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The concept of remuneration in the Posting of Workers Directive
context: towards greater legal certainty?
Name: Saverio Campanale
Student number: 12216151
Submission date: 25 July 2019
LLM Programme: European Private Law
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A me, alla mia determinazione.
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Table of contents
Abstract
Chapter 1: Introduction
1.1 Introduction and methodology 1.2. Thesis trajectory
Chapter 2: Posting of workers and the EU Internal Market.
2.1. Brief introduction.
2.2. The freedom to provide services as fundamental freedom of the EU.
2.3. Restrictions on the freedom to provide services and the non- discrimination principle
2.4. The starting point for a European discussion about the Posting of workers: Rush
Portuguesa case.
2.5. Brief conclusion.
Chapter 3: The adoption of the Posting of Workers Directive in 1996.
3.1. Brief introduction.
3.2. The legal grounds of the Directive.
3.2.1. Definition of posted workers within the PWD. 3.3. Art. 3 as key element for the legislation.
3.3.1. Minimum rates of pay.
3.4. After the Directive: Social and economic dimension of the EU in Laval case among the right to collective action and the freedom to provide services.
3.5. Brief conclusion.
Chapter 4: The revision and the adoption of the new rules: Directive 2018/957
4.1. Brief introduction.
4.2. The European Commission´s proposal.
4.2.1. The Yellow Card procedure.
4.3. The new Art. 3: the concept of ¨remuneration¨. 4.4. Brief conclusion.
Chapter 5: Conclusion Bibliography
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Abstract
The Posting of Workers directive of 1996 left room to many doubts regarding a missing balance between the freedom to provide services and the workers’ rights. Thus, after more than twenty years, the European Commission tried to improve and to strengthen the workers’ protection. The aim of this research is to analyze and to deeply understand how the revision of the Posting of Workers Directive of 2018 could be a new starting point for a more accurate protection of the posted workers.
In order to achieve the latter objective, the core of my research concerns new concept of ‘’remuneration’’ which has replaced the unclear one of ‘’minimum rates of pay’’, evaluating if the new one can represent a new starting point to achieve a better protection for the posted workers. As it will be shown, the concept of remuneration followed many instances and concerns of the parties involved in the discussion, such as the Member States, the trade unions and the European Commission. I will argue, also in historical and political terms, how the new concept of remuneration has become effective, and if the latter can lead to better results in terms of workers’ protection.
There is not a simple answer to the posting of workers issue. As discussed in the research, the European Commission’s attempt to establish a better balance between the freedom to provide services and the posted workers’ protection can be a useful starting point. But it does not depend only on it. Even the European Court of Justice, the member States and the different stakeholders involved have the duty to achieve and maintain a certain level of protection, trying to protect the European Union’s social and economic dimension, which concerns the whole European project.
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Chapter 1: Introduction
1.1. Introduction
The European Union has many policy objectives which must be reached, among which the proper functioning of the Internal Market1 is one of the most decisive for the entire Union. The functioning
of the Internal Market, according to many decisions of the European Court of Justice and the EU’s institutions policy objectives, depends on the development and preservation of the four fundamental freedoms of the EU (freedom of movement of capital, service, goods and people, especially in the labor law field) which are the internal market´s key factor.
The aim of this research is, in fact, to briefly retrace the interesting but complex path from the first attempt provided by the European Union with the first posting of workers Directive and the latest revision of the original one (Directive no. 2018/957) in which the Commission, in its first proposal, partly shared by the European Parliament2, strongly desired ¨to ensure equal pay for equal work in the same place¨. At the same time, it is very important to evaluate the European Court of Justice´s approach in this field during the last years, analyzing some crucial decisions which can be considered as the landmark of this field. Sometimes, however, as recognized by many legal scholars3, the ECJ’s decisions facilitated the creation of social dumping, due to their interpretation of the Directive as an internal market instrument and not as a workers’ protection one4.
The legal basis provided by Art. 56 of the Treaty on the Functioning of the European Union (hereinafter, TFEU), states that the firms can send their employees to another Member State to provide a service there. At this regard, the posted employees´ contracts are governed by the law of their Member State, but the issue which can raise is that the firms (or providers of services) could easily exploit the low labour standards, and more particularly the equal pay requirements, to win the contracts they need and, as a result, many concerns grow up in terms of unfair competition, unequal pay between posted workers and local ones and the possible substitution between the
1 Art. 3.3 TEU.
2 ¨Posting of workers Directive- current situation and challenges¨, The European Parliament study for EMPL
Committee, 2016.
3 N. Countouris and Samuel Engblom, Civilising the European Posted Workers Directive, in M. Freedland and J.
Prassl, 2014, p. 282.
4 N. Countouris and Samuel Engblom, Civilising the European Posted Workers Directive, in M. Freedland and J.
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foreign and local workers. For these reasons the posted workers issue leaves room to tension between market and the social integration within the European Union, especially when there is the need to guarantee a balance between the promotion of an economic growth and the purpose of maintaining the social protection of European workers among the Member States, which are two core elements on which the whole Internal Market rely upon.
The Posted Workers issue seems at the same time of primary interest since it was the first labour law provision, at the European Union level, which provided a set of protection rules for the posted workers5. In fact, before the above- mentioned Directive, lex loci laboris principle was applicable
to the workers sent to another country. This means that the applicable law was only the sending country’s one6.
The Member States were involved in the harmonization process, with the implementation of the Directive in their national systems, but many issues affected the effective application of the Directive, especially in the aspect of the ¨low wage¨ requirements. The ¨core aspect¨7 of the Directive is stated by Art. 3(1), where the rule requires to the Member States to guarantee and to create a set of conditions in law or in collective agreements for posted workers8. It must be declared, just for the purpose of a clear explanation of the Directive itself and its objectives, that this protection applies only to a certain extent, because not all working conditions are covered. But that will be shown in the following chapters.
Moreover, as stated by Van Hoek and Houwerzijl9, the concept of level playing field is always at stake in the Posting of Workers Directive, since it involves the principle for which both the local and the foreign service providers must be subjected under the same rules. The two authors also pointed out the Posted Workers Directive has three main areas which must guarantee the level
5 Jan Cremers, ' Economic freedoms and labour standards in the European Union', Transfer: European Review of
Labour and Research, no.22(2), 2016, p.152.
6 Jan Cremers, ' Economic freedoms and labour standards in the European Union', Transfer: European Review of
Labour and Research, no.22(2), 2016, p.150.
7 T. Van Peijpe, ¨Collective labour law after Viking, Laval, Ruffert, and Commission v. Luxembourg¨, International
Journal of Comparative Labour law and Industrial Relations 25, no. 2 (2009), p. 81,107.
