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Poland warns that planned changes to EU labour laws will harm economy

European Commission plans to limit "posting" of workers from one country to another will damage the EU economy, Poland's deputy prime minister has told the Financial Times.08 Aug 2017

The Commission proposed a reform to the Posting of Workers Directive last year to tackle 'social dumping', where workers are sent abroad but paid as though they remained in their home country to avoid higher wages and tougher employment regulations.

The same work at the same place should be remunerated in the same way, and any posting should be done "within a climate of fair competition and respect for the rights of workers", the Commission said.

All rules on remuneration that are applied generally to local workers would also have to be granted to posted workers, and remuneration would not only include the minimum rates of pay, but also other elements such as bonuses or allowances where applicable.

However, Poland's deputy prime minister Mateusz Morawiecki told the Financial Times that this would make the EU economy less competitive.

"It would not be good for the EU because I think that out of the four freedoms of the famous Treaty of Rome . . . the freedom to provide services is by far the weakest. And modern economies are more and more based on services," Morawiecki said.

"So we have to work on how to free up services, how to eliminate red tape . . . whereas some moves by [French] president Macron are in the opposite direction," he told the Financial Times.

During his election campaign Macron promised to reform the proposed directive to go further in preventing the use of 'detached workers' on lower wages and under less stringent labour rules, Le Figaro reported at the time (link in French).

"They talk about social dumping. I would say how about corporate dumping? You have very strong French banks and retail companies in Poland, and you have very strong dividends out of those companies, and we do not tax those dividends by the way, and we do not call it corporate dumping even if we feel that those companies are advantaged vis-à-vis domestic companies of a similar kind," Morawiecki told the Financial Times.

The European Parliament has still to vote on the directive.

Employment law expert Stuart Neilson of Pinsent Masons, the law firm behind, said: "Currently there are some basic protections in place for workers who are posted by their employer in one member state to work in another member state. Those basic protections ensure that the posted worker is entitled to rely upon the host countries rules on issues such as national minimum wage, holidays, rest breaks, and so on. At the moment the protections do not extend to ensuring that posted workers are paid the same for doing the work as host country employees."

"The proposal from the European Commission would require equal pay for posted workers when compared to host country employees doing the same work. It is quite a radical proposal and while it finds favour with trade unions and politicians in mostly western European countries on the basis that in their eyes it stops the 'undercutting' of the wages of local employees, it is less welcome in eastern European countries and the Baltic states, where the ability of their businesses to compete will be in jeopardy if this proposal proceeds," Neilson said.

"It is only a proposal at this stage so we will need to wait and see how this develops. The extent to which it may or may not be relevant to the UK after March 2019 remains, like much of Brexit, uncertain," he said.

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