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Embargoed
Tuesday, 8 June 0:001 am
Non-UK
European Businesses Escape Health and Safety Law Enforcement
Non-UK European businesses providing services in Britain
on a non-permanent basis may no longer have to comply
with British health and safety law if the European
Parliament and Council of Minister agrees to the text
of a new Framework Directive currently under consultation.
The Health and Safety Executive and Local Authorities
will not be able to inspect, investigate, impose enforcement
notices or lay criminal charges against the company
or individuals for any breaches of health and safety
law, according to the "Directive on Services
in the Internal market".
Non-UK
European companies in Britain will instead have to
comply with their own country's laws and only HSE
equivalent bodies of the foreign country will be able
enforce the law in Britain.
This
rule would however not apply to foreign businesses
operating in Britain for an "indefinite period."
Conversely, British businesses operating on a non-permanent
basis on the continent will have to abide by British
law and the HSE will have responsibility for inspecting,
investigating and prosecuting.
This
principle is known as the "country of origin"
principle. Recital 38 of the Directive states:
"It
is .. necessary to ensure that supervision of service
activities is carried out at source, that is to
say, by the competent authorities of the Member
State in which the provider is established. The
competent authorities of the country of origin are
best placed to ensure the effectiveness and continuity
of supervision of the provider and to provide protection
for recipients not only in their own Member State
but also elsewhere in the Community. In order to
establish mutual trust between Member States in
the regulation of service activities, it should
be clearly laid down that responsibility under Community
law for supervision of the activities of providers,
regardless of the place where the service is provided,
lies with the Member State of origin."
The
Health and Safety Commission are deciding how to respond
to the proposed directive at a meeting today, Tuesday,
8 June 2004
David Bergman, Director of the Centre for Corporate
Accountability said:
"This
must surely not only be wrong in principle, but
must be unworkable in practice. If HSE inspectors
go to a factory and find that a non-British European
business - which is not based in Britain 'indefinitely'
- is failing to comply with health and safety law
in the way it provides a service to the factory,
the Directive would mean that the inspector could
do nothing, even if the company's working practices
are in serious breach of the law. The HSE would
have to inform the regulator from the business's
country of origin and wait to see whether they will
act. A similar British company giving the same service
at the same factory, in contrast, could have an
enforcement notice imposed on it and if the breach
is serious enough, be subject to prosecution.
"Equally, the HSE - already with limited resources
- would be responsible for enforcement of safety
law in relation to British companies operating (on
a non-permanent basis) in the rest of Europe. How
would HSE inspectors be able to do that in X number
of countries when the inspectors are unlikely to
be able to even speak the language of the host country.
"The
reality would surely be that any European businesses
operating temporarily in another European country
would be outside of the reaches of the law.
"The Directive is proposing quite an extraordinary
proposition - which one can't really be believe
it ever meant".
This
scenario would only not apply in two situations.
| • |
If
the Government could show that compliance with
health and safety law was "indispensable
for reasons of public policy or public security
or for the protection of public health or the
environment" (1) (Article 16, para 17); or |
| • |
If
the government decided that there was "exceptional
Circumstances" in a particular case. However,
in addition to the situation having to be 'exceptional',
the HSE would have to show (a) that the law in
Britain was more stringent than the law in the
country of origin; (b) would have to inform the
regulator of the country of origin of why it wanted
to take action and (c) wait for at least 15 days
before taking any action. It could only avoid
this delay if the matter was 'urgent'. |
Recital
43 does indicate that the first exception might be
allowed to apply to "building sites" - however
this is not clear from the Directive itself.
According
to the Department of Trade and Industry, "the
Government strongly supports the aim of these proposals"
which it says will"cut red tape in order to improve
access to the European Internal Market for the service
sector, a main driver of economic growth and employment
in the UK."
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CCA
- Press Inquiries
Contact: David Bergman
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020 7 490 4494 (office)
07876 364571 (mobile)
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FURTHER
DETAILS
The
Country of Origin Principle
This Introduction to the Directive summarises this
as meaning:
"service
providers are subject only to the law of the country
in which they are established and Member States
may not restrict services provided by operators
established in another Member State. It therefore
enables operators to provide services in one or
more other Member States without being subject to
those Member States' rules. This principle also
means that the Member State of origin is responsible
for the effective supervision of service providers
established on its territory even if they provide
services into other Member States" (page 9)
It
goes on to say that:
"the
application of the country of origin principle will
make it possible to achieve the objective of guaranteeing
the free movement of services whilst allowing the
various national regimes to co-exist with all their
distinctive characteristics. These regimes may not
be used to restrict the provision of services by
an operator established in another Member State"
(page 18)
To
read article 16, click here
To
Which type of Businesses does this Apply
The Directive applies to any business involving the
provision of a service to consumers or businesses.
