Europe’s controversial rules for temporary workers abroad

Paris – French President Emmanuel Macron is seeking to persuade reluctant central and eastern European leaders to tighten up EU rules on workers sent to another country by their employer.

Here’s what you need to know about the controversial topic:

WHAT DO THE EU RULES SAY?

Workers sent by their employer to provide services temporarily in another EU country must receive the relevant legal minimum wage, holidays and rest periods in the country where they are working, among other conditions.

In the construction industry, they must also receive pay and conditions stipulated by universally binding collective agreements or arbitration awards. Member states can extend that protection to other sectors too.

A separate EU regulation provides that workers with a temporary posting of no more than two years will remain attached to the social security system of their home country.

HOW MANY WORKERS ARE INVOLVED?

In 2014 there were more than 1.92 million postings in the EU, up 44.4 per cent compared to 2010, according to the European Commission.

The postings make up about 0.7 per cent of the total EU workforce.

WHERE DO THEY COME FROM AND WHERE DO THEY GO?

Some 86 per cent of workers in 2014 were posted to the 15 pre-2004, mainly western EU states, while only 54 per cent came from those states.

Germany received the highest number of posted workers in 2014 at 418,908, followed by France with 177,674 and Belgium with 156,556.

Poland posted the highest number of workers abroad in 2014 with 463,174, followed by Germany with 240,862 and France with 139,040.

Some 42 per cent of total postings were in the construction industry.

WHAT’S CONTROVERSIAL ABOUT THE RULES?

First of all, trade unions and other critics say that posted workers are used to undercut local pay and conditions.

Posted workers are not legally entitled to benefit from collective agreements that are not considered universally binding, other non-binding practices, and some bonuses, allowances or seniority-linked rises.

The European Court of Justice has also ruled against trade unions taking collective action to win conditions for posted workers above those applied by the EU rules.

The European Commission itself says that workers posted to other EU countries get paid less than local workers – between 10 and 50 per cent less depending on the country and sector.

Secondly, Macron and other western European critics have argued that because social security contributions are often lower in the sending countries, posted workers cost employers less. They say this results in unfair competition – so-called “social dumping.”

According to the Robert Schuman Foundation, a European think-tank, in 2011 employer social security contribution rates in France were 49 per cent, compared with 28.45 per cent in Romania and 27.84 per cent in Bulgaria.

Thirdly, French authorities argue that the rules are hard to police and fraud takes place with employees not having genuinely previously worked for the sending company or not respecting the 24-month limit.

ARE THERE PROPOSALS TO CHANGE THE RULES?

Last year the European Commission proposed amendments to the Posted Workers Directive that it said would “ensure a level playing field.”

Under the new rules posted workers would be entitled to the same remuneration as local workers, including bonuses, allowances and overtime rates.

Universally binding collective agreements would apply to posted workers in all sectors.

Public bodies could also impose wage conditions not just on their direct contractors but also on sub-contractors.

The 2-year limit on postings would apply for the purposes of employment law as well as social security.

Macron, however, wants the time limit reduced to 12 months and further anti-fraud measures.

HOW HAVE THE PROPOSALS BEEN RECEIVED?

Trade unions, the European Parliament and richer member states including Austria, France, Germany and Sweden have welcomed them.

Central and Eastern European countries objected, arguing that pay rate differences were a legitimate element of competitive advantage for service providers.

Employers’ group Business Europe said the proposals were “an attack on the single market” and that the main problems were illegal practices, not the rules themselves, as well as excessive taxes that made labour in richer countries uncompetitive.

The national parliaments in 11 member states – Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia – formally objected to the proposals, arguing they were infringing on national competence, but the Commission overruled them.

Macron is hoping to win over at least some of those member states to his position. During the French presidential election campaign he defended the principle of the posted workers rules against far-right and radical left opponents who called for France to unilaterally stop applying them.