A new European agency will oversee the rights of workers who move across the European Union.
Inaugurated on October 16, the European Labour Authority was established to support individuals, businesses and national authorities dealing with cross-border activities. It will coordinate EURES, the European portal on employment and recruitment opportunities across Europe, and provide information to workers and companies about their rights and obligations.
It will also facilitate the coordination of social security systems among EU member states, as well as joint inspections and enforcement actions to deal with abuses and undeclared work. When necessary, it will mediate in disputes between national authorities.
According to the EU statistical office Eurostat, about 17.5 million EU citizens currently live or work in an EU country other than that of their nationality. The number has doubled in the past 10 years.
The Authority “will directly support the millions of Europeans who live or work in another member state as well as the millions of businesses operating cross-border in the EU,” said EU Commission President Jean-Claude Juncker at the opening ceremony.
Free movement ‘under attack’
Juncker proposed the creation of the Authority in September 2017. “It seems absurd to have a banking authority to police banking standards, but no common labour authority for our single market,” he said at the time. In his speech on Wednesday, he added that free movement of workers “has been under attack.”
“Freedom of movement was attacked for the wrong reasons, with many nationalistic and hateful arguments by people who wanted to discriminate between workers and create in fact two classes of European citizens. We cannot and we will never accept that,” he said.
“But freedom of movement was also under question for more legitimate reasons, because it was not seen as fair and because there were risks associated to a lack of rules, to fraud or to abuse. This we needed to fix urgently,” he continued.
According to the European Commission, small and medium-sized enterprises (SMEs) will particularly benefit from the work of the Authority, as 90% of businesses registered on the EURES portal are SMEs.
Individuals will also be able to access more easily the information they need. For instance, a worker in the construction sector will find information on job opportunities, working conditions, wages, or health and safety requirements.
First nine cases reported
As regards abuses, the European Trade Union Confederation (ETUC) and the European Federation of Building and Woodworkers (EFBWW) have already referred to the Authority the first nine cases for investigation.
All of them concerned “posted workers”, individuals sent for temporary assignments to another EU country. The cases involved several people sent from Poland, the Czech Republic, Bulgaria, Slovakia and Slovenia to work in Germany, Austria and Denmark.
Some of them received a salary significantly lower than local workers. In other cases employers withheld wages, holiday and sick pay or avoided the payment of social security contributions. For example, a Czech scaffolding company sent 45 workers to Copenhagen paying them 135 Kroner per hour, whereas local workers earn 220, and that amount included social security contributions too. In this case, the unions want the Labour Authority to rule on whether social security contributions should be counted as part of the wages.
Some other cases were related to bogus posting by companies with no economic activity in the home country. A company registered at an accountancy office in Slovenia, for instance, sent 391 workers (mostly Bosnian) to Germany since 2011.
“It’s a sad fact that posting and freedom of movement has created a substantial industry profiting from the exploitation of workers with bogus companies, bogus self-employment and relying on local lack of knowledge of social security, pension, health and other contributions systems in other countries. The European Labour Agency should help to tackle this cross-border fraud,” said Werner Buelen from EFBWW.
Last year the EU revised the rules on the posting of workers to ensure “equal pay for equal work at the same place.” A reform of rules on the coordination of social security systems is ongoing.
While initially working in Brussels, the Authority will be based in Bratislava, Slovakia. The plan is to have 140 staff in place by 2024 and operate with a budget of 50 million euros per year.
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