Abstract By eroding the obstacles to the cross-border provision of services, the European Community has exacerbated the subcontractors’ position in the internal market, without providing for special protective rules. The absence of a Community minimum standard can only leave the door open for Member States to provide individual systems of protection at the national level. The peculiarities of the local construction industry have made resulting subcontracting being intensively regulated in France through Law n° 75-1334, which, failing payment by the contractors, grants subcontractors a direct action for payment vis-à-vis the employer. This pronouncement of the authoritative mixed Chambers of the French Supreme Court, which grants a direct action to all subcontractors working in a building site localized in the territory of France irrespective of the applicable law to the subcontract, seems to establish a protectionist application of the protective rules of Law n° 75-1334. Although apparently intended to avoid discrimination based on nationality, application of Law n° 75-1334 based on territoriality effectively reduces the competitive advantage that subcontractors legally employed in France, though being nationals of other States or having their establishment abroad, might have with respect to French subcontractors. Foreign subcontractors’ right to equal treatment in the host country is unquestionable, but it is doubtful whether concerns of unfair competition and social dumping by means of rules governing working conditions, which seems to be the disguised fears on which this judgment is founded, can be approved of in the internal market.
The French Plumber, Subcontracting and the Internal Market
PIRODDI, PAOLA
2008-01-01
Abstract
Abstract By eroding the obstacles to the cross-border provision of services, the European Community has exacerbated the subcontractors’ position in the internal market, without providing for special protective rules. The absence of a Community minimum standard can only leave the door open for Member States to provide individual systems of protection at the national level. The peculiarities of the local construction industry have made resulting subcontracting being intensively regulated in France through Law n° 75-1334, which, failing payment by the contractors, grants subcontractors a direct action for payment vis-à-vis the employer. This pronouncement of the authoritative mixed Chambers of the French Supreme Court, which grants a direct action to all subcontractors working in a building site localized in the territory of France irrespective of the applicable law to the subcontract, seems to establish a protectionist application of the protective rules of Law n° 75-1334. Although apparently intended to avoid discrimination based on nationality, application of Law n° 75-1334 based on territoriality effectively reduces the competitive advantage that subcontractors legally employed in France, though being nationals of other States or having their establishment abroad, might have with respect to French subcontractors. Foreign subcontractors’ right to equal treatment in the host country is unquestionable, but it is doubtful whether concerns of unfair competition and social dumping by means of rules governing working conditions, which seems to be the disguised fears on which this judgment is founded, can be approved of in the internal market.
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