28th July 2016

EC deals with “yellow card” on posted workers directive

On 20 July, the European Commission adopted a Communication dealing with the so-called yellow card triggered under the Lisbon Treaty-introduced subsidiarity check by national parliaments. A third of national parliaments (chambers) needs to oppose a proposal on the grounds of the subsidiarity principle in order to trigger the mechanism. The posting of workers revision was only the third proposal that faced such opposition.

Fourteen parliamentary chambers from 11 member states, almost exclusively “new Member States”, sent their reasoned opinions, stating that the proposal breaches the subsidiarity principle. The argument was that the EC did not examine the proposal with regard to subsidiarity, which is a legal obligation. The EC carried out the examination ex post and found that like the original 1996 posting of workers directive, also its revision complies with the principle. As a result, the Commission plans no changes to the proposal.

Although the yellow card is a legal instrument, the problem with the posting of workers directive revision is a political one. Western EU states criticize the current framework, citing unfair competition from Eastern companies. Eastern EU states see the current legal framework as sufficient. The revision would undermine the competitiveness of their companies, they fear. Under the proposal, posted workers would benefit from more advantages of local employees. This would increase the costs for posting companies. The political cleavage between Eastern and Western countries is set to continue as the file continues in the legislative process.

For more, click herehere and here.

Members of the American Chamber of Commerce in the Czech Republic