The debate on posted workers has flared up again following Emmanuel Macron’s visit to Austria, Romania, Bulgaria and Luxembourg. But to break the deadlock, Europe needs to broaden its approach to the issue, write Frederic De Wispelaere and Jozef Pacolet.
Frederic De Wispelaere is a senior research associate and Prof. Dr. Jozef Pacolet is head of the welfare state and housing research group at HIVA Research Institute for Work and Society KU Leuven.
What is posting?
An employee may be sent to another EU country by his employer to work there for a certain period of time. This is called intra-EU posting. Also self-employed persons can post themselves. The posted person remains subject to the social security system of the country of origin for a period of up to 24 months. This principle is established in EU legislation on social security coordination. In addition, a ‘hard core’ of terms and conditions of employment, including minimum wages, set out in the host country should be respected. These provisions are defined in the Posting of Workers Directive. It is worth noting that posted self-employed persons are not covered by the Directive.
A marginal phenomenon?
Intra-EU posting currently represents 0.4% of the total employment in the EU. Nevertheless, in some host countries and sectors of activity the impact of intra-EU posting is far greater. For instance, the number of posted workers makes up 30% of total employment in the Belgian construction sector. In France, where posted workers account for approximately 1% of total employment, the relative impact is significantly lower. This makes the prominent role of France in the current debate on intra-EU posting all the more striking.
A labour mobility package
In the current public and political debate, posting is, unfortunately, too often linked to social dumping, social fraud and the displacement of domestic jobs. This prevailing negative perception makes that there is an urgent call for change, especially coming from countries that are confronted with high numbers of posted workers. In this regard, the European Commission’s proposal to review the Posting of Workers Directive addresses a number of relating concerns. The proposal to revise the Directive was launched in March 2016, under the slogan ‘equal pay for equal work in the same place’. But no political agreement on the issue has been reached yet.
This being said, an approach that focuses exclusively on reviewing the Posting of Workers Directive is simply too narrow. The recent launch of two other proposals to review European legislation on the matter adds to this opinion. They also have a direct impact on intra-EU posting. Therefore, they can’t be overlooked in the coming debates.
Firstly, at the end of 2016, a review of the EU legislation on social security coordination was launched (in which the existing main principle that social security contributions are paid in the country of origin remained unchanged). Secondly, specifically for the transport sector, another proposal was made in May 2017 to change a number of European provisions that also have important implications.
In addition to these proposals, countries were required to incorporate provisions that safeguard compliance with the Posting of Workers Directive in their national legislation by mid-2016 at the latest. These provisions were established in the Enforcement Directive. However, it is too soon to make a statement about the latter’s impact.
The need for a broader approach and debate
The aforementioned European Commission initiatives are clearly linked and should therefore be viewed as a whole. In order to perform an effective assessment of the potential impact of these initiatives on the future development of posting, it is recommended that the debate takes place within a broader framework that pays attention to all the related aspects.
Both in terms of the legislation to be discussed…
The existing applicable European legislation has put labour costs and working conditions under pressure. Therefore, on the one hand, changes to the Posting of Workers Directive and the EU legislation on social security coordination could reduce the risk of social dumping. On the other hand, other relevant objectives must also be taken into account. Think about promoting mobility within the European Union and economic integration, as well as avoiding additional administrative burdens.
With this in mind, it seems to concern a balanced political package of proposals launched by the European Commission. In any event, the grievances of ‘receiving’ member states (via the proposal to change the Posting of Workers Directive) and those of the ‘sending’ member states (by not changing the main principles in the EU legislation on social security coordination) are partially taken into account. This serves to illustrate the value of maintaining a view of the bigger picture during the current political debate.
… as well as the socio-economic impact of intra-EU posting
At the same time, in spite of a sharp focus on the negative consequences of intra-EU posting, a more nuanced debate on the impact of the practice is more than welcome. The benefits of intra-EU posting from the perspective of the ‘sending’ country (such as tempering the negative effects when countries are confronted by an economic crisis) as well as that of the ‘receiving country’ (in response to labour shortages) are hardly ever cited.
The French proposal as a good example of a broader debate
Currently, these proposals are not discussed simultaneously at the political level. Or are they? The proposal made by France, presented at the EPSCO council in June, appears to signal change in this area. France’s proposal to limit posting to 12 months not only involves the Posting of Workers Directive, but also the EU legislation on social security coordination. This also applies to a number of other topics in the proposal made by France. As a result the framework is made broader. This is an important step. The next step is having a more substantive discussion based on facts and figures. This is the only way to address the various countries’ current conflicting positions.