COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the enforcement of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (Text with EEA relevance) and Proposal for a COUNCIL REGULATION on the exercise of the right to take collective action within the context of the freedom of establishment and the freedom to provide services
Date: 2012-03-21
Institutions: European Commission
Subjects: collective bargaining, equal treatment, free movement of workers, freedom to provide services, frontier worker, labour dispute, right of establishment, right to strike, social dumping, working conditions

EUROPEAN COMMISSION 

Brussels, 21.3.2012  
SWD(2012) 64 final 

COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a  

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the enforcement of Directive 96/71/EC concerning the posting of workers in the 
framework of the provision of services 
(Text with EEA relevance) 

and  

Proposal for a  
COUNCIL REGULATION  

on the exercise of the right to take collective action within the context of the freedom of 
establishment and the freedom to provide services  
(Text with EEA relevance) 

{COM(2012) 130 final} 
{COM(2012) 131 final} 
{SWD(2012) 63 final} 

EN 

   EN 

 
 
 
 
  
 
 
 
 
 
 
COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a  

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the enforcement of Directive 96/71/EC concerning the posting of workers in the 
framework of the provision of services 
(Text with EEA relevance) 

and  

Proposal for a  
COUNCIL REGULATION  

on the exercise of the right to take collective action within the context of the freedom of 
establishment and the freedom to provide services  
(Text with EEA relevance) 

1. 

INTRODUCTION 

Directive 96/71/EC1 (hereafter: 'the Directive'), based on Article 53(1) and 62 TFEU, defines 
the core of mandatory working conditions to be respected in the host country by companies 
posting  workers  temporarily  to  that  country.  This  facilitates  the  cross-border  provision  of 
services considerably as the service provider does not have to know and apply the entire body 
of  employment  rules  of  the  host  country.  At  the  same  time,  the  Directive  provides  for  a 
significant  level  of  protection  of  posted  workers  and  avoids  that  working  conditions  in  the 
host country are undermined as an effect of competition.  

Posted  workers  fall  in  three  categories:  workers  posted  under  a  service  contract,  intra-
corporate transferees or temporary agency workers. The hard core of terms and conditions of 
employment,  as  defined  in  Article  3(1)  of  the  Directive  (hereafter  also:  applicable  working 
conditions),  includes:  maximum  work  periods  and  minimum  rest  periods;  minimum  paid 
annual holidays; the minimum rates of pay, including overtime rates; the conditions of hiring-
out of workers, in particular the supply of workers by temporary employment undertakings; 
health,  safety  and  hygiene  at  work;  protective  measures  with  regard  to  the  terms  and 
conditions  of  employment  of  pregnant  women  or  women  who  have  recently  given  birth,  of 
children  and  of  young  people;  equality  of  treatment  between  men  and  women  and  other 
provisions on non-discrimination. 

1 

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. 

EN 

2 

   EN 

 
 
 
 
 
 
                                                 
As  far  as  these  terms  and  conditions  of  employment  are  laid  down  by  law,  regulation  or 
administrative provision Member States must apply them to workers posted to their territory. 
Member States must equally apply them to posted workers if they are laid down by collective 
agreements or arbitration awards which have been declared universally applicable within the 
meaning of Article 3(8). Member States may apply terms and conditions of employment laid 
down by such collective agreements or arbitration awards with regard to other activities than 
building  work  (Article  3(10)  second  indent)  and  on  matters  other  than  those  referred  to  in 
Article 3(1) in the case of public policy provisions (Article 3(10) first indent) in accordance 
with primary law. 

The  Directive  also  includes  in Articles  4,  5  and  6  provisions  on  information,  administrative 
cooperation, enforcement and jurisdiction. 

2. 

GATHERING INFORMATION AND CONSULTING STAKEHOLDERS  

Since  2009,  the  Commission  launched  four  ex-post  evaluation  studies  concerning  social, 
economic and legal aspect of posting. In order to prepare the Impact Assessment, an ex-ante 
evaluation  study  has  been  carried  out  by  an  external  consultant  in  2011.  The  work  of  the 
Expert Committee on the Posting of Workers (ECPW) has been taken into consideration, in 
particular  the  pilot  project  on  electronic  information  exchange  using  a  separate  and  specific 
application of the Internal Market Information System (IMI) in the area of posting of workers. 

The  Commission  held  a  public  consultation  on  50  proposals  to  re-launch  the  single  market 
(Communication  "Towards  a  Single  Market  Act"  of  27  October  2010),  including  two 
proposals concerning the legislative initiatives assessed by this Impact Assessment. On 27/28 
June  2011,  the  Commission  organised  a  Conference  on  fundamental  social  rights  and  the 
posting  of  workers  in  the  framework  of  the  provision  of  services  in  Brussels  gathering  key 
stakeholders  (Member  States,  social  partners  at  EU  and  national  level,  EU  institutions  and 
international  organisations  as  well  as  academics  and  researchers).  On  this  occasion 
stakeholders and key political actors have had an additional opportunity to express their views 
on Commission ideas regarding the regulatory options and possible content of the legislative 
initiatives  announced  in  the  Single  Market  Act:  a  so-called  'Monti  II  Regulation'  and  an 
Enforcement Directive. 

3. 

PROBLEM DEFINITION 

3.1. 

