Documents considered by the Committee on 13 December 2017 Contents

7Mobility Package: Social Pillar

Committee’s assessment

Politically important

Committee’s decision

(a) Not cleared from scrutiny; further information requested (b) Not cleared from scrutiny; further information requested (c) Cleared

Document details

(a) Proposal for a Regulation amending Regulation EC 561/2006 as regards minimum requirements on maximum daily and weekly driving times, minimum breaks and daily and weekly rest periods and Regulation EC 165/2014 as regards positioning by means of tachographs; (b) Proposal for a Directive amending Directive 2006/22/EC as regards enforcement requirements and laying down specific rules with respect to Directive 96/71/EC and Directive 2014/67/EU for posting drivers in the road transport sector; (c) Consultation Document: first phase consultation of the Social Partners under Article 154 of TFEU on a possible revision of the Road Transport Working Time Directive (Directive 2002/15/EC)

Legal base

(a) and (b) Article 91(1) TFEU; ordinary legislative procedure; QMV (c) Article 154 TFEU

Department

Transport

Document Numbers

(a) (38783), 9670/17 + ADDs 1–5, COM(17) 277; (b) (38784), 9671/17 + ADDs 1–5, COM(17) 278; (c) (38814),—, C(17) 3815

Summary and Committee’s conclusions

7.1The EU’s ‘social rules’ on the conditions for ‘mobile workers’ (drivers) in the road transport sector are, according to the Commission, out of date and difficult to enforce. The two legislative proposals considered here are part of the Mobility Package on transport, which we have been considering over the past weeks.

7.2Increased competition in the road haulage sector following successive EU enlargements has led to downward pressures on profits and wages and an accompanying rise in illegal practices by companies seeking to circumvent EU rules.

7.3The different perspectives of transport operators and other stakeholders in western European (the EU-15) and eastern European (the EU-13) Member States over existing provisions and the Commission’s proposals demonstrate the difficulty of legislating on this issue. These difficulties have been particularly apparent in our ongoing consideration of revisions to the Posting of Workers Directive.25

7.4The Parliamentary Under Secretary of State (Jesse Norman) tells us that the Government is currently looking at some of the potential downsides to the proposals on the Driving Time Regulation, with concerns focusing around the implications for driver fatigue and road safety of the additional flexibility around weekly rest times.

7.5The Government is supportive of the proposed changes to the Tachograph Regulation, and believes that the revisions will have positive enforcement benefits and require only minor technical changes to put into effect.

7.6The Commission’s proposals for specific enforcement rules relating to the working time of mobile workers attract some reservations from the Government. The Minister tells us that there are “practical reasons why it may be time-consuming to check the working time rules alongside the driving time rules”, and that the Government will be undertaking analysis to determine the scale of impact of this requirement.

7.7We would like the Minister to tell us what these “practical reasons” might be, and also to inform us in due course of the outcome of the analysis conducted. Does the Government believe that it would be more efficient and effective to conduct working time checks separately from driving time checks, and if so, why?

7.8We would also like to hear from the Government in due course on its assessment of the implications for driver fatigue and road safety of the proposals on the Driving Time Regulation. The Minister has told us that the proposed requirement for drivers to return home for their weekly rest at least once every three consecutive weeks could indirectly benefit British drivers “through reducing somewhat their exposure to competition from foreign drivers that spend many consecutive weeks (or even months) away from their home base”. Does the Government believe that the proposed Regulation strikes the right balance between improving working conditions for drivers and ensuring fair competition in the single market?

7.9The Minister informs us that while these proposals do not directly affect Member States’ positions on businesses from third countries (i.e. the UK post EU exit), the EU is likely to seek to amend a wider UN agreement on international road transport workers to which the UK is a contracting party.26 Is it the Government’s view that following UK exit, international agreements such as this one, negotiated under the aegis of the UN Economic Commission on Europe, will enable the UK to protect and promote its interests in this sector effectively?

7.10The application of EU social rules to the transport sector has already proved contentious in the context of related negotiations on the Posting of Workers Directive. We are scrutinising the separate proposal to revise that Directive and recently noted that the Government abstained on the General Approach due to the transport provisions. We are awaiting a clearer articulation of the Government’s concerns on that Directive.

7.11We would like the Government to respond to the questions we have raised here once it has completed its assessments and consultations. In the meantime, we retain the legislative proposals under scrutiny.

Full details of the documents

(a) Proposal for a Regulation amending Regulation EC 561/2006 as regards minimum requirements on maximum daily and weekly driving times, minimum breaks and daily and weekly rest periods and Regulation EC 165/2014 as regards positioning by means of tachographs: (38783), 9670/17 + ADDs 1–5, COM(17) 277; (b) Proposal for a Directive amending Directive 2006/22/EC as regards enforcement requirements and laying down specific rules with respect to Directive 96/71/EC and Directive 2014/67/EU for posting drivers in the road transport sector: (38784), 9671/17 + ADDs 1–5, COM(17) 278; (c) Consultation Document: first phase consultation of the Social Partners under Article 154 of TFEU on a possible revision of the Road Transport Working Time Directive (Directive 2002/15/EC): (38814),—, C(17) 3815.

