Article 3 generally available. || More transparent information in more languages will reduce costs for companies, in particular for SMEs. || No new IO for companies compared to the existing Directive. || At the moment not all MS provide transparent information in different languages by different means of dissemination. 2. National control measures (package B) || - || || || MS may impose: - prior declaration (limited number of information) - obligation to keep certain documents for inspections - obligation to designate a representative or contact person with legal capacity to present and negotiate (if need be) with relevant social partners in accordance with national law/practice However, this option will limit MS possibilities to require certain information and/or documents as it also clarifies what MS may not impose. || - || - || No new IO compared to the existing Directive imposed by EU law. Package B will limit the number of information MS may ask within the prior declaration. Therefore, the option reduces administrative burden for companies. The same is valid for the possibility to ask for certain documents. The possibility to designate a representative to negotiate with relevant social partners is only relevant for a very limited number of MS in accordance with their national industrial relation systems. || In accordance with the existing jurisprudence of the CJEU MS may already ask for a prior declaration and for keeping certain documents for inspection purposes. Currently, 18 MS ask for a prior declaration covering approximately two third of the postings. With regard to documents a number of MS have already such an obligation. Furthermore, Directive 91/533 already requires a document during the posting which will be taken into account. 3. Inspections (package B) || || || || MS shall ensure that effective and adequate inspections are carried out; MS shall base inspections on a risk assessment. Derogations in accordance with national law/practice as far as national labour inspectorates are not responsible for the controls: - inspections can be delegated to social partners (e.g. Nordic MS) - establish or maintain (alternative) arrangements which guarantee the respect of working conditions of posted workers (e.g. UK) || 5 Member States shall take appropriate measures in the event of failure to comply with this Directive. They shall in particular ensure that adequate procedures are available to workers and/or their representatives for the enforcement of obligations under this Directive. || No significant costs; risk assessment will better target controls on problematic sectors and firms. || No new IO compared to the existing Directive. || The existing Directive implies that MS carry out inspections. 4. Joint and several liability (package B) || || || || MS shall ensure that: Contractor can be held liable to pay net minimum wage instead of direct subcontractor || || General compliance cost resulting from a possible change in behaviour of companies while selecting subcontractors. || No new IO. || Exists in some MS. ANNEX 6: Quantification of administrative
burden and other costs resulting from package B and option 7 1. Summary Costs for Member States: Package B causes additional administrative burden with regard to
access to information (required translation and leaflet) of approximately
90,000 EUR (one-off costs) and 180,000 EUR (repetitive costs per year) in total
for EU-27. The use of IMI will reduce costs. Option 7 causes additional
administrative burden with regard to the foreseen alert mechanism. Such a
burden should not be significant due to the very limited number of expected
cases. Costs for companies: There is no additional administrative burden for companies linked
to package B and option 7. Package B entails additional general compliance
costs of 2 million EUR in total for 27 Member States resulting from the
provision on joint and several liability. Provisions regarding inspection will
not cause new costs. The risk assessment may shift inspections and respective
costs to risk sectors and situations. General compliance costs should decrease
since package B will provide for better access to information and limit
administrative requirements of Member States (national control measures). Benefits:
Costs are balanced by benefits for Member States, companies and posted workers
since they contribute to better enforcement of the Directive and a more level
playing field. Member States will benefit from the cross-border execution of
fines. In detail: 2. Overall administrative burden and
other costs in EU 27 2.1. Access to information (package B) Impact on Member States || Impact on companies Increase in administrative burden resulting from new IO (requirement of a leaflet and additional language) || Reduction of costs since information regarding the applicable working conditions are easier accessible New requirements compared to the
existing Directive: According to Article 4(3) of the Directive,
Member States must take the appropriate measures to provide information on the
applicable conditions of employment to posted workers set by law, regulation or
collective agreement in accordance with Article 3. This implies that Member
States have to provide this information at least in their national language
through one appropriate mean (e.g. website). Package B foresees that Member
States provide this information at least in one additional language (other than
the national) and through websites and a summarised leaflet in a transparent
and clear manner. Since all Member States provide information via websites,
this can be taken as the status quo (business as usual). The leaflet is an
additional requirement. It is necessary since not all posted workers have
access to internet. Equally not all posting companies may be used to find
information on the internet (i.e. SMEs). Benefits:
More transparent, clearer and easier accessible information will produce
benefits for posted workers, companies and Member States. Companies will save
costs because it will be easier to find the relevant information. Posted
workers will be better informed about their rights and Member States will
benefit from better compliance with the applicable working conditions. Costs: There
is additional administrative burden for Member States resulting from these new
Information Obligations. Member States will have to translate the information
in at least one language other than the national language (one-off costs).
Translation costs will be partially repeated when applicable working conditions
change (repeated costs). The leaflet has to be produced with existing
information from the website (one-off costs) and it has to be regularly updated
when applicable working conditions change (repeated costs). The following action is required: Description || Type of information obligation/goldplating || Required administrative action || Target group || Type of cost 1. Translation of the information || Not labelling information for third parties || Translation || Public administration || One-off 2. Translation of the information || Not labelling information for third parties || Translation of updated information || Public administration || Repetitive (periodical) 3. Designing the leaflet || Not labelling information for third parties || Designing information materials || Public administration || One-off 4. Printing of the leaflet || Not labelling information for third parties || Updating information materials and copying || Public administration || Repetitive (periodical) Quantification of costs: ·
The evaluation of the costs linked to the first
translation of the information (item 1, one-off) is calculated considering the
number of keystrokes (characters + spaces) in the Belgian information website multiplied
by the average European tariff per keystroke usually applied for professional
translations of legal text (for 1 language). The Belgian information web site
was selected as the benchmark since it is regarded as best practice in communication
on posting[8].
Therefore, this reference reflects a conservative approach. The rate for
translation has been based on a review of a number of internet based
translation services[9].
Both parameters (keystrokes and translation rates) have been increased by
20-40% to adopt a conservative approach. ·
The costs for translation of updated information
(item 2, repetitive) are estimated to be 50% of the one-off costs per year. ·
The assessment of costs linked to the designing
of the leaflet (item 3) is calculated considering two working days of a PA
employee as the average time necessary to produce information materials on
posting. The approach follows the EU Standard Cost Model (SCM). ·
The costs for updating the leaflet (item 4,
repetitive) are calculated considering one working day of a PA employee. ·
The costs linked to the printing of the leaflet
(item 4, repetitive) is calculated considering three colours printing, double
sided leaflet, on gloss paper. The rate for translation has been based on a
review of a number of internet based printing services (Ismeri). The cost has
been increased by 40% to take a conservative approach. This is calculated at
EUR 1,400 per 10,000 leaflets and for a total number of 1 million leaflets. Description || Target group || Tariff || Type of cost || Total administrative cost (see spreadsheet for details per country) 1. Translation of the information || Public administration || Internet based translation services, cost per keystroke, one language (Ismeri) || One-off || EUR 81,000 2. Translation of the information || Public administration || Internet based translation services, cost per keystroke, four languages (Ismeri) || Repetitive (annual) || EUR 40,500 3. Designing the leaflet || Public administration || Two working days at labour costs for public administrations (Labour Cost Survey 2008, NACE rev. 2, O84, hourly rate per MS, EUROSTAT) || One-off || EUR 8,871 4. Printing of the leaflet || Public administration || Internet based printing services, cost per 10,000 leaflets (Ismeri) || Repetitive (annual) || EUR 140,000 2.2. Administrative cooperation (package
B) Impact on Member States || Impact on companies No new administrative burden. The use of IMI to exchange information electronically will reduce costs. || Reduction of costs since better administrative cooperation will to a certain extent limit national control measures New requirements compared to the
existing Directive: (i) Member States shall reply to
information requests, carry out checks, inspections and investigations (if
necessary) regarding compliance with the Directive; as well as good conduct and
infringement of applicable rules in sending Member States. Already under the
existing Directive Member States have to reply to information requests. This
implies necessary checks, inspections and investigations in this respect
(business as usual). (ii) Member States shall reply in 2 weeks;
in 24 hours in case of urgency: The content of the obligation to investigate
and to reply is the same than before. (iii) Member States shall use IMI to
exchange information electronically. This is a new obligation for Member
States. However, implementation costs are not significant in this respect. The
web-based application as well as part of the training is provided by the EC. Compared
to the status quo IMI will facilitate work of national administrations
(paperwork; predefined questions; translation) and reduce costs linked to
replying to information requests. Benefits:
There are benefits for Member States, companies and posted workers. Better
administrative cooperation and quick replies to information requests will
contribute to better enforcement of the existing Directive. Better
administrative cooperation might reduce the need for Member State to relay on
national control measures and hence might reduce costs for companies. Member
States will benefit from the use of IMI (less paperwork; use of predefined
questions; less translation). 2.3. Inspections (package B) Impact on Member States || Impact on companies No new administrative burden/costs. Better risk assessment may help to better target problematic sectors or companies. || No new administrative burden/compliance costs resulting from this aspect. Risk assessment may shift inspections to companies in problematic sectors or with a bad record. New requirements compared to the
existing Directive: The existing Directive (Article
5) implies that Member States carry out inspections (business as usual). Providing
for more effective and adequate inspections does not imply an increase in
controls, inspections and respective costs or resources compared to the status
quo. It depends very much on the specific situation of each Member State how
effective and adequate inspections can be ensured (organisation of labour
inspectorates, priority of tasks etc.).[10]
Basing inspections on a risk assessment will make inspections more effective
and reduce costs for companies in non-risk sectors/situations. Reinforced
controls under risk assessment might increase compliance costs for firms in
problematic sectors or when there is a bad record. Derogations are foreseen in
accordance with national law and practice as far as national labour
inspectorates may not be responsible for the controls in some Member States.
Such Member States should establish or maintain (alternative) arrangements (e.g.
in collaboration with social partners) which guarantee the respect of working
conditions of posted workers. Benefits:
Member States, companies and posted workers will benefit from more effective
and adequate inspection since they will contribute to a better compliance with
the Directive and a more level playing field. The required
risk assessment – as far as it does not exist already in Member States – will
contribute to more effective and focused inspections and reduce overall implementation
costs. 2.4. Complaint mechanism for posted
workers (package B) Impact on Member States || Impact on companies No new administrative burden. No significant implementation costs, depending on implementation. || No additional administrative burden or costs. New requirements compared to the
existing Directive: The existing Directive foresees
that Member States shall in particular ensure that adequate procedures are
available to workers and/or their representatives for the enforcement of
obligations under this Directive (Article 5). In order to comply with this
provision it is sufficient if Member States grant posted workers access to
Courts in order to claim their rights. However, a specific easy accessible
complaint mechanism for posted workers is not foreseen in the existing
Directive. Benefits: A
specific complaint mechanism will facilitate enforcing posted worker's rights
when disputes with their employers about individual employment contracts arise.
Member States will benefit from better enforcement of the Directive. Costs: The
complaint mechanism does not imply additional costs for Member States (e.g.
existing bodies could be nominated to fulfil the task). 2.5. Execution of fines (package B) Impact on Member States || Impact on companies No new administrative burden. No significant implementation costs. || No additional administrative burden or costs. New requirements compared to the
existing Directive: The existing Directive does not
entail any provisions regarding the cross-border enforceability of
administrative fines. Furthermore, the current EU regulatory framework does not
provide effective means to enforce administrative sanctions in other Member
States (see for instance the Council Framework Decision 2005/214/JHA of 24
February 2005 on the application of the principle of mutual recognition to
financial penalties and the Council Regulation (EC) No 44/2001 of 22 December
2000 on jurisdiction and the recognition and enforcement of judgments in civil
and commercial matters). Benefits:
Member States, companies and posted workers will benefit from a better
compliance with the existing Directive and a more level playing field. Member
States will benefit from enforced fines. Costs: The
execution of fines does not imply significant additional costs since Member
States have already established the requisite bodies in related areas (e.g. Council Framework Decision 2005/214/JHA) in the past. 2.6. Alert mechanism (option 7) Impact on Member States || Impact on companies New administrative burden linked to notification obligation for situations causing serious damage or grave disruption, or creating social unrest in the Member States concerned || No additional administrative burden or costs. New requirements compared to the
existing Directive: Option 7 will entail a notification
obligation for Member States regarding situations causing serious damage or
grave disruption, or creating social unrest in the Member States concerned. The
existing legal framework does not entail such an obligation. The notification
will be submitted to the European Commission and other concerned Member States. Benefits:
The European Commission and other Member States will be made aware of situations causing serious damage or grave disruption, or creating
social unrest in the Member States concerned. Respective measures can be taken
if appropriate. Costs: There
will be no significant additional costs since the number of potential cases is
expected to be low. 2.7. Joint and several liability
(package B) Impact on Member States || Impact on companies No additional administrative burden or costs. || No additional administrative burden. General compliance costs of 5.7 million Euro. Since the main receiving Member States have already systems of joint and several liability in place (representing 3.7 million Euro) only 2 million Euro are in fact new compliance costs for companies. New requirements compared to the
existing Directive: The existing Directive does not
entail a provision re joint and several liability. Package B will oblige Member
States to provide for the liability of companies for minimum wage claims of
posted workers of their subcontractors. Benefits:
Posted workers employed by subcontractors will be able to hold liable the
contractor instead of their direct employer for minimum wage claims. Member
States and companies, in particular SME in sending and receiving Member States
which are sensitive to unfair competition, will benefit from better enforcement
of the existing Directive, a more level playing field and fairer competition. Costs: The
liability provision does not entail an Information Obligation and will not
produce administrative burden.[11]
It entails additional general compliance costs of 2 million EUR resulting from
a possible change in behaviour of companies while selecting subcontractors (5.7
million overall minus 3.7 million for Member States which have already a system
of joint and several liability in place: AT, DE, ES, FI, FR, IT, NL). The proposed measures focus on preventive
measures aimed at a risk selection of subcontractors. Companies might analyse
whether there is a risk that the subcontractor will not comply with its minimum
wage obligations in the host Member State. In line with the OECD Guidelines for
Multinational Enterprises, responsible business conduct and governance should
at least imply carrying out risk based due diligence while selecting
subcontractors. Quantification of costs: The time needed to monitor the application
of the rules on minimum rates of pay by subcontractors can be estimated as fifteen
minutes of work per posting at labour costs for business support activities
(Labour Cost Survey 2008, NACE rev. 2, N82, hourly rate per MS, EUROSTAT).[12] The number of postings is
approximately 1 million. Description || Target group || Tariff || Type of cost || Total administrative cost (see spreadsheet for details per country) Joint and several liability/risk based selection of subcontractors || Companies || Labour Cost Survey 2008, NACE rev. 2, N82, hourly rate per MS, EUROSTAT || Repetitive || 5.7 million 2.8. National control measures (package
B) Impact on Member States || Impact on companies No additional administrative burden or costs. || No additional administrative burden or costs resulting from EU law. Package B will reduce Member States possibilities to impose administrative requirements compared to the current situation and reduce administrative burden for companies. New requirements compared to the
existing Directive: The existing Directive does not
entail any provisions regarding national control measures. Package B will not
impose any new obligations in this respect on Member States. Package B will
clarify the possibilities of Member States to impose such measures. It provides
that Member States may impose a prior declaration, the obligation to keep
certain documents for inspections and the obligation to designate a
representative or contact person with legal capacity to present and negotiate
(if need be) with relevant social partners in accordance with national
law/practice. These requirements are effective means for Member States in order
to ensure compliance with the Directive. At the same time this option clarifies
what Member States may not impose on service providers. Simple prior declaration before the
posting: In accordance with the existing
jurisprudence of the CJEU Member States may already ask for a prior
declaration. Currently 16 Member States impose mandatory ex-ante notification
obligations on service providers and two Member States on the service
recipient. Another two Member State impose notification obligations on service
provider vis-à-vis the service recipient. Package B will limit the extent of
information Member States may ask within the prior declaration. Therefore, as
far as Member Stats require more information at this stage, the option reduces
administrative burden for companies. Obligation to keep certain documents for
inspections: The same is valid for the possibility
to ask for certain documents. This package will reduce Member States
possibilities to require certain documents for inspections. Package B will take
into account the obligations stemming from Directive 91/533 which already
requires a document during the posting. Consequently, this option will reduce
administrative burden for service providers. Designate a representative to negotiate
with social partners: The possibility to designate
a representative to negotiate with relevant social partners is only relevant
for a very limited number of MS in accordance with their national industrial
relation systems. Benefits:
Package B will provide for legal clarity for Member States and companies with
regard to possible national control measures and respective administrative
requirements on service providers. Costs:
Administrative burden for companies based on national law will be reduced.
