Equal pay for foreign workers

Polish workers building a power station on the coast of the Netherlands at Eemshaven are to receive pay rises of between 5% and 20% after agreement was reached in the Dutch haulage sector guaranteeing equal pay for foreign workers. Transport union FNV, one of the parties to the new collective agreement, launched legal proceedings against the company hiring the Polish workers, arguing that they were entitled to the same rates of pay as Dutch workers covered by the agreement.

Background

The Dutch Transport Workers’ Union (FNV) and the National Federation of Christian Trade Unions (CNV) concluded a new collective labour agreement in June 2012, explicitly embracing workers from central and eastern Europe.

The agreement, in effect, ruled that equal work should receive equal pay regardless of workers’ country of origin, even though the deal would make it difficult for transport companies to heavily undercut prices.

The new collective agreement clarifies the circumstances and standards applicable to the payment of hired-in staff members. It will mean the dismantling of a number of practices established by employers to engage the services of central and eastern European truckers, generally at far cheaper rates.

The new agreement, valid for two years, applies to around 135,000 drivers. It specifies a wage increase for all drivers of 1.5% effective from 1 January 2013, and 0.5% effective from 1 July 2012. Once union members have given their approval, the Minister of Social Affairs, Henk Kamp, will be asked to make the collective labour agreement applicable throughout the sector.

Drivers and construction workers

The deal also applies to 800 Polish construction workers currently building a coastal coal-fired power station at Eemshaven for RWE/Essent. They will now earn the same as their Dutch counterparts, giving them salary increases of between 5% and 20%.

This agreement comes after judicial proceedings were begun by FNV against the Polish contractor Remak, responsible for hiring in the construction workers. FNV initiated the preliminary relief proceedings because Remak had ignored the relevant collective agreement. After being suspended twice by the courts, Remak finally agreed to pay the wages set by the collective agreement, and also to pay Polish workers a holiday allowance and a surcharge for evening shifts. However, Remak’s company supervisory board has yet to ratify the outcome of the negotiations.

It is likely the ruling will add an extra €1 million to the cost of building the power station.

The unions believe this agreement will end unfair competition among employers, and also hope that Dutch workers, previously regarded as too expensive to employ, will now be able to fill vacancies at Eemshaven.

Commentary

This case represents an important milestone for the unions. Close to three quarters of the companies examined during an internal FNV study were found to have disregarded the rules laid down in the collective agreement. It was found the companies paid the statutory minimum wage rather than the higher collectively agreed wage.

FNV found that many central and eastern European employees worked at a rate 30% to 40% below the collectively agreed wage. This meant that co mpanies employing workers from central and eastern Europe could operate far more cheaply than competitors.

This phenomenon can also be found in the agricultural sector, goods transportation, the shipbuilding industry, supermarket distribution and large construction sites such as those at Eemshaven and Maasvlakte 2, a major civil engineering project. FNV intends to challenge other companies with the agreement concluded at Eemshaven.

Marianne Grünell, University of Amsterdam, HSI

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