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AK EUROPA: Fair mobility in the EU labour market - The contribution of the European Labour Authority in the fight against wage and social dumping in the EU

The creation of a European Labour Authority has been an important demand of both Chamber of Labour and trade unions for a long time. In Brussels, representatives of AK Lower Austria and a high-ranking panel debated the planned authority and explained its relevance in respect to the fight against wage and social dumping by the example of Lower Austria. In view of the forthcoming Council Presidency, the Commission representative called on the Austrian Federal Government, to proactively pursue the legislative proposal on the Labour Authority at Council level.

The European Labour Authority shall take remedial action in cases of wage and social dumping, where cross-border sanctions are difficult to impose. Austria as a “bridge” to the newly acceded Central and Eastern European Member States with still significantly lower wage levels is strongly affected by this.

Against this background, the fact that the EU Labour Authorities were not mentioned in the recently published Programme for die Austrian Council Presidency from July 2018 is particularly noticeably. Markus Wieser, President AK Lower Austria, referred to this fact in his opening address: the Presidency Programme makes absolutely no reference to the European Labour Authority. According to Wieser, only a transnational labour authority with cross-border enforcement rights could effectively tackle increasing wage and social dumping to de facto enforce the principle of “equal pay for equal work at the same location”, as also laid down in the recently adopted Posting of Workers Directive. Hence, Wieser demands a Labour Authority with “teeth”.

Following the opening address, Christoph Kunz, expert on Europe of AK Lower Austria, explained the (Lower) Austrian Situation by referencing to current wage and social dumping statistics. In his presentation, Kunz pointed out that in particular employees in posting companies were more affected by inspection and criminal statistics. Extreme would be the difference with regard to suspected cases of underpayment (according to the Construction Workers Holiday and Redundancy Fund BUAK): of 4,181 companies that were inspected (3,365 domestic companies/816 posting companies) during the first half of 2017, only in the case of 0.9 % of employees working for domestic companies inspectors had suspected underpayment compared to 41 % of employees from posting companies.

Piet van Nuffel, Cabinet of Marianne Thyssen, European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, pointed out that cross-border mobility and postings would be among EU's important achievements. However, now an EU Labour Authority was required to assist Member States in respect of legal enforcement. According to van Nuffel, joint inspections and mediation would play an important role. He also placed hope on the national liaison officers, who in future would directly and on a daily basis cooperate within the scope of the Labour Authority. In his concluding remarks, van Nuffel called on the Austrian Council Presidency to actively pursue the dossier. It would be the objective that the Labour Authority would start work in spring 2019 - before the Elections to the European Parliament.

Maxime Cerutti considered the Commission proposal on the Labour Authority in its current form as too broadly defined. From BusinessEurope’s point of view, a “European Help Desk” as a contact point for companies and employees would be sufficient for coordination and information purposes. BusinessEurope does not see any need to create a “European Labour Authority”. Apart from that, Maxime Cerutti described the proposal as too cost intensive, bureaucratic and protectionist, and it would also violate the principle of subsidiarity. Even though he would in general agree with the objectives of the Labour Authority, he was certain these could be achieved by other means.

Agnes Jongerius, Dutch Member of the European Parliament, S&D faction, was pleased that the Commission had presented a proposal on the Labour Authority. Given the enforcement competencies, which at the present moment were not yet sufficient, gradual improvements would also be a conceivable solution. It was now important to ensure that the institution would come into being in the first place. However, due to the end of the legislative period there would also be a certain time pressure. Similar to Austria, the Netherlands would also record an increasing number of suspected cases in respect of wage and social dumping by posting companies. Law enforcement would often fail due to the lack of cooperation between Member States.

Further links

Commission proposal on the Labour Authority

Position Paper by the Chamber of Labour on the Commission proposal

AK Lower Austria: Facts and experiences on postings and wage and social dumping in Lower Austria

Workers’ rights and fair mobility: Workshop on the EU Labour Authority in the EU Parliament

AK Europa: Posting of Workers Directive - A milestone has been reached - what is needed now is the implementation of the European Labour Authority

AK Europa: European Labour Authority - Exchange of opinions in EU Parliament

AW-Blog: European Labour Authority - For the rights of employees instead of Dumping companies

AK: Wage dumping – Figures, data, facts

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Photo: Julie de Bellaing
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