A tentative agreement has been reached on the highly contested reform of the posted workers directive. What is the directive about? It is about the protection of employees who are sent to another EU country by their employer on a temporary basis. The rules relate predominantly to the wages paid during the posting and the time spent in the “host” country during which the social security obligations can still be paid in the “home” country.
Serious negotiations, compromises and creative separation of topics have led to the feasible possibility for agreement by Commission, Council and Parliament. Although the directive affects only 0.9% of the total employed population in the EU, it has become a dividing line between mostly Western and many Eastern member states. Accusations of “Eastern social dumping” were countered with “Western protectionist tactics”. What have we learned from this reform exercise?
1. The West vs. East divide is a blurry line
We do not need to zoom-in very much to see that countries like Spain and Portugal were not going to agree with a deal where their truck drivers will be regulated in the EU under the new posted workers directive. In unison with Poland and other Eastern European countries, these Western/older members stood against the initial French proposals for a reform. In a symbolic fashion, the UK and Ireland abstained from voting at the meeting of ministers of employment and social policy on October 23—signalling concerns for their own workers. On the contrary, all Eastern European member states besides Poland, Hungary, Latvia and Lithuania supported the final compromise (Croatia abstained).
2. Some member states have more clout than other member states.
The French President, Emmanuel Macron, took it upon himself to push for changes to the posted workers directive, shortly after winning the elections. While the Commission had already provided a draft, the French President, backed by several other Western European countries, namely Germany, Belgium, Luxemburg, the Netherlands and Austria, insisted on stricter rules regarding comparable, not minimum wage remuneration and shorter periods of posting. It was demanded on the grounds of preventing “social dumping.” The requirements for higher wages and less time spent in the “host” country were also presented as good for the workers’ social wellbeing. Indeed, most demands were passed. The ministers of employment and social policy agreed for wages to be set according to the “equal pay for equal work” principle not based on the minimum wage scale. Workers’ postings are to be limited to 12 months (with an option for extension of 6 more months). However, once the directive becomes operational in the next 4 years, some companies, predominantly from Eastern Europe, will not be able to post their workers. This would mean that some of the workers may lose their jobs—it would simply be too expensive to send them abroad and keeping their positions domestically might be too hard. Meanwhile, some of the more well-off, predominately Western states, would eliminate sectoral competition for their own companies.
3. With repackaging and some concessions, the job can be done.
What led to the re-start of negotiations on the reform of posted workers directive on Parliament and Council levels was, mainly, the separation of the transportation sector to another set of regulations, a.k.a. “mobility package” and the postponement of the enforcement of the directive for four years—a time for members that lag behind in income levels to potentially catch up. First, a week before the agreement by the ministers of employment and social policy, the European Parliament’s Committee on Employment and Social Affairs voted, with a comfortable majority, in favour of the “equal pay for equal work” provision which would guarantee all posted workers receive equal salary for equal type of work in the same country. Members of the European Parliament (MEPs), however, kept the Commission’s original proposal of a two-year limit on postings. Additionally, MEPs voted in favour of the possibility to extend the maximum posting period.
Second, reports emerged after the European Council Summit which took place in October expressing that both the French President Emmanuel Macron and the Polish Prime Minister Beata Szydlo while still, in general, opposing e each other’s points of view on posted workers—have sent some positive signals on the topic. It has been on the Commission’s agenda to tackle the reform by the end of this year as 18 months full of tense and sometimes stalled negotiations have passed. Just a few days after the European Council Summit, the ministers of employment and social policy came to a compromise. Three-way talks between the Council, Commission and Parliament can now commence to agree on the final version of the new directive.
4. One confrontation at a time is more chewable (logrolling at play).
Initially, the posted workers directive reform included the transportation sector which prevented any progress. For now, the tentative agreement reached on the reformed directive assured that truck drivers will follow the old rules created in 1996. The upcoming Social summit in November will focus on this difficult matter—reforms of the transportation sector posting regulations. This will be a new battleground not between the West and the East but between the members who use transportation as their competitive edge and do it at large (read: Poland, Spain, Portugal, Bulgaria, etc.) and those who feel the necessity to protect their own industry.
The current regulations are not simple. They attempt to keep the drivers safe and accountable. Still, some Western countries claim that drivers with lower wages and fewer labour protections—often from Eastern Europe—are forced to drive for more hours. This leads to a lack of safety for both the driver and the surrounding environment but also affects the ability of better-paid drivers with more protection to access jobs.
In the current regulations, there are also requirements for drivers to carry on various documents that are translated into languages of the countries which the truck/ bus passes. The Czech Republic has recently conducted a number of checks on Western and Eastern European truck drivers. The Czech authorities concluded that the Western European drivers do not follow regulations on the required documentation and translations. On the other hand, Eastern European drivers have the documents ready in several languages.
While ensuring the provision of required paperwork by truck drivers is not directly connected with the remuneration debate, it provides ammunition for future negotiations. One basic question to ask will be whether new and/or more rules are actually necessary or if they constitute an extra burden. Are Eastern European drivers the ones who do not follow the regulations? If there is a tendency to insist on fairness and equal treatment, one may demand that all regulations are applied with the same vigour. Otherwise, “picking and choosing” only adds more fuel to the discussion about “equal pay for equal work”. Is it a disguised form of economic protectionism or a quest for fair rules that need to be followed with no exceptions?