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«7. CONCLUSION 7.1 Introduction This thesis addressed the (to a large extent) still-unexplored regulatory dynamics within transnational workspaces in ...»

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7. CONCLUSION

7.1 Introduction

This thesis addressed the (to a large extent) still-unexplored regulatory dynamics

within transnational workspaces in the EU where posted work is prevalent. At the

end of this thesis the reader will, I hope, have learned 1) how and under which

conditions the regulatory posting framework is implemented differently at the

workplace than at the policy level, 2) the extent to which posted workers are

constrained from exercising voice through collective channels of representation in the host country, 3) the conditions under which transnational action can occur and

4) how firm and state border interact in a pan-European labour market to create differentiated membership for workers.

One of the intentions was to analyse the enacting of institutional frameworks. Throughout the chapters, the reader was advised that the institutions of a political economy can best be understood in relation to how they have been enacted at different levels. The chapters then each investigated which institutional contexts enable and condition the room for manoeuvre of the particular actors involved in the posting process. The thesis stressed the possible transformative capacity of enaction. It focused on the workplace level, looking at actors involved in the posting relationship, including posted workers themselves, as opposed to policymakers. The aim was to portray how local affairs both sustain and prompt shifts in the posting regulatory framework. By illuminating the micro level, which is not part of the standard repertoire of EU integration research, the study aimed to highlight the overall importance of this approach for a dynamic research agenda of European integration and the changing nature of employment relations it induces.

I believe it can shed additional information on the uneven and multilevel dynamics of EU integration and the discrepancy between market-making and social integration.

This qualitative case study and the in-depth interview data with posted workers, trade unionists, NGOs, works councillors, management, labour inspectors and policymakers support four main findings. First, transnational subcontracting allows the emergence of different regulatory spaces at the national and workplace level. Second, it opens exit options for capital but constrains voice options for unions, works councils and mobile workers. Third, transnational workspaces also create opportunities for transnational action; however, these opportunities take on other forms than is usually expected within the German political economy. Fourth, it is necessary to analyse how different kinds of borders, in this case state and firm borders, intersect in order to fully grasp the structure of a pan-European labour market.

These broad findings reflect the discussions within the respective chapters.

Chapter 3 studied how firms enact the posting framework creatively. It examined how these mechanisms initiate a process of institutional change through power dynamics at the micro level relevant for theories on institutional change generally.

The findings show that the possibility for firms to diverge from rules is accelerated in a transnational setting. The reason is related to the unequal power dynamics between firms and workers but also due to the inability to publicly or collectively enforce rules. The examination of how actors engage with this transnational institution contributes to institutional theory by bridging the gap between institutional context and its appropriation by firms, posted workers and unions.

The next chapter showed how the pan-European labour market opens exit options for capital but isolates posted workers from collective channels of worker representation. Chapter 4 related the changes in labour market regulation to changes in the nature and organisation of the nation state. These findings contribute to comparative institutional analysis by highlighting how the deterritorialization of previously ‘bounded‘ institutional political economic or industrial relations systems decreases collective voice and increases institutional exit.

The following chapter explored the conditions for posted-worker resistance.

It highlighted the shift in strategy of the German meat sector union to coalitions with community organisations in order to mobilise posted workers. It demonstrated the conditions under which such coalitions emerge and are successful such as lack of union power and resources, a useful division of work and a media strategy focusing on social justice. It contributed to blind spots in cross-national comparative perspectives based on institutional equilibrium and sectors with union strongholds. It emphasised the importance of engaging with migration and its different configurations in relation to industrial relations, an area of study too often neglected by industrial relations scholars.

Finally, chapter 6 considered how the changing nature of state and firm borders affects posted workers in transnational workspaces. The insights of three key areas of study – the changing nature of state borders, institutional analysis and labour geography, and the industrial relations literature on transnational solidarity – are combined to develop an original framework that enhances both our theoretical and practical understanding of transnational workspaces in the EU. The chapter contributes to the literature on European integration and the territorial structuring of politics. A bottom-up approach aimed to enhance the understandings on how the de-bordering of a political territorial space affects the European labour market and its mobile workers, which is largely missing from the debate (Meardi, 2009).





All chapters point to the weakening of labour power and labour market regulation due to the disembedding of labour relations from the territorial nation state. In establishing the freedom to provide services, the EU has created a European economic space but has not at the same time extended the spaces for controls. What are the implications of these findings for institutional reforms to the worker-posting framework? Unfortunately, the recently negotiated Enforcement Directive (ED) missed an opportunity to correct the gaps in the regulatory framework. In response to the loophole between the established rights and their appropriation, or what in practice has become ‘the rule’ (Streeck, 2001: 142), policymakers felt the need to negotiate a framework in order to clarify how the Posting of Workers Directive can be more effectively enforced.

7.2 The Enforcement Directive of the Posting of Workers Directive

In April 2014 the European Parliament adopted the Enforcement Directive of the Posting of Workers Directive. Its main purpose, as the name indicates, is to strengthen the enforcement of the Posting of Workers Directive. The final document passed just before the European Parliamentary election in 2014. The timing was no coincidence. The Directive was a political solution to show they did all within their might to improve the position of posted workers. Its content does hardly go beyond the codification of already-existing regulatory measures at the national level. More importantly, the ED may have opened the door for deteriorating practices. The aim here is not to present the detailed and complex negotiation process, reflecting the various interests and positions of the actors leading to the outcome. Rather, the section discusses some of the main Articles in relation to the findings of this thesis in order to attend to the implications for the changing regulatory configurations.

