With the adoption of an own-initiative report on challenges to collective agreements in the EU, members of the EP Employment and Social Affairs Committee reacted on Monday to the recent Laval, Viking, Rüffert and Luxembourg rulings of the European Court of Justice. The freedom to provide services is one of the cornerstones of the European project but this should be balanced against fundamental rights and the social objectives anchored in the treaties, say MEPs.The committee argues that the free movement of services does not contradict nor does it override the fundamental rights of the social partners. The report, drafted by Jan Andersson (PES, SE), also underlines the importance of the principles of free movement of workers and equal treatment.
Directive on the posting of workers
The Posting of Workers Directive (PWD) allows public authorities and social partners to look for terms and conditions of employment which are more favourable to workers according to the different traditions in the Member States, MEPs point out.
The legal basis of the PWD should, however, be broadened to include a reference to the free movement of workers. It should also be reviewed to take account of matters such as working conditions, pay levels and equal treatment, adds the report.
MEPs question the idea of applying a "proportionality principle" to the right to take collective action against firms that use the right of establishment or the right to provide services across borders while undercutting terms and conditions of employment.
The Member States and the Commission are asked to adopt measures to combat "letterbox-companies" which are not engaged in any genuine business in the country of origin but have been created to circumvent the full application of regulations in the host country, especially on wages and working conditions.
Lastly, the report says that fundamental social rights are not hierarchically subordinate to economic freedoms. It therefore asks for a re-assertion in primary law of the balance between fundamental rights and economic freedoms.
In the Viking case, the Viking company wanted to reflag 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.
Committee vote: 38 in favour, 0 against, 5 abstentions - Procedure: own-initiative - Plenary vote: October II