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19. May 2017

The posting of workers within the European Union- The European level and the case of Germany -

NOVA Law School, University of Lisbon

Julia Beckmann, LL.M.19 May 2017

1

19. May 2017

Agenda

Legislation at the European level•• The general legislative framework•• Specific legislative measures on the posting of workers

Case law of the Court of Justice of the European Union•• Laval, Rüffert, Commission v. Luxembourg

Case law of the EFTA Court•• STX Norway Offshore AS and Others v. The Norwegian State,

EFTA Surveillance Authority v. Iceland

German Legislation•• The Posted Workers Act - the Arbeitnehmer-Entsendegesetz

2The posting of workers within the European Union - The European level and the case of Germany -

19. May 2017

Legislation at the European LevelThe definition of a ‘posted worker’ in Art. 2 PWD (Directive 96/71/EC)


Core elements:

- for a limited period- in the territory of a

Member State other than the State in which he normally works

19. May 2017

Legislation at the European LevelProblems related to the transnational character of the posting process

Which (national) law to apply?•• To the employment contract•• Regarding working conditions

The specific characteristics of labour law in the EU legal system•• Limited competences of the EU institutions

(see Title IX on ‘Employment’ and Title X on ‘Social Policy’ of the TFEU)•• To a large extent national which regulates sensitive issues, such as minimum

wage

The applicable fundamental freedoms•• The posted worker cannot rely on the free movement of workers (Art. 45 TFEU)•• But the employer can rely on the freedom to provide services (Art. 56 TFEU)


19. May 2017

Art. 45 TFEU is not applicable as the worker carries out his work only temporarily in another Member State. He is not integrated into the host state’s labour market.

His employer, however, can rely on Art. 56 TFEU.Art. 56 TFEU states the following:

Legislation at the European LevelThe general legislative framework in situations of transnational character (1)


19. May 2017 The posting of workers within the European Union - The European level and the case of Germany -

Rome I RegulationArt. 8 Art. 9

Legislation at the European LevelThe general legislative framework in situations of transnational character (2)

6

19. May 2017

Legislation at the European LevelThe specific legislative framework in the case of posting of workers

The Posted Workers Directive (PWD)

-Directive 96/71/EC

The Enforcement Directive (PWED)

-Directive 2014/67/EU

A Proposal for a Directive amending Directive 96/71/EC


19. May 2017

Legislation at the European LevelThe Posted Workers Directive


The Posted Workers Directive (PWD)

Full title:Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services

Legal basis:Art. 53 (1) and 62 TFEU

Legislative aim:Ensuring fair competition while setting a minimum level of protection

19. May 2017

Legislation at the European LevelThe relationship of the PWD and the Rome I Regulation (1)

‘The protection of workers’ as an essential interest under Art. 9 (1) Rome I Regulation?

In the Unamar case, the CJEU held that Member States may have discretion to override otherwise applicable law to give effect to mandatory provisions of forum law, in so far as it seems that the national legislature adopted the provisions in order to protect an essential interest.-> judged essential by that particular Member StateDrawing on the Ingmar case, the protection of agents could be qualified as an essential interest – the protection of workers might then also be judged essentialLimit: any such application has to comply with the fundamental freedoms guaranteed by the Treaties

The Member States interpreted Art. 9 (1) Rome I Regulation very differently, which resulted in a situation of legal uncertainty.

The Posted Workers Directive also responded to that situation, aiming to establish clarity


19. May 2017

Legislation at the European LevelThe relationship of the PWD and the Rome I Regulation (2)


The P

WD

and A

rt. 8

Rome

I Reg

ulatio

n

•• Disagreement in legal literature as to what extend the PWD would also limit the application of the host state law as the law applying by virtue of Art. 8 Rome I.

•• Art. 3 (7) PWD as the starting point:Art. 3 (7) PWD allows more favourable conditions to be applied to posted workers in two settings –the employer voluntarily applies the more favourablehost state standards or the home state standards are more favourable and thus applied.

•• On this basis some authors argue in favour of a home country control rule. The applicable laws would thus be the laws of the country where the employer is established, even if provisions of the law applicable by virtue of Art. 8 Rome I are more favourable.

