Thematic feature - posted workers

This article examines the UK situation, as of June 2003, with regard to: legislation and collective bargaining on the pay and conditions of posted workers (ie workers from one EU Member State posted by their employer to work in another); the number of such posted workers; and the views of the social partners and government on the issue.

EU Directive 96/71/EC concerning the posting of workers in the framework of the provision of services seeks to avoid 'social dumping' by ensuring that a minimum set of rights is guaranteed for workers posted by their employer to work in another country. The basic principle is that the working conditions and pay in effect in a Member State should be applicable both to workers from that State, and those from other EU countries posted to work there. The Directive covers undertakings established in a Member State, which, in the framework of the transnational provision of services, post workers to the territory of another Member State.

The Directive establishes a core of essential regulations aimed at ensuring employees' minimum protection in the country in which their work is performed. It guarantees the application of the host country's statutory and regulatory provisions relating to:

  • maximum work periods and minimum rest periods;
  • minimum paid annual holidays;
  • minimum rates of pay, including overtime rates (excluding supplementary occupational retirement pension schemes);
  • the conditions of hiring-out of workers, in particular the supply of workers by temporary employment agencies;
  • 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; and
  • equality of treatment between men and women and other provisions on non-discrimination.

As well as these generally applicable statutory and regulatory provisions, a Member State's collectively agreed provisions on these issues must also be applied to workers in the construction sector (where these are based on 'collective agreements or arbitration awards which have been declared universally applicable').

The Directive allows for a number of exceptions to all or some of these 'minimum provisions' for: the crew of merchant ships; staff involved in the initial assembly and/or first installation of equipment; postings lasting less than a month; and where 'the amount of work to be done is not significant'. The Member States were obliged to transpose the Directive by 16 December 1999.

In 1999, the European Industrial Relations Observatory (EIRO) conducted a comparative study on posted workers and the implementation of the Directive. In June 2003, the EIRO national centres in each EU Member State (plus Norway), have updated the basic information in the earlier comparative study, four years on, in response to a questionnaire. The UK responses are set out below (along with the questions asked).

Regulatory framework

What changes were made to national legislation in your country in order to implement the Directive? And have there been any further changes to the relevant legislation since then?

Most UK legislation relevant to the 1996 posted workers Directive already applied to all employees or workers whether working permanently or temporarily in the UK and therefore applied to posted workers. This included the Working Time Regulations 1998 (UK9810154F), the National Minimum Wage Act 1998 (UK9904196F) and associated Regulations, the Employment Agencies Act 1973 and associated Regulations, the Health and Safety at Work Act 1974 and associated Regulations, and legislation governing the employment of children and young people. Only limited legislative changes were therefore required to bring UK law into line with the Directive.

The two main changes to UK legislation introduced in response to the requirements of the Directive have been as follows:

  • the Employment Relations Act 1999 (UK9912145F) repealed section 196 of the Employment Rights Act 1996, which excluded employees ordinarily working outside Great Britain from a wide range of individual employment rights (the exclusion is retained in relation to mariners). The rights concerned include protective measures for pregnant women and those who have just given birth; and
  • the Equal Opportunities (Employment Legislation) (Territorial Limits) Regulations 1999 amended existing legislation concerning discrimination on the grounds of sex, race and disability so that those employed mainly outside Britain were no longer excluded from its scope. Previously, anti-discrimination provisions did not apply where employment was wholly or mainly outside Great Britain.

The Employment Relations Act 1999 also amended the Employment Agencies Act 1973 to specify that services provided by employment agencies and businesses in respect of persons seeking employment outside the UK, or persons normally resident outside the UK seeking employment in the UK, fall within the scope of the government’s regulation-making powers under the Act.

Please outline very briefly the current legal position of posted workers in your country - are they covered by specific or general employment legislation, what is their position with regard to social security (are they covered under the social security system in their country of origin or the host country?) etc. Also, have any specific measures been taken to prevent abuses arising from the posting of temporary agency workers (eg an agency hiring temporary workers through a subsidiary in a low labour cost country and sending them to work for a user company in a higher labour cost country)?

