10.6092/issn.1561-8048/10040
This article aims to examine to what extent the recent reform of the Posting of Workers Directive (PWD) may represent a proper instrument to correct the well-known pro-market approach adopted by the case law of   the CJEU (“Laval quartet”) and favour more worker-friendly interpretations.  The revised Directive is analysed under the heading of the equal treatment rule between local worker and posted workers in order to emphasize some critical aspects of the EU law which could reduce the practical impact of that rule, especially in case of long-term postings.  The idea is that even though this Directive has also been adopted as a measure of employee protection, it only partially affects the position of the home-state employers wishing to post their employees to the territory of another Member State on a temporary basis. For example, for various reasons, the scope of the equal treatment rule could be curtailed and thus restrictively interpreted by the courts.
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Raffello Santagata De Castro
Italian Labour Law e-Journal
Social Dumping
EU Law on Posting of Workers and the Attempt to Revitalize Equal Treatment
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https://illej.unibo.it/
12
Miscellaneous
2019-12-17
2019-11-21
2019-12-17
2020-09-15
149-169
ILLeJ
Raffello Santagata De Castro
2019/12/17
10.6092/issn.1561-8048/10040
149
Vanvitelli University of Campania
1561-8048
2
Social Dumping
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169
EU Law on Posting of Workers and the Attempt to Revitalize Equal Treatment
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 EU Law on Posting of Workers and the Attempt to                                                                             Italian Labour Law e-Journal
 Revitalize Equal Treatment                                                                                                         Issue 2, Vol. 12 (2019)
 Raffaello Santagata De Castro                                                                                                            ISSN 1561-8048
 raffaello.santagatadecastro@unicampania.it                                                                https://doi.org/10.6092/issn.1561-8048/10040
__________________________________________________________________________________________________




      EU Law on Posting of Workers and the Attempt to
                Revitalize Equal Treatment
                                                                Raffaello Santagata De Castro


1. Introduction. 2. Equal Treatment of Local Workers and Posted Workers? One Step further
than Directive 96/71? 3. Equality of Treatment, “Remuneration” and Collective Agreements.
3.1. The concept of Remuneration, the Role of Domestic Law and the Freedom to Provide
Services. 4. Long-term Postings. The Relationship between the Enforcement Directive and
the Revised Directive. 4.1. Long-term Postings and the Equal Treatment Rule. 5. Brief
Concluding Remarks.

                                                                                               Abstract:

 This article aims to examine to what extent the recent reform of the Posting of Workers Directive
(PWD) may represent a proper instrument to correct the well-known pro-market approach adopted
by the case law of the CJEU (“Laval quartet”) and favour more worker-friendly interpretations. The
revised Directive is analysed under the heading of the equal treatment rule between local worker and
posted workers in order to emphasize some critical aspects of the EU law which could reduce the
practical impact of that rule, especially in case of long-term postings. The idea is that even though
this Directive has also been adopted as a measure of employee protection, it only partially affects the
position of the home-state employers wishing to post their employees to the territory of another
Member State on a temporary basis. For example, for various reasons, the scope of the equal
treatment rule could be curtailed and thus restrictively interpreted by the courts.

Keywords: EU Internal Market; Freedom to Provide Services; Posting of Workers; Equal Treatment,
Social Dumping.



1. Introduction.

    For at least four years, the reform of the Posting of Workers Directive (PWD) has been
at the centre stage of EU political debate. This reform was originally announced by president
Juncker in his speech before the European Parliament of 15 July 2014. In spring 2016, the
Commission adopted a first Proposal for a revision of the PWD in order to revise the rules
on the terms and conditions applicable to posted workers and ensure that posted workers
receive “equal pay for equal work in the same place”. However, unsurprisingly, the Proposal
caused much controversy and the split between “old” and “new” Member States, and


  Raffaello Santagata De Castro, Researcher, Università della Campania Luigi Vanvitelli. This document was
initially prepared as a discussion paper for a workshop organized by the European Judicial Training Network
(EJTN) on “Ruling on Cross-border Labour Cases at a European Level” (Lisbon, September 25, 2018). The
article has been revised and updated. This article has been submitted to a double-blind peer review process.

https://doi.org/10.6092/issn.1561-8048/10040
    Raffaello Santagata De Castro                                                            Italian Labour Law e-Journal
                                                                                                    Issue 2, Vol. 12 (2019)
                                                                                                    Section: Miscellaneous

particularly between receiving countries and sending countries, was unavoidable1. This is why
the Commission’s proposal was discussed for more than twenty months, and it was only in
February 2018 that an agreement was found between the co-legislators so that in June 2018
the final text of a revised Directive 2018/957/EU (amending Dir. 96/71/EC)2 was approved
by the Council.
   Reading the preamble, the main aim of this Directive is very clear. Recital 4 states: “more
than 20 years after its adoption, it has become necessary to assess whether Directive
96/71/EC of the European Parliament and of the Council still strikes the right balance
between the need to promote the freedom to provide services and ensure a level playing field
on the one hand and the need to protect the rights of posted workers on the other”.
   The important CJEU judgments, that have come to be known as the “Laval quartet”,
have clearly demonstrated that finding the proper balance between competing objectives at
stake – as in 1996 the authors of the PWD tried to do – is very difficult. There is no doubt
that the “Laval quartet” marked a fundamental shift in the nature of the relationship between
national social systems and internal market law, as originally configured by the Rome Treaty.
In fact, as is well-known, the Court clearly overturned the presumption in favour of the
principle of territoriality, at least in the context of the freedom to provide services,
interpreting and using Directive 96/71/CE on the posting of workers (PWD) as an
instrument to allow “regime portability in favour of workers”3. In doing so, to some extent,
the Court provided an explicit invitation to regime shopping and allowed a market paradigm
based on wage competition to play an increasingly important role in the law on the posting
of workers. Consequently, the EU’s freedoms, and particularly the freedom to provide
services, collided with national social policy to the detriment of national rules. This is very
problematic in the more recent context as the economic crisis, the growth in pay gaps
between Member States and the reform of European economic governance have contributed
to questioning the role and status of national social spaces.
   In 2018, the adoption by the European Parliament and the Council of revised Directive
2018/957/EU signalled a change on the horizon. Many observers think that the revised
Directive could represent a turning point4. The aim of this directive is clearly to correct the

1 The difference in the conflicting interests at stake is evident. As is well-known, whereas higher wage countries,
i.e., Member States, mainly from Western Europe, receiving a large number of posted workers, have been in
favour of an extension of the scope of the PWD by promoting an equal pay rule, Central and Eastern Member
States, i.e. low-wage countries, triggered a “yellow-card-procedure” to block the Commission’s proposal, as
they have a national interest in not expanding the applicability of the host State’s labour standard to posted
workers. In particular they claimed that the realization of “equal work for equal pay in the same place” would
mean the loss of the competitive advantage that companies established in their territory enjoy due to their lower
wage costs.
2 Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive

