Spain looks to break impasse

Date: 12/10/1995

By Michael Mann

IT may take court action to break the impasse over the European Commission's long-stalled proposal on protecting foreign workers posted to another member state, according to industry lobbyists.

There has been little sign of movement on the question since the French presidency abandoned efforts to get agreement at a meeting of EU social affairs ministers in June.

The Spanish presidency will be looking for fresh inspiration at an informal meeting in Cordoba from the 27 to 29 October, but diplomats remain doubtful that a compromise can be reached. “Spanish officials have absolutely no idea what to do to bring the two sides closer together,” said one.

Commission hopes for an EU-wide accord appear to rest on a sudden attack of pragmatism within the Council of Ministers. More dramatically, the countries who have already introduced tough domestic legislation might be forced to soften their line by the threat of court action from other member states who claim that their rules prevent the free provision of services by companies in other countries.

The Commission is already believed to have received a complaint from Denmark about restrictions in France. Operators wanting to post workers face the prospect of filing paperwork in French to at least three different authorities, according to a trade insider.

Spanish Labour Minister Antonio Grignan's chances of engineering a compromise look remote, mainly because France, Belgium and Luxembourg already have domestic legislation giving posted workers equal status with local employees from day one - the so-called 'zero option'.

The probability that this group will be joined by Germany has recently faded with confirmation that the German employers' federation BDA has rejected proposals from the country's Labour Minister Norbert Blüm for similar legislation.

Experts do not believe, however, that this will have a decisive effect on the debate in Council. The two sides of the argument remain diametrically opposed and Blüm is unlikely to believe that an EU deal could provide a suitable replacement for his failed legislation. His unsuccessful attempt to broker a compromise as Council president in December 1994 inspired him to draw up domestic proposals in the first place.

The failure to find a compromise is unusual, given that the proposed directive on posted workers comes under the umbrella of single market legislation and is, therefore, only subject to qualified majority voting rather than unanimity, the basis for purely social legislation.

But the French-led bloc see the problem in black and white terms. Any solution falling short of the zero option would conflict with national legislation and would be unacceptable.

In the other camp are the UK, Ireland and Portugal, which favour a three-month grace period before employers have to provide local employment conditions; Italy, which could probably move from two months to one; and Spain itself, which appears to favour a short threshold of around 15 days.

Apparently intractable differences reflect movements of labour within the Union. Germany and its allies believe the 'zero option' to be necessary to prevent foreign firms from undercutting local companies bound by strict national legislation on working conditions.

The group led by the UK, as exporters of labour, regard the German attitude as highly protectionist. During its presidency term, France suggested an optional threshold, a move which would have made a mockery of the whole principle of common EU rules.

For its part, the Commission is caught between the two sides, aware of the practical problems involved in the immediate application of local rules, but determined to force through common EU standards which it believes to be crucial to the success of the single market.

Officials dealing closely with the dossier see very little reason for optimism, although one diplomat said the Spanish minister had said “very confidently that we can leave it to him”.

Commission officials suggest that Flynn may have a new initiative to put to Grignan in the margins of this month's informal meeting of ministers.

Working groups should return to the issue in late October to prepare the ground for a final push for agreement at December's formal meeting.

If ministers cannot agree in December, the understanding among the social partners is that they would be consulted, not on a legal basis under the terms of the Social Protocol but purely to sound out their views.

“The Commission cannot turn to us because there is no legal basis under the protocol for consultations on the free provision of services,” said a UNICE official. In any case, the official continued, the draft Directive does not even touch on the most important point, the danger of companies being forced to pay social contributions in both their country of origin and the country to which they are sending workers.