# C_2004112EN.01004901.xml

| 30.4.2004 | EN | Official Journal of the European Union | C 112/49 |
| --- | --- | --- | --- |

30.4.2004

EN

Official Journal of the European Union

C 112/49

---

Opinion of the European Economic and Social Committee on the ‘communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on the implementation of Directive 96/71/EC in the Member States’

(COM(2003) 458 final)

(2004/C 112/15)

On 25 July 2004 the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the above-mentioned communication.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 3 March 2004. The rapporteur was Ms Le Nouail Marlière.

At its 407th plenary session of 31 March and 1 April 2004 (meeting of 31 March), the European Economic and Social Committee adopted the following opinion by 93 votes to one with five abstentions.

1.   Introduction

Background

1.1   The directive

| 1.1.1 | The directive on the posting of workers (1) was adopted in 1996 by the Council and the European Parliament. |
| --- | --- |

1.1.1

The directive on the posting of workers (1) was adopted in 1996 by the Council and the European Parliament.

1

| 1.1.2 | The directive seeks to strike a balance between extending the opportunities for businesses to provide services in other Member States and social protection of workers. For this reason, it defines a series of employment conditions which posted workers are to be guaranteed in the territory of the host country, regardless of which legal system governs posted workers' employment contracts. The directive defines a posted worker as 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 (Article 2(1)). |
| --- | --- |

1.1.2

The directive seeks to strike a balance between extending the opportunities for businesses to provide services in other Member States and social protection of workers. For this reason, it defines a series of employment conditions which posted workers are to be guaranteed in the territory of the host country, regardless of which legal system governs posted workers' employment contracts. The directive defines a posted worker as 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 (Article 2(1)).

| 1.1.3 | Regulation 1408/71, which deals with the coordination of social security in the EU in connection with the free movement of workers and services, introduced postings as one of the circumstances in which social insurance coverage could continue in the State of residence when working in another Member State for a maximum period of 12 months (2), or 18 months under certain conditions. |
| --- | --- |

1.1.3

Regulation 1408/71, which deals with the coordination of social security in the EU in connection with the free movement of workers and services, introduced postings as one of the circumstances in which social insurance coverage could continue in the State of residence when working in another Member State for a maximum period of 12 months (2), or 18 months under certain conditions.

2

| 1.1.4 | Directive 96/71/EC is concerned with the practical coordination of employment conditions for posted workers. Article 3 is the core of the text, stipulating the conditions applicable to posted workers. These are laid down:






  — | by employment conditions established in law, regulation or administrative provision; |
| --- | --- | --- |

1.1.4

Directive 96/71/EC is concerned with the practical coordination of employment conditions for posted workers. Article 3 is the core of the text, stipulating the conditions applicable to posted workers. These are laid down:

—

by employment conditions established in law, regulation or administrative provision;

| — | by fulfilling the criteria set out in the directive; |
| --- | --- |

—

by fulfilling the criteria set out in the directive;

| — | by specific employment conditions such as those referred to in Article 3(1), listed in collective agreements which have been declared universally applicable, insofar as they concern the activities referred to in the annex of the directive. This concerns activities in the construction sector; |
| --- | --- |

—

by specific employment conditions such as those referred to in Article 3(1), listed in collective agreements which have been declared universally applicable, insofar as they concern the activities referred to in the annex of the directive. This concerns activities in the construction sector;

| — | by specific provisions leaving the Member States to apply the directive as they see fit, for example with regard to very short-term postings, the one-month exception concerning minimum rates of pay and the extension of the directive's scope to include collective agreements in sectors other than construction; |
| --- | --- |

—

by specific provisions leaving the Member States to apply the directive as they see fit, for example with regard to very short-term postings, the one-month exception concerning minimum rates of pay and the extension of the directive's scope to include collective agreements in sectors other than construction;

| — | a provision of the directive establishing its minimal character, i.e. that workers may receive more favourable conditions of employment (Article 3(7)). |
| --- | --- |

—

a provision of the directive establishing its minimal character, i.e. that workers may receive more favourable conditions of employment (Article 3(7)).

| 1.1.5 | Together with transposition into national legislation, administrative cooperation (Article 4) is also considered an important means for implementing the provisions of the directive, not only for exchange of information, but also for measures necessary to prevention infringement of the rules set out in the directive. Directly preventing infringements contributes to social protection and the free movement of services. |
| --- | --- |

1.1.5

Together with transposition into national legislation, administrative cooperation (Article 4) is also considered an important means for implementing the provisions of the directive, not only for exchange of information, but also for measures necessary to prevention infringement of the rules set out in the directive. Directly preventing infringements contributes to social protection and the free movement of services.