96/71/EC concerning the posting of workers in the framework of the provision of services (Text with EEA
relevance) PE/18/2018/REV/1, OJ L 173, 9 July 2018, 16–24.
3 In other words, an employer moving from a less regulative state to a more regulative one is entitled to the

protection of the weak standards and rules applied in the “country of origin”: Deakin S., Regulatory Competition
in Europe after Laval, Centre for Business Research, University of Cambridge, Working Paper No. 364, 2008, 21.
See also Kenner J., The Enterprise, Labour and the Court of Justice, in Perulli A., Treu T. (eds.), Enterprise and Social
Rights, Kluwer Law International B.V., The Hague, 2017, 199-247: “following these cases, the PWD is so
constrained in its application that, in its present form, and in isolation, it offers very limited potential to be used
by the host Member State to prevent social dumping and may even be promoting it”.
4 For example, Giubboni S., Il diritto sociale europeo alla ricerca dell’autonomia perduta: opportunità e rischi, in Politiche

sociali, 2019, 3. For a partly different view, see Franzen M., Die geänderte Arbeitnehmer-Entsenderichtlinie, in

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pro-market and less protective CJEU approach and focus more on the need to protect the
rights of posted workers. Some of the key changes to the text, such as those relating to
remuneration and equal treatment – which this article aims to discuss – seem to have been
introduced in order to find a better balance between EU rules on free movement in the single
market and the social dimension at national level and, therefore, preserve the autonomy of
the national systems of labour law (host States’ room to manoeuvre with a view to preventing
social dumping).
   As will be seen below, however, the practical impact of these changes in terms of a shift
of values underpinning the internal market should not be overestimated. It is doubtful, for
example, whether, and to what extent, a reform like this can really represent a proper
instrument to correct the former pro-market approach adopted by the CJEU and favour
worker-friendly interpretations inspired by a substantive approach of equal treatment
between local worker and posted workers.


2. Equal Treatment of Local Workers and Posted Workers? One Step further than the
Directive 96/71?

   As previously mentioned, after the Laval quartet, there is an urgent need to reopen and
amend the substantive content of the 1996 Directive as that Directive had been read and
used in ways that leave foreign service providers from countries with lower wage levels
“significant possibilities further to increase their competitive advantage, if not through
outright fraud, then through advanced regime shopping”5. It had become clear that the CJEU
had found a way to interpret the provisions of the PWD not as a “floor” of rights but as a
“ceiling”6, putting the territorial application of labour law under pressure.
   One of the main criticisms relating to the posting framework was that the posted
employees of a cross-border service provider, unlike migrating workers, are not entitled to
equal pay, or equal treatment like workers in the host State; as a matter of fact, EU provisions
grant posted workers the right to be treated equally only in relation to minimum wage but
not in relation to any higher pay that may be provided under a collective agreement.
Therefore, the practice of posting, in this environment, will inevitably cause social dumping.
   This fundamental problem had been left untouched also by the Posted Workers
Enforcement Directive (2014/67/EU: ED), adopted on 15 May 20147: it only sought to
prevent abuse of posting, taking into account that, in the opinion of the majority, the posting


Europäische Zeitschrift für Arbeitsrecht, 2019, 3-23, according to whom the Directive clearly aims to protect the
interests of the higher wage countries but leaves many problems of interpretation to the courts in relation to
the principle of equal treatment, especially in cases of long-term postings.
5 Countouris N., Engblom S., Civilising the European Posted Workers Directive, in Viking, Laval and Beyond, Hart,

Oxford, 2014, 287.
6 See also Hendrickx F., A Post-Laval Case: Esa and Minimum Wages for Posted Workers, in Comparative Labor Law

& Policy Journal, 2011, 101: “After Laval, it has become clear that there are limitations to the protection that
host states may wish to impose on foreign service providers. In the Laval-judgment, the Court pointed out that
article 3(1) of the Posting Directive “relates only to minimum rates of pay” and cannot be relied upon to impose
rates of pay “which do not constitute minimum wages” (cf. § 70 of the judgment)”.
7 Schmid-Drüner M., The revision of the Posting of Workers Directive (Briefing Employment and Social Affairs),

European Parliament, 2017.

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provisions of the Directive 96/71 have not been effective in practice, and Member States
and employers have had difficulty in implementing, applying, and enforcing the Directive8.
   Only in the original proposal for a new directive presented in 2016 did the Commission
acknowledge the need for a more protective regime for posted workers” social rights clearly
intended to address issues relating to equal treatment9.
   It is significant that although the EU Commission’s proposal explicitly mentioned the
famous guiding principle of equal pay for equal work in the same place, the new Posting
Directive is silent on this point. For this reason, according to some authors, this “principle
has no legal grounds. It is nowhere to be found in the text of the Directive”10.
   However, it should be pointed out that in the revised directive there are two important
references to the more general concept of “equality of treatment”. First, according to the
new wording of art. 3(1), Member States are obliged to ensure that foreign undertakings
guarantee, “on the basis of equality of treatment”, that workers who are posted to their
territory follow Member State rules and treatment in a number of areas such as, for example,
maximum work periods or a minimum number of paid annual holidays, as well as minimum
wages. At the same time, the new art. 3(1) seems to widen the hard nucleus of working
conditions of the host state to the extent that it substitutes the term “minimum rates of pay”
with the term “remuneration”.
   Secondly, a significant reference to equal treatment can also be found in the new art. 3(1a)
which introduces a new provision for long-term postings. In this respect, Dir. 2018/957
seems to go one step further than the Directive 96/71, where equal treatment is only
mentioned in art. 3(8), which uses the term “equality of treatment” in order to underline that




8 Rocca M., The Reform of the Eu Directive On Posting Of Workers Fortune Smiles on the Juncker Presidency?, in Casale
G, Treu T. (eds.), Transformations of work: challenges for the national systems of labour law and social security. XXII ISLSSL
World Congress, Giappichelli, Torino, 2018, 1171: “The reform of the PWD should be seen as the second limb
of the intervention initiated with the Enforcement Directive. The latter was meant to curb regulatory evasion
by companies, by lowering the obstacles for the cross-border application of sanctions and by attacking practices
such as the use of bogus posting. The present reform of the PWD aims at addressing the risks posed by
regulatory arbitrage and conformance. Or, following a different taxonomy, the risk posed by legal social
dumping”.
9 This need had been also recognized by the European Committee of Social Rights (ECSR) that delivered a

decision in 2012 directly concerning the compatibility of the EU legal framework for the posting of workers,
as interpreted by the CJEU, with the European Social Charter. In this decision the ECSR stated that posted
workers are indeed migrant workers and thus should have the right “to receive treatment not less favourable
than that of the national workers of the host State in respect of remuneration, other employment and working
conditions, and enjoyment of the benefits of collective bargaining”. Swedish Trade Union Confederation (LO)
and Swedish Confederation of Professional Employees (TCO) v. Sweden Complaint No. 85/2012, 12 July
2012. See also Rocca M., (9). In the opinion of the ECSR, according only minimum protection to posted
workers, as well as economic and social rights which are more limited than the ones guaranteed to national
workers, constitutes discriminatory treatment, which cannot be justified by the objectives of facilitating cross-
border movement of services.
10 Lhernould J.-P., Directive (EU) 2018/957 of 28 June 2018 amending Directive 96/71/EC concerning the posting of

workers in the framework of the provision of services What will change in 2020?, in Europäische Rechtsakademie (ERA) Forum,
2019. According to this author, the directive in question is an “interesting example of how internal market
legislation may strengthen the social face of the EU”. See also Laagland F., Member States” Sovereignty in the Socio-
Economic Field: Fact or Fiction? The Clash between the European Business Freedoms and the National level of Workers”
Protection, in European Labour Law Journal 2018, Vol. 9(1), 50–72: “This example shows that the Member States
are still capable of achieving a broad enough political consensus within the European institutions for the
adoption of legislation to temper, or correct, judicial decisions”.