Background

7.12There is an extensive set of EU ‘social rules’ in place for road haulage operators and road passenger transport operators. These seek to improve working conditions for ‘road transport mobile workers’, enhance road safety for all road users, and ensure fair competition between road transport operators in the single market. The rules apply to professional drivers (employed and self-employed) and to all transport undertakings engaged in the movement of goods by vehicles weighing over 3.5 tonnes or in the transportation of passengers in vehicles for over nine people.

7.13The main social rules for transport are set out in Regulation (EC) 561/2006 (the Driving Time Regulation) and Directive 2002/15/EC (the Road Transport Working Time Directive). Enforcement provisions are set out in Directive 2006/22/EC (the Enforcement Directive) and Regulation (EU)165/2014 (Tachograph Regulation).

7.14The Commission, in its explanatory memorandum, notes that road transport social rules are closely linked to internal market rules on access to the occupation of road transport operator, access to the international road haulage market and access to the international passenger road transport market. In addition, the Commission notes the applicability of Directive 96/71/EC (Posting of Workers Directive), which applies to all transport sectors whenever the conditions for a posting situation are fulfilled.

7.15The Commission’s evaluation of existing road transport social legislation, conducted from 2015 to 2017, concluded that:

“The legislation remains a relevant tool, but it is only partially effective in improving working conditions of drivers and ensuring fair competition between operators….The insufficient effectiveness and efficiency of the social legislation is mainly due to unclear and unsuitable rules, diverging national interpretations and application of the rules, inconsistent and ineffective enforcement practices and a lack of administrative cooperation.”

7.16Since the legislation in question came in to effect, significant market changes have taken place, precipitated by the global economic downturn in 2007 to 2008, and the Eurozone crisis in 2009. The Commission notes that the road transport market has always been highly competitive and price-sensitive, and is dominated by a large number of small companies and owner-operators. These firms “tend to compete mainly on price, with labour costs being a key determinant”.

7.17The EU enlargements of 2004 and 2007 (the EU-13) led to increased competition in the sector and downward pressures on profits and wages. Lower labour costs in those Member States have led to practices such as letterbox companies, illegal cabotage and other illicit employment arrangements by companies seeking to circumvent EU and national legislation. This practice, known as ‘social dumping,’ leads to a distortion of competition. The Commission has sought to address this challenge through other proposals in its Mobility Package.

7.18The competition faced by road transport operators in the EU-15 has resulted in some Member States taking unilateral, and in the Commission’s view—disproportionate—measures to apply posting rules to the road transport sector.

7.19These challenges have led to distortions of competition between road transport operators and persistent inadequate working conditions for drivers. In particular, the evaluation found that:

“There has been a continuous pattern of…infringements since 2007–2008, with the provisions on rest breaks and rest periods being breached most frequently, followed by infringements concerning driving times and driving time records.”

7.20Member States are not required to carry out regular checks on compliance with working time provisions, and national enforcement agencies told the Commission that infringement statistics are also unreliable indicators of compliance, due to “random, insufficient and ineffective checks as well as sophisticated manipulation techniques”.

7.21Road transport operators also face high regulatory costs from complying with existing road transport rules since Member States interpret, apply and enforce them in divergent ways. For instance, apart from the unilateral measures on national minimum wage referred to above, some Member States impose financial and even criminal penalties for drivers taking their weekly rest breaks in their vehicles. Other Member States do not prohibit this practice.

7.22The Commission observes that high regulatory costs of compliance with rules not only distort competition but also risk depriving drivers of their rights when working temporarily in another Member State, because there is a higher incentive for operators to circumvent the rules. It cites the example of eastern European drivers employed by eastern European companies, and paid eastern European-level wages despite working for several months in western Europe. These drivers typically lack access to adequate sleeping or toilet facilities, as their pay (which can be as low as 25% of the pay of a western European driver) is insufficient to meet the costs of spending prolonged periods of time in western Europe.

7.23The Commission’s impact assessment identifies the following deficiencies in the existing legal framework, which have contributed to a lack of effectiveness in the existing rules:

The Commission’s proposals

(a) Amendments to the Driving Time and Tachograph Regulations

7.24The Commission’s proposed amendments to these Regulations seek to simplify and adapt them to the changing needs of the sector. The proposed changes are set out below:

(b) Directive to amend rules on enforcement, and sector-specific rules on posting of workers in road transport sector

7.25The Commission’s proposal amends Directive 2002/15/EC (the Road Transport Directive). It also seeks to simplify and adapt rules of posting of workers to the specific needs of the transport sector. The main provisions of the proposed Directive are set out below:

(c) Consultation of the Social Partners under Article 154 TFEU on a possible revision of the Road Transport Working Time Directive (Directive 2002/15/EC)

7.26Article 154(2) TFEU requires that before submitting proposals relating to social policy, the Commission must consult management and labour on the possible direction of Union action.