The phenomenon of posting 

3.1.1.  Extent of the phenomenon 

The only available data source at EU-level is based on the systematic data collection of E101 
certificates  (2005-2009)  in  the  field  of  social  security,  carried  out  by  the  Commission  in 
cooperation  with  national  authorities2.  However,  this  database  has  several  limitations.  It 
measures the number of postings, not the number of posted persons (the same person can be 
posted several times). Furthermore, the E101 social security form is not issued to all posted 

2 

European Commission (2011), “Posting of workers in the European Union and EFTA countries: Report 
on  E101  certificates  issued  in  2008  and  2009”;  European  Commission  (2011),  “Administrative  data 
collection on E101 certificates issued in 2007”.  

EN 

3 

   EN 

 
                                                 
workers, either because it is not required (postings of over 12 months are not considered for 
social  security  purposes)  or  because  some  companies  do  not  apply  for  E101  forms  when 
workers are posted, especially in the cases of very short-term postings. 

With these caveats, it can be estimated that around one million workers are posted each year 
by their employers from one Member State to another.  

In  relation  to  labour  mobility  within  the  EU,  the  number  of  postings  represented  18.5%  of 
non-national  EU-27  citizens  in  the  labour  force  in  2007.  However,  posting  concerns  only  a 
small  share  of  the  total  active  population  (0.4%  of  the  active  population  of  EU-15  sending 
countries and 0.7% of the active population of EU-12 sending countries). While posting is a 
significant phenomenon in terms of labour mobility, especially in some countries and sectors, 
it remains a relatively small observable phenomenon in the EU labour market.3 

3.1.2. 

Sector-specific breakdown 

The available data suggest that on average in 2009, around 55% of posted workers were sent 
to the industrial sectors. Most important among these sectors is construction sector with 24% 
of overall postings. The service sector represented on average 44% of postings of which the 
most important are financial intermediation and business activities (16%) as well as transport, 
storage  and  communication  (7%).  In  the  construction  sector  there  is  a  strong  presence  of 
SMEs in posting, mainly as subcontractors.4 

The  findings  of  two  studies5  which  assessed  the  factors  that  influence  the  phenomenon  of 
posting, suggest that the following factors are most relevant: geographical proximity seems to 
be the most relevant factor able to explain the distribution of flows of posting (the direction 
and  the  extent  of  the  phenomenon);  labour  costs  for  receiving  countries;  labour  and  skill 
shortages as well as specialisation, in particular for posting from high labour cost countries to 
other  Member  States;  unemployment  rate  for  sending  countries  (in  particular  in  low  labour 
cost countries); level of economic market integration between Member States (however less 
relevant). 

3.1.3.  Effects of posting 

Despite its small size as compared to the overall workforce, the posting of workers plays an 
important role in the cross-border provision of services, in particular sectors. The possibility 
to  provide  services  internationally  represents  an  opportunity  for  business  expansion  across 
Europe,  particularly  for  SMEs.  Posting  provides  business  and  job  opportunities,  and  is  a 
source  of  additional  income  in  sending  countries.  It  contributes  to  the  improvement  of 
competitiveness and efficiency in receiving countries.  

3 

4 
5 

Cf. Idea Consult and Ecorys Netherlands, Study on the economic and social effects associated with the 
phenomenon of posting of workers in the European Union, Brussels, 2011. Available on the website: 
http://www.ec.europa.eu/social/posted-workers,  executive  summary.  The  percentage  provides  only  a 
rough  indication  of  the  weight  of  postings  on  non-nationals  EU-27  citizens  in  the  labour  force  (it  is 
likely to be an overestimation). On the one hand, a E101 certificate does not represent a full-time one-
year equivalent worker, on the other, the Labour force survey which provides the data on non-nationals 
EU-27 citizens in the labour force does not cover posted workers. 
Idea Consult (footnote 3), case study on the construction sector, p. 164. 
Ismeri  Europa,  Preparatory  study  for  an  Impact  Assessment  concerning  the  possible  revision  of  the 
legislative framework on the posting of workers in the context of the provision of services, Draft final 
report; Idea Consult (footnote 3). 

EN 

4 

   EN 

 
                                                 
Posting  has  implications  for  the  labour  markets  of  both  sending  and  receiving  countries.  It 
offers  job  opportunities  in  sending  countries  and  fills  skill  and  labour  shortages  in  the 
receiving  countries.  Therefore,  posting  contributes  to  a  more  efficient  allocation  of  labour 
across  boundaries.  However,  it  can  have  ‘displacement’  effects  in  the  receiving  labour 
markets, whereby local workers are substituted by posted ones. The strength of this effect will 
depend on the existence of an oversupply of labour in particular sectors and professions. At 
the  same  time,  it  should  be  underlined  that,  since  employment  creation  in  the  EU  relies 
heavily  on  the  development  of  an  integrated  market  for  services,  posting  may  effectively 
contribute to support job creation. 

3.2. 

The problems to be addressed 

3.2.1.  Problems  related  to  the  implementation,  monitoring  and  enforcement  of  the 
applicable  working  conditions  of  posted  workers,  including  the  protection  of 
worker's rights 

3.2.1.1.  Problem  1a:  Deficiencies  with  respect  to  information  for  employers  and  posted 

workers 

Despite  the  obligation  in  Article  4  (3)  of  the  Directive,  the  information  concerning  the 
applicable working conditions in the host Member State is often difficult to obtain, uneven, 
and  of  insufficient  quality.  This  information  is  crucial  for  service  providers  in  order  to 
guarantee  the  applicable  working  conditions  and  for  posted  workers  in  order  to  claim  their 
rights. 