However, due to the lack of information regarding the quantitative impact of
the very diverse national administrative requirements in place it is impossible
to quantify the reduction of administrative burden. Concerning the prior declaration, were the
remaining seven Member States to introduce such a mechanism the respective
administrative burden for companies can be calculated. The following action is required: Description || Type of information obligation/goldplating || Required administrative action || Target group || Type of cost 1. Notification of posting || Notification of activity || Submitting the information to the relevant authorities || Companies (sending) || Repetitive Goldplating ·
The notification of posting is based on the case
studies of LIMOSA and RUT-Register (Ismeri). This considers 15 minutes as the
average time used per one posting by a business consultant.[13] ·
The number of postings is approximately 1
million. Quantification of (maximal) costs through
goldplating for 27 Member States: Description || Target group || Tariff || Type of cost || Total administrative cost for 27 MS 1 Notification of posting || Companies (sending) || Ismeri case studies, fifteen minutes per posting at labour costs for business consultants (Labour Cost Survey 2008, NACE rev. 2, M70, hourly rate per MS, EUROSTAT) || Repetitive || EUR 8 million per year ·
Currently 16 Member States impose mandatory ex-ante
notification obligations on service providers and two Member States on the
service recipient. Another two Member States impose notification obligations on
service providers vis-à-vis the service recipient. These 20 Member States
represent approximately 75% of the received postings. These Member States
represent 6 million EUR of overall 8 million EUR administrative burden through
possible goldplating. ·
The remaining seven Member States (IE, EE, IT,
NL, PT, SE, UK) represent approximately 25% of the overall received postings in
2009. If these Member States would use the possibility for goldplating this
would cause additional administrative burden of 2 million EUR. 3. Administrative burden and other costs
by Member State Country || No || Type of IO/compliance costs || Required admin. actions || Target group || A. Tariff || B. Time or units || C. Price A.*B. || Num. of actions per year || Type of cost || Total admin. costs Austria || 1 || Non labelling information for third parties || Designing leaflet || PA || 25.23 || 16 || 403.68 || 1 || one-off || 2,018 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 40,083 || per year || 5,612 11,505 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 40,083 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 24.69 || 15 || 6.17 || 40,083 || per year || 247,413 LC in PA || || || || || || || || || || 25.23 || || || || || || || || || || High LC || || || || || || || || || || 46.31 || || || || || || || || || || Low LC || || || || || || || || || || 24.69 || || || || || || || || || || || || || || || || || || || || Belgium || 1 || Non labelling information for third parties || Designing leaflet || PA || 34.68 || 16 || 554.88 || 1 || one-off || 555 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 114,972 || per year || 16,096 46,260 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 114,972 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 32.80 || 15 || 8.20 || 114,972 || per year || 942,768 LC in PA || || || || || || || || || || 34.68 || || || || || || || || || || High LC || || || || || || || || || || 59.23 || || || || || || || || || || Low LC || || || || || || || || || || 32.80 || || || || || || || || || || || || || || || || || || || || Bulgaria || 1 || Non labelling information for third parties || Designing leaflet || PA || 3.44 || 16 || 55.04 || 1 || one-off || 55 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 2,800 || per year || 392 4,739 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 2,800 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 3.11 || 15 || 0.78 || 2,800 || per year || 2,177 LC in PA || || || || || || || || || || 3.44 || || || || || || || || || || High LC || || || || || || || || || || 5.83 || || || || || || || || || || Low LC || || || || || || || || || || 3.11 || || || || || || || || || || || || || || || || || || || || Cyprus || 1 || Non labelling information for third parties || Designing leaflet || PA || 22.29 || 16 || 356,64 || 1 || one-off || 357 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 2,381 || per year || 333 143 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 2,381 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 8.26 || 15 || 2.07 || 2,381 || per year || 4,916 LC in PA || || || || || || || || || || 22.29 || || || || || || || || || || High LC || || || || || || || || || || 14.23 || || || || || || || || || || Low LC || || || || || || || || || || 8.26 || || || || || || || || || || || || || || || || || || || || Czech Rep. || 1 || Non labelling information for third parties || Designing leaflet || PA || 10.87 || 16 || 173.92 || 1 || one-off || 174 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 16,988 || per year || 2,378 14,244 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 16,988 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 9.47 || 15 || 2.37 || 16,988 || per year || 40,219 LC in PA || || || || || || || || || || 10.87 || || || || || || || || || || High LC || || || || || || || || || || 22.03 || || || || || || || || || || Low LC || || || || || || || || || || 9.47 || || || || || || || || || || || || || || || || || || || || Denmark || 1 || Non labelling information for third parties || Designing leaflet || PA || 36.61 || 16 || 585.76 || 1 || one-off || 586 Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 18,149 || per year || 2,541 3,774 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 Received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 18,149 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 34.05 || 15 || 8.51 || 18,149 || per year || 154,491 LC in PA || || || || || || || || || || 36.61 || || || || || || || || || || High LC || || || || || || || || || || 47.95 || || || || || || || || || || Low LC || || || || || || || || || || 34.05 || || || || || || || || || || || || || || || || || || || || Estonia || 1 || Non labelling information for third parties || Designing leaflet || PA || 9.81 || 16 || 156.96 || 1 || one-off || 157 Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 2,088 || per year || 292 8,723 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 Received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 2,088 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 9.74 || 15 || 2.44 || 2,088 || per year || 5,085 LC in PA || || || || || || || || || || 9.81 || || || || || || || || || || High LC || || || || || || || || || || 14.93 || || || || || || || || || || Low LC || || || || || || || || || || 9.74 || || || || || || || || || || || || || || || || || || || || Finland || 1 || Non labelling information for third parties || Designing leaflet || PA || 30.60 || 16 || 480.60 || 1 || one-off || 481 Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 19,260 || per year || 2,696 2,146 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 Received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 19,260 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 22.24 || 15 || 5.56 || 19,260 || per year || 107,087 LC in PA || || || || || || || || || || 30.60 || || || || || || || || || || High LC || || || || || || || || || || 38.23 || || || || || || || || || || Low LC || || || || || || || || || || 22.24 || || || || || || || || || || || || || || || || || || || || France || 1 || Non labelling information for third parties || Designing leaflet || PA || 28.87 || 16 || 461.92 || 1 || one-off || 462 Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 151,168 || per year || 21,164 219,795 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 Received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 151,168 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 30.47 || 15 || 7.62 || 151,168 || per year || 1,151,525 LC in PA || || || || || || || || || || 28.87 || || || || || || || || || || High LC || || || || || || || || || || 50.71 || || || || || || || || || || Low LC || || || || || || || || || || 30.47 || || || || || || || || || || || || || || || || || || || || Germany || 1 || Non labelling information for third parties || Designing leaflet || PA || 30.49 || 16 || 487.84 || 1 || one-off || 488 Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 224,138 || per year || 31,379 179,279 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 Received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 224,138 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 18.22 || 15 || 4.56 || 224,138 || per year || 1,020,951 LC in PA || || || || || || || || || || 30.49 || || || || || || || || || || High LC || || || || || || || || || || 45.02 || || || || || || || || || || Low LC || || || || || || || || || || 18.22 || || || || || || || || || || || || || || || || || || || || Greece || 1 || Non labelling information for third parties || Designing leaflet || PA || 13.66 || 16 || 218.56 || 1 || one-off || 219 Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 9,307 || per year || 1,303 3,224 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 Received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 9,307 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 17.29 || 15 || 4.32 || 9,307 || per year || 40,230 LC in PA || || || || || || || || || || 13.66 || || || || || || || || || || High LC || || || || || || || || || || 14.78 || || || || || || || || || || Low LC || || || || || || || || || || 17.29 || || || || || || || || || || || || || || || || || || || || Hungary || 1 || Non labelling information for third parties || Designing leaflet || PA || 10.73 || 16 || 171.68 || 1 || one-off || 172 Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 8,302 || per year || 1,162 36,377 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 Received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 8,302 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 7.23 || 15 || 1.81 || 8,302 || per year || 15,006 LC in PA || || || || || || || || || || 10.73 || || || || || || || || || || High LC || || || || || || || || || || 16.37 || || || || || || || || || || Low LC || || || || || || || || || || 7.23 || || || || || || || || || || || || || || || || || || || || Ireland || 1 || Non labelling information for third parties || Designing leaflet || PA || 35.72 || 16 || 571.52 || 1 || one-off || 572 Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 7,723 || per year || 1,081 957 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 Received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 7,723 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 23.55 || 15 || 5.89 || 7,723 || per year || 45,471 LC in PA || || || || || || || || || || 35.72 || || || || || || || || || || High LC || || || || || || || || || || 45.76 || || || || || || || || || || Low LC || || || || || || || || || || 23.55 || || || || || || || || || || || || || || || || || || || || Italy || 1 || Non labelling information for third parties || Designing leaflet || PA || 25.35 || 16 || 405.60 || 1 || one-off || 406 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 56,302 || per year || 7,882 2,687 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 56,302 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 22.21 || 15 || 5.55 || 56,302 || per year || 312,619 LC in PA || || || || || || || || || || 25.35 || || || || || || || || || || High LC || || || || || || || || || || 35.28 || || || || || || || || || || Low LC || || || || || || || || || || 22.21 || || || || || || || || || || || || || || || || || || || || Latvia || 1 || Non labelling information for third parties || Designing leaflet || PA || 8.54 || 16 || 136.64 || 1 || one-off || 137 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 2,982 || per year || 418 913 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 2,982 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 6.52 || 15 || 1.63 || 2,982 || per year || 4,861 LC in PA || || || || || || || || || || 8.54 || || || || || || || || || || High LC || || || || || || || || || || 9.95 || || || || || || || || || || Low LC || || || || || || || || || || 6.52 || || || || || || || || || || || || || || || || || || || || Lithuania || 1 || Non labelling information for third parties || Designing leaflet || PA || 8.21 || 4,800 || 656.80 || 1 || one-off || 657 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 60 || 0.14 || 5,974 || per year || 836 1,657 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 5,974 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 4.77 || 15 || 1.19 || 5,974 || per year || 7,123 LC in PA || || || || || || || || || || 8.21 || || || || || || || || || || High LC || || || || || || || || || || 12.12 || || || || || || || || || || Low LC || || || || || || || || || || 4.77 || || || || || || || || || || || || || || || || || || || || Luxembourg || 1 || Non labelling information for third parties || Designing leaflet || PA || 33.62 || 16 || 537.92 || 1 || one-off || 538 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 29,245 || per year || 4,094 47,008 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 29,245 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 33.62 || 15 || 8.41 || 29,245 || per year || 245,806 LC in PA || || || || || || || || || || 33.62 || || || || || || || || || || High LC || || || || || || || || || || 33.62 || || || || || || || || || || Low LC || || || || || || || || || || 33.62 || || || || || || || || || || || || || || || || || || || || Malta || 1 || Non labelling information for third parties || Designing leaflet || PA || 11.58 || 16 || 185.28 || 1 || one-off || 185 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 1,664 || per year || 233 102 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 1,664 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 9.03 || 15 || 2.26 || 1,664 || per year || 3,756 LC in PA || || || || || || || || || || 11.58 || || || || || || || || || || High LC || || || || || || || || || || 12.52 || || || || || || || || || || Low LC || || || || || || || || || || 9.03 || || || || || || || || || || || || || || || || || || || || Netherlands || 1 || Non labelling information for third parties || Designing leaflet || PA || 38.95 || 16 || 623.20 || 1 || one-off || 623 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 91,082 || per year || 12,751 9,299 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 91,082 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 23.34 || 15 || 5.84 || 91,082 || per year || 531,461 LC in PA || || || || || || || || || || 38.95 || || || || || || || || || || High LC || || || || || || || || || || 46.28 || || || || || || || || || || Low LC || || || || || || || || || || 23.34 || || || || || || || || || || || || || || || || || || || || Poland || 1 || Non labelling information for third parties || Designing leaflet || PA || 9.37 || 16 || 149.92 || 1 || one-off || 150 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 14,853 || per year || 2,079 227,672 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 14,853 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 7.09 || 15 || 1.77 || 14,853 || per year || 26,328 LC in PA || || || || || || || || || || 9.37 || || || || || || || || || || High LC || || || || || || || || || || 9.08 || || || || || || || || || || Low LC || || || || || || || || || || 7.09 || || || || || || || || || || || || || || || || || || || || Portugal || 1 || Non labelling information for third parties || Designing leaflet || PA || 14.68 || 16 || 234.88 || 1 || one-off || 235 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 12,706 || per year || 1,779 64,345 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 12,706 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 12.75 || 15 || 3.19 || 12,706 || per year || 40,500 LC in PA || || || || || || || || || || 14.68 || || || || || || || || || || High LC || || || || || || || || || || 19.64 || || || || || || || || || || Low LC || || || || || || || || || || 12.75 || || || || || || || || || || || || || || || || || || || || Romania || 1 || Non labelling information for third parties || Designing leaflet || PA || 5.28 || 16 || 84.48 || 1 || one-off || 84 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 10,585 || per year || 1,482 9,078 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 10,585 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 3.95 || 15 || 0.99 || 10,585 || per year || 10,453 LC in PA || || || || || || || || || || 5.28 || || || || || || || || || || High LC || || || || || || || || || || 6.38 || || || || || || || || || || Low LC || || || || || || || || || || 3.95 || || || || || || || || || || || || || || || || || || || || Slovakia || 1 || Non labelling information for third parties || Designing leaflet || PA || 6.68 || 16 || 106.88 || 1 || one-off || 107 Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 4,562 || per year || 639 9,078 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 4,562 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 6.99 || 15 || 1.75 || 4,562 || per year || 7,972 LC in PA || || || || || || || || || || 6.68 || || || || || || || || || || High LC || || || || || || || || || || 11.84 || || || || || || || || || || Low LC || || || || || || || || || || 6.99 || || || || || || || || || || || || || || || || || || || || Slovenia || 1 || Non labelling information for third parties || Designing leaflet || PA || 18.19 || 16 || 291.04 || 1 || one-off || 291 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 3,838 || per year || 537 12,908 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 3,838 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 13.68 || 15 || 3.42 || 3,838 || per year || 13,124 LC in PA || || || || || || || || || || 18.19 || || || || || || || || || || High LC || || || || || || || || || || 21.01 || || || || || || || || || || Low LC || || || || || || || || || || 13.68 || || || || || || || || || || || || || || || || || || || || Spain || 1 || Non labelling information for third parties || Designing leaflet || PA || 22.12 || 16 || 353.92 || 1 || one-off || 354 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 86,158 || per year || 12,062 26,526 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 86,158 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 16.01 || 15 || 4.00 || 86,158 || per year || 344,846 LC in PA || || || || || || || || || || 22.12 || || || || || || || || || || High LC || || || || || || || || || || 22.58 || || || || || || || || || || Low LC || || || || || || || || || || 16.01 || || || || || || || || || || || || || || || || || || || || Sweden || 1 || Non labelling information for third parties || Designing leaflet || PA || 33.62 || 16 || 537.92 || 1 || one-off || 538 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 21,724 || per year || 3,041 3,503 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 21,724 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 25.03 || 15 || 6.26 || 21,724 || per year || 135,936 LC in PA || || || || || || || || || || 33.62 || || || || || || || || || || High LC || || || || || || || || || || 48.29 || || || || || || || || || || Low LC || || || || || || || || || || 25.03 || || || || || || || || || || || || || || || || || || || || United King. || 1 || Non labelling information for third parties || Designing leaflet || PA || 25.25 || 16 || 404 || 1 || one-off || 404 sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 0.14 || 1 || 0.14 || 38,550 || per year || 5,397 39,354 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 100,000 || 3,000.00 || 1 || one-off || 3,000 received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 0.03 || 50,000 || 1,500.00 || 1 || per year || 1,500 38,550 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 21.94 || 15 || 5.49 || 38,550 || per year || 211,448 LC in PA || || || || || || || || || || 25.25 || || || || || || || || || || High LC || || || || || || || || || || 32.82 || || || || || || || || || || Low LC || || || || || || || || || || 21.94 || || || || || || || || || || || || || || || || || || || || Legenda Target group: || PA= Public Authorities RF= Receiving Firm A. Tariff || It is the relevant tariff per hour or per relevant unit of service. For Target group PA it is labelled LC in PA and is defined as the hourly labour costs in public administration and defence; compulsory social security (Nace 2 O84) with the exception of France and Slovakia (Labour costs in public administration and community services Nace 1.1. L) and Austria, Belgium, Luxembourg, Malta and Sweden (Labour costs in Services). Source Labour Costs Survey 2008 Eurostat. For actions required to SF/RF, tariff is the hourly labour cost in activities of head offices; management consultancy activities (Nace Rev. 2, M 70) - labelled as High LC- or the labour costs in office administrative, office support and other business support activities (Nace Rev. 2 N82 - MIN -) – labelled as Low LC. The choice depends on the skills involved in the required administrative activity. In some cases missing data are replaced by other data: for Luxembourg we use the labour cost in service, for Portugal Low LC is calculated as the costs in service. Source Labour Cost Survey 2008 Eurostat. Tariff of leaflets printing per copy is calculated as the Internet based printing services average cost per 10,000 leaflets (Ismeri Europa) Tariff of translation is calculated as the internet based translation services cost per keystroke (Ismeri Europa) B. Time or units || When the tariff corresponds to hourly labour cost, time corresponds to the hours which are necessary to one person to perform the required administrative action. In the case of translation the total number of keystrokes required by the administrative action is provided. C. Price per action || It is calculated as A.*B. Number of actions (per year) || This column reports 1 for One-off action. Otherwise it reports the number of received/sent postings in 2010 according to Ismeri Europa simulation when the price of the administrative action is calculated per individual posting. When the action requires more than one person in PA., the column reports the number of people involved in the administrative action (price is calculate for one person performing the action. Summary – New administrative costs in EU27 || No || Type of IO/compliance costs || Required administrative action || Target group || Tot. admin. cost || Per Posting || Type EU 27 || 1 || Non labelling information for third parties || Designing leaflet || PA || 8,871 || 0.01 || one-off Sent || 2 || Non labelling information for third parties || Copying leaflet || PA || 139,662 || 0.14 || per year 997,585 || 3 || Non labelling information for third parties || Designing information materials: Translation || PA || 81,000 || 0.08 || one-off Received || 4 || Non labelling information for third parties || Designing information materials: Translation || PA || 40,500 || 0.04 || per year 997,585 || 5 || General compliance costs || Risk assessment for subcontractor selection (joint and several liability) || RF || 1,957,671* || 1.96* || per year EU27 Average PA || || || || || || || 20.60 || || || || || || || EU27 Average High LC || || || || || || || 27.51 || || || || || || || EU27 Average Low LC || || || || || || || 16.74 || || || || || || || Overall admin. cost one-off || 89,871 || || Overall one-off admin. cost per posting || 0.09 Overall admin. costs per year || 2,137,833 || || Overall admin. costs per posting per year || 2.14 * This figure takes into account that AT,
DE, ES, FI, FR, IT and NL already have a system of joint and several liability
in place (representing 3.7 million EUR). ANNEX 7: Distribution of costs and
cost-related benefits across Member State || Costs for Member States (Information) || Costs for companies (Joint and several liability) || Cost-related benefits * || EUR one off || EUR per year || EUR per year || AT || 5.000 || 7.000 || 0 ** || ++ specialised receiving country BE || 4.000 || 18.000 || 943.000 || +++ major sending and receiving country BG || 3.000 || 2.000 || 2.000 || + specialised sending country; relatively low number of posting CY || 3.000 || 2.000 || 5.000 || + specialised receiving country; relatively low number of posting CZ || 3.000 || 2.000 || 40.000 || ++ medium number of sent and received postings DE || 3.000 || 33.000 || 0 ** || +++ major sending and receiving country DK || 4.000 || 4.000 || 154.000 || ++ specialised receiving country EE || 3.000 || 2.000 || 5.000 || ++ specialised sending country EL || 3.000 || 3.000 || 40.000 || ++ specialised receiving country ES || 3.000 || 14.000 || 0 ** || +++ major receiving country FI || 3.000 || 4.000 || 0 ** || ++ specialised receiving country FR || 3.000 || 23.000 || 0 ** || +++ major sending and receiving country HU || 3.000 || 3.000 || 15.000 || ++ specialised sending country IE || 4.000 || 3.000 || 45.000 || ++ specialised receiving country IT || 3.000 || 9.000 || 0 ** || +++ major receiving country LT || 4.000 || 2.000 || 7.000 || ++ sending and receiving country LU || 4.000 || 6.000 || 246.000 || +++ major sending country LV || 3.000 || 2.000 || 5.000 || ++ sending and receiving country MT || 3.000 || 2.000 || 4.000 || + specialised receiving country; relatively low number of posting NL || 4.000 || 14.000 || 0 ** || +++ major receiving country PL || 3.000 || 4.000 || 26.000 || +++ major sending country PT || 3.000 || 4.000 || 41.000 || +++ major sending country RO || 3.000 || 3.000 || 10.000 || ++ sending and receiving country SE || 4.000 || 5.000 || 345.000 || ++ specialised receiving country SI || 3.000 || 2.000 || 13.000 || ++ specialised sending country SK || 3.000 || 2.000 || 8.000 || ++ specialised sending country UK || 3.000 || 7.000 || 211.000 || ++ sending and receiving country * Benefits for
sending countries result from more transparent information on the applicable
working conditions; benefits for both sending and receiving countries result
from fairer competition, a more level playing field following and a better
protection of rights of posted workers following the introduction of joint and
several liability. ** Member State
already has a system of joint and several liability in place. ANNEX 8: Anecdotal evidence regarding the
non-respect of the applicable working conditions and abuses of the posting
legislation in the German construction sector This Annex provides anecdotal evidence
regarding the non-respect of the applicable working conditions and abuses of
the posting legislation in the German construction sector based on information
provided on the website[14]
of the European Migrant Workers Union (EMWU) and an interview with one of their
employees.[15] 1. Who is EMWU? EMWU is a German association supporting in
particular posted workers in the construction sector in case of disputes with
their employers. The association started its work in 2005 and is supported by
German and Polish trade unions. The focus is on enforcing the German minimum
wage mainly for Polish and Romanian posted workers. The association provides
advice to workers and negotiates with employers. Since the association has been
restructured in 2010 judicial proceedings are handled by IG BAU in close
cooperation with EMWU. Since October 2011 EMWU, together with
Deutscher Gewerkschaftsbund (DGB), participates in the project 'Faire
Mobilität' (fair mobility) which provides information and advice to workers in
particular from EU-8 and EU-2 Member States concerning the applicable working
conditions and the rights of workers in Germany. The project is co-financed by
the European Social Fund (ESF) and the German Federal Ministry of Labour and Social
Affairs. 2. Information provided at the request
of the European Commission services At the request of the European Commission services
EMWU has provided via interview, information concerning their experience of the
phenomenon of posting: ·
Since 2005, as a result of actions by EMWU
between 2.5 and 3 million Euro have been recovered on behalf of posted workers
following judicial proceedings or settlements out of court. ·
The interviewee joined EMWU in 2007 and handled
about 1.000-1.500 cases of Romanian posted workers per year. None of them had
received the German minimum wage. Through on the spot visits the case handler
estimates that he has an overview of approximately 3.000 cases per year.