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all undertakings in a similar situation must be subject to the same obligations11. At first sight,
the revised Posted Workers Directive seems to raise hopes that posting may acquire a more
social “face” and the legal framework will be able to mitigate against the most harmful effects
of social dumping. However, the practical implications that could derive from this new
directive are, to some extent, controversial.


3. Equality of Treatment, “Remuneration” and Collective Agreements.

     It is important to note that even if the revised directive mentions the expression “equality
of treatment” [articles 3(1) and 3(1a)] and replaces the reference to “minimum rates of pay”
of art. 3(1)(c) of the PWD with “remuneration”, this does not mean that it creates a right for a
posted worker to be treated no less favourably than a local worker.
     As far as the rule of equality is concerned, the question arises whether in the context of
posted workers, the scope of this rule could be curtailed and therefore restrictively
interpreted by the courts. As is well known, according to CJEU case law, equality is based
on the Aristotelian principle whereby like things should be treated alike. In other words, a
breach of the principle of equal treatment because of different treatment for similar situations
presupposes that the situations concerned are comparable and therefore that two individuals
treated alike are similarly situated. Thus, considering all the elements that characterise the
posted workers’ situation and that of the local workers, this requirement is difficult to meet,
because, unlike local workers (who are permanently present in the local job market), posted
workers are posted temporarily to another Member State to perform a service contract and do
not seek access to the labour market of the host State.
     In all cases, the question has to do with the selection of a point of comparison. According
to the new wording of Article 3(1), a posted worker, as will be seen below, is entitled to the
same “remuneration” as a local worker from the host country. However, in order to bring a
remuneration claim under Article 3(1) PWD, the applicant needs to indicate someone who
is paid better for doing equal work and can represent a point of comparison. Clearly, there
must be a local worker in the host country who can serve as a point of comparison. What is
less clear is to which local worker he/she should be compared12. However, as the sixth Recital
seems to suggest, when comparing the remuneration of a posted worker and the
remuneration of a local one (and, therefore, due in accordance with the national law and/or
practice of the host Member State), “the relevant case-law of the Court of Justice of the
European Union is to be taken into consideration”. This means that key principles relating
to equal treatment could apply to these claims as well. However, this approach also has its
drawbacks. It is clear that (unlike in cases of sexual discrimination) the comparator (i.e.
person chosen for comparison) does not need to be a person of the opposite sex. However,
it is important to point out that the CJEU has acknowledged that the basic principle of equal

11 See also Schiek D., Forde C., Alberti G. (eds.), EU Social and Labour Rights and EU Internal Market Law,
European Parliament, Directorate General for Internal Policies, 2015, 41: “In its regulatory concept, the
principle of equal treatment between undertakings, the EU term for corporate economic actors, does not leave
scope for equal treatment of posted workers with workers in the host state. In refusing to grant the right to
equal treatment to workers who move through posting, the Directive is based on the Court’s case law”.
12 See also Lhernould J.-P., Directive (EU) 2018/957, (11).



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pay enshrined in the Treaty (art. 157 TFEU) does not extend to hypothetical comparisons13
as is found in the direct discrimination provisions. Thus, the requirement for an actual
comparator could also limit the effectiveness of the rule of equality in the context of posted
workers, especially in sectors dominated by foreign workers.
    It could be argued that in order to assess whether the person chosen for comparison is
engaged in the same or broadly similar work (work of equal value) and can therefore be
considered in a comparable position, a range of factors such as the nature of the work,
training and working conditions should be taken into account14. As in the field of sexual
equality, for posting too, the levels of qualiﬁcations, skills and experience need to be taken
into account. Moreover, it cannot be ruled out that a posted worker’s lower seniority may be
appropriate to justify a pay differential because, as the Court explained in Danfoss15, the length
of service usually goes hand in hand with experience, and this experience enables the worker
to perform his or her duties better.
    The selection of the comparator and the meaning of equal treatment rule are not the only
relevant questions. The most contentious is the amendment replacing the reference to
“minimum rates of pay” of art. 3(1)(c) of the PWD, by “remuneration”.
    The substitution of the term “minimum rates of pay” by the term “remuneration” may
constitute an important innovation. Some years ago, many labour law scholars had already
emphasized the fact that the “minimum rates of pay” principle does not fit in with the vision
of a socially oriented European integration supported by Treaty provisions16. It is clear that
a substantive modification of art. 3(1)of Directive 96/71, and particularly the introduction
of the equal treatment principle for posted workers, could play a crucial role in creating a
“level playing field” of social rights and prevent unfair competition within the internal
market, especially through the exploitation of the competitive advantage of companies
established in Member States with low wage standards17.
    The notion of “remuneration” is broader than that of “minimum rates of pay”: it
encompasses “all the constituent elements of remuneration rendered mandatory by national
law, regulation, or administrative provision, or by collective agreements or arbitration awards
which, in that Member State, have been declared universally applicable or otherwise apply in
accordance with paragraph 8” (new art. 3.1).
    This means that host States are now allowed to require the service provider to pay its
workers not only the minimum wage laid down by the host State’s law but also some elements
that do not come under this concept, such as seniority allowances, holiday allowances and


13 See CJEU, Case C–320/00 Lawrence v. Regent Office, in ECLI:EU:C:2002:498; Fredman S., Discrimination
Law, University Press, Oxford, 2011, 160; Ellis E., Watson P., EU Anti-discrimination Law, Oxford EU Labour
Library, Oxford, 2012, 226.
14 See CJEU, Case C-12/179 Macarthys Ltd. v. Wendy Smith, in ECLI:EU:C:1980:103; Ellis E., Watson P., EU

Anti-discrimination Law, (14), 224.
15 CJEU, Case C–109/88 Danfoss, in ECLI:EU:C:1989:383.
16Ales E., Transnational Wages Setting as a Key Feature of a Socially Oriented European Integration: Role of and (Questionable)

Limits on Collective Action, WP C.S.D.L.E. “Massimo D”Antona” .INT – 63/2008. More recently, Countouris
N., Engblom S., Civilising the European Posted Workers Directive, in Freeland M., Prassl J. (eds.), Viking, Laval and
Beyond, Hart, Oxford, 2014, 282.
17 See European Commission, Commission Staff Working Document: Impact Assessment. Accompanying the

document Proposal for a Directive of the European Parliament and the Council amending Directive 96/71/EC concerning the
posting of workers in the framework of the provision of services, SWD (2016) 52 final 2016, 13.

