Employers, unions at odds over international staff transfers

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Multinational companies and unions are struggling to find common ground on European Commission proposals for an EU directive on intra-corporate transfers (ICTs), which aims to make it easier for key staff members with special skills to work in the EU on a temporary basis.

In today's globalised economy, many companies have activities in several different countries and move key senior managers and technical experts from one country to another.

A number of EU member states already have special schemes to provide temporary work and residence permits to these so-called 'intra-corporate transferees'. Other member states treat them in the same way as any other migrant workers coming from outside the EU.

The current situation makes life very complicated for companies as they face 27 different sets of rules and procedures, and often experience long delays in the processing of applications for residence and work permits.

Last summer, the European Commission proposed a new directive to introduce a common set of rules and procedures that will streamline and simplify the granting of residence and work permits to intra-corporate transferees.

Simplifying the rules for intra-corporate transfers is necessary for Europe's economic competitiveness, argues the EU executive. Businesses that operate in the EU will often need to access expertise that might not be available locally.

Making staff transfers easier will make Europe more attractive to multinational companies and investors, thereby contributing to the success of the so-called 'Europe 2020' strategy, which is designed to encourage economic growth and job creation.

"If we are going to realise our goals in the Europe 2020 strategy, the EU needs to remain open and competitive in the labour market, and we need to create more legal ways for migrants to come to Europe," Maria Âsenius, chief adviser and head of cabinet to EU Home Affairs Commissioner Cecilia Malmström told a European Policy Centre conference this week.

Malmström is in charge of developing and implementing the Commission's Policy Plan on Legal Migration, which was originally presented in 2005.

The plan includes the European Blue Card scheme, currently being rolled out by member states, and directives on temporary workers and intra-corporate transfers (ICTs).

Once it has been approved by the Council and the Parliament, the directive on ICTs will speed up admission to the bloc of transferees from outside the Union, so that work and residence permits can be obtained in not more than 30 days. The directive will also make it easier for transferees to bring their families with them, and to work in more than one member state if their employer asks them to do so.

"We are not making these proposals only to be nice to Indian or American businessmen," said Âsenius. "It is in our interest that companies operating in Europe can have access to the right people with the right skills at the right moment."

"It's high time that Europe started making itself more attractive, because competition for workers will increase in the future," continued the Commission official. "Not just in the EU, but also in the US and Canada, and within a few years China. So it is very much in our interest to be more of a magnet for migration."

The draft directive on ICTs includes strict limits on the amount of time that a transferee can work in the EU. The maximum length of stay for managers and specialists would be three years, while trainees would not be allowed to stay in the EU for longer than 12 months.

But, in accordance with the EU Treaties, each member state will retain control over how many non-EU workers are allowed in the country.

"The Commission cannot force member states to accept ICTs against their will," Âsenius admitted. "This is all decided at member state level, if they want to take anybody or not. But we say: if they are open to taking ICTs, these are the rules that apply, and nothing else."

Proposals backed by multinational companies

The Commission's proposals on intra-corporate transfers are strongly supported by multinational companies.

Ameet Nivsakar is vice-president of NASSCOM, a trade association representing the Indian IT industry. He says that the introduction of a common system on ICTs for the whole EU would bring benefits in terms of competitiveness and efficiency, and also bring a lot of knowledge into Europe from other parts of the world.

"It is important that a globally mobile workforce is able to seamlessly move within Europe," Nivsakar told the conference.

Nivsakar rejects the idea that the ICT scheme could be used by some companies as a way for them to import cheap labour from outside Europe. He insists that transferees are highly-skilled professionals, and points out that Europe has a shortage of skilled workers in certain fields, such as engineering and technology.

"For a company to bring in someone from outside the EU is not cheap," said Nisakar, citing costs related to transport, insurance and family relocation. "If we add all of that, it actually is not beneficial to the company to bring in someone from outside unless that person is not available within Europe."