1.2   The opinion of the Committee

| 1.2.1 | In 1991, the ESC issued an opinion on the Proposal for a Council Directive concerning the posting of workers in the framework of the provision of services (COM(91) 230 final – SYN 346, and ESC opinion CES 1512/91). |
| --- | --- |

1.2.1

In 1991, the ESC issued an opinion on the Proposal for a Council Directive concerning the posting of workers in the framework of the provision of services (COM(91) 230 final – SYN 346, and ESC opinion CES 1512/91).

1.3   Why a Communication from the Commission?

| 1.3.1 | The directive was to be transposed by the Member States by the end of 1999. |
| --- | --- |

1.3.1

The directive was to be transposed by the Member States by the end of 1999.

| 1.3.2 | Article 8 of the directive stipulated that the Commission should review its operation by 16 December 2001, in order to see if it was necessary to propose any amendments to the Council. When the deadline expired, the Commission began to monitor the implementation of the directive in Member State legislation. The conclusions of the report were transposed into the Commission's communication on implementation of the directive. The communication is an evaluation of the transposition, in legislative terms, of applicable national rights. It introduces the content and objectives of the directive under evaluation, and describes the legislative measures taken in the Member States, dividing them into three groups: those which have reproduced the terms of the directive, without indicating to which provisions of their national legislation the matters covered by the directive correspond; those which have sought to identify the applicable national provisions and have inserted references to these national provisions; and lastly, those Member States which have not adopted any specific transposition legislation concerning the national provisions applicable to posted workers. |
| --- | --- |

1.3.2

Article 8 of the directive stipulated that the Commission should review its operation by 16 December 2001, in order to see if it was necessary to propose any amendments to the Council. When the deadline expired, the Commission began to monitor the implementation of the directive in Member State legislation. The conclusions of the report were transposed into the Commission's communication on implementation of the directive. The communication is an evaluation of the transposition, in legislative terms, of applicable national rights. It introduces the content and objectives of the directive under evaluation, and describes the legislative measures taken in the Member States, dividing them into three groups: those which have reproduced the terms of the directive, without indicating to which provisions of their national legislation the matters covered by the directive correspond; those which have sought to identify the applicable national provisions and have inserted references to these national provisions; and lastly, those Member States which have not adopted any specific transposition legislation concerning the national provisions applicable to posted workers.

| 1.3.3 | The legal study cites the provisions of conventions, the implementation of cooperation on information (Article 4), monitoring measures and penalties in the event of non-compliance with the directive (Articles 5 and 6). |
| --- | --- |

1.3.3

The legal study cites the provisions of conventions, the implementation of cooperation on information (Article 4), monitoring measures and penalties in the event of non-compliance with the directive (Articles 5 and 6).

| 1.3.4 | In chapter 4 of the communication, the Commission assesses the situation regarding the transposition of the directive in the Member States, the method of transposition, and the nature of the standards and collective agreements applicable. |
| --- | --- |

1.3.4

In chapter 4 of the communication, the Commission assesses the situation regarding the transposition of the directive in the Member States, the method of transposition, and the nature of the standards and collective agreements applicable.

| 1.3.5 | Chapter 4 also mentions the practical and administrative difficulties in application encountered by the Member States, with three short paragraphs being given over to difficulties encountered by service provider undertakings and posted workers. |
| --- | --- |

1.3.5

Chapter 4 also mentions the practical and administrative difficulties in application encountered by the Member States, with three short paragraphs being given over to difficulties encountered by service provider undertakings and posted workers.

| 1.3.6 | It concludes that since none of the Member States has encountered any particular legal difficulties in transposing the directive, implementation may pose some difficulties, but these should disappear over time. |
| --- | --- |

1.3.6

It concludes that since none of the Member States has encountered any particular legal difficulties in transposing the directive, implementation may pose some difficulties, but these should disappear over time.

