The European Commission has just provided EU member states with clarification on the expected effect of the legislative reform it proposed in March 2016 on the remuneration of posted workers.
The Maltese Presidency of the Council of the EU, which began its term of office on 1 January, has so far been very cagey as to how it will manage the reform of the rules on the posting of workers. However, according to several sources consulted by EUROPE, it appears likely that it will revert to the initial proposal from the Commission, hence the importance of the clarification just provided on this key component of the reform.
At the Council, the member states resumed discussions on Tuesday 24 January on the legislative proposal for a targeted reform of the 1996 directive on the posting of workers (see EUROPE 11507). The working group meeting concentrated solely on the key component of the reform: “remuneration” that detached workers would receive. “Remuneration” will replace “minimum wage” in the directive to give effect to the principle of “equal pay for equal work in the same place”.
Commission clarification. At the meeting in the Council, the Commission presented a non-paper, which has been seen by EUROPE, to address the questions raised on this issue by the majority of the opponents of the reform (Central and Eastern European member states) and by those, such as the United Kingdom and Ireland, which have yet to determine their position (see EUROPE 11685). In the non-paper, the Commission sets out why its proposal contains no clear definition of the notion of “remuneration” or indication on what differentiates it from “minimum wage”. For the Commission, this is a matter of national competence which produces widely different results across the EU.
It notes in the non-paper that it nonetheless provides “some clarification” of the scope of the notion, in ruling out that a posted worker can be subject to supplementary occupational retirement pension schemes in the host country and in limiting the scope of the elements that make up the remuneration to that set by national law or through generally applicable collective agreements.
This will not prevent the result from varying from one country to another, the Commission notes, since, in highly decentralised wage-setting systems, the difference between remuneration and minimum wage will be very slight for posted workers, even after revision of the directive. This is a key point in the criticisms directed at the Commission as opponents of the reform, among whom Poland and Hungary principally, believe that this brings significant uncertainty and little clarity for businesses. These countries note, further, that in France there are more than 30 elements of remuneration above the minimum wage.
What should be used in determining the elements of remuneration is one of the most controversial points. The European Parliament joint rapporteurs proposed in their draft report that member states be allowed to apply their regional and sectoral collective agreements to posted workers (see EUROPE 11679). This idea, which the Commission was not keen to propose, has merely strengthened the opposition who were already against the reform. According to a source, the Maltese Presidency of the Council of the EU does not like this suggestion, preferring the solution offered by the Commission.
Effect of the reform. To illustrate the impact of the reform, the Commission prepared a chart showing which additional elements would be included in the remuneration of posted workers in the four countries (Belgium, Germany, France and Denmark) which host most posted workers. After the reform, there will be two new elements of remuneration for workers: “extra holiday allowances” and “daily allowances, board and lodging allowances”.
Four other elements – length-of-service bonuses, bonuses related to specific working conditions, allowances for Sunday- or holiday-work and bonuses for dangerous, difficult or dirty work – would be added to remuneration under the reform, since currently the situation is not at all clear and it varies between countries. The “13th month and end of year bonus” will clearly be included under the reform.
The impact will not be uniform across the member states, the Commission again underlines. Posted workers would be paid more, for example, for overtime worked, but the rate would vary from 20% in Belgium to between 50% and 100% in Germany.
The next legislative steps. The Maltese Presidency of the Council could table a draft compromise for the working group in February, with the aim of reaching a general approach at the Council on 15-16 June. According to first indications, it will take the Commission’s initial proposal as its basis, dropping the dual system idea backed by the Slovak Presidency (see EUROPE 11640).
The issues of sub-contracting and temporary work agencies no longer pose an insurmountable problem, some are saying, even though opponents continue to be critical. The Maltese Presidency is likely to retain the notion of “remuneration” as defined by the Commission and the 24-month limit for the duration of posting, despite the calls, notably from some Socialists, for it to be reduced to six months.
Work has fallen a little behind schedule in the European Parliament. The first debate on the draft report was due to take place on Thursday 26 January but it was postponed, probably until 6 February, due to lack of time. At a meeting with a group of journalists on Thursday, MEP Danuta Jazlowiecka (EPP, Poland), who is fiercely opposed to the reform, said that what was most contentious for her was the lack of clarity on the elements of remuneration and on how to avoid double payment of certain bonuses and allowances. She felt there was uncertainty on how to determine the length of the posting and the 24-month limit and said she was against including regional and sectoral collective agreements. (Original version in French by Jan Kordys)