On 3 September, Commissioner Marianne Thyssen exchanged with the European Parliament’s Committee on Employment and Social Affairs on the revised Posted Workers Directive. The subject was equal treatment of posted workers in their host country, as well as social protection of employees, which shall put a stop to the infamous race to the bottom and social dumping. However, one question was not dealt with: What actually happens if a company that posted workers goes bankrupt in the home country, leaving employees behind with unpaid wages?
Walter Gagawczuk, Labour Law Expert of AK Vienna, took a closer look at this subject. Further information can be found in a study commissioned by the AK, which examines the legal situation in Slovenia, Hungary and Slovakia in more detail. The following two examples illustrate the problem:
Example 1: Ceiling for payments of open claims
A Hungarian company posts a Hungarian construction worker to work on a job in Austria. He works three months in Austria – for a total gross wage of 2,700 €, hence 900 € per month. The employee contacts the AK and learns that the Austrian minimum wage is 1,800 €, double of what he is paid. He demands the difference he is entitled to from his Hungarian employer, who refuses to pay the correct wage. As a result, the Hungarian employee files a suit against his Hungarian employer in Austria. The court agrees with the suing employee; however, the Hungarian employer files for insolvency. Due to the ceiling of open claims, the Hungarian insolvency fund does not reimburse the payment amount: the employee gets nothing and even has to the pay legal costs of 1,200 € himself.
Example 2: Time limit to sue for claims
A Slovenian construction worker works form 19 March 2012 to 14 September 2012 on a building site in Austria. Even though the posted Slovenian worker is due the Austrian minimum wage for the period of his stay, he receives the lower Slovenian wage. The employee contacts the AK Steiermark and subsequently sues for the wage difference due to him within the scope of the European order for payment procedure. The claim is upheld on 12 November 2013. On 12 February 2014, the Slovenian company disappears from the company register. The Slovenian insolvency fund rejects the claim of the employees. Why? Pursuant to Slovenian legislation, claims can only be asserted 90 days after the end of the employment. The employee, who claimed his due, gets nothing.
Conclusion: The Directive does not provide comprehensive protection for employees
The Directive 2008/94/EC of 22 October 2008 on the protection of employees in the event of insolvency of their employer refers to cases such as the examples described above. However, the Directive gives Member states the opportunity to limit the payment obligation of insolvency funds - based on average or minimum wages, the Member states themselves determine how much money has to be paid in arrears. From the AK’s point of view, the Directive, whose title includes the protection of employees in the event of insolvency, is no longer up-to-date and requires revision. The maximum amounts of open claims are too low. A particular bitter pill is the fact that even ECJ rulings agree with the insolvency funds and in doing so entrench the obvious weaknesses of the Directive. The message for posted workers is to abstain in case of doubt from a costly legal dispute and to waiver their claims, even though a legitimate claim exists. Thus, the AK demands the Directive to be revised and the level of amounts and time limits in the Member states to be adjusted, in order to ensure protection and fairness for posted workers - also in the case of insolvencies.