Third Report of Session 2013-14 - European Scrutiny Committee Contents


2   The posting of workers

(33787)

8040/12

+ ADDs 1-3

COM(12) 131

Draft Directive on the enforcement of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services

Legal baseArticles 53(1) and 62 TFEU; co-decision; QMV
DepartmentBusiness, Innovation and Skills
Basis of considerationMinister's letter of 14 May 2013
Previous Committee ReportsHC 86-xix (2012-13), chapter 7 (7 November 2012);

HC 86-i (2012-13), chapter 1 (9 May 2012);

HC 86-v (2012-13), chapter 4 (20 June 2012)

Discussion in Council20 June 2013
Committee's assessmentLegally and politically important
Committee's decisionNot cleared; further information requested

Background and previous scrutiny

2.1  In March 2012, the Commission proposed a draft Directive which seeks to improve the implementation and enforcement by Member States of a 1996 Directive establishing a legal framework for businesses to send ("post") workers from their home Member State to another (host) Member State in order to provide a service on a temporary basis. The draft Directive does not seek to amend the content of the 1996 Directive, but includes provisions which are intended to:

  • help identify "letter-box" companies that use posting as a means of circumventing the application of employment or social security rules;
  • improve access to information on the core terms and conditions of employment (including any minimum wage requirement) applicable to posted workers in the host State;
  • strengthen administrative cooperation and mutual assistance between national authorities responsible for monitoring the application and enforcement of the 1996 Directive; and
  • provide effective mechanisms for workers to lodge complaints and bring proceedings in their host or home Member State and, in the case of construction workers, to recover unpaid wages from their posting employer or the host State contractor by means of joint and several liability.

2.2  Our First Report of the 2012-13 session, agreed on 9 May 2012, provides a detailed overview of the draft Directive and the Government's position.

2.3  We thought that improving the provision of information on the terms and conditions of employment applicable to posted workers would make it easier for businesses to compete within the internal market, help to expose abusive practices, and strengthen the protection of core employment rights. However, we shared the Government's concern that the evidence base for further regulatory intervention at EU level was weak, with many of the difficulties cited by the Commission as a justification for EU action being based largely on anecdotal reports. In particular, the Government questioned whether there was sufficient evidence to support the introduction of joint and several liability in the construction sector, which would require a change to UK law, and suggested that Member States should determine how to enforce the 1996 Directive in line with their own methods for enforcing labour laws.

2.4  The Government's consultation of stakeholders, summarised in our 19th Report of the 2012-13 session, revealed broad support for provisions in the draft Directive clarifying what constitutes a posting and requiring information on applicable working conditions to be made widely available, as well as sharp differences of opinion on provisions dealing with the enforcement of the rights of posted workers, including the introduction of joint and several liability within the construction sector (Articles 11 and 12), and national control measures which Member States may apply to ensure that service providers posting workers to their territory comply with the 1996 Directive (Article 9). We asked the Government to explain how these differences of opinion would influence its negotiating position and to provide progress reports on the negotiations.

The Minister's letter of 14 May 2013

2.5  The Minister for Employment Relations and Consumer Affairs (Jo Swinson) anticipates that the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council may reach a general approach on the draft Directive at its meeting on 20 June. She describes the Government's negotiating priorities and the progress made so far.

"Our priorities in negotiations are to avoid the imposition of a requirement that all Member States must introduce a system of joint and several liability in the construction sector for posted workers (which would make contractors responsible if their sub-contractors do not correctly pay posted workers) and to ensure that there is an appropriate balance in the permitted national control measures which Member States can impose on businesses seeking to provide services in their territory. These Articles, 12 and 9 respectively, have remained the most difficult to agree in negotiations thus far with strong positions held in Council.

"Our position on the draft directive has reflected our concern that any measures which are agreed should not create hurdles to the Single Market. HMG agrees that Member States should help ensure that posted workers benefit from the protections set out in the Posting of Workers Directive, in particular that there should be mechanisms which ensure workers are able to receive outstanding remuneration. Article 11 of the proposed Directive does this. However, the imposition of a mandatory system of joint and several liability in Article 12 is not the appropriate approach. We do not agree that the same enforcement mechanism should be prescribed for all Member States. Member States which have chosen to introduce joint and several liability should be free to maintain those systems but we believe that Member States should be given the flexibility to decide how best to enforce this objective, in line with what works best for their country.

"On national control measures, [...] a considerable body of European Court of Justice case law has developed to assess the national control measures which Member States can put in place. This strikes a delicate balance in permitting mechanisms to enable enforcement and protect workers whilst still ensuring businesses are fully able to exercise their freedom to provide services and make full use of the Single Market, and is well reflected in the Commission's proposal. I believe it is important to ensure we retain that balance."

2.6  The Minister indicates that there is a greater degree of agreement on other provisions of the draft Directive which seek to protect vulnerable workers and ensure fair competition for businesses. She continues:

"These include increasing awareness of rights and responsibilities for workers and businesses (Article 5), improving exchange of information between Member States to support enforcement (Article 6), requiring mechanisms to support workers in enforcing their rights (Article 11) and ensuring there is a system to enforce these rights across borders (Chapter VI)."

2.7  Given the difficulties encountered in negotiations on Articles 9 and 12 of the draft Directive concerning national control measures and joint and several liability, the Minister considers that the Presidency's timetable for agreeing a general approach in June may be ambitious. She adds:

"I consider that it is important for us to agree upon the right Directive, one that respects the underlying principles of Union law such as the freedom to provide services, rather than to agree something quickly. Nevertheless, the Presidency is pushing forward to identify a compromise and it is possible that an agreement could be reached which would pave the way for a general approach in June. I will write to you again should this appear to be the case, but as negotiations may move swiftly at that point I wanted to update you on progress in advance."

Conclusion

2.8  We thank the Minister for her letter and welcome her undertaking to write to us again with details of any compromise proposal put forward by the Presidency to secure a general approach at the June EPSCO Council. We ask the Minister to provide us with a copy of the text which will form the basis for the general approach or to provide full details in her letter of any changes to the Commission's original proposal and their impact for the UK. Meanwhile, the draft Directive remains under scrutiny.



 
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