WRITTEN QUESTION E-1479/98

by Bartho Pronk (PPE) and Ria Oomen-Ruijten (PPE) to the Commission

(13 May 1998)

Subject: Holiday pay and bad-weather payments

I have received a complaint from the Netherlands-Germany Building Export Foundation to the effect that Dutch building firms which have posted workers to Germany are having to pay premiums in respect of holiday pay both in the Netherlands and in Germany. This is very expensive, particularly for small companies, and it is claimed that it has led in some cases to bankruptcies.

1. Is the Commission aware of this? Does the Commission consider that this double payment is contrary to the freedom to provide services, since it leads to distortions of the market and of competition, with no benefits to the workers concerned?

If so, does the Commission plan to take any action against it?

2. In the Commission's opinion, is holiday pay covered by the "posted workers" Directive 96/71/EC?(1)

Must Germany adapt its legislation before the directive enters fully into force?

3. Is the Commission aware that similar complaints have been raised in other Member States?

Answer given by Mr Flynn on behalf of the Commission

(13 July 1998)

The Honourable Member raises questions concerning the freedom to provide services across borders, a fundamental freedom under Article 59 of the EC Treaty, in particular the question of the conditions of application 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(2).

The aim of this Directive is to ensure that any enterprise providing services on the territory of another Member State and posting workers there to this end complies with a "hard core" of labour law rules in force in that Member State. Under German legislation, foreign enterprises providing services on German territory are obliged to comply with German rules governing contributions to holiday-pay funds set up by the social partners.

The Commission has received and examined several complaints from various Member States concerning the risks of double payment facing employers when they are subject to obligations concerning holiday pay for workers in both their Member State of origin and the host Member State, in this case Germany. The Commission takes the view that this double burden on employers restricts the freedom to provide services and violates both the letter and the spirit of Directive 96/71/EEC.

While, under the terms of the Directive, Germany is entitled to require foreign enterprises to comply with compulsory German provisions on the payment of contributions to holiday-pay funds, the application of this obligation must not violate the provisions of the Directive or Article 59 et seq. of the EC Treaty and must take account in particular of the protection granted and guaranteed to posted workers in this area by the legislation or practices in force in the Member State from which they are posted, the aim being to avoid the risk of double payment. In any event, workers must be able to benefit from the application of such an obligation on employers to pay contributions.

The Commission has organised several meetings of national experts in order to ensure proper transposition of the Directive. It also encourages the conclusion of agreements between social partners in order to avoid all double payment risks for employers.

(1) OJ L 18, 21.1.1997, p. 1.

(2) OJ L 18, 21.1.1997.