The revision of the posting of workers legislation Francisco Javier Gómez Abelleira Jean Monnet Summer Course EU Labour Law Perspectives: Enhancing the EU Social Pillar University of Amsterdam, 20-22 June 2018 This Course is funded by the Erasmus + Jean Monnet program of the European Commission

overview 1. Posting of workers: what are we talking about? 2. A little bit of history: Directive 96/71 and early case law 3. EU reaction: new case law and legislative enactments 4. The new PWD 5. Challenges ahead

WHAT ARE WE TALKING ABOUT? POSTING OF WORKERS WHAT ARE WE TALKING ABOUT?

Work of a limited duration Employment relationship Cross-border provision of services Host State Home State CLIENT in State B EMPLOYER in State A Service contract Work Employment contract WORKER

2.3 million posted workers per year (2016) Important wage gaps across the EU 1:3 in 1999 to 1:10 in 2015 Eastern Enlargement 2004, 2007 Politically sensible issue Migration as one of the main challenges now

WHY WAS PWD APPROVED IN THE FIRST PLACE? A LITTLE BIT OF HISTORY WHY WAS PWD APPROVED IN THE FIRST PLACE?

Back in the 1990s Rush Portuguesa (C-113/89) Community law does not preclude Member States from extending their legislation, or collective labour agreements entered into by both sides of industry, to any person who is employed, even temporarily, within their territory, no matter in which country the employer is established Domestic reaction: legislation extending employment law to posted workers Commission reaction: PWD (Directive 1996/71)

Early European case law PWD as maximum ceiling ARBLADE (C 369/96) MAZZOLENI (C 165/98) FINALARTE (C 49/98) PORTUGAIA (C 164/99) COM v. GERMANY (C 493/99) COM v. LUXEMBOURG (C 319/06) Article 3(1) sets out an exhaustive list of the matters in respect of which the Member States may give priority to the rules in force in the host Member State

European case law Strongly pro-economic freedoms LAVAL (C 341/05) the right of trade unions of a Member State to take collective action by which undertakings established in other Member States may be forced to sign the collective agreement is liable to make it less attractive, or more difficult, for such undertakings to carry out work in Sweden, and therefore constitutes a restriction on the freedom to provide services RÜFFERT (C 346/06) by requiring undertakings performing public works contracts and, indirectly, their subcontractors to apply the minimum wage laid down by the ‘Buildings and public works’ collective agreement, a law such as the Landesvergabegesetz may impose on service providers established in another Member State where minimum rates of pay are lower an additional economic burden that may prohibit, impede or render less attractive the provision of their services in the host Member State

Case law and legislative developments in the last few years EU Reaction. First part Case law and legislative developments in the last few years

Recent case law SÄHKÖALOJEN AMMATTILIITTORY (C-396/13) it is admissible an allowance intended to ensure the social protection of the workers concerned, making up for the disadvantages entailed by the posting as a result of the workers being removed from their usual environment (allowance which is also paid to local workers when they are posted within the country) REGIO-POST (C-115/14) Member States can require tenderers of public procurements and their subcontractors to pay their employees a set minimum wage (contrast with Rüffert case). ALTUN (C-359/16) (Social Security) Prohibition of fraud and abuse of rights. National court unilaterally disregarding social security certificate

The “Enforcement Directive” In order to prevent, avoid and combat abuse and circumvention of the applicable rules by undertakings taking improper or fraudulent advantage of the freedom to provide services  Main content: Increases MS’s ability to monitor working conditions and enforce the rules applicable. Provides qualitative criteria for determining when the posting is genuine: “genuine” link between the posted worker and the employer, and between the latter and the MS of establishment. Strengthens Inter-State Cooperation

EU Reaction. Second part The new PWD Same work at the same place, same remuneration?

European Commission announced in its Work Programme 2016 a revision of the PWD. It promotes the principle that the same work at the same place should be remunerated in the same manner.

Main amendments (as per Position of EP 29 May 2018) Limited duration of posting 24 months (Comm), 12 months (Council, EP) Habitual place of work (Regulation Rome I) Conditions of employment “Remuneration” replaces “minimum rates of pay” Rules set by law or universally applicable collective agreements become mandatory for posted workers in all economic sectors. Subcontracting chains Possible limitation based on remuneration of subcontractor’s employees

Challenges ahead

Monitoring and enforcement Social Security (Altun C-359/16) European Labour Authority. COM(2018) 131 final

Altun (2018) C‑359/16 When, in the dialogue between States, the institution of the Member State to which the workers have been posted puts before the institution that issued the E 101 certificates concrete evidence that suggests that those certificates were obtained fraudulently, it is the duty of the latter institution, by virtue of the principle of sincere cooperation, to review, in the light of that evidence, the grounds for the issue of those certificates and, where appropriate, to withdraw them. If the latter institution fails to carry out such a review within a reasonable period of time, it must be possible for that evidence to be relied on in judicial proceedings, in order to satisfy the court of the Member State to which the workers have been posted that the certificates should be disregarded.

Tasks of the European Labour Authority (a) facilitate access to information by individuals and employers on rights and obligations in cross-border situations (b) facilitate cooperation and the exchange of information between national authorities with a view to the effective enforcement of relevant Union law (c) coordinate and support concerted and joint inspections (d) carry out analyses and risk assessments on issues of cross-border labour mobility (e) support Member States with capacity-building regarding the effective enforcement of relevant Union law; (f) mediate in disputes between Member States' authorities on the application of relevant Union law;

More challenges ahead Genuine posting (“genuine double link”) Hiring-out of workers Limited duration What maximum duration is reasonable in relation to the protection of freedom to provide services?

Genuinely established Genuine service EMPLOYER in State A CLIENT in State B Service contract Work Employment contract WORKER Genuine employment relationship

More challenges ahead Transparency – “free of charge” !! Costly information PWD and Rome I Mention to Rome I finally removed from Directive Towards a distinction between contractual aspects and employment conditions?

franciscojavier.gomez@uc3m.es