One of the most contentious issues of the ED is the specification of which rights apply when the worker is deemed to fall outside the posting framework. As set out in the operationalization of posted work for this thesis (see chapter 1), a fluid labour market has emerged in which it is difficult to disentangle under which rights framework a worker is actually employed. For example, it is often unclear if the worker de facto falls under the free movement of persons or services (here the added complication is if the person is employed via a subcontractor or agency contract) or is unconsciously bogusly self-employed. Most of the workers interviewed for this research were recruited for the purposes of the posting relationship. They would therefore fall outside the scope of the posting framework.

Trade unions demanded a clear definition of which law would apply to a worker who is under a de facto but not a de jure posted employment relationship (such as bogusly self-employed workers). The demand was for the ED to clearly state that in the aforementioned case the worker would be covered by the entire legislation of the host country. However, the ED does not state which framework would apply and therefore leaves the possibility open that it will be the country-of-origin framework.20 The danger is the introduction of the country-of-origin principle through the back door. The way the posting framework is enacted, as described in this thesis, will thus not be curtailed but may turn out to be justifiable with this legal loophole in place.

This thesis has argued that the particular precarious situation evolves for

posted workers due to the discrepancy between nationally embedded regulatory institutions and labour power and the transnational labour market. The ED hardly introduced remedies in this regard. Interestingly, the heated debate in relation to Recital 11 states: ‘Where there is no genuine posting situation and a conflict of law arises, due regard should be given to the provisions of Regulation (EC) No 593/2008 of the European Parliament and of the Council (‘Rome I’) or the Rome Convention that are aimed at ensuring that employees should not be deprived of the protection afforded to them by provisions which cannot be derogated from by an agreement or which can only be derogated from to their benefit. Member States should ensure that provisions are in place to adequately protect workers who are not genuinely posted.’ (Directive 2014/67 EU).

the ED revolved around strengthening the national control measures instead of transnational cooperation. For example, the main debate focused on subcontracting-chain liability and other particular control measures. Social partners of several EU countries pushed for a main-contractor liability for all the elements in the subcontracting chain. According to Article 12 of the Enforcement Directive, only the direct subcontractor can be held liable. It is left to the member state to determine the exact tool to enforce such abuse in the subcontracting chain.

Paradoxically, the ED leaves room for the member states to decide relevant enforcement measures but at the same time repeatedly cautions that additional measures need to be ‘justified’ and ‘proportionate’.

For example, national inspectorates are not restricted in imposing particular measures. However, any additional measures have to be justified and proportionate in order to avoid creating a barrier, or an obstacle to the free provision of services.

In fact throughout the ED the attention to ‘proportionate’ measures alerts member states to maximize their own tools to avoid infringement procedures. Moreover, the European Commission emphasizes in Article 9 that it will monitor whether the Directive is effectively translated into national law. Even though the European Commission has an institutional duty to monitor compliance, this responsibility is usually not written in Directives. By doing so, it again draws attention to the importance of employing proportionate instruments at national level. This may render national regulatory frameworks impotent to counter transnational exploitative practices as observed in the case of transnational workspaces.

In certain aspects the Directive did advance transnational administrative cooperation. It sets time limits by which authorities of other member states have to respond to requests for assistance (for example a 2-working-day limit to respond to urgent requests and a 25-working-day limit for non-urgent requests). However, how the actual collection of fines is to be achieved is unresolved. Fines imposed on a posting firm cannot be executed effectively because they are based in a different jurisdiction. Moreover, Art. 18 (1) introduces a right for the service providers to contest the fine, penalty and/or underlying claim. If such a dispute arises, the cross-border enforcement procedure of the fine or penalty imposed will be suspended pending the decision of the appropriate national authority in the matter. Companies making a business model out of worker posting may be able to use this provision as a tool to postpone real execution. In that sense companies are still able to profit, and can strategise around the fact that they are registered in another jurisdiction.

Essentially, the ED hardly tackled the underlying structural issues. This study has observed a functional change in the institutional framework. Even though policymakers wanted to remove loopholes, the actual policy framework did not change much on the EU level. Campbell argues that most researchers would agree that changes in rules would qualify as instances of institutional change; by contrast, functional changes would not (2009). However, the complexity of the posting regulation and the outcome of the ED show that highly politicised controversies impede on changing the actual rules of the game through the political process. The heterogeneity of economic interests for both member states and trade unions largely inhibits effective change. These policy struggles more often than not result in vague and ambiguous formulations of legal text that leave wide room for reinterpretation. Therefore, the study points to the importance of paying equal attention to functional change. In light of these rather grim conclusions and policy developments, what then are the implications of this research for more effective strategies to strengthen workers’ rights in transnational workspaces?

7.3 Practical and utopian considerations on how to proceed Interested parties in the posting policy field have developed several practical policy recommendations. I will shortly point to policy measures that may enhance the position of posted workers at the national and transnational levels before moving on to more utopian, but in my view equally important, ideas.



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