Are British workers protected from undercutting?
One of the key issues in the Lindsey Oil Refinery dispute was the concern that the terms and conditions of the workers brought in from Italy and Portugal would be lower than those usually paid in the industry. The employers have claimed that this is not the case (although they didn’t say so immediately, which is a bit suspicious). The news media and Government have accepted that claim at face value, and certainly there is not yet any evidence to contradict it. The industry – construction engineering – certainly has a solid collective agreement negotiated unions and employers.
But that’s all that would prevent undercutting – there is no legal barrier to it, and that was a major cause of the uncertainty and fear that sparked the walkouts. Unfortunately, that isn’t the impression that the Lord Mandelson or the BBC are giving. They say the EU Posting of Workers Directive protects British workers against undercutting. But in practice, because of the way it has been transposed into UK law, it doesn’t.
Lord Mandelson was speaking in the House of Lords on 2 February, and it’s worth quoting what he said in detail, because what he said was factually correct, but misleading. He said:
The statement issued by Total last night confirmed that workers from overseas are paid at the same rate as other workers on site.
Two paragraphs further on, he said:
The workers coming here from Italy and Portugal are protected by the EU Posting of Workers Directive, which the UK has implemented fully. This guarantees these workers minimum standards, for example, on pay and health and safety. The Directive facilitates the free movement of services within the European Union, a vital market for British companies.
The impression is that the Directive guarantees what Total say is happening, ie that the rate for the job is paid. And that’s what the Directive is supposed to provide. But in the UK, it doesn’t.
What the UK Government did when the Directive was implemented was to require employers to abide by the legal minima on pay – which means the National Minimum Wage. In most of the rest of Europe, collective agreements are legally enforceable, and that means UK workers posted to continental Europe are guaranteed the rate for the job. But Italian and Portuguese workers are only guaranteed the National Minimum Wage.
As I say, Lord Mandelson did not say anything other than that, but I think that’s what he was implying. And the BBC’s report of his speech on 5 February to a CBI dinner in Birmingham suggests that they have certainly misunderstood – they say categorically that:
Under the EU’s Posting of Workers Directive, foreign workers can be brought in on a temporary basis, as long as they enjoy the same rights and pay as their local counterparts.
Which is definitely not true.
As long as employers are allowed to bring in workers and pay them less than the rate for the job (as long as they pay above the National Minimum Wage of course), they will, and British workers will continue to be distinctly worried.
The Government could change this situation very easily – no one in Brussels will stop them – because all they need to do is bring UK practice on posted workers’ rights into line with the principle of the European Directive.