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supplements for dirty, heavy or dangerous work, quality bonuses, 13th month bonuses, travel
expenses and meal vouchers18.
    The European legislator aims to codify the more recent CJEU case law, which had already
developed a concept of “minimum rates of pay” in a wider sense. For example, in the
Sähköalojen ammattiliitto19 case, the Court held that the concept allows Member States to
include some elements of remuneration such as basic hourly pay according to pay groups,
holiday allowance, a daily allowance, and compensation for travelling time20.
    The CJEU stated that the minimum holiday pay that the posted worker must receive
during the holidays is intrinsically linked to that what he receives in return for his services
and is thus to be regarded as part of the minimum wage (paras. 64–69). Furthermore, daily
allowances and compensations for daily travelling time are not paid to the workers in
reimbursement of expenditure actually incurred because of the posting – i.e. it is granted on
a flat-rate basis – and are therefore to be regarded as part of the minimum wage (paras. 46–
52 and 53–57). As far as accommodation costs and meal vouchers are concerned, according
to the CJEU these allowances are not to be considered part of the minimum wage because
they are paid out as compensation for living costs actually incurred by the workers on account
of their posting.
    The revised Directive, endorsing the approach developed by this case law, not only tries
to identify more clearly what constitutes remuneration (including the posting allowance) and
what constitutes reimbursement of expenditure, but it also aims to facilitate the prevention
of illegal conduct. In this respect, it is significant to mention that according to the amended
art. 3(7), if doubts should arise, i.e. where the rules applicable to the employment relationship
do not determine which elements of the allowance speciﬁc to the posting are paid as a



18 See European Economic and Social Committee, Opinion on the “Proposal for a Directive of the European
Parliament and of the Council amending Directive 96/71/EC of the European Parliament and of the Council
concerning the posting of workers in the framework of the provision of services” of 10 March 2017. OJ
C 2017/75.
19 CJEU, Case C–396/13 Sähköalojen ammattiliitto ry v. Elektrobudowa Spółka Akcyjna, in

ECLI:EU:C:2015:86.
20 This case marks a turning point because in previous rulings (Luxembourg, Commission v Germany and Isbir) the

Court had interpreted the concept of remuneration in a narrower sense, giving guidance on what may not be
included in the minimum rates of pay within the meaning of Directive 96/71. In Commission v. Germany (C-
341/02), for example, the Court had ruled that additional bonuses for, inter alia, heavy work and additional
working hours (or similar ones provided for under foreign law or in contracts with the foreign employer) fall
outside said concept because they “are not defined as being constituent elements of the minimum wage by the
legislation or national practice of the Member State on the territory of which the worker is posted, and alter the
relationship between the service provided by the worker, on the one hand, and the consideration which he
receives in return, on the other”. In Isbir (CJEU, C-522/12, November 7, 2013, in ECLI:EU:C:2013:711) the
Court held the same view with regard to the capital formation contribution, in view of its objective and its
characteristics as set out by the national court: “Even if such a contribution is not separable from the work
done, it is distinguishable from the salary itself. Since its aim, by the formation of a capital amount that the
worker will benefit from in the longer term, is to achieve an objective of social policy supported, in particular,
by a financial contribution from the public authorities, it cannot be regarded, for the application of Directive
96/71, as forming part of the usual relationship between the work done and the financial consideration for that
work from the employer. It is for the national court, however, to verify whether that is indeed the case in the
proceedings before it”.


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reimbursement of expenditure and which are part of the remuneration, then “the entire
allowance shall be considered to be paid in reimbursement of expenditure” .
    The shift towards the notion of “remuneration” is understood as an attempt to strengthen
the weapons that a host Member State can use to prevent social dumping and reduce chances
for foreign service providers to compete on the market “unfairly”: employers must grant
posted workers the same treatment that local workers are also entitled to, including
allowances, daily flat-rate allowances, and compensation for travelling time.
    However, despite this important and appreciable change, there are still many doubts as to
whether the revised directive can represent a significant step towards “equality of treatment”.
    First, the legal uncertainty surrounding the notion of remuneration still remains an open
question21: even though the CJEU attempted to provide a clarification regarding the elements
of remuneration to be included in the concept of “minimum rates of pay”, it is doubtful
whether this case law is perfectly transposable in the context of the new concept of
remuneration.
    Secondly, the concept of remuneration could be defined by the Member States in many
different ways, which could do further damage to legal certainty if one also considers that, as
will be seen below, a host State’s choices to classify some types of payments as pay could be
reviewed under Article 56 TFEU.
    Thirdly, the EU legislator does not substantially change the instruments, and particularly
the type of collective agreement that can be qualified as an appropriate minimum standard
setter in Member States22. This means that if a Member State does not have a formal system
for declaring collective agreements “universally applicable”, and collective agreements (or
arbitration awards) cannot be “generally applicable” to undertakings, there is only one way
for the State to base its rules on. That member State could only use collective agreements
“which have been concluded by the most representative employers and labour organisations
at national level and which are applied throughout national territory”. But in this case too
collective agreements must apply to all the undertakings covered by the Directive and must
ensure “equality of treatment”, meaning the same obligations between national undertakings
and posting undertakings in a similar position as regards the matters listed in art. 3(1) and
also a requirement “to fulfil such obligations with the same effects”.
    This is highly problematic for Italy due to the fact that collective agreements are not
universally applicable and it is not (always) possible to prove that they can meet the
requirements established by EU law23: according to Legislative Decree no. 136/2016 –

21 Delfino M., Worker”s Mobility in the European Union: a Labour Law Perspective, in Marhold F., Eichenhofer E.,
Igl G., (eds.), Liber amicorum for Maximilian Fuchs, Nomos, Baden – Baden (forthcoming).
22 See also Giubboni S., Orlandini G., Mobilità del lavoro e dumping sociale in Europa, oggi, in Giorn. Dir. lav. rel. ind.,

2018, 907.
23 However, things could be quite different if one considers specific areas in which collective agreements are

entitled by the legislator to modify legal norms, particularly to (de)regulate certain details of labour regulations:
for example, define the conditions of fixed-term contracts (Act 99/2013). In cases like this, the extension of
the effects of the collective agreement beyond the sphere of the signatory parties is favoured by legislation,
although in different ways. It is interesting to note that the selection of the union entitled to stipulate the
collective agreement is based on the formula of the comparatively most representative trade union association
(which has been preferred to the other formula “comparatively more representative trade union association”).
The same formula has been also adopted by the Legislative Decree no. 136/2016. For a full account of the
debate on the binding effects of collective agreements in the area of ﬂexible labour contracts see Zoppoli A.,
Sull’efficacia soggettiva del contratto collettivo nella disciplina dei rapporti di lavoro “flessibili”, in Rusciano M., Zoli C.,
Zoppoli L. (eds.), Istituzioni e regole del lavoro flessibile, Editoriale Scientifica, Napoli, 2006, 317.

