POSTING OF WORKERS : CONVOLUTED CASE-LAW.

ANALYSIS

Questions regarding the application of rules on the posting of workers abroad date back further than the draft Services Directive and even the Directive on the Posting of Workers. The European Court of Justice, in several rulings issued in the 1980s (Webb, Seco), outlined general principles in this complex area. With the accession of Spain, and above all Portugal, the issue became an even more economically and politically sensitive hot potato, notably in the construction sector. A new landmark ruling concerning a Portuguese company in France (Rush Portuguesa) triggered the adoption of a Directive (1) designed to strike a balance between several apparently contradictory principles: on the one hand, 'the principle of free competition between businesses', and their right to 'move activities to certain member states to benefit from lower costs', and on the other, the member states' right to 'establish minimum wages in order to guarantee an adequate minimum standard of living'.

The Court lays down three fundamental principles. Firstly, the equality of service providers: 'the freedom to provide services outlined in article 49 of the Treaty implies ( ) that service providers can, in providing services, exercise their activity on a temporary basis in the (host) country under the same conditions as those applied by that country to its nationals'. Secondly, a ban on restrictive measures: the host state (on whose territory work is to be carried out) 'cannot impose restrictive conditions on service providers (such as a requirement to hire staff in the country or impose work permit obligations)'. Thirdly, scope for controls: 'member states are authorised to verify that an enterprise is not circumventing Treaty provisionsa under cover of the provision of services' (EC and accession treaties).

OBJECTIVE: COMBATING SOCIAL DUMPING

Very early on, case law recognised that the social protection of workers constitutes a 'fundamental general interest' justifying 'restrictions on the freedom to provide services' (Webb ruling). The need to prevent social dumping is recognised (Arblade ruling). 'Measures may be considered provided one of the national legislator's objectives is to prevent unfair competition from enterprises paying their workers less than the minimum wage' (Wolff & Muller ruling). 'The aims of preserving fair competition and ensuring protection of workers are not contradictory but can be pursued concomitantly' (Wolff & Muller ruling).

This...