8 Directive 96/71/EC of the European Parliament and the Council of 16 December 1996 concerning the posting of
workers in the framework of the provisions of services, art. 3(1).
9 Mijke Houwerzijl and Aukje Van hoek, 'Complementary study on the legal aspects of the posting of workers in the
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playing field in the relationship between the players at stake, such as rates of pay, health and safety and working time and holidays10.
In order to reach the purpose of this Master´s thesis and after a brief analysis of all the elements under discussion, the attention will be focused on the Art. 3 of the Directive with regard to the new provision about the ¨remuneration¨ concept instead of the ¨minimum rates of pay¨ which has been modified in order to follow the European Commission´s objective about the promotion of the principle that the same work in the same place shall be rewarded in the same manner.
According to the purpose of this research, I will also try to answer the following research question:
¨How did we get to the new concept of remuneration and how does this impact the legal certainty? ¨
The thesis’ objective is to analyze the phenomenon of the posting of workers especially from a legal point of view, considering the different attempts of the Member States to obtain a better level of workers’ protection. Furthermore, different perspectives can be considered in the discussion, and it can be useful in order to comprehend how the posting of workers discussion is a hot theme which covers different areas of the EU action. At this regard, the core of the discussion will consider, from a legal point of view, the new Art. 3 of the Directive and its implications.
To do this, I have chosen a descriptive method and, on the one hand, I will analyze the history of the PWD, considering the reasons why there was the need of such a protection for posted workers, and on the other hand I will focus the attention on the new amended Posting of Workers Directive of 2018, considering the new concept of remuneration which replaced the minimum rates of pay one.
The analysis will not only involve the ‘institutional’ discussions and opinions, such as the European Union Institutions or the Member States opinions, but also a practical point of view given by the players at stake in the discussion about the posting of workers, such as workers’ or employers’ organizations, which are fundamental in the improvement process of the posting of workers discussion at European level.
10 Ibid., p. 8.
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Moreover, regarding the methodology, I have conducted a doctrinal research conducted according to a historical perspective, looking how the concept of pay has been developed in the Posting of Workers Directive. In order to achieve the aim of this research, a logical analytical method has been used, analyzing the provisions contained in the Posting of Workers Directive and, of course, other relevant legal sources.
I will also consider some data from specialized stakeholders, such as trade Unions, Eurostat, etc.
1.2. Thesis trajectory
This research will be structured as follows. In the second chapter, the analysis will go through the general context in which the Posting of workers phenomenon operates, explaining the strong link between the latter and the freedom to provide service in the EU and the starting point for a European discussion in the field of posting of workers, represented by Rush Portuguesa case law. The description of the already mentioned background could be helpful in order to understand the reasons why the European Commission decided to act in the direction of the Posting of Workers Directive in the first place. In the third chapter, I will finally trace the contents of the Posting of Workers in its original version, also through some relevant ECJ’s decisions, and the central role of the first version of the Art. 3 of the Directive. Besides, the discussion will be focused on why the concept of minimum rates of pay has been declared, by many legal scholars and stakeholders, uncertain from a legal point of view. The fourth chapter can be considered as the core and the final part of the research, in fact I will try to answer to the above- mentioned research question with a specific focus on the new Directive, which has been released in 2018, and the revision of the Art. 3, in order to reach the EC’s objective of “equal pay for equal work in the same place” with the new concept of “remuneration” of Art. 3. Finally, I will conclude the research with a brief summary and opinions about the state of art of the new Directive and if the European Commission’s objective could be on the right direction.
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Chapter 2: Posting of Workers and EU Internal Market
2.1 Introduction
In the following chapter, I will analyze the background and the reasons why the European Union tried to give an answer, also from a social perspective, to the problem of the posting of workers, adopting the Posting of Workers Directive in 1996. Moreover, I will discuss the relationship between the freedom to provide services, as a fundamental freedom of the EU, and the phenomenon of posted workers. Then, it will be shown the reason why one of the leading cases of the European Court of Justice, Rush Portuguesa, can be considered as the starting point of the discussion about the Posting of workers Directive.
2.2. The freedom to provide services as fundamental freedom in the EU
The freedom to provide services is one of the fundamental freedoms which constitute the pillars of the European Union and it is one of the core elements which contribute to the development of the internal market. This is also confirmed by the fact that at the beginning of the European Economic Community, based on Rome Treaty, the implementation of the economic dimension was the first goal to be achieved, keeping in the background the development of the social dimension of the European Union11. In fact, considering labour law as part of the national affairs,
the Community was not interested in the development of this social policy, leaving this competence to the national legislators12.
In order to show the importance of the implementation of the economic dimension (but not only), it seems useful to briefly consider, for the purposes of this research, the “problematic” relationship between the European Union’s centre and its periphery13. The European Union’s key objective
would be the achievement of several goals, such as pluralism or constitutional tolerance14, but there is not always a correspondence between the centre countries or regions with a high gross domestic product (GDP) and the regions of periphery. Of course, the countries in the first category appoint many sources in the direction, for example, of research and development, while sometimes
11 D. Chalmers, European Union law, Cambridge University press 3rd edition, 2014, p. 669. 12 C. Barnard, EU employment law, Oxford University Press 4th edn, 2012, p. 7
13 D. Kukovec, Law and Periphery, in European law journal, Vol. 21, n. 3, 2015. 14 See J. H. H. Weiler, Federalism and Constitutionalism: Europe’s Sonderweg, 2000.
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it does not happen with the periphery countries. This discussion could be another perspective from which look at the issue of Posting of Workers, since the periphery countries suffer a less grown environment in terms of workers and posted workers’ rights. Finally, also these aspects should be considered while discussing of the posting of workers phenomenon.
The implementation of the freedom to provide services is very strategic for the whole project of the implementation of the EU Internal Market. The Art. 26 of the Treaty of Functioning of the European Union (hereinafter TFEU) is the legal basis which drives this EU´s policy objective in this field and it states that:
‘The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties.’
Taking into account the objective of this research, this ¨pillar¨ will be considered within the framework of the posting of workers. From a legal perspective, the Art. 56 can be considered as the landmark of the whole Internal market. It introduces the Chapter 3 TFEU (about services) and it provides that:
¨restrictions on freedom to provide services shall be prohibited in respect of nationals of Member
States who are established in a Member State other than that of the person for whom the services are intended¨.
