Blog: Stop social dumping

Social dumping

Macron wants to tackle the wage gap between Eastern and Western Europe.

‘Social dumping’ is high on the European Commission’s agenda. French President Emmanuel Macron recently added further fire to this ongoing debate. He too wishes to fight against the growing and mostly insufficiently regulated use of cheap labour from Eastern Europe. To achieve this, he wants to revise the ‘European Posting of Workers Directive’. In this blog, you can read how he wants to achieve that and what the (massive) consequences will be if he succeeds.

The Posted Workers Directive
Europe allows for the free movement of services and people. A Dutch citizen may work in Spain and an Austrian may work in Greece. The current Posted Workers Directive regulates this freedom and employees receive at least the minimum wage of the country in which they work. A nice idea in theory but less attractive in practice. In practice, foreign employees miss out on many of the working conditions to which they are entitled, and are, therefore, in most cases a lot cheaper than ‘local’ employees.

Change
Macron wants construction workers, workers in agriculture and horticulture and healthcare employees (the main groups of labour migrants) and others to receive exactly the same salary for equal work at the same place. He wants employers not to be able to deduct travel and subsistence expenses from salaries, and European labour inspections to exchange information on ‘bad’ employers. It is clear therefore that the Posted Workers Directive needs to be seriously improved on. Macron is supported by Germany, Italy, the Netherlands and other countries.

Why not?
It all sounds positive. Don’t we all want the best for everyone? There are, however, many parties who do not like the plan. Resistance is coming in particular from Eastern European member states. They see the proposals as indirect protection of the Western European labour market. It would make it harder for Eastern European workers to get work in Western Europe in the first place. Western European employers are also not all happy to pay higher wages for workers that they now ‘fly in’ from low-wage countries.

Conclusion
If the changes come about, there will be huge consequences for the salaries of more than two million labour migrants, and for competitive relationships within Europe. That this is not a trivial issue is apparent from the anti-European sentiment in many countries north to south, and east to the westernmost point of the United Kingdom.

Questions about this? The Global Law Group has specialists in this area in every European country (and beyond). See here to find our offices in your country that can help you further.

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