The newly agreed minimum wage in Germany may not be implemented before 2017. Yet it is crucial for limiting social dumping, according to the French government, which announced a new offensive against low-cost workers ahead of next year's European Parliament elections.
Six months before the European Parliament elections, French concerns about employment issues and social dumping were higher than ever.
On Wednesday (27 November), the government announced that a new plan to fight the abuse of "posted workers" who are sent by their employers to another EU country on a temporary basis, often at a lower cost.
In France, as in other European countries, the EU's posted worker's directive, which regulates such practices, is being increasingly bypassed, the French government said in a report. Sophisticated fraudulent arrangements flourish all over the French territory,including in the construction sector and many others, it claims.
This unfair competition coming from European enterprises which operate in France in breach of the posted workers directive amounts to genuine “social dumping”, claims the report from the French Council of Ministers.
An offensive to counter the effects of such schemes is being led by the social affairs minister, Michel Sapin, who listed a number of measures specific to France and a renewed push to move the issue forward at European level.
In France, it will mean:
- Tightening labour inspection controls in the affected sectors
- Preventing fraud with the help of the social partners
- Strengthening legislation to “empower contractors and outsourcers when they use multiple subcontractors. Trade unions and professional organisations will be able to file a civil suit in case of illegal work.
France has until 9 November to convince EU partners
Details of the initiative have been already spelled out by the French EU Affairs Minister, Thierry Repentin, in an interview with EurActiv France at the beginning of November.
A meeting of EU social affairs ministers, scheduled on 9 and 10 December, should help clarify whether Paris can drum up support for its initiative.
France and Germany want a more protective directive on posted workers, which the UK opposes. British Prime Minister David Cameron is using the low-cost workers argument to attract voters who are tempted by the Eurosceptic UKIP. He made an even more radical move – limiting free movement inside of the EU.
The French government will try to convince other countries by the December summit of EU leaders, including Poland. The aim is to amend the directive on posted workers by qualified majority voting, which is feasible at ministerial level. If not, the procedure would be much longer.
“Strenghtening co-operation between labour inspection authorities is also necessary and has yet to be built. Besides, introducing a minimum wage in each member state would be a way to fight against unfair social competition,” the French government assures.
Meat production, construction, agriculture
Imposing a minimum wage, specific to each country is one of the demands of many sectors of the French economy.
According to the national union of meat producers, social dumping by Germany creates big competitive distortions, as the cost of labour in France is three times higher than in Germany.
The union further calculated that the cost of temporary labour in Germany is €7 per hour, while it is €20 in France for a minimum wage with social contributions, and €30 in Denmark.
For these professions, 80% of the added value is related to the cost of labour.
The issue was also raised in the construction sector.
“The use of posted workers via European interim agencies or construction companies too often means very low wages, breach of the working time and security rules, social contributions paid in a different country”, laments Dider Ridoret, president of the federation of the construction sector.
A minimum wage in Germany in 2017
The newly formed German coalition committed to impose a minimum wage in the country at around €8.50 per hour. But the government is obviously not in a hurry to implement the measure.
According to the coalition agreement adopted on 27 November, companies can delay the application of the minimum wage until 2017. But the €8.50 figure may no longer make sense by that time if inflation is taken into account. And the temporary work sector, which poses the biggest problem for the competitiveness of French slaughterhouses, will not have to adopt the minimum wage until that date.
French MEP Constance Le Grip (European People's Party) welcomed the move by the French government, saying that "unfair competition affects many of our workers, of our companies. Even if the move is late, it is welcome”.
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).
- 9-10 Dec. 2013: Employment and Social Affairs Council
- 19-20 Dec. 2013: EU summit in Brussels