3.2.1.2.  Problem 1b: Deficiencies in control, monitoring and enforcement action 

According to Article 5 of the Directive, Member States have to ensure compliance with the 
provisions  of  the  Directive  by  taking  appropriate  measures,  in  particular  to  ensure  adequate 
procedures  for  enforcement  of  the  applicable  working  conditions.  The  'how'  of  monitoring 
and  enforcement  of  the  rights  conveyed  in  the  Directive  is  left  to  the  national  level. 
Deficiencies  with  regard  to  control,  monitoring  and  enforcement  action  cause  a  serious  risk 
that  applicable  working  conditions  in  the  host  state  are  not  respected,  in  particular  with 
respect  to  wages,  working  time  and  health  and  safety  conditions.  They  may  also  facilitate 
anti-competitive behaviour. Such gaps are compounded by the short-term nature of much of 
the posting taking place, which makes the task of controlling authorities more difficult.  

3.2.1.3.  Problem 1c: Unnecessary administrative requirements and control measures imposed 

on service providers 

Member  States  should  comply  with  the  obligation  inscribed  in  Article  5  of  the  Directive  in 
line with prevailing EU law, in particular the freedom to provide services as interpreted by the 
Court of Justice. The monitoring exercise in 2007 showed that several Member States impose 
administrative  requirements  and  control  measures  on  service  providers  which  are 
incompatible with prevailing EU law.6  

6 

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, COM(2007)304 final. 

EN 

5 

   EN 

 
                                                 
3.2.1.4.  Problem 1d: Deficiencies with regard to administrative cooperation 

Article  4(1)  and  (2)  of  the  Directive  impose  obligations  as  regards  cooperation  between 
national  administrations,  and  makes  it  the  responsibility  of  Member  States  to  create  the 
necessary conditions for such cooperation. However, the provisions included in the Directive 
are  not  sufficiently  precise.  The  proper  functioning  of  administrative  cooperation  among 
Member States is an essential instrument for compliance control. Its virtual absence referred 
to  in  COM(2007)  304  undermines  the  operation  of  the  Directive  and  may  at  least  partly 
explain other problems like disproportionate national control measures.  

3.2.1.5.  Problem  1e:  Posted  workers  are  not  adequately  protected  in  disputes  concerning 

individual employment conditions 

Article 6 of the Directive contains a jurisdiction clause allowing the posted worker to enforce 
his rights granted by the Directive in the host state. However, there is evidence indicating that 
posted  workers  are  not  adequately  protected  in  disputes  concerning  individual  employment 
conditions.  

3.2.2.  Abuse of the posted workers status in order to evade or circumvent legislation 

3.2.2.1.  Problem 2a: Posting is no longer of a temporary nature or has a rotational character 

In  order  to  justify  the  difference  in  treatment  between  posted  workers  (core  protection)  and 
migrant workers (equal treatment), posting has to be of temporary nature. If  the duration of 
the  posting  is  excessive,  and  becomes  permanent,  the  presumption  behind  the  difference  in 
legal  status  between  these  two  categories  of  workers  is  no  longer  valid.  The  same  situation 
occurs if the same or different employees are repeatedly recruited by an undertaking with the 
purpose  of  being  posted  to  another  Member  State  for  carrying  out  the  same  job  (rotational 
postings). 

The problem is mainly driven by the absence of criteria which would enable Member States 
authorities to determine if a posting is of temporary nature. The Directive defines the posted 
worker as a worker who, for a limited period of time carries out his work in the territory of a 
Member  State  other  than  the  State  in  which  he  normally  works.  There  is  however  no 
indication  as  to  the  temporary  nature  of  the  posting.7  The  Directive  neither  provides  for  a 
fixed time limit nor other criteria to determine the temporary character of the stay in the host 
State8.  There  is  no  reference  either  to  the  possibility  of  repeated  posting  for  the  same  job. 

7 

8 

CJEU,  judgment  of  11  December  2003,  case  C-215/01,  Schnitzer;  Aukje  van  Hoek  and  Mijke 
Houwerzijl, Study on the legal aspects of the posting of workers in the framework of the provision of 
services in the European Union, 2011. Available on the website: http://www.ec.europa.eu/social/posted-
workers, p. 46-48, 187-189 (recommendations 1, 11, 12). 
Requested  periods of previous  employment  in  the  sending  Member  State  in  the  context  of  posting  of 
third country nationals of 6 or 12 months were considered as incompatible with Article 56 TFEU by the 
CJEU  (cases  C-445/03,  Commission  v  Luxembourg;  C-168/04,  Commission  v  Austria;  C-244/04, 
Commission v Germany. See also Aukje van Hoek and Mijke Houwerzijl, Study on the legal aspects of 
the  posting  of  workers  in  the  framework  of  the  provision  of  services  in  the  European  Union,  2011. 
Available  on 
the  website:  http://www.ec.europa.eu/social/posted-workers,  recommendation  12 
(reimbursement of expenditure for travel). 

EN 

6 

   EN 

 
                                                 
However, the social security legislation applying to posted workers 9 sets a time limit of two 
years for posting and excludes the possibility of repeated postings for the same job. 

3.2.2.2.  Problem 2b: The employer has no genuine link with the sending Member State 

The Directive provides that the posting undertaking has to be ‘established’ in a Member State. 
This  requires  the  existence  of  a  genuine  link  between  the  undertaking  and  the  sending 
Member  State.  However,  the  Directive  does  not  set  the  criteria  in  order  to  determine  the 
existence of such a genuine link. The social security administrative rules applying to posting 
are  more  explicit,  as  they  establish  criteria  allowing  to  define  posting  more  precisely.  With 
regard  to  the  activities  in  the  sending  Member  State,  such  rules  require  that  an  undertaking 
ordinarily carries out substantial activities in the territory of the Member State in which it is 
established in order to be authorised to post its workers to another Member State.10 In order to 
evade or circumvent employment or social security legislation, unscrupulous employers may 
direct  their  operations  involving  the  posting  of  workers  exclusively  towards  the  market  of 
another  Member  State  without  having  in  fact  any  relevant  economic  activity  in  the  country 
where they are formally registered. 

