Brussels, 12/02/2015 (Agence Europe) - On Thursday 12 February, the Court of Justice of the EU returned a landmark verdict (case C-396/13) on worker secondment, which clarifies the way the minimum rates of pay must be calculated and what this must include, such as travel costs and daily allowances. However, the European Trade Union Confederation (ETUC) described it above all as a break with the highly controversial case-law of the Laval and Viking judgements of 2007, as this time the Court has put wage equality ahead of the principal of competitive service provision.
The Polish company ESA (Elektrobudowa Spolka Akcyjna) posted 186 employees (under Polish contracts) to Finland to carry out electrical installation work at the construction site of the nuclear power station at Olkiluoto. These workers claimed that ESA had not paid them the minimum remuneration due to them under the Finnish collective agreements concluded for their sector of employment (electricity and building technology). They asked the Finnish trade union for the electricity sector to represent them to recover what was due to them.
The dispute between the seconded workers and ESA hinges on several questions. The remuneration issue is based on the fact that Finnish collective agreements establish pay categories or specific wage groups, in which the formula to calculate the minimum hourly rate (remuneration on the basis of time) differs from the calculation per job (piecework). The ESA wished to apply the lower of the possible wages and refused to include a daily allowance, compensation for travelling time, a holiday allowance or accommodation costs in the minimum wage. Ultimately, the company argued, the Finnish union does not have the standing to represent the Polish workers, as Polish law prohibits the assignment of claims arising from an employment relationship.
When the case was brought before it by a Finnish court, the Court of Justice first of all established “unambiguously”, the judges stressed, that a host state union can represent seconded workers, because the minimum wage rate is governed by the rules of that state, in this case Finland (by virtue of directive 96/71 EC on the secondment of workers in the framework of service provision), even if the law applicable to the employment relationship is not (Polish law applies in this case). Consequently, the procedural law of the host state must apply and the right to an effective legal remedy laid down by the Charter of fundamental rights must be respected.
Then, the Court had to return its verdict on the elements which make up the minimum wage. Although a central point in worker secondment (the directive provides that as regards the minimum wage rates working and employment conditions guaranteed to seconded workers, the rules of the state where the work is carried out prevails), this is not laid down clearly enough to avoid all uncertainty arising from the variety of practices between the Twenty-Eight. This ambiguity is illustrated by the fact that the judges did not fully take up the conclusions of Advocate General Nils Wahl, which were presented in September 2014.
The Court and Wahl agreed on two points. Firstly, the employer covering the expenses arising from the accommodation of seconded workers and issuing cannot constitute an element of the minimum wage. Secondly, the right to an annual period of paid leave is an integral part of the minimum wage. On two other points, the opinions of the judges differed from those of the Advocate General. The Court ultimately ruled that the daily allowance must be an allocation specific to the secondment and therefore an integral part of the minimum wage (similar to the case of workers seconded to a different region of the same state, for instance). Compensation for daily travelling time must also be included in this.
However, one of the main elements of the case - and the one which gave ETUC the most concern - was the question of which minimum wage should be applied in the event of several pay categories in the host state. Taking account of pay categories for seconded workers instead of the lowest remuneration in place would be tantamount to granting unjustified importance to the protection of the national employment market to the detriment of the freedom to provide services and would overturn the Laval judgement, the Advocate General argued.
The Court rejected this interpretation and found that the directive does not contradict an hourly/piecework calculation of the minimum wage on the basis of the categorisation of workers into pay groups, as long as this calculation and this classification are based on binding and transparent rules. It is therefore the responsibility of the national judge to ensure that they are. ETUC takes the view that this verdict is a victory for wage equality and will act as a reminder to the member states to improve the employment framework on their soil for seconded workers. (Jan Kordys)