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Identifying the (dis)placement of ‘new’ Member State social interests in the posting of workers: the case of Latvia

  • Zane Rasnača

Abstract

Social and economic interests of ‘new’ and ‘old’ Member States along centre and periphery axis – Judicial and legislative developments concerning the posting of workers – Continuous deepening of the divide between centre and periphery – Lack of placement of new Member States’ social interests at the EU level – The need to place social interests firmly in the EU (internal market) structure – Developing meaningful common social standards to mitigate the centre/periphery divide

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PhD (European University Institute), researcher at the European Trade Union Institute. This paper profited from discussion with other participants at the workshop ‘The Displacement of Social Europe. A Law in Context Inquiry’ and feedback from Claire Kilpatrick, Magdalena Bernaciak as well as by the referees and editors. The usual disclaimer applies.

Footnotes

References

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1 ‘Eastern enlargement’ refers here to the three rounds of accession that took place in 2004 (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia), 2007 (Bulgaria and Romania) and 2011 (Croatia). Countries such as Cyprus and Malta are not included in this study because they were not part of the Soviet sphere of influence.

2 D. Kukovec, ‘Law and Periphery’, 21(3) ELJ (2015) p. 406.

3 Compare with ibid., p. 419-422.

4 For more in-depth analysis of this ‘economic’ element see ibid.

5 Ibid., p. 408-411.

6 Such stakeholders as the EU institutions, and Member States. For a comparison, see the social ‘trilemma’ as identified by M. Barslund and M. Busse, ‘Labour Mobility in the EU. Addressing challenges and ensuring “fair mobility”’, CEPS special reports, No. 139, 2016, p. 10.

7 96/71/EC.

8 ECJ 18 December 2007, Case C-341/05, Laval un Partneri.

9 Ibid., para. 121.

10 M. Whittall, ‘Unions fear ECJ in Laval case could lead to social dumping’, available at <www.eurofound.europa.eu/observatories/eurwork/articles/unions-fear-ecj-ruling-in-laval-case-could-lead-to-social-dumping>, visited 12 January 2018.

11 Malmberg, J. and Sigeman, T., ‘Industrial Actions and EU Economic Freedoms: The Autonomous Collective Bargaining Model Curtailed by the European Court of Justice’, 45 CMLR (2008) p. 1115 ; Deakin, S., ‘Regulatory Competition after Laval’, 10 CYELS (2007-2008) p. 581 .

12 Kukovec, supra n. 2, p. 418.

13 ‘Questions and Answers on the revision of social security coordination rules’, European Commission, 13 December 2016, <europa.eu/rapid/press-release_MEMO-16-4302_en.htm>, visited 12 January 2018.

14 Dhéret, C. and Ghimis, A. , ‘The revision of the Posted Workers Directive: towards a sufficient policy adjustment?’, EPC Discussion Paper, 20 April 2016, p. 2.

15 M. Bernaciak, ‘Intra-EU employee posting and PWD revision debates’, ETUI, Presentation, 30 May 2017, Brussels.

16 Dhéret and Ghimis, supra n. 14, p. 5.

17 Ibid., p. 5-6.

18 Ibid, p. 6.

19 Barslund and Busse, supra n. 5, p. 6.

20 Ibid.

21 De Wispelaere, F. and Pacolet, J., ‘An ad hoc statistical analysis on short-term mobility – economic value of posting of workers’, HIVA Research Institute for Work and Society, KU Leuven (2016), p. 19 .

22 Research by Pellegrina and Saraceno, 2013, as cited in ibid.

23 Ibid.

24 Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Ireland, Latvia, Lithuania, Poland, Spain and Sweden.

25 Report of the hearing in ECJ in Case C-341/05, Laval, paras. 26, 24, 31, 29, 30, 34.

26 In Schmidberger, the ECJ reasoned that, since the restriction resulted from the exercise of fundamental rights, and given that fundamental rights constitute general principles of EU law, measures incompatible with human rights were not acceptable (paras. 72 and 73). The Court decided that the interests involved had to be weighed in order to determine whether a ‘fair balance’ had been struck (paras. 80-81) (ECJ 12 June 2003, Case C-112/00, Schmidberger).

27 Report of the hearing in supra n. 25, para. 26.

28 Ibid., para. 27.

29 Ibid., paras. 25, 28, 32, 33 and 35.

30 Only in so far as they pursue the protection of posted workers, and not going beyond that (ECJ 18 December 2007, Case C-341/05, Laval un Partneri, para. 57).

31 ECJ 3 April 2008, Case C-346/06, Rüffert.

32 Ibid., para. 44.

33 Report of the hearing in Rüffert, paras. 21, 22, 23, 24, 25 and 27.

34 Ibid., para. 29.

35 Ibid., paras. 26 and 28.

36 ECJ 15 July 2010, Case C-271/08, Commission v Germany.

37 ECJ 7 October 2010, Case C-515/08, dos Santos Palhota and Others. The case concerned a requirement to send a prior declaration of posting to the Belgian authorities (para. 16).