•• Others deny ‘the existence of a home country control rule with regard to employment protection’. They argue instead that the ‘country of origin’ in the Court’s case law should be understood as the country in which the work is normally or habitually carried out. They thus conclude that ‘[t]he law applying to the employment contract under Article 8 of Rome I may be applied in full, even if this law happens to be the law of the host state’.

The P

WD

and A

rt. 9

Rome

I Reg

ulatio

n •• Not very much debated in legal literature.

•• As Art. 3 PWD is based o the principle of equal treatment and prescribes that national rules on matters listed in Art. 3 PWD have to be applied to national and posted workers but at the same time does not harmonize the content thereof, it is deemed to be ‘a private international law provision which gives a specific interpretation of Article 9 Rome I’.

19. May 2017

Legislation at the European LevelThe core provisions of the Posted Workers Directive (1)

Art. 3 (1) PWD –

Terms and conditions of employment


19. May 2017

Legislation at the European LevelThe core provisions of the Posted Workers Directive (2)


Art. 3 (7) PWD

Art. 3 (10) PWD

Art. 3 (8) PWD

19. May 2017

Legislation at the European LevelThe Enforcement Directive – Aim and background

A measure intended to improve the enforcement of the provisions of the PWD

Already during the implementation process problems, such as a lack of clarity and the designation of competent authorities, became obvious and

resulted in insufficient enforcement

The Commission issued several communications to clarify the material provisions and to give guidance on implementation and enforcement

Problems for example related to:a lack of clarity as to what control measures Member States are allowed to

introduce; a clear statement or definition of what kind of company can undertake postings; practices such as the use of letterbox companies and

bogus-self-employment


19. May 2017

Legislation at the European LevelThe Enforcement Directive – Structure

The initial chapter (on ‘general provisions’) contains a provision on the identification of a genuine posting situation and the prevention of abuse and circumvention.

The following chapters are devoted to: ‘access to information’, ‘administrative cooperation’, ‘monitoring compliance’, ‘enforcement’, and ‘cross-border enforcement of financial penalties/ or fines’.

Article 9 (on administrative requirements and control measures) and article 12 (on subcontracting liability) PWED were the most debated ones during the legislative procedure.


19. May 2017

Legislation at the European LevelThe Proposal for a Directive amending the PWD – Aim and background

On 8 March 2016, the European Commission published the ‘Proposal for a Directive of the European Parliament and the Council amending Directive 96/71/EC of the European Parliament and the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services’.

The targeted review focuses on the areas of remuneration of posted workers, subcontracting liability, temporary agency workers, and long-term posting.The core principle to be brought in is the ‘equal pay for equal work’-principle.

The recent proposal and the PWED ‘are complementary to each other and mutually reinforcing’.The PWED focuses on tackling abuse and fraud as well as the strengthening of exchange of information mechanisms, whereas the recent proposal is concerned with achieving ‘better protection of posted workers through the reduction of inequality’.


19. May 2017

Legislation at the European LevelThe Proposal for a Directive amending the PWD – The proposed changes

Long-term posting

••Concerning long-term posting the new proposal introduces the rule that if the anticipated or effective duration of posting exceeds 24 months, the host state is deemed to be the country in which the work is habitually carried out. The Rome I Regulation is applicable and thus the host state’s labour law applies to the employment contract, if no other choice of law was made.

•• If there is a replacement of a worker regarding the same task, the cumulative duration is decisive. However the host state law only applies to the individual employee’s contract in case he/she was posted for more than six months.

Art. 3 PWD

••Three main amendments with the effects that: a Member State might rely on universally applicable collective agreements in all sectors of the economy, that the rules on remuneration applicable to local workers are also applicable to posted workers and that Member States are obliged to publish online the constituent elements of remuneration for posted workers.

••Member States are moreover allowed ‘to oblige undertakings to subcontract only to undertakings that grant workers certain conditions on remuneration applicable to the contractor, including those resulting from non-universally applicable collective agreements’ –but only allowed on a proportionate and non-discriminatory basis.


