An objective of the Wage Union Initiative is accomplished

The EU is planning to set up a special authority to represent the interests of employees working abroad. Belgian EU Commissioner Marianne Thyssen, who took over the management of social and labour affairs from Hungary’s László Andor, proposes to set up an independent authority to protect the interests of employees working in another EU Member State than their own. The EU Labour Authority would also help Hungarian public servants involved in employment affairs to do a better job.

Such help is needed because several EU member states have experienced anomalies in connection with the “Posting of Workers Directive”. This regulation is aimed at reducing bureaucracy by allowing workers, under certain circumstances, to stay in their own social security system even if they are actually posted to a job in another Member State. Such posting may last for 2 years at most.

It is typical in the construction industry: for example, Hungarian, Slovakian, Polish or Romanian companies work on a project in Austria as subcontractors of an Austrian employer but their workers are registered in their home country rather than in Austria. Consequently, the wages and social security contributions paid by the employer are not Austrian but Hungarian, Slovakian, etc.

This leads to several problems: firstly, Austrian construction workers don’t get jobs because they can’t offer a competitive price since they have to pay Austrian taxes instead of Hungarian ones (wage dumping) and secondly, Hungarian workers are forced to live on Hungarian wages in Austria where the cost of living is actually higher.

There are political ramifications, too: even proudly anti-racist and feminist Socialists often harbour resentment to “eastern” workers. Interestingly enough, Austria upheld the longest labour law restrictions on citizens of the EU Member States joined in 2004 under the leadership of Chancellor Werner Faymann, the same politician who criticized the V4 Group’s position on the influx of migrants. Furthermore, the contingent work permit procedures are still applied to the citizens of Croatia, the most recent entrant of the European Union as of today.

Notably, the minimum wage set by the German government for logistics jobs performed in German territory (for foreign truckers serving loading or unloading stations in Germany) is also aimed at protecting the German market from the eastern competition since Romanian- or Bulgarian-registered logistics companies are unable to pay German wages.

If an institution is set up to prevent protectionist machinations violating EU law and disguised as a legal regulation, it could accomplish a fundamental objective of the Wage Union Initiative because it could guarantee legal security for workers across the EU. The location of the new institution has not been decided yet. Austrian MPs want to lobby for setting up the institution in Vienna as the city has extensive experience with the employment of non-Austrian EU citizens.