Most posted workers remain loyal to their employer and do not dare to go
against them. ·
Cases concern single or groups of posted
workers, sometimes large groups. ·
The situation of posted Polish workers got
better since the economic situation in Poland improved considerably. However,
even there in most of the cases a part of the minimum wage is missing. ·
Wages are generally paid in cash on the spot
against signature of the pay slip. It is common that workers sign for the
minimum wage but receive only part of it (e.g. one third). Payments are often
late. ·
Problems often re-occur with a particular
company or an employer who operates several companies. ·
Posted workers often arrive in Germany without a
written employment contract or similar documents. ·
Foreman/gang masters on construction sites
openly state that posted workers are not allowed to join a trade union and that
they would lose their jobs. Sometimes contracts foresee explicitly that workers
are not allowed to join a trade union and include respective fines up to 30.000
Euro. The interviewee indicated that he was in possession of copies of such
documents. ·
A large number of posted workers are recruited
only on the day of the posting. ·
Several firms that are posting workers are
primarily operating in Germany. They only have minor business activities in the
sending countries or even only a letter box. ·
In cases of Romanian posted workers the
interviewee said that it was common that A1 forms were issued on the basis of
falsified information and that workers have been without social security
coverage during their work. This has lead to serious consequences in cases of
accidents at work since adequate medical treatment has not been provided. The
interviewee reported that he personally knew two workers concerned and that he
had heard of further cases. 3. Analysis of cases described on the
EMWU website On the website of EMWU 39 cases are
described concerning about 900 posted workers (or fake posted workers or fake
self-employed) from Romania and Poland in the construction sector in Germany
which have not been paid according to the German minimum wage provisions. 14 of
the 39 cases concerned fake self-employed. In all cases subcontractors were
involved. EMWU supported these workers in order to enforce their wage claims
against their employers or the main contractor. As a result of actions by EMWU
approximately 1.5 million Euro have been recovered on behalf of posted workers
following judicial proceedings or settlements out of court in these cases. In
the few cases in which enforcement against the subcontractor was successful the
main contractor was involved in the negotiations. In several cases it is mentioned that: ·
Workers and employers deliberately agreed on
wages below the German minimum wage as a condition for the posting. Otherwise
workers would not have been posted and/or recruited. ·
Workers have been threatened with violence or
pressure has been put on workers after having contacted EMWU. ·
Employers deducted disproportionate costs for
housing and meals from (minimum) wages of workers. ·
Middlemen/gang masters have been involved, in particular
in cases of fake self-employed. ·
The website also mentions letter box companies. ·
Enforcement was not successful because workers
could not agree to pursue their employer and/or main contractor, workers have
been afraid of losing their job or (false) promises have been made by the
employer and/or main contractor. These cases represent only a very small
selection of cases handled by EMWU. Cases are generally very similar to those
presented on the website. A detailed overview of the cases is
provided in the table at the end of this Annex. 4. Conclusions with regard to the
problem definition and the baseline scenario of the Impact Assessment The analysis of the cases combined with the
information provided in the interview suggests that there is a systematic and
deliberate non-respect of the applicable minimum wage in the German
construction sector by posting undertakings from Romania. It also suggests that
in a large number of cases of postings from Poland the applicable minimum wage
is not respected. This finding supports the negative
effects of posting described in the problem definition in section 3.1.5 and the
baseline scenario in section 6.2 regarding non-respect of working conditions,
enforcement problems, unfair competition, pressure on local labour markets and
working conditions in high labour cost receiving countries. It also supports
enforcement deficiencies indicated in problem 1b in section 3.2.1.2. Posted workers often agree to work for less
than the minimum wage during the posting in order to be recruited and/or
posted. Mostly, they do not dare to go against their employer and they enforce
the minimum wage only in exceptional circumstances (e.g. when they are paid
much less than what has been agreed or not at all). This finding supports problem 3.2.2.5
(no adequate protection in disputes concerning individual employment
conditions). The right of third parties to intervene in cases and bring them to
Court is important to enforce posted workers rights. The role of trade unions
and joint bodies of social partners is crucial in this respect. In all cases subcontractors have been
involved. Almost all wage claims have been enforced against the main
contractor. In the few cases in which enforcement against subcontractors was
successful the main contractor was involved in the negotiations. This finding supports problem 3.2.2.5
(no adequate protection in disputes concerning individual employment
conditions). A system of joint and several liability seems appropriate in order
to enable posted workers to enforce their rights in the host Member State. Summary
of cases described in press releases of EMWU from 2005 to 2011[16] Case[17] || Number of workers || Posted from || Subcontractor involved || Fake self-employed || Enforced against subcontractor || Enforced against main contractor || Other issues mentioned (e.g. strike, housing, threat/pressure on workers contacting EMWU, falsified pay slips/time sheets) 1 || 4 || RU || Yes || || Partly || Involved in negotiations || Threat against workers 2 || 50 || RU || Yes || || 100.000 Euro (not entirely clear if employer or main contractor paid) || || Systematic violation of minimum wage provision as well as health and safety at work 3 || Several || RU || Yes || || || Seems that main contractor paid (not entirely clear) || 4 || 45 || ? || Yes || || || 76.000 Euro || 5 || Several || RU || Yes || Yes || || Main contractor paid || 6 || 8 || RU || Yes || Yes || || 28.000 Euro || Overpriced housing; threat against workers 7 || 1 || RU || Yes || Yes || 7.000 Euro || || Housing costs deducted from minimum wage; middleman involved 8 || Several || RU || Yes || Yes || || No, workers could not agree to go against (main) contractor || 900 Euro deduction from wage for housing (12 persons in 3 room apartment), middleman involved; pressure on workers 9 || 3 || RU || Yes || Yes || 5.000 Euro after pressure from main contractor || || 10 || Several || RU || Yes || || || || Neither minimum wage is paid nor conditions agreed in RU before posting; workers fear to be "sent home" by employer in case of contact with trade unions 11 || 120 || RU || Yes || || || 176.000 Euro (out of Court) || Subcontractor asked workers to work for less than minimum wage but did not pay at all; workers reported that three times in 12 months they have not been paid at all by different employers 12 || Several || RU || Yes || || || Yes, judicial proceeding || Subcontractor asked workers to work for less than minimum wage (otherwise they would not have been recruited); agreed wages have not been paid; high deductions from wages for housing and food. 13 || Several || RU || Yes || || No, judicial proceeding re holiday pay without success (insolvency) || Partly, judicial proceeding || 14 || 28 || RU || Yes || Yes || 3.500 Euro travel costs || 30.000 Euro, part of outstanding wages || Wages of 2-4 Euro have been paid in the beginning, afterwards nothing at all; deduction of costs for housing and meals 15 || 81 || RU || Yes || || || No, wage claim has not been perused (136.000 Euro) || Sub and main contractor reached agreement with workers and promised payment; some workers did not receive payment even after return 16 || 14 || RU || Yes || Yes || || 12.600 Euro plus travel costs || Letter box company 17 || 12* || RU || Unclear || Yes || || 24.000 Euro (not entirely clear who paid) || Middleman/gang master involved 18 || 40 || RU || Yes || Yes || || 90.000 Euro || Blockade of offices of main contractor 19 || 15* || RU || Yes || Yes || || 30.000 Euro || 20 || 19 || RU || Yes || Yes || || 67.000 Euro || 21 || 6 || RU || Yes || || || Partly || Letter box company 22 || 10 || PL || No || Yes || || 15.000 Euro, judicial proceeding || 23 || 49 || RU || Yes || Yes || || 89.500 Euro || 24 || 15* || PL || Yes || || || 30.000 out of Court || Subcontractor states in PL media that he paid less than minimum wage like everybody does 25 || 12 || PL || Yes || Yes || || Judicial proceeding || 8 Euro agreed in written contract (less than minimum wage) but not paid 26 || 50* || RU || Yes || || || 100.000 Euro || 27 || 1 || RU || Yes || || || 4.000 Euro || 800 Euro/month agreed in RU (instead of 1.800 Euro minimum wage), only 425 Euro paid; worker attacked with knife and threatened by other RU worker 28 || 19 || RU || Yes || || || 30.000 Euro || Workers have been paid 500 Euro for two months 29 || 55* || PL || Yes || || || 110.000 Euro out of Court || 30 || 20 || PL || Yes || || || 29.000 Euro, judicial proceeding || 31 || 33* || PL || Yes || || || 67.000 Euro || 32 || 20* || PL || Yes || || || 40.000 Euro || 33 || 44* || PL || Yes || || || 88.500 Euro || 34 || 24 || PL || Yes || || || 45.000 Euro || 35 || 19 || RU || Yes || || || 65.000 Euro || 36 || Several || PL || Yes || || || || Workers are systematically working 10 hours per day but are paid for only 7. The system is organised by a foreman. 37 || 29 || PL || Yes || || || 38.000 Euro || 38 || 15 || PL || Yes || || || 28.600 Euro || Strike 39 || 8* || PL || Yes || || || 16.500 Euro || Unclear if workers had signed having been paid the minimum wage; some workers said they would not have signed such papers others said they had to sign blank papers before the posting * Estimated with
regard to sum of wage claim. ANNEX 9: Public consultation on the
Single Market Act (COM(2010) 608 final) – summary of replies to proposals 29
and 30 Proposal No 29: Pursuant
to its new strategy for the effective implementation of the Charter of
Fundamental Rights by the European Union, the Commission will ensure that the
rights guaranteed in the Charter, including the right to take collective
action, are taken into account. The Commission will first of all conduct an
in-depth analysis of the social impact of all proposed legislation concerning
the single market. Proposal No 30: In 2011,
the Commission will adopt a legislative proposal aimed at improving the
implementation of the Posting of Workers Directive, which is likely to include
or be supplemented by a clarification of the exercise of fundamental social
rights within the context of the economic freedoms of the single market. 1. Member States a.
Governments || Proposal 29 || Proposal 30 Czech Republic || Considers the single market as a policy priority and supports the global approach of the SMA, but finds particularly problematic the propositions in the social domain covering a new strategy for the effective implementation of the Charter of Fundamental Rights. || Also finds particularly problematic the revision of the Posting of Workers Directive since this proposal can affect the balance between economic freedoms and workers' social rights in the EU. Recognises the importance of the social dimension, but this should not lead to damaging the competitiveness in Europe. Finland || Attention must be paid to the equal treatment of workers and the equal competitive position of companies, in addition to rights guaranteed in the Charter of Fundamental Rights. || Positive view of measures to promote practical implementation of the rights of posted workers and better implementation of Directive 96/71/CE, through cooperation between authorities (including IMI). France || Underlines the importance of the social IA. || Better implementation of the exiting PWD is needed (in line with announcement of Pres Barroso). In particular: better access to information for service providers on the applicable working conditions; better administrative cooperation. Germany || Understands the Commission's announcement to precede legislative proposals for the single market with a social impact analysis as a reference to the integrated impact assessment approach, i.e. to mean that the economic, social and environmental impacts will all continue to be scrutinised. || A clarification of the relationship between fundamental economic freedoms and social rights must cause neither a reduction in existing standards of protection nor a reduction in the possibilities for national control. Ireland || Welcomes the Commission’s reaffirmation of the social dimension of its integrated impact assessment approach. || Welcomes the legislative initiative which is intended to ensure effective respect for posted workers rights and to clarify the obligations of national authorities and business. Lithuania || Measures in relation to rights guaranteed in the Charter of Fundamental Rights, including the right to take collective action raises serious reservations. || Included within the top 12 proposals. Luxembourg || - || Existing Directive is sufficient. Poland || - || Welcomes any initiatives to strengthen the administrative cooperation among MS in order to enhance the process of posting the workers (including the use of IMI). Objects to any amendment of the existing PWD. Sweden || Finds it worthwhile to clarify that the cross border posting of workers should not affect the right to take industrial action or to strike as provided for in national law and practice which respects Community law. These rights are integral parts of the Swedish labour market model. || It is positive that the Commission intends to adopt a legislative proposal aimed at improving the implementation of the Posting Directive. UK || Cf. 30. || Could not support any proposals for improved enforcement of the Posting of Workers Directive that did not respect individual Member States’ employment and enforcement framework or that sought to guarantee the right to take industrial action in any new single market legislation. b.
Parliaments || Proposal 29 || Proposal 30 Parliament of the Czech Republic || - || The emphasis should be put on the due implementation of the Directive rather than adopting new legislation German Bundesrat || Underlines the importance of the social dimension of the single market and the social impact assessment. || In favour of a Monti clause. In favour of revising the PWD clarifying that Directive is only setting minimum conditions and MS can go beyond. Employment relationships which were only concluded for posting should fall under the law of the host MS. 2. Trade Unions a.
European level || Proposal 29 || Proposal 30 ETUC || Attaches very high priority to the introduction of a social progress protocol in the Treaties in order to balance the movement of workers and services and to make the economic freedoms respect fundamental rights. There is a need of an instrument that gives priority to fundamental social rights in case of conflict with economic freedoms. Supports a social clause guaranteeing the right to collective action and strike. || Supports the revision of the Posting Directive in order to reverse the ECJ rulings and a Monti II Regulation [In addition, supports a review of the EU public procurement directives for strengthening social criteria in public contracts.] ETF and EFBW || Upholds a Social Progress Protocol to be added to the Treaties and a Monti II regulation in order to ensure rights of trade unions and employers to negotiate and conclude collective agreements and, in case of conflict of interest, the right to take collective action to defend their interests, in the context of economic freedoms in the Single Market. || Welcomes the Commission's commitment to present legislative proposals to enhance the interpretation and the implementation of the Posting of Workers Directive. Supports a legislative proposal which clarifies the exercise of fundamental social rights within the context of the economic freedoms of the Single Market, ensuring a level playing field for business and labour EFFAT || || Calls for a thorough revision of the Posting of Workers Directive, which effectively implements fundamental ILO Conventions and the EU Charter of Fundamental Rights. This Directive must include specific tools that prevent it from being used in aid of human trafficking and must clearly and unambiguously allow workers to join unions, bargain collectively and take industrial action. Supports the principle of equal treatment and same working conditions regardless the location of work. European Service Workers' Union || Supports an instrument which gives priority to fundamental rights over economic freedoms and upholds the right to collective action and strike as proposed in the ETUC Socvial Progress Protocol or Monti-stile regulation. || A legal act improving implementation of the Directive is not enough, and the EU should guarantee equal treatment of local and migrant workers and avoid unfair competition on wages and working conditions. b.