19. May 2017

Legislation at the European LevelThe Proposal for a Directive amending the PWD – The state of play

Eleven Member States issued reasoned opinions under Protocol

No. 2 on the application of the principles of subsidiarity and

proportionality (the so-called ‘yellow card

procedure’)

The Commission responded on 20 July 2016 and announced that it is

the Commission’ belief that the proposal does not infringe the

subsidiarity principle(general statement + country

specific responses)


19. May 2017

Case law of the Court of Justice of the European UnionThe Court of Justice and the Posted Workers Directive

Laval •• In particular, the right to strike

Rüffert •• In connection with public procurement law

Commission v. Luxembourg

•• Special focus on Art. 3 (10) PWD


19. May 2017

Case law of the Court of Justice of the European UnionThe Laval case – The facts

•• The Laval case arose out of a dispute between the Swedish construction workers’ trade unions and a Latvian company named Laval.

•• Laval had won a contract for construction work on a school site in Vaxholm. In order to provide the services Laval posted Latvian workers to Sweden.

•• These Latvian workers earned about 40 percent less than Swedish workers doing the same kind of work.

•• The Swedish construction union hence urged Laval to apply the terms and conditions of the Swedish collective agreement, with the entering into the agreement being a preliminary step to start negotiating wage levels.

•• Laval refused. •• A union picket at the school site followed and gained momentum

due to its effectiveness and the solidary action of the Swedish electricians’ union that joined the strike action.

•• The Swedish local authority of Vaxholm terminated the contract and the Swedish subsidiary of Laval went bankrupt.

The facts


19. May 2017

Case law of the Court of Justice of the European UnionThe Laval case – the legal issues (1)

The four main legal issues in the Laval case

the applicability of union law to the exercise of fundamental social rights (in particular the right to strike)

the applicability of Art. 56 TFEU to trade unions

whether strike action restricts the freedom to provide services

the issue of justification of strike action


19. May 2017


•• In Viking, trade unions and certain governments had argued that Union law should not apply as this would ‘undermine the integrity of national law’, referring to Art. 153 (5) TFEU that exempts the right to strike from Union competence.

•• This argument was rejected by the Court, explaining that even if Art. 153 (5) TFEU excludes the Union’s competence in relation to the right to strike, strike action as a whole, does not fall outside the scope of Union law.

•• When making his argument the Court importantly acknowledged and stated that the right to strike is ‘a fundamental right which forms an integral part of the general principles of Union law the observance of which the Court ensures’.

•• This fundamental right is to be protected in accordance with national law and practices and Union law as set out in Article 28 of the Charter of Fundamental Rights of the European Union.

•• The Court supposed that the appropriate way of reconciling the right to strike and the free movement rights would be the application of a proportionality test (citing the Schmidberger and Omega Spielhallen cases to support its argument).

The Court’s overall finding: Union law is indeed applicable (as already held in the Viking case)


19. May 2017



•• The Court’s concern being that the removal of barriers imposed by states could otherwise be neutralised.

•• This reasoning is line with other cases on the applicability to non-state actors, such as Bosman, Wouters and UEFA.These cases concerned private bodies with a regulatory role.

•• Some authors criticise the Court’s reasoning, stressing that the role of a trade union is different from a professional association in that it ‘impose[s] rules of its own choosing on those who want to participate in a particular activity’ and is ‘given exclusive control over a particular area of economic activity’.

•• It moreover puts trade unions in the same position as Member States in terms of obligations under Art. 56 TFEU, but not with respect to justification –the defences of Art. 52 TFEU, including public policy, not being that much of an option.

The freedom to provide services does apply to trade unions

19. May 2017


•• The Court found, in application of Säger formula (market access approach), that there is a restriction in the present case.

•• The collective action ‘might have ‘forced’ the employer to enter into a collective agreement containing terms going beyond the minimum laid down in Article 3 (1) of the Posted Workers Directive and might have ‘forced’ the employer to engage in ‘negotiations ... of unspecified duration’ to determine the minimum wage rates’.

Strike action as a restriction of the freedom to provide services?


