EN Official Journal of the European Union C 224/95

Opinion of the European Economic and Social Committee on the Posting of workers in the framework of the provision of services — Maximising its benefits and potential while guaranteeing the protection of workers

COM(2007) 304 final

(2008/C 224/22)

On 13 June 2007, the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions — Posting of workers in the framework of the provision of services: maximising its benefits and potential while guaranteeing the protection of workers.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 7 May 2008. The rapporteur was Ms Le Nouail Marlière.

At its 445th plenary session, held on 28 and 29 May 2008 (meeting of 29 May), the European Economic and Social Committee adopted the following opinion by 116 votes to 1, with 4 abstentions.

On 13 June 2007, the Commission published the aforementioned Communication, in which it assesses the measures taken by the Member States to transpose Directive 96/71/EC on the posting of workers in the framework of the provision of services in the European Union and suggests improvements to its implementation.

Directive 96/71/EC aims to reconcile the exercise of the fundamental freedom to provide cross-border services under Article 49 TEC for service providers, on the one hand, with the need to ensure an appropriate level of protection of the terms and conditions of employment of workers temporarily posted abroad to provide these services.

According to the Commission, a worker is said to be ‘posted’ when he is sent by his employer to a Member State in order to perform work there, in the framework of the contracted provision of services. This cross-border provision of services implies the sending of employees to a Member State other than the one in which they usually work, and creates a specific category of workers, known as ‘posted workers’. However, Member States had been left some scope for interpretation as regards the definition.

This Communication follows on from two communications (1), which included guidelines pursuant to Directive 96/71/EC which stipulated that the Commission should review the text by 16 December 2001 with a view to submitting proposals to the Council for any amendments which might be needed.

The Committee had issued an opinion (2) wherein it recommended that the Commission should ‘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 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 were prevented,

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

The Committee also suggested ‘a more detailed analysis regarding the economic and social partners, 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, drawing on an inventory of best information-sharing practices for both employers and employees, 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’.

1. General comments

1.1 This Communication is based on a third assessment completed many years after the date set by the directive itself (16 December 2001 at the latest) which takes account of transpositions and enactments in all Member States, thus highlighting the specific character of this sector which is not only legal, technical and economic, but primarily social and human, resulting in difficulties in assessment, transposition, implementation and supervision. This highly legal Directive involves interpretations and scope for interpretation at several levels as regards its transposition and case-law, which leads to practical problems for businesses, posted workers and work supervisors, as was pointed out by the social partners and local and national authorities during parliamentary hearings. The European Parliament (3) issued a number of recommendations, including one which stipulated that the social partners should be given a stronger role, without however providing details on how this should be achieved.

1.2 The Committee points out that one way to ensure that certain freedoms considered on the same footing (personal freedom and the freedom to provide services) remain equal in reality is to ensure that the directive guarantees compliance with a significant level of protection of the rights of posted workers and fair competition between all service providers. The Committee does not feel that it is possible to calmly envisage free movement of services at the expense of certain workers. Recent case-law (4) may be interpreted as moving along these lines, but the Committee would point out that ILO conventions No 87 on the Freedom of Association and No 98 on Collective Bargaining state that the process of framing social legislation must follow the customary procedures for such legislation, including collective bargaining at enterprise or any other level, and in areas as varied as setting minimum wages in a sector or company. Since the transposition of Directive 96/71/EC came under this customary lawmaking framework in each Member State, the Commission should enforce international law, as interpreted by ad hoc supervisory bodies, and labour standards ratified by all Member States, in accordance with primary law.

1.3 Currently, in addition to the new Communication under examination, the Commission has proposed a recommendation (5) for adoption by the Council on enhanced administrative cooperation, an information exchange system and the sharing and exchange of best practice.

1.4 Taking into account all these new proposals, the Committee stresses that the Commission is moving in the right direction, in particular with the proposal to boost administrative cooperation and set up an information exchange system between Member States to exchange information on labour law useful to workers posted to that State and on relevant collective conventions, to provide workers and service providers with access to this information in languages other than the official language or languages of the country in which the services are being provided, to set up liaison bureaux with appointed representatives and to involve the social partners in the high ranking committee, etc.