Following this, Art. 57 TFEU is the first specific rule about services and the latter states that services shall be considered as such where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and people. Besides, the rule does not leave room to doubts when it refers only to services that are temporary qualify for the rules concerning the freedom of services and through this temporary character the freedom to provide services differs from the freedom of establishment15. At this
regard, the ECJ in an important decision16 stated that the notion of temporary could be not the
same as a fixed period, because the temporary nature of the activities at stake has to be determined
15 R. Blanpain, European Labour Law, p. 381.
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not only considering the duration, but also on the basis of its regularity, periodicity and continuity17.
2.3. Restrictions on the freedom to provide services and the non- discrimination principle
Regarding the freedom to provide services, one of the most important questions regards the possibility of imposing restrictions to service providers based on their nationality or other reasons. From a legal perspective, it cannot be permitted, based on the Art. 56 of the TFEU, but many issues and complex situations may raise up based on the rules of the Member States in the field of labour law, tax law, etc. From the perspective of posting of workers, this possible
limitation may create problems in terms of guarantee an equal treatment among national workers and posted workers. Thus, the main challenge is to understand when the national provisions in labour law matters can create barriers the freedom to provide services.
Linked to the issue of possible restrictions on the freedom to provide services, another importance statement, well- developed by the ECJ with many decisions at this regard, there is the possibility of a conflict of the above- mentioned freedom with the national policies. According to Bernard, the Court has applied two different approaches, such as the non-discrimination approach and the
market access or restrictions approach, and it can be considered as an objective test with which
the Court establishes if a restriction, operated by the Member State, is justified or not18.
A clear example of the first category can be given by the ECJ’s case Commission v France19, in
which the Court points out its argumentations related to the impact of the Member State’s social policy on migrant workers and national ones. Thus, if there is a direct or indirect discrimination based on the nationality of the worker, it cannot be admitted according to the EU law because it constitutes a limit to the development of the EU Internal Market20. Accordingly, the Court in its
decision, in order to justify the possibility of restriction to the freedom of provide services, defined four requirements: firstly, the restriction has to be justified by overriding reasons of public interest,
17 C-55/94, para. 39.
18 C. Barnard, EU employment law, Oxford University Press 4th edn, 2012, p. 200-202 19C- 167/73, Commission v. France, paragraph 45
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then it has to be non- discriminatory between national and foreign workers, objectively necessary and it must not go beyond of what is necessary taking into account the objective of the restriction itself21.
From the side of the market access approach, it is well explained in Säger ECJ’s decision where the Court basically confirms that the Art. 56 TFEU requires not only every kind of discrimination but also any other restrictions, especially when the latter operate against a service provider on the grounds of his nationality22. Briefly, it can be considered as a test, provided by the ECJ, with which
the Court focuses its attention on the national rules which impact on foreign workers. According to Bernard, in fact, the market access approach can be considered as a landmark and it respects the ECJ’s dominant opinion23. As a result, Barnard points out that the market access approach
could be a limitation for the national labour law legislations, because it includes non- discriminatory measures in the Treaty’s scope24.
2.4. The starting point for a European Discussion about the Posting of Workers: Rush Portuguesa case
The discussion about a first attempt in order to guarantee more rights to the employees posted in another Member State finds its origins in the 90s, when the political agenda of the EU was not focused on the posting of workers and the topics related to it. According to Evju, a first attempt was given by the Regulation n. 1612/68 about the free movement of workers and the need for them to be equally treated under the host´s State labour law as migrant workers25. This aspect has to be discussed in light of the above- mentioned Reinhard case26 , where the ECJ stated, and it could be gathered also in many discussions27 that the difference between migrant workers and posted
21 C-167/73.
22 Case C- 76/90, Säger, para 12.
23 C. Barnard, EU employment law, Oxford University press 4th edition, 2012, p. 201 24 Ibid.
25 S. Evju, Revisiting the Posted Workers Directive: conflict of laws and laws in contrast¨, p. 156. Regulation (EEC)
n. 1612/68 of the Council on the freedom of movement for workers within the Community.
26 Ibid. Ref. 7.
27 Among others, M.S. Houwerziijl, ¨De Detacheringsrichtlijn: over de achtergrond, inhoud en implementatie van
Richtlijn 96/71/EC¨ (The Posting of Workers Directive: on the background, content and implementation of Directive 96/71/EC)
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workers is given by the temporary character, also under the Art. 45 TFEU (about the freedom of movement and residence in the EU).
On the one hand, the accession of Spain and Portugal in 1986 has shown the need of a clear and effective regulation about the legal issues of posting of workers. On the other hand, the Member states, in the 80s, adopted rules declaring which rules in the host member State would apply to posted workers in their territory28. A first important impulse was given by the European
Commission’s White Paper regarding the internal market 29, in which the EC pointed out the
objectives and the actions that would have been applied in order to achieve the implementation of the single market.
Then, the ideal starting point, with regard to the disputes in the European Union about the posting of workers, could be referred at the moment of the inclusion of Southern countries in the EU in the 1980s30. It has been significant the key role of one of the leading cases in this field, such as
Rush Portuguesa case31, because it was the first real challenge for the EU and the rights of workers. Portugal was under a transitional control imposed before the accession in the EU due to the different wage rates between the new Member State and the old ones.
Briefly, the case involved a Portuguese undertaking specialized in construction tasks which made use of its staff members for a construction work in France. As a result, a conflict between Rush and the French authorities raised, because the latter required Rush Portuguesa to pay a special contribution and to arrange work permits for the workers being posted32.
Consequently, Rush Portuguesa acted against the French labour law provision for which only the”
Office national d´immigration’ could employ workers from third countries, assuming that this rule
affected the freedom to provide services.
Firstly, the ECJ in its logical iter determined that the service providers should not compete only on labour costs only and the Court besides stated that the posted workers have to be considered
28 Ibid.
29 The European Commission, White paper on completing the Internal Market, 1985
30 Jon Erik Dolvik & Jelle Visser, ’Free movement, equal treatment and Workers’ rights: can the EU solve its
trilemma of fundamental principles?’, 2009, Industrial relations journal, p. 495.
31 Case C- 113/89, Rush portuguesa v Office national d’immigration. 32 Ibid., para 3.
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within the free movement of services33. Moreover, moving from the freedom of provide services, the Court stated that the imposition of a requirement for which a work permit is mandatory must be considered as discriminatory and an unjustified limitation of the freedom to provide services34.
Besides, the Court stated that Member States can also extend their legislation and collective agreements to any person employed within their territory, without any regard to where the employee is established35. It seems that the European Court of Justice here ruled in favour of the
freedom of the Member States in applying their national labour law rules to foreign service providers36. As a result, this could be one of the reasons why the European Commission acted in
favour of the Posting of Workers Directive, in order to balance the freedom to provide services in a competitive market and the need to protect the workers’ rights.