19. May 2017


•• The general rule: Art. 56 TFEU may only be restricted if the measure pursues a legitimate objective compatible with the Treaty and is justified by overriding reasons of public interest. -> The restriction must be proportionate.

•• In the context of posting, this can only be the case if the terms of the PWD have been complied with.

•• The matters raised in Laval concerned Art. 3 (1), 3 (7), 3 (8) and Art. 3(10) of the Posted Workers Directive.

The justification of strike action (1)


19. May 2017



•• The legal source – Art. 3 (1), 3 (8) PWD:

In order to satisfy the conditions set out in Art. 3 (1) and 3 (8) PWD, a collective agreement has to be declared universally applicable or, in case the Member States in question does not have such a system for declaring collective agreements universally applicable, these have to be ‘generally applicable to all similar undertakings in the geographical area and in the profession or industry concerned’ or ‘have been concluded by the most representative employers’ and labour organisations at national level and which are applied throughout national territory’.

-> Neither was the case in Sweden.

The Court acknowledged that the Directive does not ‘harmonise the systems for establishing the terms and conditions of employment in the Member States’, but also expressed its disapproval of ‘case-by-case’ negotiations.


19. May 2017



•• The material provisions – Art. 3 (1) PWD:The agreement went beyond the requirements set out in Art. 3 (1) PWD in two respects –1) it was not just concerned with the minimum wage and 2) the provisions for working time and annual leave were more favourable than those laid down in Swedish law;it furthermore required firms to make contributions to insurance schemes.

The Court held that the Directive aims to set minimum terms and conditions and that the respective way of implementation was therefore not an acceptable means.

Art. 3 (7) could not be relied on as a defence as it would only be applicable in case the employer voluntarily agrees to more favourable terms and conditions. This implies that it cannot be the case where there is the threat of collective action.

As the payments to insurance schemes were held to fall outside the matters listed in Art. 3 (1) PWD, they could possibly be saved by invoking the exception in Art. 3 (10) PWD. However, Art. 3 (10) PWD could not be relied on for two reasons: the Swedish authorities had not expressly invoked Art. 3 (10) PWD and the trade unions were classified by the Court as not being bodies governed by public law and thus not being in the position to rely on the public policy exception of Art. 3 (10) PWD.


19. May 2017



•• Proportionality:

Preliminary remark: In the Laval case, the PWD was not complied with and a justification was therefore not possible, the question of proportionality being irrelevant.Nevertheless, it can be said that the Court established a proportionality test for the right to strike in the Viking and Laval cases.

The Court acknowledged that ‘the right to take collective action for the protection of workers in the host state against possible social dumping may constitute an overriding reason of public interest’. However, as the starting point of examination was not the right to strike, but the freedom to provide services instead, it was the union’s industrial action that ‘must pursue a legitimate aim and [...] must not go beyond what is necessary to achieve that aim’.

The mere existence of the right to strike was not held to be a legitimate aim in itself (different from the Schmidberger case the Court referred to).

A consequence of the established proportionality test in the context of industrial action is that the more effective the action is and therefore also the more restrictive on the employer’s free movement rights, the more difficult is it to justify.


19. May 2017

Case law of the Court of Justice of the European UnionThe Laval case – the aftermath of the CJEU’s Laval judgment

Judgment of the Swedish Labour Court•• followed by statement of the ILO's Committee of Experts on

the Application of Conventions and Recommendations

Lex Laval•• followed by a complaint to the European Committee of Social

Rights lodged by LO, the Swedish confederation of trade unions


19. May 2017

Case law of the Court of Justice of the European UnionThe Rüffert case – the facts

••In Ruffert, the compatibility of a Lower Saxony, a German Bundesland, law with Art. 56 TFEU was an issue.

••The law, dealing with the award of public contracts, prescribed that1) contractors are required to agree not only ‘to pay workers deployed on the contract a minimum level of pay’ but also to impose this obligation on their sub-contractors; 2) the minimum level of pay was to be determined according to a collective agreement applicable in the particular geographical area; and3) introduced the imposition of a contractual penalty (up to 10 % of the contract’s value) in cases of culpable breach.