The use of 'letter-box' companies is particularly problematic in this respect. These companies 
are opened in the sending country only for the purpose of evading social security and labour 
legislation of often one specific host Member State.  

3.2.3.  Problems  related  to  the  unclear  or  controversial  interpretation  of  the  terms  and 

conditions of employment of the Directive 

3.2.3.1.  Problem 3a: The scope and level of the terms and conditions of employment  

In  countries  where  minimum  wages  are  set  by  law  or  by  universally  applicable  collective 
agreements,  their  application  to  posted  workers  is  straightforward,  however,  in  countries 
where no such tools exist, an uncertain situation is created for undertakings and workers. 

Authorities  of  the  countries  deprived  of  minimum  wages  set  by  law  or  by  universally 
applicable collective agreements have not appreciated the full scale of the consequences of the 
uncertainty created by the absence of provisions regarding posted workers, or were eager to 
maintain  their  traditional  industrial  relations  systems  unaffected  by  the  application  of  the 
Directive. 

3.2.3.2.  Problem 3b: Unclear level of protection with regard to the notion of 'minimum rates 

of pay' 

It is legally unclear which components of the wage paid form part of the minimum rate of pay 
in  the  host  Member  State.  The  definition  of  the  concept  of  minimum  rates  of  pay  is  in 
principle  a  matter  for  the  host  Member  State,  which  is  explicitly  referred  to  in  the  last 
sentence of Article 3 (1), however, within the limits of the jurisprudence of the CJEU.11 The 
definition may thus vary from one Member State to another. Member States may determine 

9 

10 

11 

Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the 
coordination of social security systems. 
Article 12 of Regulation (EC) 883/2004 in conjunction with Article 14(2) of Regulation (EC) 987/2009 
and Decision A2. 
See in this respect case C-341/05, Laval, in particular points 60 and 68. 

EN 

7 

   EN 

 
                                                 
the various allowances and bonuses which are included in the minimum pay applicable. Some 
Member  States  restrict  it  to  the  minimum  wage  as  such  others  include  different  kinds  of 
bonuses,  allowances  or  contributions  to  funds.  Existing  jurisprudence12  did  not  clarify  this 
issue.  

3.2.4.  Problem  4:  Tensions  between  the  freedom  to  provide  services/establishment  and 

national industrial relation systems 

The rulings of the Court, interpreting the Directive and Treaty provisions, in cases Viking and 
Laval,  exposed  underlying  tensions  between  the  freedoms  to  provide  services  and  of 
establishment,  and  the  exercise  of  fundamental  social  rights  such  as  the  right  of  collective 
bargaining and the right to industrial action. In particular, the rulings were perceived by trade 
unions as imposing a screening of industrial action by EU or national courts whenever such 
action could affect or be detrimental to the exercise of the freedom to provide services or the 
freedom of establishment. Such perceptions have led in the recent past to negative "spill-over" 
effects as illustrated by a few transnational industrial disputes. 

The  importance  of  this  problem  has  been  highlighted  in  the  2010  Report  of  the  ILO 
Committee  of  Experts  on  the  Application  of  Conventions  and  Recommendations  which 
expressed  ‘serious  concern’  about  the  practical  limitations  on  the  effective  exercise  of  the 
right  to  strike  imposed  by  the  CJEU  rulings.  The  right  to  strike  is  enshrined  in  ILO 
Convention No. 87, which is signed by all EU Member States. 

3.2.5. 

Social partners views on the problems identified 

Problems  1a,  1b,  1d  and  2b  are  shared  concerns  of  ETUC  and  BUSINESSEUROPE. 
However, according to BUSINESSEUROPE only problems 1d and 2b justify an intervention 
on EU level. With regard to problem 1e ETUC is in favour of a far-reaching system of joint 
and  several  liability  while  BUSINESSEUROPE  is  against.  Concerning  problem  1a  ETUC 
would be in favour of a clear time limit for posting while BUSINESSEUROPE is not. Social 
partners  have  divergent  views  on  problems  3a  and  4  mainly  resulting  from  a  different 
perception of the jurisprudence of the CJEU. 

4. 

OBJECTIVES 

4.1. 

General objectives 

The initiative should contribute to the following Treaty-based policy objectives: 

•  The sustainable development of the internal market, based on a highly competitive social 

market economy (Article 3 TEU); 

•  The freedom to provide services across borders and the promotion of a level playing field 

(Article 56 TFEU); 

•  The  improvement  of  living  and  working  conditions,  so  as  to  make  possible  their 

harmonisation while the improvement is being maintained (Article 151 TFEU); 

12 

Case C-341/02, Commission v. Germany. 

EN 

8 

   EN 

 
                                                 
•  The  respect  for  the  diversity  of  industrial  relation  systems  in  the  Member  States  and  the 

promotion of dialogue between management and labour (Article 152 TFEU). 

4.2. 