Neverthless, the Court in its decision did not specify which rules have to be applied to the posted workers, in terms of labour law rules; according to Evju, this missing point should be considered as an implicit statement for which the member States may impose the whole set of labour law rules37 and this was clear after few years when the ECJ pointed out that the member States may extend their legislation and collective labour agreements only relating to minimum wage38.
2.5 Brief conclusion
This chapter retraces the historical path followed by the EU, and the Member States, in which is shown the strong link among the freedom to provide services and the posting of workers. The European Commission, after the Rush Portuguesa ruling and the attempts of some Member States to create barriers against the free provision of services, began to think how regulating a decisive aspect which is part of the internal market and its full development, such as the posting of workers phenomenon. Besides, this chapter shows the key role of the ECJ in the “decision making” process of the EU with its decision, which are truly important for the internal market’s improvement.
33 Ibid, para 12.
34 Ibid, para 11-12. 35 Ibid., para. 18.
36 Similarly, it is shown also by another ECJ’s ruling, Arblade, C-369/96.
37 S. Evju, Revisiting the Posted Workers Directive: conflict of laws and laws in contrast¨, Regulation (EEC) n.
1612/68 of the Council on the freedom of movement for workers within the Community. , p. 163-164.
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Chapter 3: The adoption of the Posting of Workers Directive in 1996
3.1. IntroductionAfter having analyzed the background before the adoption of the Posting of Workers Directive, this chapter will firstly explain the legal basis which supports the Directive second it will discuss the core of the Directive, including Art. 3 (and its different points), in order to elucidate why this article is very decisive for the whole legal instrument. Then, I will analyze a leading case which is decisive in order to contextualize the social dimension of the Posting of Workers’ and the balance between the freedom to provide services and the posted workers’ rights from different perspectives.
3.2. The legal grounds of the Directive
The main objective of the PWD was to guarantee a balance between the freedom to provide services (Art. 49 TFEU) and an equal treatment for workers who are posted in a host country. At this regard, the concept of “posting” states that a worker is “posted” when an employer sends one or more employees in another country for a limited period of time, recognizing their rights and duties on the grounds of the labour law of the host country.39
For the purposes of the Directive, it seems difficult to understand why its legal basis, since the beginning, were the freedom of establishment and the freedom to provide services40. Moreover, it results at the same time inexplicable why, ex multis, the Community Charter Fundamental Social Rights of Workers did not apply, considering that the Directive was supposed to act in favour of the workers.
The directive shows the tension between the ‘'unfair competition’' and the ‘'free market’' issues41,
as can be seen comparing Recital 3 of the PWD, which states that ‘'the completion of the internal
market offers a dynamic environment for the transnational provision of services’' and Recital 5 of
39 J. Cremers, E. Dolvik, G. Bosch, ”Posting of workers in the single market: attempts to prevent social dumping
and regime competition in the EU”, Industrial Relations Journal, 524, 2007.
40 J.E. Dolvik, J. Visser, ’Free movement, equal treatment and Workers’ rights: can the EU solve its trilemma of
fundamental principles?’, 2009, Industrial relations journal, p. 499.
41 A. Defossez, Directive 96/71/EC concerning the posting of workers in the framework of the provision of services,
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the Directive, where it provides that “the provision of services requires a climate of fair
competition and measures guaranteeing respect for the rights of workers”. In order to achieve the
above - mentioned goals, the Posting of Workers Directive’s terms create a certain level playing field, limiting the freedom to provide services42. Both provisions suggest the existence of such a
hierarchy between the social and economic objectives of the PWD. As Evju points out43, the
promotion of transnational provision of services is the primary objective, while the respect for the workers’ rights is back- loaded.
Furthermore, the provision is covered by the chapter related to the freedom to provide services, in the Art. 53(1) and 62 TFEU. A further confirmation, which will be analyzed in a more specific manner below, derives from Laval case44 when, according to Barnard45, the ECJ states that the Directive’s first purpose is to guarantee the freedom to provide services and, secondly, the rights of workers.
Therefore, it comes clear that the workers’ protection is crucial but only after the protection of the freedom to provide services, and it sounds unclear considering that this should be exclusively a Directive useful to protect workers’ and their rights.
From the Member State’s perspective, it is transparent that the Directive should be implemented into the national labour law systems. At this regard, Art. 7 of the Directive states that the EU members have to set up valid and effective legal instruments in order to protect the posted workers, on the other hand they must guarantee to the firms their right to provide services in other Member States.
An interesting example is shown by the Belgium, “a case of maximalist implementation”46, where
the in first decade of 2000s the Government promoted decisive measures in order to protect the workers and to apply the PWD. The implementation regarded a “nucleus of mandatory rules”
42 Mijke Houwerzijl and Aukje Van hoek, Complementary study on the legal aspects of the posting of workers in the
framework of the provision of services in the European Union, Contract, no. 105 (96), 2011, p.12.
43 S. Evju Revisiting the Posted Workers Directive: conflict of laws and laws in contrast¨, Regulation (EEC) n.
1612/68 of the Council on the freedom of movement for workers within the Community., p.164.
44 Case C- 341/05, Laval un Partneri Ltd v Svenska Byggnadsarbetareforbundet, Svenksa
Byggnadsarbetareforbundet avd. 1, Bygettan, Svensa Elektrikerforbundet, 2007, para 74.
45 C. Barnard,”Viking and Laval: an introduction”, in C. Barnard, Cambridge Yearbook of European Legal Studies
Volume 10, 463, 2008.
46 J. Cremers, J.E. Dolvik, G. Bosch, Posting of workers in the single market: attempts to prevent social dumping
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which went beyond the minimum requirements of the Art. 3 of the PWD (which will be analyzed below). For instance, the inspectors’ control was implemented and the rules about wage and employment conditions had to be notified to the posted workers, after 2007 directly from the foreign firm to their employees. The foreign undertakings had to always keep the useful information available for the controls of the Belgian inspectors. Following that, this kind of approach can be considered quite strict and not so close to the intentions and the objectives of the EC, to protect the freedom to provide services without these hard conditions.
These aspects show the complexity of the subject and the necessity of a better coordination between the Member States and the EU. The recent review of the Directive, as will be analyzed in the fourth chapter, could be an attempt done by the EC to solve the main issues which derive from the original Directive of 1993.
3.2.1. Definition of posted workers within the PWD
As stated by Art. 2 of the Posting of Workers Directive, a posted worker is ‘'a worker who, for a
limited period, carries out his work in the territory of a Member State other than the State in which he normally works’'’. Thus, one of the main aspects is the limited period in which the worker has
to carry out his job, and it differs from the content of the Regulation n. 883/2004 on social security in which is included a maximum period of 24 months.