There are no legal provisions relating specifically to posted workers within the meaning of the Directive. Posted workers in the UK are covered by the UK’s general employment legislation as outlined above.

With regard to social security, workers of an employer based in another European Economic Area (EEA) country who are sent to work in the UK for 12 months or less, and who are not replacing someone else in the same position, continue to be insured under the other country’s social security scheme and do not have to pay UK contributions. Posted workers whose job in the UK lasts longer than 12 months, although they did not expect it to, can carry on being insured under the other EEA country’s scheme for not more than another 12 months but the UK’s Inland Revenue must agree to this extra time. If their work in the UK has still not finished when the second 12-month period is over - or if they are not allowed to stay insured under the scheme of the other EEA country after the end of the first 12 months, they must start paying contributions to the UK National Insurance scheme (source: Your social security insurance, benefits and healthcare rights in the European Economic Area, Department for Work and Pensions, February 2003).

With regard to measures to prevent abuses arising from the posting of temporary agency workers, in addition to the general requirements of the Employment Agencies Act 1973 and associated Regulations relating to UK employment businesses (ie temporary work agencies) - for example, the prohibition on charging fees to workers for seeking to find them work and the obligation to ensure that work offered, whether in the UK or abroad, does not contravene the law - there are certain specific provisions concerning the supply of workers to a hirer abroad. These specify that employment businesses:

  • must not supply a worker to a hirer abroad who has no business premises in the UK unless satisfactory written testimony has been obtained which states that the work will not be detrimental to the worker's interests;
  • must not send a worker to a hirer abroad unless they have made arrangements to pay the worker's return fare themselves when the job ends or if the job does not commence, or else have obtained a written undertaking from the hirer to do so. If a hirer defaults on such an undertaking, the employment business must pay the return fare; and
  • must supply the worker and the hirer, before the worker departs, with a written statement giving specified details of the work or of the worker respectively.

Have there been any collective agreements concluded on the issues covered by the Directive? Have the social partners been consulted as part of the legislative and policy-making process and, if so, in what way? Have the social partners taken any other initiatives related to posted workers?

No collective agreements or initiatives by the social partners specifically concerning posted workers have been reported in the UK. The government consulted the main employers’ and trade union organisations in the normal way on the legal changes introduced to meet the requirements of the Directive, but this was not a high profile issue.

The workers affected

Please provide the latest figures available on the number of employees who are posted from your country to other EU Member States.

The UK’s Office for National Statistics does not collect specific data on how many employees are posted by their employer to work in other EU countries. However, a report for the (then) Department of Employment in 1994 found that the number of UK employees posted by their company to another EU Member State each year was 'extremely small' (The impact of the posted workers Directive on company practice in the United Kingdom, Michael Gold, Employment Department Research Series No. 37, 1994). The report cited one estimate that the number of British corporate transferees working in other countries worldwide (rather than in Europe) was 42,000.

Please provide similar figures, if available, for employees posted to your country from other EU Member States.

The Labour Force Survey provides information on foreign nationals who live and work in the UK, but not posted workers as such. Labour Market Trends (August 2000) gives figures as at winter 1999-2000: of the 1.1 million non-UK nationals in employment in the UK, 18% were from the Republic of Ireland (198,000), and a further 22% were from other EU countries (236,000). A subsequent analysis (Labour Market Trends, October 2001) shows that, while the numbers of foreign workers in the UK rose considerably over the 1990s, the proportion of foreign workers from EU/EFTA countries fell from 49% in 1992 to 42% in 2000. The foreign working population is generally more skilled or of a higher professional status than the UK-born workforce.

Workers in the construction industry

The EU Directive, although of general application, is aimed particularly at workers in the construction industry (building and public works), in which discrepancies between practice and legal standards are often observed. Has any special action been taken by the social partners or the state to address the situation of posted workers in this industry?

