The significance of Directive 96/71 EC ("Posted Workers Directive")

July 2010
            There are several things that Directive 96/71 EC does; however, none of them are more significant than the effect it has had on social dumping. Prior to Directive 96/71 EC Member States were posting workers as labourers for a given job, contract, or sub-contract, etc. but were paying them the wages and treating them with the laws of their home State, not of the host State (the State where the worker is posted). This created "cheap work" and essentially made an unequal playing field for native workers.

            Essentially, the Directive allowed workers to be posted workers that could be subject to the host State's laws for the vast majority of things (eg. minimum wage, health and safety, breaks, etc.). A posted worker is "a worker [as defined by the host State] who, for a limited period, carries out his work in the territory of a Member State other than the State in which he normally works." Art 2(1) & 2(2).  Since the Directive is directly effective all Member States must be cautious and will no longer be able to bring in "cheap workers" to do a job in a country for a given time then send them on their way. Next to look at the basics of what the Directive 96/71 EC actually says/provides.

            There are three Articles that are relevant to the discussion: Articles 1-3. Article 1. lays out when the Directive will be applicable to the Member States posting workers. The Member State must post workers under one of three ways for the Directive to apply. First, (3(a)) the Member State would have to post workers "on their account and under their direction, under a contract concluded between the undertaking making the posting and the party for whom the services are intended...". Secondly, the Member State would have to post workers to "an establishment or to an undertaking owned by the group in the territory of a Member State, provided there is an employment relationship...." Finally, the posted worker may be "a temporary employment undertaking or placement agency, [that] hire out a worker to a user undertaking...provided there is an employment relationship...." If one of these three elements are met and are not done so as to a navy undertaking (Art 1 (2)) then the Directive applies.

            The last significant Article to the Directive is Article 3. Article 3 lays down what the States must protect and ensure when the posted workers are there. For example, maximum work periods and minimum rest periods, conditions of hiring out of workers, equality of treatment between men and women and other provisions on non-discrimination, etc. (see Art 3(1)(a)-(g)).

            The Directive itself is mildly vague about the meaning of Article 3. The ECJ (European Court of Justice) has heard cases to try to clarify some of the ambiguities and thus truly reigned in social dumping. In

Rush Porteguesa the ECJ clarified that "Community law does not preclude Member States from extending their legislation...to any person who is employed...within their territory...; nor does Community law prohibit Member States from enforcing those rules by appropriate means." Paragraph 18. Essentially, this single paragraph sums up much of the Posted Workers Directive - that the Directive is something that is trying to eliminate social dumping. However, the ECJ also said that the Member State in which the work is taking place "may not impose on the supplier of services conditions relating to the recruitment of manpower ...or work permits." Paragraph 19. This shows that while the Member State in which the work is taking place (the host State) is permitted to ensure it is not being used as a place for social dumping it does have limitations on what is permissible.

            Likewise, in Mazzoleni the ECJ clarified Directive 96/71 EC.  Mazzoleni is a case where the minimum wage aspect is looked at more closely. Essentially, the ECJ decided to leave it up to the host State to decide "whether, and if so to what extent, application of national rules imposing a minimum wage [where there is a short time posted worker] is necessary and proportionate in order to ensure the protection of the workers concerned." Paragraph 29. The ECJ essentially says that posted workers may be subject to the minimum wage of the host State; however, when the posted worker is there for brief periods of time or for part time work it is up for discretion of the host State.

            Thus, Directive 96/71 EC has been influential in limiting social dumping and setting the ground work for Member States to be able to keep work on their own soil competitive. So, by ensuring that there is an equal playing field via anti-discrimination, working conditions, application of the host state's laws for essentials (eg. wages, work and rest periods, health and safety, etc.) one can see how Directive 96/71 EC has changed and severely limited social dumping.