Hopes fade for breakthrough in posted workers deadlock

Optimism is fading that Italy may be on the verge of brokering a compromise on the long-stalled proposal on rights for workers posted to another member state.

Despite initial indications that Portugal's Socialist government was moving closer to those countries which feel that local employment conditions should apply from day one of a posting - the 'zero option' - rather than after a threshold period, this now appears not to be the case.

'It's more a question of presentation. Portugal is still part of the hard core group which wants a threshold; they just don't like to admit it any more,' said one member state official.

Lisbon is known to be unhappy about the effect the proposed directive could have on the country's building sector.

Discussions are getting under way slowly on a formal proposal from the Italian government aimed at breaking the deadlock. This is based on the compromise it recommended recently at an informal ministerial meeting in Venice.

The next formal meeting of social affairs ministers has been postponed until 29 March, ostensibly to allow more time for officials to study the text.

But Italy's ideas are so vague that if its proposal was adopted, each member state would be able to do virtually whatever it wanted. Experts stress that a lot more work is needed to define precisely what caretaker Labour Minister Titziano Treu is trying to achieve.

'Rome seems to want to provide a directive which will sanction any legislation at national level by any member state, as well as providing cover for the new French and German legislation in case they are brought before the court,' suggested one cynical observer.

In basic terms, the Italian compromise suggests that the zero option should apply for the award of annual paid holiday entitlements. As far as salaries are concerned, a company could request exemption from the zero option from the member states' 'competent authorities'. But member states would also be free to negotiate a threshold period before local pay conditions apply at national level.

Rome is also suggesting a waiver to the salary rules for 'small jobs', defined as those costing no more than the number of hours worked by a single full-time worker in the sector in question in one month.

A further exemption for maintenance and installation work, except in the construction industry, is also thought likely to arouse the opposition of the zero option countries - France, Germany and the Benelux.

France already has a law on its statute books enforcing the zero option, while in Germany similar measures have passed through parliament, but are still being blocked by employers' representatives.

Many believe the key to future progress will be the approaching elections on 3 March in Spain and on 21 April in Italy. Opinion polls suggest that a right-wing government is likely to emerge in Madrid, which would probably move Spain further towards the British-led group of countries favouring a threshold.

The situation in Rome is as unclear as ever. Italy's role as broker is crucial to the outcome, and nobody seems too sure what line it will take.

Another group believes the enthusiasm for the directive may be on the wane.

'Those who really wanted this type of legislation the most have already introduced national laws, and Commissioner Flynn has moved away from his original insistence that there must be a threshold to ensure freedom of movement,' commented one disgruntled official.