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06/12/2016

France looks for EU allies in fight against low-cost workers

Social Europe & Jobs

France looks for EU allies in fight against low-cost workers

polish_plumber_198.jpg

The French government is seeking support to tackle social dumping by revising the EU posted workers directive but its efforts are meeting with firm opposition from the UK and Eastern European countries.

After the myth of the Polish plumber came to the fore in 2005, the French political class is now battling against the problem of “posted workers”, who are sent to another EU country on a temporary basis, often at a lower cost.

Najat Vallaud-Belkacem, the spokeswoman of the French government, singled out the problem in Brittany, a region where high unemployment is causing social unrest.

"A number of companies in this region, and elsewhere, have been able to hire employees from other European countries, with a different labour law, a different social system, that makes those workers less expensive […] at the expense of French employees, which comply with an ambitious social system," the spokeswoman said.

According to a 1996 EU directive, posted workers have to comply with the labour law of the host country, a measure aimed at guaranteeing equal pay. However, employers pay social contributions in the country of origin, which can create a gap in labour costs and boost benefits for companies.

The number of posted workers in France has soared since the EU enlargement to Eastern countries in 2004. Between 2006 and 2011, their number has multiplied by four, rising from 38,000 to 145,000.

“It should be stressed that the difference in contributions between France and Poland can go up to 30%,” said Eric Bocquet, a French senator from the Communist Party who authored a resolution on this issue and who spoke to EurActiv France in an interview.

>> Read the entire interview with Eric Bocquet here (in French)

Posted workers are usually hired in areas such as construction, agriculture and transport, but also in other sectors, such as events management, Bocquet explained.

But some companies simply abuse the system.

“We are starting to see an industry that thrives on the social gap that exists between East and West”, said Gilles Savary, a socialist deputy, during a debate in the French Parliament. Savary gave the example of a Spanish interim company called Terra fecundis, which he said “works with 2,400 workers, all posted in the south of France”.

Xenophobic backlash

Paris is looking for partners at EU level that will support the call for tougher rules on these “low-cost” workers.

Thierry Repentin, the French minister in charge of European affairs, said “France wants an ambitious text at EU level in order to fight against the abusive use of the posted worker status as a means to bypass national legislation”.

However, EU negotiations to revise the posted workers directive have stalled. The last meeting of Social Affairs Ministers in October 2013 failed to reach a compromise. While France and countries like Belgium, Spain and to a lesser extent Germany, want better control of the posted workers status, the UK and the Eastern countries are firmly opposed to it.

Michel Sapin, the French Labour Minister, "is doing everything to make sure that we get the support, not only of Spain, but also of Portugal and Germany, that we are now convincing how necessary it is to fight against this unfair competition,” said Vallaud-Belkacem, the government spokeswoman.

EU labour ministers will reopen the posted workers file in December, but a compromise before the EU elections in 2014 seems unlikely.

French politicians fear the sensitive issue could impact on the European elections, just like the “Polish plumber” did in 2005, when the French rejected a proposed EU constitution.

"We must not let this subject get too high on the agenda on the eve of the European elections as it could crack up hard," says Gilles Savary. “When an employer can hire 30% cheaper workers in a legal and systematic way in a highly competitive environment, not only can the labour market be destabilised, but it can only create xenophobia”.

Françoise Castex, a socialist MEP, is also worried, saying social dumping is “the main cause for the rejection of the EU by citizens”.

A competition problem?

If the problem cannot be settled at the political level, many are looking to the EU Court of Justice to solve the issue.

In January 2011, a French association against social dumping filed a complaint against Germany, which doesn’t have a minimum salary, and uses low-cost posted workers in the butchery sector. The complaint soon found the support of two Belgian ministers.

“We must take on Europe at its own turf, that of free and undistorted competition,” Savary said.

But the French Minister Repentin does not support the idea for now. “Negotiations currently underway in Germany on the formation of a new government are the perfect opportunity to make progress on issues that were blocked until now”.

Background

Employment ministers from France, Luxembourg and Sweden called in October 2008 for a political solution to two separate rulings by the European Court of Justice that inflamed debate on the balance between workers' rights and economic freedom in the EU.

The European Court of Justice 'Viking Line' and 'Laval' judgments triggered an intense debate about the extent to which trade unions are able to defend workers' rights in cross-border situations, involving posting or relocation of companies.

The judgments have been interpreted by some stakeholders as meaning that economic freedoms would prevail over social rights and in particular the right to strike. 

In the Laval case (also known as the Vaxholm case), Swedish unions took action against Latvian construction company Laval un Partneri, which had posted several dozen workers from Latvia to building sites in Sweden. The company had refused to respect Swedish laws on working conditions and minimum wages.

In the related Viking case, the Court held that trade unions' right to take collective action may be limited by employers' right to freedom of establishment (EurActiv 12/12/07).

Timeline

  • 9 December: EU Labour Ministers Council

Further Reading