Specific and operational objectives 

4.2.1.  Better protecting the rights of posted workers 

The following operational objectives are related to this specific objective: 

•  Improving information regarding the applicable working conditions for posted workers 

•  Enabling posted workers to better defend their rights, including in subcontracting chains 

•  Clarifying the role of social partners in enforcement activities 

•  Improving monitoring and enforcement of the applicable working conditions 

•  Providing  for  more  clarity  regarding  the  interpretation  of  the  provisions  concerning  the 

terms and condition of employment of the Directive 

4.2.2.  Facilitating  cross-border  provision  of  services  and  improving  climate  of  fair 

competition 

The following operational objectives are related to this specific objective: 

•  Providing for a more precise definition of posting 

•  Improving  information  regarding  the  obligations  of  undertakings  in  respect  of  applicable 

working conditions for posted workers 

•  Providing for clarity regarding administrative requirements and national control measures 

•  Improving administrative cooperation between the responsible national authorities 

•  Improving monitoring and enforcement of the applicable working conditions 

•  Providing  for  more  clarity  regarding  the  interpretation  of  the  provisions  concerning  the 

terms and conditions of employment of the Directive 

4.2.3. 

Improving legal certainty as regards the balance between social rights and economic 
freedoms, in particular in the context of the posting of workers 

The following operational objectives are related to this specific objective: 

•  Clarifying  that  no  primacy  exists  between  the  freedom  to  provide  services/freedom  of 

establishment and the right to take collective action, including the right to strike.  

•  Clarifying  that  worker's  rights  may  continue  to  be  defended  either  individually  or 

collectively through trade union action in cross-border situations.  

EN 

9 

   EN 

 
5. 

ANALYSIS OF SUBSIDIARITY 

The problems identified are linked to the objectives set out by Article 3(3) TEU and Articles 
56 and 151 TFEU. Lack of clarity of the existing legal framework on EU level is at the origin 
of  the  problems  identified.  The existing  Directive  leaving  Member  States  wide  margin  with 
regard  to  implementation,  application  and  enforcement  in  practice  as  well  as  previous 
attempts  to  address  existing  problems  by  the  way  of  non-binding  measures  have  not  been 
sufficient to solve the identified problems. Therefore, it is necessary to address problems 1, 2 
and  3  at  EU  level  in  order  to  better  achieve  the  objectives  of  the  Treaty.  Legal  clarity  and 
certainty with regard to problem 4 can only be achieved at EU level. The action is necessary 
and proportionate in order to better achieve the objectives of the Treaty. 

6. 

POLICY OPTIONS 

6.1. 

Options and sub-options related to problems 1, 2 and 3 

•  Option 1: No policy change (baseline scenario) 

•  Option 2: Non-regulatory intervention  

– 

– 

– 

Sub-option  2a:  Clarifying  Member  States'  obligations  with  regard 
to 
implementation,  monitoring  and  enforcement  of  the  Directive,  including  the 
protection of posted worker's rights (addressing the drivers underlying problem 
1) 

Sub-option 2b: Clarifying the constituent elements of the notion of 'posting' to 
better  fight  circumvention  and  abuses  of  the  rules  (addressing  the  drivers 
underlying problem 2) 

Sub-option 2c: Clarifying certain issues related to the interpretation of different 
aspects of the terms and conditions of employment of the Directive (addressing 
the drivers underlying problem 3) 

•  Option 3: Regulatory intervention  

– 

– 

– 

Sub-option  3a: 
the 
Introducing  more  precise  provisions 
implementation,  monitoring  and  enforcement  of  the  Directive,  including  the 
protection of posted worker's rights (addressing the drivers underlying problem 
1) 

regarding 

Sub-option  3b:  Introducing  further  criteria  by  legislative  means  to  clarify  the 
constituent  elements  of  the  notion  of  posting  by  so  as  to  better  fight 
circumvention  and  abuses  of  the  rules  (addressing  the  drivers  underlying 
problem 2) 

Sub-option  3c:  Modifying  the  scope  and  level  of  terms  and  conditions  of 
employment under the Directive (addressing the drivers underlying problem 3) 

•  Option 4: Repealing the existing regulatory intervention (the Directive) 

EN 

10 

   EN 

 
6.2. 

Options related to problem 4 

•  Option 5: No policy change (baseline scenario) 

•  Option 6: Non-regulatory intervention  

– 

Clarifying the exercise of freedom of establishment and the freedom to provide 
services alongside fundamental social rights by the way of a Communication  

•  Option 7: Regulatory intervention  

– 

Introducing by legislative means rules designed to clarify how the exercise of 
the fundamental social right to collective action can be made compatible with 
the freedom of establishment and the freedom to provide services  

7. 

MAIN ECONOMIC, SOCIAL AND ENVIRONMENTAL IMPACTS OF EACH OPTION  

With regard  to the policy  options concerning the  posting  of  workers  the  impact  of  different 
packages  (combinations  of  sub-options)  is  assessed  against  the  baseline  scenario  (option  1). 
The packages address all drivers underlying problems listed under headings 1, 2 and 3 either 
by  legislative  or  non-legislative  means  in  order  to  ensure  comparability.  Packages  which 
address  the  drivers  underlying  problems  grouped  under  1  by  non-legislative  means  (see 
section 6.1) will not be considered for further analysis since previous attempts to address such 
problems by non-legislative means have not reached their objectives. Therefore, the following 
packages will be taken into consideration. 

Sub-option addressing drivers 
underlying problem 1 

Sub-option addressing drivers 
underlying problem 2 

Sub-option addressing drivers 
underlying problem 3 

Package A 

Package B 

Package C 

Package D 

3a 

3a 

3a 

3a 

2b 

3b 

2b 

3b 

2c 

2c 

3c 

3c 

intervention by non-legislative means; intervention by legislative means 

With  regard  to  the  policy  options  concerning  the  tensions  between  the  freedom  to  provide 
services/establishment  and  national  industrial  relation  systems  (problem  4)  option  6 
(intervention  by  non-legislative  means)  and  option  7  (legislative  intervention)  are  assessed 
against the baseline scenario (option 5). 

