Chapter 7 - Do we Need a New Conflict-of-Laws Rule for Labour in the European Road Transport Sector? Yes We Do

Summary

INTRODUCTION

In the white book of the Belgian trade unions ABVV and BTB, which came about in collaboration with the University of Antwerp, 25 measures against social dumping in the European road transport sector were presented. One of these measures concerns the adjustment of the current conflict of law rule of Article 8 Rome I Regulation. In this contribution, this measure will be further scrutinized from a labour protection point of view. I will explain why it is necessary to adjust the conflict of law rules to enhance the fight against social dumping in the European road transport sector.

First, a short assessment of the legal framework will be made, which will be followed by an examination of the case law of the Court of Justice of the European Union concerning Article 8 Rome I Regulation. Other mechanisms, such as overriding mandatory rules under Article 9 Rome I Regulation and the Posting of Workers Directive, although relevant for international labour, will not be discussed here as the current focus is on the provision for employment contracts and the specific ABVV-BTB suggestions.

LEGAL FRAMEWORK

FREEDOM OF SERVICES AND FREEDOM OF ESTABLISHMENT

Key for the realization of the internal market are the fundamental freedoms of circulation. In order to ensure these freedoms in the specific and atypical field of international (road) transport, a common transport policy was created. This policy is defined in Title VI of the Treaty on the Functioning of the European Union (TFEU). Based on this Title, many regulations and directives were enacted, mainly with the aim of increasing the liberalization of the road transport sector. At present, the liberalization is almost complete. Restrictions on the freedom of services ex Article 56 TFEU have been removed, apart from a few restrictions relating to cabotage. The freedom of establishment ex Article 49 TFEU is directly applicable to this sector and is specified in Regulation 1071/2009.

Since labour standards are not harmonized within the Union, it is lucrative for transport companies in low-wage Member States to use the freedom of services to provide cross-border services. Indeed, these low wages and lower labour standards give those companies serious competitive advantages compared to companies located in high-wage Member States.