Last week (1.3.2018), Employment Commissioner Thyssen talked about a “ground-breaking agreement” and a “new phase of fair regulations in the Single Market”, when she presented the preliminary agreement on the Posting of Workers Directive together with the co-Rapporteurs of the EU Parliament Morin-Chartier and Jongerius as well as the Bulgarian Deputy Minister of Labour and Social Affairs Zornitsa Roussinova. However, only the final legal text will show whether the agreement does indeed represent an effective improvement in the fight against wage and social dumping. However, the agreement appears to have been unable to solve some major problems.


Increased number of Postings

The recently published Annual report on intra-EU labour mobility finds that 2.3 million Postings of Employees are taking place annually in Europe. The number has strongly increased in recent years. 120,000 employees (ranking 4 in the EU) are annually posted to Austria; over 75,000 employees (ranking 10 in the der EU) were posted from Austria. From 2010 to 2016, the figures in Austria have increased by 101.5 % and even189.4 % respectively. Most Postings to Austria are taking place in the construction sector (55.9 % of Postings); this figure is significantly above EU-average.


Only recently, during a joint Event in the Permanent Representation of Austria in Brussel, the Chamber of Labour and the Austrian Trade Union Federation, emphasises the problems and regulatory gaps accompanying the Postings and cross-border labour mobility in respect of wage und social dumping.


Principle “Equal pay for equal work in the same place”?

In the press conference of the trilogy negotiators, the integration of the principle of “Equal pay for equal work in the same place” was also named a key element of the revision of the Posting of Workers Directive. Employers in Austria are already obliged to pay Austrian wages. However, it had been a key demand der Chamber of Labour, that the Posting of Workers Directive should include the obligation that employers have to assume the expenses of posted employees for journey, board and accommodation. Hence, any tricks, to burden employees with these costs could thereby be avoided. Even though the Agreement now provides an obligation for the employer to take over the expenses for journey, board and accommodation, reference is made to the national law of the country of origin. It must be feared that not all Member States have a relevant provision in their national law.


The Revision of the Directive also does not solve the problem of significantly different Social insurance contributions, which are used as “competitive advantage” with the scope of Postings. In the press conference, Commissioner Thyssen pointed out that short-term changes between social insurance systems were not practical and that she did not deem the problem to be solvable within the scope of the Posting of Workers Directive.


Maximum posting period and transport sector

In future, the maximum posting period may not exceed 12 months; however, there is an option to extend this period by 6 months (de facto: 18 months). This is – from the point of view of the Chamber of Labour – still far too long and does not meet reality as the average posting period is only 4 months.


With regard to the transport sector, the Chamber of Labour has rejected a special rule in form of a “lex specialis”: from the point of view of the AK, there is no reason to create a special regulation for this sector and not to apply posting regulations from day one. Here too, the Trilogue Agreement is not sufficient. Initially, the provisions of the old Posting of Workers Directive from 1996 and only after implementation of the “lex specialis”, the provision of the new systems shall apply to employees in the transport sector. A “lex specialis”, as it is currently discussed by Parliament and Council will probably mean that the now adopted Posting of Workers Directive will not apply on the first day to road transport employees.


Protection of employees and respecting trade union rights

In spite of the announcement of having found a “ground-breaking agreement”, important demands remain open from an employees' point of view. Even though also in future no double legal basis, in accordance with a reference also to Article 153 AEUV has been provided for in the Directive, the new Article 1 also refers to the protection of employees and could therefore at least be an aid as a counterbalance to the Single Market legal basis sein. The Article also contains a “Monti” clause; hence a clarification that the Directive respects the fundamental rights of collective agreement negotiation and of strike.


According to the Agreement, the new regulations shall come into force as early as 2020. Prior to this, the Agreement still requires the approval of the Committee on Employment and Social Affairs and the plenum, as well as of the Member States in the Council. It remains to be seen whether the preliminary agreement will become the final Directive text. One can already observe the resistance of some Member States at Council level regarding the result of the negotiations.


AK demand: Effective EU Labour Authority

In view of the fact, that even after the revision of the Posting of Workers Directive – provided the current stage of negotiations remains – there will be significant need for action with regard to tackling wage and social dumping, the Chamber of Labour - in addition to the reforms with the Posting of Workers Directive – supports the establishment of a European Labour Authority. Within the scope of the “Package of Social Fairness”, which has been scheduled for the coming week (13.3.2018), the Commission has also announced - apart from Council conclusion on access to social protection - a proposal for establishing a European Labour Authority.


Further information

Press conference on the preliminary agreement in trilogue from 1.3.2018

Factsheet of the Commission on the Revision of Posting of Workers Rules

2017 annual report on intra-EU labour mobility

AK EUROPE: The planned European Labour Authority – an effective tool against wage and social dumping or a placebo?

AK-Europe: Committee on Employment and Social Affairs adopts Report on Posting of Workers Directive

AK-Europe: EU Posting of Workers Directive NEW: A great success? Wrong!

ETUC: Equal pay in sight for posted workers?