In order to take into account the new realities of the labor market in Europe, European countries have undertaken a modernization of Directive 96/71/EC dating from December 16, 1996 to adapt it to these new realities.
After a long legislative process that began in 2016, the new directive (EU) 2018/957 concerning the posting of workers in the framework of the provision of services was approved on June 28, 2018 by the European Parliament.
It will enter into force on 30 July 2020, the deadline before which Member States must adopt and publish the legal, regulatory and administrative provisions necessary to comply with the directive.
I. PREVIOUS REGIME
The 1996 Directive on the posting of workers allows any company having its registered office in an EU country to temporarily send its employees to another Member State.
These posted workers benefit from the working conditions of the host country, while the social contributions remain those of the country of origin.
The directive guarantees posted workers a “hard core of rights” from the host Member State with regard to:
- minimum wage rates;
- maximum work periods and minimum rest periods;
- the minimum period of paid annual leave;
- the conditions for making workers available through temporary employment companies;
- occupational health, safety and hygiene;
- equal treatment between men and women.
II. NEED FOR REFORM:
Although the Directive lays down a series of mandatory rules concerning terms and conditions of employment applicable to posted workers, the differences in wages between countries continue to confer a cost advantage to the benefit of companies posting workers compared to local companies. and to generate forms of “social dumping”.
“Social dumping” is characterized by a foreign service provider offering lower rates than local providers, applying less stringent labor standards.
Posted workers are most often paid on the basis of the minimum wage of the host country and the social charges remain those of their country of origin.
Among the problems frequently mentioned can also be cited the fight against violations committed by certain employers, with regard to the law of the host country. Examples of violations include unpaid overtime, working Saturdays and Sundays, or failure to include travel and accommodation costs in wages.
There are also many practices of false posting, similar to illegal work.
These false postings are carried out from “letter box” establishments, created by companies from one Member State in another Member State with lower social security contribution rates, without these companies carrying out a real activity, in order to to justify the posting of workers recruited in that other State.
The objective of the reform is to eliminate unfair competition and to encourage competition based on specialization, innovation and business skills, thus leading to a fairer European labor market.
It aims to ensure fair working conditions for posted workers and to avoid fair competition between companies that are service providers and local companies in the host country.
III. REFORM:
The reform proposal initiated by the European Commission in 2016 aimed to modify the existing directive in three areas: the remuneration of posted workers (“for equal work, equal pay”), the rules surrounding the posted work of temporary workers (same conditions as one local worker for one worker posted by a cross-border temporary agency) and long-term posting (limitation of the duration of the posting).
The elements of the reform that have been adopted are the following:
- Recognition of the principle of “equal work, equal pay, in the same workplace”.
Posted workers will generally benefit from the same rules on pay and working conditions as local workers.
From now on, all the rules relating to remuneration which are generally applicable to local workers will also have to be applied to posted workers.
Remuneration should also include other elements, such as bonuses or allowances where applicable.
- The application of national regulations concerning temporary work when temporary work companies established abroad post workers.
- In the event of posting for a period exceeding 12 months (or 18 months in the event of an authorized extension), companies must not only guarantee the “hard core of rights” guaranteed by the directive, but also all the working rules of the host Member State. Excluded from this obligation are the laws regulating the conclusion and termination of the employment contract, including non-competition clauses and retirement.
- The exclusion of the road transport sector from the scope of the directive until the development of a specific legal text governing this sector.
- The limitation to 2 years of the transposition period of the revision of the directive by each Member State.
IV. LIMITATIONS OF THE NEW DIRECTIVE :
It is generally accepted that the economic impact of the directive will remain limited.
Indeed, several EU countries had already transposed more protective national rules compared to the 1996 directive for posted workers and the new directive will not present a big change for them.
Moreover, certain modifications such as the rules which apply to postings which last more than 12 months (with a possible extension of 6 months following a request from the company) are considered symbolic given that the average duration of posting is of 4 months.
The road transport sector, although considered to be strongly marked by distortions of competition within the European Union, has been decoupled from the revision of the directive on posted workers.
Spain, Portugal and Eastern European countries are among the countries that have supported the dissociation.
This decoupling means that the new directive will only apply to the transport sector from the date of an amendment to be made in 2019 to Directive 2006/22/EC on social legislation relating to road transport activities. This amended directive will list the specific rules for the posting of road drivers.
This sector is in fact considered not to comply with the same posting rules as the other sectors due to the high mobility of workers.
Unfair competition in this sector emanates from transporters from Eastern countries working in Western countries under the conditions of their country of origin and from companies from Western countries setting up in Is through “letterbox companies”.
The discussions revolve specifically around the question of cabotage, a practice which consists of loading and then unloading several times outside the worker’s border: the Commission plans to consider drivers as posted workers, benefiting from a local salary, from three days of work per month in a country while France intends to defend the establishment of local wages from day one.
Countries like Bulgaria oppose this and argue that road transport workers should not be treated as posted workers.