Furthermore, three forms of posting are listed in the Directive, such as subcontracting, intra- group posting and posting through temporary agency work47. The latter category could leave room to some concerns since, as Wagner points out48, many agencies are established in countries with
lower labour standards and, as a result, they do not apply the rules of the Member States with high labour standards where the workers are sent. This, of course, create an uncertain perspective considering the competition between the service providers and the workers’ rights.
47 Posting of Workers Directive, Art. 1(3).
48 Ines Wagner, 'EU posted work and transnational action in the German meat industry', Transfer: European Review
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3.3. Art. 3 as key element for the legislation
The aim of this research is to analyze the ‘'nucleus’'49 of the Directive, which is represented by the
Art. 3, also defined as the ‘cornerstone’ of the PWD because it introduced a package of minimum standards as a part of a “hard core of clearly defined protective rules”50 which the Member States
had to guarantee. It was also strongly declared in the Recital 13 of the PWD. More specifically, the Art. 3 (1) provided several conditions which have to be applied:
maximum work periods and minimum rest periods;
Minimum paid annual holidays;
The minimum rates of pay, including overtime rates; this point does not apply to supplementary occupational retirement pension schemes;
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 of non- discrimination.
The provision forced the host Member States to guarantee that the firms which post workers on their territory should comply with clear terms and conditions of employment, and this could be achieved thanks to collective agreements or law.
As a proof of how is decisive the cooperation among the EU and the Member States is given by Art. 3(1) states that the concept of minimum rates of pay is defined by the national law and/or practice of the Member States to whose territory the worker is posted. Besides, the rules from Art. 3(1) to 3(6) can be applied by the member States with more favorable conditions, as states by the Art. 3(7).
49 Recital 13, Posting of Workers Directive.
50 EC,”Staff Working Document: Impact Assessment accompanying the document proposal for a Directive of the EP
and the COuncil amending the Directive 96/71/EC concerning the posting of workers in the framework of the provision of services”, 10.
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Given this list, it remains unclear, from a legal point of view, which elements of the wage have to be considered as constituent parts of the minimum rates of pay, in the host country, as Voss argues51. According to Dolvik and Visser52, the list was not exhaustive, but the ECJ in Laval case stated that the protection accorder by the Directive was sufficient and, moreover, that the Member State should not go beyond the conditions imposed by the Art. 3(1).
These elements created legal uncertainty. In fact, one the one hand it regards the service providers’ perspective, since they should know which elements are included in the minimum rates of pay. On the other hand, the workers have to be conscious of what they deserve in terms of remuneration and rights53, and the legal uncertainty does not help at that regard.
Furthermore, assessing the ECJ approach at this regard, it has been harshly criticized due to the little attention given to the objective of ensuring fair competition and protection of workers, which should be the main aspect that has to be taken into account. As it will be analyzed in the next paragraph, the Member States cannot impose rules which go beyond the actual meaning of Art. 3(1) of the PWD.
3.3.1. Art. 3(1)(c): ‘'Minimum rates of pay’'
One of the elements which can be considered as the core of the PWD, and at the same time the main aspect of this research, is the clarification of the concept of ’minimum rates of pay’, as one of the terms of employment, provided by Art. 3(1) of the PWD. The interests at stake here are truly decisive, because it is closely linked to the role of the member States in determining the minimum protection applicable to the posted workers. As it will be described in the next paragraph, the Court identifies the concept of ‘minimum rates of pay’ as the ‘minimum wages’54. Nevertheless, the
actual elements of the remuneration are not clearly specified, thus it can bring to the failure of the ideal concept of ’equal pay for equal work at the same place’.
51 Eckhard Voss and others, 'Posting of Workers Directive: Current Situation and Challenges', 2016, p.32 52 J.E. Dolvik, J. Visser, ’Free movement, equal treatment and Workers’ rights: can the EU solve its trilemma of
fundamental principles?’, 2009, Industrial relations journal, p. 499.
53 R. van der Vlies, Posting of workers within the construction sector, a comparative study within Belgium and The
Netherlands on the protection of posted workers, 2018, p. 21.
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The expression at stake here has been clarified by the ECJ in one of its cases, Sähköalojen
ammattiliitto55. The latter decision regarded a Polish firm which concluded contracts of
employment with several Polish workers, and after the conclusion of these contracts they were posted to Finland in order to complete their duties there. In the following proceeding the workers pointed out that the contracts, in their remuneration part, did not apply the Finnish rules provided by the collective agreements in that specific sector. The Finnish trade union (Sähköalojen
ammattiliitto), claimed that, according to these rules, the’'minimum rates of pay’' of the posted
workers should have been paid under criteria which would have given to workers the most favourable conditions possible. Following this, the Finnish Court asked to the ECJ for a preliminary ruling, requesting the Court:
’' Is Article 3 of Directive 96/71, read in the light of Articles 56 and 57 TFEU, to be interpreted
as meaning that the concept of minimum rates of pay covers basic hourly pay according to pay groups, piecework guarantee pay, holiday allowance, flat-rate daily allowance and
compensation for daily travelling time, as those employment and working conditions are defined in a collective agreement declared universally applicable and falling within the scope of the Annex to the directive?”56.
The ECJ stated that, taking into account the concept of’'minimum rates of pay’', the Posting of
Workers Directive refers to the national practice or the host Member State’s one, without affecting the freedom to provide services57. Thus, clarifying the broad concept of ’'minimum rates of pay’', the Court stated that holiday allowance, daily flat- rate allowances (to compensate the disadvantages given by being a posted worker), equal terms as local workers, compensation for travelling, etc. can be considered under the ’'minimum rates of pay’' if these rules are set up by the host Member State58.
This ECj’s ruling, by the way, found many approvals among scholars and authors. According to Pecinovsky, this decision shows ‘'great consideration for the social dimension of the issue’'59.
55 Case C- 396/13, Sähköalojen ammattiliitto. 56 Ibid., para 23 (6).
57 Ibid., para. 34.
58 Ibid., paras. 52, 56 and 69.
59 P. Pecinovsky, ’'Evolutions in the Social case law of the Court of Justice: the follow- up cases of the Laval
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Accordingly, he argues, the ECJ was in the right direction since there is not the prevalence of the economic freedom over the posted workers' rights60.
