Victory for social rights as European services e-card is rejected

Wednesday 21 March 2018

Today trade unions scored a victory for social rights after having successfully led the drive to reject the European Commission’s proposal for an e-card in a vote in the internal market (IMCO) committee.

The General Secretary and Confederal Secretary of the ETUC, alongside the heads of the European Trade Union Federations EFFAT, ETF, industriAll, EPSU, EFBWW and UNI Europa, sent a joint letter to IMCO MEPs calling on them to rejected this proposal ahead of the vote.

As the largest component of the EU’s economy, the service sector, represented by UNI Europa, unanimously supports the freedom to deliver services across the EU, provided that there is fair competition, labour protection and a well-functioning Single Market. However, it seems that the proposed services e-card would have been counterproductive to these goals.

Aimed at making the cross-border provision of business services – in particular the insurance, cleaning and construction sectors – easier and removing administrative burdens, the e-card would de facto establish the country of origin principle by undermining host-country control and enforcement tools. According to the proposal, the host member state would have had to accept the authorisation given by the home member state without any further requirements and despite it having no time limit. Only under certain conditions could the home member state have suspended or revoked the authorisation. All in all, the e-card could have led to more cross-border social fraud such as bogus self-employment, undeclared work, fake posting and social dumping.

Intended to make the provision of cross-border services easier by removing administrative burdens, the Commission’s proposal would have had the adverse effect. The e-card does not address any of the real barriers businesses face when they want to offer services in another member state. On the contrary, member states would have been burdened with additional administrative structures and legal uncertainty would have increased. To properly support businesses offering cross-border services, the Commission should ensure that existing measures, such as the single points of contact, are implemented correctly.

“Today’s rejection of the e-card in the IMCO committee is a strong signal to the European Commission that their economically liberal proposals face strong opposition,” stated Aileen Körfer, who leads Services Policy for UNI Europa. “The Commission proposal, if adopted, would have been a disaster for regulatory and social framework. Under the guise of facilitating the provision of cross-border services, the e-card would have paved the way for the return of the country of origin principle. It would have facilitated social fraud and encouraged unfair competition among both companies and member states.”

“Rather than enhancing social cohesion in the EU, the e-card would have put downward pressure on pay and working conditions, both in the home country and host country of service providers,” said Oliver Roethig, Regional Secretary of UNI Europa. “Its rejection is a victory for social Europe, yet a small one. A European Commission that is focusing on competitiveness and profitability misses out on its real mission. What we really need are concrete initiatives that make Europe and the Single Market work for all workers and citizens.”