Challenges to collective agreements in the EU

The freedom to provide services is one of the cornerstones of the European project, however, this should be balanced against fundamental rights and the social objectives set out in the Treaties and against the right of the public and social partners to ensure non-discrimination, states the report by Jan Andersson (PES, SV), adopted by 474 votes for, 106 against and 93 abstentions.

 

MEPs call on the Commission to prepare the necessary legislative proposals which would assist in preventing conflicting interpretation in the future.

 

 

The Posting of workers directive (PWD) allows public authorities and social partners to lay down terms and conditions of employment which are more favourable to workers according to the different traditions in the Member States, MEPs pointed out.

 

The legal basis of the PWD could however be broadened to include a reference to the free movement of workers. It could also be partially reviewed with specific regard to the issues of applicable working conditions. (par 28) However, any review of that directive should be done after a thorough analysis at national level of the actual challenges to the different models of collective agreement, added the report. 

 

 

MEPs also question the introduction of a "proportionality principle" to the right to take collective actions against firms that use the right of establishment or the right to provide services across borders while deliberately undercutting terms and conditions of employment.

 

 

Lastly, the Member States and the Commission are asked to adopt measures to combat "letterbox-companies" which are not engaged in any genuine and effective business in the country of establishment but have been created to circumvent the full application of rules and regulations in the host country, especially on wages and working conditions.

 

 

In the Viking case, the Viking company wanted to re-flag a vessel from Finland to Estonia to avoid the constraints of Finnish collective bargaining agreements. In the Laval case, a Swedish trade union tried, through collective action, to force a Latvian service provider to sign a collective agreement when performing services in Sweden.  In two judgments handed down in December 2007, the European Court of Justice (ECJ) ruled in favour of Viking and Laval, which had complained, respectively, of violations of the freedom of establishment and the freedom to provide services.

 

In April 2008 the ECJ delivered its verdict in the Rüffert case, which concerns the right of public authorities, when awarding contracts for work, to demand that tendering companies commit themselves to pay wages that are in line with rates already agreed through collective bargaining in the place where the work is carried out, or whether this could be outlawed as a restriction on the freedom to provide services under Article 49 of the Treaty.

 

In the Luxembourg case, the ECJ ruled in favour of the European Commission, which accused Luxembourg of transposing the 1996 PWD too restrictively into Luxembourg law.