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ISSUE 59 page 5

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Social partners not impressed as Monti rides to the rescue of posted workers (again)

Bernadette Ségol thinks that ‘collective action is a fundamental right which must be guaranteed’ and that it falls short of ‘correcting the problems' brought about by decisions of the European Court of Justice.
Philippe de Buck, said: ‘the European Commission has proposed EU legislation, which companies will have great difficulties to apply.. ‘.
Both European unions and employers have criticised the new EU proposals to improve the Posted Workers directive. We outline the problems it is designed to correct and the reasons for the negative reaction

 THE POSTED WORKERS DIRECTIVE, ORIGINALLY PASSED BY THE EU in 1996, seems to have caused as much controversy as any other piece of European legislation over the last few years. A string of judgements from the European courts such as Laval/Vaxholm (see issue 41) and Viking have turned it on its head so that what started out as a way of protecting the working conditions of employees on temporary posting outside their home country became a means of undercutting local pay and practice to the benefit of unscrupulous companies, at least in the view of trade unions. Aware of the problems engendered by the legislation the European Commission charged Mario Monti, presently the Prime Minister of Italy and author of a 1998 regulation clarifying the original law, with the task of ending the abuses and balancing the rights of companies to provide a service with that of unions to ensure good working conditions, including through strikes. In his 2010 report he seemed sensitive to trade union opinion that the push for ‘economic freedom’ was a ‘code for dismantling social rights’ and could alienate ‘a segment of public opinion, workers' movements and trade unions’. He recommended improved implementation of the directive including a mechanism for informal resolution of disputes and a guarantee of the right to strike.Now the Commission has published two proposals which put flesh on the Monti bones. Another regulation (now known as Monti II) proclaims that there is no fundamental conflict between the right to take collective action and the right to provide services and one does not have primacy over the other. However when they need to be reconciled the principle of proportionality should be observed. Monti II provides for non-judicial dispute resolution but does not affect the rôle of national courts or national laws on strikes. It also calls on Member States to alert each other and the



Commission when it believes that either the EU internal market or its own industrial relations system is threatened by a cross-border contract. As well as the regulation a draft enforcement directive aims to clamp down on abuses. These include ‘letter-box’ companies, where a firm established in a country with high labour costs sets up in a low-cost country merely to post workers back to its base on worse conditions than if it recruited locally, and permanent or ‘rotational’ postings which are not really temporary and, therefore, should not come under the Posted Workers directive at all. The draft also lays down provisions for improved access to information and administrative co-operation between Member States. Government and social partner web sites would have to publicise terms and conditions of employment in all relevant languages and the authorities in one country could request inspections of companies based in another. It recognises the difficulty in regulating a foreign company but requires that they make a ‘simple declaration’ of their identity and those of their employees as well as to keep pay slips, contracts and time sheets.  The European Trade Union Confederation (ETUC) welcomed features of the proposed directive such as the right of workers and unions to sue cross-border employers in both jurisdictions but criticised Monti II for not restoring the right to take collective action without any restriction. Business Europe objected to special provisions in the construction industry which would hold main contractors liable for wages unpaid by sub-contractors. José Manuel Barroso, the European Commission President, said: ‘Today, the European Commission is taking concrete action to stamp out the unacceptable abuses. We want to ensure that posted workers enjoy their full social rights across Europe’.

The school in Vaxholm at the centre of the ‘Laval’ case and representations of cross-border workers



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