Carriers will yearn for posting, as one of the experts said during the discussions on the Mobility Package and other EU initiatives. And all signs are that these words can come true. In particular due to the report by the German MEP Ismail Ertug adopted by the European Parliament’s Committee on Transport and Tourism on 10th January.
It is worth reminding that in November last year the Council of the European Union adopted a general approach. And the issue that aroused our greatest concern was the diversification of bilateral transport operations and the extension of the posting to all cross-border transport. The next step after the adoption of a position by the Council was supposed to be a report by the European Parliament and the subsequent agreement on the final text of the legislation through negotiations between the Committee, the Council and Parliament.
The Ertug report, which was voted through by the Committee on Transport and Tourism, will certainly be maintained in the European Parliament’s report. This uncertainty is due to the fact that two other reports on the remaining provisions of the Package could not be adopted by the Committee within the foreseen deadline. The rules governing parliamentary legislative procedure do not provide for such a situation.
However, in the face of strong pressure from the European Commission, as well as French and German MPs, it is very likely that the solutions voted through in the Committee on Transport and Tourism will sooner or later become EU law. It is precisely these solutions that may make us long for posting, because according to one of the principles adopted there, the employer will be obliged to conclude an employment contract with the driver on the basis of the law of the country in which he usually performs his work.
Wages and insurance as in the country where the driver is working
As an example of possible consequences, drivers of a Polish carrier from Słubice (near the German border), who perform everyday transports to and from Potsdam (the route in both directions almost entirely on German roads), can be mentioned. According to the proposal, they will have to be employed under German law, receiving salaries and all benefits provided for German drivers. And since this obligation has been included in the requirements to be met by the company, its violation will result in the withdrawal of transport rights – i.e. liquidation of the company.
As if that were not enough, the final stage of legislative work on the revision of the rules on the harmonisation of social security systems – negotiations between Parliament, the Council and the European Commission – is in progress at the same time. In these negotiations, Parliament’s representatives are bound by a report adopted by MEPs, which proposes social security for mobile workers (drivers) in the country where they usually carry out their work.
In this situation, the provisions on posting would apply only to transports carried out as a minor part of the work performed. This is best illustrated by the example of a driver who performs 40% of his work in Germany, 20% in Poland, 20% in France and 20% in Belgium each month. He would be employed under German law. In Germany and Poland he would receive German wages, and during his stay in France and Belgium, he would receive wages and social benefits there as part of the posting. And for the whole monthly period insurance premiums would be paid to the German equivalent of ZUS.
The presented solutions change the existing rules of employing drivers to such an extent that operating road transport in its present form will become completely unprofitable. A smaller carrier will not be able to cope with such requirements, and for a larger one, it will be much easier to relocate the company to Germany or France. The relocation will give an additional bonus in the form of full access to the internal market of these countries, as well as avoiding other restrictions resulting from the solutions adopted by the Committee on Transport and Tourism on 10 January this year.
Draconian penalties for infringement of a provision detrimental to international transport
Another new criterion for admission to the occupation of road transport operator is the solution that most interferes with the EU market. This criterion is to be the performance of most transport operations within or from the territory of the carrier’s state of establishment. This means the necessity to significantly restrict the provision of international transport services other than bilateral services. Therefore, companies providing services throughout Europe, including cross-trade and cabotage, will have to significantly reduce the volume of their transports or relocate to one of the countries in which they most often operate.
This will introduce the principle that the handling of trade in goods between individual countries of the Union belongs mainly to carriers from those countries. Thus, goods from Germany to France will, as a rule, be carried by German or French carriers. As they do not have adequate transport capacity, this gap will be filled, among others, by Polish companies moving to these countries. Only then they will no longer work for Poland.
It may be considered a complete peculiarity in this situation to require each vehicle to carry out at least one unloading or loading every four weeks in the state where the carrier is established. The penalty for breach of this obligation, as well as the requirement to limit the number of operations not related to the country of establishment, will be the withdrawal of the permit to operate as a road transport operator. No exceptions have been proposed to this requirement in connection with random events (e.g. breakdown or stopping of a vehicle) or with the specific nature of transport work (e.g. future transport to and from China on the New Silk Road).
Penalties also for shippers and forwarders
But that’s not all. The next proposals voted through in the Committee on Transport and Tourism will make cooperation with carriers from countries other than the country of the principal very risky. The Committee has decided on criminal or administrative criminal liability of contractors (shippers, forwarders and other principals) for infringements committed by carriers, albeit through no fault of their own. It is sufficient that, in the opinion of the authority imposing the penalty, the contractor ‘should know that the transport services he has commissioned involve an infringement of the regulation’.
A reasonable operator will, therefore, avoid outsourcing transport services to carriers from other countries, in particular, those with lower salaries. Why risk a fine of up to half a million euros if it can be imposed for the mere fact that the principal should know that such a carrier may be in breach of the rules on the posting or employment of drivers under foreign national law? Unless a significantly lower freight rate compensates for potential risks.
As a result, the additional effect of the solution will also be even greater differentiation of freight rates. Higher for domestic carriers and lower for high-risk foreign carriers. Among other bizarre, from the market point of view, solutions adopted by a majority of votes in January by the Committee on Transport and Tourism, are the following:
– differentiation of the level of penalties for contractors for infringements committed by carriers, by making their level dependent on the assessment attributed to the carrier in the system of national electronic registers;
– an obligation for each vehicle at the disposal of the company to carry out at least one unloading or loading operation in the carrier’s state of establishment every four weeks;
– reducing the five-day period during which three cabotage operations are allowed to three days;
– the introduction of a cooling period (60 hours) between cabotage operations – the cooling period is not calculated from the time of departure from the country where cabotage was carried out, but only from the time of the next transport operation carried out from the territory of the carrier’s state of establishment;
– the obligation to check every three years each road transport operator for compliance with the conditions for granting a permit to operate in this capacity by the competent authorities of the Member State in which it is established;
– granting the European Labour Office powers in the field of road transport control;
– the obligation to keep copies of the employment contracts of employed drivers in national electronic registers and to update them in the event of any change in the conditions contained therein. In Poland, such a register is kept by the Chief Inspector of Road Transport;
– regulations governing the international road transport by vehicles or combinations of vehicles with a maximum permissible weight of 2.5-3.5 t.
The Mobility Package will wait for a new term of office?
In this state of affairs, it is difficult to agree with the assessment of those who consider the outcome of the vote on 10 January 2019 in the European Parliament’s Committee on Transport and Tourism to be a success for Polish and Central European road carriers. We have not gained much from rejecting the reports on the posting and resting of drivers, because much more restrictive measures have been adopted. Solutions that eliminate us not only from the EU market but also from carrying out a significant part of transport to non-EU countries, such as Russia and other countries of the former Soviet Union.
This last consequence for non-EU markets stems from the fact that the rules on admission to the profession of road transport operator apply only to EU carriers. And this is where solutions were introduced to prevent carriers from specializing in servicing so-called third countries and to tie them to bilateral services related to their state of establishment. In this way, the KR3 permit quotas won during the joint committees may soon become useless.
Over time, we will see when and to what extent we will be affected by these changes in the conditions and rules for international road transport. If MEPs do not adopt the report on the Mobility Package by the end of March, it is most likely that this legislative initiative will only return to us in the next European Parliament’s term of office.