The European Trade Union Confederation is gravely concerned about some of the provisions in the European Commission’s draft Directive on services in the internal market. It warns that they could speed up deregulation, seriously erode workers’ rights and protection, and damage the supply of essential services to European citizens.

The ETUC acknowledges the important potential for job creation in many service sectors across Europe. It recognises efforts in the Commission’s draft Directive to improve the efficiency of the internal market through reducing administrative costs and setting up single contact points for service providers.

However, the draft as it stands is seriously flawed, and threatens to undermine existing collective agreements, national labour codes, and the success of the whole European Social Model. For these reasons, the ETUC cannot support it, and has called for an urgent meeting with the European Council working group on competitiveness and growth to discuss its concerns.

Where the draft goes wrong

The ETUC finds that the proposal fails to distinguish between services of very different kinds and with very different objectives, and indeed fails to make clear exactly which services it would cover. European trade unions have long been calling for a framework Directive on services of general interest (SGI), covering health care and other essential services where a simple supplier-consumer relationship does not apply. In the ETUC’s view, these cannot be subject to the same rules as commercial services like retailing and property development, as proposed in the current draft.

The proposal for providers to be subject only to regulations in their ‘country of origin’ offers carte blanche for organisations to shift their operational base to Member States with the lowest social and environmental standards. This could lead to a downward spiral of deregulation with Member States competing against one another. The ETUC believes this principle could seriously damage the social cohesion of the EU.

While the draft Directive claims not to address labour law, the ETUC believes it will have inevitable repercussions, and is demanding that the Commission should give priority to improving standards and to better protection for posted workers (through strengthening the existing Directive 96/71/EC) and temporary agency workers (by progressing the blocked proposal for a Directive).

Finally, the ETUC believes the proposal places too many restrictions on the right of Member States to act against abuses of labour law and to protect migrant workers on their own soil. It doubts that authorities in the country of origin will be able to carry out effective monitoring and control across borders.

The potential for job creation in services is due to the labour-intensive nature of these sectors. Any change in regulation will inevitably mean a change also in labour relations. This is why it is crucial for workers’ representatives to have an input in policy developments.

The ETUC is demanding that before this proposal goes any further, the Commission should make on in-depth study of the impact on workers, employers and service-recipients, and carry out a proper process of consultation, which takes account of the views of European trade unions.