EU Level: Latest working life developments – Q1 2018

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The Commission’s Social Fairness Package, the provisional agreement on the revision of the Posting of Workers Directive, and discussions at the Spring Tripartite Social Summit for Growth and Employment are the main topics of interest in this article. This update reports on the latest developments in working life in the European Union in the first quarter of 2018.

European Commission publishes social fairness package

The European Commission presented its Social Fairness Package on 13 March 2018, consisting of: a communication on monitoring the implementation of the European Pillar of Social Rights; a regulation establishing a European Labour Authority; a council recommendation on access to social protection for workers and self-employed people; and the Commission’s vision for the European Social Security Number.

Guidance on implementing the Social Pillar

The Communication on monitoring the implementation of the European Pillar of Social Rights (PDF) provides guidance on how to implement the Pillar at EU level (including relevant financial support through EU funds) and at national level. It also proposes initiatives on how to monitor the implementation and outlines the Social Fairness Package. Key aspects of the communication are summarised in an online factsheet (PDF).

Establishing a European Labour Authority

The Regulation to establish a European Labour Authority complements previous initiatives to improve the rules for the posting of workers and the coordination of social security systems. Free movement of workers is one of the most cherished freedoms of the internal market, seen as benefitting individuals, economies and societies as a whole. An extensive body of EU legislation is in place to ensure fair mobility, but the rules must also be effectively applied on the ground. In this context, the role and added value of the European Labour Authority (ELA) will be to:

  • simplify access to information by individuals and employers on rights and obligations in cross-border situations as well as to relevant services
  • support cooperation between Member States in the cross-border enforcement of relevant EU law, including coordinating joint inspections
  • carry out analyses and risk assessments on issues of cross-border labour mobility
  • support Member States with capacity-building though mutual learning, training, and promoting good practices
  • mediate between Member States' authorities in cases of dispute concerning the application of EU law
  • support cooperation between relevant stakeholders in the event of labour market disruptions – for instance, in the case of large-scale restructuring of companies affecting several Member States

The proposed ELA will be complementary to and ensure consistency with the activities of the four EU agencies that operate in the area of employment and social policy: Eurofound, the European Centre for the Development of Vocational Training (Cedefop), the European Training Foundation (ETF) and the European Agency for Safety and Health at Work (EU-OSHA). It will also update and simplify the EU institutional landscape in the area of cross-border mobility, which includes several EU bodies in which national administrations cooperate and exchange best practices. The new ELA will combine the tasks of these bodies into a permanent structure, giving a stronger basis for cooperation and joint investigations leading to better, more efficient outcomes. In this context, the ELA will:

  • take over the running of the EURES European Coordination Office, currently managed by the Commission
  • replace the Technical Committee on the Free Movement of Workers
  • replace the Committee of Experts on Posting of Workers
  • replace the Technical Commission, the Audit Board, and the Conciliation Board of the Administrative Commission for the Coordination of Social Security Systems
  • replace the European Platform on tackling undeclared work

An online factsheet (PDF) summarises the key functions of the ELA.

Boosting access to social protection for workers

The Council Recommendation on access to social protection for workers and self-employed (PDF) proposes measures to eliminate or reduce obstacles that limit the capacity of social protection systems to provide citizens with adequate social protection, while respecting Member States’ competences in designing their social protection systems. Member States will continue to have control over certain aspects that are beyond the scope of the current initiative – in particular, the level of protection provided, whether to extend coverage under existing schemes or new schemes, how to finance the protection, and combinations of schemes to be used (public, occupational or private). Given the diversity of social protection systems across the EU, Member States are best placed to make these decisions.

An online factsheet (PDF) summarises the key points of the recommendation.

Plans for a European Social Security Number

The Commission is also working on developing a European Social Security Number, which will provide a digital identifier to make existing systems interoperable. This would facilitate the portability of rights across borders, allow for real-time identification and verification of coverage, and reduce the risk of errors and fraud associated with paper documents. It would also simplify administration processes at all levels. This initiative is part of the Commission Work Programme 2018. The Commission is engaging with Member States and stakeholders on the issue and will come forward with an initiative later this year.

Revision of the Posting of Workers Directive

After reaching an understanding on the contours of a possible agreement on the revision of the Posting of Workers Directive, co-legislators issued a joint statement on 1 March 2018. On 20 March, they reached an agreement on the two remaining issues: pay and working conditions.

