The social cost of European Commission plans to weaken rules on the posting of workers will be far higher than the small savings which would be made by businesses, trade unions are warning.
The European Commission today published a proposal to create a single EU system for the declaration of posted workers, the goal of which should have been ensuring better compliance with and enforcement of rules.
However, the proposed regulation clearly prioritises cutting costs for businesses at the expense of Europe’s most vulnerable group of workers and comes after minimal consultation with trade unions or national labour inspectorates.
The Commission staff working document says plainly that a "reduction of the information requirements” for employers about posted workers is the objectives of the regulation.
11 Euro saving
That would make it even harder for already overstretched labour inspectorates to know which workplaces they need to visit to tackle endemic abuse faced by posted workers, such as the non-payment of wages and dangerous working conditions.
Members states taking part in the system would not be able to require employers to provide any further information needed to track businesses and prevent abuse.
According to the Commission, the current cost to employers of declaring a posted worker is a modest €10.78. Even if every member state implemented this initiative, the total savings for European business would only be “approximately €13.945.000,” it says.
The European Trade Union Confederation (ETUC) wrote to the Commission before the proposal to raise our concerns that the negative social consequences far outweigh this small saving.
Responding to today’s proposal, ETUC Deputy General Secretary Isabelle Schömann said:
“The European Commission has missed an opportunity to introduce a system for the declaration of posted workers which would make it easier for both employers to properly register posted workers and labour inspectors to uphold workers’ rights.
“Unfortunately, the Commission has instead prioritised a cut in the information that employers will need to provide about workers they send to other countries in order to save just 11 Euro a time.
“Further deregulating this process is highly irresponsible when posted workers are already facing widespread abuse, ranging from the non-payment of wages to unsafe working conditions which have led to fatal accidents.
“The social cost of this proposal would far outweigh the small savings for companies. It is a clear example of the false economy of the Commission’s Trump-style deregulation agenda.
“Instead, the Commission urgently needs to take legislative action to regulate labour intermediaries and limit the long subcontracting chains that are allowing companies escape liability for exploiting posted workers.”
EFBWW General Secretary Tom Deleu warns that this initiative will lead to more social dumping, labour crime and unfair competition:
"This initiative completely ignores worrying signals from the construction industry that indicate that fake posting, especially in long and complex chains of subcontracting have become an exploitative business model.
"The recent ELA report on the construction industry, the Letta Report and the implementation report from the Commission on the revised Posting of Workers Directive all insist that there is an urgent need for better and more effective enforcement, especially in a cross-border context.
"The current proposal completely ignores these important reports and is based on a one-sided view that looks only at cost and administrative burden. As the proposal stands it will undermine existing good practices of prior notification schemes that exist in several member states.
"This proposal will make it easier for letterbox companies to continue and even increase their business model of fake postings. A business model that undermines fair competition and that undermines genuine construction companies that engage in posting of workers. The new Commission should reasses its priorities and focus on a strategy that will limit subcontracting, promote quality jobs and fair competition."
Notes
Examples of the problems faced by posted workers include:
- Non-payment of wages: A company registered at an accountancy office in Slovenia has posted 391 workers, almost all of whom are from Bosnia, to Germany since 2011. It is believed the workers did not receive the minimum wage or paid holiday. The company has not registered any economic activity in Slovenia. Source.
- Non-payment of social security contributions: French authorities ruled that 12 million Euro should have been paid in social contributions for 460 Polish and Romanian employees posted to work in construction by an Irish company which established their contracts with a fictitious office in another member state. Source.
- Non-respect for health and safety: On 18 June 2021, a school building under construction collapsed in the Belgian city of Antwerp. The accident killed five construction workers and left nine severely injured. All workers concerned were non-Belgian posted workers. Source.
