Equal Pay for Equal Work in the Same Place? Assessing the Revision to the Posted Workers Directive

Abstract

Following criticism of the current system of posted work in the European Union, the Revised Posted Workers Directive 2018/957 was adopted in June 2018. This paper examines the extent to which the Revised Directive is likely to achieve the stated objective, as put forward by the Member States that criticised the current system and as explained in the Commission’s original proposal, of ensuring ‘equal pay for equal work in the same place’. The article begins by providing a brief overview of posted work within the European Union, including the adoption of the Original Directive and its interpretation by the Court of Justice. By looking at the key decisions of Laval, Ruffert and Commission v Luxembourg, it explains how the Court’s acquis created a system whereby foreign service providers are able to compete unfairly on a national market by circumventing national wage demands in order to gain a competitive advantage, thereby fostering a system of unequal pay for equal work. Following this, the article examines some of the wider implications of the Court’s case law. First, it explains how the current system of posted work underlines the normative tension between the ideas of wage competition and social dumping in Europe. Second, it assesses the extent to which the Original Directive acted to deregulate the labour legislation of various Member States, thereby undermining their ability to pursue social policies, as well as their national autonomy. Then, it explains how the Directive is based solely on Treaty provisions relating to service provision and establishment, and what effect this has on the Court’s approach to posted workers’ cases. Finally, the article assesses the Revised Directive. It explains the concrete changes to the Directive and then evaluates the extent to which the Revised Directive will achieve the ambition of equal pay for equal work. In this respect, the article claims that the Revised Directive will likely mitigate the more damaging consequences arising from the Court’s acquis, although given the more fundamental challenges that exist this may be limited.