The essay analyses the different instruments of cooperation, coordination and information between European Member States as required by the Directives aimed at regulating transnational posting of workers. In order to avoid any duplication or disproportion in authorizations, control activities and sanctions, the essay then highlights the role of labour inspectorates and the consequential evolution of Italian legislation up to the latest innovations introduced by Legislative Decree no. 122/2020.

SOMMARIO:

1. A premise: from balancing rights to deciding the limits of necessary “collaboration” - 2. Controls, guarantees and sanctions for non-compliance with transnational posting regulation: first approaches - 3. Administrative coordination and right to information before the objectives of European harmonization - 4. ... and the consequential evolution of Italian legislation (Legislative Decree no. 136/2016) - 5. Detecting infringements: the role of labour inspectorates and national jurisdiction - 6. The impact of Directive EU 2018/957 and Legislative Decree no. 122/2020 for a better coordination and an effective sanctions framework - NOTE

1. A premise: from balancing rights to deciding the limits of necessary “collaboration”

The free movement of persons and services is one of the main policy objectives of the European Union [1]. It implies that member states must ensure that legal, economic and even de facto barriers between them are removed, so that the movement of persons and services underpins the movement of rights. The intention of the European Union to act like a system of “communicating vessels” is intended to ensure equal business opportunities and equal working conditions [2], so that the posting of workers does not serve (also) as an expedient to reduce costs through “economy” of guarantees and differentiated treatments (in an opportunistic or sometimes fraudulent way) based on nationality, residence and origin (from an EU member State or, also, from an extra-EU country) [3]. Indeed, striking a balance between competition law and social rights has always been far from easy and, precisely on the issue of transnational posting [4], the approach that looks at the regulatory framework outlined in the Services in the internal market Directive continues to be a source of debate both before the Court of Justice [5] and also on the occasion of the most recent reform of the matter pursued through Directive (EU) 2018/957. That being said, the original Directive 96/71/EC obviously dealt with the outlining of the key pillars Member States should be inspired by (and adhere to) in the field of transnational posting of workers [6], with a view – also – to ensuring their effective application, while allowing individual Member States to establish the appropriate tools to protect their legal domain and (part of) their national legislation [7]. In the Directive, Recital 13 explicitly requires that Member States must be “coordinated in order to lay down a nucleus of mandatory rules for minimum protection to be observed in the host country by employers” who post workers to perform temporary work in the territory of a Member State where services are provided” [8], especially because they are usually considered responsible for the infringement of the rules on transnational posting for cost containment purposes and in order to obtain a competitive advantage [9]. In turn, Recital 23 requires Member States to avoid going in different directions: “competent bodies in different Member States must cooperate with each other in the application of this Directive” [continua ..]

2. Controls, guarantees and sanctions for non-compliance with transnational posting regulation: first approaches

The 1996 Directive represents a regulatory model capable of guaranteeing its effectiveness, and of the eight articles, Article 4 (Cooperation on information), Article 5 (Measures), Article 6 (Jurisdiction) and, with a summary scope, Article 7 (Implementation) are particularly important [10]. Firstly, the equal treatment of posted workers within the EU does not only respond to the understandable protection of the workers with regard to “terms and conditions of employment” (as stated in the heading of Article 3) [11], but also to the need to place companies on an equal footing with regard to the competition regime. Recital 5 makes explicit reference to a “climate of fair competition” [12]. Hence, the provision and legitimacy of the aforementioned “control” measures, certainly restrictive – at least potentially – of the freedom to provide services, but in any case to be considered legitimate based on an autonomous assessment and balancing of interests, and justified by the need to monitor the application of the working and employment conditions envisaged by the Directive. Secondly, the ‘information’ which the Member States must undertake to provide concerns existing legislation (ius conditum) or any national practices on the posting of workers and the indication of the internal liaison offices and/or the national bodies responsible for monitoring the terms and conditions of employment referred to in Article 3. The “information” to be provided to the requesting Member States and the Commission, even if not specifically requested (Article 7), is based on the assumption that Member States have an internal control system including offices and bodies specifically responsible for the matter, and a provision for cooperation between the public authorities pursuant to and for the purposes of Article 4(2). This is intended to provide an overall picture of the size of the phenomenon of the temporary “transnational hiring-out of workers” and relative statistics to be analysed in the light of national legislation, the European Directive and the implementing and transposing legislation [13]. Hence, the issues regarding information and monitoring are qualifying and essential elements to comply with the freedom to provide services at the transnational level, and they both represent crucial elements for guaranteeing the rights of posted workers, [continua ..]

