European Law (2016/2017) Seminar 4

Seminar 4 of the Course European Law (2016/2017), Utrecht University. 

These are the questions of Week 5! Week 4 has no seminar questions. 

Week 5 (Seminar 4) European Law

Posted workers

Question 1

Paul Robowski, of Polish nationality, (26 years old) is working in Poland, where he earns 350 euros a month. On New year’s eve 2012 he decides that he wants to have a better life and wants to earn a higher wage in the future. He decides to apply for a job at Philips in Eindhoven (Netherlands), where he is subsequently offered an employment contract for 3 years. His wage is 2500 euros a month. In the beginning Paul is exhilarated as he earns about 7 times as much as before. Then he notices that his colleague, who is of the same age and has the same work experience and who does the same work earns 3000 euros. Paul goes to the personnel management and they tell him that they pay a lower wage to employees of the new Member States, since they earn a much lower income in the State of origin.

1. Can Paul, who agreed with the wage in his contract of employment, do anything against the difference in wage and on which grounds?

Answer to Question 1a:

Paul is a worker, he falls within the scope of article 45 TFEU. Therefore, he can rely on the equality of treatment (article 45 (2) TFEU). He can claim the same wage as the national workers. There is also secondary legislation: The Regulation on the freedom for workers within the Union (article 7(1) Regulation). Paul can invoke article 45 TFEU, which protects free movement of the workers and requires equal treatment of workers. This provision has also horizontal direct effect. He can invoke the provisions against the employer.

Paul’s sister Elaine (24 years old), working and residing in Poland, hears about Paul’s wage and his success stories of his stay in that fairytale country and wishes to go the Netherlands as well. Fortunately, a company in her home town offers her a job in the Netherlands. She will be employed by this company and then sent to Nieuwegein for three years to work as a nurse for a private care institution. She will be offered a good wage. When she arrives in Nieuwegein in October 2013, she is offered by the Polish company a contract of employment for 3 years under Polish labour law, which says that she is offered 1250 euros a month for a full-time job. She hears from a colleague that she is paid below the statutory minimum wage in the Netherlands, which is 1477,80 euro. She also hears that the Dutch nurses in the clinic of her age and work experience doing the same work receive 1750 euros.

2. Can Elaine, who agreed with the wage in his contract of employment, do anything against the difference in wage and on which grounds?

Answer to Question 1b:

Elaine does not fall within the scope of Article 45 TFEU. She is a posted worker, the company is posting her to the Netherlands. As a posting worker Elaine falls within the scope of Article 56 TFEU. Article 3(1 /sub c) Posted Work Directive is important. Her period of posting is quite long, but the Directive does not set definitive limits to the duration of the posting. Mostly, the limit upheld is 3 years. Article 3 of the Directive applies so she can claim the minimum wage. Elaine cannot claim equal treatment. There is a difference, because Elaine can’t claim equal treatment, she is not a worker and is less protected. She is entitled to the minimum wage of 14477,80 euro, but nothing more.

3. If there is a difference in outcome between Paul’s and Elaine’s case, what is the reason for this difference? Is this difference justified?

Answer to Question 1c:

There is a difference between a worker and a posted worker. The posted worker provides services for a shorter period of time. It is a political and economic decision. If you impose more strict guidelines, you would force the company to pay a much higher wage: it would harm the freedom of services, that’s why there is a lower form of protection.

Elaine is dismissed after two years, since the employer became bored now Elaine kept complaining about her low wage. She argued that under Dutch law a contract of employment for a definite period can be terminated before its expiry only if this is foreseen in the contract itself (which was not the case). Her employer says that this is not the case. Since dismissal law is not part of the posting directive and since unemployment benefits are not mentioned in the directive, she cannot oppose her dismissal with reference to Dutch law and she is not entitled to Dutch unemployment benefits.

d.         Is this reference to the posting directive correct?

Answer to Question 1d:

Dismissal rights and consultation rights do not fall under the protection of this Directive (article 3 PWD). Dismissal law is no part of the Directive. The exception from article 3(10) must be interpreted very strictly, and dismissal law and benefits are no part of this exception.

Question 2

Suppose, the Netherlands wishes to reduce the possibilities of agencies for temporary work  of other Member States to employ foreign workers in this country, since it fears high unemployment due to the financial crisis. Therefore it wishes to introduce a permit system for foreign offices; a permit is issued only if the owner has a certificate of good behaviour obtained in the Netherlands.

Latviatemp, owned by Ms Mary, who has already run an office for temporary work for 5 years in Latvia and a permit for this work by that country, for which she submitted  a certificate of good behaviour, is refused to operate in the Netherlands because of the lack of the certificate.

Can Ms Mary do something against this?

Answer to question 2:

This would be an extra requirement. She can do something about it. The requirement falls under the scope of the article 56 TFEU. The certificate is not justifies, since is not a proportionate requirement. According to the Rüffert-case, par. 33: ‘’You may not go beyond the rules for the minimum protection. It  may only be justified if there is protection’’.

Question 3

What is the relevance of the Laval judgment to the Posting Directive? (you can ignore the issue of the way in which Sweden collective agreements are implemented)

Answer to Question 3:

The right guaranteed by workers post in the territory of the Host Member state is limited (Article 3(1)). Par. 80 and 81 of the Laval case.

Question 4

The Posting directive mentions, in Article 3, a number of social rights which have to be observed in case of posting.

There is some discussion whether these minimal social rights constitute protection of the posted workers (view 1), or whether they are meant to protect the national social model of the Member States  (view 2). By social model is meant  that Member States each have a certain organisation of their labour law and social security law, which provides for a particular level of protection. There are important differences between the old Member States, which have, in general, a relatively high level of protection, and the new ones, which are more dedicated to a liberal model, with little protection. If a Member State with a ‘’cheap model’’ can, without restriction, make use of the differences in protection level, this may undermine the traditional model of the old Member States. The latter is sometimes referred to as social dumping.

Give some arguments for the first view and some for the second view.

Answer to question 4:

Posted workers have at least some protection. Posted workers can gain by the Directive in other Member States. That is quite good for the posted workers.

There can still be a competition about wages, and social dumping. This is unfortunate for the Host Member State. The Sending state takes advantages of the low labour market in the other Host State.  

There must be found a balance between a fair competition and a certain level of protection. The Directive tries to do this.