••In the present case, the company – Objekt und Bauregie – won the contract for building works and engaged a Polish company as sub-contractor. The contract between the state authority and Objekt und Bauregie contained an agreement as prescribed in the Lower Saxony law.

••The Polish sub-contractor paid its workforce lower wages than required by the applicable collective agreement.

••This led the state of Lower Saxony as well as Objekt und Bauregie terminate their respective contracts.

The facts


19. May 2017

Case law of the Court of Justice of the European UnionThe Rüffert case – the legal issues (1)

•• The Court held that the wage level set out in the relevant collective agreement, the Lower Saxony law referred to in its § 3 I 1, was not a wage level prescribed by law or generally applicable collective agreement according to Art. 3 (1), 8 second indent PWD.

•• Art. 3 (1) PWD was held to be exhaustively implemented by the German Posted Workers Act (Arbeitnehmerentsendegesetz - AEntG), the relevant collective agreement not being a generally applicable one according to § 1 I 1 Nr. 1 AEntG.

The legal source

•• The Court held that § 3 I 1 of the Lower Saxony law does not constitute working conditions more favourable to workers according to Art. 3 (7) PWD. The Court arguing that if Art. 3 (7) PWD would be applied to this particular situation, it would lose its practical effectiveness.

A case of Art. 3 (7) PWD?


19. May 2017


•• According to Davies, ‘its particular point of interest is the tight relationship the Court finds between what Member States are required to provide by way of mandatory terms and conditions of employment for temporary workers under Directive 96/71/EC (the Posted Workers Directive) and the restrictions on cross-border service provision which they can justify under Article 49 as being for the protection of workers’.

•• The Court’s conclusion seems to be that the PWD exhaustively sets out which standards can be justified under Art. 56 TFEU on the worker protection ground, that higher standards are restrictions of the freedom to provide services as they are not required by the Directive.

•• The Court states in paragraph 35 of its judgment that its interpretation ‘is confirmed by reading [the Directive] in the light of Art. 49 EC [now Art. 56 TFEU], since that directive seeks in particular to bring about the freedom to provide services, which is one of the fundamental freedoms guaranteed by the Treaty’.

Relationship between Art. 56 TFEU and Art. 3 PWD


19. May 2017


•• Is it appropriate to use the PWD to determine the scope of justification under Art. 56 TFEU?

•• Preliminary question: What is the purpose/ the rationale of the requirement set out in Art. 3 PWD?

•• Three possible rationales:1) the so-called social dumping rationale – the protection of host state workers from competition from the workers from home states with lower labour costs and protection; 2) the protection of posted workers by improving their conditions of employment; 3) the promotion of cross-border services.

•• The Court appears to follow the third rationale, being supported by the legal basis (Art. 53 (1) and 62 TFEU).

•• One might wonder ‘how subjecting posted workers to more costly terms and conditions than would be applicable under the home state rules promoted the freedom of their employers to provide cross-border services into the host state’.

•• The solution being the Rome Convention with its mandatory requirements-provision that allowed the host state to apply parts of its national labour law to posted workers combined with the PWD that harmonized the list of mandatory requirements.

The rationale of Art. 3 PWD and its meaning in relation to Art. 56 TFEU


19. May 2017

Case law of the Court of Justice of the European UnionThe Commission v. Luxembourg case – the facts


••In Commission v. Luxembourg, the Commission initiated proceedings because the Luxembourgish law transposing the PWD diverged from the requirements set out therein.

••First, the catalogue of core labour law provisions was broader –it contained rules on the written contract of employment or document established pursuant to Directive 91/533/EEC (employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship), indexation of minimum rates of pay, rules on part- time and fixed-term work, rules on collective agreements.

••Second, the law required a list of information to be provided in advance as well as an obligation to retain the documents necessary for monitoring purposes with an ad hoc agent residing in Luxembourg.

••Three of the Commission’s four complaints related to these additional requirements; the fourth concerned an incomplete transposition of Art. 3 (1) (a) PWD.

The facts

19. May 2017

Case law of the Court of Justice of the European Union The Commission v. Luxembourg case – the legal issues (1)

•• Luxembourg had only started the implementation of Art. 3 (1) (a) PWD after the initiation of proceedings. This could not be taken into account, as a subsequent change is not legally relevant.

