Thematic feature - posted workers

This article examines the Finnish situation, as of June 2003, with regard to: legislation and collective bargaining on the pay and conditions of posted workers (ie workers from one EU Member State posted by their employer to work in another); the number of such posted workers; and the views of the social partners and government on the issue.

EU Directive 96/71/EC concerning the posting of workers in the framework of the provision of services seeks to avoid 'social dumping' by ensuring that a minimum set of rights is guaranteed for workers posted by their employer to work in another country. The basic principle is that the working conditions and pay in effect in a Member State should be applicable both to workers from that State, and those from other EU countries posted to work there. The Directive covers undertakings established in a Member State, which, in the framework of the transnational provision of services, post workers to the territory of another Member State.

The Directive establishes a core of essential regulations aimed at ensuring employees' minimum protection in the country in which their work is performed. It guarantees the application of the host country's statutory and regulatory provisions relating to:

• maximum work periods and minimum rest periods;
• minimum paid annual holidays;
• minimum rates of pay, including overtime rates (excluding supplementary occupational retirement pension schemes);
• the conditions of hiring-out of workers, in particular the supply of workers by temporary employment agencies;
• health, safety and hygiene at work;
• protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people; and
• equality of treatment between men and women and other provisions on non-discrimination.

As well as these generally applicable statutory and regulatory provisions, a Member State's collectively agreed provisions on these issues must also be applied to workers in the construction sector (where these are based on 'collective agreements or arbitration awards which have been declared universally applicable').

The Directive allows for a number of exceptions to all or some of these 'minimum provisions' for: the crew of merchant ships; staff involved in the initial assembly and/or first installation of equipment; postings lasting less than a month; and where 'the amount of work to be done is not significant'. The Member States were obliged to transpose the Directive by 16 December 1999.

In 1999, the European Industrial Relations Observatory (EIRO) conducted a comparative study on posted workers and the implementation of the Directive. In June 2003, the EIRO national centres in each EU Member State (plus Norway), have updated the basic information in the earlier comparative study, four years on, in response to a questionnaire. The Finnish responses are set out below (along with the questions asked).

Regulatory framework

What changes were made to national legislation in your country in order to implement the Directive? And have there been any further changes to the relevant legislation since then?

The Act on Posted Workers came into force on 16 December 1999, implementing the Directive. It was amended on 1 June 2001 and on 1 January 2003.

Please outline very briefly the current legal position of posted workers in your country - are they covered by specific or general employment legislation, what is their position with regard to social security (are they covered under the social security system in their country of origin or the host country?) etc. Also, have any specific measures been taken to prevent abuses arising from the posting of temporary agency workers (eg an agency hiring temporary workers through a subsidiary in a low labour cost country and sending them to work for a user company in a higher labour cost country)?

The Act on Posted Workers applies to workers posted to Finland. It covers the principal regulations concerning working time, paid annual holidays, safety at work, payment of wages and salaries, and a number of social benefits. These regulations are applied whenever they are more beneficial to the worker than of other regulations which would be applied in the absence of the Act on Posted Workers. For posted workers, existing binding collective agreements determine minimum rates of pay, which include any supplements paid to workers on the basis of them being posted. As a rule, posted workers are covered by the social security system in their country of origin for one to five years or in some cases even longer than that.

There have been no special measures to prevent abuses, but recently a working group published a report on the basis of which new legislation is being prepared with the aim of intensifying monitoring of the working conditions of foreign workers in Finland. A similar aim is expressed in the current government’s programme.

Have there been any collective agreements concluded on the issues covered by the Directive? Have the social partners been consulted as part of the legislative and policy-making process and, if so, in what way? Have the social partners taken any other initiatives related to posted workers?

The Directive has not been taken into account in any collective agreements, because according to the Act on Posted Workers binding collective agreements should be applied to posted workers.

The Act on Posted Workers was prepared in cooperation with the social partners. Several of their initiatives are included in the more recent working group report (see above) which proposed ways to intensify monitoring of the working conditions of foreign workers in Finland.

The workers affected

Please provide the latest figures available on the number of employees who are posted from your country to other EU Member States.

There are no overall figures available on the number of workers posted from Finland to other EU Member States. The authorities and social partner organisations generally refuse to give even 'best guesses', although the numbers are believed to be very small. The Construction Trade Union (Rakennusliitto) states that there are now probably about 100-300 construction workers posted from Finland, mostly to Norway. In the 1990s, there were perhaps up to 2,000 construction workers posted from Finland to Germany, but as Finnish construction workers have become more expensive, only a few individuals with high expertise, assigned to special tasks, have been posted in recent years.

Please provide similar figures, if available, for employees posted to your country from other EU Member States.

There are no overall figures available on the number of workers posted to Finland from other EU Member States. Also in this case, the authorities and labour market organisations mostly refuse to give 'best guesses', although the numbers are believed to be quite small. The Construction Trade Union states that there are currently probably only a few construction workers from other EU Member States posted to Finland. About 2,000 construction workers have come from Poland, Estonia and Russia, but it is not known how many of them have been posted.

Workers in the construction industry

The EU Directive, although of general application, is aimed particularly at workers in the construction industry (building and public works), in which discrepancies between practice and legal standards are often observed. Has any special action been taken by the social partners or the state to address the situation of posted workers in this industry?

No special action has been taken so far with regard to posted workers in the construction sector but, as mentioned above, a working group recently published a report on the basis of which new legislation is being prepared with the aim of intensifying the monitoring and control of the working conditions of foreign workers in Finland, which may be of relevance to this industry. A similar aim is expressed in the government’s programme. The social partners participated in the working group. The trade unions complain that almost all measures proposed by them in the group have been blocked by the employers’ associations, and that in a corporatist system this is sufficient to prevent any legislation.

The positions of the social partners and government

Please outline the stances adopted by the social partners and the public authorities/government on this issue. Particular attention should be given to unions and employers in the construction industry.

The public authorities/government and employers have taken a positive attitude towards the Directive and regard its implementation in Finland satisfactory. On the trade union side, however, there is widespread dissatisfaction with the current state of affairs, and particularly the Construction Trade Union anticipates severe difficulties after the enlargement of EU in 2004, when hired employees can be posted from the new Member States to Finland without work permits. The Construction Trade Union thinks that it would be very difficult, if not impossible, to control the working conditions of these workers, because no public authority has such an obligation and the trade unions have limited rights to act. (Heikki Taimio, Labour Institute for Economic Research)