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through which Italy implemented the 2014 directive and amended the previous transposition
legislation relating to the Directive 96/71 – foreign undertakings are obliged to guarantee the
“conditions of work and employment” governed by the collective agreements referred to in
art. 51 of Legislative Decree n. 81 of 2015, i.e. collective agreements stipulated by the
comparatively most representative trade union associations [art. 2.1(e)]. However, only the
application of the collectively agreed minimum rates of pay at national level may actually be
extended, to some extent, to posted workers. This is because, as is well-known, the minimum
rates of pay laid down by the national collective agreement have been considered by the
established case law as a legitimate criterion to determine the “fair wage” laid down by art.
36 of the Constitution and have an indirectly binding effect also on employers who are not
members of the employers” association that have signed the respective collective agreement.
Moreover, in Italy the problem is also that the minimum rates of pay guaranteed as a “fair
wage” do not include all the elements of remuneration laid down by the collective agreement
and are not determined by the courts on the ground of a uniform notion24.
    Lastly, in Member States where there is an increasing decentralisation of bargaining
power, and collective agreements have been made more ﬂexible, the question arises as to
whether this trend in collective bargaining could undermine the ambition of “equal pay for
equal work in the same place”. This is the case of Germany, where there has long been
widespread use of the so-called opening clause allowing the actors at plant and enterprise
level not only to specify the collective agreement, but also, within certain limits, to deviate
from it. According to the CJEU, such a system can be considered to restrict the freedom to
provide services25 to the extent that, unlike an employer from the host Member State, an
employer established in another Member State has no possibility of avoiding the obligation
to pay the minimum wage laid down by the collective agreement governing the economic
sector concerned26. The same could be true for all the systems based on negotiations at
company level (or requiring negotiation on a case-by-case basis), as they could make it
“impossible for the service provider to know in advance the working conditions applicable
to posted workers”27.
    As far as Italy is concerned, the implementation of the 2018 Directive implies dealing with
the concept of pay and clarifying the constituent elements of remuneration that foreign
employers have the duty to pay posted workers in the case of short-term and long-term
postings. According to Decree Law no. 136/2016 (art. 7(1b)) all information must be
published by the Ministry of Labour on the official national website. However, for the
reasons mentioned above, this may not be enough to fight wage dumping and to take a




24 Esposito M., Gaeta L., Zoppoli A., Zoppoli L., Diritto del lavoro e sindacale, Giappichelli, Torino, 2018.
25 Rocca M., (9), 1173.
26 CJEU, Case C-164/00, Portugaia, 35.
27 CJEU, Case C-341/05 Laval un Partneri Ltd. v. Svenska Byggnads arbetare förbundet; Rocca M., (9), 1173;

Delfino M., Worker’s Mobility, (22).

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significant step towards “equality of treatment” even if the Act has provided for the
consequences of the absence or the incompleteness of information (art. 12).


3.1. The Concept of Remuneration, the Role of Domestic Law and the Freedom to
Provide Services.

    The revised Directive states that “the concept of remuneration shall be determined by the
national law and/or practice of the Member State to whose territory the worker is posted”
(art. 3.3), and underlines that wage setting is a matter for the Member States and the social
partners alone and that national systems of wage setting or the freedom of the parties
involved must not be undermined (see recital 17).
    Furthermore, it is significant that the final version of the revised PWD amends Recital 12
of the Commission’s original proposal, which expressly referred to the proportionality test,
making clear that national rules on remuneration “must be justified by the need to protect
posted workers and must not disproportionately restrict the cross-border provision of
services”.
    However, these provisions – some of which have no binding force because they are laid
down in the preamble – could be, to some extent, misleading and mystifying.
    The point to make here is that although the 1996 directive had already stated that the
concept of minimum rates of pay is a matter for national law, this did not stop the CJEU
from stating that the domestic policy choice to classify some types of payments as pay could
be reviewed under Article 56 TFEU.
    In Isbir, for example, the CJEU was particularly clear on this point: “The task of deﬁning
what are the constituent elements of the minimum wage, for the application of that directive,
therefore comes within the scope of the law of the Member State concerned, but only in so
far as that deﬁnition, deriving from the legislation or relevant national collective agreements,
or as interpreted by the national courts, does not have the effect of impeding the free
movement of services between Member States”28.
    A change to this case law in the context of the concept of remuneration, although
desirable, in our view, cannot reasonably be expected from the CJEU in future. Actually, the
revised Directive, despite the great emphasis laid on the protection of workers” rights29,
seems to primarily maintain its internal-market-oriented character and, most probably, this
will continue to play a decisive role in shaping the case law of the CJEU on the matter. In



28 § 46. As some labour law scholars held, the restriction of Member States” room is due to the fact that Member
States “may be tempted to incorporate into notion of “minimum rates of pay” unrelated advantages therefore
extending the nucleus of rights provided for by the PWD”: Defossez A., Directive 96/71/EC, in Ales E., Bell
M., Deinert O., Robin-Olivier S. (eds), International and European Labour Law, Nomos, Baden-Baden, 2018, 654.
29 The introductory recitals, as well as the content of the amendments proposed to the articles of Directive

96/71/EC show this very clearly. Revised Article 1 points out the need to “ensure the protection of posted
workers during their posting in relation to the freedom to provide services, by laying down mandatory
provisions regarding working conditions and the protection of workers” health and safety”, adding that the
Directive “shall not in any way affect the exercise of fundamental rights as recognised in the Member States
and at Union level, including the right or freedom to strike or to take other action covered by the speciﬁc
industrial relations systems in Member States”.

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this respect, the identification of the legal basis of the revised PWD is very eloquent because
there is a clear link between legal grounds and objectives.
    During the adoption process of the 2018 Directive, the European Parliament had
proposed adopting a dual legal basis and added a reference to the Treaty provisions on social
policy (Article 153 TFEU) alongside the provisions on freedom to provide services. From
this point of view, the choice to enlarge the legal basis could have made the aspect of
“rebalancing” the promotion of the freedom to provide services with the protection of
workers” rights more effective.
    However, the European Parliament’s proposal was rejected and thus the revised Directive
has only the Treaty provision on free movement of services as its exclusive legal basis
(although it also refers to social provisions such as Article 3 of the TFEU with its focus on
a social market economy and Article 9 of the TFEU referring, inter alia, to a high level of
employment and social protection). In view of this choice, the directive can only be regarded
as an internal-market-oriented act; the competing objectives, such as the protection of posted
workers, have been relegated to second-tier status30.
    This may lead the CJEU to refrain from interpreting this legislation in a socially friendly
way. In fact, there is no doubt that, despite the reference to the proportionality test having
been deleted, the revised directive could still, under article 56 TFEU, enable the Court to
review the national provisions on pay, ruling on the compatibility of those provisions with
the freedoms to provide services.
    In the context of posting, case-by-case interpretation could still limit the effectiveness of
the principle of equal treatment. The fact that the definition of the concept of
“remuneration” refers to “national law and/or practice” does not mean that the Member
States may unilaterally determine the scope of the concept31, establishing both the constituent
parts of pay and the level of those constituent parts.
    Even though the concept must include all mandatory constituent elements of
remuneration, uncertainty still prevails: indeed, all national rules thought to comply with a
piece of EU secondary legislation, still also need to be checked for their compatibility with
the Treaty. Thus, there is still ample room for the CJEU to adopt pro-market interpretation
and undermine the ability of Member States to apply their national legislation.
    For example, as happened in Rüffert, if a host State were to require contractors to comply
not with the minimum wage agreement – which has been “extended” by govemmental action
so as to be applicable to all employers – but with another collective agreement, which had
not been extended and which requires rates of pay “well above” those required by the former,
this would interfere with the free movement of services.
    In Rüffert, the CJEU found that the German Law on Awarding Public Contracts, which
required contractors to agree to pay workers the minimum level of pay did not comply with
the Posting of Workers Directive interpreted in the light of Article 56 TFEU. For this reason,
it would seem that the host State’s choice to establish the level of the constituent parts of

30 Costamagna M., The Revision of the Posted Workers Directive as a Meaningful Way to Curb Regulatory Competition in
the Social Domain?, in Borelli S., Guazzarotti A. (eds), Labour mobility and transnational solidarity in the European
Union, Jovene, Napoli, 2019.
31 The CJEU said something similar in other contexts: CJEU, Case C-151/02, Landeshauptstadt Kiel v. Jaeger

[2003] ECR I-8389, paras. 59 with reference to the concept of working time enshrined in the Working Time
Directive 2003/88.

