Strasbourg, 04/04/2006 (Agence Europe) - After months of intense and, at times, emotional debate on the draft “services” directive and, to a lesser extent, on the implementation of the “posting of workers” directive, on 4 April, the European Commission came to the European Parliament with a position that reassured most MEPs, although it displeased some in relation to services in the internal market.
Charlie McCreevy, European Internal Market Commissioner, who presented the amended proposal for a directive on services, said: “I had said that the Commission would base its amended proposal on the Parliament's opinion. You will see that we have kept to our commitment”. The Commission has taken on board the main elements of the compromise voted by the EP at first reading mid-February (see EUROPE 9133). The scope of the future directive is greatly reduced but still includes services of general economic interest (SGEI). The cross-border service provisions do away with the country of origin rule once and for all. The only substantial differences are that the Commission has gone against the EP by reintroducing legal services into the directive, and has also restricted exclusion of social services.
Scope. The amended proposal for a directive does not question the existence of public monopolies providing certain services, nor the method of organisation or financing of services of general economic interest. It does not prevail over existing sector-specific rules such as the directives on electricity, gas, transport or financial services. All interference with social and labour law as well as with Directive 96/71/EC on the posting of workers is also dismissed (see below). Also prevailing over the future “services” directive are: Regulation (EEC)140/71 on the application of social security regimes for employees and their families, Directive 89/552/EEC on televised broadcasting activity, Directive 2005/35/EC on the recognition of professional qualifications, as well as the rules of private international law (Regulation Rome I and future Regulation Rome II on contractual and non-contractual obligations).
The Commission has not taken on board the exclusion of legal professions advocated by the EP. “We have not followed exclusion of legal services”, Charlie McCreevy confirmed. On this point, the EP took up the amendments adopted in the internal market committee. On the other hand, the amended Commission proposal provides for services of general interest (SGI) not to be covered. In its provisional version, the Commission services had not taken up the EP directive which excluded SGI as defined by Member States but simply evoked exclusion of non-economic SGIs. Furthermore, Mr McCreevy confirmed that healthcare, whether public or private, will be excluded from the future directive. The provisions on patient mobility, contained in the initial proposal, are therefore withdrawn. Mr McCreevy recalled that the Commission will present a “separate and specific initiative” on the health sector. As far as “social services” are concerned, the Commission has restricted the exclusion relating to this type of services. It did not take on board in its entirety the PES group's amendment adopted by the EP which excluded “social services, such as social housing, child-minding services and family services”. In its place there is a proposal to exclude social services which are directly related to “social housing, support for children, families and the needy”. Mr McCreevy said that at the end of April, the Commission would adopt a communication on social services of general interest which would “reflect the importance of these services” for the people of Europe.
The Commission has taken on board other exclusions from the scope of the proposal. As the Parliament wanted, gambling, radio and television, port services, temporary work agencies and private security services have been excluded. However, services of general economic interest, notably water distribution and treatment services, are still included.
Free provision of services. “Articles 16 and 17 (on cross-border service provision) have been included in the revised proposal,” said Mr McCreevy. The Commission has thus respected the compromise agreed by the EP on how to manage cross-border service provision. This compromise removes the country of origin principle of the initial proposal, but does not introduce the need for a cross-border service provider to abide by the rules of the destination country. According to the principle of free provision of services: 1) Member States are required to respect the right to provide a service in a Member State other than the one in which the provider is established, and the Member State of destination has to ensure free access to and free exercise of a service; 2) Member States have to prove that they are not applying restrictions counter to the principles of non-discrimination, need and proportionality or any obstacles specified in a list; 3) Member States will nonetheless be able to apply certain restrictions on the free provision of services, justified by reasons related to security and public health, the environment and working conditions.
Tthe draft directive includes the indicative list voted by the EP excluding SGEI following the principle of free provision of services: postal services, electricity, gas, distribution, water treatment, waste management.
Freedom of establishment: the amended proposal gets rid of two demands for Member States having to evaluate, in order to determine whether they constitute barriers to freedom of establishment for a service provider. This involves bans and obligation in the area of sales at a loss and sales, as well as demands imposed on an intermediate provider to give access to certain specific services provided by other providers. The EP vote means that SGEI are not affected by demands regarding evaluation. Introducing a slightly more restrictive element, the draft proposal is based on the substance of Article 86 (2) of the treaty, according to which the providers of SGEI are subject to competition rules whereby these limits do not restrict the accomplishment in law or in effect of their specific mission.
Additional harmonisation. In the list of services that could be subject of further harmonisation, the Commission has got rid of gambling, maintained the legal recovery of debts and added security services.
Three years after entry into force of the directive, Member States will have to create one stop shops that allow service providers to rapidly deal with the administrative formalities necessary for setting up on a given territory. The Commission also highlighted the possibility of carrying out all these formalities by e-mail and suggests using information guides for service providers.
Like the EP, the Commission would like administrative cooperation to be enhanced. It is introducing binding provisions in areas of mutual assistance between Member States, whether they are the country of establishment, provider or country of destination for a service. The future directive will create an alarm system between Member States in case of a service provider going under.
Date for implementation. The Commission has extended their deadline for application of the services directive to two years after its adoption. The EP had planned on a three year transition period.
The proposal has now been sent to the Council. Mr McCreevy will present it to the informal “Competitiveness Council” in Graz on 21-22 April. According to co-decision procedure, the Council will have to adopt the EP amendments not accepted by the Commission, by unanimity.
