Estonian Presidency reaches compromise on low-cost eastern labour

Kaia Iva, Estonian Minister for Social Protection, Jevgeni Ossinovski, Estonian Minister of Health and Labour, who chaired the Council meeting on 23 October 2017. [Council]

EU ministers yesterday night (23 October) struck a compromise after marathon talks about low-cost labour from Eastern and Central Europe, a decision affecting workers posted temporarily to more affluent bloc members.

Since 2004, when several Eastern and Central countries joined the EU, the issue has riled richer nations as the workers’ taxes and social charges are paid into their home countries, making for cheaper employment.

“I believe we have found a balanced compromise,” said Estonia’s minister Jevgeni Ossinovski, who chaired the 11 hours of talks as his country currently holds the rotating EU presidency.

“We have very strong support for the agreement that was reached,” Ossinovski told a final press conference in Luxembourg.

Opposing the agreement among the 28 labour ministers were Poland, Hungary, Latvia and Lithuania, while Britain, Ireland and Croatia abstained. The remaining countries showed strong support for the compromise, Estonia said.

French President Emmanuel Macron had vowed to revamp the system, saying it creates an uneven playing field in wealthier EU nations such as France, Germany and Austria.

Macron’s office quickly hailed the compromise as a “victory for Europe,” adding: “It’s an essential step to rebuild European trust.”

France pushed for and got a limit of 12 months for workers posted abroad but with a key concession allowing for the period to be extended for six months at the company’s request.

At the outset of the talks in March 2016, the European Commission had proposed a 24-month cap.

Posted workers revision gets off to shaky start

In an attempt to fight social dumping and fraud, the European Commission proposed on Tuesday (8 March) a review of the contentious Posting of Workers Directive, which regulates people employed in one EU country, but sent to temporarily work in another country.

Paris also yielded on the road transport sector as Poland, Hungary, the Czech Republic and Slovakia as well as Spain and Portugal voiced fears the reforms would hurt their truck drivers.

Controversial EU labour rules tackle truck drivers' pay and working conditions

Truck drivers are the latest workers to come into the European Commission’s sights in its bid to build a more ‘social Europe’, with new rules designed to make sure drivers from lower-wage countries don’t undercut better paid workers when they travel to other EU member states.

Their work will be governed under the previous rules for now. The decision is that rules for posted workers also apply for truckers, but given the specificity of the profession, modalities would be decided as part of the “mobility package” still under negotiation.

The regulation, first introduced in 1996, lets companies send workers from lower-waged countries such as Poland to wealthier economies on short-term assignments without paying the host country’s social charges.

The Posted Workers Directive has caused resentment in western countries such as France, Germany and Austria, which argue it amounts to “social dumping” that creates unfair competition on their labour markets.

But there has been staunch resistance in Eastern and Central Europe, where most of the less expensive workers come from. Poland is the EU member that benefits most from the regulation.

European Social Affairs Commissioner Marianne Thyssen, speaking with the Estonian minister, hailed what she called a “breakthrough” that will be a step forward to end “social dumping.”

The European Parliament and ministers are due now to negotiate a definitive text.

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