Schrauwen, A.

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International Migration, Integration and Social Cohesion online publications

UvA-DARE is a service provided by the library of the University of Amsterdam (https://dare.uva.nl)UvA-DARE (Digital Academic Repository)From the Board: Towards a Social Europe?Schrauwen, A.Publication date2018Document VersionFinal published versionPublished inLegal Issues of Economic IntegrationLicenseOtherLink to publicationCitation for published version (APA):Schrauwen, A. (2018). From the Board: Towards a Social Europe? Legal Issues of EconomicIntegration, 45(4), 323-328.http://www.kluwerlawonline.com/abstract.php?area=Journals&id=LEIE2018019General rightsIt is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s)and/or copyright holder(s), other than for strictly personal, individual use, unless the work is under an opencontent license (like Creative Commons).Disclaimer/Complaints regulationsIf you believe that digital publication of certain material infringes any of your rights or (privacy) interests, pleaselet the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the materialinaccessible and/or remove it from the website. Please Ask the Library: https://uba.uva.nl/en/contact, or a letterto: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. Youwill be contacted as soon as possible.Download date:09 Mar 2023From the Board: Towards a Social Europe?At the end of June 2018, just before the summer break, EU Member States’ministers of social affairs and employment reached an agreement on a Councilposition in three legislative documents that should contribute to a more socialEurope. These documents include a revision of the coordination of socialsecurity systems, a draft directive on work-life balance, and a draft directiveon transparent and predictable working conditions.1 Together with the adop-tion of the revision of the posting of workers directive (PWD) at the sameCouncil meeting,2 the Council positions symbolize the efforts the EU ismaking to address one of the sources of discontent that played a major rolein the political debates in the run-up to the Brexit referendum: (perceived)unfair competition and displacement on the labour market caused by freemovement of labour, especially since the 2004 enlargement of the EuropeanUnion, and the role of the EU in requiring the weakening of social andlabour rights during the sovereign debt crisis. While the UK White Paper onthe future relationship between the United Kingdom and the EuropeanUnion leaves no doubt as to ending free movement once the UK leaves theEU,3 extensive analysis of the Brexit vote has shown that there are personaldetermining factors making it harder to deal with economic and social changesuch as education level, age, and impact of austerity measures on one’ssituation, and they are more indicative of the leave vote than the numberof migrants from Eastern Europe.4 In this perspective, the November 2017solemn proclamation of the European Pillar of Social Rights (EPSR or SocialPillar), focusing on equal opportunities and equal access to the labour market,fair working conditions and social protection and inclusion, seems a goodstrategy to prevent other Member States from following the Brexit route. The‘From the Board: Towards a Social Europe?’. Legal Issues of Economic Integration 45, no. 4 (2018): 323–328.© 2018 Kluwer Law International BV, The Netherlands1 Respectively COM(2016)815 final of 13 Dec. 2016, COM(2017)253 final of 26 Apr. 2017 and COM(2017) 797 final of 21 Dec. 2017.2 Directive 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive96/71/EC concerning the posting of workers in the framework of the provision of services, OJEUL173/16 of 9 July 2018.3 The Future Relationship Between the United Kingdom and the European Union Cm 9593, points 4.1.1 and4.1.2 (July 2018), https://www.gov.uk/government/publications/the-future-relationship-between-the-united-kingdom-and-the-european-union (accessed 8 Sept. 2018).4 Sascha O. Becker, Thiemo Fetzer & Dennis Novy,Who Voted for Brexit? A Comprehensive District-LevelAnalysis, CESifor Working Papers 6438/2017 (Apr. 2017), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2976254 (accessed 8 Sept. 2018).EPSR contains twenty principles reaffirming existing EU social rights and‘addressing challenges arising from societal, technological and economicdevelopments’.5The Social Pillar was initiated by the Juncker Commission as part of a responseto broader populist challenges to the EU.6 It was also seen as a ‘cautious but steadyparadigm shift, away from austerity’, at least within the Commission.7 The rationalebehind the