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pay (and to classify these constituent parts of pay as “remuneration”) still needs to be
reviewed in terms of its compatibility with the Treaty, and in particular with Article 56 TFEU.


4. Long-term Postings. The Relationship between the Enforcement Directive and the
Revised Directive.

    The specific provision on long-term postings is probably the main change to the revised
directive32. In this way, the reform takes an important step towards bringing labour law into
line with the scheme in social security coordination, in particular with art. 12 Reg. 883/2014.
The 1996 Directive gave no clear indication regarding the temporary nature of posting.
Contrary to Regulation (EC) 883/2004, the PWD33 – apart from exceptional cases such as
short-term postings according to arts 3.2 and 3.3 – provided for neither a fixed time limit
nor other criteria (e.g. required periods of previous employment in the sending Member
State) to determine the temporary character of the posting duration in the host country34.
Moreover, the Commission acknowledged that there was a need to address the issue of
temporariness for the sake of worker protection35. The lack of clear and quantitative (means
of determining the duration or frequency) criteria for assessing “temporariness” (regarding
services) (a definition or the characters of “temporariness”) in terms of either the service or
the posting, has contributed to ambiguity and favoured malpractice and circumvention36.
    In this respect, the new directive has the potential to redress disadvantage experienced by
posted workers where posting is not temporary.
    When the effective duration of a posting exceeds 12 months, EU law now requires
Member States to introduce a principle of equality of treatment: Member States must ensure
that, irrespective of which law applies to the employment relationship, undertakings will
guarantee workers posted to their territory, “in addition to the terms and conditions of
employment referred to in the “hard core”, all the applicable terms and conditions of


32   Franzen M., Die geänderte Arbeitnehmer-Entsenderichtlinie, (5): (“wichtigste Neuerung”).
33   See Fuchs M., Posting. The Legal Panorama of European Labour And Social Security Law, in Riv. It. Dir. Lav., 2018,
3.
34 Dir. 96/71 used an undefined term: “for a limited period: the worker should be posted “for a limited period
of time” to a Member State other than the one in which he “normally works””.
35 According to the Commission, the absence of a time limit has “adverse consequences on the fairness of

competition between posting and local companies” and “workers in long-term postings are more exposed to
abuses of their working conditions”.
36 The point to make is that also the Enforcement Directive (ED) has a significant gap with regard to the

sanctions, i.e., the legal consequences in cases of some forms of misuses, such as, for instance long-term
postings, repeated replacements of posted workers or the use of so-called letter-box firms, are identified and
verified. The only implication to be drawn from this is that, in these cases, the PWD is not applicable, and the
situation should be regarded from the perspective of international private law. The ED does not clarify which
employment law would be then applicable to the workers concerned. There can be no doubt that where there
is no genuine posting situation, Regulation (EC) No 593/2008 (“Rome I”) has to be taken into account.
However, with regard to the determination of the law applicable to individual employment contracts the
uncertainty still prevails. See also Zoppoli L., Il distacco del lavoratore nel quadro giuridico delle fonti multidimensionali,
in Marhold, E. Eichenhofer, G., Igl G. (eds.), Liber amicorum for Maximilian Fuchs, Nomos, Baden – Baden
(forthcoming).
For an overview on the principle of public policy see Cordella C., Transnational posting of workers between public
policy and collective bargaining, in Perulli A., Bellomo S. (eds.), New Industrial relations in the era of globalization: a multilevel
analysis, Cedam, Padova, 2019, 125-136.

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employment which are laid down in the Member State where the work is carried out: by laws,
regulations or administrative provisions, and/or by collective agreements or arbitral awards
which have been declared universally applicable or otherwise apply in accordance with
paragraph 8” (Article 3(1a)).
    The idea at the root of the introduction of the principle of equality of treatment is
undoubtedly the acknowledgment that there is a link between the labour market of the host
Member State and the long-term posted worker (recital 9). By virtue of this link, the worker
posted in the Member State in which the service is carried out is to be treated the same as
workers who belong to the labour market of that country (and with whom, in fact, he carries
out the work): indeed, when the posting is of very long duration, the worker gains access to
the labour market of the host State to some extent.
    The importance of the new provision laid down in Article 3(1a) is clear. That rule is
evidently incompatible with art. 8.2 of Regulation Rome I, which established no fixed time
limit and should now be considered amended. According to Recital 36 of that Regulation
“As regards individual employment contracts, work carried out in another country should be
regarded as temporary if the employee is expected to resume working in the country of origin
after carrying out his tasks abroad”.
    Application of this Regulation would have had negative consequences also due to the legal
uncertainty surrounding the notion of “temporary”: according to some labour law scholars37,
in order to exclude the “temporary” nature of a posting, it is necessary to verify that the
habitual place of work has changed permanently. Regulation Rome I would probably have
led to a higher time limit than that set by art. 3(1a) of the revised directive.
    The question arises whether, and to what extent, it is now possible to use the criteria,
introduced by the Enforcement Directive (Directive 2014/67/EU: ED), in order to allow
the identification of a genuine posting and prevention of abuse and circumvention.
    These criteria are intended to help competent authorities in the assessment of both the
existence of a real link between the employer and the Member State from where the posting
takes place and the temporary nature inherent to the concept of posting (see the indicative,
non-exaustive qualitative list of factual elements under article 4).
    Inspired by the experience and the legislative acts in social security coordination, the ED
Directive fills, to a certain extent, the gaps arising from the insufficient definition of posting
in the Directive 96/71, transposing some jurisprudential rules that have developed in the
case law of the CJEU by interpreting art. 12(1) of Reg. 883, arts 14(1,3) of Reg. 987/2009,
and decision A238.
    One could argue that the revised directive would narrow down the scope of application
of the criteria introduced in the 2014 Directive so that the competent authorities would be
entitled to apply those criteria only on condition that the duration of a posting exceeds 12
months. Such a view might be held for reasons of legal certainty. However, the argument is
not fully convincing: if it were so, the provision would lose much of its meaning. Moreover,
the revised directive in no way amends the Directive 2014/67/EU: it introduces the time
limit provision as a mandatory provision for minimum protection. This means that these
criteria should be applicable to the same extent as before and that, according to the new

37   Deinert O., Internationales Arbeitsrecht, 2013, § 9, Rn. 102.
38   See Fuchs M., Posting, (34).

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provision, a case where a posting does not exceed 12 months could also be qualified as a
non-genuine posting.


