Economic freedoms and labour standards in the European Union

Abstract

The European Union internal market seeks to ensure the free movement of goods, services, capital and citizens. The primacy given to these economic freedoms has culminated in a socio-economic reasoning dominated by competition, bringing about side effects that may pose a threat to working conditions and labour standards. This article examines the problematic relationship between economic freedoms and labour standards in the context of cross-border labour recruitment. It starts with a summary of the relevant EU acquis, in particular rules concerning social security coordination and the pay and working conditions of posted workers. It reviews key issues of the ‘hard core’ of the internal market legislation (free choice of contracts, freedom of establishment for firms, deregulation of the ‘business environment’ and free provision of services). The next part identifies experiences of rule-enforcing institutions: regime shopping, non-compliance with social standards, lack of cross-border enforcement, the difficulty of tracing circumvention in a transnational context and weak sanctioning mechanisms. The possibility of verifying, legally and in practice, whether a worker is correctly posted within the framework of the provision of services has become an Achilles heel of the enforcement of the use of cross-border recruited labour. The article also assesses whether the 2014 Enforcement Directive can be seen as an effective remedy for the identified problems.