"Recital" 14 and 15 of the Directive states
that:
"The
concept of service covers a wide variety of ever-changing
activities, including business services such as
management consultancy, certification and testing;
facilities management, including office maintenance
and security; advertising; recruitment services,
including employment agencies; and the services
of commercial agents. That concept also covers services
provided both to businesses and to consumers, such
as legal or fiscal advice; real estate services
such as estate agencies; construction, including
the services of architects; transport; distributive
trades; the organisation of trade fairs; car rental;
travel agencies; and security services. It also
covers consumer services, such as those in the field
of tourism, including tour guides; audio-visual
services; leisure services, sports centres and amusement
parks; health and health care services; and household
support services, such as help for the elderly.
Those activities may involve services requiring
the proximity of provider and recipient, services
requiring travel by the recipient or the provider
and services which may be provided at a distance,
including via the Internet.
As
the Court of Justice has consistently held with
regard to Articles 49 et seq of the Treaty, the
concept of service covers any economic activity
normally provided for remuneration, without the
service having to be paid for by those benefiting
from it and regardless of the financing arrangements
for the remuneration received in return, by way
of consideration. Any service whereby a provider
participates in the economy, irrespective of his
legal status or aims, or the field of action concerned,
thus constitutes a service."
Principle
applies only to foreign Businesses that are not "established"
in Britain
The directive makes a distinction between those businesses
that are 'established' and those that are 'temporary'
and only applies this particular principle to those
businesses that are 'temporary' (see Recital 19).
The Directive defines "established businesses"
as those that pursue economic activity"through
a fixed establishment ... for an indefinite period."
(see Article 4, para 5)
In
effect therefore any business not based in Britain
for an 'indefinite period' appears to be temporary.
Recital
19 of the Directive states that:
The
Court of Justice has consistently held that the
temporary nature of the activities in question must
be determined in the light not only of the duration
of the provision of the service, but also of its
regularity, periodical nature or continuity. In
any case, the fact that the activity is temporary
does not mean that the service provider may not
equip himself with some forms of infrastructure
in the host Member State, such as an office, chambers
or consulting
rooms, in so far as such infrastructure is necessary
for the purposes of providing the service in question.
Non-Application
of the Principle
As stated above, there are two circumstances - according
to the directive - that would allow this principle
not to apply:
General
Derogation: There are a number of circumstances
that allow for a derogation, but the only one relevant
to safety is para 17 which states that a derogation
can be made if:
"specific
requirements of the Member State to which the provider
moves, that are directly linked to the particular
characteristics of the place where the service is
provided and with which compliance is indispensable
for reasons of public policy or public security
or for the protection of public health or the environment."