7.27The Commission has accordingly set out in this first phase consultation document some considerations relating to the effectiveness of the Road Transport Working Time Directive, and asks social partners for their views. Following receipt of views, the Commission will decide whether action is required, and if so, it will launch a second-phase consultation. This would cover the content of any proposal for action.

7.28The provisions of the Road Transport Working Time Directive supplement the Driving Time Regulation, and takes precedence over the Working Time Directive, since it contains more specific provisions on workers in the road transport sector.

7.29The Commission notes that since the 2005 deadline for the transposition of the Road Transport Working Time Directive, there have been a number of significant changes relating to terms of employment and business arrangements in the sector. The increased internationalisation of transport operations, an increase in the number of operational bases, and the development of long sub-contracting chains have placed mobile workers under additional pressure and made it more difficult to monitor compliance with the Directive.

7.30The Commission summarises the findings of an evaluation of the Directive carried out in 2015 to 2017.

The Government’s Explanatory Memorandum of 5 July 2017

7.31Competence for legislating in the area of transport is shared between the EU and Member States. The Government states that:

“As the aim of the EU social legislation is to protect road safety, to ensure fair competition in the industry and to improve the working conditions of drivers at the European level, the Government agrees that action at the Union level is therefore justified.”

Amendments to Driving Time and Tachograph Regulations

7.32The Parliamentary Under Secretary of State (Jesse Norman), commenting on the proposed changes to the driving time and tachographs rules, states that

“The proposed additional flexibility around weekly rest times may provide operators with greater flexibility with respect to scheduling. However, there are also potential downsides in terms of driver welfare and we will need to explore the potential implications of the proposals on driver fatigue.”

7.33He notes that the proposed new obligation on transport operators to organise drivers’ work time so that they can return home for a weekly rest at least once every three weeks will probably benefit those drivers engaged in longer international journeys, although operators are likely to bear additional costs as a result. He adds that UK drivers are generally able to, and do, return home at weekends, and will therefore probably not be affected by the provision. The Government is considering the road safety implications of these amendments.

7.34The Minister adds that:

“There could, however, be an indirect benefit to British drivers through reducing somewhat their exposure to competition from foreign drivers that spend many consecutive weeks (or even months) away from their home base.”

7.35So far as the proposed changes to tachograph provisions are concerned, the Minister states that:

“[these] are expected to have positive enforcement benefits, and to only require minor technical change to put into effect.”

Directive to amend rules on enforcement, and sector-specific rules on posting of workers in road transport sector

7.36The Parliamentary Under Secretary of State expresses some reservations over the proposed obligation to require Member States to include checks on working time rules as part of roadside and premises checks, noting that there could be “material resource implications for the Driver and Vehicle Standards Agency (DVSA), which enforces the rules”.

7.37He adds:

“there are practical reasons why it may be time-consuming to check the working time rules alongside the driving time rules. Further analysis will be undertaken to understand the scale of the impact.”

7.38In addition, the Government believes that the provision requiring the Commission to establish a common formula for calculating the risk rating of undertakings could have implications for the way that the DVSA currently operates. However, it notes that this would depend on the eventual policy that is set out following the adoption of the Directive.

7.39The proposed amendments on better cooperation and exchange of data and information between Member States are not expected to affect enforcement capacity in the DVSA, and the Government is supportive of these provisions.

(c) Consultation of the Social Partners under Article 154 TFEU on a possible revision of the Road Transport Working Time Directive (Directive 2002/15/EC)

7.40As this is a consultation document, the Government notes that there are no direct policy implications for the UK at this stage.

General policy and cost implications for the UK

7.41The Parliamentary Under Secretary of State notes that as the Commission has already conducted targeted consultations as well as an open public consultation, the Government has no plans to issue a public consultation on the proposals. However, the Government will be consulting industry stakeholders with a view to informing the Government’s negotiating position in the EU exit talks.

7.42The Minister informs us that:

“The legislative proposals do not directly affect Member States positions with respect to businesses from third countries. However, based on numerous precedents, it is likely that, should the proposed changes to driving times be adopted, the EU would propose that the wider UN AETR27 agreement (to which the UK is a Contracting Party) should be amended to retain the alignment of the two sets of rules.”

7.43The Commission’s impact assessment identified eventual potential savings of around €785 million (approximately £722 million) a year to EU operators from reduced administration costs. UK transport operators could expect to see their administrative costs cut by 59% (over a period of 15 years).

7.44The Government notes that the Commission’s impact assessment identified small short-term increases in enforcement costs for authorities and compliance and administrative costs for operators. The Explanatory Memorandum states:

“As the proposals and the associated impact assessments begin to be discussed in working groups, we will consider whether it would be appropriate to also undertake a domestic Analysis Checklist.”

Previous Committee Reports

None.


25 Second Report, HC 301–ii (2017–19), Chapter 5 (22 November 2017)




15 December 2017