Implementation of Art. 3 (1) (a) PWD

•• The monitoring scheme was not in conformity with Union law, as it ‘was not sufficiently clear to ensure legal certainty’.

Monitoring scheme

•• The duty to retain documents by a designate ad hoc agent residing in Luxembourg was found to be in breach because Luxembourg ‘did not submit specific evidence for the fact that only the retention by such an ad hoc agent’ would enable effective monitoring by the Luxembourgish authorities.

Ad Hoc Agent residing in Luxembourg


19. May 2017


•• The general approach:First, the judgment states that the catalogue of Art. 3 (1) PWD is exhaustive in nature, the requirements in Art. 3 (10) PWD, however, are not comprehensive.Second, the ‘public policy’ exception of Art. 3 (10) PWD has to be interpreted strictly ‘as it is a derogation from the fundamental principle of the freedom to provide services’.

•• Applied to the present case:- The requirement of a written contact or document established pursuant to Directive 91/533/EEC and the application of the Luxembourgish rules on part-time and fixed-term work were held to be contrary to Art. 3 (10) PWD, as these obligations were already imposed by Directive 91/533/EEC as well as Directives 97/81/EC and 1999/70/EC (thus being safeguarded through the rules of the employer’s country of establishment).

- In respect of the indexation of minimum pay rates as part of the list of core labour law provisions, Luxembourg failed to provide appropriate evidence to show that the indexation is necessary and proportionate to the objective of safeguarding public policy.

- The rule concerning collective agreements is contrary to Art. 3 (10) PWD, as this provision refers to collective agreements that are generally applicable only.

Additional requirements imposed by Luxembourgish law


19. May 2017


•• Luxembourg referred to Art. 9 (2) Rome I Regulation as well as Art. 3 (10) PWD for justification purposes.In a first step, it justified that it had declared most of its labour law provisions and collective agreements to be mandatory rules by relying to Art. 9 (2) Rome I Regulation.As the Court held that this would be in breach of the PWD and Art. 56 TFEU, Luxembourg referred to Art. 3 (10) PWD and the public policy exception contained therein.

•• This line of argument would support the view that the two provisions are coextensive.•• And the Court appears to have the same understanding, as it applies the same ‘test’ to Art.

3 (10) PWD usually used for Art. 9 (2) Rome I Regulation.•• Still, the Commission seems to take a different stand on the issue. In its Green Paper on

the Conversion of the Rome Convention it states that Art. 3 (1) PWD ‘determines a focal point of mandatory rules to be complied with throughout the period of assignment to the host Member State ... The Directive must therefore be regarded as an implementation of Art. 7 Rome Convention, concerning overriding mandatory rules’.

•• The doctrine of pre-emption might offers a solution – Because the Commission has chosen the matters listed in Art. 3 (1) PWD to be mandatory rules under Art. 9 (2) Rome I, the Member States cannot unilaterally rely on Art. 9 (2) Rome I and Art. 3 (10) PWD to impose additional requirements outside the scope of Art. 3 (1) PWD, except in ‘truly exceptional’ circumstances.

Relationship of Art. 9 (2) Rome I Regulation and Art. 3 (10) PWD


19. May 2017

Case law of the Court of Justice of the European UnionMain points of the judgments


Laval

•• Acknowledgment of the right to strike•• For justification (Art. 56 TFEU), the PWD has to be

complied with•• Next step would have been proportionality test

Rüffert

•• Art. 3 (10) has to be read in light of Art. 56 TFEU•• PWD exhaustively sets out which standards can be

justified under Art. 56 TFEU on the worker protection ground

Commission v.

Luxembourg

•• Art. 3 (10) PWD has to interpreted very strictly (‘almost out of existence’)

19. May 2017

Case law of the EFTA-CourtThe STX Norway Offshore AS and Others v. The Norwegian State case


••In STX Offshore AS212, the EFTA Court was asked to give an advisory opinion on the compatibility of regulations issued by the Norwegian Tariff Board based on the Norwegian Engineering Industry’s collective agreement for the maritime construction industry 2008-10 with the PWD and Art. 36 EEA Agreement (freedom to provide services).

