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The European Union Court of Justice (ECJ) yesterday dismissed actions brought by Hungary and Poland seeking the annulment of the directive strengthening the rights of posted workers.

The European Union had brought in changes to the posted workers directive so as to strengthen the rights and conditions of ‚posted’ drivers. However, Hungary and Poland have rallied against the changes as they feel that the new rules will have a detrimental effect on their hauliers.

According to the ECJ, the aim of the new directive is as follows:

The EU legislature endeavoured, when adopting Directive 2018/957, to ensure the freedom to provide services on a fair basis, by guaranteeing competition that would not be based on the application, in one and the same Member State, of terms and conditions of employment at a level that is substantially different depending on whether or not the employer is established in that Member State, while offering greater protection to posted workers. To that end, Directive 2018/957 seeks to ensure that the terms and conditions of employment of posted workers are as close as possible to those of workers employed by undertakings established in the host Member State.

Hungary and Poland argued that the above represented an infringement of Article 56 TFEU, which guarantees the freedom to provide services, and an infringement of the ‘Rome I’ Regulation.

However, yesterday the ECJ dismissed both claims in their entirety. The full legal basis on which the court dismissed the case brought forward by Poland and Hungary can be downloaded here.

Some of the key extracts highlighted by the ECJ in their explanation for dismissing the case are as follows:

  • Where a legislative act has already co-ordinated the legislation of the Member States in a given EU policy area, the EU legislature cannot be denied the possibility of adapting that act to any change in circumstances or advances in knowledge.
  • The Court states that the fact that Article 53(1) and Article 62 TFEU empower the EU legislature to coordinate national rules which may, by reason of their heterogeneity, impede the freedom to provide services between Member States, cannot entail that that legislature need not also ensure due regard for, inter alia, the overarching objectives laid down in Article 9 TFEU. Those objectives include the requirements pertaining to the promotion of a high level of employment and the guarantee of adequate social protection.
  • Accordingly, in order best to achieve the objective pursued by Directive 96/71, given the changed circumstances, it was open to the EU legislature to adjust the balance inherent in that directive by strengthening the rights of posted workers in the host Member State so that competition between the undertakings posting workers to that Member State and the undertakings established in that State should develop on a more level playing field.
  • However, that directive does not remove any competitive advantage which the service providers in some Member States may enjoy, since it has in no way the effect of eliminating all competition based on costs.

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