Danish government prolongs East Agreement

The Danish government has informed the European Commission that the transition scheme covering workers from the new central and eastern European Member States – also called the East Agreement – has been extended, with some revisions, for a further three-year period. The revised agreement establishes smoother provisions regulating the entry of eastern European workers into the Danish labour market.

In December 2003, the Danish parliament approved an agreement establishing a national transition scheme concerning access to the Danish labour market of workers from eight of the 10 new Member States (except Cyprus and Malta) that joined the European Union (EU) on 1 May 2004. According to the agreement – also referred to as the East Agreement – a work and residence permit is given under the precondition that the applicant is offered a full-time job under the provisions of a collective agreement in force (DK0312103F; DK0404103F; DK0505101N and DK0512101N).

The agreement of December 2003 stipulated that, before the end of the first two years after EU enlargement, the parties to the agreement – according to EU rules – would evaluate the need for a renewal of the agreement and report their conclusion to the European Commission before 1 May 2006.

By the end of April, therefore, the government informed the Commission that the parties to the agreement had concluded a new agreement concerning the transition scheme.

Subsequent to a review of the first two-year period, and in light of public consultation by the main organisations in the labour market, the political parties to the agreement decided to extend, but also to revise, the transition scheme concerning workers from the eight new central and eastern European Member States – the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia and Slovakia. It remains a key political objective in Denmark that work adheres to collective agreements or other measures providing for standard wage and employment conditions.

Adjustments to transition scheme

A number of changes, aimed at facilitating the existing application procedure, have been introduced in the national transition scheme. The most important adjustments are as follows:

• Danish companies covered by a collective agreement, where the party to the agreement on the employee side is, at a minimum, a local trade union are thus entitled to gain approval in advance to hire workers from the eight new Member States in question. The company must not be engaged in a legal industrial dispute.

• A company covered by a collective agreement can gain approval in advance to hire persons on the basis of individual contracts, e.g. researchers, specialists, professionals, managers and teachers.

• Advance approval does not allow the hiring of citizens from the eight new Member States in other work functions besides those approved.

• In contrast to the former transitional scheme, advance approval gives the company the right to hire citizens from the countries in question without prior application for residence and a work permit for each employee. The Danish Immigration Service (Udlændingeservice) will consider applications for advance approvals.

• Other new aspects of the transitional scheme are: possible part-time work of at least 30 hours a week; extended rights for students from the central and eastern European Member States to work under the same conditions as other foreign students; the right to work while an application regarding continuation of the work permit is considered by the authorities; new criteria and target levels concerning the administrative turnaround period.

Reactions from the social partners

The Minister of Employment, Claus Hjort Frederiksen, of the Liberal party, had wanted companies that were not actually covered by a collective agreement to be included in the advance approval framework, as long as they guaranteed the wage levels and conditions in the collective agreements. However, he did not gain the necessary support in this respect.

Both the United Federation of Danish Workers (Faglig Fælles Forbund, 3F) and the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) expressed satisfaction with the new East Agreement, particularly with the fact that the provisions only include companies covered by collective agreements. On the other hand, the option of hiring workers on a part-time basis was not well received. Vice-President of LO, Ms Tine Aurvig-Huggenberger believes that ‘if we hire workers from eastern Europe because of a scarcity in labour supply, then there should not be a particular need to hire them on part-time contracts’. In addition, LO does not agree that companies with a single-employer agreement should share the same rights as companies covered by multi-employer agreements regarding advance approvals.

The employee union in building, construction and woodworking, the BAT Cartel (Bygge, Anlægs og Trækartellet, BAT-Kartellet) – which is leading the unions’ efforts to identify illegal workers – expects that the new agreement will provide for a better and more effective control of the workforce and companies from the eight new central and eastern European Member States.

The employers have also expressed satisfaction with the revisions of the transition scheme, but will continue to seek the future complete abolishment of the scheme. The Danish Confederation of Employer Organisations in Agriculture (Sammenslutningen af Landbrugets Arbejdsgiverforeninger, SALA) is most critical of the scheme, stating that the new agreement is overcautious and is a waste of time and resources in terms of the amended administrative procedures. Moreover, the agreement does not meet the acute need for workers in peak periods, such as in the season-dependent sectors of agriculture and horticulture.

The largest main employers’ organisation, the Confederation of Danish Employers (Dansk Arbejdsgiverforening, DA) is more neutral in its commentary of the agreement. DA believes that the revised transition scheme represents an improvement and welcomes the understanding among the parties to the agreement of the need for solving the real problems in recruiting sufficient workers. The employers’ association Danish Commerce and Services (Dansk Handel & Service, DHS) recognises that the new agreement will facilitate business for the temporary work agencies. Many SMEs have left it to the agencies to manage the administrative paperwork in connection with hiring temporary agency workers from the new Member States. With the new advance approval system, the agencies will not have to seek renewed work and residence permits every time a worker changes job or employer.

Commentary

Since EU enlargement in May 2004, about 8,000 residence and work permits have been granted to citizens from the central and eastern European Member States. From the perspective of proponents of the transitional scheme, this moderate figure indicates that the East Agreement has so far worked according to plan.

Carsten Jørgensen, FAOS

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