The facts

••The three raised questions concerned the meaning of pay in Art. 3 (1) (c) PWD.

The legal issues

••Finding 1: The first issue was whether overtime rates constituted pay. The EFTA Court held that overtime rates were explicitly mentioned in Art. 3 (1) (c) PWD.217 However, these had to be minimum rates of pay for work outside maximum normal working hours and also be easily accessible and clear.

••Finding 2: The second question related to a posting allowance for assignments requiring overnight stays. The Court stated that it is up to the Member States to define rates of pay. The Court then named four conditions that have to be met for a posting allowance to be included in that definition: 1) it has to be a minimum, 2) it has to be expressly stated and transparent, 3) it has to be applied in a general and equal manner to all similar undertakings, 4) it must not be contrary to Art. 36 EEA (a justification being possible in cases of breaches).

••Finding 3: The third issue was whether the term ‘pay’ covered expenses for travel, board and lodging. The Court held that ‘the compensation was not pay because the amount varied depending on the costs involved’ and it does not fall under another head of Art. 3 (1) PWD.221 It might be covered by the public policy exception of Art. 3 (10) PWD – a matter for national courts to decide on

The findings

19. May 2017

Case law of the EFTA-CourtThe EFTA Surveillance Authority v. Iceland case


•• The EFTA Surveillance Authority initiated proceedings against Iceland arguing that Icelandic rules imposing an obligation on foreign undertakings that post workers to its territory to pay regular wages for sick leave and to take out accident insurance were in breach of the PWD.

The facts

•• The EFTA Court held that Art. 3 (1) PWD sets out an exhaustive list of terms and conditions of employment a host state might require foreign undertakings to observe.

•• Although this list contains the point of ‘minimum rates of pay, including overtime rates’, the Court stated that the sickness pay could not be subsumed under ‘minimum rates of pay’ because it is not set at a minimum rate, but rather corresponds to the regular wage the worker receives.

•• The obligation to take out accident insured was found to fall outside the scope of Art. 3 (1) PWD.

•• Both obligations could not be justified under the public policy exception of Art. 3 (10) PWD, Iceland failing to establish that these are ‘necessary to counteract a genuine and sufficiently serious threat to a fundamental interest of society’.

The findings

19. May 2017

German legislationThe Entsendegesetz – Background and aim

Background:••The German legislator adopted the German Posted

Workers Act already prior to the adoption of the Posted Workers Directive.

••The Act, however, needed re-adjustments after the Directive had been adopted and was thus subject to a number of amendments.

Aim:••When adopting the Act, the aim was primarily to ensure

fair competition between national businesses and those from other Member States in the construction industry.

••With the further extension to other sectors in 2007 and 2009, the aim of the Act was broadened as well. It is now aimed at ensuring fair competition while guaranteeing minimum working conditions not only for cases of posting but also for situations that have no cross-border dimension.


19. May 2017

German legislationThe Arbeitnehmer-Entsendegesetz – The structure of the Act

•• Legislative aim

Title 1

•• General working conditions

Title 2

•• Working conditions set by collective agreements

Title 3

•• Working conditions in the care sector

Title 4

•• Civil liability and enforcement

Title 5

•• Control and enforcement by public authorities

Title 6

•• Final provisions

Title 7


19. May 2017

German legislationThe Arbeitnehmer-Entsendegesetz – The core provisions (1)

•• Minimum wage levels:Act on the Minimum Wage (MiLoG); state laws on public procurement

•• Minimum period of holiday:§§ 3 and 11 of the Federal Act on Holidays (BUrlG) and § 125 of the Social Code IX (SGB IX)

•• Maximum working time and minimum rest time:Working Time Act (ArbZG) and Federal Act regarding closing hours for shops (LadenSchlG)

•• Temporary Agency Work:Act on Temporary Agency Work (AÜG)

•• Labour Protection / Occupational Health and Safety

•• Specific protection:Maternity Protection Act (MuSchG), Young Persons (Protection of Employment) Act (JArbSchG)