Another vocal supporter of the Commission's proposals is Karl Cox, vice-president of Oracle and a former director of the American Chamber of Commerce in the EU.

"It's quite simply not possible and not realistic for us to have these specialist skills based in each and every one of the countries," said Cox.

"It's not only specific product knowledge, it's also knowledge of the client," insists Cox, who gave the example of a team of experts that might need to visit several countries when they are installing and deploying a software application for a multinational company.

For Cox, one of the most appealing aspects of the draft directive on ICTs is that it includes provisions for member states – if they wish to do so – to establish a 'fast track' for certain companies that have already shown that they are able to closely follow the relevant regulations. He believes that such a provision would act as a powerful incentive and discourage companies from abusing the ICT system.

"It allows those entities who have shown that they don't abuse the system to have a fast track through the process, thereby allowing immigration authorities in the member states to focus their enforcement activities on those companies that don't have an established track record," says Cox.

However, businesses would like the Commission to look again at the rule which says that individual managers and specialists should already have been working for the same company for a continuous period of at least 12 months before they can qualify for a work and residence permit to enter the EU.

Cox says that the rules should be made more flexible, so that they also allow for key staff who have been working in a company that has either merged with or been acquired by another company. In such cases a person might stay in the same job, but suddenly find themselves working for a 'new' employer.

Trade unions fear immigration impact

However, European trade unions are afraid that some companies might abuse any new procedures and find ways of bringing cheaper workers from outside the EU, instead of providing jobs for European workers.

John Monks, general secretary of the European Trade Union Confederation (ETUC), warned that "if [the ICTs directive] is exploited by some of the more unscrupulous employers to flood labour markets with cheap labour that undermine local conditions, then you can see the explosive social consequences that might come from that".

He also noted that it is impossible to discuss immigration issues without taking account of the economic crisis affecting EU member states and very high unemployment rates, especially among young people.

"I do accept the need for movement and some flexibility of people to come and go around the world, and companies to allocate people. But the dangers of abuse in our view are not being properly addressed," protested the trade union chief, citing the example of Asian workers being used by the textile industry in the United Kingdom.

"We insist that the conditions which apply to intra-company transferees are the conditions of the host country, and not just the minimum conditions either, but that there’s a degree of equality," said Monks, adding that undermining these conditions would create racism, anti-migrant feeling and community tensions.

While admitting that the issue of immigration is much broader and more complex than the specific issue of intra-corporate transfers, the ETUC general secretary insisted that the political implications of immigration should not be ignored by policymakers.

Many EU member states are experiencing serious shortages of highly-qualified workers in fields such as engineering and information technology (IT). Facilitating the migration of workers with particular skills from outside the EU is seen as a way of solving this problem.

In December 2005, the European Commission issued a Policy Plan on Legal Migration, which lists a series of legislative measures to be developed for certain categories of migrant workers coming from outside the EU.

In 2007, the Commission published a proposal for a directive that will establish a single permit and application procedure for non-EU nationals who wish to reside and work in the EU. This directive should be adopted in the spring of 2011.

In 2009, the Council and the European Parliament approved a directive that creates an EU Blue Card, which allows highly-qualified workers to establish residence in the EU. Member states have until June 2011 to amend their national laws in line with this directive.

In July 2010, the Commission published a proposal for a directive on the procedures regulating entry and residence of Intra-Corporate Transferees (ICT). This directive covers senior managers and specialists who possess essential knowledge, as well as trainees who have already completed their higher education.

Also in July 2010, the Commission published its proposal for a directive which will establish conditions for the entry and residence of seasonal workers from outside the EU.

  • Early 2011: Council and Parliament expected to adopt directive establishing single permit and application procedure for workers from outside EU.
  • June 2011: Deadline for member states to transpose EU Blue Card system into national legislation.
  • First half of 2011: European Parliament and member states to discuss proposals on intra-corporate transfers (ICTs) and seasonal workers.

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