initiative is to withstand the ‘legacy of the crisis’,8 notably the idea that as aconsequence of the crisis more people feel left behind or wronged by globalization,Europeanization and the rapid changes taking place in the world of work. Theyworry about life prospects, unemployment, growing inequalities and lack of oppor-tunities. The analysis of the Brexit vote cited above confirms that this legacy of thecrisis does exist. Furthermore, as others have remarked, the legacy of the crisis playsinto an East-West andNorth-South divide.9 The East-West divide shows itself in thecontext of labour migration, where citizens in theWest worry about free movementof persons that results in unfair competition on remuneration and labour conditions,and citizens from the East see labour mobility as one of the attractive elements ofmembership of the EU. The North-South divide resulted from the sovereign debtcrisis, where citizens of Member States in the North worried that ‘their’ taxpayers’money was used in credit arrangements for Member States in the South and wherecitizens from Member States in the South worried about the harsh fiscal conditionsand the downgrading of national welfare provisions they were confronted with andthat accompanied the credit arrangements.The Council agreement of 28 June on the draft directives may be seen as a firstsmall step in transforming the principles of the Social Pillar into concrete measures.The legislative documents on which the Council reached agreement have in com-mon that they aim at social protection on the labour market, but their aim and scopeis different. While the draft directives on work-life balance and on transparent andpredictable working conditions apply to ‘every worker within the EU’, and in theirpreamble refer to both the EU Charter of Fundamental Rights and the European5 Recital 14 to the preamble, EPSR, https://ec.europa.eu/commission/publications/european-pillar-social-rights-booklet_en (accessed 8 Sept. 2018).6 Preamble of the EPSR (n. 5), recital 7 refers to the EPSR as enabling ‘support for the Europeanconstruction’. See also C. Kilpatrick, The Displacement of Social Europe: A Productive Lens of Inquiry, 14EU Const. 66, 62–74 (2018).7 F. Vandenbroucke, From the Gothenburg Social Summit to a European Social Union, Soc. Eur. J. (17 Nov.2017), https://www.socialeurope.eu/gothenburg-social-summit-european-social-union (accessed 8Sept. 2018); cf. S. Deakin, What Follows Austerity? From Social Pillar to New Deal, in A European SocialUnion After the Crisis 194, 192–210 (F. Vandenbroucke, C. Barnard & G. de Baere eds, CUP 2017).8 Communication from the Commission to the European Parliament, the Council, the EuropeanEconomic and Social Committee and the Committee of the Regions, Establishing a European Pillar ofSocial Rights, COM(2017)250 final of 26 Apr. 2017, at 3.9 S. Garben,The European Pillar of Social Rights: Effectively Addressing Displacement?, 14 EUConst. 212–213,210–230 (2018).324 LEGAL ISSUES OF ECONOMIC INTEGRATIONPillar of Social Rights, the revision of the Social Coordination Regulation and theadoption of the revision of the PWD aim at cross-border labour and find their legalbasis and ratio in the internal market. Revision of the PWD in particular wasdemanded by a number of Member States, among which was the UK, with a viewto prevent ‘unfair’ competition and to meet the concerns of those feeling left behind.The adoption of the revised PWD is formally not part of the Social Pillar, but theunderlying aim to promote ‘equal pay for equal work’ matches the language of theSocial Pillar. At the same time, the East-West divide could not be ignored during therevision. It makes it interesting to see how the revision tries to accommodate rights ofposted workers, freedom of services provision and protection of local workers againstcompetition on wages and labour conditions, and how it tries to take into accountboth the social interests of the ‘old’ Member States in the West and the ‘new’Member States in the East. Before taking a closer look at the adopted text, I brieflyrecall the main positions in the debate on posting of workers, to sketch the dividebetween the market and the social, and between the ‘old’ and ‘new’Member Statesthat forms a common thread running through the posted workers saga. Of course,my overview is far from comprehensive but serves to illustrate that provoking aparadigm shift towards a more social EU is far from easy.In the well-known Laval case10 the divide between old and new Member States,with ‘old’Member States aiming to protect both their autonomy in organizing labourlaw and national social welfare systems and their national