The EU Court of Justice has ruled that the Polish company which had paid workers posted in Germany less than the minimum salary set out in a (German) collective agreement had the right to do so. This decision was immediately criticised by unions and the European political left for legitimising social dumping.
The so-called Ruffert' case, referred to the Court by the region of Lower Saxony, concerns litigations pitting the region against a Polish company working as a subcontractor for a German firm on a construction site sold by public tender.
The law of Lower Saxony on public tenders sets out that work contracts are only given to companies which commit in writing to paying their employees the minimum payment set out in the applicable collective agreement. The successful bidder must also commit to pass this obligation on to subcontractors. Failure to respect this commitment results in a penalty. This case fell under the Buildings and public works' collective agreement.
The German company responsible for the building site, Objekt und Bauregie, subcontracted part of the work to a Polish firm, whose workers only received 46.57% of the minimum wage set out. The court of Lower Saxony referred the case to the ECJ to ask it if the Polish company should be condemned to paying the anticipated penalty.
In its judgement, the Court finds that the provisions at issue are incompatible with the Community's Directive 96/71/EC concerning the posting of workers. In that respect, it states that the rate of pay provided for by the Buildings and public works' collective agreement was not fixed according to one of the procedures laid down by the directive. Although Germany has a system for declaring collective agreements to be …