4.1 Long-term Postings and the Equal Treatment Rule.

    As far as equality of treatment is concerned, it should be noted that in this case that
principle is somewhat mitigated by permitting that it not be applied to “procedures,
formalities and conditions of the conclusion and termination of the employment contract,
including non-competition clauses; supplementary occupational retirement pension
schemes”. Therefore, there is no full extension of the labour law of the host country.
    Moreover, the revised Directive allows the host Member State to extend the time limit to
18 months. It is sufficient for the service provider to submit a justified notification. In order
to avoid circumvention, art. 3(1a) adds that where an undertaking replaces a posted worker
with another posted worker performing the same task in the same place, the duration of the
posting must be the cumulative duration of the posting periods of the individual posted
workers concerned.
    Art. 3(1a) also clarifies to what extent a cumulative duration of the posting periods is to
be applied: it is necessary to consider, inter alia, the nature of the service to be provided, the
work to be performed, and the address(es) of the workplace. However, there is still no clear
answer to the question39 of how to establish whether a posted worker has been replaced by
another posted worker when a worker’s posting is interrupted; it is not clear whether it should
be deemed a continuous posting or two independent ones, both triggering different
consequences. On this, the Council referred to Regulation 883/2004 during the debate on
the Commission’s original proposal.
    In the field of social security, once a worker has ended a period of posting, with no fresh
period of posting for the same worker, the undertakings and the Member State themselves
can be authorized until at least two months have elapsed from the date of expiry of the
previous posting period40. Hence, the 24 months period does not apply in such a case because
there are two different postings.
    Generally speaking, it is highly problematic that the revised Directive might have a
restrictive effect on the freedom to provide services to the extent that, in the event of long-
term postings, host Member States now, as a rule, have to impose upon “their” employers
an obligation to meet not only the terms and conditions of employment referred to in the
“hard” nucleus but those of the entire body of their domestic labour law with the above-
mentioned exceptions [(Article 3(1a)].
    The Directive clearly aims to protect the interests of the higher wage countries that receive
a large number of posted workers, obliging them to apply a principle of equal treatment for


39 According to some German scholars, a similar question arises with reference to the social security law and in
particular to Art. 12, paras. 1, Reg. 883/2004. See. Steinmeyer H.D., in Fuchs M., Europäisches Sozialrechts, 7.
Aufl. 2018, Teil 2 VO (EG) Nr. 883/2004 Art. 12 Rn. 14.
40 Decision No A2 of 12 June 2009 concerning the interpretation of Article 12 of Regulation (EC) No 883/2004

of the European Parliament and of the Council on the legislation applicable to posted workers and self-
employed workers temporarily working outside the competent State (Text of relevance to the EEA and to the
EC/Switzerland Agreement). IO C 106, 24.4.2010, lgh. 5-8.

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all those working in their territory. The question arises as to how precisely the equal treatment
rule and the Treaty, i.e. the provisions on freedom of movement of services, fit together.
    Naturally, the CJEU has frequently addressed the question of the compatibility of
domestic laws imposing host state standards on posted workers with the relevant provisions
of the Treaty on the freedom to provide services. In this vein, it may be useful to mention
some of the most important rulings briefly. In Rush Portuguesa, the ECJ was particularly
explicit in saying that Union “law does not preclude Member States from extending their
legislation, or collective labour agreement entered into by both sides of industry, to any
person who is employed, even temporarily, within their territory, no matter in which country
the employer is established”.
    In its subsequent case law, the Court revisited its approach and brought its case law more
into line with its general jurisprudence on the freedom to provide services (Säger), where the
Court adopted the so-called “market access” test41 and clarified that art. 49 TFEU requires
“not only the elimination of all discrimination against a person providing services on the
ground of his nationality, but also the abolition of any restriction, even if it applies without
distinction to national providers of services and to those of other member states, when it is
liable to prohibit or otherwise impede the activities of a provider of services established in
another Member State where he lawfully provides similar services”.
    Hence, the Court clearly confirms on the one hand that European law does not preclude
Member States from applying Member State’s legislation or collective labour agreements that
guarantee minimum wages to employers providing services within the territory of that State.
On the other hand, however, according to the CJEU, the host national employment rules
breach EU law whenever they hinder or restrict the ability of the out-of-state actor to exercise
freedom of movement.
    To this end, the CJEU not only assesses whether the application of the labour legislation
of the host country can be regarded as an obstacle to the free movement of services and
whether the [measure’s] restrictive effect can be “justified by overriding requirements relating
to the public interest”, but also adopts the proportionality test so that restrictions on the
freedom to provide services cannot be justified if the benefit can be seen to be potentially
supplied in such a way as to have a lesser impact upon the home State’s freedom to provide
cross-border services42.
    Lastly, the ECJ underlines the importance of the other stage that should be applied in the
scrutiny of national laws (the assessment of “genuine benefit”), when the court has to assess
whether or not the posted workers” terms and conditions of employment are improved by
the application of the host State’s rules43: the host-state rules apply only on condition that its
law does not already provide “essentially similar protection” to posted workers (duplication).
    Coming back to the revised Directive and taking into account the established case law
mentioned above, it is necessary to assess whether and to what extent the new European




41 On the so-called market access approach see Barnard C., Free Movement and Labour Rights: Squaring the Circle?,
University of Cambridge, Faculty of Law Legal Studies Research Paper Series, http://www.law.cam.ac.uk/ssrn, 4.
42 See for example Mazzoleni Case C-165/98, in ECLI:EU:C:2001:162.
43 See Finalarte Case C-49/98, [2001] ECR I-7831.



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rules may affect the position of the home-state employers wishing to post their employees
to the territory of another Member State on a temporary basis.
    Article 3(1a) does not clarify the substantive areas in which the host State’s employment
law, in the event of long-term postings, would be applicable to posted workers concerned.
It is important to note that the wording of the new art. 3(1a) significantly differs from the
Commission’s original proposal. Initially, the host Member State became the country where
the work is habitually carried out in the event that the posting exceeds 24 months (art. 2(a)).
The consequences are therefore very clear: the law of the host Member State applies to the
employment contract of these long-term posted workers unless the parties have agreed to
the application of another law in accordance with art. 3 of the Rome I Regulation (original
proposal).
    In contrast, article 3(1a) seems to be worded more vaguely and it is therefore highly
questionable whether, and to what extent, the posted worker is entitled to equal treatment in
the case of long-term postings.
    The impression is that many problems of interpretation have been left to the courts.
    a) There is no doubt that according to art. 3(1a), collective agreements that are not
universally applicable cannot be applied to posted workers also in the case of long-term
postings. Consequently, in some member States, such as Italy, the same problems of
interpretation mentioned above (para. 3) arise.
    Indeed, with reference to the long-term postings the revised Directive, on the one hand,
confirms the regulatory function of collective bargaining (as it provides that Member States
shall ensure to workers who are posted to their territory all the applicable terms and
conditions that are laid down “by collective agreements or arbitration awards which have
been declared universally applicable or otherwise apply in accordance with paragraph 8”).
On the other, it makes clear that for the countries (like Italy) having no system for declaring
collective agreements to be of universal application (if they may not base themselves on
collective agreements “generally applicable to all similar undertakings in the geographical area
and in the profession or industry concerned”), it is possible to rely on “collective agreements
which have been concluded by the most representative employers and labour organizations
at national level and which are applied throughout national territory” provided that their
application ensures “equality of treatment” between undertakings posting the workers and
national undertakings that are in a similar position.
    As a labour law scholar recently pointed out44, the universal (erga omnes) application of
collective agreements – that the PWD requires in order to ensure equal treatment to all the
service providers – is very problematic for their recognition as regulatory sources due to
the fact that CJEU has interpreted this concept in a strict sense45.
    There is no doubt that through the last (previously mentioned) option the revised PWD
leaves a door open to Italy: in case of long-term postings, the working conditions to apply
to the foreign undertaking could be fixed in accordance with this procedure and the selection
of the most representative employers’ and labour organizations entitled to stipulate the

44 See Ales E., The Regulatory Function of Collective Agreements in the Light of Its Relationship with Statutory Instruments
and Individual Rights: A Multilevel Approach (forthcoming).
45 For example, in Rüffert the CJEU held the view that a collective agreement could not be regarded as “generally

applicable”, because its binding effect covered only part of the construction sector falling within the
geographical area of the agreement as it only applied to public contracts (para 28).

