Trade unions protest in favour of a more social Europe

In July 2008, the trade union platform of the ‘Grande Région’ expressed its discontent with the EU’s social policy, when trade unions from Belgium, France and Luxembourg staged a demonstration in the latter country’s capital city. The recent European Court of Justice ruling against Luxembourg for failing to fulfil its obligations regarding the Posting of Workers’ Directive triggered the move. The trade unions believe that the ruling is ‘condemning Luxembourg for its high social standards’.

Court ruling sparks trade union opposition

On 19 June, the European Court of Justice (ECJ) in Luxembourg issued a ruling in which, at the request of the European Commission, it condemns Luxembourg for its incorrect transposition 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. The directive was transposed into Luxembourg legislation by the law of 20 December 2002.

The ruling sparked strong opposition from the trade union platform of the ‘Grande Région’ – an established association comprising the regions of Saarland, Lorraine, Luxembourg, Rhineland-Palatinate and Wallonia, which seeks to foster economic and cultural development, as well as tourism, in the region. On 5 July 2008, trade unions from Belgium, France and Luxembourg staged a demonstration in Luxembourg, protesting against the ruling, which was viewed as a condemnation of Luxembourg’s ‘high social standards’.

Criticisms of Luxembourg law

The criticisms of the 20 December 2002 law mainly relate to three points: its provisions regarding national public policy, minimum protection rules and the issue of control.

National public policy

The Luxembourg law on secondment – whereby posted workers undertake their work in another EU Member State besides the one in which they normally work – is a matter of public social policy. This means that dispensations from these regulations are only possible if they are more favourable to employees. The ECJ takes the view that such a public policy exception would constitute an exemption from the fundamental principle of free movement of services. While Member States are essentially free to determine public policy requirements in accordance with their national interests, in an EU context this concept has to be interpreted in a strict sense, and can only be invoked in the case of genuine and serious threats affecting society’s fundamental interests.

Minimum protection rules

Luxembourg has added four additional areas to its legislation, which derive from its labour law, to the seven areas which already make up the core compulsory minimum protection rules: maximum work periods and minimum rest periods, maximum paid annual leave, minimum rates of pay, conditions of hiring workers, health and safety, protective measures for pregnant women or mothers who have just given birth, equal opportunities and discrimination. The four additional provisions relate to written employment contracts, adjustment of salaries in line with the cost of living, legislation on part-time work and fixed-term employment contracts, and provisions relating to collective agreements. The ECJ believes that the Directive on the posting of workers provides an exhaustive list of the areas in which Member States can apply the rules in force in the host Member State.

Therefore, it has ruled that the obligation laid down by Luxembourg legislation that only personnel who are connected to the company through a written employment contract can be posted is an incorrect transposition, since compliance with this requirement is a matter for the authorities of the Member State in which the company concerned is located. In terms of automatic adjustment of remuneration in line with the cost of living, the directive only stipulates the regulation of pay levels in line with the minimum wage in the host Member State. With regard to the stipulations on essential provisions of national law on collective agreements, the court has ruled that ‘single’ collective agreements – that is, those which are not of general application – cannot be classified under the public policy concept as a whole.

Issue of control

Luxembourg’s regulations on the posting of workers require companies whose head office is outside of Luxembourg territory to designate an ad hoc representative who is a resident in Luxembourg to hold social documents, which will enable the Luxembourg labour inspectorate to carry out checks effectively.

The ECJ argues that the organised system of cooperation and exchange of information between Member States laid down by the Posting of Workers’ Directive makes it unnecessary to keep such documents in the host Member State.

Luxembourg model undermined

According to the trade unions, 700 of its members attended the demonstration in July 2008, at the end of which they were received by Luxembourg’s Minister for Labour and Employment, François Biltgen. Minister Biltgen indicated that he largely agrees with the trade unions on the issue of workers’ secondment in the context of free movement of services, adding that the Luxembourg government will do all it can to strengthen social law within the internal market.

The trade unions believe that the Luxembourg model, which is based on public social policy and legislation that seeks to protect workers, has been undermined by the ECJ ruling, which they believe renders ‘labour law a prisoner of economic freedoms’.

Odette Wlodarski, Prevent