•• Anti-discrimination:General Act on Equal Treatment (AGG)

Working conditions under § 2 of the Posted Workers Act – applicable acts


19. May 2017

German legislationThe Arbeitnehmer-Entsendegesetz – The core provisions (2)


•• Minimum wage levels•• Duration of holidays, holiday pay, additional holiday allowance•• Contributions to holiday allowance funds•• Other working conditions (in conjunction with § 2 of the Act)

Working conditions under § 5 of the Posted Workers Act – collective agreements

19. May 2017

German legislationRecent discussions in legal literature

Since 2015, Germany has a statutory minimum wage, which was set at 8,50 Euros at that time.

As a consequence, if a collective agreement sets a lower minimum wage, the statutory minimum wage prevails.

Subsequent to the amendment of the Posted Workers Act in 2009, a discussion arose on the constitutionality of giving priority to the state enforced minimum wage over wage levels determined by collective agreements, without including in the law the possibility to deviate from statutory law by way of collective agreement.


19. May 2017

Conclusion

•• The Laval quartet appears to indicate focus on economic freedoms.The justification of laws on worker protection being made subject to strict requirements.

•• The Enforcement Directive provides for stricter enforcement, but does not touch on the material content of the Posted Workers Directive, thus not changing the level of protection standards.The recent proposal does, but it remains to be seen whether it will succeed.

•• For now, one might wonder whether a fair balance has been achieved in the posting context.

The broader perspective –The balancing of economic and social rights in the European Union


19. May 2017

References (selection)

Barnard C, ‘More Posting’ (2014) 43 Industrial Law Journal 194 Barnard C, ‘The UK and Posted Workers: The Effect of Commission v Luxembourg on the Territorial Application of British

Labour Law Case C-319/06 Commission v Luxembourg, Judgment 19 June 2008’ (2009) 38 Industrial Law Journal 122

Barnard C, EU Employment Law (4th edn, Oxford University Press 2012) Countouris N and Engblom S, ‘Civilising the European Posted Workers Directive’ in Mark Freedland and Jeremias Prassl

(eds), Viking, Laval and Beyond (Hart Publishing 2014) Davies ACL, ‘One Step Forward, Two Steps Back? The Viking and Laval Cases in the ECJ’ (2008) 37 Industrial Law

Journal 126 Davies P, ‘Case C-346/06, Ruffert v Land Niedersachsen [2008] IRLR 467 (ECJ)’ (2008) 37 Industrial Law Journal 293 Kilpatrick C, ‘Laval’s Regulatory Conundrum: Collective Standard-Setting and the Court’s New Approach to Posted

Workers’ (2009) 34 European Law Review 844 Krebber S, ‘Case C-319/06, Commission v. Luxembourg, Judgment of the Court (First Chamber) of 19 June 2008, [2008]

ECR I-4323’ (2009) 46 Common Market Law Review 1725 Rocca M, Posting of Workers and Collective Labour Law: There and Back Again – Between Internal Market and

Fundamental Rights (1st edn, Social Europe Series 33, Intersentia 2015) Ronnmar M, ‘Laval return to Sweden: The Final Judgment of the Swedish Labour Court and Swedish Legislative Reforms’

(2010) 39 (3) Industrial Law Journal 280


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References (selection)

Seifert A, ‘Die vergaberechtliche Tariftreuepflicht vor dem Europaischen Gerichtshof – Urteil des Europaischen Gerichtshofs vom 3.4.2008 – Rechtssache Ruffert’ (2008) 1 Europaische Zeitschrift fur Arbeitsrecht 526

Van Hoek A, ‘Private International Law: An Appropriate Means to Regulate Transnational Employment in the European Union?’ (2014) 7 Erasmus Law Review 157

Weatherill S, ‘Viking and Laval: The EU Internal Market Perspective’ in Mark Freedland and Jeremias Prassl (eds), Viking, Laval and Beyond (Hart Publishing 2014)


19. May 2017

Thank you very much for your attention


nova law school, university of lisbon julia beckmann… · nova law school, university of lisbon...

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