National level || Proposal 29 || Proposal 30 Deutscher Gewerkschaftsbund || Welcomes that Commission is willing to fulfil their already existing legal obligations under the Lisbon Treaty. Considers that a social protocol amending primary EU law is necessary to clarify that, in case of conflict, fundamental social rights are prevailing over economic freedoms. || Proposal is not sufficient. In favour of a fundamental revision of the PWD: equal pay and equal rights, minimum protection, respecting different models of collective bargaining, limiting the duration of posting, fight against letter box companies, appropriate control measures and enforcement of workers rights. LO (Swedish Trade Union Confederation) || Deems positive (not new) the proposal to conduct social impact assessments. Supports a social progress protocol which lays down that fundamental human and trade union rights are not secondary over economic freedoms. || The part concerning the legislative proposal is insufficient and proposes that this legislative proposal addresses the interpretation problems that the ECJ's has caused. The second part of the proposal (clarification of the exercise of fundamental social rights in the context of economic freedoms) is an important commitment. This regulation should include: proportionality assessment of the conflict at national level, a threshold for obstacles to the free movement in sectors regulated by collective agreements, basic system for exchange of information where cross border consequences. LO Norwegian Confederation of Trade Unions || The proposal lacks an instrument which can guarantee respect for the rights, and which protects and maintains the right to collective actions and right to strike. || Proposes a limited revision of the Directive to the extent required to ensure that posted workers wages and working conditions are equal to those workers in the host country Nordic Financial Unions || Strongly supports this proposal. || - CFDT || Regrets that the Commission's Communication has not included a Monti clause, in order to tie up single market and fundamental rights. The integration of the Charter of Fundamental Rights in the Treaty and the transversal social clause are needed in order to guarantee the balance between economic freedoms and fundamental rights. || The legislative proposal must respect fundamental rights and the access to market of employers throughout the EU, for which social dialogue at all levels (professional, sectoral and decentralised) is needed. TUC || Need for action to address problems created by the ECJ cases. Adoption of a social progress clause. || It is necessary to revise the PWD. CFDT (France) || Include Monti clause in all internal market Directives. || In favour of a 'Social Protocol' amending the Treaty. Revision of the legal framework; concerned about ECJ jurisprudence. IG BAU (Germany) || In favour of a 'Social Protocol' amending the Treaty. || Not in favour of changing the PWD. ECJ jurisprudence has to be revised by changes of primary law (Social Protocol). FGTB, CSC, CGSLB (France) || In favour of a 'Social Protocol' amending the Treaty. || Revising the PWD and including the principle equal pay for equal work at the same place. Bundesarbeitskammer Österreich || In favour of a 'Social Protocol' amending the Treaty. || In addition to a Social Protocol a Monti clause is welcome. PWD has to be revised: Allow effective control measures for MS and Social partners, re-establish minimum character. Deutscher Beamtenbund || - || ECJ jurisprudence Rüffert and Luxembourg should be revised. DGB Sachsen || In favour of a 'Social Protocol' amending the Treaty. || PWD has to be revised: equal pay for equal work at the same place. GMB Trade union (UK) || Social clause protecting social rights from market freedoms is needed. Taking into consideration ECtHR and ILO. Equal treatment for all workers. || Fundamental revision of the PWD. TCO (Sweden) || In favour of a Monti II Regulation and a 'Social Protocol' amending the Treaty. || Revising the ECJ jurisprudence. Guarantee equal treatment. Force Ouvriere (France) || In favour of a 'Social Protocol' amending the Treaty. || Revision of the PDW to revise the ECJ jurisprudence. Chambre des fonctionnaires et employés publics (Luxembourg) || Assuring that fundamental social rights always prevail over economic freedoms. || Important Central Organisation of Industrial Employees in Denmark (CO-industri) || - || Revising ECJ jurisprudence; guarantee equal treatment of posted and national workers. 4. Employers a.
European level || Proposal 29 || Proposal 30 BusinessEurope || Art. 9 TFEU is sufficient. Further guarantee will not provide added value and contravene the clear exclusion of the right to strike from EU competences. || Supports COM proposal on better implementation and enforcement (without reopening debate on working conditions). Eurocommerce || - || There is no need to revise the PWD, but rather to improve its enforcement and implementation CEEMET, Council of European Employers of the Metal, Engineering and Technology-based industries. || Supports the Commission's goal to overcome tensions between economic freedoms and freedom of collective action, but there is no need for a further guarantee of the right for collective action at EU level. || A proper national application of the PWD will contribute to complementing the European Single Market. b.
National level || Proposal 29 || Proposal 30 Union des Entreprises Luxembourgeoises (UEL) || - || Support but no priority; clarifications for better implementation of the existing PWD but no new legislative text. CBI, The voice of business || Considers that this proposal does not have a role to play in fulfilling the Single Market's potential. || Considers that this proposal does not have a role to play in fulfilling the Single Market's potential. Wirtschaftskammer Österreich || Respect of fundamental rights is important. However, the right to take collective action is not expressly guaranteed in all MS. || Could be helpful with regard to the trade union's negative position re posting. Verband der Öffentlichen Wirtschaft und Gemeinwirtschaft Österreichs || Welcomes in depth analysis of social impact of future legislation to strengthen fundamental rights. Points out importance of early involvement of social partners. Public economy must comply with fundamental rights. || Points out importance of effective control measures and enforcement by host Member States. In favour of fundamental revision of the PWD, in particular: clarifying that PWD only provides for minimum protection, limiting the definition of postings (duration, fight against letter box companies), better respecting national social models, allowing reference to local wages in public procurement, broadening the concept of public policy provisions. Welcomes Monti-clause with regard to all economic freedoms. However, instead of including in the PWD a separate horizontal instrument should be introduced (e.g. be extending the existing Regulation 2679/98). Revision of primary EU law remains indispensable (social protocol). Conseil Supérieur des Indépendants et des PME || - || In favour of revision and better implementation of the PWD, in particular: control obligations for the service receiver has to be simplified by better exchange of information between MS; labour inspections should be able to qualify a posted worker as a migrant worker if need be. BDA/BDI (Germany) || Existing framework is sufficient. || No revision of the PWD. Better implementation, enforcement and administrative cooperation are needed to combat abuse. No need for a Monti clause. Art. 153.5 has to be respected. Zentralverband des deutschen Handwerks || Existing IA is sufficient. || No need for changes. In favour of better administrative cooperation, in particular cross-border enforcement of sanctions is an issue to be tackled. Handwerkskammer Rhein-Main || - || No need for changes. In favour of better administrative cooperation, in particular cross-border enforcement of sanctions is an issue to be tackled. Westdeutscher Handwerkskammertag || Existing framework is sufficient. || No need for changes. In favour of better administrative cooperation, in particular cross-border enforcement of sanctions is an issue to be tackled. Fédération des Entreprises de Belgique || Existing framework is sufficient. || Welcomes better implementation; no need for revision. CEOE, Confederacion Espanola de Organizaciones Empresariales || Additional guarantee re Fundamental Rights is not necessary. Regulation on the right to take collective action could go against article 153.3 TFEU || It is fundamental to guarantee the effective implementation of the Directive. More cooperation is needed. Reopening a debate on the posted workers' working conditions is rejected. Chambre de Commerce et d'industrie de Paris || - || It is a priority to improve and clarify the legal framework of the Directive. 5. Others || Proposal 29 || Proposal 30 S&D || Proposal 29 is clearly insufficient. Upholds a horizontal social progress clause in the form of a) an overarching Regulation; b) a social clause in all single market legislation, in order to give priority to fundamental social rights (collective action and strike) in case of conflict with economic freedoms, so the basic social rights are not subordinated to the economic freedoms and that employment protection and working conditions are guaranteed. Draws attention to a necessary thorough social impact assessment when developing SMA. || Upholds a clear revision of the existing legislation and a more ambitious approach ensuring, along with the economic freedoms, protection of the most advanced labour law and industrial relation standards and practices, the respect of rights to collective action, collective representation and bargaining, strike and full implementation of equal pay for work of equal value. CES. Conseil Economic et Social de Luxembourg. Workers Group || Gives priority to fundamental social rights, right to take collective action and right to strike, in case of conflict with economic freedoms. Support the introduction of a social progress clause in the Treaties || Endorses a legal instrument reversing the ECJ rulings by revising the Directive and the principle of country of origin and guaranteeing the fundamental labour law regulations Economic and Social Council of the Republic of Bulgaria || Supports creating conditions for the better implementation of the Charter of Fundamental Rights, including the right to collective action. || New problems related to increased transnationalisation of labour and social rights have to be taken into account when preparing changes to directives concerning labour and social policy COSLA, Convention of Scottish Local Authorities || || Welcomes the Commission's intentions to make easier for workers posted elsewhere in the EU to avoid complex national administrative procedures. Sveriges Kommuner och Landsting || Support for better respect of fundamental rights, in particular the right to take collective action. || - AEIP, European Association of Paritarian Institutions of Social Protection || || Proposal should ensure worker's protection and uphold fair competition. Improving the implementation of PWD should not affect the control mechanisms that the Member States have already efficiently put into place in accordance with Art. 5. This is particularly true with regard to any improvements of cross-border cooperation in terms of Art. 4. Cross-border cooperation between the national control authorities should be built for supporting, rather than replacing national control mechanisms. AIM (Association Internationale de la Mutualite) || The in-depth analysis of the social impact of all proposed legislation should consider how far proposed measures foster sustainable growth with job creation and social cohesion. || There is no clarity re the definition of posted workers (in Directive and according to ECJ rulings). The Commission should seek, jointly with all relevant parties, a unified definition, clarifying the rights and entitlements from which posted workers should benefit Mutualité Française || Support || Interested in particular in Monti clause. Bundesarbeitsgemein-schaft der Freien Wohlfahrtspflege (Gemany) || - || PWD has to be revised: Re-establish minimum character. COFACE - Confederation of Family Organisations in the EU || Calls for a broad range of stakeholder to be included in the practical implementation of the social impact assessment of EU policy making based on the Charter of Fundamental Rights. || - ANNEX 10: Summary of CJEU cases: Viking
Line, Laval, Rüffert and Commission v. Luxembourg 1. Viking Line Facts: This case concerns a dispute that dates
back to 2003 between Viking Line, a Finnish ferry company and the International
Transport Workers Federation (ITF). It centres on the attempt by Viking Line to
reflag one of its ferries, the Rosella, which was operating at a loss on
a route between Talinn and Helsinki. Viking Line intended to register it in Estonia
in order to employ an Estonian crew at a lower level of pay that in Finland.
Following a request from the Finnish Seaman’s Union, ITF sent a circular to all
its affiliates requiring them to refrain from entering into negotiations with
Viking Line. Main points of the ruling: The referral from the Court of Appeal in
London to the ECJ concerned ten questions on the compatibility of the right to
take collective action by trade unions with the rules on the freedom of
establishment and on whether the threat to take collective action constituted
an unjustified restriction of Article 43 EC on the freedom of establishment. Most importantly, the Court acknowledged
that the right to take industrial action must be recognised as a fundamental
right which forms an integral part of the general principles of Community law
(the observance of which the Court ensures). At the same time, the Court stated
clearly that this, or the fact that Article 137(5) EC does not
give the Community the competence to regulate the right to strike or the right
to impose lock-outs, does not mean that this right to take industrial action
falls outside the scope of Community law, or in other words, that it
renders Community law inapplicable, and that the exercise of this right may be
subject to certain restrictions. The latter very much reflects the situation in
national legal orders, such as in Finland and in Sweden, as well as in other
Member States, where this right enjoys constitutional protection, but may not
be exercised without any limitation. One must therefore consider whether the
fact that trade unions can take collective action is a restriction on the
freedom to provide services and, if so, whether it can be justified. With
respect to the latter, it follows from the case law that a restriction of a
fundamental freedom is warranted only if: ·
it pursues a legitimate objective compatible
with the Treaty, and ·
it is justified by overriding reasons of public
interest, and if that is the case, ·
it must be suitable for attaining the objective sought
and does not go beyond what is necessary to attain it. According to the Court, the exercise of the
fundamental right to strike must therefore be reconciled with the economic
freedoms of the Treaty, such as the freedom of establishment and the freedom to
provide services, which it may restrict. In this context the Court recognises that
collective action may be justified by the protection of workers against social
dumping and that action by a trade union involving blockading of the host
Member State with the aim of ensuring that their terms and conditions of
employment of workers posted in connection with transnational provision of
services are fixed at a certain level falls within the objective of protecting
workers. Furthermore, the Court clearly indicated that economic considerations
do not per se prevail over objectives pursued by social policy, or vice versa. The question whether, and to what extent,
the exercise of the right to take collective action respects prevailing
Community law obligations, and in particular the proportionality of the action,
was left to the national judges to decide, contrary to its ruling in the Laval
case where the Court ruled itself on this issue. 2. Laval Facts: Laval un Parteri Ltd, a Latvian company,
was hiring out labour from Latvia to an affiliated company in Sweden. The
company hired out building workers to construction sites in Vaxholm and
Danderyd in the Stockholm area where L&P Bygg AB (L&P Baltic
Construction Ltd, a subsidiary) is in charge. Laval had signed collective agreements in
Latvia with the Latvian building-sector trade union previously/shortly before
(i.e. in September and October 2004) and refused to sign any collective
agreement on working conditions and remuneration in Sweden, so the Swedish
Builders’ Union had been blockading the construction site since 2 November
2004. From December 2004, the Swedish Electricians’ Union started action in
sympathy, blocking all electric-related work and services until the company
signed a collective agreement with the Swedish Builders’ Union. Laval initiated proceedings against the
Construction Trade Union before the Swedish Labour Court, seeking a declaration
that the trade unions’ industrial actions (both the blockading and the sympathy
action) were unlawful, and an order for compensation for the damages suffered. Wishing to ascertain whether
Article 49 EC and Directive 96/71/EC preclude trade unions from
attempting, by means of collective action, to force a foreign undertaking which
posts workers to Sweden to sign and apply a Swedish collective agreement, the
Swedish Labour Court referred the matter to the Court of Justice for a
preliminary ruling. Main points of the ruling: First, the Court ruled that the right to
take collective action is a fundamental right which forms an integral part of
the general principles of Community law, but that the exercise of the
collective action must be justified and proportionate. The Court recognised
that collective action may be justified by the protection of the posted workers
against social dumping. In the case in point, however, the Court
found that the collective action was not justified because it aimed to force a
foreign service-provider into negotiation on wages and to sign a collective
agreement which contained obligations which went beyond the Posting of Workers
Directive. In other words, trade unions will continue
to be able to defend the interests of their members at national level. However,
in the specific case at issue, the Swedish trade unions cannot try to impose
obligations contained in collective agreements on companies from other Member
States posting workers which exceed the requirements of the Posting of Workers
Directive. It results from the ruling that Member
States have agreed on the appropriate level of protection of the posted workers
in the host Member State (the Posting of Workers Directive which contains rules
on which minimum working conditions apply to posted workers in the Member State
to which they are posted – Sweden was already a member of the EU when the
Directive was negotiated and adopted). Terms and conditions in excess of the
Posting of Workers Directive (such as paying training or insurance fees
which are of no benefit to the posted workers) cannot be justified.
