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Freedom of movement of citizens and workers is a primary principle of the European Union. Yet, the latter has been at the centre of massive criticism for years.
More specifically, it is the temporary posting of workers from one EU country to another that created harsh political debates in several states. Especially far-right parties have tried to exploit the social grievances originating from the posting of workers, during electoral contests. Relevant examples are the French Front National (FN), but as well the Alternative for Germany (AFD), or, earlier, in Italy, the Northern League.
Aforementioned is why, in October, the EU Council approved a general framework to modify the Posted Workers Directive, a European legislative act that specifies the modalities of the posting of employees across nations. The agreement in the EU Council followed months of negotiations between Political Groups inside the European Parliament (EP).
In Switzerland, fears linked to ‘unfair’ competition from EU-Member States are unusually high among older workers
The text that was issued by the Council establishes a new ceiling of 12 months as a maximum period detached workers can operate in another country (down from 18 months before). But most importantly, it sets out new obligations for enterprises as to hinder any activity of what has been called “social dumping”. Indeed, under the upcoming revised directive, employees will be obliged to respect the social security and payment standards set by national lawmakers. EU institutions are set to approve a final text in 2018.
But will the intervention of European institutions prove sufficient to block chauvinist movements and political claims across the Union?
The topic has been at the centre of a high-level debate organised by Euractiv and the Mission of Switzerland to the European Union, in Brussels. Leading questions of the debate moderated by Daniela Vincenti, editor-in-chief at Euractiv, were: what are the best measures to protect workers? How can States avoid social dumping? What is the role of the EU and national institutions? How can social stakeholders be involved and make a difference?
The high-level debate
Boris Zürcher, Head of the Labour Directorate at the Swiss State Secretariat for Economic Affairs (SECO), kicked off the discussion. Zürcher explained that, in relative terms, Switzerland takes up more workers from abroad (0,9% of the total labour force) than most European Member States, such as the UK, for instance. Zürcher mentioned so-called “pull-factors” to explain the Swiss immigration numbers. Wages in the Helvetic confederation are significantly higher than elsewhere. Yet, it would be unfair to say that labor-immigration wasn’t controversial in the extra-EU state: “In Switzerland, fears linked to ‘unfair’ competition from EU-Member States are unusually high among older workers”, Zürcher said. Consequently, the national Government developed “flanking measures” to, on the one hand, substantiate agreements with EU institution on the trans-border movement of workers, and, on the other one, ease-off fears and risks related to social dumping.
Moving away from the Swiss case, Jordi Curell Gotor, Director Labour Mobility, DG EMPL, underlined that EU institutions took a set of specific actions to tackle the concerns of native workers. The European official did not only point at the already mentioned Posted Workers Directive, but as well the European Pillar of Social Rights and, most of all, at the Enforcement Directive of 2014. “If you want, we can draw a parallel between the Swiss flanking measures and the Enforcement Directive of the EU”, Gotor said.
The exploitation of different welfare systems is becoming a business model in the Old Continent
Indeed, the Enforcement Directive aims at tackling frauds linked to the implementation of European social rights in the states. Yet, the EU official called for Governments to play their part: “It is difficult to deliver if Member States are reducing labour officials who should check for execution of social norms and provisions”. Moreover, Gotor recalled the idea of setting up a European Labour Authority (the latter should be similar in its duties and responsibilities, to the Unique Banking Authority).
Agnes Jongerius, MEP from the Social and Democrats Group (S&D), called for a radical shift in the language of discourse on posted workers: “The very term social dumping is despicable, as it equates people to ‘garbage’. Let’s move away from that”. Bringing a wider and more political picture, Jongerius said that nowadays “the exploitation of different welfare systems is becoming a business model in the Old Continent”.
However, as Gotor said, the revision of the Posted Workers Directive and the proclamation of the European Pillar of Social Rights should aim precisely at shutting down any such “anti-social” behaviour. Nevertheless, Jungerius warned that, notwithstanding recent progress, there are still many issues that deserve attention from legislative institutions at the EU level: “We have to fix issues linked to minimal standards of living of posted workers in host countries”.
Following up on the precedent interventions, Séverine Picard (European Trade Union Confederation, ETUC), called for Member States and the Commission to establish a fully fledged vision of what “Social Europe” should look like. The ETUC expert underlined that any such grand vision needs to “take into account national welfare differences”. Drawing upon history, Picard said that, in the absence of such a vision, a “laissez-faire” paradigm took the lead in the EU after the 50’s.
EU rules are complicated enough as employers struggle to provide jobs for the economy
Picard outlined as well a set of important, medium-term and long-term priorities for the EU. In the first place, “we need to reinstate the ‘equal pay for equal work’ principle and tackle the establishment of letter-box companies by employers across the Union”. Secondarily, “we have to move towards a Treaty change that “reverses the hierarchy between economic and social freedoms”. Last but not least, in the long term we need “concrete policies and action to foster wage convergence”.
Asked by EuVisions if trade unions across the EU hold the same view on the controversial issue of posted workers, Picard answered: “Trade unions from both, Eastern and Western countries are united in this battle. Recently Polish trade unions changed their attitude on this as they realised that the protection of posted workers is in their interest”.
Jongerius took up a similar approach during the debate: “When it comes to ‘unfair labour competition’, we have to understand that the root of the problem is a European Single Market that features significant differences regarding wages and welfare systems”. “Back in the days, we thought that by establishing a unique space of economic exchange we would foster convergence between countries”, Jongerius said. “Yet, what we saw was divergence”. According to the left-wing MEP, the Commission is making a similar mistake today, as it is betting on the fact that the post-crisis return to growth will bring about convergence: “I have some doubts about that”.
That said, Gotor warned that the enforcement of social provisions should not hurt the principles of free trade of services across the Union. The point was taken up well by Delphine Rudelli from the CEEMET, the European employers’ organisation representing the interests of the metal, engineering and technology-based industries. Rudelli claimed that EU rules are complicated enough as employers struggle to provide jobs for the economy.
Eventually, tackling the discussion on how to enforce the legal directives set by institutional actors, Zürcher explained that Swiss national authorities directly involved social partners in the development of the already mentioned flanking measures. The latter were developed through a “bottom-up” and “horizontal” approach. This enabled to frame legal interventions without the risk of plunging into “discriminatory practices” against foreign employees. In the end, it is all about fostering the “labour market access of workers at large”, Zürcher concluded.
Photo Credits CC: Peter Thoeny – Quality HDR Photography
Alexander Damiano Ricci author