The cast of the ITV show Auf Wiedersehen, Pet
“Guten tag, pet!” Reforming the Posted Workers Directive
On Tuesday (8 March) the European Commission announced a long-waited revision of the twenty year-old Posted Workers Directive, which regulates the entitlements of workers sent by their employer to another EU country on a short-term project. Think of the characters in Auf Wiedersehen, Pet – they would be the kind of workers that this directive sought to protect.
There are nearly 2m posted workers in the EU and while they have increased significantly between 2010 and 2014, they remain overall a rather small percentage of the workforce (0.7%). The UK is the fifth receiving country, trailing behind Germany, France and Belgium with around 50,893 workers posted to the UK and concentrated mainly in construction (74.7%) and business services (8.6%). Contrary to public perceptions, most workers posted to the UK come from France and Germany rather than Poland.
So is this Much Ado About Nothing? Not at all. Because until now, according to the 1996 directive and subsequent restrictive interpretations from the European Court of Justice, these workers were entitled only to the minimum rates of pay – which effectively means the National Minimum Wage – rather than the going rate for the job, which in some instances is set by collective agreements and can be significantly higher than the NMW.
So posted workers on lower rates of pay undercut the local workforce and contribute to downward pressure on negotiated terms and conditions. This was exactly the concern that emerged during the Lindsey Oil Refinery dispute in 2009 around Italian and Portuguese workers brought over by Italian company IREM to work on a Total Oil construction site in North Lincolnshire.
Aside from the direct impact on jobs and wages, this hardly contributes to a cohesive society and only heightens tensions where unemployment is high and foreign workers end up being blamed for taking ‘British jobs’ away from ‘British workers’. So trade unions in the UK and across Europe have been campaigning hard for measures to stop social dumping and the exploitation of migrant workers in general. The TUC in particular has also worked with local communities to stem scapegoating of migrants and put the blame on unscrupulous employers who seek to exploit a cheaper and more vulnerable workforce.
Partly in response to protests from the trade union movement, the last Commission introduced an enforcement directive on posting of workers. However, it was not enough: while it encouraged greater administrative cooperation between national authorities to ensure that the rights of posted workers were respected, it did not fundamentally revise the main tenet of the 1996 that posted workers were only entitled to minimum rates of pay.
Protests from the workers’ movement did not abate and the ETUC amongst other continued to call for a revision of the 1996 directive. So when Jean Claude Juncker became European Commission president in 2014, he promised that there would be no social dumping under his watch and that he would introduce “equal pay for the same work in the same place”. At last someone seemed to be listening to trade unions and would be ready to stop what was seen by many workers as unfair competition.
So the unveiling of a new initiative this week was a welcome step forward. Regrettably the Commission missed an opportunity to deliver on this promise. What the proposed revised directive suggests is that posted workers should be entitled to a broader notion of ‘remuneration’ and therefore a level of pay higher than the statutory minimum only where the rates are set by collective agreements that extend to all workers in the same sector (known as universally applicable or ‘erga omnes’.) Such agreements exist in France, where their scope is extended by law, but do not exist in countries like Denmark, Italy, Sweden or the UK.
So the European Trade Union Confederation (ETUC) General Secretary Luca Visentini reacted critically to the proposal:
“President Juncker promised equal pay for equal work and has delivered it with a significant loophole.
“We appreciate the Commission’s intentions and efforts, but the solution proposed is not satisfactory. It is equal pay that many posted workers will never get. Workers and trade unions will be obliged to continue to go to court to see their rights recognised.”
And this is the whole point: while business retains an absolute freedom to provide services across the EU free from ‘discrimination’, the workers carrying out those services continue to be treated differently. There is effectively one European labour market but no level playing field for the workers operating within it – and even Employment and Social Affairs Commissioner Marianne Thyssen admitted that differences in wages (and social security provisions) among member states have significantly increased.
In the run up to the EU referendum in June, it is critical that the Commission comes forward with positive initiatives that give workers in the UK (and across the EU given the success of populist parties across the continent) a sense that they have not been forgotten. Frances O’Grady said that:
“While the Commission is right to tackle this issue, far bolder measures are needed.
“If the European Commission wants people to vote to stay in the EU this June, they need to take working people’s concerns seriously. We will be working with unions across Europe and Members of the European Parliament to strengthen these proposals and make them more effective and fairer for everyone.”
And GMB Europe officer Kathleen Walker-Shaw said:
“GMB members will be glad to see that the EU commission is finally accepting that the current posting of workers protections are not fit for purpose, in releasing proposals for a revision. However, there is still a way to go before the proposals tabled meet the expectations of GMB members and workers across Europe.”
But there is a way forward, and some grounds for hope. The proposal is only the beginning of the process. The text will now be negotiated between Council of Ministers and the European Parliament and there is scope for improvement. We’ll be aiming to add some real fairness into the measure, and we’ll be working with our European trade union colleagues to make it happen.