These conditions are contrary both to the Directive and to Article 49 (on the
freedom to provide services). Although the Court does not say explicitly
that Sweden has not correctly transposed the Posting of Workers Directive, this
could be the implicit result of the judgment, which imposes clear obligations
of transparency and predictability of collective agreements in order to
make it possible for foreign companies to know in advance what salary to pay
and which working conditions to apply in the host country. Second, the Court found that the Swedish
law (lex Britannia) was discriminatory because it allowed the trade unions to
take collective action against foreign service-providers in order to force them
to sign up to the collective agreement, even where the service-provider already
had a collective agreement in its home country, whereas collective action
against a Swedish company was not allowed in a similar situation. 3. Rüffert Facts: The Rüffert case concerns a law of a German
Land on the award of public contracts. The law at stake requires contractors
(and, indirectly, their subcontractors) to pay workers, posted for the purpose
of performing a public contract, at least the remuneration laid down in the
collective agreement in force at the place where those services are performed (so-called
"Tariftreueklausel"). The wage levels in these ‘locally’ applicable
collective agreements were well above the minimum rates of pay required in
Germany under the ‘generally’ applicable collective agreements. Main points of the ruling: The preliminary question the ECJ decided on
is whether such a Tariftreueklausel is in compliance with Community law,
notably the posting of workers directive and Article 49 EC when the collective
agreement is not "declared to be of universal application" as
provided for in directive 96/71/EC. The Court stated that the binding effect
of a collective agreement such as that at issue covered only a part of the
construction sector falling within the geographical area of that agreement,
as it applied only to public contracts and not to private contracts and the collective
agreement had not been declared universally applicable. The Court concluded that such an obligation
was able to impose on service providers established in another Member State an
additional economic burden and that measure such as that at issue in the main
proceedings is capable of constituting a restriction within the meaning of
Article 49 EC. Such a measure could also not be considered
to be justified by the objective of ensuring the protection of workers, as the
Tariftreueklausel solely applies to public contracts and not to private
contracts. There was no evidence to support that the protection resulting from
such a rate of pay is necessary for a construction sector worker only when he
is employed in the context of a public works contract but not when he is
employed in the context of a private contract "Rüffert"
is different from "Laval" in several respects 1) The "Rüffert" case does not
affect the freedom of trade unions to conclude collective agreements or to take
collective action. In that judgment, the Court merely presented and
explained the possibilities available under the Posting of Workers Directive to
public authorities to extend collective agreements to all economic operators,
including posted workers. 2) The German system to
apply collective agreements to foreign service providers is very different from
the Swedish one. In contrast to Sweden, Germany has a regulatory system to
declare collective agreements generally applicable and has made use of this
system in the sector concerned in "Rüffert" (construction). 3) The situation in
"Rüffert" is specific to certain public procurement legislation in
certain German Länder. There were no indications in the
hearing in this case that there was any other Member State in a comparable
situation. 4. Commission v. Luxembourg Background: On 20 July 2006
the Commission brought an action before the European Court of Justice against
the Grand Duchy of Luxembourg concerning ·
the incorrect transposition of the so-called
Posting of Workers directive (Directive 96/71/EC), and ·
the use of national control measures it
considered incompatible with article 49 EC. The posting of
workers directive allows for service providers to send their employees
temporarily to other member states in order to provide these services. 1) While posting workers to another Member State, certain rules of the
host country, the so called 'nucleaus of mandatory rules for minimum
protection', have to be complied with by foreign service providers, such as, (a) maximum work periods and
minimum rest periods; (b) minimum paid annual holidays; (c) the minimum rates of pay,
including overtime rates; this point does not apply to supplementary
occupational retirement pension schemes; (d) the conditions of hiring-out of
workers, in particular the supply of workers by temporary employment
undertakings; (e) health, safety and hygiene at work; (f) protective measures with regard to
the terms and conditions of employment of pregnant women or women who have
recently given birth, of children and of young people; (g) equality of
treatment between men and women and other provisions on non-discrimination. The directive allows Member States to apply
further working conditions on foreign service providers provided they concern 'public
policy provisions' .(such as prohibition of forced labour). When implementing the directive Luxembourg
went beyond the so called nucleus/hard core of mandatory provisions considered
to fall under 'public policy provisions' and imposed, among other, the
following requirements as 'public policy provisions' : (1) an automatic adjustment of pay to
changes in the cost of living (2) the respect of national rules governing
part-time and fixed-term employment (3) the respect
of collective labour agreements even if they are not universally applicable 2) Furthermore the Commission pled that Luxembourg breached Articles 49
EC and 50 EC on free movement of services by setting up additional barriers for
foreign service providers whose workers carry out temporary activity in
Luxembourg. Two issues: a) Luxembourg is very unspecific in when
the service provider has to give prior notification of the posted workers to
allow for efficient controls (make available to the Inspection du Travail et
des Mines 'before the start of the works', 'at the mere request' and 'as
quickly as possible' the particulars necessary for a control). It further
appears that the non-respect of this requirement enables the Luxemburgish
Labour Inspectorate to order the immediate cessation of works and leads to
fines. b) Luxembourg further requires foreign
service providers to designate an 'ad hoc' agent resident in Luxembourg
responsible for keeping the documents necessary for monitoring the obligations
which lie upon them. Luxembourg has failed to prove that such an 'ad hoc' agent
resident in Luxembourg is necessary in order to be able to efficiently control
the compliance with the mandatory employment conditions by foreign service
providers. On
19 June 2008 the Court of Justice rendered its judgment in case C-319/06, Commission v. Luxembourg and: "Declares that, – by declaring the provisions of points (1), (2), (8)
and (11) of Article 1(1) of the Law of 20 December 2002 transposing Directive
96/71/EC of the European Parliament and of the Council of 16 December 1996
concerning the posting of workers in the framework of the provision of services
and the monitoring of the implementation of labour law to be mandatory
provisions falling under national public policy; – by failing fully to transpose Article 3(1)(a) of
Directive 96/71/EC of the European Parliament and of the Council of 16 December
1996 concerning the posting of workers in the framework of the provision of
services; – by setting out, in Article 7(1) of that Law of 20
December 2002, conditions relating to access to the basic information necessary
for monitoring purposes by the competent national authorities with insufficient
clarity to ensure legal certainty for undertakings wishing to post workers to
Luxembourg; and – by requiring, in Article 8 of that Law, that
documents necessary for monitoring purposes be retained in Luxembourg by an ad
hoc agent resident there, the Grand Duchy of Luxembourg has failed to fulfil its
obligations under Article 3(1) of Directive 96/71, read in conjunction with
Article 10 thereof, and Articles 49 EC and 50 EC." ANNEX 11: Expected impact on
competitiveness of EU industry (Competitiveness Proofing) 1. Introduction The analysis below aims at providing
additional information on the expected impact on competitiveness of the
regulatory initiatives concerning the "enforcement of the provisions
applicable to the posting of workers in the framework of the provision of
services" preferred policy option (package B). 1.1. Objectives of
"Competitiveness Proofing" The legal framework on the posting of
workers in the context of the provision of services aims at facilitating the
cross-border provision of services while ensuring an adequate level of
protection of workers’ rights. The Directive defines the core of mandatory
working conditions which have to be respected by companies in the host country.
The Directive aims at promoting the necessary climate of fair competition
between all service providers in the Internal Market by seeking to lay the
conditions for a level playing field, as well as legal certainty for service
providers, service recipients, and workers posted within the context of the
provision of services. The preferred policy option B aims at improving and
reinforcing the transposition, implementation and enforcement in practice of the
Posting of Workers Directive, including measures to prevent and sanction any
abuse and circumvention of the applicable rules. Some sectors such as
construction and temporary work agencies deserve particular attention, due to
the significant reliance on Posting of workers. A set of specific competitiveness-related
questions will be addressed, in line with the "Competitiveness
Proofing" which provides operational guidance for assessing impacts on
sectoral competitiveness[18]: ·
Cost competitiveness: the cost of doing
business, which includes cost of intermediate consumption and of factors of
production (labour, capital and energy); ·
Capacity to innovate: the capacity of the
business to produce more and/or higher quality products and services that meet
better customers' preferences ·
International competitiveness: the above two
aspects could also be assessed in an international comparative perspective, so
that the likely impact of the policy proposal on the sector market shares and
revealed comparative advantages on the world markets is taken into account. 1.2. Availability of data The only
available direct source at EU-level is the administrative data based on E101
social security forms which enables an effective EU comparison of the number of
postings. Further evaluation of impact of the new regulatory environment in
terms of competitiveness would require the improvement of statistical
information. However, in order to avoid additional administrative burden for
companies a mandatory EU wide notification system for posting has not been
included in the policy options. 2. Cost and price competitiveness:
Cost of labour Posting can have a specific role in internationalization of
companies. The possible flow of labour exerts a pressure on costs and allows
companies to enter new markets using its existing pool of skills. Posting will
have a stronger impact in what concerns the cost of labour. The expected
impacts of posting of workers regulatory initiatives in labour market are the
following: ·
Lower labour costs for receiving companies ·
Externalisation of costs: experienced posted workers are immediately productive whereas newly
recruited employees need training. ·
Reducing labour
shortages. In times of
economic growth, posting has
had an important labour market effect in sectors where it is
concentrated. Posting can have a positive impact in
overcoming labour shortages both volume and skills. In receiving
countries there is limited evidence of displacement of local workers by foreign
workers. ·
Flexible capacity and seasonal demand: posted workers can be hired on short
term contracts in accordance to the needs of a company. In this way, a company
can adapt the volume of the workforce to the demands of seasonal labour or
other labour demand fluctuations. ·
Benefit from competitive prices of foreign-service providers due to lower wage and labour costs: posting
can decrease the cost of services purchased if the labour costs of posted
workers are below that of workers from the host country doing comparable work. ·
Reducing transaction costs through improved and easy access to information. Currently, companies have difficulties
finding out and interpreting the conditions of employment and rules related to
posting given the different national legal frameworks. Better
and adequate information available to undertakings as regards the provision of
services in the framework of posting of workers provide for more clarity and
certainty for companies regarding the applicable working conditions and will
also contribute to a better respect of the applicable labour legislation. Package
B will contribute to the reduction of costs for compiling and gathering
information. A reduction in transaction costs, due to an easy access to
information can have a positive contribution to the development of the
externalization of activities and can promote the use of such services without
the negative impacts on competition arising from social dumping. Thus, an
increased legal certainty can reduce the cost of compliance for business which
do need to use posted workers as part of their transnational operations,
therefore a positive impact on competitiveness can be expected through the
enhanced ability of companies being able to assemble resources at an European
level. ·
Improving quality of cross-border services: posting is important in order to
maintain and improve the amount and quality of cross-border services offered to
international clients. It allows companies to send experienced employees for a
short period abroad to give training, or to install specialised equipment. ·
Centralizing purchasing policies: companies will have the choice of implementing purchasing
strategies at EU-level (e.g. maintenance or ICT, for example). ·
Higher potential
liability costs: package B includes the
introduction of a system of joint and several liability. This will contribute
to reduce unfair competition compared to the current situation. This can lead to a reduction of costs related with
complaints against service users. However, companies must be aware of the risks
entailed in using the services of subcontractors who do not comply with the
minimum wage provisions applicable to posted workers. A respective risk
assessment entails additional general compliance costs of about 2 million Euro
for EU-27 per year. Beyond joint
and several liability package B does not entail other costs for companies.
Provisions regarding national control measures will limit Member States
possibilities to impose administrative requirements on service providers and
reduce costs for companies. For further details see Impact Assessment section
6.3.1 and Annexes 5, 6 and 7. In increasingly
globalised markets competitiveness in products and services markets depend on
the competitiveness of the different value chain stages. If companies can
benefit from a more stable regulatory environment, which allow them to make
more efficient choices about the use of resources at European level, that has
the potential to generate savings and impact the cost of inputs. Posting can
contribute for companies to gain more flexibility in the organization of their
value chains, being able to adjust to the economic cycles. It will give
companies a higher ability to implement low cost strategies. Improved
regulatory framework for posting of workers is expected to reinforce
competitiveness of European companies by contributing to lower labours costs,
increased flexibility in value chains and a clearer level playing field. 3. Capacity to innovate and to produce
and bring R&D to the market Package B can
have a beneficial impact on the capacity of companies to innovate:
multinational companies tend to organize themselves on a larger geographical
scale (e.g. European scale) for internal activities such as R&D, this
increases the need for short term international staff mobility. Also, from the
perspective of the sending countries, cooperation with companies from other EU
countries inevitably raises the capacity for learning and innovating. 4. International competitiveness 4.1. Competitiveness in internal
market From the perspective of business, posting
is closely associated with the trend towards internationalisation of production
chains. One of the main drivers of posting are labour and/or skills shortages
in the host market. Companies benefit from posting their workers abroad in different
ways: ·
Entering new markets: companies looking to expand often
consider entering new geographical markets. Once they have started offering
services in another Member State they often make use of posting during the
start-up period. Experienced staff from the company is sent to support the
development of business abroad. Improvements in the Posting of workers
regulatory framework will make it easy and less risky for the companies to
enter a new market using their own pool of resources, therefore reducing the
barriers to entry in other markets. ·
Using own workforce and maintaining a higher degree of control over the work
performed: companies prefer to send experienced
and specialized staff to supervise or assist to the work done in other
countries. ·
Gaining experience and learning through working abroad: companies
and employees want to benefit from improved competences gained through work
abroad, with positive spill-over effects in what concerns competition in the
internal market. ·
Adapt to demand in the home market: there can be a negative relation
between the economic climate and the amount of postings in a sector, whereby a
decline in the home market can force companies to look for work abroad and an
increase in the home market reduces this need. Thus posting will create
incentives for increased competition in the internal market as it provides
companies with additional opportunities to exploit new markets and to reduce
the risks associated with economic cycles. The posting of workers legislation has an important role in
defining the level playing field, guaranteeing fair competition and respect for
the rights of posted works. The positive effects of the existing Directive will
be reinforced by package B. This is expected to have the following positive effect
in terms of competitiveness: ·
Reducing social dumping: In labour law, the Posting of Workers Directive implies compliance
with a hard core of applicable terms and conditions of employment in the host Member
State, unless the rules of the sending state are more favourable, the objective
being that freedom to provide services should not promote social dumping. Since
package B will improve the application of the existing Directive in practice this
will have a positive effect on the most productive and profitable companies
which will not be exposed to the behaviours of less efficient companies which
exploit the current loopholes in legislation. ·
Reducing effects of unfair competition: The new measures will tackle the abuse of the posting legislation.
