On Thursday 23 April, the European Trade Union Confederation (ETUC) welcomed the possibility that “a milestone for millions of people who work in another EU country” is now within reach after the European Parliament and the Cyprus Presidency of the EU Council reached a provisional agreement the previous day, on the reform of European rules for coordinating social security schemes (see EUROPE 13854/3).
“After years of deadlock, this agreement is a significant step towards more legal certainty and stronger tools to combat fraud and error in cross-border situations. The agreement provides clarity and guarantees for a better social security coverage for workers when living and working in different EU countries”, welcomed the ETUC.
Among other things, the Confederation welcomes the principle of mandatory prior notification of postings, which “would ensure authorities have the information they need to verify social security coverage, prevent ‘fake postings’ and undeclared work, and carry out effective inspections”.
The principle of mandatory notification is maintained for all postings, except for postings of less than three days and business trips.
The construction sector, on the other hand, will not be affected by this exemption from mandatory prior notification for short postings.
“Making prior notification the general rule is a decisive step that will support authorities’ access to information before a posting starts, to ensure workers are genuinely covered and to prevent fraud from the outset”, welcomes the ETUC.
The European Federation of Building and Woodworkers (EFBWW) also believes that “mandatory prior notification for posted workers in construction is a turning point. It gives authorities a real tool to act before abuse happens, not after. This is essential in a sector where fraud and fake posting are a structural problem”.
The representatives of European businesses, BusinessEurope, are also calling on the EU Council and the European Parliament to rapidly validate this agreement, which they welcome, in particular the exemption of business trips and short-term postings (up to three days) from the obligation of prior notification, except in the construction sector.
“Combined with the introduction of automated acknowledgements where notification is required, this marks a meaningful step towards simpler, more efficient rules on labour mobility and social security coordination. This will deliver clear benefits for both employers and workers”.
On Wednesday 22 April, after a two-hour meeting, the co-legislators of the European Parliament and the EU Council announced an agreement on the last points outstanding.
The text of the agreement was not yet available at the time of going to press, but the following points were agreed during the negotiations:
- for unemployment benefits for cross-border workers, a 22-week period of affiliation will be required before the Member State of employment, and not their country of residence, becomes responsible for paying benefits, and this for a period of six months, compared with three at present. The employment service in the unemployed person’s country of residence will have to report to the institution responsible for payment, particularly on job-seeking efforts.
- on the subject of prior notification, i.e. the sending of an A1 form to the authority of the country of employment, two exemptions from the general obligation of prior notification are maintained: business trips and activities of no more than three consecutive days within a 30-day period. However, there is an exemption for the construction sector (see above).
- with regard to pluriactivity, the list of factors is non-exhaustive and will only be placed in the recitals, which the European Parliament regrets. In addition, the criteria of ‘length of time that the undertaking has been established’ and ‘place where the undertaking uses office space’ have been removed. The purpose of these criteria, although indicative, is to better identify the institution responsible for the payment of benefits or to fight against the phenomenon of so-called ‘letterbox’ companies.
- at the European Parliament’s request, an addition has also been made to the recitals on measures for employers in cases of failure to comply with the prior notification obligation, but the terms used are vague, not specifying what type of sanctions could be applied to these recalcitrant employers. According to the draft text under discussion, these are only proportionate measures, but they do not jeopardise the free movement of workers or require a change in the applicable law. This inclusion enabled the European Parliament to be satisfied overall with the balance of the package on the table, with the retention of mandatory notifications for the construction sector seen as a battle won by the European Parliament. On the other hand, it had to abandon its demand concerning the duration of export of unemployment benefits.
Some countries that are very opposed to the reform will be able to make adjustments, such as Luxembourg, which will be granted a five-year exemption from one of the most controversial parts of the regulation, namely the liability rule for cross-border unemployed workers.
Courage. “We salute the political courage of the Cyprus Presidency in the face of this challenge. The ball is now in the court of the EU Member States, for the third time. We hope that there is now sufficient political awareness to move forward”, was the reaction of European Parliament rapporteur, Gabriele Bischoff (S&D, German), on Wednesday evening.
“It is unacceptable for people to pay taxes and social security contributions in one country for years, only to be sent back to another when they become unemployed. The ‘lex loci laboris’ – the law of the place of work – is not just a question of fairness; it is a logical consequence of the single market that we are all defending”, she said.
EU Member States will be briefed on the provisional agreement at Coreper on Friday 24 April, before being asked to approve the political agreement on 29 April. The European Parliament’s Committee on Employment and Social Affairs will discuss the agreement reached on 6 May, which is expected to be presented in plenary before the summer. (Original version in French by Solenn Paulic)