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01/10/2016

Hungary opposes proposed EU changes on seconded workers

Social Europe & Jobs

Hungary opposes proposed EU changes on seconded workers

Construction workers on the site of the European Central Bank. [European Parliament]

Hungary opposes a European Union plan to equalise pay between seconded and local workers, as it would pose an “unacceptable competitive disadvantage” to Hungarian companies, a government spokesman said on today (11 April).

Poland also rejects the proposed changes put forward by the EU executive and hopes to block them together with other poorer countries in the bloc, Polish diplomatic sources said last week.

The number of seconded or “posted” workers, employed in one EU state but temporarily sent to work in another, has jumped in recent years. There were some 1.9 million posted workers in the EU in 2014, the most recent data shows.

Employers are not now obliged to pay posted workers more than the minimum wage in the host country, which leads to underpayment of posted workers and competition between firms
employing seconded or local workers. The European Commission has proposed equalising the pay of the two categories.

“The planned measure would be disadvantageous to us, and would threaten the jobs of tens of thousands of Hungarians, for example those truck drivers working in the international road
haulage sector,” the government spokesman said.

He said the planned measure would oblige foreign companies to pay higher wages to workers than local firms, which could still pay wages between the minimum wage and the average wage.

“This would bring about an unacceptable competitive disadvantage for Hungarian companies,” the government spokesman said, adding that several other Central European countries thought the planned changes “do not serve national interests.”

Commission President Jean-Claude Juncker has made the case for “same pay for the same job at the same place.”

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However, the Central and Eastern European countries have long criticised the revision fearing a backlash on their companies’ competitiveness.

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Background

In an attempt to fight social dumping and fraud, the European Commission proposed on 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.

The new proposal intends to redress so-called ‘social dumping’, where European companies use low-cost workers to circumvent the labour laws of the host country.

The revision of the 1996 EU law has sparked controversy in the past, as the 28-country bloc struggles to reconcile the freedom to offer cross-border services, a cornerstone of the internal market, with clear differences in wages and levels of social protection.

An average hour of work costs an employer €40 in Denmark and €39 in Belgium, but only €3.80 in Bulgaria, €4.60 in Romania or €8.40 in Poland, according to Eurostat data for 2014.

The number of posted workers has increased by almost 40% in the last 4 years reaching almost 2 million in 2014, according to the Commission.