Changes to the EU Posted Workers Directive - What it Means For the Construction Industry

Changes to the EU Posted Workers Directive - What it Means For the Construction Industry

05th August 2015

A proposed legal change is aimed at forcing the EU Posted Workers Directive means that main contractors here in the UK will soon face top up wage claims from the workers of any foreign EU subcontractors if they are undercutting the agreed national UK trade rates. The change has come about in order to stop local or national wage agreements from being eroded by the use of cheap labour from other European countries.

The definition of a Posted Worker is any person who is sent (on behalf of their employer) to carry out his or her work in another EU Member State than the State in which he or she normally works for a limited duration of time.

The new posted workers enforcement directive contains stricter reporting on where EU subcontractors are being used on UK jobs. There are currently around 1.2 million posted workers in the EU and most of these are in the construction industry – other sectors include transport, business and financial services, communications and agriculture.

This means that any workers posted to the UK by an Italian steel fixing firm will need to be paid to the agreed UK trade rates if these are better than the going rate in Italy. The use of European sub-contractors at several of the major oil refinery and power station upgrade projects have led to protests at UK sites after unions revealed that foreign workers were undercutting local labour.

There have already been concerns that the rules have been flouted and now policing measures are currently being introduced and the government is making plans on how it will introduce the new plan and tighten enforcement procedures. The government is seeking the views of those who work in the construction industry on how the government will comply with the Posted Workers Enforcement Directive – anybody interesting in making their viewpoint clear can do so via a response form or by email.

The Posted Workers Directive is the basis of the mandatory rules regarding the terms and conditions of employment which must be applied to posted employees. This includes guaranteeing that their rights and working conditions are protected throughout the European Union and avoiding “social dumping” – where foreign service providers can undercut local service providers because their standards are lower. The main issues involved include:

  • Maximum paid annual leave
  • Maximum work periods and minimum rest periods
  • Minimum rates of pay (including any overtime rates)
  • Health, safety and hygiene in the workplace
  • Equal treatment between men and women
  • Conditions of hiring out workers, the supply of workers by temporary employment undertakings
  • Protection of pregnant women

As for tax – employment income should be paid in the country in which the income is earned and it’s a rule that workers moving within the European Union must be subject to a single social security legislation.

It’s hoped that the changes to the Enforcement Directive will make it possible to achieve these objectives and that more employers will see the attractions of posting their employees abroad.