38 Report of the Hearing in Santos Palhota, paras. 24, 25, 26, 27 and 28.

39 ECJ 17 November 2015, Case C-115/14, RegioPost. In this case, the question arose as to whether a Member State contracting authority can require tenderers and their subcontractors to undertake to pay the statutory minimum hourly wage (paras. 1-2).

40 Ibid., para. 27.

41 ECJ 10 February 2011, Cases C-307/09, C-308/09 and C-309/09, Vicoplus and Others.

42 ECJ 18 June 2015, Case C-586/13, Martin Meat. A Hungarian company sought to establish the civil liability of its legal advisers, claiming that they had failed to advise that its contract with a slaughterhouse established in Austria constituted the hiring-out of Hungarian workers in Austria and that, consequently, those workers could not be employed in that Member State without obtaining a work permit (para. 18).

43 Ibid., para. 44.

44 Ibid., para. 46.

45 ECJ 18 September 2014, Case C-549/13, Bundesdruckerei. The Czech Republic, Hungary and Poland intervened.

46 ECJ 7 November 2013, Case C-522/12, Isbir. Austria, Denmark, Poland and Sweden intervened.

47 ECJ 3 December 2014, Case C-315/13, De Clercq.

48 ECJ 12 February 2015, Case C-396/13, Sähköalojen ammattiliitto.

49 ECJ 12 February 2015, Case C-396/13, Sähköalojen ammattiliitto, paras. 11-18.

50 ECJ 18 September 2014, Opinion of AG Wahl, Case C-396/13 Sähköalojen ammattiliitto, para. 45.

51 Ibid., paras. 43, 73, 81.

52 Case C-396/13, Sähköalojen ammattiliitto, para. 71.

53 The national parliaments may carry out a subsidiarity check on new Commission’s legislative proposals (Art. 6), and, if at least one-third of them object to a proposal on subsidiarity grounds, the proposal must be reviewed (Art. 7(2)(3) of Protocol 2 TFEU).

54 Directive 2014/67/EU of the European Parliament and of the Council of 15 May 2014 on the enforcement of Directive 96/71/EC and amending Regulation (EU) No. 1024/2012, OJ L 159, 28.5.2014, p. 11-31.

55 The ‘Monti II’ proposal was so titled in reference to the ‘Monti I’ Regulation ((EC) No 2679/98) that contained a ‘Monti clause’ similar to the one proposed.

56 COM(2012) 130 final.

57 COM(2016) 128 final.

58 Council of the European Union, ‘Summary of the Meeting of the Committee on Employment and Social Affairs (EMPL)’, Brussels, 2 and 3 September 2009, 13081/09, p. 2.

59 J.M. Barroso, ‘Passion and Responsibility: Strengthening Europe in a Time of Change’, European Commission, 15 September 2009, <europa.eu/rapid/press-release_SPEECH-09-391_en.htm>, visited 12 January 2018.

60 European Commission (CWP DG EMPL), ‘Roadmap. New Legislative Initiative for Posting of Workers’ (2010).

61 A business that establishes its domicile in a tax-friendly country with just a mailing address, while conducting its commercial activities in other countries for the purpose of minimising its tax liability.

62 COM(2012) 131 final.

63 COM(2012) 130 final.

64 SWD(2012) 63 final, p. 15.

65 Reasoned opinions on COM(2012) 131 final from the German Bundesrat and from the Italian Parliament, p. 2. Both available at <www.ipex.eu>.

66 Reasoned opinion on COM(2012) 131 final from the Assemblée Nationale (France), available at <www.ipex.eu>.

67 The Senate of the Parliament of the Czech Republic 8th term, 668th Resolution of the Senate, available at <www.ipex.eu>.

68 Twelve national parliaments submitted reasoned opinions – both on time and after the deadline.

69 M. Hall, ‘Brussels drops plans for EU law limiting right to strike’, EURACTIV, 14 September 2012, <www.euractiv.com/section/justice-home-affairs/news/brussels-drops-plans-for-eu-law-limiting-right-to-strike>, visited 12 January 2018.

70 Reasoned opinions on COM(2012) 130 final from the parliaments of Belgium, Denmark, Luxembourg, Sweden and the Netherlands, available at <www.ipex.eu>.

71 Reasoned opinions on COM(2012) 130 final from the parliaments of Latvia, Czech Republic and Poland, available at <www.ipex.eu>.

72 Reasoned opinion on COM(2012) 130 final from Latvian Saeima, available at <www.ipex.eu>.

73 ‘College holds orientation debate on the economic and social dimension of the Single Market’, 6 October 2015, <europa.eu/rapid/press-release_IP-15-5763_en.htm>, visited 12 January 2018.