7.1. 

Option 1: Baseline posting of workers 

7.1.1.  Economic Impact 

Continuing deficiencies regarding information, monitoring and enforcement, legal uncertainty 
regarding administrative requirements as well as abuses and circumvention of the applicable 
rules  will  continue  to  have  negative  effects  on  fair  competition  and  the  functioning  of  the 
single market. SMEs are in particular sensitive to unfair competition on labour costs and will 
continue to be affected by such deficiencies. 

EN 

11 

   EN 

 
 
7.1.2. 

Social impact 

Negative  impact  on  fair  competition  will  indirectly  affect  labour  markets,  job  opportunities 
and  worker's  rights  in  sectors  and  regions  where  posting  is  concentrated  in  receiving 
countries. Due to wage convergence, this effect might slightly decrease. 

7.2. 

Package  A  (Regulatory  measures  to  deal  with  problem  1,  combined  with  non-
regulatory measures to deal with problems 2 and 3) 

7.2.1.  Economic Impact 

Package A (sub-option 3a) will contribute to fair competition and a more level playing field 
by providing for more clarity regarding monitoring, controls, enforcement (including joint and 
several liability), and administrative cooperation. It will facilitate the cross border provision 
of  services  by  clarifying  the  administrative  requirements  Member  States  may  impose  on 
service providers. Increased regulatory certainty and cooperation between Member States will 
reduce barriers to the provision of services and create positive effects on the development of 
the single market. Facilitated cross border provision of services will increase competition in 
the internal market for services.  

SMEs are in particular sensitive to unfair competition. Therefore, they will benefit from better 
enforcement of the existing Directive, a more level playing field and fairer competition. With 
regard  to  unfair  competition  on  labour  costs,  the  positive  impact  on  SMEs  in  receiving 
countries  will  be  even  more  significant.  Effective  and  adequate  inspections  including  risk 
assessment,  improved  administrative  cooperation,  cross-border  execution  of  fines  and  joint 
and several liability (regarding costs see below) will contribute to better enforcement of the 
Directive.  However,  the  positive  impact  will  be  less  significant  than  in  packages  B  and  D 
since package A will not provide for binding legal clarity regarding the definition of posting 
as  well  as  provisions  aiming  at  reducing  abuses.  SMEs  especially  in  sending  countries  will 
benefit  from  improved  information  regarding  the  applicable  working  conditions  and  legal 
clarity regarding administrative requirements in the host Member State. They will particularly 
benefit  from  the  removal  of  some  disproportionate  forms  of  control  measures  which  imply 
extra costs.  

Costs  for  Member  States:  Administrative  burden  related  to  access  to  information  is 
anticipated  to  amount  to  approximately  90,000  EUR  (one-off  costs)  and  180,000  EUR 
(repetitive costs per year) for the EU as a whole. Member States will benefit from the use of 
IMI, better administrative cooperation and the cross-border enforcement of fines. The use of 
IMI will reduce costs for Member States. Costs for companies: No administrative burden for 
companies is linked to package A. Additional indirect compliance costs of about €2 million 
could be expected from businesses adapting their risk assessment in selecting subcontractors 
to the introduction of joint and several liability in those Member States where such a system is 
not in place. However, a decrease in compliance costs could be expected as a result of better 
access  to  information  and  reduced  administrative  requirements  of  Member  States  (national 
control measures) brought about by package A.  

7.2.2. 

Social impact 

Reducing non-respect of the applicable working conditions and better enforcement of posted 
workers rights will have a positive impact on existing tensions in receiving high labour cost 
countries with regard to posting. However, the impact will be less significant than in packages 

EN 

12 

   EN 

 
B and D since package A will not provide for binding legal clarity regarding the definition of 
posting as well as provisions aiming at reducing abuses. Transparent information and clarity 
regarding administrative requirements will positively affect market opportunities for sending 
firms.  Working  and  employment  conditions  of  posted  workers  will  improve  due  to  better 
information, monitoring and enforcement. At the same time downward pressure on working 
condition of local workers in receiving countries will decrease.  

7.3. 

Package B (Regulatory measures to deal with problems 1 and 2, combined with 
non-regulatory measures to deal with problem 3)  

Package B is to a large extent identical to package A. However, it provides for binding rules 
regarding  the  definition  of  posting  and  additional  provisions  aiming  at  reducing  abuses  and 
circumvention of the applicable working conditions. Therefore, the positive impacts regarding 
fair  competition  and  a  more  level  playing  field,  worker’s  rights  and  job  quality  as  well  as 
reducing potential downward pressure on local wages is more significant than in package A 
(no changes in costs). 

7.4. 

Package C (Regulatory measures to deal with problems 1 and 3, combined with 
non-regulatory measures to deal with problem 2)  

7.4.1.  Economic Impact 

Package  C  (sub-option  3c)  would  give  the  host  Member  State  the  possibility  to  impose  a 
wider set of employment conditions to foreign undertakings than currently foreseen in Article 
3 of the Directive. It would also allow for establishing wages for posted workers in excess of 
the minimum wage rate set by law or collective agreement.  

