New rights for posted workers ‘problematic’ for business

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A European Commission proposal to enforce the social rights of workers in the construction sector when they are temporarily posted abroad is creating jitters in the business community. France, for its part, said it would veto a related proposal on trade union's right to strike if the text was not strengthened further.

The Commission proposal, unveiled yesterday (21 March), puts forward new rules to increase the protection of workers when they are temporarily posted abroad.

The directive's revision comes alongside related proposals to strengthen EU rules governing the right to strike, the so-called 'Monti II Regulation'.

"Minimum employment and working conditions are often not respected for the one million or so posted workers in the EU," the EU executive said in a statement, saying the directive will increase monitoring and compliance with existing rules on posted workers.

José Manuel Barroso, Commission president, said the proposed revision of the posted workers directive, initially adopted in 1996, is aimed at rebalancing economic freedoms in the 27-country bloc with basic social rights.

"The free provision of services within the internal market represents a major growth opportunity. But the rules need to apply equally to all. This is not always the case for workers posted in another member state," Barroso said.

“Temporarily posting workers … cannot be used as a way to sidestep minimum social standards," added László Andor, EU Commissioner for Employment, Social Affairs and Inclusion.

'New obligations' for companies

BusinessEurope, the EU employers' organisation, said it supported the directive in principle but warned about the costs of compliance, saying it imposed "an EU system of joint and several liability" that will hurt business.

The proposed system, it said, creates new obligations for companies in the construction sector in 19 countries and shifts the responsibility to enforce social rules to companies, creating new administrative burdens for them.

"Companies’ role is not to monitor the wages and payslips of their suppliers’ workers in a different language," said Philippe de Buck, BusinessEurope's director general.

The Commission accepted that the new system of joint and several liability "may restrict the freedom to provide services" in the single market. But it said it was "justified by the protection of workers rights."

The business lobby had similar complaints about the proposed update of the Monti II Regulation, which addresses concerns that, in the single market, economic freedoms would prevail over the right to strike.

In its proposed update, the Commission stresses that "there is no primacy between the right to take collective action and the freedom to provide services," giving a boost to trade unions which had complained about European Court of Justice rulings that restricted the right to collective action (see background).

But BusinessEurope said such provisions "disrespects the exclusion of the right to strike from EU competences in the Treaty," and "could alter tried and tested industrial relations systems at national level."

In a statement, the French employment ministry hailed the Commission's proposal, saying it had been long been calling for an update of the posted workers directive to avoid "social dumping".

However, it criticised the proposed update of the Monti II Regulation, saying it is "ambiguous and contradicts the general objective" of the text by stipulating that the right to strike should respect the right of companies to establish themselves and do business anywhere in the single market.

French employment minister Xavier Bertrand, said any such conditionality on the right to strike was "not acceptable" and that France would "will not give its approval" to the text – which requires unanimity – if it was not amended.

The European Trade Union Confederation (ETUC) said it welcomed proposals to strengthen the rights of posted workers but added these were "too weak" and insufficient to fight "social dumping". It also rejected the proposed update of the 'Monti II' Regulation, saying it falls short of correcting the problems brought about by the Viking and Laval cases (see background).

"The ETUC does not support an economic system where competition invades all spheres of society and undermines social progress," it said in a statement.

Speaking to EURACTIV, a spokeswoman for ETUC also wondered why the proposal was not being extended to other sectors, like tourism and lesure. "Why only construction?" she asked.

Employment ministers from France, Luxembourg and Sweden called in October 2008 for a political solution to two separate rulings by the European Court of Justice that inflamed debate on the balance between workers' rights and economic freedom in the EU.

The European Court of Justice Viking Line and Laval judgments triggered an intense debate about the extent to which trade unions are able to defend workers' rights in cross-border situations, involving posting or relocation of companies.

The judgments have been interpreted by some stakeholders as meaning that economic freedoms would prevail over social rights and in particular the right to strike. 

In the Laval case (also known as the Vaxholm case), Swedish unions took action against Latvian construction company Laval un Partneri, which had posted several dozen workers from Latvia to building sites in Sweden. The company had refused to respect Swedish laws on working conditions and minimum wages.

In the related Viking case, the Court held that trade unions' right to take collective action may be limited by employers' right to freedom of establishment (EURACTIV 12/12/07).

  • The proposal for an update to the posted workers directive is now transmitted for approval by the 27 EU member states in the Council of Ministers. The European Parliament has a full say as co-legislator.
  • The Monti II Regulation update is being decided by the member states only and requires unanimity among them.

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