| 1.3.7 | The Commission then concludes that it would therefore be premature to consider amending the directive. Finally, it proposes that a group of government experts of variable composition should be charged with examining ways of facilitating access to information on the provisions applicable to posted workers and of monitoring compliance with provisions in order to resolve the difficulties identified (countries failing to transpose specific provisions, public policy provisions, information seeking, compliance with national transposition provisions, and implementing penalties). |
| --- | --- |

1.3.7

The Commission then concludes that it would therefore be premature to consider amending the directive. Finally, it proposes that a group of government experts of variable composition should be charged with examining ways of facilitating access to information on the provisions applicable to posted workers and of monitoring compliance with provisions in order to resolve the difficulties identified (countries failing to transpose specific provisions, public policy provisions, information seeking, compliance with national transposition provisions, and implementing penalties).

2.   General comments

2.1   On the Commission's lines of analysis

| 2.1.1 | The Committee considers the communication to be useful, but insufficient. It calls upon the Commission to flesh out its analysis, especially regarding the unfair competition and social dumping which could result from bogus postings. The Committee urges the Commission to conduct sector-based consultations with those to whom transposition is effectively addressed, particularly in the construction sector where the social partners have not yet been consulted, since they have mentioned problems concerning the definitions of posted workers and the grey area comprising ‘self-employed’ workers. This fuller analysis could focus on the practical implementation of Article 3 of the directive in terms of real respect for the fundamental rights of workers contained in it. In this connection, the Committee wonders if the national consultations carried out in the first exercise effectively shed light on practical difficulties in application and the real state of transposition of the implementing provisions. In any case, the Committee considers that more detailed work needs to be carried out on the most advantageous provisions, in order to provide a more accurate comparison of good practices and better inform all workers and businesses concerned. |
| --- | --- |

2.1.1

The Committee considers the communication to be useful, but insufficient. It calls upon the Commission to flesh out its analysis, especially regarding the unfair competition and social dumping which could result from bogus postings. The Committee urges the Commission to conduct sector-based consultations with those to whom transposition is effectively addressed, particularly in the construction sector where the social partners have not yet been consulted, since they have mentioned problems concerning the definitions of posted workers and the grey area comprising ‘self-employed’ workers. This fuller analysis could focus on the practical implementation of Article 3 of the directive in terms of real respect for the fundamental rights of workers contained in it. In this connection, the Committee wonders if the national consultations carried out in the first exercise effectively shed light on practical difficulties in application and the real state of transposition of the implementing provisions. In any case, the Committee considers that more detailed work needs to be carried out on the most advantageous provisions, in order to provide a more accurate comparison of good practices and better inform all workers and businesses concerned.

| 2.1.2 | The definitions used in the different national laws regarding posted workers are of significance in terms of the principles of the directive. Specific questions, which are important if the evaluation is to be complete, must be raised. How do the Member States recognise posted workers, and do they apply the directive accordingly? What type of measures have the Member States or the social partners taken to ensure compliance with the directive? A number of aspects are of particular importance in this regard:






  — | clarification between the legislation and collective agreements applicable in all the sectors in question; |
| --- | --- | --- |

2.1.2

The definitions used in the different national laws regarding posted workers are of significance in terms of the principles of the directive. Specific questions, which are important if the evaluation is to be complete, must be raised. How do the Member States recognise posted workers, and do they apply the directive accordingly? What type of measures have the Member States or the social partners taken to ensure compliance with the directive? A number of aspects are of particular importance in this regard:

—

clarification between the legislation and collective agreements applicable in all the sectors in question;

| — | the position of posted workers within the national legislative framework and the applicable definition; |
| --- | --- |

—

the position of posted workers within the national legislative framework and the applicable definition;

| — | the principle of application of minimum Community standards; |
| --- | --- |

—

the principle of application of minimum Community standards;

| — | the principle of equal treatment, in the light of the new Treaty Article 13 and ensuing directives; |
| --- | --- |

—

the principle of equal treatment, in the light of the new Treaty Article 13 and ensuing directives;

| — | compliance with provisions on minimum wages; |
| --- | --- |

—

compliance with provisions on minimum wages;

| — | provisions concerning social security and those concerning employment conditions; |
| --- | --- |

—

provisions concerning social security and those concerning employment conditions;

| — | the situation regarding posted workers who are third-country nationals; |
| --- | --- |

—

the situation regarding posted workers who are third-country nationals;

| — | the enforcement of a number of judgments, such as the Arblade Leloup case concerning minimum rates of pay (3), and the Guiot (4) and ULAK (5) cases, and in particular before transposition of the directive in the Member States except for Ireland and the United Kingdom. |
| --- | --- |

—

the enforcement of a number of judgments, such as the Arblade Leloup case concerning minimum rates of pay (3), and the Guiot (4) and ULAK (5) cases, and in particular before transposition of the directive in the Member States except for Ireland and the United Kingdom.

