If one looks in detail at the draft of the Commission on the EU Posting of Workers Directive NEW, which was proposed this week, the fairy tale “The Emperor's New Clothes” inevitably comes to mind. But this time the court does not continue the parade against its better judgement, but immediately levels objective criticism and inevitably comes to the conclusion that the new proposal does not entail any progress in the fight against wage and social dumping. A promise, which the EU Commission always pretended to make good on, as also the principle of equal pay for equal work in the same workplace. However, the EU Commission only wants “to promote” the latter. Hence, competitive distortions will remain and become firmly established.

For Austria, the proposal on the Posting of Workers Directive NEW does not bring any added value

However, things could have turned out even worse. Unfortunately, this is the bitter truth. The originally intended proposal of the EU Commission on the Posting of Workers Directive NEW had included a provision, which would have led to the massive deterioration for employees and to wage dumping. For example, in future the legal or collectively agreed wages should have no longer been explicitly prescribed for posted workers, but the wage, which is “necessary for the protection of employees. In particular, with regard to shorter posting periods, the collective agreed wages would have come under pressure. Only the fast action and massive protest of labour representatives and governments, above all from Austria, Sweden and Germany, made it possible to ward off this plan at the last minute. Even though the now found formulation has significantly improved, it only stipulates what applied already to Austria; hence the obligation to pay Austrian wages. It would have been far more desirable if employers had been obliged to assume the costs for travel, board and lodging for posed workers.

Extending the Posting of Workers Directive to all branches in Austria has long been reality

The EU Commission now claims it to be a new achievement that the Member States will be obliged to extend the Posting of Workers Directive to all sectors. However, fact is that Austria has already applied this already existing opportunity. The provision too that in case of postings of more than two years the labour law of the host country automatically applies is actually a dead letter, because very few postings last longer than two years. It would have much more important for example to take measures against quasi postings, as due to the current legal situation the hands of domestic social insurance carriers are tied in case of quasi postings. A minimum employment term in the home country before posting as well as effective options of social insurance carriers, to tackle false applications in the home country would help, to keep quasi postings at bay. It should also have been made clear that wages, which are to be paid in case of postings, form the basis for the social insurance contributions in the home country. If in the event of postings, the wage claim at the location of employment (which is higher in many cases) is not taken as the basis for social insurance contributions, many domestic businesses and employees suffer a major competitive disadvantage. Hence, in case of postings the payment claim at the location of employment should form the basis for social insurance contributions.

Businesses also levy strong criticism at the Posting of Workers Directive

The EU Commission should give thought to the fact that both labour representatives and business representatives levy such strong criticism that both reach the conclusion that the proposal in this form would not have been necessary. Hence, one can only conclude, that a big opportunity has been wasted. It would have been better if the EU Commission had officially consulted the EU social partners, as these would certainly have come to a suitable result. However, what is needed now is that the interests of employees are intensively articulated towards co-legislators, EU Parliament and Council, to perhaps adapt one or another improvement after all.

Further information:

AK Press release on the Posting of Workers Directive NEW

Press release of the EU Commission on the Posting of Workers Directive NEW

WKÖ Press release on the Posting of Workers Directive NEW