labour market, and ‘new’Member States aiming to get access to the markets of the ‘old’Member States for theirservice providers, became very clear. In this case, trade unions in Sweden blockedconstruction sites in order to force a Latvian service provider to sign a collectiveagreement for the building sector that would have resulted in higher pay for the postedworkers but at the same time would have made the service provision far less compe-titive and consequently market access more difficult. The Court accepted that collec-tive action could protect Swedish workers against social dumping and, in principle,could be considered an overriding reason of public interest justifying a hindrance tofree movement. However, in Sweden the labour standards were negotiated on a case-by-case basis and therefore it would not be possible for the service provider to know itsobligations in advance.11 Hence, the hindrance to free movement caused by thecollective action was not justified. Furthermore, the Court ruled that service provisioncould not be made conditional upon observance of terms and conditions of employ-ment that go beyond the mandatory rules for minimum protection as laid down in thePWD.12 The case has been criticized for giving too much weight to ‘the market’ as10 Case C-341/05, Laval un Partneri, ECLI:EU:C:2007:809.11 Ibid., para. 99.12 Ibid., para. 80.TOWARDS A SOCIAL EUROPE? 325opposed to ‘the social’. The arguments of the parties and the intervening MemberStates in this case and subsequent cases on the PWD however hardly ever focused onthe protection of the rights of the posted workers.13 Instead the arguments of theprotection of national labour law, protection of collective actions as a fundamentalright and protection of the national labour market against social dumping on the onehand, were opposed to those of broad access to the market under free movement ofservices and of the idea that alignment of wages across Member States should come as aconsequence of further economic development.14 The Finnish Electrical Workers Unionforms an exception in the line of cases on the PWD, as the Finnish trade union in thatcase was representing the posted workers involved.15As stated above, the targeted revision of the PWD was pleaded in a letter to theCommission from nine Member States from Northwest Europe.16 The subsequentproposal for revision however was subject to a yellow card procedure in whichparliamentary chambers, mostly from ‘new’ Member States, opposed the revisionbecause it would go against the idea of an internal market and competitiveness. Theyellow card procedure again showed how debated the revision was and howdiverged the East and West were. However, the Commission decided to maintainits proposal.17 When subsequently the Council found compromises on expandingthe minimum protection on ‘wages’ to ‘remuneration’ and a time limit of twenty-four months on posting, the revision seemed ready for adoption in June 2017.However, the French president Macron re-opened the discussion on the timelimit for posting and wanted a reduction to twelve months.Meanwhile the European Parliament also discussed the proposal. It consideredthe possibility to add as a legal basis Article 153 TFEU, a provision that provides theEU with (shared) competence in social policy. That proposal did not survive thecompromise that was reached in the trilogue negotiations between Parliament,Council and Commission.18 The European Parliament adopted the final13 See also Z. Rasnača, Identifying the (Dis)placement of ‘New’ Member State Social Interests in the Posting ofWorkers: The Case of Latvia, 14 EU Const. 141, 131–153 (2018); M. Houwerzijl & A. Schrauwen, FromCompeting to Aligned Narratives on Posted and Other Mobile Workers Within the EU?, in Towards a DecentLabour Market for Low Waged Migrant Workers. An Introduction 81–108 (T. de Lange & C. Rijken eds,Amsterdam University Press 2018). A first case in which protection of the rights of posted workers wasaddressed as opposed to that of the service provider only recently.14 This argument is also expressed in a letter of Ministers of nine ‘new’Member States to the Commission,cited in Communication from the Commission on the proposal for a Directive amending the Posting ofWorkers Directive, with regard to the principle of subsidiarity, in accordance with Protocol No2,COM(2016)505 final of 20 July 2016, at 4.2.1.15 Case C-396/13, Sähköalojen ammattiliitto ry, ECLI:EU:C:2015:86.16 http://rijksoverheid.nl.archiefweb.eu/#archive (accessed 8 Sept. 2018).17 COM(2016) 505 final of 20 July 2016,Communication from the Commission to the European Parliament, theCouncil and the