Moreover, one of the main issues was the huge difference among minimum wages in different Member States, for instance Bulgaria and Luxembourg, in which respectively the minimum wage is 215 Euros and 1923 Euros61. Thus, are the Member States free to include or exclude the elements contained in the minimum wage? Basically, they are not free. Indeed, Posting of Workers Directive is only a coordination instrument, and it does not have as an objective the harmonization of the provisions given by the ‘'nucleus‘' and the Member States, defining the contents of theirs provisions, should make it ’'in compliance with the EC Treaty and the general principles of
European Union law’'62.
Finally, even if the list provided by the ECJ is not exhaustive, and consequently there is not legal certainty in this sense, the European Commission in its impact assessment63 decided to give voice
to the ECJ’s ruling at this regard, and it will be analyzed in the next chapter, with regard to the new concept of ’'remuneration’'.
3.4. After the Directive: Social and economic dimension of the EU in Laval case among the right to collective action and the freedom to provide services
In the first chapter has been analyzed Rush Portuguesa case, which is a leading case referred to the European Union enlargement period, thus before the PWD.
For the purposes of this chapter, it can be useful to focus the attention on one of the leading cases, Laval64, in fact, is an important case that involves the discussion about the concept of minimum wage and, also, the issue of collective agreements and their applicability. More specifically, Laval is a Latvian construction company which posted around 35 workers to its Swedish subsidiary in order to perform a contract in the municipality of Vaxholm. Thus,
60 Ibid., 308.
61 Eurostat, 2016. 62 Case C-341/05, Laval.
63 EC,”Staff Working Document: Impact Assessment accompanying the document proposal for a Directive of the EP
and the COuncil amending the Directive 96/71/EC concerning the posting of workers in the framework of the provision of services”, p. 52.
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negotiations started between a local trade union and the Latvian company, but they never find an agreement about the labour law standards applicable to the posted workers. At that time, in fact, Sweden did not have rules on minimum wage, nor an applicable system of collective agreements. After the failure of the negotiations, the trade union acted against the Latvian company with a blockade action in its construction sites and they also boycott the company. As a result, the municipality of Vaxholm frustated the contract and the Latvian company became subject of the liquidation proceedings.
In the following legal proceeding, Laval asked to the Swedish labour Court to declare illegal the collective actions and to order the cessation of the actions carried on by the trade union. Thus, the Court referred two questions to the ECJ.
The first question regarded the compatibility with the rules of the EU on the freedom to provide services and the prohibition of any discrimination on the grounds of nationality and the PWD of a behavior of a trade union to attempt, with a “blockade”, to force a foreign provider of services to sign a collective agreement in the host country in respect of terms and conditions of
employment. This is an interesting question, because it leaves room to many debates about the hierarchy between the freedom to provide services and the workers’ rights at stake.
The second question at the same time involved the compatibility with these rules but in particular with regard to the Swedish legislation (Lex Britannia). This law allowed actions (blockade) in order to challenge a foreign collective agreement.
The European Court of Justice played a significant role analyzing and clarifying many aspects of the PWD: first of all, regarding Art. 3(8) on collective agreements, the Court pointed out65 that Swedish system does not fall into one of the categories which allowed the application, to the posted workers, of employment conditions as represented in collective agreements, because the Swedish system is founded on a case by case analysis about wages and working conditions. Thus, the Court argued that the collective action was not compatible with the Posting of Workers Directive and the freedom to provide services. Furthermore, according to Van Peijpe66, the Court also stated that the
65Ibid., para 69,70,100.
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Member States should make an explicit choice when transposing the PWD when they want to use the "options” provided by Art. 3(8), such as collective agreements or arbitration awards.
With regard to the freedom to provide services, which is the main aspect which has to be taken into account in this discussion, the ECJ was67 against the argument for which the EU has no competence on the right to strike, only based on the exclusion in the Treaties68. Besides, the ECJ also dismissed the opinion for which the EU has no competence on the fundamental rights69 and it
recognized the right to collective action as a fundamental right which has to be considered within the competences of the EU. Nevertheless, the exercise of this right can be limited in case of ’certain restrictions’70. As a result, the Art. 56 TFEU, which refers to the freedom to provide services, is
applicable to the trade unions due to their presumed quasi – regulatory nature71. The latter aspect leaves room to several discussions.
Moreover, taking into account the social objective of the Posting of Workers Directive, Evju stated72 that the Court’s decision was surprisingly in the economic direction and not, as expected, in the social dimension’s one. As Carter points out73, the Court has interpreted Art. 3(1) of the
PWD not as provision for minimum rights but, conversely, only as a legal instrument able to overcome the conflict of laws. In this way, Carter argues, it helps the creation of a system of unequal pay for equal work.
In the end, the Court declared that a collective action, such as a ‘blockade’, could make less attractive and more difficult, for a firm, to perform a contract in Sweden, thus it is not allowed since it constitutes a restriction to the freedom to provide services74. Finally, the ECJ stressed out that ’forcing’ an employer by using collective actions is contrary to the freedom to provide services, when these actions have as an objective to go beyond the purposes of the PWD.
67Ibid., para 86-88. 68 Art. 153 TFEU. 69 Ibid., para 89-95. 70 Ibid., para 91. 71 Ibid., para 98.
72 S. Evju, Revisiting the posted workers Directive: conflict of laws and laws in contrast, Cambridge year book of
European Legal Studies, 2010, p. 155.
73 D. Carter, Equal pay for equal work in the same place? Assessing the Revision of the Posting of Workers
Directive, 2018, p. 45.
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As stated in many other important ECJ’s case law, such as Commission v. Germany75, the Court
confirmed that, due to the central role of the Member States, the latter have to establish the core elements of the minimum wages, taking into account that such a ‘freedom’, given by the silence of the PWD in that sense, must not affect the freedom to provide services provided by Art. 56 TFEU.
3.5. Brief conclusion
This chapter has analyzed the legal grounds of the Posting of Workers Directive, characterized by the research for a balance between the freedom to provide services and an equal treatment for workers who are posted in another country. After the PWD of 1996, the European Union had to deal with many issues which come from the application and the interpretation of the PWD. As is shown above, the European Court of Justice pointed out several times that the minimum protection provided by the Directive operates at the same time as the maximum protection that could be offered by the Member States, leaving room to many concerns at this regard, considering that if the Member States cannot guarantee a better protection to the posted workers, the whole framework of the PWD is in trouble. Besides, the literal meaning of Art. 3(8) limits the extent of the collective agreements, basically limiting their use for the improvement of the workers condition. Finally, the decisions of the ECJ show how the social dimension of the Posting of Workers Directive, in a first moment, seems being sacrificed under the weight of the freedom to provide services and that is the reason why new efforts were required in order to repair the unclear framework in which the Posting of Workers operates.
