WRITTEN QUESTION E-3110/98

by Viviane Reding (PPE) to the Commission

(16 October 1998)

Subject: Discrimination against Luxembourg firms in the crafts trades sector by virtue of the German law on the posting of workers

Since the beginning of 1997 a law on the posting of workers has been in force in Germany, one of the aims of which is to prevent social dumping and unfair competition by the posting of workers to other EU countries. This is a perfectly legitimate objective, but should not be used as a pretext for the introduction of new protectionist barriers.

A case in point is the problem of Luxembourg firms in the crafts sector offering their services in Germany (particularly in Rhineland-Palatinate and Saarland), which have been placed in an impossible situation because their employees have to be insured both in Luxembourg and in Germany. Workers in the construction industry in Luxembourg have a statutory right to paid holiday, and the collective agreement provides for a holiday bonus of 11,77 % of gross pay. Luxembourg firms are now being required by the German holiday and pay compensation fund (ULAK) to pay the latter 14,25 % of the gross salary paid during the period spent working abroad as a holiday bonus. Luxembourg firms are at a clear disadvantage in relation to their German competitiors as a result of this dual liability (i.e the payment of simultaneous contributions to comparable institutions) and the high administrative costs involved.

Is the Commission aware of this problem? What measures does the Commission intend to take to ensure that the German law on the posting of workers and the social insurance arrangements applying to the construction industry do not impede access to the market by firms from other EU countries?

Reply by Mr Monti on behalf of the Commission

(20 November 1998)

The honourable Member has raised a number of questions concerning the compatibility of the German Law on the posting of workers (Arbeitnehmerentsendegesetz) with the freedom to provide services abroad, a fundamental freedom under Article 59 of the EC Treaty.

The interpretation of this freedom should take account of Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services abroad(1) even though the deadline for the transposal of this directive is not until 16 December 1999. Under Directive 96/71/EC, all businesses providing services on the territory of another Member State and posting paid workers for this purpose should observe a "hard core" of minimum requirements in force in that Member State.

Germany's holiday-fund measures should be examined in the light of these provisions. In February 1998, a German industrial tribunal submitted to the Court of Justice references for preliminary rulings on the present holiday-fund scheme in Germany. The Commission has also received numerous complaints from businesses in other Member States (but not from Luxembourg so far). Given that the German authorities have no intention of suspending the application of their scheme in the light of these references, the Commission is dealing with the matter under the procedure set out in Article 169 of the EC Treaty.

(1) OJ L 18, 21.1.1997.