Workers from the East European countries counteract bottleneck problems

The workers from the new EU countries who have come to Denmark since the enlargement of the European Union in May 2004 have contributed to counteracting the emergence of bottlenecks on the labour market - in particular in agriculture and horticulture and in the building sector. This is one of the results of a report published by the Ministry of Employment on 30 November 2005.

Since he EU enlargement 1 May 2004 workers from the East European countries have contributed to counteract bottlenecks problems at the Danish labour market - in particular in seasonal employment as agriculture and horticulture and in the building sector. This is the conclusion of a new report about the consequences of the EU enlargement for the Danish labour market made by Ramboll Management for the Ministry of Employment. The report was presented 30 November 2005.

In connection with the enlargement of the European Union in 2004, the Accession Treaty made it possible to introduce transitional schemes that regulate the free movement of labour among the eight new East European Member States and the 15 old EU Member States. With the exception of Sweden and Ireland, the other EU-15 countries used this possibility. The report has to be seen in relation to the duty of the Danish government to inform the EU Commission before 1 may 2006 if Denmark wish to carry on the existing national transition scheme another two years.

In Denmark, a transitional scheme (the so-called East Agreement) was introduced which implies that it is a condition for obtaining a work permit that citizens from the East European Member States have an offer of a full-time job on terms laid down in a collective agreement or similar conditions (DK0312103F and DK0505101N)

In addition to this possibility citizens from the East European EU Member States have - as all other EU citizens - the right to set up their own business in Denmark. Finally, enterprises from the East European countries have a right to provide services in Denmark on the same terms as enterprises from other EU Member States and to post workers to Denmark in connection with the provision of such services. There are no transitional rules as regards the freedom of establishment and the free movement of services.

The report shows that by the end of August 2005, a total number of 5,472 workers, mainly from Poland and the Baltic countries, had been granted a work permit in accordance with the rules laid down in the transitional scheme. About 4,000 were active while the remaining permits had either expired or had not yet taken effect. The report thus draws the conclusion that the total number of work permits must be said to be rather modest.

Half of the active permits have been given in agriculture and horticulture (corresponding to 5% of the total workforce in this sector), while 7.1% of all permits have been given in the building sector. By August there were 285 active work permits in this sector. The number of posted workers and of persons that have chosen to establish a company in Denmark is rather blurred, but does not exceed a couple of hundreds.

Attempts to circumvent the rules are mainly found in the building sector in the form of the establishment of 'bogus' one-man-firms where the alleged self-employed person is actually in an employee relationship as he/she receives all instructions and working tools from the alleged customer. The number of reports to the police about such illegal work, and the number of charges and court decisions has been increasing from 2004 to 2005 (DK0404103F).

The report finally recommends that new initiatives should be considered with a view to attracting highly skilled experts and researchers as well as skilled workers in the building and construction industry. It is also recommended to examine the possibilities for relaxing the rules laid down in the transitional scheme.

The Danish Minister for Employment, Claus Hjort Frederiksen, states that the report clearly shows that the inflow of labour from Eastern Europe is limited. 'We have seen no balance problems on the labour market. On the contrary, the East European workers have contributed to ensuring that it has been possible for sectors with emerging bottlenecks to maintain their production and employment', he said on the day of presentation of the report.

The employer organisations The Danish Confederation of Employers' Associations in Agriculture (Sammenslutningen af Landbrugets Arbejdsgiverforeninger, SALA) and the Confederation of Danish Employers (Dansk Arbejdsgiverforening, DA) quite agree that the rules should be relaxed so that it will be easier for East European workers to come to Denmark. They would rather prefer the full abolishment of the scheme. They have also pointed to the slowness in deciding cases in the Danish Immigration Services (Udlændingestyrelsen) as an obstacle to a smooth supply of labour. The Ministry of Employment states that this will be one of key fields of action in the future.

The trade union cartel in building and construction, the BAT Cartel (Bygge-, Anlægs- og Trækartellet, BAT-kartellet) is strongly opposed to a relaxation of the rules, let alone the abolition of the rules. On the contrary the scheme has turned out to function as intended. 'The East Agreement has made it possible to monitor the inflow of workers from the new EU Member States so that the efforts can be concentrated on revealing those who tries to circumvent the agreement', says Gunde Odgård from the BAT Cartel, who also points out that the scheme by controlling the inflow has also ensured that no social dumping has taken place. He furthermore stresses that the administrative procedures only take a long time in those cases where the employers have no collective agreement; in such situations the Danish Immigration Service and the regional labour market councils must ensure that the East European workers are employed at ordinary pay and working conditions before the cases can be decided.

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.

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