75 C- 341/02, Commission v. Germany.
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Chapter 4: The revision and the adoption of the new rules: Directive
2018/957
4.1. Introduction
This final chapter represents the core of this research, because it considers the last revision of the Posting of Workers Directive of 2018. Furthermore, considering the research trajectory, the scope would be to give an answer to the main research question, which has as main objective to understand if the revision of the PWD can realize the EU objective of ‘'equal pay for equal work
in the same place’' with regard to the concept of ‘remuneration’ which has replaced the
‘'minimum rates of pay’' criterion. In the previous chapter, it has been analyzed why there were concerns about the Directive’s objectives. Thus, it is now decisive the discussion about why the European Commission decided to amend the PWD, even with many difficulties given by some Member State’s resistance. To reach the purpose of this research, it will be explained the concept of ‘remuneration’ as modified in the Revised Directive.
4.2. The European Commission’s proposal
In the previous chapter, it has been shown how the first release of the PWD had left room to some doubts, especially for the absence of a balance between the posted workers’ rights and the freedom to provide services. Nevertheless, the EU project regarding the protection of such a category has been constantly considered in the EU’s policy objectives, and for this reason it has to be analyzed the importance of the EC’s proposal to amend the PWD.
At first glance, the situation before the Revision was very unclear, especially on the side of the remuneration aspects. As already mentioned, Voss pointed out that ‘it is legally unclear as to which
components of the wage paid should be regarded as constituent elements of the minimum rate of pay in the host country’76. Thus, the discussion was focused on how to improve the legal
26
uncertainty about the concept of remuneration, since the’'minimum rates of pay’' had failed in its intentions and it did not give a concrete answer to the problem of the elements of remuneration. According to Verschueren77, many doubts remained, for instance, about which elements of the remuneration, should be included in the Revised Directive, such as maternity pay, redundancy pay or sick pay. Following this, Garben notes78, it would have been more helpful if the proposal would have contained the complete definition of remuneration, in order to not to leave in the hands of the European Court of Justice the qualification of the elements of the remuneration, considering that the decisions are almost always unpredictable.
As it can be found in the Recital 4 of the Directive 2018/957, “after 20 years” it was urgent to amend the Directive 1976/71/EC in order to achieve a right balance between the improvement of the freedom to provide services and the posted workers’ rights. At this regard, during the adoption process, many were the issues which deserved a discussion. For instance, according to Eurostat data79, the total average costs for a single hour of work, in States like Denmark and Belgium, were around Euro 40-42. Conversely, in countries like Bulgaria and Romania the amount was incredibly low, remaining at Euro 5 per hour. Of course, also security contributions and social costs in general are included in the total amount. Moreover, in the Impact Assessment many concerns were founded on the unbalanced situations in some Member States for which posted workers receive only the minimum wage as ruled by the State, without any attention to the peculiarities of the job. For instance, In Sweden and in Denmark, posted workers received only the 70% of the average wage, in the UK the 40%80. Consequently, this can only bring to develop a system in which the governments and the firms take advantages of this situations, at the expense of the competitiveness among the undertakings.
The EC, in its impact assessment81, tried to give several options in order to amend the Directive, for instance the adaptation of specific rules based on a specific situation, or the clarification of the
77 H. Verschueren, The revision of the Posting of Workers Directive: protectionism or combating social dumping?,
2016.
78 S. Garben. The constitutional (Im)balance between the ’Market’ and the ’Social’ in the European Union, p. 40,
2017.
79 Eurostat,’'Wages and labour costs, 2017.
80 European Commission Impact Assessment, (n. 53), pp. 12-14.
81 Commission staff working document, ’'Impact assessment, accompanying the document: proposal for a Directive
of the EP and the Council amending the Directive 96/71/EC concerning the Posting of workers in the framework of the provision of services”, 2016, pp. 22-26.
27
criteria given by the ECJ for the composition of the minimum rates of pay. Furthermore, the EC strongly wanted to confirm the principle that the same work at the same place should be remunerated in the same manner82, that is why the Commission had as main objectives to make clearer, for a legal certainty, the different EU rules about posted workers and to improve several rules in order to guarantee equal wages applicable to posted and local workers83.
Furthermore, the EC described the main issues that the Member States faced with the PWD and, moreover, showed that from the preliminary consultations with the interested stakeholders, such as small and medium enterprises, almost 30% of the firms which provide cross- borders services registered many difficulties with the rules of the Posting of Workers Directive84. Moreover, many
concerns find their origin in the lack of legal certainty, as shown by the SME’s85, when there are
not certain requirements for service providers applicable, in the same manner, in each Member State.
4.2.1. The Yellow Card procedure
The Yellow Card procedure, linked to the Commission’s proposal, deserves a mention. Firstly, its legal basis is Art. 5(3) TFEU, to be read with Art. 6 and 7 of Protocol no. 2 on the Application of Principles of Subsidiarity and Proportionality. More specifically, this procedure can be activated whether a Member State believes that a European Commission’s proposal does not comply with the principle of subsidiarity. If the opinions of the Member States involved are at least one third of the votes given to the National Parliaments, the European Commission has the duty to review the proposal86. In 2016, eleven Member States’87 parliaments sent to the European Commission valid reasons to open a discussion about the proposal to amend the Posting of Workers Directive. These Member States reunited 22 votes (since each country has two votes), but 6 countries just asked for a real dialogue with the Commission, without claiming the violation of the principle of
82 EC, Explanatory memorandum, p.2.
83 Commission staff working document, ’'Impact assessment, accompanying the document: proposal for a Directive
of the EP and the Council amending the Directive 96/71/EC concerning the Posting of workers in the framework of the provision of services”, 2016, p. 20.
84 EC, ’Upgrading the Single Market: more opportunities for people and business’, 2015. 85 Small and Medium enterprises.
86 Art. 7(2) of Protocol no. 2 on the application of Principles of Subsidiarity and Proportionality.
87 The Member States involved were: Romania, the Czech Republic, Poland, Lithuania, Denmark, Croatia, Latvia,
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subsidiarity. Since the Yellow Card procedure was officially open, the European Commission was forced to review the Proposal, but in a first moment chose the path of the political dialogue with the Member States involved.
In the official document88, it can be seen how the instances of the Member States were point to a better consideration of the Member States’ role, considering the principle of subsidiarity. For instance, they pointed out, among other reasons, that ’'the proposal fails to recognize explicitly
Member States’ competences on remuneration and conditions of employment” and, moreover, that
’'the existing rules are adequate and sufficient’'.