74 SWD(2016) 52 final, p. 4.

75 Austria, Belgium, France, Germany, Luxembourg, the Netherlands and Sweden.

76 COM(2016) 128 final, p. 4.

77 Ibid., p. 5.

78 Bulgaria, Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Romania and Slovakia.

79 COM(2016) 128 final, p. 5.

80 Ibid., p. 12.

81 Ibid.

82 Ibid., p. 7.

83 E.g. A. Eriksson, ‘EU Parliament delays a posted workers vote’, EUobserver, 1 June 2017, <euobserver.com/social/138073>, visited 12 January 2018.

84 Sénat and Statement from the Assemblée Nationale (France) concerning COM(2016) 128 final, available at <www.ipex.eu>.

85 Camera dei Deputati (Italy), COM(2016) 128 final, available at <www.ipex.eu>.

86 Assembleia da República (Portugal), COM(2016) 128 final, available at <www.ipex.eu>.

87 BG, CZ, EE, HR, HU, LT, LV, PL, RO and SK.

88 Chamber of Deputies and Statement from the Senate (Czech Republic), COM(2016) 128 final, available at <www.ipex.eu>.

89 Latvijas Republikas Saeima (Latvia), COM(2016)128 final, available at <www.ipex.eu>.

90 Camera Deputatilor (Romania), COM(2016) 128 final, available at <www.ipex.eu>.

91 Reasoned opinions on COM(2016)128 final from the Seimas of the Republic of Lithuania; the National Council (Hungary); the Senate of the Republic of Poland; and the Camera Deputatilor (Romania), all available at www.ipex.eu.

92 Reasoned opinion on COM(2016)128 final from the Chamber of Deputies and Statement from the Senate (Czech Republic), available at <www.ipex.eu>.

93 Folketing, COM(2016) 128 final, available at <www.ipex.eu>.

95 See <euobserver.com/social/139599>, visited 12 January 2018.

96 See also the call for change in legal thinking by Kukovec, supra n. 2, p. 427-428.

97 And due to the primacy and direct effect of EU law, and the accordingly limited discretion at the national level, this non-representation exaggerates the existing imbalance.

98 At least to the best of my knowledge.

99 Only judgments that were made publicly available (at <manas.tiesas.lv/eTiesasMvc/nolemumi>) for the years 2012-2015, and that involved a situation in which the posting of workers was involved, formed part of this analysis. The number of judgments analysed was 112.

100 Bernaciak, supra n. 15.

101 Laval, para. 121.

102 The Latvian courts, and also other stakeholders (including trade unions), have interpreted the judgment in the Finnish Electrical Workers’ Union case (supra n. 48) as prohibiting the home state from adopting rules on the relationship between ‘minimum wage’ and ‘daily allowances’ more favourable than those required by the host country. While the ECJ has interpreted the Posted Workers Directive as a partly maximum harmonisation measure only in regard to host country rules, the Latvian courts have extended this to apply to home country rules as well.

103 For example, Administrative Regional Court, 31 May 2012, Case No. 142199411, para. 11; Administrative Regional Court, 26 April 2012, Case No. A420695110; Administrative Regional Court, 22 March 2013, Case No. 142246511; Riga Regional Court, 12 November 2013, Case No. C30606012.

104 The original definition of posting in the Labour Law did not make a distinction between a posting, a mission or a business trip (Art. 14(1) Labour Law in the version prior to 1 January 2016).

105 Administrative Regional Court, 31 May 2012, Case No. 142199411, para. 11; Administrative Regional Court, 26 April 2012, Case No. A420695110.

106 Administrative Regional Court, 22 March 2013, Case No. 142246511; Riga Regional Court, 12 November 2013, Case No. C30606012.

107 Administrative Regional Court, 12 September 2013, Case No. A420290113.

108 Supreme Court, 10 December 2012, Case No. A420521210; Supreme Court, 28 December 2012, Case No. A420536110; Supreme Court, 14 December 2012, Case No. A420521110.

109 ECJ 9 August 1994, Case C-43/93, Vander Elst.

110 ECJ 21 October 2004, Case C-445/03, Commission v Luxembourg.

111 ECJ 19 January 2006, Case C-244/04, Commission v Germany.

112 ECJ 27 March 1990, Case C-113/89, Rush Portuguesa.

113 See Supreme Court, 10 December 2012, Case No. A420521210; Supreme Court, 28 December 2012, Case No. A420536110; Supreme Court, 14 December 2012, Case No. A420521110.

114 Vidzeme District Court, 18 September 2014, Case No. C21044413; Administrative Regional Court, 28 October 2015, Case No. A420422314.

* PhD (European University Institute), researcher at the European Trade Union Institute. This paper profited from discussion with other participants at the workshop ‘The Displacement of Social Europe. A Law in Context Inquiry’ and feedback from Claire Kilpatrick, Magdalena Bernaciak as well as by the referees and editors. The usual disclaimer applies.

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