Is the wider implementation of equal pay to posted workers a good step?

One of hot topics concerning EU law reform in recent months is posting of workers. It became a bone of contention between the “old” EU members and “new” EU members. Soon, it may face significant changes.
 
Posting of workers stands for short-term working for the benefit of an entrepreneur in one Member State by an employee of an employer from another Member State. Workers posting is usually organized in one of the following manners:
 

• an undertaking in the EU provides services to an undertaking in the territory of another Member State by work of its workers on its own account and under its direction,
   
• an undertaking in the EU sends its workers to an establishment or to an undertaking belonging to the same capital group in the territory of another Member State,
   
• a temporary employment or placement agency in the EU hires out its worker to a user undertaking in the territory of another Member State.

 
For example, a French shipyard can use the services of a temporary employment undertaking which hires out Polish welders for 3-month contracts. Another example can be posting a worker by its employer to another EU undertaking abroad under the agreement on provision of services between them.
 
Although it may seem that posting of workers is not really significant issue (in 2014, posted workers amounted to only 0.7 per cent of total employment within the EU), this method of providing work and services is dynamically developing. Moreover, recently posting of workers has been rising controversy and became the first area for a new legislative offensive of Brussels with regard to employment law.
 
Such solutions connected with the free movement of persons and services within the EU allow entrepreneurs, in particular those in Western Europe, to save money while using the services of reliable workers from the “new” Member States on good terms. The controversy arose due to objections from Western European worker associations and trade unions in the face of some cases of abuse while posting workers, in particular in construction and installation works.
 
Because of that, the European Commission came out with an initiative to change the Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (the Posting Directive). The proposed amendments aim at enforcing equal treatment of foreign and domestic EU workers as far as possible. Some of the Member States and employer associations tried to convince the EU to wait with the changes until the assessment of effects of the recently implemented Directive 2014/67/EU, enforcing the Posting Directive, is completed and opposed material amendments in the nearest future.
 
France and other “old” Member States are the main proponents of amending the Posting Directive in order to limit the freedom of workers posting and to fully align terms of employment for workers from other EU countries with the local ones. At the same time, Poland and other Central European countries oppose these changes as a threat to freedom of movement of persons and services in particular in transportation and construction sector.
 
In October 2017, the Council of the European Union assessed positively the motion of the Commission to amend the Posting Directive, in majority compatible with the French position. The Council proposed the European Parliament the changes proposed by the Commission, adding some modifications of its own. The main proposals are as follows:
 

• posted workers will have the terms of employment in accordance with laws of the Member State in which they perform work not only with regard to minimum salary but also with respect to other elements of remuneration, including bonuses, diets, remuneration for working overtime etc.,
   
• posted workers will be provided with equal terms like local workers also with regard to health and safety at work, maximum working periods, minimum resting periods and conditions of accommodation,
   
• if a worker is posted for a long term (i.e. more than 12 or 24 months), also all the remaining terms (beside those mentioned above) will be in accordance with the laws of the Member State in which the worker performs work while it is favourable for him or her,
   
• the rules on employment determined in laws and collective labour agreements which are generally applicable in the Member State in which a posted worker performs work will be applicable to posted workers in all sectors,
   
• posted workers hired by temporary employment agencies from abroad will be treated equally with workers hired by local agencies,
   
• the Member States will be obliged to indicate in their law precisely all the elements of remuneration to provide the employers with clear picture how to establish proper terms of remuneration.

 
The changes as proposed by the Commission and the Council appear to impose excessive limitations on entrepreneurs and their possibility to hire posted workers on terms less favourable than local but still better than in their country of origin.
 
The Commission’s proposal is not good for the EU as a whole because it would bring a significant increase of costs leading to a decrease of competitiveness of the EU’s economy and slow again its development. European employers would have to spend more on their employees instead of competing on quality with cheaper producers from outside the EU.
 
Although the legislative process in the Parliament will take time and the amended Posting Directive will be binding after a 3-year transitional period, the direction of EU authorities’ actions appear to be fixed. The strive for harmonisation of broadly defined employment law may be inevitable despite the ongoing dialogue between the Member States. As long as the process continues, however, there is a hope that the negotiated amendments still may be changed in the spirit of freedom of market.