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EPSCO agreement on the Enforcement Directive

A disappointing agreement with low ambitions

Yesterday, the European Ministers of Labour reached a last-minute agreement on the Enforcement Directive. The Directive initially aimed at legal clarification, clear sanctions and improved cross-border cooperation between labour inspectors to prevent and combat cross-border social dumping and workers’ exploitation in case of posting. The final outcome is a desperate agreement reached in order to demonstrate at the upcoming EP elections that there is still a “social Europe”.
At the EPSCO discussions the Labour Ministers avoided tackling several controversial key topics, such as bogus self-employment and fake posting. Although these problems are widely acknowledged they were not discussed in order to avoid controversies amongst the Member States. A major disappointment and set-back for the whole trade union movement.
Finally, the EPSCO discussion only revolved around two points: the possibility of the Member States to organize their controls and inspections (article 9) and the introduction of a joint and several liability of the main contractors for the non-payment of the wages by the subcontractors (article 12). Strangely enough both points are presented as victories by all parties, which clearly demonstrates that the agreement is very ambiguous.
On article 9, the EFBWW welcomes that Members States can introduce additional control measures, when it appears that the “existing measures are insufficient or ineffective”. However, all administrative additional requirements and controls must be “justified” and “proportionate”. These testing criteria will increase the number of complaints, infringement procedures and legal cases. Every Member State, the European Commission and even each company can challenge a national measure before the Court of Justice of the European Union, by arguing that the measures are “not justified” or “disproportionate”. The EPSCO agreement gave an explicit mandate to the European Commission to control the national measures “closely”. Thus the so-called “open list” of control measures, will in reality become a “closed list”, with the European Commission as the ultimate judge.
Additionally, the EFBWW strongly deplores the poor formulation of various admissible control measures, e.g. that a prior notification of posting can be done on the day of posting (art. 9.1a), which makes it very difficult for labour inspectors to organize their controls efficiently. Or that there is no obligation to keep the original documents (only copies of electronic formats) on the work place, which, in cases of social dumping, are often falsified.
On article 12 (chain liability), the EFBWW strongly deplores the lack of political courage to impose an unconditional chain responsibility for the main contractors for the non-payment of wages by all his/her subcontractors. Instead, the EPSCO imposed a so-called mandatory one-step liability, with a mandatory exoneration for the construction industry based on “due diligence”. However, even this minimum obligation could be avoided by “other appropriate enforcement measures” (new article 3.a). Thus, there is no mandatory liability scheme whatsoever!
Theoretically, Member States can impose more stringent rules, but only when they are (1) in conformity with Union Law, (2) non-discriminatory and (3) on a proportionate basis. Once more the proportionality test will lead to an increase of legal proceedings, infringement procedures and formal complaints.
The EFBWW agrees that finding an agreement was vital in order to demonstrate that a “Social Europe” is possible. But this agreement was made out of desperation and will to no extent contribute to the creation of a “Social Europe”.
Once again, the right to provide services on the Internal Market has prevailed over the rights of workers, and large-scale social dumping and exploitation of cross-border workers is likely to continue as before.

Related pages about:
EU Legislation Construction
Posting of Workers