Double Charges in Case of Posting of Employees: The Guiot Judgment and its Effects on the Construction Sector

Abstract

A company which performs services by employing its workers in another Member State may be confronted with the obligation to pay contributions to social funds in both the country of establishment and the country of employment. It follows that in some cases there is a tension between on the one hand, the law concerning the freedom to provide services and, on the other hand, national labour law and social security law. In other cases there is a tension between the law on providing services and the EU law concerning the free movement of workers. This article is concerned with these tensions and outlines the case law of the Court of Justice in this field. In the Guiot Judgment, the Court considered an obligation to contribute to funds in both countries in some circumstances to be an infringement on the free movement of services. A consequence of this Judgment is that the employee may lose his entitlement to an advantage to which he would have been entitled under the law on the free movement of workers even if it is more attractive than the corresponding advantage in the country of establishment. We describe the problems in this area and the solution realized by employers' and employees' organisations in Belgium and the Netherlands by making a bilateral agreement.