1.5 The Commission however has submitted the document assessing the measures to implement and transpose these rules in English only, thereby minimising the assessment's potential contribution to the Member States and the social partners at all levels. The Committee suggests that the Commission take into account the specific area in question (mobility, freedom of movement), and make the effort to publish the attached document (6) in at least three languages, including one southern romance language and one Slav language, in addition to English. The matter of language will arise in any event, and if the new provisions are to have the anticipated impact, the Committee recommends that appropriate language arrangements be introduced both when providing information for the social partners who play a major role in the field and for the information exchange system between the Member States. The Committee refers to its opinion on the implementation of the Commission's multilingualism strategy and the new exploratory opinion (7) requested by the Commission, and will certainly raise the matter of communication and the information necessary for the application of the provisions on the posting of workers, of which institutional communication is one aspect.

1.6 General nature of the information system and specific nature of the system of social registers:

1.7 The Commission proposes to do away with those control measures regarding the posting of workers that it considers unnecessary, while continuing to guarantee appropriate protection for posted workers. In its Communication, the Commission stresses that its purpose is not to question the Member States' social models, but, referring to part of the ECJ's case-law, it considers that certain control measures are unjustified since they would exceed what would be needed for the social protection of workers.

1.8 The Committee emphasises the lack of consistency in proposing to do away with the obligation to keep social registers in the Member State in which the service is being provided. While an information exchange system provides information on the legislation in force as well as on the rights and obligations of service providers and workers, it does not allow for the individualised monitoring of rights in the area of social protection, including immediate and long-term protection, illness, accidents, pensions and social insurance, nor of the social security and tax contributions which are mandatory in the country in which the service is being provided, these contributions being regulated by the labour law in force, specifically that of the country in which the service is being provided. The Committee therefore advises against the abolition of this obligation.

1.9 The Committee points out that the objectives of Directive 96/71/EC have not been fully realised even 10 years after its enactment. Diverging attitudes regarding the type and extent of social protection of posted workers persist in Europe, for both EU and third country workers.

1.10 In its Green Paper on Modernising labour law to meet the challenges of the 21st century, the Commission states that black labour, especially within the context of cross-border posting of workers, is an extremely disturbing and persistent phenomenon in today's labour markets and is also responsible for distortions of competition (8) as well as for the exploitation of employees. In the Green Paper, the Commission called for enforcement mechanisms able to secure the efficiency of the labour markets, avoid violations of national labour law and protect the social rights of employees.

1.11 The Committee points out that the economic and social partners in the building industry are particularly alert to the enactment of Directive 96/71/EC owing to the social dumping as well as to possible distortions of competition, due to the specific conditions in which the workforce in this sector is posted, especially as regards cross-border postings (9). Control measures adjusted to the particularities of the building industry are essential to protect domestic and posted workers affected by this. With this in mind, the Commission's plans should not weaken Member States' control mechanisms which have proven themselves over a long period of time, since the Commission would thus contradict its declared intention not to change the social models in the Member States.

1.12 The Committee quotes the EP view according to which the Commission should moderate its interpretation of ECJ case-law when evaluating the compatibility of certain measures with Community law (10).

2. Specific comments

2.1 With regard to the obligation to keep certain documents in the language of the host Member State, the Commission considers the obligation to translate to be an unjustified limitation on the free provision of services. In contrast to this, the ECJ recently decided in a decision of 18 July 2007 (C-490/04) that this controversial obligation is in keeping with Community law.

2.2 The Commission also quotes another ECJ ruling, whereby measures which are automatically and unconditionally applicable, based on a general presumption of tax evasion or fraud by a person or company exercising a fundamental freedom guaranteed by the Treaty, constitute an unjustified limitation of the free provision of services (11). The Committee doubts that the Court of Justice's interpretation is applicable to measures which are subject to Directive 96/71/EC, since the directive authorises Member States to ‘take appropriate measures in the event of failure to comply with this directive’. This provision does not lead to a general presumption of fraud. On the contrary, it states that the substantive law content of the directive would be void if the Member States were unable to police compliance with the provisions of posting with the appropriate means.

3. Improved cooperation as a solution for the existing problems when applying Directive 96/71/EC

3.1 The Committee welcomes the Commission's clear recognition of the considerable deficiencies that currently exist in cross-border administrative cooperation and of the need for action on this front, and is convinced that effective cooperation regarding the sharing of information between Member State authorities may contribute to overcoming the problems arising from difficulties in the practical implementation of the directive regulating the posting of workers, not least in relation to compliance monitoring.

3.2 However, the Committee does not feel that improved cooperation may void national control measures. The cooperation mechanisms within the framework of Directive 96/71/EC have so far proven to be unworkable; they have been unable to guarantee the social protection of employees in the same way and to the same extent in all domestic provisions.