Like package A and B this sub-option will facilitate the cross border provision of services by 
clarifying the  administrative  requirements Member States may impose on service providers. 
Increased regulatory certainty and cooperation between Member States will reduce barriers to 
the provision of services and create positive effects on the development of the single market. 
However,  the  economic  incentive  for  posting  and  therefore  for  cross-border  provision  of 
services would be greatly reduced in this package. Foreign undertakings would have to know 
in detail the entire body of labour law of all Member States they intended to post workers to. 
Equal treatment of posted workers as regards wages would suppress the wage cost difference 
that  is  an  incentive  for  posting.  Indeed,  it  would  create  a  disincentive  given  the  extra  costs 
incurred  by  posting  (transport,  accommodation,  administrative  formalities).  Therefore,  this 
option  will  decrease  competition  in  the  internal  market  for  services  in  some  sectors  and 
regions.  Local  firms  in  high  labour  cost  countries  will  benefit  from  reduced  competition  on 
labour costs. However, firms in sending countries would loose business opportunities.  

7.4.2. 

Social impact 

Extending  the  protection  of  posted  workers  beyond  the  core  of  mandatory  working  and 
employment  conditions  and/or  providing  for  equal  pay  with  local  workers  might  reduce 
posting flows and have a negative impact on job opportunities for workers in low labour cost 
countries.  Local  firms  and  workers  in  receiving  high  labour  cost  countries  will  in  principle 
benefit  from  less  competition  on  labour  costs.  Better  enforcement  of  posted  workers  rights 
will  have  a  positive  impact  on  fair  competition in  receiving  high  labour  cost  countries  with 
regard to posting. However, the positive impact on fair competition is less significant against 
the  baseline  scenario  than  in  package  B  or  D  since  package  C  will  not  reduce  abuses  and 

EN 

13 

   EN 

 
circumvention  of  the  applicable  rules  by  providing  for  binding  legal  clarity  regarding  the 
definition of posting and provisions aiming at reducing abuses. The impact in this respect is 
similar to package A. At the same time, raising significantly the level of protection of posted 
workers may increase abuses and circumvention of the applicable rules as well as undeclared 
work  if  not  compensated  by  additional  efforts  regarding  monitoring,  controls  and 
enforcement. Equal working conditions for local and posted workers will greatly reduce the 
flows of legal posting.  

7.5. 

Package D (Regulatory measures to deal with problems 1, 2 and 3) 

The impact of package D is close to the impact of package C. However, the positive impact of 
package D on fair competition and a more level playing field is more significant against the 
baseline scenario than in package C since package D will reduce abuses and circumvention of 
the applicable rules by providing for binding legal clarity regarding the definition of posting 
and provisions aiming at reducing abuses. In this respect, impacts are similar to package B. 

7.6. 

Option  5:  Baseline  related  to  the  tensions  between  the  freedom  to  provide 
services/establishment and national industrial relation systems (problem 4) 

7.6.1.  Economic Impact 

Regulatory  uncertainty  in  case  of  conflicts  will  negatively  impact  on  the  functioning  of  the 
internal  market.  Possible  loss  of  support  for  the  single  market  of  an  important  part  of 
stakeholders  would  have  a  significant  negative  impact.  It  would  create  an  unfriendly 
environment for service providers and could include protectionist behaviour. 

7.6.2. 

Social impact 

Regulatory  uncertainty  in  case  of  conflict  between  the  right  to  strike  and  fundamental 
economic  freedoms  creates  a  risk  of  damage  claims.  Doubts  regarding  the  role  of  national 
courts with regard to the exercise of the proportionality test concerning strikes in cross-border 
conflicts may prevent trade unions from playing their role in protecting worker’s rights. This 
creates  a  negative  impact  on  the  protection  of  worker’s  rights.  There  is  a  direct  negative 
impact  on  Article  28  of  the  Charter  (Right  of  collective  bargaining  and  action)  since 
regulatory  uncertainty  in  this  context  will  weaken  trade  union  involvement  in  protecting 
worker’s rights.  

7.7. 

Option 6: Non-legislative intervention 

7.7.1.  Economic Impact 

Clarifying the extent to which trade unions can make use of the right to strike in cross-border 
situations involving the freedom to provide services and the freedom of establishment would 
have  a  positive  impact  on  the  functioning  of  the  single  market,  to  the  extent  that  it  would 
reduce the scope for legal uncertainty.  

7.7.2. 

Social impact 

There  is  an  indirect  positive  effect  on  the  protection  of  worker’s  rights,  since  this  option 
would clarify social partner's role in protecting worker’s rights in case of cross-border social 
conflict as well as providing for more legal certainty in case of conflict between the right to 
strike and fundamental economic freedoms. This could strengthen trade union involvement in 

EN 

14 

   EN 

 
protecting worker’s rights by providing more legal clarity in case of conflict between the right 
to  strike  and  fundamental  economic  freedoms.  This  clarification  could  have  an  indirect 
positive  effect  on  the  functioning  of  national  industrial  relation  systems.  Since  the  material 
content of the right to strike differs between the Member States, stressing the important role 
of  national  courts  in  applying  the  proportionality  test  on  a  case-by-case  basis  while 
reconciling  the  exercise  of  fundamental  social  rights  and  economic  freedoms  should 
positively affect national industrial relation systems.  

7.8. 

Option 7: Legislative intervention  

Option  7  has  the  same  positive  impacts  as  option  6,  to  the  extent  that  it  pursues  the  same 
objective  of  clarifying  the  jurisprudence  of  the  CJEU.  Impacts  should  be  more  significant 
since  a  Regulation  provides  for  more  legal  certainty  than  a  soft  law  approach  (option  6).  A 
further  provision  regarding  an  alert  mechanism  would  have  additional  positive  impacts.  In 
addition, a legislative intervention would express a more committed political approach by the 
Commission to respond to a problem that is seen with great concern by the unions and parts of 
the Parliament. 