It will envisage better monitoring in order to diminish fraud. In this
respect, the rules concerning liability of recipients (clients/main
contractors/user companies) of a service carried out by posted workers, will
contribute to prevent the non-payment of wages by their employer, thus reducing
effects of unfair competition. ·
Generating pressure on local competitors of
foreign service providers in local services markets (e.g. price competition): The new regulatory efforts concerning posting will encourage
cross-border trade and free movement of services. This is expected to have a
positive impact in promoting competitiveness of firms in a very broad range of
sectors operating the internal market. Example: Unfair competition by
exploiting legal uncertainty: letter box companies Setting up letter box companies which then hire
workers specifically to post them to other Member States and incidences of
consecutive postings of a single worker to a single Member State by different
‘employers’ in different Member States. In some cases, the employer is not
genuinely established in the sending state, in other cases a link between the
employment contract and the state of establishment of the employer is missing. The worker might actually be made to work under
the direct supervision of the user undertaking, thus creating a situation of
bogus subcontracting or illicit provision of manpower. The absence of genuine
activities in the country of origin may be combined with repeated postings, in
which the ‘posted’ worker is working in a specific Member state on an (almost)
permanent basis. Other cases might describe situations of rotational posting in
which the worker is posted consecutively to different Member States. 4.2. Competitiveness in external
markets Posting between
different companies is related to the international provision of services.
Posting of Workers regulatory environment will have economic effects in the
areas of: ·
Market entry and internationalisation: it allows service providers
consolidate or expand their international market by servicing international
clients through short term assignments at the client’s workplace. However, it
will ensure that international players will not be subject to better conditions
in the use of posted workers. ·
Increase flexibility and competitiveness: From a receiving perspective, posting is used as a tool to increase
flexibility and competitiveness. The clients are able to have access to
specialist skills across borders. Intra-company posting is rather a phenomenon
of multinational companies although specialised SME’s with international
activities also make use of it. International mobility is a necessity for these
enterprises and it contributes to the overall development of the companies and
to their ability to access and combine resources. ·
Reducing distortions to competition and the adverse effects on the
protection of workers resulting from the transnational provision of services. Improved
application and enforcement in practice of the posting of workers Directive would
allow EU companies to exploit cost advantages of externalising activities,
allowing them to better respond to the challenge of globalised competition,
being able to access critical resources at competitive costs. Since companies
established outside the Union have to respect at least the same terms and
conditions of employment a better enforcement of the current legal framework would
also reduce unfair competition on wages and working conditions by these
companies. 5. Sector implications – Illustrative
cases From the preparatory studies and consultation it emerges
that the main sectors concerned with the use of posted workers are: ·
Agriculture; ·
Hotels; restaurants and catering; ·
Transport; ·
Construction; ·
Temporary agencies. According to the main report the sectors that are more likely
to be affected and which better illustrate the relevance of posting of workers
are the last two. Posting has played a significant role
in the construction sector, noticeably, regarding competition and
competitiveness in the sector and temporary work agencies have been identified
has critical components for the effective implementation of the posting of
workers directive Illustrative
case 1: Construction sector Posting in the
construction sector is the archetypal cross-border posting, which lay at the
origin of the Directive. The sector is characterized by the fact that the
service is actually performed at a specific site, and hence requires workers to
move to that site to perform the services. Compared with other industries,
construction is one of the most labour-intensive industries with many workers
working on temporary basis, so labour costs are an important element for
companies. As the number of posted workers in this sector is relatively high,
the Posting of Workers Directive is considered to be one of the cornerstones of
European legislation for the construction sector. Conflicts in the construction
sector are at the origin of numerous proceedings before the CJEU. Most drivers
and barriers regarding posting in the construction sector do not significantly
differ from other sectors: economic and financial motives, together with labour
shortages in the receiving country constitute the main drivers. The high level
of postings can, amongst other elements, be explained by the labour intensity
of the industry and the high share of temporary work. The other drivers and
barriers do not differ significantly from other sectors - economic and cost
motives, especially related to labour costs, together with labour shortages in
the receiving country constitute the main drivers. As an example in Germany the
Construction sector faced a need to cut costs since prices become increasingly
under pressure, cost-reduction was achieved through the deployment of posted
workers. As regards
economic effects, posting seems to have a positive effect on competitiveness
(reflected in costs) of the construction sectors, but with differences between
sending and receiving countries: ·
Economic drivers and competitiveness: foreign (posted) employees often have very competitive prices. The
externalisation of costs as construction companies do not have to cover the
costs of education and training for example, as educated workers can be posted
directly. For longer distance posting, wage differences and market
opportunities are the main drivers for posting. ·
Shortages and lack of qualifications in
the local economy: shortage of labour supply in
the local economy could be a driver to receiving posted workers. In addition,
for some professions in the construction sector, competences and qualifications
in technical aspects are lacking. In some countries the construction sector
finds insufficiently qualified candidates to fill the market-place demands. ·
More competition in the sector: posting of workers would contribute to
more competition in the sector in the local labour market. In the currents
status of the Posting of Workers Directive companies who are not competitive in
their own local market but survive through using cheaper services available
from foreign providers, could be rewarded. It is thus a way for those
non-efficient companies to survive for longer instead of going bankrupt. For
receiving countries, posting in the construction sector is mainly about cutting
costs and thus the search for cheap labour. Posting of workers in the construction
sector is mainly about having low-skilled activities performed by foreign
workers who are prepared to work for low payment and who are quickly
employable. ·
Trend of subcontracting in the sector: In Germany for example, the posting of workers enabled large
construction companies to develop a completely different business model in
which the organisation of large subcontracting chains plays a key role. Even
though the management costs of such subcontracting chains are high, the
cost-reduction achieved through the deployment of posted workers largely
exceeds these costs. ·
Limited effect on local workers and
working condition. In
companies where workers from abroad are posted, there has been a possible
limited effect on wages and working time for (low qualified) local workers,
following from the direct competition with posted workers. It was to be
mentioned by several stakeholders from different countries, in the construction
sector, that under the current system there were unfair competitionpractices,
because labour conditions (working hours and wages) were not respected by
companies making use of foreign posted workers. This allowed certain
competitors to set lower prices in bids, which were, in some cases, even
considerably lower than prices estimated by the client. The clear
interpretation of those issues by the proposed regulation is expected to have a
positive impact in terms of reducing unfair competition and through that means
contributing to reinforced competitiveness of the European construction firms. Package
B will also be instrumental in tackling unlawful labour conditions by improving
the effectiveness of controls. Illustrative
case 2: Temporary work agencies Another sector
which is characterized by the fact that the services are performed ‘on site’ is
the service provided by temporary work agencies. The temporary agency industry
is atypical: temporary agency workers are placed at the disposal of an employer
in another sector, which could be anything from construction to banking and
other commercial services, to agriculture and manufacturing. This means that
workforce provision crosses the lines between different sectors of industry. Intermediaries/service
providers have nevertheless discovered the legal possibility to hire people in
the cheapest and/or easiest way. Sometimes intermediaries in other Member
States are used with the sole purpose of turning (temporary or seasonal)
migration into posting. Besides this, provision of manpower is quite often
associated with illegal operations and undeclared work. In extreme cases this
may lead to forms of modern slavery and/or trafficking in human beings. The illegal
temporary work agencies may be established both in the country of recruitment
(leading to posting) or in the county of work (leading to migration). Several
reported cases of abuse concerned migrant workers or even (bogus)
self-employed. These cases involve social dumping in its purest form – with no
respect for either the protective system of the country of origin or that of
the host country. With respect to
posting by means of temporary agency work, the new provisions concerning.
control measures and enforcement (defence of rights, subcontracting chains,
liability and penalties), will contribute to create a more predictable
regulatory environment and will distinguish between "fair"
exploitation of differentials in remuneration and in business cycles between
regions and unfair practices. A positive impact on competitiveness is expected
from the increased certainty in the provision of services by temporary work
agencies making it possible for companies to exploit the advantages of
outsourcing in their value chains in a secure way. 6. Impacts on SME and micro-SME A positive
impact on the competitiveness of SMEs and micro-SMEs can be expected since an improved
and clear regulatory environment will improve the predictability of the
business environment. SMEs are in particular affected by the lack of
transparent information regarding the applicable working and employment
conditions in the host Member State since they have little capacity to
investigate the applicable rules themselves. Thus, companies will have lower
costs of investigating applicable working and employment conditions in the host
Member State, and will benefit from the ability of SMEs and micro-SMEs to
exploit the possibility of providing services in new markets. Since SMEs and
micro-SMEs are especially affected by any kind of administrative requirements that
create excessively onerous obligations for foreign undertakings they will
benefit from package B which will limit Member States possibilities to imposes
such measures. Package B provides guidance for Member States with regard to
inspections. SMEs and micro-SMEs with a good record will benefit from
inspections based on a risk assessment. Effective inspections, improved
administrative cooperation, cross-border execution of fines and joint and
several liability will contribute to fairer competition and a more level
playing field. Since SMEs and micro-SMEs are in particular sensitive to unfair
competition they will benefit from these provisions. ANNEX 12: Directive 96/71/EC DIRECTIVE 96/71/EC OF THE EUROPEAN
PARLIAMENT AND OF THE COUNCIL of 16 December 1996 concerning the posting of
workers in the framework of the provision of services[19] THE EUROPEAN PARLIAMENT AND THE COUNCIL OF
THE EUROPEAN UNION, Having regard to the Treaty establishing
the European Community, and in particular Articles 57 (2) and 66 thereof, Having regard to the proposal from the
Commission (1), Having regard to the opinion of the
Economic and Social Committee (2), Acting in accordance with the procedure
laid down in Article 189b of the Treaty (3), (1) Whereas,
pursuant to Article 3 (c) of the Treaty, the abolition, as between Member
States, of obstacles to the free movement of persons and services constitutes
one of the objectives of the Community; (2) Whereas,
for the provision of services, any restrictions based on nationality or
residence requirements are prohibited under the Treaty with effect from the end
of the transitional period; (3) Whereas the
completion of the internal market offers a dynamic environment for the
transnational provision of services, prompting a growing number of undertakings
to post employees abroad temporarily to perform work in the territory of a Member
State other than the State in which they are habitually employed; (4) Whereas the
provision of services may take the form either of performance of work by an
undertaking on its account and under its direction, under a contract concluded
between that undertaking and the party for whom the services are intended, or
of the hiring-out of workers for use by an undertaking in the framework of a
public or a private contract; (5) Whereas any
such promotion of the transnational provision of services requires a climate of
fair competition and measures guaranteeing respect for the rights of workers; (6) Whereas the
transnationalization of the employment relationship raises problems with regard
to the legislation applicable to the employment relationship; whereas it is in
the interests of the parties to lay down the terms and conditions governing the
employment relationship envisaged; (7) Whereas the
Rome Convention of 19 June 1980 on the law applicable to contractual
obligations (4), signed by 12 Member States, entered into force on 1 April
1991 in the majority of Member States; (8) Whereas
Article 3 of that Convention provides, as a general rule, for the free choice
of law made by the parties; whereas, in the absence of choice, the contract is
to be governed, according to Article 6 (2), by the law of the
country, in which the employee habitually carries out his work in performance
of the contract, even if he is temporarily employed in another country, or, if
the employee does not habitually carry out his work in any one country, by the
law of the country in which the place of business through which he was engaged
is situated, unless it appears from the circumstances as a whole that the
contract is more closely connected with another country, in which case the contract
is to be governed by the law of that country; (9) Whereas,
according to Article 6 (1) of the said Convention, the choice of law made by
the parties is not to have the result of depriving the employee of the
protection afforded to him by the mandatory rules of the law which would be
applicable under paragraph 2 of that Article in the absence of choice; (10) Whereas
Article 7 of the said Convention lays down, subject to certain conditions, that
effect may be given, concurrently with the law declared applicable, to the
mandatory rules of the law of another country, in particular the law of the
Member State within whose territory the worker is temporarily posted; (11) Whereas,
according to the principle of precedence of Community law laid down in its
Article 20, the said Convention does not affect the application of provisions
which, in relation to a particular matter, lay down choice-of-law rules
relating to contractual obligations and which are or will be contained in acts
of the institutions of the European Communities or in national laws harmonized
in implementation of such acts; (12) Whereas
Community law does not preclude Member States from applying their legislation,
or collective agreements entered into by employers and labour, to any person
who is employed, even temporarily, within their territory, although his
employer is established in another Member State; whereas Community law does not
forbid Member States to guarantee the observance of those rules by the
appropriate means; (13) Whereas
the laws of the Member States must be coordinated in order to lay down a
nucleus of mandatory rules for minimum protection to be observed in the host
country by employers who post workers to perform temporary work in the
territory of a Member State where the services are provided; whereas such
coordination can be achieved only by means of Community law; (14) Whereas a
'hard core` of clearly defined protective rules should be observed by the
provider of the services notwithstanding the duration of the worker's posting; (15) Whereas it
should be laid down that, in certain clearly defined cases of assembly and/or
installation of goods, the provisions on minimum rates of pay and minimum paid
annual holidays do not apply; (16) Whereas
there should also be some flexibility in application of the provisions
concerning minimum rates of pay and the minimum length of paid annual holidays;
whereas, when the length of the posting is not more than one month, Member
States may, under certain conditions, derogate from the provisions concerning
minimum rates of pay or provide for the possibility of derogation by means of
collective agreements; whereas, where the amount of work to be done is not
significant, Member States may derogate from the provisions concerning minimum
rates of pay and the minimum length of paid annual holidays; (17) Whereas
the mandatory rules for minimum protection in force in the host country must
not prevent the application of terms and conditions of employment which are
more favourable to workers; (18) Whereas
the principle that undertakings established outside the Community must not
receive more favourable treatment than undertakings established in the
territory of a Member State should be upheld; (19) Whereas,
without prejudice to other provisions of Community law, this Directive does not
entail the obligation to give legal recognition to the existence of temporary
employment undertakings, nor does it prejudice the application by Member States
of their laws concerning the hiring-out of workers and temporary employment
undertakings to undertakings not established in their territory but operating
therein in the framework of the provision of services; (20) Whereas
this Directive does not affect either the agreements concluded by the Community
with third countries or the laws of Member States concerning the access to
their territory of third-country providers of services; whereas this Directive
is also without prejudice to national laws relating to the entry, residence and
access to employment of third-country workers; (21) Whereas
Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of
social security schemes to employed persons and their families moving within
the Community (5) lays down the provisions applicable with regard to social
security benefits and contributions; (22) Whereas
this Directive is without prejudice to the law of the Member States concerning
collective action to defend the interests of trades and professions; (23) Whereas
competent bodies in different Member States must cooperate with each other in
the application of this Directive; whereas Member States must provide for
appropriate remedies in the event of failure to comply with this Directive; (24) Whereas it
is necessary to guarantee proper application of this Directive and to that end
to make provision for close collaboration between the Commission and the Member
States; (25) Whereas
five years after adoption of this Directive at the latest the Commission must
review the detailed rules for implementing this Directive with a view to
proposing, where appropriate, the necessary amendments, HAVE ADOPTED THIS DIRECTIVE: Article 1 - Scope 1. This
Directive shall apply to undertakings established in a Member State which, in
the framework of the transnational provision of services, post workers, in
accordance with paragraph 3, to the territory of a Member State. 2. This
Directive shall not apply to merchant navy undertakings as regards seagoing
personnel. 3. This
Directive shall apply to the extent that the undertakings referred to in paragraph
1 take one of the following transnational measures: (a)
post workers to the territory of a Member State
on their account and under their direction, under a contract concluded between
the undertaking making the posting and the party for whom the services are
intended, operating in that Member State, provided there is an employment
relationship between the undertaking making the posting and the worker during
the period of posting; or (b)
post workers to an establishment or to an
undertaking owned by the group in the territory of a Member State, provided
there is an employment relationship between the undertaking making the posting
and the worker during the period of posting; or (c)
being a temporary employment undertaking or
placement agency, hire out a worker to a user undertaking established or
operating in the territory of a Member State, provided there is an employment
relationship between the temporary employment undertaking or placement agency
and the worker during the period of posting. 4.