With regard to the first point, the Member States manifested their disappointment about the lack of an express recognition of their role in determining the conditions of pay and employment. The European Commission, at this regard, replied that in the proposal the Member States instances are taken into account, in particular when the proposal states that the remuneration and the conditions of employment are in accordance with their national law and practices89. This is basically declared in Recital 12 of the proposal amending the PWD.
Considering the second claim, the Member States stated that the existing rules were adequate and, as a result, there was not the need to change the status quo provided by the Posting of Workers Directive90. The European Commission replied that the main objective of the Revised posting of Workers Directive would be to improve a more equal level playing field between local and foreign service providers and, moreover, that the workers should be protected regardless they are posted or local91. Finally, the Commission argued that the main objective of the Art. 3(1) was not to establish a system for which the wages in the member States are aligned, but conversely Art 3(1) has as main goal that the rules in force on remuneration in the host Member State are at the same time applicable to the posted worker, without any difference.
The European Commission, after having considered and discussed the concerns of the above- mentioned Member States, decided to keep the proposal in force in order to achieve the objective of ‘'equal pay for equal work in the same place’', guaranteeing the maximum efforts in order to
88 COM, 505 final, Brussels 20 July 2016, p. 5. 89 Ibid.
90 Ibid. 91 Ibid.
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improve the workers’ protection, even facing the lack of reliable data about the issue of posted workers92.
4.3. The new Art. 3 (c): the concept of ¨remuneration¨
This research finds its ‘'heart’' in the amendment of the Art. 3(1) of the PWD, which would represent a reply to the general concerns expressed by different stakeholders about the absence of the balance between the freedom to provide services and the posted workers’ rights.
After a long political debate, and also after the economic crisis which accentuated the gap among pay throughout the European Union, the Member States in the European Council finally agreed on the revision of the Posting of Workers Directive93. According to the proposal94, the Member States had as the main goal to ’'safeguard the freedom to provide services on a fair basis in both the short
and the long term, notably by preventing abuse of the rights guaranteed by the Treaties’' and,
moreover, ’' the total gross amounts of remuneration should be compared, rather than individual
elements of remuneration’'95.
Considering the long process which has delivered the Revised Directive, it seems necessary to explain the path followed by the EC and the reasons why the concept of ‘remuneration’ has been taken into account to change the existing concept of ‘'minimum rates of pay’'. In the previous chapter96, it has been seen how the Sähköalojen ammattiliitto case finally gave an partial answer to the issue of the 'minimum rates of pay’. The importance of the latter case law is remarked by the proposal itself, which declares that’' the concept of ‘remuneration’ should include, but should not
92 N. Mussche, The EU Free Movement of Services and the growing mobility of Third-Country Nationals as posted
workers, 2018.
93 European Council, press release: Council reaches agreement. Available at:
http://www.consilium.europa.eu/en/press/press-releases/2017/10/23/epsco-posting-of-workers/
94 European Council, Proposal to amend the Directive 96/71 concerning the posting of workers in the framework of
the provision of services, p. 5.
95 Ibid., p. 7. 96 See Section 3.3.1.
30
be limited to, all the elements of minimum rates of pay developed by the Court of Justice of the European Union’'97.
On the other hand, after the concerns and the controversial aspects of the PWD in its first release, the European Commission idea was to replace the “'minimum rates of pay’' with ‘'remuneration’' in order to make clearer that the Directive has a social dimension, based not only to the fundamental freedom to provide services but also focus on the workers’ rights, which would meet the original idea on the grounds of the Directive.
In the above- mentioned Impact Assessment, the EC stated that under the concept of ‘'remuneration’' are included all the elements of the remuneration when they are explicitly declared by law or the collective agreements98. This follows the Sähköalojen ammattiliitto ruling
and it is confirmed, at the same time, how the Court of Justice’s decisions play a significant role in the law- making. According to Zahn99, the social dimension of the Directive itself could
increase, because it would give to the social parties involved more room for manoeuvre when the several elements included in the remuneration are at stake.
At this regard, the Directive explicitly statues that:
For the purposes of this Directive, the concept of remuneration shall be determined by the national law and/or practice of the Member State to whose territory the worker is posted and means all the constituent elements of remuneration rendered mandatory by national law, regulation or administrative provision, or by collective agreements or arbitration awards which, in that Member State, have been declared universally applicable or otherwise apply in accordance with paragraph 8100.
Thus, the Directive’s purpose is to apply the same rules on pay to have an equal treatment between the local workers and the host ones, including other benefits such as allowances or reimbursement for covering travel expenses.
97 European Council, Proposal to amend Directive 96/71/EC concerning the posting of workers in the framework of
the provision of services, recital 12a.
98 EC Impact Assessment, p. 23.
99 R. Zahn, ’' Revision of the Posted Workers Directive: equality at last?’', European Legal studies on-line papers,
2016, p.13.
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As stated in many discussions in the Council, the ‘'remuneration’' should be determined by the national law101, giving more weight to national power at this regard. As a result, the Recital 17 of the Revised Directive confirms that ‘' the setting of wages is a matter for the Member States and
the social partners alone. Particular care should be taken not to undermine national systems of a wage setting or the freedom of the parties involved’'. Furthermore, the Council even added that the
concept expressed in the Revised Directive should include all the elements stated by the European Court of Justice in its decisions, but the same concept could be also implemented as well. In fact, also Recital 17 and 18 of the Directive declare that all the additional amounts and the gross earnings should be included in the concept of’'remuneration’'.
Thus, the replacement of minimum rates of pay with the new concept of remuneration can be seen as a mitigation of the issues created by the original Posting of Workers Directive of 1996102 but, as Carter argues, a possible evaluation of consequent legal effects of this relevant change can be discussed after the interpretation of the new PWD by the European Court of Justice103, taking into account the need to balance the service providers’ interests and those of workers.
Considering the efforts of the European Commission and all the parties involved, the main objective was to give to the Member States more autonomy and discretion regarding the remuneration and all the elements included. Moreover, as Carter points out104, the EC’s main objective was to go beyond the legal uncertainty of the original Directive and to overcome some specific situations as showed by Laval case. Besides, he also confirms the importance of the European Court of Justice’s decisions, which has the ’'duty’' to create and maintain a balance between the service providers and the posted workers’ rights.
101 Council of the European Union, general approach to the Proposal for a revision amending the Posted Workers
Directive.
102 D. Carter, Equal pay for equal work in the same place? Assessing the Revision of the Posting of Workers
Directive, 2018, p. 60.
103 D. Carter, Equal pay for equal work in the same place? Assessing the Revision of the Posting of Workers
Directive, 2018, p. 61.
104 D. Carter, Equal pay for equal work in the same place? Assessing the Revision of the Posting of Workers
