The recent protests at the Lindsey oil refinery and elsewhere reflect the knock-on effect of four judgments from the European Court of Justice last year: Viking, Laval (see weekly LELR 49), Ruffert and Luxembourg.
At the Lindsey refinery, workers suspected that the sub-contractor, IREM, wanted to ship Italian and Portuguese workers to the UK so that they could undercut the local collective agreements (a claim that has always been denied by Total and IREM).
But this is exactly how “social dumping” works - employers gain competitive advantage by posting workers from a lower wage economy, undercutting local wages and collective agreements and driving down the wages and terms and conditions available.
The Posted Workers Directive, on the other hand, lays down a floor of minimum protections which a member state must guarantee to workers posted to their territory. As a result of the four judgments, however, that floor has turned into a ceiling. Restricting an employer’s freedom to provide services under Article 49 EC Treaty can probably only be justified, in a posted workers’ case, if the terms imposed go no further than the minimum protections provided for in the directive.
As for pay, the directive only requires a guarantee of minimum rates as laid down in national laws or collective agreements which have been “declared universally applicable”. After the four judgments last year, those minimum rates are all that a member state is entitled to impose on contractors posting workers to its territory.
Even if IREM was not seeking to undercut local wages and collective agreements, the opportunity for other contractors to do so is obvious given the strait-jacket imposed on member states by the ECJ’s interpretation of the Posted Workers Directive. For the moment, in EU law, an employer’s freedom to provide services trumps social measures taken by member states to protect local wages and collective agreements.