The posting of workers directive: EU Commission sticks to its guns

The Commission presented its proposed changes to the posting of workers directive in March this year. The purpose was to make sure people who work temporarily in a foreign country should get the same pay as the host country’s workers, rather than having to make do with the minimum wage, which is the case today. The proposal is – put mildly – unusually controversial. 

Governments and trade unions in high-wage EU countries, including the Nordic countries, welcome the initiative. But member states from the former Eastern block are upset that the Commission wants to start tampering with the old directive while the wounds from the fight over the so-called enforcement directive, adopted in 2014, still need healing. They believe all the necessary regulations are already in place.

Employers protest

Employers do not want a revision of the directive either. In a letter to the Commission, the five largest Nordic employers’ confederations have said that the very foundations of our collective agreement and wage formation systems are shaken if the same wages are to be paid for the same work in the same place.

Hence, it was no surprise when parliaments in the “new” member states tried to stop the proposal by giving it a so-called yellow card. This is how national parliaments can object to proposed legislation if they believe it concerns issues which should not be regulated on an EU level, or which they feel go too far. If one third of parliaments express such reservations, the Commission must review its proposal.

That does not mean it is forced to withdraw or change it. It can stick to its proposal, in which case it must present a more comprehensive justification for why it does not accept the objections.

Eleven yellow cards

And that is exactly what has happened in this case. In early May the parliaments of eleven countries had given the proposal a yellow card, which was enough. The main argument was that companies in the new member states would loose an important – and just – competitive advantage if they were forced to pay their posted workers more than the host country’s minimum wage. It would, in other words, restrict the freedom of movement. 

In fact, the Danish parliament also objected, but for different reasons. It welcomes the fact that the Commission presents a proposal with the aim of guaranteeing the same pay for the same work, but the text is not clear enough on the fact that it should be member states themselves that define what pay is. The Danish parliament also thinks the proposal is unclear on terms and conditions for workers hired out by temporary work agencies.

In late July the Commission announced it would disregard all objections and stick to its proposal. The aim is to ”provide a more level playing field”  between national and cross-border service providers, and for people working in the same place to be protected by the same, binding regulations. It is not possible to achieve this without EU level rules, the Commission argues. It also does not consider the Danish parliament’s unease to be justified, and points to wordings in the proposal which should guarantee member states’ rights to decide over wages and conditions for temporary agency workers.

Labour ministers from the member states will debate the proposal on 8 and 9 December for the first time. It is expected to be a lively meeting. The question is whether there is any chance at all to move forward.