A tough tone between EU and national courts

The directives were being debated when the EU&Arbetsrätt newsletter together with the Nordic Council of Ministers for Labour hosted a conference in Stockholm in mid-May. Also on the agenda: examples of conflicts between national and EU courts which have arisen when trying to interpret EU directives in relation to national laws and agreements. 

The conference also drew interested representatives from the social partners, government ministries and researchers. There was so much interest, in fact, that not everyone got a space.

The core set is growing

The EU decided to amend the directive on the posting of workers on 21st June 2018. Once the new directive was adopted, member states were given two years in which to implement the amendments and change national legislation to comply within two years –by the summer of 2020 at the latest.   

The amended directive expands the so-called “core set” of labour law provisions. These comprise a range of areas where a company employing posted workers must follow the host country’s labour legislation.   

The new, amended directive says posted workers will now have the same right to  allowances or reimbursement of expenses related to meals, travel and board as workers in the host country – if they perform work away from their ordinary place of work in the host country.    

Costs related to the actual posting, e.g. travel, board etc., is not affected by this. The amendment could be compared with the right to claim food expenses for those who work away from their every-day workplace.

The new posting directive also says this right is limited to the first twelve months of a posted worker’s job. If the posting is extended beyond that time, the posted worker will enjoy the same work and employment conditions as host country workers. The exception are the rules covering workplace pensions and terms of employment. The 12 month deadline can be extended with a further six months, if the employer can provide a good enough reason. 

Ongoing consultations

The amended directive will be fully implemented in the summer of 2020, and member states are busy preparing the necessary legal changes. Sweden will be presenting a white paper towards the end of May, which will then be put out to consultation before being made into a bill which will finally be put to a parliamentary vote.    

“The greatest challenge has been to try to implement the EU directive’s rules so that they work within the framework of the Swedish model, and with the manner in which we have implemented the posting of workers directive in Sweden,” said Hanna Björknäs, who is working on the white paper.

The process is also being assisted by a reference group made up by the social partners, as well as experts from government agencies and ministries. One of the issues being looked at is individual workers’ rights if the posting lasts for more than one year.

“This concerns individual benefits like the right to take study leave. The posted worker will normally remain linked to his or her home country’s social benefit system, however. The new directives do not provide posted workers with employment protection according to Swedish law, nor a working pension,” said Hanna Björknäs.

Ingrid Finsland from the Norwegian Ministry of Labour and Social Affairs said Norway too is in a preparatory phase, putting together its own white paper containing the ministry’s assessments and proposals. This will then be sent out to consultation with the aim of presenting a bill to the Norwegian parliament in the summer of 2020. 

Norway talks about “exported” workers rather than “posted” workers, but the issues surrounding the amendment of the EU directive are generally important, underlined Ingrid Finsland. The Norwegian view is that conditions set out in Norwegian legislation should also cover the “exported” workers, and that the universally applicable collective agreements should cover them too.

“The amended directive is of great importance for Norway, a country with large labour immigration. One of the challenges is how the new rules for long-term posting should be implemented through national legislation. The new rule on compensation of expenses is important, partly because of the STX case,” said Ingrid Finsland, alluding to a long-running conflict over whether the posting of workers directive allows for expenses when workers are covered by a universally applicable collective agreement.

In Denmark, there is a broad consensus that the country’s collective agreement model should form the basis for how to treat posted workers. The directive on the posting of workers was met with scepticism when it was introduced in 1996. The principle to adhere to seems to be “equal pay for equal work”, whether or not the worker is posted.

EU law or national collective agreement

The EU directive on transparent and predictable working conditions is also new, after being passed by the EU Parliament last summer. Some work is still being done on its exact wording, but as soon as it arrived as a proposal from the Commission, the Nordic social partners voiced their displeasure. 

The social partners in Sweden called the proposal “a deadly blow to the tradition of regulating employment and working conditions through collective agreements, and to the social partners’ autonomy in an area where they now operate freely.” 

The conference highlighted the difficulties which can arise when countries try to combine national legislation with EU directives. Tensions regularly arise between the EU and EFTA courts on one side and the national courts on the other, not least when it comes to labour law. The EU’s intentions and directives do not always fit with national praxis, especially not when it comes to labour law.  

On one hand, freedom of movement should be promoted. On the other, workers who spend a period of time working in a different country should enjoy reasonable protection while they perform their job. It can be difficult to determine which rules are to be followed and who gets to interpret this, exemplified by many years of legal wrangling in both Norway, Sweden and Denmark. 

A tough tone

The conference highlighted some examples that illustrated how complicated things can be. There are many different interpretations for what should be followed when – EU or national law. The Nordic countries are used to the Nordic model’s strong tradition for regulating the labour market through collective agreements. So when the EU wants to create legislation to solve issues that are usually settled around the negotiating table, it is met with a degree of scepticism in the Nordics.   

Who owns the issue, how should it be interpreted and who gets the last word? Examples from Sweden, Denmark and Norway were used to illustrate how difficult it can be for national courts and the EU and EFTA courts to agree. There have been long-running disputes and appeals, and cases have been pushed all the way to very top on both national and EU levels. 

“The Supreme Court of Norway rarely refers cases to the EFTA Court, as the Norwegian interpretation is that one may, but is not obliged to, relate to it. The EFTA Court interprets this differently, however,” said Professor Christian Franklin from the University of Bergen. He wants to see more dialogue between the national courts and their counterparts in the EU/EFTA.

The examples of how conflicts had begun and developed were complicated, but this was no doubt an issue that engaged the audience; representatives from the social partners, researchers and representatives from various Nordic government ministries that deal with EU labour market directives. 

Associate Professor Natalie Videbæk Munkholm from the Aarhus University explained the so-called “AJOS case” – a legal process which has been running since 2009 until now. The Supreme Court of Denmark and the European Court of Justice have been at loggerheads over how the case should be interpreted, and over who has the right to decide. The judicial handling of the case has also come in for much criticism, and the courts have been accused of treating each other badly.

“One of the things which has come in for a lot of criticism is that both courts have escalated the conflict and not worked towards a suitable dialogue, based on trust and cooperation. This creates a ripple effect both politically and legally,” she said.

“There are no signs the tensions between the national and EU courts are set to dissipate. We only agree to disagree,” said one of the audience members.