Social Policy : Posting of Workers: Rules and Loopholes

European Social Policy, January 20, 2014 | Go to article overview

Social Policy : Posting of Workers: Rules and Loopholes


Latvian workers being posted to a Swedish sawmill for 2.3 an hour, Romanian workers being paid 2 an hour at a chair manufacturing company in Italy, Polish workers paid half the normal' wage at a nuclear power plant construction site in Flamanville, France. One thing is certain: the Stop Social Dumping group is not short of examples to make their case. "Undoubtedly, the current EU legislation, recommendations and instruments are completely inefficient to prevent, control and sanction fraudulent practices of economic exploitation, which lead to social dumping," explains the European Federation of Building and Woodworkers (EFBWW).

Under Directive 96/71/EC, the first rule to comply with is for posted workers to be declared to a competent institution, which will issue them with an A1 document. Then comes the lex loci laboris' principle: companies must guarantee their posted workers "hard core" mandatory protection rules - involving work schedules, paid leave, minimum wage, health and safety - in the host country. Social security contributions are still, however, exempt from this principle: the worker may remain subject to the first member state's social security legislation as long as the foreseeable duration of work does not exceed 24 months and that they are not sent to replace someone who has completed their term of posting.

Nevertheless, these rules - which have applied since 1999 - have quickly proved to be limited: in several cases, posted workers are exploited and deprived of all or part of their salary. Posted workers have been unable to invoke their rights in these situations because the company that employed them disappeared or never really existed. Even the Court of Justice acknowledged the problems caused because the directive was not applied properly (Viking-Line, Laval, Ruffert and Commission vs Luxembourg cases). The EFBWW explains that "fraudulent companies have a wide array of options to circumvent the law: false self-employment, the use of letter-box companies, non-existent or weak supervision in certain countries, falsified documents, inadequate cross-border cooperation between national authorities, insufficient on-site control". …

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