Brussels, 03/04/2008 (Agence Europe) - The Community directive on the posting of workers can be used to oppose public procurement being subject to collective wage agreement in the place where the work is done. Wage rates set in a collective agreement that has not be declared according to general standards, when a member state recognises such a system, cannot be imposed by a legislative measure of the said member state to public procurement, for cross-border service providers, posting workers to the territory of the member state in question. These are the conclusions in a decision made on Thursday 3 April by the European Court of Justice (ECJ) in the case of Rüffert versus the Lower Saxony region (C-346/06) (EUROPE 9630). The European Commission believes that this ruling makes the directive on the posting of workers clearer but the European Trade Union Confederation believes that, “this is another destructive and damaging judgement”.
This case focuses whether public authorities, when awarding contracts for work, have the right to demand that tendering companies commit themselves to pay wages to all workers including posted workers that are in line with rates in collective agreements applicable in the place where the work is done. It also involves the possible banning of this practice as a restriction to the freedom of services under Article 49 of the treaty. In the decision made on Thursday, the ECJ concludes the incompatibility of provisions with the Community directive on posted workers. The Court, in that respect, states that the rate of pay provided for by the 'Buildings and public works' collective agreement was not fixed according to one of the procedures laid down by the directive. Although Germany has a system for declaring collective agreements to be of universal application, no such declaration appears to have been made in respect of the collective agreement here in question. Moreover, the binding effect of the 'Buildings and public works' collective agreement covers only a part of the construction sector, since, first, the relevant law applies only to public contracts, to the exclusion of private contracts, and, second, the collective agreement has not been declared universally applicable. Therefore, the legislation of the Land does not comply with the provisions of the Community directive on the posting of workers, which provide, subject to certain conditions, that Member States are entitled to impose minimum rates of pay on undertakings established in other Member States in the framework of the transnational provision of services.
The Commission believes that this ruling makes application of the directive
on posted workers clearer
This ruling coincides with adoption on the same day of the European Commission's recommendation on posted workers (see other article). On this occasion, the Commission declared that there was no contradiction between the principles of the internal market and defence of workers' rights. These rights are not subordinated to internal market rules. The Commission will still continue to fight against any form of social dumping or disrespect of workers' rights. The Commission also underlined that the recent ECJ judgements on Viking and Laval do not jeopardise member states' choice of organisation of industrial relations, including the Nordic social model.
Joannes Leitenberger, the spokesman for president Barroso informed the press that this ruling explains the application of the directive on the detachment of workers and applying a certain level for wages requires the planned mechanism in the directive in question. A journalist asked whether a minimum wage could become binding on member states. Katharina von Schnurbein said that there were three possibilities in the directive to establish a minimum wage: by the legal road, by universal application of a collective agreement, by a collective agreement that is subject to an agreement between social partners who are at the most senior national level. She also said that his collective agreement had to be supported by they great majority (at least 80%-85%) of workers.
John Monks (ETUC): says it is another destructive and damaging judgement
“This judgement underlines the need for urgent action by the European authorities to confirm that the EU is not just an economic project but has as its main objective the improvement of living and working conditions of its populations, and that the concept of social progress is of fundamental importance for keeping the support of Europe's citizens and workers for the European project". John Monks said that, “this is another destructive and damaging judgement”. (G.B.)