European Court of Justice judgement on the Spanish stevedoring regime 11/12/2014 (Part I)

On November 2013, the European Commission initiated proceedings against Spain before the European Court of Justice for breach of Article 49 of the Treaty on the Functioning of the European Union (TFEU) for infringement of the principle of freedom of establishment, by “imposing on other Member States wishing to develop the activity of handling goods in the Spanish ports of general interest the obligation of enrolling in a Limited Company for the Management of Port Stevedores (SAGEP) and, where appropriate, to participate in the capital thereof, on the one hand, and of hiring workers on a priority basis made available by such SAGEP, and a minimum of such workers on a permanent basis, on the other hand”.

Spain justifies this restrictive legislation by arguing that the cargo handling service is a service of general interest subject to public service obligations, which aims to ensure the regularity, continuity and quality of service and that this restriction is necessary to ensure the protection of workers, which is an overriding public interest.

The Ruling of the European Court of Justice (which can be consulted here)* rejects these arguments saying that “Spain has not demonstrated that the measures taken are necessary and proportionate to the objectives " and that "there are less restrictive and appropriate measures to achieve a similar result and ensure continuity, consistency and service quality of goods handling and protection workers.” Thus, inviting Spain to amend the Ports Act and set out a new model.

It is a difficult issue given the conflicting positions and interests of the actors involved in this field.
From the point of view of the legal authorities, in particular Puertos del Estado (State Ports Organization under the Ministry of Public Works) as national port regulatory body, they call on all stakeholders in the industry to engage in dialogue and adapt to the guidelines set by the Luxembourg Court. They also call the stevedoring unions and companies to agree on an answer. State Ports Authority seeks the broadest consensus to change those aspects of the Ports Act which, according to the ruling, are not in conformity with Community law.
The Unions’ position is quite different, they are against the ruling, and they urge the Ministry of Public Works to exhaust the remedies legally admissible in defending the Spanish port model. They say the ruling ignores issues as crucial as SAGEPs are private companies managed directly by their own stevedoring companies where port workers have a permanent contract in each port. SAGEP partners (stevedoring companies) use the personnel hired by the SAGEP for their own activity, occupying a number of workers and professional qualifications they need for each activity (without any imposition by law, contrary to what the judgment exposes). They think that the sentence is an assault on job security of Spanish stevedores, who happen to have permanent contracts with companies grouped in SAGEPs to be unemployed managed by temporary employment agencies. They think the aim of the EU is the "deregulation of the sector and precarious working conditions in ports."

From the point of view of the employers and the industrial sector, the stevedoring companies see it as an opportunity to modernize the labor system and adapt it to a global economy.
The National Association of Stevedoring Companies and Ship Agents (ANESCO) states that the Luxembourg Court judgment is not good news because it establishes that Spanish law conflicts with European but it is an opportunity to work with the Government and through social dialogue to reach a transition that allows compliance with the law without much delay.

The ECJ ruling suggests as an option that stevedoring companies manage their own employment offices and provide them with labor; a creation of a pool of workers managed by private companies that function as temporary employment agencies that provide workers for the stevedoring companies; and finally, relating to training of workers, they propose that it is conducted not from the SAGEP, but from "public entities or by themselves stevedoring companies".

All this raises important questions, and one of the issues of greatest interest is how it will affect port workers training, since until now it has been the responsibility of the SAGEPs.

*Only Spanish and French versions available

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