A posted worker is defined as ‘a person who, for a limited period of time, carries out his or her work in the territory of an EU Member State other than the State in which he or she normally works’ (Council Directive 96/71/EC).
The definition, used in several European Institution documents, regulations and research, underlines major characteristics, such as:
- a genuine employment relationship with the ‘original’ employer;
- the temporary nature of the activities performed.
Migrant workers are subject to different regulations, as their situation does not correspond to the main criteria of posting. The qualification of posted worker does not apply to:
- people who decide of their own accord to seek employment in another Member State;
- seagoing personnel in the merchant navy;
- the self-employed.
It should be pointed out that the ‘free movement of workers’, which gives every citizen the right to move freely to another Member State to work and reside there for that purpose and protects them against discrimination, has to be differentiated from the ‘freedom to provide services’ that gives businesses the right to provide services in another member state. This is laid out in Article 56 of the Treaty on the Functioning of the European Union (TFEU).
It is difficult to know exactly who is posted, and how many workers are posted. Calculations are particularly complicated as there are significant differences in how figures are compiled depending on sectors, occupations, sources of data and countries.
Posted worker arrangements are common in the construction industry, but are also found in transport, telecommunications, entertainment, repairs, maintenance and servicing. While it is difficult to calculate the precise number of posted workers, data from a European Commission-funded report (1.96Mb PDF) issued in 2011 found that, based on E101 forms, there were 1,294,669 posted workers in the EU27 countries in 2007. These included postings to a specific country and applications to work in the EU. However, posted workers represented only 0.37% of the active population of EU-15 ‘sending countries’ (countries which are posting abroad) and 0.74% of the active population of EU-12 sending countries. The main sending countries were France, Poland and Germany.
The issues at stake when it comes to posted workers are, on the one hand, workers’ rights and, on the other hand, company freedom and obligations. The Rome Convention of 19 June 1980 held that, whichever law applies, the worker should not be deprived of the protection afforded by mandatory rules of law applicable in the host country. This authorised Member States to require posting enterprises to respect local legislation and collective agreements.
The 1996 Directive
In 1996, the Council adopted a Directive aimed at addressing the challenge for balancing the workers’ and companies’ rights – the Council Directive 96/71/EC on the posting of workers is the framework of the provision of services. The aim of the 1996 Directive was to remove the uncertainties and obstacles impeding the free provision of services by increasing legal certainty and facilitating the definition of working conditions regulations applicable to posted workers. In this way, it hoped to avoid the risk of posted workers being misused or exploited.
The Directive goes a step further than the 1980 Rome Convention, by making posting enterprises’ obligations a requirement of EU law. Article 3(1) provides that ‘Member States shall ensure that... undertakings... guarantee workers posted to their territory’ minimum standards of employment conditions that prevail in the posted worker country. The terms and conditions covered by the Directive include:
- maximum work periods and minimum rest periods;
- maximum paid annual leave;
- minimum rates of pay (including overtime);
- conditions of hiring workers (especially regarding temporary agency work);
- health and safety;
- protective measures for pregnant women or mothers who have just given birth;
- equal opportunities and discrimination.
Discussing the issues
Implementation of the Posting of Workers Directive has been a matter of much discussion.
In 2006, the Commission published a set of guidelines to help governments, enterprises and employees better understand the applicability of the directive. Concerned that the minimum standards outlined in the directive were not being fully complied with, the Commission’s 2006 Communication underlined control measures to improve the application of the directive.
The Commission, however, was conscious that such control mechanisms should not impinge on Article 56 of the TFEU governing companies’ provision of cross-border services. Citing European Court of Justice (ECJ) rulings, the Commission notes, ‘inspections must be suitable for achieving the objectives pursued without restricting this freedom any more than necessary, in accordance with the principle of proportionality’.
In October 2006, the Commission followed up on its earlier Communication (COM (2006) 159 final) (163Kb PDF) by undertaking a survey involving Member States, EU-level social partners and the European Parliament on the application of the directive in Member States. The findings, announced in a Communication of June 2007 (COM(2007) 304 final) (65Kb PDF)), reveal that control mechanisms continue to be quite limited. The problem of the posted worker concerns the conditions of work applicable to these employees. Are they those of the home country of the enterprise (and worker), or those of the host country where the work is performed? There is a risk that foreign businesses could undermine local labour standards by applying lower home country conditions in countries where standards were higher. In the past few years, there has been renewed focus at EU level on the issue of posted workers. The issue has been highlighted by judgements by the ECJ in the Viking (87Kb PDF) (EU0706029I, EU0605029I), Laval (99Kb PDF) (EU0801019I, SE0801019I, SE0706029I) and Rüffert (99Kb PDF) (EU0805029I) cases.
