COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing a European Labour Authority
Date: 2018-03-13
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU office or agency, employment service, free movement of workers, job mobility, operation of the Institutions, single market

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   EUROPEAN COMMISSION  Strasbourg, 13.3.2018  SWD(2018) 69 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing a European Labour Authority  {COM(2018) 131 final}  - {SWD(2018) 68 final}   
 
 
Impact assessment on [Proposal for a Regulation establishing a European Labour Authority  

Executive Summary Sheet 

Why? What is the problem being addressed?  

A. Need for action 

Free  movement  of  workers  and  of  services  are  key  asset  for  the  EU.  Yet,  they  depend  on  clear,  fair  and 
effectively  enforced  rules  on  cross-border  labour  mobility  and  social  security  coordination.  The  EU  has 
developed  an  extensive  body  of  legislation  regulating  free  movement  of  workers,  posting  of  workers  in  the 
context  of  the  provision  of  services  and  rules  on  social  security  coordination.  The  Juncker  Commission  has 
submitted  several  proposals  to  improve  this  regulatory  framework,  including  the  revision  of  the  Posting  of 
Workers  Directive  and  of  the  Regulation  on  the  Coordination  of  Social  Security  Systems,  as  well  as  the  lex 
specialis on posting in the international road transport sector.  

However,  concerns  remains  regarding  compliance  with  and  effective  enforcement  of  EU  rules  which  risk 
jeopardising  trust  and  fairness  in  the  Internal  Market.  In  particular  two  problems  stand  out:  first,  inadequate 
information,  support  and  guidance  function  for  individuals  and  employers  in  cross-border  situations;  second, 
inadequate cooperation between national authorities on rule enforcement. 

This proposal aims at addressing the following specific challenges: 

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Inadequate  support  and  guidance  for  individuals  and  businesses  in  cross-border  situations,  including 
incomplete or sparse information available to the public concerning their rights and obligations; 
Insufficient  access  to  and  sharing  of  information  between  national  authorities  responsible  for  different 
domains of labour mobility and social security coordination; 
Insufficient capacity of national authorities to organise cooperation with authorities across borders; 

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-  Weak or absent mechanisms for joint cross-border enforcement activities; 
-  The lack of a cross-border mediation mechanism between Member States across all domains of labour 

mobility and social security coordination; 
Insufficient cooperation set-up at EU level in this area. 

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EU labour mobility has shown an upward trend throughout the crisis. By 2017, 17 million citizens lived or worked 
in a Member State other  than  that of their  nationality. The figures almost doubled compared to a decade ago. 
Postings have increased by 68% from 2010 to 2.3 million in 2016. 1.4 million EU citizens commute to go to work 
in  another  Member  State.  Facing  this  situation,  there  is  a  need  for  effective  cooperation  between  national 
authorities and for concerted administrative action to manage the increasingly European labour market.  

What is this initiative expected to achieve?  

The general objective of the initiative is to help strengthen fairness and trust in the internal market and support 
the free movement of workers and services. The specific objectives of the initiative are respectively to: 

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improving  access  to  information  by  individuals  and  employers  about  their  rights  and  obligations  in  the 
areas of labour mobility and social security coordination as well as access to relevant services;   
strengthening  operational  cooperation  between  authorities  in  the  cross-border  enforcement  of  relevant 
Union law, including facilitating joint inspections; 

-  mediating and facilitating solutions in cases of disputes between national authorities and cross-border 
labour market disruptions, such as a restructuring of companies affecting several Member States.  

What is the value added of action at the EU level?  

While the enforcement of EU law remains the competence of national authorities, the free movement of workers, 
the posting of workers, and the coordination of social security are by definition transnational matters that require 
action at EU level. 

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B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not? Why?  

Three  policy  options  for  the  European  Labour  Authority,  characterised  by  increasing  levels  of  ambition,  have 
been  considered,  (1)  a  support  option,  (2)  an  operational  option,  and  (3)  a  supervisory  option.  Each  option 
covers the following tasks that a European Labour Authority could carry out: 

Labour mobility services for individuals and businesses  

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-  Cooperation and exchange of information between national authorities; 
-  Support to joint inspections; 
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-  Support to capacity building 
-  Mediation between national authorities; 
-  Facilitation of cooperation between relevant stakeholders in the event of cross-border labour disruptions.  

Labour market analyses and risk assessment;    

In terms of delivery, the following options have been considered: 

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- 

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a European Network is established coordinating existing EU labour mobility bodies and the Commission 
takes on new operational tasks; (1) 
a new European Labour Authority is established performing operational tasks, which builds on existing 
labour mobility bodies;(2) 
a  new  European  Labour  Authority  is  established  building  on  an  existing  EU  Agency  in  the  area  of 
employment.(3) 

The preferred option combines the operational policy option (2) to be delivered through a new European Labour 
Authority (2). This approach allows the Commission to keep the policy steer, together with the Member States as 
for today, and thus complies with the non-delegation doctrine.     