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collective agreements could be based on the formula, already adopted by the Legislative
Decree no. 136/2016, of the comparatively most representative association (which should
be preferred to the other formula “comparatively more representative association”)46.
    However, even if the parties to a collective agreement are granted by the Italian law the
power to regulate terms and conditions for posted workers, it is doubtful whether this can
lead per se to the extension of the scope of application of collective agreement to non-
organized employers and employees. Generally speaking, in Italy such an approach has been
sometimes held by jurisprudence and some labour law scholars47 but the arguments are not
completly convincing. As a matter of fact, that view could go against the constitutional
principles of the second part of Article 39 of the Italian Constitution48, in which a speciﬁc
regulation is provided for in order to make collective agreements generally binding.
Furthermore, the adoption of the technique based on the concept of “comparatively most
representative union” to deﬁne the bargaining agent seems not be helpful at all in resolving
the problem as the representativeness is indirectly presumed and is in no way verified through
democratic procedures49. This is why in Italy the use of the collective agreement as an
instrument to regulate posted workers” working conditions is still highly problematic.
     b) Moreover, the question arises as to whether the rules on contract termination may be
really excluded from the extension of the hard core for long-term postings. Art. 3(1a) appears
to have answered that question in the affermative. However, some labour lawyers have
attempted to argue that host country rules on contract termination are perhaps applicable to
posted workers under Article 8 of Rome I. This suggestion is based on the assumption that
the question of coordination between the (revised) posting Directive and Rome I Regulation
is renewed by the adoption of the revised Directive50.
    However, this argument is not convincing at all. As a matter of fact, there is no doubt
that the new European rules have to be coordinated with the main legal framework that was
established by Directive 96/71/EC, which in this respect remains applicable with the
wording prior to the amendments introduced by the new one. If so, the provision on
applicable law in Article 3(1a) can be seen to supplement the Rome I Regulation [the old
Rome Convention (RC)], which is extensively referred to in the Preamble to the 1996 PWD.
It is clear from Recital 11 of the Preamble that in the event of conflict, the 1996 PWD takes
precedence over the rules of the Rome I Regulation and it is therefore difficult to argue that
host State rules (or some of them) on contract termination would be applicable to posted
workers.
    c) Generally speaking, as far as the law applicable to employment contracts is concerned,
for long-term postings, everything depends on the interpretation of the formula “terms and
conditions of employment”. This provision is to be read in the light of Article 56 TFEU. As
has been shown above, also the “terms and conditions of employment” applied by the host

46 See also the footnote no. 37.
47 See for example C. Cost. 10 October 1996, no. 344, in Giur. cost., 1996, 3016; Cass. 11 November 2002, no.
17674 in Foro it., 2003, I, c. 443; Carabelli U., Leccese V., Una riflessione sul sofferto rapporto tra legge e autonomia
collettiva: spunti dalla nuova disciplina dell”orario di lavoro, in A.a.V.v., Studi in onere di Giorgio Ghezzi, Cedam, Padova,
345.
48 For example, Rusciano M., La metamorfosi del contratto collettivo in Riv. Trim.Dir. Proc.Civ., 2009, 29, particularly,

47; Zoppoli A., Sull’efficacia soggettiva del contratto collettivo, (24), 331.
49 Zoppoli A., Sull’efficacia soggettiva del contratto collettivo, (24), 333.
50 Lhernould J.-P., Directive (EU) 2018/957, (11).



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country, in the context of a posting exceeding 12 or, where applicable, 18 months, still need
to be checked for their compatibility with the Treaty and can be regarded as an obstacle to
the free movement of services. The new Directive does not jeopardize the ECJ settled case
law according to which any provision applicable to posted workers must be compatible with
that freedom. Even though this Directive has also been adopted as a measure of employee
protection, there is no doubt that the EU legislator also safeguards the position of the home-
state employers wishing to temporarily post one or more of its employees to the territory of
another Member State. Recital 10 speaks of a right of undertakings to invoke the freedom to
provide services, including in cases where a posting exceeds 12 or, where applicable, 18
months and makes clear that restrictions to the freedom to provide services are permissible
only if they are justified by overriding reasons in the public interest and if they are
proportionate and necessary51.
    d) Lastly, another question arises as to whether article 3(1a) can be considered to be in
line with the principle of “essentially similar protection” enunciated many times by the CJEU
and previously mentioned above. The approach adopted by the Directive seems to be highly
problematic: in addition to some home State rules (for example, rules on contract
termination), the law applicable to employment contract includes host state rules. Adopting
this legal technique came under attack because it was thought that it might increase the
probability that undertakings would have to comply with the host-state rules even though
home-state law already provides an essentially similar protection. This is likely to hinder the
exercise of freedom to provide services by undertakings wishing to post workers52. Those
consequences could have been avoided or mitigated by recourse to the legal technique
adopted by the Commission’s original proposal.


5. Brief concluding remarks.

   As this analysis has shown, the revision of the PWD can be welcomed as an important
step in the direction of more equal treatment between posted workers and local ones.
   After the adoption of this Directive, the legal framework concerning posting may be
considered more in line with the social objectives of the EU listed in art. 3 TEU and with
the mainstreaming social clause in art. 9 TFEU.
   The Directive places great emphasis on the idea of equal treatment between posted and
domestic workers in the same location. Both the broad notion of “remuneration” (which
replaces the notion of “minimum rates of pay”) now applicable to posted workers and the
introduction of a time limit could definitely be a step forward in giving the Directive a
stronger social dimension and raising some hopes that posting may acquire a more social
“face”. However, the extent to which this new Directive will pursue the aim to reshape the
nature and substantive content of the PWD is still an open question. For example, as




51 Aubauer H., Głowacka M., Entsende-Richtlinie neu, in Gedenkschrift Robert Rebahn, Manzsche Verlag, Wien 2019,
10.
52 See Franzen M., Die geänderte Arbeitnehmer-Entsenderichtlinie, (5).



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previously indicated, the scope of the equal treatment rule could be curtailed and thus
restrictively interpreted by the courts.
    Moreover, it may very well be asked whether a reform that comes only through legislative
channels could be sufficient to amount to a significant improvement in the law concerning
posted workers and could effectively restore the delicate balance between economic
freedoms and social rights, or whether it is necessary to also undertake a jurisprudential route.
    The EU legislator has left some issues untouched, while it could have further strengthened
the Directive’s social purpose. The Directive appears to primarily maintain its orientation as
a single market measure. The refusal to change the legal basis of the PWD and include social
policy (article 153 TFEU) alongside the freedom to provide services may lead the CJEU to
refrain from interpreting this Directive in a social-friendly way, favouring market-oriented
interpretations, given that its internal-market-oriented legal basis has played a decisive role
in shaping the case law of the CJEU on the mattering the past. This is why the revision of
the Directive as it stands seems to offer signals still too weak to strengthen the social
dimension.




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Copyright © Raffaello Santagata De Castro. 2019. This article is released under a Creative
Commons Attribution 4.0 International License.




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