7.8.1.  Economic Impact 

Establishing an alert mechanism for situations causing serious damage or grave disruption, or 
creating social unrest will have an indirect positive impact, to the extent that it would increase 
transparency  and  provide  timely  information  to  Commission,  national  authorities  and 
stakeholders of concerned Member states allowing them to intervene if necessary. 

7.8.2. 

Social impact 

To the extent that this option clarifies the jurisprudence of the Court of Justice that there is no 
inherent conflict between the exercise of the right to take industrial action, including the right 
or freedom to strike, and the freedoms of establishment and to provide services, or primacy of 
one over the other, it will have a positive impact on Article 28 of the Charter. Recognising the 
key  role  of  social  partners  to  take  action  to  protect  workers'  rights,  including  through 
industrial actions will also clarify that no incompatibility exists in relation to ILO Convention 
No. 87.  

7.9. 

Social partner's views on the policy options  

With  regard  to  the  posting  of  workers  both  social  partners  agree  that  action  on  EU  level  is 
necessary, excluding option 1 (do nothing) and 4 (repeal the Directive). The preferred option 
of  ETUC  would  be  package  D.  According  to  BUSINESSEUROPE  the  existing  problems 
could be tackled by better administrative cooperation only. As a result, package A is already 
considered to be too far-reaching, in particular with respect to joint and several liability. 

Concerning  the  problem  of  tensions  between  national  industrial  relation  systems  and 
economic freedoms ETUC is in favour of a legislative intervention providing for primacy of 
social rights over economic freedoms. This would go beyond option 7. BUSINESSEUROPE 
does not consider EU action necessary 

EN 

15 

   EN 

 
8. 

COMPARISON OF THE OPTIONS AND PREFERRED OPTION 

The options have been compared with regard to their effectiveness, efficiency and coherence 
with the general objectives of the EU. 

The preferred option is a combination of package B and option 7. Package B is overall most 
effective  and  efficient  in  addressing  the  specific  objectives  ‘Better  protecting  the  rights  of 
posted  workers’,  ‘Improving  climate  of  fair  competition’  and  ‘Facilitating  the  cross-border 
provision of services’. It is also most coherent with regard to the general objectives. Option 7 
is  most  effective  and  efficient  with  regard  to  the  specific  objective  ‘Reducing  tensions 
between national industrial relation systems and the freedom to provide services’. The option 
is most coherent with regard to the general objectives. 

The preferred option is proportionate since the costs are relatively small while the benefits are 
significant.  

Package  B  can  be  realised  by  a  separate  new  enforcement  Directive  which  would  express 
more  clearly  the  policy  objectives  of  the  Commission  –  improving  and  reinforcing  the 
transposition,  implementation  and  enforcement  in  practice  of  the  Directive,  including 
measures to prevent and sanction any abuse and circumvention of the applicable rules - than a 
proposal amending the existing Directive. The enforcement Directive would be based on the 
same legal basis as the Directive 96/71 (Articles 53 and 62 TFEU).  

A  legislative  initiative  clarifying  the  exercise  of  the  fundamental  right  to  collective  action 
within the context of the freedom of establishment and the freedom to provide services would 
have to be adopted on the basis of Article 352 TFEU. Such an initiative would not establish 
rules regarding the exercise of the right to strike.  

9. 

MONITORING AND EVALUATION 

9.1.  Monitoring 

Monitoring  will  take  place  via  Implementation  Reports  issued  by  the  Commission.  The 
ECPW  expert  committee  should  continue  to  play  a  role  in  the  follow-up  of  the 
implementation  of  the  Directive.  Once  the  substance  of  future  action  is  clarified,  the 
Commission together with ECPW will develop a strictly limited set of indicators which cover 
relevant aspects of the operation of the Directive. The initial proposal for a list of indicators to 
be tracked is the following (after each indicator the source of the information is provided): (i) 
the  number  of  searches  on  national  posting  websites  (provided  by  Member  States);  (ii)  the 
number of inter-country cooperation projects on posting promoted by national authorities or 
social  partners  (Member  States);  (iii)  the  number  of  requests  made  through  the  special  IMI 
application  for  posting  (Commission);  (iv)  number  of  litigation  cases  in  national  courts 
(Member  States);  (v)  percentage  of  inspections  leading  to  sanctions  (Member  States);  (vi) 
number  of  cases  reported  under  the  alert  mechanism  established  for  cross-border  industrial 
conflicts (Commission). The Commission will also continue to collect administrative data on 
posting based on social security data. With regard to frequency of use, these indicators will be 
regularly presented and discussed in the ECPW, and will also form part of the set of indicators 
to be used in the evaluation mentioned below. 

EN 

16 

   EN 

 
9.2. 

Evaluation 

Five years after the deadline for transposition there will be a on-going evaluation. The main 
focus of this evaluation will be to assess the initial effectiveness of the Directive as modified. 
Emphasis will be placed on analysis of enhanced cooperation arrangements between Member 
States  and  quality  of  information  generated  by  these  arrangements.  This  evaluation  will  be 
carried out by the Commission with the assistance of external experts. Terms of reference will 
be developed by the Commission. Stakeholders will be informed of and asked to comment on 
the  terms  of  reference  through  the  ECPW,  and  they  will  also  be  regularly  informed  of  the 
progress of the evaluation and its findings. The findings will be made public. 

EN 

17 

   EN