After a controversial set of decisions by the European Court of Justice, the Directive has come under criticism for reducing rights of posted workers and undermining the rights of workers in a home nation.
Overview
The Directive aims to clarify competing claims of competence in the case of staff being sent abroad by their employer for a project (posting), between the rules governing labour relations in the country of origin of the employing service provider and the country where the work is actually carried out (but where the staff is not normally based). If the laws of the country where the work is actually being carried out applied even for short stays, a company wishing to offer its services in the whole of the EU would have to be aware of 27 different sets of rules. This would be a burden in particular for SMEs which would discourage them from taking advantage of the EU's Internal Market. To counter this phenomenon, the European Court of Justice has developed a balancing mechanism on the basis of the Treaty that determines which country's rules apply in a given situation. However, this case-by-case approach generates legal uncertainty which is tackled by this Directive.
To protect workers from one EU country who are sent by their employer to carry out work in another temporarily,[1] the Directive provides that a 'hard core' of rules of the host country (country of destination) needs to be observed. The Directive was first adopted in 1996.[2]
The directive applies where,
a company agrees to provide a service to a client in another Member State and needs to send staff there in order to carry out this work
a worker is posted to another country through arrangements within a group of companies, with the parent and subsidiaries based in different member states
a worker is posted through an agreement between an employer and an employment agency
The member state hosting a posted worker must ensure he is protected by the minimum standards in article 3(1). These are,
working time (hours, holidays, pay)
standards applicable to agency workers
health and safety
pregnancy and maternity protection
discrimination law
in the building and construction trades, collective agreement standards that 'have been declared universally applicable' across a geographical area[3]
However, these limited set of rights must also been read within the context of TFEU art 56 (ex TEC art 49) on the freedom of establishment, and also the right to freedom of association under the European Convention on Human Rights article 11 and the EU Race Equality Directive. In this context there is the abovementioned mechanism of 'justified restrictions for the protection of essential requirements in the general interest', that the Court of Justice of the European Union has developed on the basis of the Treaty. Where the Directive does not apply, this mechanism remains decisive.
In 2007, the European Court of Justice chose to give two decisions, whose effect appeared to suggest that employers are only required to pay their workers the rate they would receive in their home country, provided this matches minimum wages and working conditions in the country they are posted to.
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2009 Lindsey Oil Refinery strikes
The Directive came to prominence during the 2009 Lindsey Oil Refinery strikes after British workers at the Lindsey Oil Refinery in North Killingholme, North Lincolnshire claimed that they were being undercut by skilled foreign labour when the Italian construction contractor IREM appointed several hundred European (mainly Italian and Portuguese) contractors on the site at a time of high unemployment in the local and global economy.[4][5][6] However, this question is not handled by the Directive. It is a question of the right to free movement for services itself, which is handled directly by the Treaty itself, since the contractor wished to use its own staff rather than hiring external subcontractors.
Professor Michelle Everson[7] of Birkbeck, University of London, writing in the Guardian[8] noted at the time, a possible conflict between Article 56 TFEU and Article 45 TFEU in light of decisions of the European Court of Justice. The decisions in question, ruling in relation to the Posting of Workers Directive meant that service providers only have to adhere to the essentials such as minimum pay and health & safety under Article 56, whereas established organisations are required, under Article 45 TFEU, to comply with other matters, such as collective bargaining agreements.
↑ Dirk Rüffert v Land Niedersachsen [2008] IRLR 467 (C-446/06) decided that this did not include a German law allowing the state government to give mandatory effect to a building sector collective agreement because it did not cover all undertakings in the region and industry
Labour law mediates the relationship between workers, employing entities, trade unions and the government. Collective labour law relates to the tripartite relationship between employee, employer and union. Individual labour law concerns employees' rights at work also through the contract for work. Employment standards are social norms for the minimum socially acceptable conditions under which employees or contractors are allowed to work. Government agencies enforce labour law.
European Union law is a system of rules operating within the member states of the European Union. Since the founding of the Coal and Steel Community after World War II, the EU has developed the aim to "promote peace, its values and the well-being of its peoples". The EU has political institutions, social and economic policies, which transcend nation states for the purpose of cooperation and human development. According to its Court of Justice the EU represents "a new legal order of international law".
United Kingdom labour law regulates the relations between workers, employers and trade unions. People at work in the UK benefit from a minimum charter of employment rights, which are found in various Acts, Regulations, common law and equity. This includes the right to a minimum wage of £8.21 for over-25-year-olds under the National Minimum Wage Act 1998. The Working Time Regulations 1998 give the right to 28 days paid holidays, breaks from work, and attempts to limit excessively long working hours. The Employment Rights Act 1996 gives the right to leave for child care, and the right to request flexible working patterns. The Pensions Act 2008 gives the right to be automatically enrolled in a basic occupational pension, whose funds must be protected according to the Pensions Act 1995.
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Freedom of movement for workers shall be secured within the Community.
Such freedom of movement shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.
It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health:
The provisions of this article shall not apply to employment in the public service.
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