From the TUC

MEPs should call halt to shoddy compromise on posted workers

14 Mar 2014, by in International

TUC General Secretary Frances O’Grady has written to MEPs urging them to put off the adoption of the draft Posted Workers Enforcement Directive because it doesn’t address the problems with the Posting of Workers Directive that it was meant to solve. This is crucial to ensuring that the free movement of labour around Europe does not result in exploitation and undercutting, and it was highlighted by Labour Leader Ed Miliband in his speech about Europe on Wednesday.

The 1996 Posting of Workers Directive was designed to ensure that, when people moved around the EU to work for their employer, they got a fair rate of pay for the country where they worked, making sure that they weren’t exploited and the local labour force wasn’t undercut. But in countries like Britain, where the only legal floor to wages is the National Minimum Wage, the Directive provided very little protection. And even in other countries with stronger collective bargaining arrangements at sectoral level, the Directive proved problematic.

Unions therefore pressed for action to restore the principles underpinning the Posting of Workers Directive and to make it more enforceable. The eventual response has been the draft Posted Workers Enforcement Directive (PWED) which has been considered by the Council of Ministers, the European Parliament and the European Commission over the past few years. Next week, a compromise text based on all three institution’s views will be debated in the Employment Committee of the European Parliament, which will pass the result to the Parliament as a whole (‘the plenary’). But the compromise text has a number of flaws, from a trade union perspective.

First, Article 3 of PWED will not prevent employers from devising bogus self-employment arrangements to avoid employment protections for posted workers.  In the UK, the problem of false self-employment is now prevalent amongst migrant and posted workers in the construction sector.  The draft Directive will not address this issue or deter the spread of such practices to other parts of the UK labour market.

Secondly, Article 9 of the draft Directive limits the range of control measures which Member States may adopt to monitor the flow and working conditions of posted workers in their own countries. Whilst it envisages an ‘open list’ approach, permitting Member States to adopt additional measures not specified in the draft Directive, we do not agree that control measures should be subject to a proportionality test supervised by the Commission. The UK government has argued that Member States’ discretion to set their own control measures should be limited, to stop them being used for protectionist purposes. The TUC disagrees with this approach as it will weaken the enforcement of posted workers’ rights and lead to migrant workers being used to undercut pay and conditions of the existing workforce.

Thirdly, the rules relating subcontracting liability contained in Article 12 are too weak and will provide inadequate protection for posted workers. The draft Directive proposes that the main contractor should be liable if the first or main sub-contractor fails to comply with posted workers’ rights.  But these provisions are largely optional for Member States, and contractors can avoid liability if they can demonstrate ‘due diligence’.

The TUC believes that the introduction of joint and several liability should be mandatory and that the rules should extend to all sectors.  This is the best way of achieving a level playing field and fair competition for businesses across the EU.  We also believe that joint and several liability should apply throughout the supply chain. For example, in the construction sector it is not uncommon for numerous contractors to be involved in the supply of workers.  If the joint and several liability rules only apply to the main sub-contractor means they are likely to have limited effect.

This may sound like a highly technical discussion – and it is! But it has huge implications for the working conditions and wages of millions of workers across the EU, whether migrants or existing workers. And it is at the heart of how to make sure that free movement of labour works without a race to the bottom.