The operational policy option achieves the best balance in meeting the objectives, ensuring positive impacts for 
national authorities, workers and businesses without significantly increasing costs, and has strong support with 
stakeholders. The delivery option of establishing a new European Labour Authority building on existing EU level 
mobility  bodies  combines  effectiveness  in  delivering  operational  tasks  with  supporting  the  activities  of  existing 
EU  bodies  while  rationalising  them,  in  a  proportionate  manner  and  in  respect  of  subsidiarity,  both  concerns 
raised by relevant stakeholders.   

A legislative instrument (Regulation) is required to establish a new agency.  

Who supports which option?  

The level of support varies  across stakeholders and across  measures and options. There is  broad support for 
better exchange of information and risk assessment, but there is strong reluctance of national authorities, as well 
as  by  employer  organisations,  towards  imposed  joint  cross-border  inspections,  binding  decisions,  or  binding 
dispute  settlement  mechanisms.  In  international  road  transport  national  enforcement  authorities  more  strongly 
support  an  EU-level  mechanism  that  would  facilitate  harmonised  cross-border  enforcement  of  rules.  Trade 
unions  support  EU  conciliation  mechanisms.  Both  trade  unions  and  citizens  would  support  extending  dispute 
settlement beyond national authorities to individual cross-border disputes.  

With a few exceptions, support to the setting up of a new Authority is conditional on the scope and objectives 
conferred  to  it,  as  well  as  on  its  possible  costs.  Stakeholders  tend  to  favour  the  option  of  rationalising  and 
increasing the efficiency of existing networks and structures.  

What are the benefits of the preferred option (if any, otherwise main ones)?  

C. Impacts of the preferred option 

The benefits for individuals, especially the mobile workers, will be better protection and reduced exposure to the 
risk of fraud and abuse, especially in the road transport sector. Further benefits come from improved possibilities 
to exercise their free movement rights.  

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Business,  especially  SMEs,  will  benefit  from  more  fair  competition  and  equal  playing  field  and  from  reduced 
uncertainty  about  their  situation,  especially  relevant  in  relation  to  posting  of  workers.  That  together  with  better 
information can facilitate their decisions to engage in cross-border activities.  

Benefits  for  national  authorities  flow  from  their  reinforced  cooperation  and  control  capacities  for  better  rule 
enforcement. Benefits of structured cooperation are expected to increase over time as more national authorities 
decide to use the available framework.  

Wider macro-economic benefits would generally ensue from the improved and fairer functioning of the internal 
market, contributing to overall fair competition and to restoring trust between administrations.  

What are the costs of the preferred option (if any, otherwise main ones)?  

Under  the  preferred  combined  option,  the  EU  budgetary  total  costs  of  the  European  Labour  Authority  are 
estimated to be 50.9 million per year at cruising speed in 2023. There are no environmental impacts.  

How will businesses, SMEs and micro-enterprises be affected?  

Businesses,  SMEs  and  micro-enterprises  should  be  positively  affected.  They  should  benefit  from  improved 
administrative efficiency and a better functioning of the internal market, notably through a better enforced level-
playing field. There are no costs for rule compliant businesses. 

Will there be significant impacts on national budgets and administrations?  

There will be minimum impacts on national budgets given the support for the proposal in the EU budget. It is not 
possible  to  exactly  quantify  the  impacts  on  administrations,  but  on  the  basis  of  case  studies  the  impact  is 
anticipated to be positive as better rule enforcement will capture previously unpaid social contributions.  

Will there be other significant impacts?  

The proposal will trigger the rationalisation of some of the existing EU mobility bodies, namely:  (i) the EURES 
European  Coordination  Office;  (ii)  the  Conciliation  Board  from  the  Administrative  Commission  (AC)  on  social 
security coordination (iii) Audit Board and the (iv) Technical Commission of the AC; (v) the European Platform to 
tackle Undeclared Work; (vi) the Expert committee on the Posting of Workers; and (vii) the Technical Committee 
on the Free Movement of Workers. The tasks currently performed by these bodies would be carried out by the 
Authority.  Instead,  ELA  would  develop  cooperation  with  the  three  remaining  committees  in  the  labour  mobility 
and  social  security  coordination  field  (the  Administrative  Commission  and  the  Advisory  Committee)  and  the 
Advisory  Committee  on  the  Free  Movement  of  Workers.  The  Committee  on  Road  Transport  shall  also  remain 
unaltered. 

When will the policy be reviewed?  

D. Follow up 

The Commission will review the application of the Regulation 5 years after it enters into force in line with the 
requirements of the Financial Regulation and the Better Regulation Guidelines.  

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