Controversy over rules for workers from new EU Member States

In December 2003, the Danish parliament approved measures aimed at preventing illegal work and possible misuse of the Danish welfare system when workers from central and eastern Europe seek jobs in Denmark following EU enlargement on 1 May 2004. However, trade unions in the building and construction industry claimed in April 2004 that loopholes in the new provisions will enable them to be evaded, and for workers from the new Member States to be employed on wages below collectively agreed rates.

Under transitional arrangements agreed by the EU and new Member States in central and eastern Europe which join in 1 May 2004, the existing Member States may limit movements of workers from the new Member States for a period of up to seven years after enlargement. In December 2003, a majority in the Danish parliament (Folketinget) supported a government proposal to introduce such transitional limitations (DK0312103F). Thus Denmark has joined the other 'old' Member States, with the exception of Ireland, in taking a number of precautions in order to prevent any fears of an excessive movement of workers from the east. In terms of the nature of its transitional measures, Denmark is in the middle of the EU range, with Ireland at one extreme and Germany and Austria at the other (the latter have reportedly acted to restrict all movement of workers from the central and eastern European countries for the full seven-year transition period).

Precautions against misuse and illegal work

According to the Danish measures, which were due to be enacted on 20 April 2004, citizens from the new EU Member States can seek work in Denmark on the same footing as other EU nationals from 1 May 2004. However, they have no right to receive social benefits while searching for a job. If they find a job, they will - unlike other EU nationals - have to apply for a special work and residence permit which will be granted only if they have a full-time job on terms corresponding to those normally applying on the Danish labour market. This means that no permit will be granted for part-time work or work at a wage which is lower than that laid down in collective agreements

This means that workers coming to Denmark from, for example, Poland or the Baltic states - the nationalities most likely to seek work in Denmark - will not have any right to Danish social provisions such as unemployment benefits. If they are unable to find a job or are dismissed, they will lose their residence permit and will have to leave Denmark.

'Loopholes' identified

It has been claimed there will be possibilities to circumvent the new provisions and for workers from central and eastern Europe to take a job at a wage lower than the relevant collectively agreed rate.

The umbrella organisation of trade unions in the building and construction industry (Bygnings-, Anlægs, and Trækartellet, BAT) criticised the government, two weeks before 1 May, for seeking to pass transitional measures which are 'full of holes'. The criticism results from a number of recent cases. A Danish entrepreneur has set up a company in Poland, through which he is offering to perform building work in Denmark carried out by Polish workers at half the cost of Danish workers. Another example is a Polish company which is offering to instal kitchens and bathrooms for a price 50% lower than Danish companies. In both cases, BAT claims, these moves are possible under the Danish legislation implementing the 1996 EU Directive (96/71/EC) concerning the posting of workers in the framework of the provision of services (DK0306103T). This law will overrule the provisions on transitional rules on free movement of labour in connection with the enlargement of EU. The transitional scheme will apply only where workers from, for example, Poland are hired by a Danish company.

The BAT cartel demands that the law should makes it absolutely clear that every worker from the new central and eastern European Member States must have a work permit according to the rules of the transitional scheme. This is seen as imperative, as new figures suggest that more Poles than previously expected will seek work in Denmark. This is the conclusion from a visit to Poland by journalists from Fagbladet, the magazine of the General Workers' Union (Specialarbejderforbundet i Danmark, SiD). They report that, according to Polish Ministry of Labour, 85,000 workers will go to Denmark over the next 10 years provided the high level of unemployment in Poland does not change. The scenario changes in line with the level of unemployment, with lower unemployment leading to fewer emigrants. According to the Ministry, 'several thousand' people will seek work in Denmark after 1 May 2004.

Commentary

The two examples cited by the BAT cartel are different. In the first case, a Danish entrepreneur is offering Polish workers, while in the second a Polish company is offering a service, ie to instal kitchens. In the first case it is difficult to see how it should be possible to avoid the provisions of the transitional scheme, since the 'product' is purely labour and the company has been set up by a Danish citizen living in Denmark. The other example will fall under the legislation on posted workers. Nevertheless, local union leaders from SiD in the areas concerned have expressed doubts that it will be possible for workers from the new Member States to work under Danish pay rates, whatever the law or provisions. The law on posted workers provides that workers posted from other EU countries should work under the same conditions as Danish workers - ie according to the relevant collective agreement. Besides, the Polish workers will need accommodation and food during their stay, the union representatives say.

As to the latest predictions of the number of Polish workers coming to Denmark, it seems that new figures are being produced every week on the numbers of workers due to arrive from the new Member States. The divergence between the figures is great, and the best course would be to monitor the situation and see what actually happens. At least SiD and BAT are going to monitor the situation at Danish workplaces intensely, they say, and ensure that every worker from central and eastern Europe has a work permit. (Carsten Jorgensen, FAOS)

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