3. Administrative coordination and right to information before the objectives of European harmonization

The term “adequate measures” mentioned in the directive at the time of transposition was therefore apparently lacking, not only in the light of the harmonization of objectives, but also in the light of the historical context of reference, where the administrative activity, similarly to the regulatory languages and conceptual systems [23], represents nothing more than a typification of the legal experience definable as law in action. Hence, there is an interest in a greater “alignment” of the control activities concerning the hypotheses of non-compliance and cooperation across Member States. These have been subject to an ongoing process of fine-tuning over the last twenty years, both at the European and national level (even if, at least as far as Italy is concerned, bilateral agreements on the matter with other Member States have not been greatly developed) [24]. A first measure is Regulation (EU) no. 1024/2012 of the European Parliament and of the Council, which streamlined the terms and procedures of “administrative cooperation” between the Member States of the European Union. This is a general measure, not aimed specifically at the transnational posting of workers, but intended to make cooperation and the exchange of information between Member States and with the Commission “more effective”, including in the case of “free movement of ... persons, services” (Recital 1). A second, more relevant, European measure is the Enforcement Directive 2014/67/EU of 15 May 2014 [25], aimed at affecting the terms of application of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services, with the objective of improving and standardising its application and effectiveness through a “proceduralisation” of inspection activities (to guarantee transparency and the right of defence of workers and employers) [26] and overcoming the objective difficulties identified in several Member States in preventing wage dumping practices [27]. With specific regard to the administrative coordination between national institutions, Article 1 makes direct reference to preventive measures and a system of penalties for “any breach and circumvention of existing rules” in the field of transnational posting. This clearly results from the acquired recognition of failed or insufficient action by national regulators and a [continua ..]

4. ... and the consequential evolution of Italian legislation (Legislative Decree no. 136/2016)

The EU ius novum led, consequently, to a new intervention of the Italian regulator through Legislative Decree no. 136 of 17 July 2016 [41]. Summing up, as regards the implementation of Article 4, par. 1, of Directive 96/71/EC, as an alternative to the designation of a specific liaison office, the Italian regulator opted for the designation of several competent national bodies. Article 2, par. 1, letter c) of Legislative Decree no. 136/2016 designated the Ministry of Labour and Social Policies and the National Labour Inspectorate, as well as the judicial authority, for the sole purpose of the provisions regarding the procedure for the enforcement and recovery of administrative penalties. Preliminary to this is the verification of the “authenticity of the posting” (Article 3) and of the “terms and conditions of employment” (Article 4) in relation to which the posted worker is granted protection “in administrative and judicial proceedings” [42]. To this end, the clarification of the “administrative requirements” with a preventive scope (Article 10) is followed by the control procedures in compliance with the principle of proportionality and non-discrimination (Article 11) and the applicable “penalties” (Article 12). Inspections relating to situations of transnational posting, in fact, must be based on a specific risk assessment (or at least on a generally compliant practice on the part of the competent authorities) and must not be discriminatory and/or disproportionate, i.e. it must be possible to achieve the objectives pursued without hindering the cross-border movement of services more than strictly necessary [43]. Pursuant to Article 7, par. 1, letter c) of Legislative Decree no. 136/2016, and as reiterated also on the website of the Ministry of Labour and Social Policies (which, in this sense, specifies the contact details of the territorially competent body with a specific link), any unlawful situation can always be reported to the territorial offices of the National Labour Inspectorate, which shall initiate the necessary supervisory activities ex officio. Article 5 of Legislative Decree no. 136/2016 – “Defence of rights” – (implementing the provisions of Article 11 of Directive 2014/67/EU), allows the posted worker, even after returning to the country of origin, to apply – [continua ..]

