Posted Workers and Free Movement of Services in the European Union – the Impact on National Employment and Immigration Law

This thesis examines posting of workers within the free movement of services in the European Union. The emphasis is on the case law of the European Court of Justice and in the role it has played in the liberalisation of the service sector in respect of posting of workers. The case law is examined from two different viewpoints: firstly, that of employment law and secondly, immigration law. The aim is to find out how active a role the Court has taken with regard these two fields of law and what are the implications of the Court’s judgments for the regulation on a national level. The first part of the thesis provides a general review of the Community law principles governing the freedom to provide services in the EU. The second part presents the Posted Workers’ Directive and the case law of the European Court of Justice before and after the enactment of the Directive from the viewpoint of employment law. Special attention is paid to a recent judgment in which the Court has taken a restrictive position with regard to a trade union’s right to take collective action against a service provider established in another Member State. The third part of the thesis concentrates, firstly, on the legal status of non-EU nationals lawfully resident in the EU. Secondly, it looks into the question of how the Court’s case law has affected the possibilities to use non-EU nationals as posted workers within the freedom to provide services. The final chapter includes a critical analysis of the Court’s case law on posted workers. The judgments of the European Court of Justice are the principal source of law for this thesis. In the primary legislation the focus is on Articles 49 EC and 50 EC that lay down the rules concerning the free movement of services. Within the secondary legislation, the present work principally concentrates on the Posted Workers’ Directive. It also examines proposals of the European Commission and directives that have been adopted in the field of immigration. The conclusions of the case study are twofold: while in the field of employment law, the European Court of Justice has based its judgments on a very literal interpretation of the Posted Workers’ Directive, in the field of immigration its conclusions have been much more innovative. In both fields of regulation the Court’s judgments have far-reaching implications for the rules concerning posting of workers leaving very little discretion for the Member States’ authorities.

Fatigued driving : prevalence, risk factors and groups, and the law

Fatigue and sleepiness are major causes of road traffic accidents. However, precise data is often lacking because a validated and reliable device for detecting the level of sleepiness (cf. the breathalyzer for alcohol levels) does not exist, nor does criteria for the unambiguous detection of fatigue/sleepiness as a contributing factor in accident causation. Therefore, identification of risk factors and groups might not always be easy. Furthermore, it is extremely difficult to incorporate fatigue in operationalized terms into either traffic or criminal law. The main aims of this thesis were to estimate the prevalence of fatigue problems while driving among the Finnish driving population, to explore how VALT multidisciplinary investigation teams, Finnish police, and courts recognize (and prosecute) fatigue in traffic, to identify risk factors and groups, and finally to explore the application of the Finnish Road Traffic Act (RTA), which explicitly forbids driving while tired in Article 63. Several different sources of data were used: a computerized database and the original folders of multidisciplinary teams investigating fatal accidents (VALT), the driver records database (AKE), prosecutor and court decisions, a survey of young male military conscripts, and a survey of a representative sample of the Finnish active driving population. The results show that 8-15% of fatal accidents during 1991-2001 were fatigue related, that every fifth Finnish driver has fallen asleep while driving at some point during his/her driving career, and that the Finnish police and courts punish on average one driver per day on the basis of fatigued driving (based on the data from the years 2004-2005). The main finding regarding risk factors and risk groups is that during the summer months, especially in the afternoon, the risk of falling asleep while driving is increased. Furthermore, the results indicate that those with a higher risk of falling asleep while driving are men in general, but especially young male drivers including military conscripts and the elderly during the afternoon hours and the summer in particular; professional drivers breaking the rules about duty and rest hours; and drivers with a tendency to fall asleep easily. A time-of-day pattern of sleep-related incidents was repeatedly found. It was found that VALT teams can be considered relatively reliable when assessing the role of fatigue and sleepiness in accident causation; thus, similar experts might be valuable in the court process as expert witnesses when fatigue or sleepiness are suspected to have a role in an accident’s origins. However, the application of Article 63 of the RTA that forbids, among other things, fatigued driving will continue to be an issue that deserves further attention. This should be done in the context of a needed attitude change towards driving while in a state of extreme tiredness (e.g., after being awake for more than 24 hours), which produces performance deterioration comparable to illegal intoxication (BAC around 0.1%). Regarding the well-known interactive effect of increased sleepiness and even small alcohol levels, the relatively high proportion (up to 14.5%) of Finnish drivers owning and using a breathalyzer raises some concern. This concern exists because these drivers are obviously more focused on not breaking the “magic” line of 0.05% BAC than being concerned about driving impairment, which might be much worse than they realize because of the interactive effects of increased sleepiness and even low alcohol consumption. In conclusion, there is no doubt that fatigue and sleepiness problems while driving are common among the Finnish driving population. While we wait for the invention of reliable devices for fatigue/sleepiness detection, we should invest more effort in raising public awareness about the dangerousness of fatigued driving and educate drivers about how to recognize and deal with fatigue and sleepiness when they ultimately occur.