3

4

5

| 2.2 | In view of the communication's shortcomings, the Committee calls on the Commission to submit a new report so that the following can be verified:






  — | if real transparency of rights is applied; |
| --- | --- | --- |

2.2

In view of the communication's shortcomings, the Committee calls on the Commission to submit a new report so that the following can be verified:

—

if real transparency of rights is applied;

| — | if the positive rights of workers are guaranteed; |
| --- | --- |

—

if the positive rights of workers are guaranteed;

| — | if workers' mobility is promoted or hindered by application of the provisions arising from transposition in the Member States of the directive, given the risks of protectionist restrictions on the labour market; |
| --- | --- |

—

if workers' mobility is promoted or hindered by application of the provisions arising from transposition in the Member States of the directive, given the risks of protectionist restrictions on the labour market;

| — | if distortions of competition in connection with free movement of services are prevented; |
| --- | --- |

—

if distortions of competition in connection with free movement of services are prevented;

| — | if small businesses enjoy proper and adequate access to the information they need in order to implement the transposed directive. |
| --- | --- |

—

if small businesses enjoy proper and adequate access to the information they need in order to implement the transposed directive.

| 2.2.1 | Several Member States have universally applicable collective agreements in the construction sector. The main question is how the provisions of such collective agreements are used to implement the directive. The interpretation of the employment conditions defined in Article 3 is of special importance in this regard. What are the minimum rates of pay, minimum paid holidays and rest periods under the terms of these collective agreements? Collective agreements may vary considerably between Member States in these areas. One example would be the use, in some Member States, of ‘social funds’ for paid holidays. Membership of such funds may ensure more advantageous conditions for posted workers. The question is to find out how such advantageous conditions may be measured and taken into account. |
| --- | --- |

2.2.1

Several Member States have universally applicable collective agreements in the construction sector. The main question is how the provisions of such collective agreements are used to implement the directive. The interpretation of the employment conditions defined in Article 3 is of special importance in this regard. What are the minimum rates of pay, minimum paid holidays and rest periods under the terms of these collective agreements? Collective agreements may vary considerably between Member States in these areas. One example would be the use, in some Member States, of ‘social funds’ for paid holidays. Membership of such funds may ensure more advantageous conditions for posted workers. The question is to find out how such advantageous conditions may be measured and taken into account.

| 2.2.2 | Not all the Member States have extended application of collectively agreed labour conditions to posted workers in other sectors mentioned in the annex to the directive, although Article 3(10)(2) explicitly provides for this possibility. |
| --- | --- |

2.2.2

Not all the Member States have extended application of collectively agreed labour conditions to posted workers in other sectors mentioned in the annex to the directive, although Article 3(10)(2) explicitly provides for this possibility.

| 2.2.2.1 | The Committee urges the Commission to gather all available information from the Member States and the new accession countries concerning the number of posted workers and the various sectors most affected, bearing in mind the differing systems of industrial relations. |
| --- | --- |

2.2.2.1

The Committee urges the Commission to gather all available information from the Member States and the new accession countries concerning the number of posted workers and the various sectors most affected, bearing in mind the differing systems of industrial relations.

| 2.2.3 | On a number of occasions over recent years, the European Commission has been obliged to acknowledge that the expectations of the mid-1980s regarding mobility have not been borne out, or only to a minor extent. Less than 2 % of the European working population works in a country other than the country of origin. The figures for annual mobility are even lower. EU estimates refer to 600,000 active workers outside their own countries, not all of whom have the status of posted workers and are therefore not covered by the directive. This mobility seems to be restricted to executives and highly-skilled workers on the one hand, and construction workers on the other. The existence of pay-related and social dumping in some EU countries and in some occupational sectors is connected with the fact that in these high-risk sectors, even a relatively small number of workers offering their services on the labour market at significantly lower rates of pay can upset the existing pay structure and trigger a down spiral of pay and prices. |
| --- | --- |