Recital
43 of the Directive states:
"The
country of origin principle should not apply to
specific requirements, laid down by the Member State
to which a provider has moved, the rationale for
which is inextricably linked to the particular characteristics
of the place where the service is provided, and
which must be fulfilled in order to maintain public
policy, public safety, public health or the protection
of the environment. Such would be the position,
for example, in the case of authorisations to occupy
or use the public highway, requirements relating
to the organisation of public events or requirements
relating to the safety of building sites"
Case
by Case derogation in exceptional circumstances:
Articles 19 and 37 are set out below
Article 19 - Case-by-case derogations from the country
of origin principle
| (1) |
By
way of derogation from Article 16, and in exceptional
circumstances only, a Member State may, in respect
of a provider established in another Member State,
take measures relating to any of the following:
| (a) |
the
safety of services, including aspects related
to public health; |
| (b) |
the
exercise of a health profession; |
| (c) |
the
protection of public policy, notably aspects
related to the protection of minors. |
| (d) |
the measures are proportionate. |
|
| (2) |
The
measures provided for in paragraph 1 may be
taken only if the mutual assistance procedure
laid down in Article 37 is complied with and
all the following conditions are fulfilled:
| (a) |
the
national provisions in accordance with which
the measure is taken have not been subject
to Community harmonisation in the fields
referred to in paragraph 1; |
| (b) |
the
measures provide for a higher level of protection
of the recipient than would be the case
in a measure taken by the Member State of
origin in accordance with its national provisions; |
| (c) |
the
Member State of origin has not taken any
measures or has taken measures which are
insufficient as compared with those referred
to in Article 37(2); |
| (d) |
the measures are proportionate. |
|
| (3) |
Paragraphs
1 and 2 shall be without prejudice to provisions,
laid down in Community instruments, which guarantee
the freedom to provide services or which allow
derogations therefrom |
Article
37 - Mutual assistance in the event of case-by-case
derogations from the country of origin principle
| (1) |
Where
a Member State intends to take a measure pursuant
to Article 19, the procedure laid down in paragraphs
2 to 6 of this Article shall apply without prejudice
to proceedings before the courts. |
| (2) |
The
Member State referred to in paragraph 1 shall
ask the Member State of origin to take measures
with regard to the service provider, supplying
all relevant information on the service in question
and the circumstances of the case. The Member
State of origin shall check, within the shortest
possible period of time, whether the provider
is operating lawfully and verify the facts underlying
the request. It shall inform the requesting
Member State within the shortest possible period
of time of the measures taken or envisaged or,
as the case may be, the reasons why it has not
taken any measures.
|
| (3) |
Following
communication by the Member State of origin
as provided for in the second subparagraph of
paragraph 2, the requesting Member State shall
notify the Commission and the Member State of
origin of its intention to take measures, stating
the following:
| (a) |
the reasons why it believes the measures
taken or envisaged by the Member State of
origin are inadequate; |
| (b) |
the reasons why it believes the measures
it intends to take fulfill the conditions
laid down in Article 19. |
|
| (4) |
The
measures may not be taken until fifteen working
days after the date of notification provided for
in paragraph 3. |
| (5) |
Without
prejudice to the possibility for the requesting
Member State to take the measures in question
upon expiry of the period specified in paragraph
4, the Commission shall, within the shortest possible
period of time, examine the compatibility with
Community law of the measures notified. Where
the Commission concludes that the measure is incompatible
with Community law, it shall adopt a decision
asking the Member State concerned to refrain from
taking the proposed measures or to put an end
to the measures in question as a matter of urgency. |
| (6) |
In the case of urgency, a Member State which intends
to take a measure may derogate from paragraphs
3 and 4. In such cases, the measures shall be
notified within the shortest possible period of
time to the Commission and the Member State of
origin, stating the reasons for which the Member
State considers that there is urgency. |
Country
of origin principle
Article 16
| (1) |
Member
States shall ensure that providers are subject
only to the national provisions of their Member
State of origin which fall within the coordinated
field. Paragraph 1 shall cover national provisions
relating to access to and the exercise of a service
activity, in particular those requirements governing
the behaviour of the provider, the quality or
content of the service, advertising, contracts
and the provider's liability. |
| (2) |
The
Member State of origin shall be responsible for
supervising the provider and the services provided
by him, including services provided by him in
another Member State. |
| (3) |
Member
States may not, for reasons falling within the
coordinated field, restrict the freedom to provide
services in the case of a provider established
in another Member State, in particular, by imposing
any of the following requirements:
| (a) |
an obligation on the provider to have an
establishment in their territory; |
| (b) |
an obligation on the provider to make a
declaration or notification to, or to obtain
an authorisation from, their competent authorities,
including entry in a register or registration
with a professional body or association
in their territory; |
| (c) |
an obligation on the provider to have an
address or representative in their territory
or to have an address for service at the
address of a person authorised in that territory; |
| (d) |
a ban on the provider setting up a certain
infrastructure in their territory, including
an office or chambers, which the provider
needs to supply the services in question; |
| (e) |
an obligation on the provider to comply
with requirements, relating to the exercise
of a service activity, applicable in their
territory; |
| (f) |
the
application of specific contractual arrangements
between the provider and the recipient which
prevent or restrict service provision by
the self-employed; |
| (g) |
an
obligation on the provider to possess an
identity document issued by its competent
authorities specific to the exercise of
a service activity; |
| (h) |
requirements which affect the use of equipment
which is an integral part of the service
provided; |
| (i) |
restrictions
on the freedom to provide the services referred
to in Article 20, the first subparagraph
of Article 23(1) or Article 25(1). |
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