3.3 This situation is particularly important for the building industry, where preventive checks carried out on building sites to assess the effectiveness of posted workers' rights are vital.

3.4 Handing responsibility for checks back to the Member State of origin would lead to undesirable delays in the protection of workers' rights. This is one of the reasons why the ECJ in the above-mentioned decision of 18 July 2007 granted Member States the authority to maintain the obligation to keep certain documents on building sites in the language of the host Member State. The Committee advises against abolishing this obligation, and indeed would recommend making recruitment and employment data, or in this case data on the posting of workers, more accessible by maintaining the obligation to make this data available for inspection by employment, vocational training and social protection authorities, in the host country and the country of origin. It will become increasingly important for this information to be clear and accessible to companies and workers in an expanded internal market with a trend towards still greater mobility.

3.5 Data on pension or health protection rights (shipyards, chemicals, agriculture, etc.) could be collected and checked more easily if there were several additional entries: country of origin, company, social services and organisations, in line with the principle of transparency.

3.6 The Committee also believes that the difficulties arising from the practical implementation of the directive regulating the posting of workers cannot be resolved bilaterally by the Member States alone. Consideration should therefore be given to establishing a European body to act as a logistical hub, relay point, catalyst and information centre for cross-border cooperation between authorities in connection with the posting of workers. This body should also draw up periodic reports on any difficulties arising and on the measures proposed to resolve them.

4. Commission recommendations to improve the implementation of Guideline 96/71/EC

4.1 The Committee applauds the Commission's intention to set up a high ranking committee in cooperation with Member States, trade unions and employers. The purpose of this committee would be to support the exchange and identification of proven processes, through the thorough examination and solution of problems connected to the cross-border enforcement of civil and administrative sanctions imposed in the context of the posting of workers. The Committee emphasises that European sectoral social partners have so far carried out the bulk of the work as regards surveillance and implementation, and so they should be explicitly involved in the process, by being automatically represented on the committee as soon as it is set up. They have already expressed their views in a joint European declaration. The Committee supports the Commission's initiative in view of the experience which has been acquired, but does not prejudge the hoped-for level of participation by inter-sectoral European social partners.

4.2 This committee should ensure that de facto conditions are not imposed on Member States, which would normally require the participation of the national or European legislator. The measures necessary to comply with Directive 96/71/EC are not sufficiently harmonised throughout the EU, and the committee could help correct this situation.

4.3 Finally, the Committee is pleased that the Commission fully takes into account the European Parliament resolutions on the posting of workers, in particular the resolution on the recognition of the commitment of the social partners, and suggests that their experience be put to good use, inter alia by providing them with additional resources to allow them to divulge examples of best practices.

4.4 In order to guarantee equal rights for all workers, the Commission should encourage efforts to adopt measures to improve controls and cooperation between Member States.

5. Unresolved issues

5.1 Bogus self-employment

5.1.1 The Committee has expressed concerns about the problems of detecting bogus ‘self-employed workers’ and their legal reclassification, in the case of those established outside or inside the Member State in which they are detected, or in cases where the posting is in some way bogus. It calls on the Commission to consider possible legal and practical solutions. Posted workers are sometimes encouraged to declare themselves to be self-employed when they are in fact entirely dependant on one single contractor, and are sometimes not declared to be either posted or self-employed, occasionally in dangerous professions in which complete social security coverage is vital.

5.1.2 National rules should contain clear and feasible definitions, as well as clear rules about liability in the event of bogus self-employment and/or bogus posting, so as to guarantee the payment of salaries, fines, taxes and social contributions which can be claimed by the worker and the authority, to ensure that the authorities can check that this obligation is complied with, to minimise the profit made by using fraudulent practices and to enhance the economic sanctions on people who commit fraud, in the event of collusion between companies and bogus ‘self-employed workers’ with the purpose of avoiding the obligations of social protection.

5.2 Subcontracting and liability

5.2.1 At Member State level, some national or sectoral partners have endorsed the principle of general or principal contractors having joint and several liability for subcontractors. This principle has been included in national law and deserves to be mentioned as good practice. The European Parliament report (12) highlights several advantages for posted workers under a regime of joint and several liability. In its communication, the Commission takes the view that the issue of whether principal contractors having subsidiary liability could constitute an effective and proportionate way to increase the monitoring and enforcement of compliance with Community law merits further examination and reflection. For its part, the European Parliament has endorsed such a move.

5.2.2 Practical experience shows that the directive on the posting of workers is sometimes circumvented by long chains of subcontracting combined with the use of cross-border service providers.

