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28/09/2016

Parliament paves way for posted workers reform

Social Europe & Jobs

Parliament paves way for posted workers reform

Road transport is one of the sectors worst affected by social dumping.

[EDDIE/Flickr]

MEPs yesterday (14 September) adopted a report on the highly controversial subject of social dumping, bringing the EU one step closer to revising the Posting of Workers Directive, despite vigorous opposition in the East. EurActiv France reports.

Europe’s fight against social dumping had its first small triumph on Wednesday (14 September).

Despite opposition from a majority of lawmakers from the EU’s eastern member states, the European Parliament voted to tighten up on rules that promote unfair competition between European workers.

“This vote represents real progress towards a socially cohesive Europe, an essential bulwark against market deregulation, which pits workers and nations against each other,” said rapporteur Guillaume Balas, a French Socialist MEP.

Agreeing on a definition

The first victory for the Parliament was to agree on a definition of the concept of “social dumping”. The report defines social dumping as “a wide range of intentionally abusive practices and the circumvention of existing European and national legislation”, which “enable the development of unfair competition” between workers from different countries.

This in itself signifies real progress, as a number of MEPs had previously refused to even recognise the concept of social dumping.

“One Baltic colleague, for example, said that social dumping did not exist, that there was only the law of the market,” said French MEP Élisabeth Morin-Chartier, from the centre-right European People’s Party (EPP) group, the largest in Parliament.

Brussels prepares to overrule Eastern Europe on posted workers directive

The European Commission plans to reject 11 ‘yellow cards’ from the EU’s eastern member states on the new Posted Workers Directive. The debate has exposed a deep East-West divide. EurActiv France reports.

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The practice of exploiting the differences between Europe’s different social systems and rates of pay creates unfair competition between EU workers. And the problem has become more acute in recent years.

The reports suggested strengthening the tools at the EU’s disposal to fight social dumping, for example cracking down on so-called “letterbox companies” and those businesses that are behind the worst violations of labour law.

In order to achieve this, Balas proposed the creation of a black list for European companies, which can deprive the worst offenders of market access, and the creation of a European road transport agency to enforce the rules in what is one of the sectors hardest hit by social dumping.

Fracture lines

If the parliamentary report lays the foundations for a more coordinated attempt to tackle unfair competition, the road to changing the EU’s legislation will be long and tortuous.

“Let’s be modest,” said Morin-Chartier. “It is only a non-binding report. But it is true that it may pave the way for the revision of the posted workers directive.”

“This report is particularly important because it directly prefigures the debates we will soon have on the revision of the Posting of Workers Directive,” said French Green MEP Karima Delli.

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.

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The revision of this directive, which dates from 1996, is a thorny subject which, perhaps more than any other, highlights the fracture line between Eastern and Western Europe.

The East wants to protect the rights of its workers to free movement and rejects the stigmatisation of the “Polish plumber”, a popular image carved out by the media during the 2005 failed referendum in France on the proposed EU Constitution.

But the West is concerned by the lack of legal supervision for posted workers and the abuses that are possible under the current system. EU rules allow companies to send workers abroad on temporary missions, while continuing to pay their social security contributions in the country where the company is based.

National parliaments invoke ‘yellow card’ in response to revised Posted Workers Directive

An attempt by the European Commission to revise the contentious Posted Workers directive is likely to fail, as the national parliaments of at least ten member states from Central and Eastern Europe are reported have used a yellow card to stop the legislation.

EurActiv.com

Before the summer, the European Commission had received a “yellow card” on the proposed new Posting of Workers Directive. This little-used procedure allows national parliaments to object to draft EU legislation if they feel the subject could be better managed at a national level.

The Commission’s response was to stonewall the 11 countries that contested the plans (Denmark, Bulgaria, Hungary, Croatia, the Czech Republic, Poland, Estonia, Romania, Lithuania, Latvia and Slovakia).

In July the EU executive decided to maintain its position, and the European Parliament’s vote on Wednesday has raised hopes of reaching a consensus on the subject. But the real battle will be played out between the member states.

Some, like France, have threatened to stop applying European rules if they are not strengthened. Others, in the East, continue to stand in the way of a revision of the directive. And so far, no date has even been set for the start of discussions.

Background

According to a 1996 EU directive, posted workers have to comply with the labour law of the host country. This measure is aimed at ensuring 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.

France and other countries like Germany and Belgium have complained of the increasing use of posted workers, which they consider a form of social dumping.

The European Commission presented a new proposal aimed at replacing the 1996 directive and tightening the rules surrounding the use of posted workers.