A New EU Posted Workers Directive and its Impact on Employers

Friday, May 16, 2014 | Published by

construction-worker-230x300The European Union is one step closer to passing a new directive concerning the posting of workers in the framework of the provision of services. In 2012, the European Commission proposed amending Council Directive 96/71/EC to better protect the rights of posted workers. Then in March of 2014, a compromise text was approved by the Council of the European Union, which has since been informally endorsed by members of the Employment and Social Affairs Committee of the European Parliament. This new directive aims to allow greater flexibility to the member states in terms of enforcing the rules, while at the same time seeks to ensure greater protection for posted workers and prevent abuses.

Background

Council Directive 96/71/EC, governs the protections afforded to ‘posted workers’ – a worker who, for a limited period, carries out his work in the territory of a member state other than the State in which he normally works. The directive governs daily rest, breaks, weekly rest period, maximum weekly working time, annual leave, night work, pattern of work, safety and health protection, and more. For jurisdiction purposes, judicial proceedings may be instituted in the Member State in whose territory the worker is or was posted.

Proposed Changes

Some of the most significant amendments to the law include:

• Member states shall only be permitted to impose administrative requirements and control measures that are justified and proportionate to ensure effective compliance with the related directives and any new or additional measures that arise as a result of the existing requirements will have to be communicated to the Commission and subsequently related to service providers via a single national website.

• For the construction industry specifically, member states may take appropriate measures to ensure that the rights of posted workers engaged by subcontractors are honored beyond just remuneration rights. Such measures include the ability to impose sanctions on subcontractors for such failures.

• There will be added oversight in order to verify if a posting is indeed genuine and if not, how to deal with such an instance, especially where a conflict of laws arises.

• Increased transparency and access to information regarding employment conditions, as well as collective agreements, applicable to posted workers, should be made available via a website or other similar means of communication.

• Specific time limits shall be set for mutual assistance (article 6) regarding the supply of information in order to enable member states to carry out checks, inspections and investigations from competent authorities…including investigation of any abuses of applicable rules on the posting of workers or possible cases of unlawful transnational activities. The time limits to respond are as soon as possible and up to a maximum of two working days for urgent cases and up to a maximum of 25 working days for all other requests for information.

• Efficient enforcement of cross-border administrative fines and penalties on a provider of service for failure to comply with the posted workers regulations.

• Finally, additional provisions such as combatting undeclared work and a horizontal three-year review clause have also been included in the text.

Support and Criticism

The proposed amendments have generally gained support from member states, notably the United Kingdom and Hungary. Business Europe, the EU employers’ organization, has also expressed support for the measure, but cautioned that adhering to these regulations could be costly, especially the new regulations applicable to the construction sector, which creates a system of self-regulation and with it increased administrative costs.

French officials praised the EUs efforts to address abuses, but criticized the proposed draft for not going far enough to prevent “social dumping”- the practice of using a cheaper workforce than is otherwise available in the area in order to save money and increase profits.

The European Trade Union Confederation (ETUC) echoed similar complaints, saying the legislation will fail to afford adequate protection to posted workers and that the law undermines collective bargaining rights, particularly the right to strike, and favors the employer’s right to conduct business and provide services over the rights of the workers.

Tips for Employers

Employers should be cognizant that ‘posted workers’ are entitled to the same protections and guarantees as non-posted workers, with some exceptions, specifically employment in the public sectors related to national security or law enforcement.

One example of the protections afforded to posted workers under EU law, allows for a member state to grant family benefits to posted or seasonal workers, even if that member state is not the territory in which the employee spends the majority of his time.

In short, a company that operates within the European Union must safeguard the fundamental rights of all citizens of the European Union in which it employs, including posted workers.

Conclusion

There is an estimated 1.5 million posted workers throughout the EU and more than 55% are involved in the construction industry.1 As such, employers, employees and government leaders must cooperate to reach a consensus that adequately addresses workers’ rights without increasing the burden on service providers, and does so in a way that can be implemented across borders without significant varying degrees of effectiveness. A harmonized approach to posted workers is vital to the economic prosperity of the European Union and its citizens and is necessary to successfully honor the legal theory regarding the free movement of workers.


1 “The Management of Posted Workers in the European Union” by The Robert Schuman Foundation, 2014


Image credit: Public domain, from Wikimedia Commons.