5. Detecting infringements: the role of labour inspectorates and national jurisdiction

A more complex issue which has not been thoroughly examined is the enforcement of administrative penalties where the jurisdictional guarantee takes other forms. The Inspectorate also plays a central role in this case: under Article 14 of Legislative Decree no. 136/2016, it is responsible for the transmission – through the IMI system [46] – of requests for notification of administrative or judicial measures or requests for recovery of an Italian pecuniary administrative penalty abroad, when the measure has become final and when, for its administrative enforcement, it is not possible to apply “the provisions and procedures provided for by the national legislation” [47] . Similarly, pursuant to Article 18 of Legislative Decree no. 136/2016, the National Labour Inspectorate is called to process – within a term of thirty days – requests for notification of an administrative or judicial measure originating from another Member State and received through the IMI system, imposing or confirming an administrative pecuniary sanction. Apart from the cases of mere notification of the measure, the procedure for the verification, recognition and enforcement of administrative pecuniary penalties imposed by a foreign Member State for non-compliance with EU legislation on transnational posting (Articles 18 et seq. of Legislative Decree no. 136/2016) is entrusted to the Court of Appeal in whose jurisdiction the (natural or legal) person against whom the penalty was imposed resides (Article 19). The role of the Court of Appeal, as well as that of the Inspectorate with respect to Article 18 of Legislative Decree no. 136/2016, is not merely executive, because it may result in “grounds for rejection” (Article 20) of the request. The competent Court of Appeal is the Criminal Court, as inferable from Article 21 on the “procedure and decision of recognition” according to which proceedings are carried out “in the forms provided for by Article 127 of the Code of Criminal Procedure”, i.e. with the “procedure in chambers” which provides for a paper-based cross-examination (by filing pleas) and an optional oral hearing if the parties or their lawyers appear before the judge. The decision can be appealed to the Court of Cassation “for infringement of the law” and the Supreme Court rules by “observing the forms of Article 127 of the Code of Criminal [continua ..]

6. The impact of Directive EU 2018/957 and Legislative Decree no. 122/2020 for a better coordination and an effective sanctions framework

There is one last – for the time being – development in the EU regulatory framework. Following a monitoring activity by the Commission [53] and on the basis of a reassessment (“on a fair basis”) of the circumstances [54], Directive 96/71/EC was amended by Directive (EU) 2018/957 of 28 June 2018 [55], which gives Member States a two-year period to comply (30 July 2020) (Article 3) [56]. The framework is that of a re-evaluation – “proportionate and necessary”, as well as “lawful” and more “fair” – of the restrictions on the freedom of services (in particular, with regard to the rules on long-term posting) and their justification in the light of “overriding reasons of general interest” for the protection of posted workers. Therefore, the 1996 Directive maintains its general structure; however, there is a need for a partial new drafting to reflect the over twenty years of application and the problems identified (especially after the expansion of the EU to Central and Eastern European countries). Recital 4 is explicit in this sense, as it explains the rationale of the EU regulator’s intervention “to ensure uniformity in the application of the rules and a genuine social convergence”, confirming that these are the critical profiles that have emerged in more than twenty years of application. Recital 16 is also explicit in underlining that freedom of competition is a fundamental value within the EU, but “a level playing field for service providers and the protection of the rights of the posted workers” are not values that can be pursued separately. “In a truly integrated and competitive internal market, undertakings compete on the basis of factors such as productivity, efficiency, and the level of education and skills of the workforce, as well as the quality of their goods and services and the degree of innovation”, which excludes that cost savings can be pursued by cutting back on social protection, working conditions, and protection of posted workers’rights. Therefore, the Member States are once again called upon to enhance “transparency and access to information” by investing in control procedures in order to ensure “legal certainty” and the correct “application of the law” (Recital 21) [57]. Hence, the request for greater [continua ..]

NOTE