Spidla convinced that directive on “posting of workers” will avoid social dumping
The Communication on the “Orientations on the posting of workers, as part of the provision of services”, adopted, as planned, on 4 April (EUROPE 9105/9104), “provides indications for Member States and contains proposals for assisting them in their everyday work, and on the administrative level, so that the conditions established in directive 96/71/EC are respected”, explained Vladimir Spidla during the Commission plenary. The Commission has already given its support in the revised proposals on the services directive to getting rid of Article 24 and 25 on administrative obstacles on the posting of workers (see above), he noted, while warning that, “Member States should not conclude from this that they can now maintain certain administrative obstacles for companies that want to post workers!” Recalling that the Commission communication is based on Article 49 of the Treaty, Mr Spidla stressed that it was necessary to ensure the free movement of services, prevent social dumping and that Member States have to implement measures necessary for checking that the directive is implemented while avoiding social dumping.
Mr Spidla also explained that the communication adopted today, establishes a certain number of demands such as that of the service provider having to “have a representative in the host country” (which should not be a permanent representative). It also has to conserve documentation, such as those on hours worked and those on health and safety in the workplace. The Commissioner explained that conditions on wages were also important, as well knowledge about administrative conditions in the country where the worker in question is seconded. Vladimir Spidla also insisted on “respect for certain provisions, such as the conservation of documents used by the authorities of Member States for providing administrative support, as well as Member States being able to carry out inspections of workers posted from third countries”. The Commissioner noted that social security documents are subject to a specific procedure in the country of origin in compliance with Regulation 1408/718/EC. Mr Spidla added that the Commission also wanted information on working conditions and cooperation between national administrative bodies. Mr Spidla insisted that “labour law has to be respected” and that “there is still quite a lot of room for improvement and filling in the gaps”. He called on Member States to “be concrete in respect of obligations that the company posting the worker has to fulfil”. The Commissioner concluded that he was “convinced that this directive will be applied well, that it will become a solid instrument and that it would avoid social dumping in pursuit of its aim of better provision of services”.
Speaking to the press, Vladimir Spidla said Directive 96/71/EC is a basic instrument for ensuring the social protection of posted workers and preventing social dumping, while preventing legal obstacles to the free movement of services. He wanted to send a “clear signal” that says: if one does not comply with the directive, then “I shall take essential measures to initiate infringement proceedings against the Member States concerned”. Within the next twelve months, the Commission will examine the situation in Member States and exploit every possibility provided by the Treaty, he announced. He stressed that the directive concerns posted workers, including those from countries which still use transitional periods. The fundamental conditions set out by the directive and which must be applied from the outset to posted workers are, the Commissioner concluded: - maximum working periods and minimal resting periods; - the minimum duration of paid annual leave; - minimum rates of pay; - the conditions for making workers available, especially temporary workers; - security, health and hygiene at work; - protective measures applying to the working conditions of pregnant women or of women who have just given birth, as well as to children and young persons.
Satisfaction among MEPs
In answer to MEPs, Commissioner McCreevy said he thought the proposal was a good one, and defended the fact that he had not “sold” it with more vigour to the Council (after British Conservative Malcolm Harbour had expressed doubts in this respect). “Pragmatism has won”, the Commissioner said, adding: “The Bolkestein proposal was never going to see the light of day as drafted. (…) The Parliament showed the way. (…) What is at issue now is how to galvanise the European economy”.
Commissioner Spidla, for his part, noted that, according to the Parliament, the posting of workers directive must not necessarily be amended at the legislative level, but must be better applied on the ground, depending on the objectives set by the legislation (worker protection, fight against social dumping and against competition distortion).
“Dear Mr McCreevy, Dear Charlie”, took up the rapporteur on the “services” directive, German Social Democrat Evelyne Gebhardt, going on to say that, despite the discussions of Heads of Cabinet in extremis, the Commission was finally able to broadly follow the Parliament's position on services. Ms Gebhardt mainly welcomes the Commission's position on doing away with the country of origin rule and on certain services of general interest. This is precisely what Toine Manders (ALDE, NL) finds displeasing. While welcoming the substance, he fears protectionist behaviour and abuse from Member States (“You can see what has happened in France when there is a fight over the body of law”, he said). In the same group, Nathalie Griesbeck of France welcomed the fact that the Commission had been able to distance itself from its first “clumsy and incomplete” text to result in a balanced proposal (a balance that the Council should not endanger). Although admitting that he would have preferred more liberalism, Malcolm Harbour, British Conservative, considers that the Council will now not have to take a stance on a ”diluted” directive but also calls for vigorous information action, stressing that the package contains over one hundred measures aimed at eliminating obstacles and reducing red tape. He said this is never sufficiently brought to notice but it must be said. Speaking for the Greens/EFA, Pierre Jonckheer of Belgium notes that the Parliament has considerably improved the initial text, but recalls that his group is hoping for a specific framework on services of general economic interest. The president of the GUE/NGL Group, Francis Wurtz, raised a question of substance: Will the directive put an end to this “competitive race between workers”? As things stand, his response is negative. Mr Wurtz also promises that his group will closely examine the Commission's text regarding the scope of the directive. On the right, the elected member of the French National Front, Fernand Le Rachinel, said he was delighted that “for once” he can agree with the Parliament's compromise. Adam Bielan of Poland (UEN), however, saw it as a “rotten” compromise between two large groups, and accuses the European Commission of not having kept its promises.
In this very short debate, some MEPs also took the floor on the posting of workers, in particular Ria Ooomen-Ruiten (EPP-ED) of the Netherlands, who did not want a mere communication but a directive on the “health” aspects. Danish Liberal Anne Elisabeth Jensen stressed for her part the problems involved in the practical application and interpretation of the text, saying it must not be amended but better managed and it must be the subject of a major effort of information.