On 11 April, the committee of permanent representatives of the Member States (Coreper) approved the provisional agreement, for adoption in the European Parliament’s EMPL Committee on 25 April. The whole Parliament and the Council will need to formally approve the draft directive before it can enter into force.

The provisional agreement resulting from interinstitutional negotiations introduces a number of changes to the Directive.

  • Article 1 is amended to to ensure that the rights granted by the Charter of Fundamental Rights can in no way be undermined by the Directive and to strengthen the position of workers in possible court cases.
  • The overall remuneration that a posted worker receives must meet the level of remuneration as laid down in the host country (reimbursement of expenses cannot be counted towards this amount(.
  • Member States must set up a single national website which sets out the mandatory elements that constitute remuneration in that Member State.
  • Where national rules exist regarding the conditions of accommodation in the host country for a local worker, these must be applied to posted workers.
  • A posted worker can work under the conditions only of the Directive for a maximum of 12 months. After this, all provisions of the labour law of the host country must be applied to the posted worker. (An extension of 6 months is possible where the company notifies the competent authority in the host country.)
  • Currently, the Directive only provides for posted workers in the construction sector to be covered by collective agreements. The provisional agreement allows for Member States to decide to extend such coverage to all sectors.
  • The agreement proposes protection against fraudulent posting – made, for instance, by a letterbox company.
  • The Commission will have to present a review on the application of the Directive five years after its entry into force (in addition to specific reviews on subcontracting and transport).

Member States will be expected to adopt the new measures within a transition period of two years. The Commission will present a review on the application of the Directive five years after it enters into force.

Social dialogue and the Pillar

EU institutions and social partners met in Brussels on 21 March 2018 for the Spring Tripartite Social Summit for Growth and Employment. The theme of the forum was ‘Delivering on the European Pillar of Social Rights’, with discussions focusing on three areas:

  • reinforcing innovation, job creation and social fairness in the Multiannual Financial Framework
  • new forms of work: challenges and opportunities for employment and social dialogue
  • economic and social convergence to strengthen growth and resilience

In the framework of the Summit, EU social partners issued a statement on the Multiannual Financial Framework.

Social partner reporting and perspectives

In anticipation of the Tripartite Social Summit, both BusinessEurope and the European Association of Craft, Small and Medium-Sized Enterprises (UEAPME) published barometers in March: the EU Reform Barometer 2018 ‘The EU economy 10 years after the start of the crisis' (PDF) (BusinessEurope) and SME Barometer (PDF) (UEAPME). Both reports contend that, despite recent improvements in the economic outlook, the EU needs to do more to improve competitiveness.

BusinessEurope’s EU Reform Barometer also contains the annual survey of its 39 member federations, which analyses progress on structural reform in 2017 and links to the European Semester. In particular, the member federations assess each of the Commission’s country-specific recommendations (CSRs) and their government’s efforts to implement them.

The European Trade Union Institute (ETUI) also published its report Benchmarking Working Europe 2018 report in March. This analyses the state of 'working Europe' with the aid of a multi-level, multi-dimensional set of indicators, asessing the achievements of current EU policies. The report states that, despite renewed economic growth in GDP terms, the proceeds of this growth are being unequally shared and structural problems remain in the areas of education, infrastructure and R&D due to the EU's predisposition towards labour market deregulation and fiscal austerity. It also highlights that workers from nine EU Member States (Italy, UK, Spain, Belgium, Greece, Portugal, Finland, Croatia and Cyprus) earned less in 2017 than in 2010, despite the economic recovery. Workers in six of those countries (Italy, UK, Spain, Belgium, Greece and Finland) also earned less in 2017 than they did in 2016.

Outlook

Following the announcements made in President Juncker’s State of the Union Address 2017 and the Commission’s 2018 Work Programme, the next Commission priorities relevant to working life developments are:

  • an initiative on a European Social Security Number that could be used across policy areas where appropriate (announced in the Social Fairness package);
  • communication on artificial intelligence (published on 25 April 2018) that outlines legal issues that the technology is likely to create and address fears about robots replacing jobs.

In addition, the Commission has planned to adopt the proposal on the post-2020 Multiannual Financial Framework on 2 May 2018.

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