In these cases, the ECJ essentially ruled that the EU principles governing the free movement of goods and services, the freedom of establishment and the freedom to provide cross-border services should not be impeded by industrial action aiming to ensure that posted workers receive collectively-agreed terms and conditions and the inclusion of collectively-agreed terms in procurement contracts.
In the Laval case, for example, the ECJ held that the right to strike could represent a restriction on the freedom to provide services. The ruling stated a strike could only be conducted under EU law where it was to pursue a legitimate aim and was justified by overriding reasons of public interest. The ECJ noted that while Article 3 of the Posted Workers Directive gave a right to minimum terms and conditions to posted workers, these rights had to have been underpinned either by law or universally applicable collective agreements. The absence of either provision meant that posted workers had no right to be paid the rate established by the collective agreement.
Reaction of EU Institutions and stakeholders
As the outcomes of the 2010 Eurofound report Posted Workers in the Europe Union (TN0908038S) shows, the discussion has mainly been at European level. Only in a few countries, including the ones directly concerned by the ECJ rulings, has action been taken by governments and social partner organisations.
The Council has never debated the consequences of the ECJ rulings for posting in either an informal or institutional framework. However, on several occasions government representatives have commented on the rulings. No explicit demand has yet been formulated for reopening the Directive 96/71 as a consequence of the rulings. Furthermore, individual Member States directly or indirectly affected by the rulings – including Denmark, Sweden, Luxembourg and Germany – have reacted by amending their own legislation. They have brought their laws in line with the rulings.
Debates about the issues raised by the implementation of the Directive have also taken place in the European Parliament which has adopted several resolutions. The last one was adopted in 2008 after intense internal debate. It calls on the Commission to continue examining the implementation, correct application and enforcement of the Directive and suggests 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 2010, the European Economic and Social Committee adopted an Opinion on the Social Dimension of the Single Market asking for a more effective implementation of the Directive 96/71. It also expressed support for a Commission initiative to clarify 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 European Commission has undertaken a number of initiatives in recent times to address some of the problems caused by the way in which the existing legislation is implemented, applied and enforced. An important initiative is the 2008 Recommendation on enhanced administrative cooperation (see EU calls for urgent action to improve working conditions for 1 million posted workers). This followed the June 2007 Communication 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) (65Kb PDF)). A press release describes how the commission was working to cut red tape for the service sector while guaranteeing the protection of posted workers.
The rulings were critically received by the European Trade Union Confederation (ETUC) and trade unions in general. They called them a ‘licence for social dumping’. They criticised what they perceived as too narrow an interpretation of the Directive, which they felt left little room for host Member States or social partners to improve the scope and/or the level of employment conditions of posted workers.
They were keen to clarify the role of trade unions in defending workers’ rights in cross-border situations. They asked for an urgent revision of the Posting of Workers Directive and the introduction of a ‘social progress clause/Monti clause’ or ‘Social Protocol’ with the aim of giving priority to fundamental social rights over economic freedoms.
On the other hand BusinessEurope and employer organisations welcomed the court rulings. They see them as an important contribution to the clarification of the legislation and the consolidation of the Single Market.
On a joint invitation by the Commission and the French Presidency of the EU, the European Social partners’ organisations – Business Europe, CEEP, UEAPME and ETUC – 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, adopted on 19 March 2010, while expressing a number of common concerns and objectives, exposed their divergences on the fundamentals.
They agreed that the most relevant points for their reflection were:
- the context of the single market and impact of ECJ rulings;
- the relationships between economic freedoms and fundamental social rights;
- the challenge of respecting the diversity of industrial relations systems and models;
- responses to the challenges raised by the judgements.
The report comprised:
- the shared observations of European employers and trade unions;
- two separate contributions from employers and trade unions following the same structure and addressing the most relevant points for reflection;
- some final remarks by the European social partners.
In the report, while stressing some points of agreement, the social partners highlighted some controversial issues. The report says:
The Posting of Workers Directive provides for minimum standards which must be observed to ensure respect for the rights of workers and a climate of fair competition. Although the European social partners agree on this, they have different views on whether these aims are achieved by the Posting of Workers Directive following its interpretation by the European Court of Justice. Whilst both sides recognise the need to compel service providers to comply with a nucleus of rules as defined in the host country, they disagree on the definition of this nucleus as well as on the possibility for trade unions and/or Member States in the host country to go beyond this nucleus of rules.
The diversity of industrial relations systems should be respected. In line with the subsidiarity principle, working conditions are and should continue to be determined primarily according to the national rules applicable to a given market, as laid down in national law, collective agreements or practices, taking into account European laws and regulations regarding minimum standards.
More recent discussions
At the presentation of his political priorities before the European Parliament on 15 September 2009, President José Manuel Barroso said he recognised the need to address the concerns and issues raised about posted workers. He announced a legislative initiative to resolve the problems of implementation and interpretation of the posting of workers Directive 1996/71. The President was responding to claims by several MEPs and the trade unions that a revision of the Directive was needed in order to reverse the ECJ rulings Viking, Laval, Rüffert and Commission vs Luxembourg.
On 21 March 2012, the Commission issued proposals for new rules governing the posting of workers in Europe (EU1204011I). The aim is to increase protection for posted workers and to clarify the debate around the primacy of freedom to provide services and employment rights that has resulted from ECJ case law.
Its proposal for a Directive on the enforcement of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (240Kb PDF) aims to reconcile the exercise of the freedom to provide cross-border services under Article 56 TFEU with appropriate protection of the rights of workers temporarily posted abroad for that purpose.
Most specifically the objectives are to:
- set more ambitious standards to inform workers and companies about their rights and obligations (Article 5);
- establish clear rules for cooperation between national authorities in charge of posting (Article 6);
- provide elements to improve the implementation and monitoring of the notion of posting to avoid the multiplication of ‘letter-box’ companies that use posting as a way to circumvent employment rules (Article 3);
- define the supervisory scope and responsibilities of relevant national authorities (Article 7);
- improve the enforcement of workers’ rights, including the introduction of joint and several liability (261Kb PDF) for the construction sector for the wages of posted workers as well as the handling of complaints (Article 12).
In addition, to address the issue of industrial actions, a specific regulation is foreseen; the so-called Monti II Regulation. The 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 (80Kb PDF) addresses concerns raised by some interpretations of the ECJ rulings.
There are risks that in the single market, economic freedoms would prevail over the right to strike. It stresses that there is no primacy between the right to take collective action and the freedom to provide services (Article 2). In the case of disputes at EU level resulting from the exercise of the right to collective action, including the right or freedom to strike, in transnational situations or situations with a cross-border character, the proposal provides for the possibility of non-judicial settlements. It also sets out a new alert mechanism for industrial conflicts in cross-border situations with severe implications (Article 4).
Social partner reaction
The European social partners commented extensively on the Commission’s ideas.
BusinessEurope said in a press release on 21 March 2012 that the Commission proposals undermined the development of the single market. It said European companies were concerned that the Commission has proposed EU legislation which companies would have great difficulties in applying. It added that developing the single market will not happen if companies operating across borders are obliged to fulfil costly administrative requirements.
Bernadette Ségol, ETUC General Secretary, said in a statement she could not support a regulation that undermined the right to strike, adding: ‘The right to take collective action is a fundamental right which must be guaranteed.’ Although ETUC welcomed measures to improve the implementation of the Posting of Workers Directive, it considered that the new enforcement directive was too weak, in particular regarding the possibility to hold a contractor liable.
In April 2012, ETUC made a declaration on the Commission proposals for a Monti II Regulation and the Enforcement Directive of the Posting of Workers Directive.
The declaration says:
The Commission package on the posting of workers adopted on 21 March 2012 does not strike the right balance between protecting workers and facilitating cross-border service provision. The ETUC rejects the proposal for a Monti II Regulation and calls on the Commission to revise the Posting of Workers Directive.
Then in June 2012, ETUC published its own position paper on the issue, setting out key demands regarding the Enforcement Directive.
In 2011 and 2012, several discussions were organised on the posting of workers issues, involving several MEPs, political parties and social partners’ representatives.