UK construction trade unions supported the Directive primarily as a means of regularising the employment conditions of UK construction workers working in other EU countries, particularly Germany. No specific initiatives by construction employers and/or unions have been reported in relation to construction workers posted to the UK. The Transport and General Workers’ Union (TGWU) told EIRO that 'the use of foreign labour is prevalent' in the UK construction industry '... but we seek to ensure a rate for the job rather than be drawn on the nationality or employment status of workers'.

As regards the terms and conditions set by collective agreements or arbitration awards in the construction sector, no action was required in the UK in response to the Directive because there are no existing mechanisms for declaring collective agreements or arbitration awards 'universally applicable'. Nor has the UK government taken up the alternative options of requiring that posted workers receive terms and conditions set by 'generally applicable' collective agreements or those concluded by the 'most representative' employers’ and labour organisations. The Construction Industry Joint Council negotiates a 'working rule' agreement for the construction industry setting the basic terms and conditions of employment for about 400,000 operatives working in the building and civil engineering industry. In addition to this agreement, there are a wide range of other agreements covering specific groups in the construction industry and covering related industries. However, the terms of collective agreements are not applicable to employers that do not belong to the employers’ associations which are party to the agreement.

The positions of the social partners and government

Please outline the stances adopted by the social partners and the public authorities/government on this issue. Particular attention should be given to unions and employers in the construction industry.

The previous Conservative Party government opposed the adoption of the posted workers Directive on the grounds that it could prove costly to UK business and was 'anti-competitive and would impede the operation of the single market'. The present Labour Party government has made no official statement about the desirability of the Directive but, as already outlined, has introduced the limited amendments to UK legislation necessary to achieve compliance.

In its comments on the original, 1991 European Commission proposal for the posted workers Directive, the Confederation of British Industry (CBI) argued that the Directive was unlikely to have a beneficial effect on competition in the single market or the free movement of labour and services within the EU. The CBI believed that the Directive could deter companies from supplying services to Member States where labour costs are significantly higher than their own. The CBI also argued that the 'essentially protectionist' approach of the Directive could work to the disadvantage of the UK compared with other, more regulated economies because of the absence of universally applicable collective agreements in the UK and, at that time, the absence of legal regulation in the key areas of pay, working time and holidays.

The Trades Union Congress 'welcomed the Directive as it would mean that UK workers posted abroad, especially building workers, would have access to the terms and conditions (concerning working time, minimum wage, health and safety, etc) of the host country'.

Among the three main construction unions in the UK, the Union of Construction, Allied Trades and Technicians argued that the Directive should give all employees the right to the terms of sectoral collective agreements in preference to any national legal minimum wage, regardless of the legal status of the agreement, and that it should cover the self-employed. The GMB union backed the introduction of the Directive in order to ensure British construction workers would have 'proper conditions' when working elsewhere in the EU, notably in respect of minimum rates of pay and health and safety provision (Construction News, 18 January, 1996). The TGWU also campaigned strongly in support of the adoption of the Directive, and was party to the 'Blankenberge declaration' of December 1994 by construction unions from five EU countries which highlighted the case for foreign construction workers to receive the minimum labour conditions applicable in each EU country.

However, the posted workers Directive has not excited a great deal of discussion in the UK. It is in the nature of the provisions of the Directive that the resulting changes to UK law will affect only employers and workers from outside the UK. Trade unions in this country seem to have been primarily interested in the Directive’s potential for improving the position of UK construction workers in other EU countries rather than as a mechanism for protecting UK labour market standards against being undercut by posted workers with inferior terms and conditions (perhaps reflecting the absence of 'universally applicable' collective agreements in the UK context).

UK-based employers which post workers to other EU countries clearly need to be aware of the relevant national terms and conditions applicable to such workers. However, UK companies tend to view compliance with foreign tax and social security regulations as a far greater problem when sending workers abroad than compliance with the country’s employment legislation. (Mark Hall, IRRU)

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment