General approach on posted workers agreed
A general approach to the proposal for an enforcement Directive on posted workers has been agreed by the Council of the European Union. Employment, social policy, health and consumer affairs ministers hope the proposal will balance protection for posted workers with the principle of European businesses being free to provide services anywhere in the EU. It is supported by employers in construction, a sector that uses large numbers of posted workers, but unions have been critical.
The European Commission (EC) has been looking at the issue of posted workers for some time. In March 2012, the Commission issued a proposal for a new Directive on the enforcement of the posted workers Directive 96/71/EC (240 KB PDF).
The proposal aims to increase protection for posted workers, and to clarify the debate about the way in which European Court of Justice (ECJ) case law has created clashes between employment rights and the principle of employers’ freedom to provide services across the EU. Three recent ECJ cases have examined how workers’ rights may be at odds with the rights of businesses to post workers abroad (EU1204011I).
Proposal includes compromise agreement
At the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council meeting (229 KB PDF) on 10 and 11 December 2013, ministers agreed on a general approach to the proposal. They reached a compromise agreement on the two outstanding issues: national control measures, and joint and several liabilities in subcontracting chains.
National control measures are covered by Article 9 of the directive. It was agreed that Member States may impose administrative requirements and control measures. However, these can only be imposed to ensure effective monitoring of compliance with the obligations set out in the directive, and only if these measures are justified and proportionate as defined by EU law. The Commission must be notified of such measures and service providers will be informed through a single national website.
Joint and several liability in subcontracting chains is covered by Article 12 of the directive. It says that Member States will:
…ensure that in subcontracting chains, posted workers can hold the contractor (of which the employer is a direct subcontractor) liable, in addition to or in place of the employer, for the respect of posted workers’ rights regarding any outstanding net remuneration corresponding to the minimum rates of pay.
Member States may instead, however:
…take other appropriate enforcement measures, in accordance with EU and national law and/or practice, which enable in a direct subcontracting relationship effective and proportionate sanctions against the contractor, in order to tackle fraud and abuse in situations where workers have difficulties in obtaining their rights.
Social partner reaction
The European Federation of Building and Woodworkers (EFBWW) and the employers’ organisation the European Construction Industry Federation (FIEC) had already contributed to the debate. In November 2013, they sent a joint letter (81.2 KB PDF) to national employment ministers ahead of the December EPSCO meeting, recommending a possible compromise on Articles 3 and 9 of the text.
Article 3 covers fake posting. The two organisations asked that the directive should clearly state that all forms of fake posting be explicitly covered by the entire legislation of the host country. The letter also said that Article 9 should include an ‘open list’ of possible control measures.
The EFBWW and FIEC also asked for a mandatory prior notification of posting and an obligation to keep or make available and/or retain copies in paper or electronic form of the employment contract or equivalent document.
In a press release (18 KB PDF), FIEC expressed its support for the compromise text. The President of the employers’ organisation, Thomas Schleicher, said:
This agreement is an important step in the fight against social fraud and abuses in the field of posting of workers, which is seriously affecting those companies that comply with the legislation as well as employment in our sector.
The press release does note, however, that there are other issues that need to be addressed during the forthcoming discussions between the Council and the European Parliament. These include closer administrative collaboration, including the use of information and communications technology and on the issue of bogus self-employment’. It also calls for clarification that where fake posting is an issue, it is subject to the entire relevant ‘host’ country legislation.
However, the EFBWW called the text ‘a disappointing agreement with low ambitions’. The union federation claims EPSCO ministers avoided tackling key controversial topics, such as bogus self-employment and fake posting. It said this was ‘a major disappointment and setback for the whole trade union movement’.
The EFBWW was also disappointed that the EPSCO discussion focused only on two issues. The federation is not happy with the outcome of either. For example, on Article 9, the EFBWW welcomed the fact that Members States can introduce additional control measures when it appears that the existing measures are insufficient or ineffective, but it is concerned that they must be justified and proportionate. The union claims every Member State, the Commission and even individual companies could challenge a national measure.
Andrea Broughton, Institute for Employment Studies