5.2.3 The Communication indicates that the Commission intends to engage with the Member States and social partners in an in-depth examination of cross-border enforcement problems (sanctions, fines, joint and several liability). In this way, the Commission takes up the consistent call of the European Parliament to take a legislative initiative on joint and several liability in order to minimise the possibilities of circumventing legal or collectively agreed standards, in accordance with the directive on the posting of workers. The Committee would ask to be informed of the outcome of this process.

6. Conclusions

6.1 The Committee supports the Commission's initiatives which have been proposed to the Council, but expresses concern that they are too one-sided in their approach, focusing primarily on the removal of the restrictions or obstacles that supposedly exist for companies posting workers to other countries. However, given the recognised shortcomings in the monitoring of working conditions, in cross-border administrative cooperation and in the enforcement of fines, the Committee feels that the same degree of importance should also be attached to enforcing employees' protected rights under the directive regulating the posting of workers. In particular, the Committee has its misgivings about the abolition of the obligation to keep social registers in the Member State in which the service is being provided; encourages the Council to adopt the proposed recommendation for enhanced administrative cooperation between Member States, improved access to information by service providers and posted workers with wider language cover, and the exchange of information and good practice between Member States within a tripartite high ranking committee, including representatives of the Member States and economic and social partners at national and European level, with the purpose of reinforcing Directive 96/71/EC and the protection of posted workers in the context of the free provision of services.

Brussels, 29 May 2008. The President of the European Economic and Social Committee Dimitris DIMITRIADIS

(1) COM(2003) 458 The implementation of Directive 96/71/EC in the Member States, and COM(2006) 159 of 4.4.2006 on Guidance on the posting of workers in the framework of the provision of services.

(2) EESC opinion of 31 March 2004 on the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: The implementation of Directive 96/71/EC in the Member States, rapporteur: Ms Le Nouail Marlière (OJ C 112 of 30.4.2004).

(3) And more recently B6-0266/2007 of 11 July 2007.

(4) Laval c) Svenska Affaire C-341/05.

(5) Commission Recommendation of (…) ‘on enhanced administrative cooperation in the context of the posting of workers in the framework of the provision of services’ IP/08/514.

(6) Sec 2008_747.

(7) EESC exploratory opinion on multilingualism, rapporteur: Ms Le Nouail-Marliére, ongoing.

(8) Green Paper, COM(2006) 708 final, paragraph 4.b) p. 11 and following pages; EESC opinion of 30 May 2007 on the Green Paper on Modernising labour law, rapporteur: Mr Retureau (OJ C175 of 27.7.2007).

(9) Particular reference should be made to one study: ‘Free movement of workers in the EU’, by Jan Cremers and Peter Donders, European Institute for Construction Labour Research, Editeurs et Werner Buelen, FETBB Auteur.

Other sectors are also victims of this social dumping, but the conditions of posting are not governed by the same Directive. EESC opinions 1698/2007 on the Cross-border agricultural workforce, rapporteur: Mr Siecker, and 1699/2007 on the Agricultural employment situation, rapporteur: Mr Wilms.

(10) European Parliament Resolution B6-0266/2007 of 11 July 2007.

(11) Point 3.2 of the Communication.

(12) The European Parliament report on corporate social responsibility: A New Partnership (2006/2133(INI)), the European Parliament report on the application of Directive 96/71/EC relating to the posting of workers (2006/2038(INI)) and the European Parliament adopted the report (A6-0247/2007) on modernising labour law to meet the challenges of the 21st century calls ‘on the Commission to regulate joint and several liability for general or principal undertakings, in order to deal with abuses in the subcontracting and outsourcing of workers and to set up a transparent and competitive market for all companies on the basis of a level playing field regarding respect for labour standards and working conditions, in particular calls on the Commission and the Member States to clearly establish at European level who is responsible for compliance with labour law and for paying the associated wages, social security contributions and taxes in a chain of subcontractors’. A practical example is the building site of the Council of Ministers' headquarters (Justus Lipsius) in Brussels during the 1990s. At a certain moment the site board included 30 to 50 subcontractors, and not everyone was on the board. Another example is the renovation of the Berlaymont building (headquarters of the European Commission) where a German company, specialised in removal of asbestos, engaged via subcontracting some 110 Portuguese workers, who were not trained at all for their task and worked in dreadful conditions. Other practical cases can be found in ‘The free movement of workers’, CLR Studies 4 (2004), pp. 48-51, Cremers and Donders eds.