Thematic feature - posted workers

Download article in original language : LU0306103TFR.DOC

This article examines the Luxembourg 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 Luxembourg 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?

The requirements of the Directive were largely thought to be met by section 4 ('Employment law applying to work performed in Luxembourg') of the law of 31 July 1995 relating to employment and vocational training. However, these provisions were eventually amended and replaced by specific legislation - the law of 20 December 2002 'relating to: the transposition of European Parliament and Council Directive 96/71/EC of 16 December 1996 concerning the posting of workers in the framework of the provision of services; and regulation of the monitoring of the application of employment law'.

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)?

Section 4 of the law of 31 July 1995 defined as 'police measures serving public order'- ie provisions applicable to all employees holding private-law status and working in Luxembourg, including those who have been temporarily posted, irrespective of their length of stay - all legal, regulatory and collectively agreed conditions relating to:

• the contract of employment;
• the minimum wage and automatic indexation of pay to cost-of-living increases;
• the duration of working time and of weekly rest periods;
• paid leave, particularly collective leave entitlements and statutory public holidays;
• the regulation of temporary agency work;
• the regulation of part-time and fixed-term employment;
• protective measures covering the working and employment conditions of pregnant women and of women who have recently given birth, of children and of young people;
• equal treatment between men and women; and
• collective agreements;

The law of 20 December 2002 repeats these provisions and adds three new issues:

• periods of obligatory work inactivity resulting from the legislation on temporary lay-offs and lay-offs due to adverse weather conditions;
• clandestine or illegal work; and
• health and safety at work.

As provisions in these three areas were already considered as 'public order measures', the new legislation added little new in this respect. However, it did make one important change: in line with the EU Directive, it provides that, under certain conditions, the provisions on the minimum wage and paid leave do not apply to the initial assembly and/or first installation of equipment where the posting lasts less than eight days (though this does not apply to most areas of construction work).

The result of this legislation is that the overwhelming majority of Luxembourg labour law is considered as applying compulsorily to all Luxembourg employees and foreign employees working in Luxembourg, and to Luxembourg employees posted abroad. These provisions usually take the form of 'police laws'- ie those who do not obey these laws face criminal sanctions.

Generally, workers posted abroad remain covered by the Luxembourg social security scheme for a period of one year. The health insurance legislation states that: 'Insured members normally employed in Luxembourg who are temporarily posted abroad by their employers continue to be members of the Luxembourg health insurance scheme.'

With regard to posted temporary agency workers, Article 22 of the law of 19 May 1994 concerning the regulation of temporary agency work provides that Luxembourg labour law (and the provisions of the 1994 law) apply to the conclusion and implementation by a temporary work agency established outside Luxembourg of labour supply contracts (ie contracts with a user company) and mission contracts (ie contracts with the temporary workers) whose objective is the employment of a temporary agency worker by a user company carrying out its business activity in Luxembourg. Those who do not comply with this legislation may face criminal sanctions. The same provisions are applicable to mission contracts concluded by a Luxembourg-based temporary work agency in respect of work to be performed outside Luxembourg. The employment in Luxembourg of foreign workers by a temporary work agency established outside Luxembourg are covered by the laws and regulations governing the paid employment of foreigners working in Luxembourg. The Luxembourg public authorities - particularly the Labour Inspectorate (Inspection du Travail) and the Employment Administration (Administration de l’Emploi) - seek to prevent Luxembourg-based temporary work agencies from recruiting temporary workers in another country to do jobs in a third country (eg recruiting in France for a job in Germany). However, the Higher Social Insurance Council (Conseil supérieur des Assurances sociales) has ruled that a temporary work agency with a permit to establish itself in Luxembourg is able to enrol foreign staff working in a foreign country into the Luxembourg social security scheme (thus applying applying the EU principles of freedom of establishment and free movement of people and labour).

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?

There are no collective agreements containing provisions on the particular problems facing posted workers, doubtless because the legislation covers the issues concerned in considerable detail. The social partners were not involved in the transposition of the Directive, and have not taken any particular initiative in this area.

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.

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

There are no statistics or estimates available on the number of workers posted from Luxembourg to other countries or vice-versa. Luxembourg is a country that attracts both workers and companies from other countries, and there is therefore a fairly large number of Belgian, German and French enterprises established in Luxembourg, suggesting that some workers may be posted in this context. On the other hand, it is now rare for Luxembourg-based firms (particularly in construction and related sectors) to operate abroad. Some Luxembourg-based companies with an international perspective post their employees abroad for fixed periods of time - eg Arbed and Paul Wurth in the construction of iron and steel plants, Husky in the installation of hydraulic presses, Luxair, the national airline and tourist company, and some banks - but these companies are rare exceptions.

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?

The posted workers issue has not featured in collective bargaining in the construction industry. The collective agreement for the sector is of general application, that is to say it applies to all companies working in Luxembourg.

A number of violations of labour law related to foreign or posted workers have been recorded in the construction industry, particularly with regard to the payment of wages by companies based in eastern Europe. However, since the mid-1990s, the Minister of Labour has issued hardly any new 'collective labour permits' to such companies and, as a result, this kind of violation has disappeared. Over the same period since 1994, the Labour Inspectorate has been systematically organising 'clenched fist' exercises in collaboration with the customs authorities, social security bodies and the police, which involve monitoring of all aspects of work on large building sites. Certain 'suspect' sites have been identified by the social partners. Furthermore, there is quite high trade union membership in the construction sector, resulting in fairly strict surveillance of pay and conditions, and the Luxembourg social partners have a vested interest in their collective agreements being complied with fully.

The posting of Luxembourg construction workers abroad is rare and has not given rise to any discussion related to their equal treatment with other employees of the enterprise concerned.

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 issue does not appear to have led to any specific initiatives by the social partners. The partners have no difficulty in agreeing with the terms of the legislation implementing the posted workers Directive: it is fully part of the Luxembourg tradition that posted workers should enjoy at least the same conditions as those working in their own country. Under the industry's nationally applicable collective agreement, employees posted to the building sector in Luxembourg must be paid at the same rates as employees of Luxembourg enterprises. (Marc Feyereisen)