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Posting of workers: Iceland brought to court for breach of EEA law

16.6.2010

The Authority today decided to bring a case before the EFTA Court against Iceland. The case concerns legislation adopted by Iceland in 2007 directed at foreign undertakings posting their workers in Iceland for temporary work. The Authority consideres that the Icelandic rules are in breach of the freedom to provide services and the Posting of Workers Directive.[1]

Under these rules, certain administrative requirements are imposed on the foreign firms which the Authority considers to be disproportionate and thus in breach of the principle of freedom to provide services.

The Authority also considers that the decision by Iceland to extend its legislation concerning the right of workers to receive wages during sick leave and the obligation imposed on employers to insure their workers against accidents at work, breaches the Posting of Workers Directive. The Directive pre-supposes that posted workers are in respect of these issues protected under their home state legislation.

Prior to this court referral, the Authority issued a letter of formal notice to Iceland in March 2009 followed by a reasoned opinion in November. In its response the Icelandic Government recognised the findings of the Authority regarding the free movement of services. A bill amending the administrative requirements of the Posting Act was adopted by Parliament on 15 June 2010. As a result of the
changes to the administrative requirements of the Act, the Authority will not pursue this part of the case further. However, as regards the Posting of Workers Directive the Icelandic Government has declared that it does not agree with the Authority's conclusion. In light of this, the Authority has decided to bring the case with regard to sickness pay and accident insurance to the EFTA Court.

 

For further information, please contact:

Mr. Xavier Lewis
Director
Legal & Executive Affairs
Tel.: (+32)(0)2 286 1830




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