The Effect of Obesity on Wages and Employment: The Difference Between Having a High BMI and Being Fat

In this paper, we re-examine the relationship between overweight and labour market success, using indicators of individual body composition along with BMI (Body Mass Index). We use the dataset from Finland in which weight, height, fat mass and waist circumference are not self-reported, but obtained as part of the overall health examination. We find that waist circumference, but not weight or fat mass, has a negative effect on wages for women, whereas all measures of obesity have negative effects on women’s employment probabilities. For men, the only obesity measure that is significant for men’s employment probabilities is fat mass. One interpretation of our findings is that the negative wage effects of overweight on wages run through the discrimination channel, but that the negative effects of overweight on employment have more to do with ill health. All in all, measures of body composition provide a more refined picture about the effects of obesity on wages and employment.

Essays on Labor Market Frictions, Technological Change and Macroeconomic Fluctuations

The dissertation consists of an introductory chapter and three essays that apply search-matching theory to study the interaction of labor market frictions, technological change and macroeconomic fluctuations. The first essay studies the impact of capital-embodied growth on equilibrium unemployment by extending a vintage capital/search model to incorporate vintage human capital. In addition to the capital obsolescence (or creative destruction) effect that tends to raise unemployment, vintage human capital introduces a skill obsolescence effect of faster growth that has the opposite sign. Faster skill obsolescence reduces the value of unemployment, hence wages and leads to more job creation and less job destruction, unambiguously reducing unemployment. The second essay studies the effect of skill biased technological change on skill mismatch and the allocation of workers and firms in the labor market. By allowing workers to invest in education, we extend a matching model with two-sided heterogeneity to incorporate an endogenous distribution of high and low skill workers. We consider various possibilities for the cost of acquiring skills and show that while unemployment increases in most scenarios, the effect on the distribution of vacancy and worker types varies according to the structure of skill costs. When the model is extended to incorporate endogenous labor market participation, we show that the unemployment rate becomes less informative of the state of the labor market as the participation margin absorbs employment effects. The third essay studies the effects of labor taxes on equilibrium labor market outcomes and macroeconomic dynamics in a New Keynesian model with matching frictions. Three policy instruments are considered: a marginal tax and a tax subsidy to produce tax progression schemes, and a replacement ratio to account for variability in outside options. In equilibrium, the marginal tax rate and replacement ratio dampen economic activity whereas tax subsidies boost the economy. The marginal tax rate and replacement ratio amplify shock responses whereas employment subsidies weaken them. The tax instruments affect the degree to which the wage absorbs shocks. We show that increasing tax progression when taxation is initially progressive is harmful for steady state employment and output, and amplifies the sensitivity of macroeconomic variables to shocks. When taxation is initially proportional, increasing progression is beneficial for output and employment and dampens shock responses.