National Parliaments on the proposal of a directive amending the Posting ofWorkers Directive, withregards to the principle of subsidiarity, in accordance with Protocol No 2.18 See for an overview of the issues that were on the table EU Observer (25 Oct. 2017), ‘EU postedworkers face hurdles’, Brussels, https://euobserver.com/social/139625 (accessed 8 Sept. 2018).326 LEGAL ISSUES OF ECONOMIC INTEGRATIONcompromise with 446 votes to 147, with 49 abstentions,19 and the Council adoptedit with 2 votes against (from Hungary and Poland), and 4 abstentions (fromLithuania, Latvia, Croatia and the United Kingdom).20The revision in Directive 2018/257 is based on Articles 53(1) and 62 TFEU, andtherefore clearly a measure within the framework of free movement of services.Despite the identical legal basis, the revision does however add to the scope andsubject matter of the PWD by adding to Article 1 PWD two paragraphs. FirstlyArticle 1 is complemented with the phrase that the PWD ‘shall ensure the protectionof posted workers’ during the posting and secondly a paragraph is added in which it ismade clear that the PWD does not affect the exercise of fundamental rights ‘includ-ing the right or freedom to strike or to take collective action.’The ‘same pay pay for the samework in the same place’mantra is reflected in therevision of the minimum wage guarantee that is replaced by a guarantee of equalremuneration, including thirteenth month allowances, travel expenses or compensa-tion for work during public holidays or night work. Furthermore, employers need toprovide posted workers with adequate housing conditions. Also, equal treatmentbetween temporary agency workers and local workers needs to be ensured. If theposting exceeds twelve months,21 all applicable terms and conditions of employmentof the host state apply. The explicit exclusion of supplementary occupational retire-ment pension schemes remains though.As stated above, the revision of the PWD formally is not part of the Social Pillar,but is closely connected to it both in its aim of protecting local workers from ‘unfair’competition on the labour market while preserving labour mobility, as well as in itspresentation as an element of the ‘new social dimension’ of the EU.22 And at firstsight the revised PWD shows signs of a ‘new social dimension’ or a ‘change ofparadigm away from austerity’. The explicit reference to protection of posted work-ers as subject matter of the PWD and the replacement of ‘wage’ guarantees by‘remuneration’ guarantees may serve as example. However, it remains uncertainwhether the Court will take the added paragraphs on protection of posted workers orprotection of collective actions as a basis for reconsidering the balance between themarket and the social that was struck in earlier cases on the PWD.On top of that, it ispossible that equal remuneration would make posting of workers less attractive, andthereby it would undermine the opportunity to work abroad as a posted worker. Therevision does not really address the concerns of ‘new’Member States. With compe-tition on wages and labour conditions being less obvious, there is a risk that service19 See http://www.europarl.europa.eu/oeil/popups/summary.do?id=1536419&t=d&l=en (accessed 8Sept. 2018).20 Document ST_10422_2018_INIT.21 Extendable to eighteen months on submission of a motivated notification by the service provider.22 See also Garben, supra n. 9, at 215.TOWARDS A SOCIAL EUROPE? 327providers will look for competitive advantages on the basis of social security con-tributions or tax laws in order to be able to respond to demand for labour at low cost.That scenario might even deepen the East-West divide in the EU.The targeted revision of the PWD needs to be implemented before 30 July2020. It can be considered a first step in the direction towards a more social outlookfor the EU, but as always, a lot will depend on how Member States implement andenforce it. However, if the pace with which the institutions have taken up the launchof the Social Pillar is indicative for their willingness to turn away from austerity andembrace a more socially oriented EU, the implementation of the revised PWDmight go hand-in-hand with the adoption of other measures contributing to a fairand inclusive labour market – preferably a labour market that also takes intoconsideration the concerns of Member States other than those in the Northwest ofthe EU.A. S. August 2018328 LEGAL ISSUES OF ECONOMIC INTEGRATION

From the Board: Towards a Social Europe?

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From the Board: Towards a Social Europe?

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