2.2.3

On a number of occasions over recent years, the European Commission has been obliged to acknowledge that the expectations of the mid-1980s regarding mobility have not been borne out, or only to a minor extent. Less than 2 % of the European working population works in a country other than the country of origin. The figures for annual mobility are even lower. EU estimates refer to 600,000 active workers outside their own countries, not all of whom have the status of posted workers and are therefore not covered by the directive. This mobility seems to be restricted to executives and highly-skilled workers on the one hand, and construction workers on the other. The existence of pay-related and social dumping in some EU countries and in some occupational sectors is connected with the fact that in these high-risk sectors, even a relatively small number of workers offering their services on the labour market at significantly lower rates of pay can upset the existing pay structure and trigger a down spiral of pay and prices.

2.3   On the direct prevention of a weakening of social protection and on free movement of services

| — | The communication does not at present justify concluding from the difficulties encountered that the directive should be simplified or revised. In this regard, national experience (social partners in the construction sector, administrators, work inspectors etc.) on posted workers constitutes a valuable source of information and is therefore of great importance. |
| --- | --- |

—

The communication does not at present justify concluding from the difficulties encountered that the directive should be simplified or revised. In this regard, national experience (social partners in the construction sector, administrators, work inspectors etc.) on posted workers constitutes a valuable source of information and is therefore of great importance.

3.   Specific comments and proposals

| 3.1 | In its new analysis, the Commission should first of all consider the impact of enlargement on the implementation of the directive in both existing EU Member States and the accession countries, taking account of the transitional accession periods. The analysis should also evaluate the regional and cross-border or sectoral dimensions, especially the construction sector.






  — | It should ensure that the economic and social partners are actively involved, especially at national and European level. In the Committee's view, an assessment should be made of whether the directive has enabled the rights of posted workers (social protection, pensions, etc.) to be more clearly defined, and distortions of competition for local businesses to be avoided. |
| --- | --- | --- |

3.1

In its new analysis, the Commission should first of all consider the impact of enlargement on the implementation of the directive in both existing EU Member States and the accession countries, taking account of the transitional accession periods. The analysis should also evaluate the regional and cross-border or sectoral dimensions, especially the construction sector.

—

It should ensure that the economic and social partners are actively involved, especially at national and European level. In the Committee's view, an assessment should be made of whether the directive has enabled the rights of posted workers (social protection, pensions, etc.) to be more clearly defined, and distortions of competition for local businesses to be avoided.

| 3.2 | The Committee also suggests the following:






  — | a more detailed analysis regarding the economic and social partners; |
| --- | --- | --- |

3.2

The Committee also suggests the following:

—

a more detailed analysis regarding the economic and social partners;

| — | an evaluation of workers' and businesses' information mechanisms with a view to their improvement; |
| --- | --- |

—

an evaluation of workers' and businesses' information mechanisms with a view to their improvement;

| — | promotion of local, regional or cross-border networks of information centres; |
| --- | --- |

—

promotion of local, regional or cross-border networks of information centres;

| — | an inventory of best information-sharing practices for both employers and employees, for example between Finland and Estonia, based in Tallinn, on the rights of posted workers in Finland; |
| --- | --- |

—

an inventory of best information-sharing practices for both employers and employees, for example between Finland and Estonia, based in Tallinn, on the rights of posted workers in Finland;

| — | a legal study to ensure that the Member States' framework of legislation and information on applicable collective agreements is sufficiently clear, accessible and up-to-date in the context of enlargement. |
| --- | --- |

—

a legal study to ensure that the Member States' framework of legislation and information on applicable collective agreements is sufficiently clear, accessible and up-to-date in the context of enlargement.

Brussels, 31 March 2004.

The President

of the European Economic and Social Committee

Roger BRIESCH

---

(1)  Directive 96/71/EC of the European Parliament and of the Council concerning the posting of workers in the framework of the provision of services, OJ L 18 of 21.1.1997.

1

(2)  Regulation 1408/71.

2

(3)  Cases 369/96 and 376/96, CJEC, 23 November 1999.

3

(4)  Case 272/94, CJEC, 28 March 1996.

4

(5)  Cases C49/98, C50/98, C53/98.

5

---