Undertakings established in a non-member State must not be given more
favourable treatment than undertakings established in a Member State. Article 2 - Definition 1. For the
purposes of this Directive, 'posted worker` means a worker who, for a limited
period, carries out his work in the territory of a Member State other than the
State in which he normally works. 2. For the
purposes of this Directive, the definition of a worker is that which applies in
the law of the Member State to whose territory the worker is posted. Article 3 - Terms and conditions of
employment 1. Member
States shall ensure that, whatever the law applicable to the employment
relationship, the undertakings referred to in Article 1 (1) guarantee workers
posted to their territory the terms and conditions of employment covering the
following matters which, in the Member State where the work is carried out, are
laid down: - by law, regulation or administrative
provision, and/or - by collective agreements or arbitration
awards which have been declared universally applicable within the meaning of
paragraph 8, insofar as they concern the activities referred to in the Annex: (a)
maximum work periods and minimum rest periods; (b)
minimum paid annual holidays; (c)
the minimum rates of pay, including overtime
rates; this point does not apply to supplementary occupational retirement
pension schemes; (d)
the conditions of hiring-out of workers, in
particular the supply of workers by temporary employment undertakings; (e)
health, safety and hygiene at work; (f)
protective measures with regard to the terms and
conditions of employment of pregnant women or women who have recently given
birth, of children and of young people; (g)
equality of treatment between men and women and
other provisions on non-discrimination. For the purposes of this Directive, the
concept of minimum rates of pay referred to in paragraph 1 (c) is defined by
the national law and/or practice of the Member State to whose territory the
worker is posted. 2. In the
case of initial assembly and/or first installation of goods where this is an
integral part of a contract for the supply of goods and necessary for taking
the goods supplied into use and carried out by the skilled and/or specialist
workers of the supplying undertaking, the first subparagraph of paragraph 1 (b)
and (c) shall not apply, if the period of posting does not exceed eight days. This provision shall not apply to
activities in the field of building work listed in the Annex. 3. Member
States may, after consulting employers and labour, in accordance with the
traditions and practices of each Member State, decide not to apply the first
subparagraph of paragraph 1 (c) in the cases referred to in Article 1 (3) (a)
and (b) when the length of the posting does not exceed one month. 4. Member
States may, in accordance with national laws and/or practices, provide that
exemptions may be made from the first subparagraph of paragraph 1 (c) in the
cases referred to in Article 1 (3) (a) and (b) and from a decision by a Member
State within the meaning of paragraph 3 of this Article, by means of collective
agreements within the meaning of paragraph 8 of this Article, concerning one or
more sectors of activity, where the length of the posting does not exceed one
month. 5. Member
States may provide for exemptions to be granted from the first subparagraph of
paragraph 1 (b) and (c) in the cases referred to in Article 1 (3) (a) and (b)
on the grounds that the amount of work to be done is not significant. Member States availing themselves of the
option referred to in the first subparagraph shall lay down the criteria which
the work to be performed must meet in order to be considered as
'non-significant`. 6. The
length of the posting shall be calculated on the basis of a reference period of
one year from the beginning of the posting. For the purpose of such calculations,
account shall be taken of any previous periods for which the post has been
filled by a posted worker. 7.
Paragraphs 1 to 6 shall not prevent application of terms and conditions of
employment which are more favourable to workers. Allowances specific to the posting shall be
considered to be part of the minimum wage, unless they are paid in
reimbursement of expenditure actually incurred on account of the posting, such
as expenditure on travel, board and lodging. 8.
'Collective agreements or arbitration awards which have been declared
universally applicable` means collective agreements or arbitration awards which
must be observed by all undertakings in the geographical area and in the
profession or industry concerned. In the absence of a system for declaring
collective agreements or arbitration awards to be of universal application
within the meaning of the first subparagraph, Member States may, if they so
decide, base themselves on: –
collective agreements or arbitration awards
which are generally applicable to all similar undertakings in the geographical
area and in the profession or industry concerned, and/or –
collective agreements which have been concluded
by the most representative employers' and labour organizations at national
level and which are applied throughout national territory, provided that their application to the
undertakings referred to in Article 1 (1) ensures equality of treatment on
matters listed in the first subparagraph of paragraph 1 of this Article between
those undertakings and the other undertakings referred to in this subparagraph
which are in a similar position. Equality of treatment, within the meaning
of this Article, shall be deemed to exist where national undertakings in a
similar position: –
are subject, in the place in question or in the
sector concerned, to the same obligations as posting undertakings as regards
the matters listed in the first subparagraph of paragraph 1, and –
are required to fulfil such obligations with the
same effects. 9. Member
States may provide that the undertakings referred to in Article 1 (1) must
guarantee workers referred to in Article 1 (3) (c) the terms and conditions
which apply to temporary workers in the Member State where the work is carried
out. 10. This
Directive shall not preclude the application by Member States, in compliance
with the Treaty, to national undertakings and to the undertakings of other
States, on a basis of equality of treatment, of: –
terms and conditions of employment on matters
other than those referred to in the first subparagraph of paragraph 1 in the
case of public policy provisions, –
terms and conditions of employment laid down in
the collective agreements or arbitration awards within the meaning of paragraph
8 and concerning activities other than those referred to in the Annex. Article 4 - Cooperation on information 1. For the
purposes of implementing this Directive, Member States shall, in accordance
with national legislation and/or practice, designate one or more liaison
offices or one or more competent national bodies. 2. Member
States shall make provision for cooperation between the public authorities
which, in accordance with national legislation, are responsible for monitoring
the terms and conditions of employment referred to in Article 3. Such
cooperation shall in particular consist in replying to reasoned requests from
those authorities for information on the transnational hiring-out of workers,
including manifest abuses or possible cases of unlawful transnational
activities. The Commission and the public authorities
referred to in the first subparagraph shall cooperate closely in order to
examine any difficulties which might arise in the application of Article 3
(10). Mutual administrative assistance shall be
provided free of charge. 3. Each
Member State shall take the appropriate measures to make the information on the
terms and conditions of employment referred to in Article 3 generally
available. 4. Each
Member State shall notify the other Member States and the Commission of the
liaison offices and/or competent bodies referred to in paragraph 1. Article 5 - Measures Member States shall take appropriate
measures in the event of failure to comply with this Directive. They shall in particular ensure that
adequate procedures are available to workers and/or their representatives for
the enforcement of obligations under this Directive. Article 6 - Jurisdiction In order to enforce the right to the terms
and conditions of employment guaranteed in Article 3, judicial proceedings may
be instituted in the Member State in whose territory the worker is or was
posted, without prejudice, where applicable, to the right, under existing
international conventions on jurisdiction, to institute proceedings in another
State. Article 7 - Implementation Member States shall adopt the laws,
regulations and administrative provisions necessary to comply with this
Directive by 16 December 1999 at the latest. They shall forthwith inform the
Commission thereof. When Member States adopt these provisions,
they shall contain a reference to this Directive or shall be accompanied by
such reference on the occasion of their official publication. The methods of
making such reference shall be laid down by Member States. Article 8 - Commission review By 16 December 2001 at the latest, the
Commission shall review the operation of this Directive with a view to
proposing the necessary amendments to the Council where appropriate. Article 9 This Directive is addressed to the Member
States. Done at Brussels, 16 December 1996. For
the European Parliament The
President K.
HÄNSCH For
the Council The
President I.
YATES (1) OJ No C 225, 30. 8. 1991, p. 6 and OJ
No C 187, 9. 7. 1993, p. 5. (2) OJ No C 49, 24. 2. 1992, p. 41. (3) Opinion of the European Parliament of
10 February 1993 (OJ No C 72, 15. 3. 1993, p. 78), Council common position of 3
June 1996 (OJ No C 220, 29. 7. 1996, p. 1) and Decision of the European
Parliament of 18 September 1996 (not yet published in the Official Journal).
Council Decision of 24 September 1996. (4) OJ No L 266, 9. 10. 1980, p. 1. (5) OJ No L 149, 5. 7. 1971, p. 2; Special
Edition 1971 (II), p. 416. Regulation as last amended by Regulation (EC) No
3096/95 (OJ No L 335, 30. 12. 1995, p. 10). ANNEX The activities mentioned in Article 3 (1),
second indent, include all building work relating to the construction, repair,
upkeep, alteration or demolition of buildings, and in particular the following
work: 1.
excavation 2.
earthmoving 3.
actual building work 4.
assembly and dismantling of prefabricated elements 5.
fitting out or installation 6.
alterations 7.
renovation 8.
repairs 9.
dismantling 10.
demolition 11.
maintenance 12.
upkeep, painting and cleaning work 13.
improvements. [1] Ismeri Europa, Preparatory study for an Impact
Assessment concerning the possible revision of the legislative framework on the
posting of workers in the context of the provision of services. [2] Box B.1 discusses the relationship between GDP and
labour cost. [3] Ismeri Europa, Preparatory study for an Impact
Assessment concerning the possible revision of the legislative framework on the
posting of workers in the context of the provision of services [4] The European Migrant Workers Union (Europäische
Verein für Wanderarbeiterfragen, EMWU) was established in September 2004 by
Germany's Trade Union for Building, Forestry, Agriculture and the Environment
(IG BAU). See the EIRO article, European Migrant Workers Union founded, EIRO 2004, DE0409206F. [5] Although existing evidence is very fragmented, data
on the number of posted workers per posting available for France and Denmark
(3-4 posted workers per posting) indicate that possibly small companies are
often involved in the posting of workers. This can be true even if in certain
sectors, like in the engineering construction industry, the role of large
multinational companies is very important, since the subcontracting chain is
extended and can include numerous SMEs at its downstream end. As a consequence,
in a sending perspective, the benefits of posting may be enjoyed especially by
SMEs. [6] This is also true for a number of related
construction sectors such as electrical contracting, building and allied
trades, heating and ventilation, plumbing mechanical engineering, environmental
engineering and demolition. Growing concerns about the potential impact of
posting on industrial relations are growing in other sectors with nation-wide
bargaining such as public services and rail transport. [7] Council Conclusions on further development of an
electronic exchange system facilitating the administrative cooperation in the
framework of the posting of workers Directive (st7395/11). [8] Fabienne Muller, Information provided on the posting
of workers, Strasbourg, 2010. Available on the website: http://www.ec.europa.eu/social/posted-workers [9] Ismeri Europa, Preparatory study for an Impact
Assessment concerning the possible revision of the legislative framework on the
posting of workers in the context of the provision of services. [10] With regard to concepts, competences and methods used
by labour inspectorates cf. Commission staff working document, SEC(2006) 439,
p.25. [11] This is confirmed by the German assessment of
administrative burden with regard to the respective provision in § 14 AEntG
(Law on the posting of workers) in accordance with the Standard Cost Model, cf.
https://www-skm.destatis.de/webskm/online. [12] Ismeri Europa, Preparatory study for an Impact
Assessment concerning the possible revision of the legislative framework on the
posting of workers in the context of the provision of services. [13] NB: 15 minutes for a posting declaration is a
relatively high assumption in order to take a conservative approach. The German
prior declaration according to § 18 (1) AEntG requires 2.77 minutes according
to the Standard Cost Model (SCM). See https://www-skm.destatis.de/webskm/online [14] http://emwu.org/ [15] The interview and the analysis of the website have been
carried out by Commission services in November 2011. [16] http://emwu.org/ à German website à Aktuelles. All cases concern wage claims of posted or fake-posted workers or
fake self-employed in the construction sector. [17] Cases are numbered chronologically backwards from 2011
to 2005. Sometimes several press releases concern the same case or several
cases are part of one press release. This has been taken into consideration. [18] Operational guidance for assessing impacts on sectoral
competitiveness within the commission impact assessment system [19] Official Journal L 018 , 21/01/1997 P. 0001 - 0006