How to address social dumping

January 29, 2013

Funding Scheme: 2013-01-29


During the meeting held in Brussels on 23 january. European Commissioner, Mr László Andor, asked the representatives of the European Federation of Building and Woodworkers to mobilize with him to find solutions in the struggle against undeclared work and abuse of posted workers by employers. He also stressed the serious control by national authorities.


The Commissioner urged the EU’s Council of Ministers and the European Parliament to adopt as soon as possible the Commission’s March 2012 proposal to boost enforcement of the 1996 posted workers Directive (see IP/12/267 and MEMO/12/199), which acts as a safeguard against social dumping.

The Commissioner also underlined the need to step up the fight against undeclared work and announced an initiative later in 2013 on establishing of an EU platform for a more effective cooperation between the Member States to address undeclared work.

The posting of workers (i.e. workers sent by their employers to work in another Member State than the one in which they reside, for a limited period of time) can remedy temporary labour and skills shortages in certain regions and/or professions such as construction, agriculture, transport and information technology. Each year, around 1.2 million workers are posted by their employers across EU borders. This is 0.4% of the EU workforce.

A 1996 Directive lays down guarantees to protect the rights and working conditions of posted workers. It requires Member States to ensure that posted workers enjoy a core set of clearly defined rights and working conditions as host country workers. This includes the minimum rates of pay, minimum paid annual holidays, maximum working hours and minimum rest periods as well as health and safety rules.

However minimum employment and working conditions are not always respected in practice. There are many cases of abuse where workers do not enjoy their full rights in terms of, for example, pay or holiday, especially in the construction sector. Posting can also be abused by companies artificially establishing themselves in another country just to benefit from a lower level of labour protection or lower social security contributions.

That is precisely why, in March 2012, the Commission proposed a new Directive to make it easier to enforce the safeguards against social dumping laid down in the 1996 Directive. More specifically, the new Directive would:

require Member States to better inform workers and companies about their rights and obligations;

improve cooperation between national authorities in charge of posting so that they can more easily crack down on suspected cases of abuse;

better define posted workers so as to tackle so-called ‘letter-box companies’;

better define the responsibilities of national authorities to supervise posted workers;

improve the enforcement of workers’ rights, including the introduction of joint and several liability of companies in the construction sector that use posted workers – so that if a company sending posted workers ceases to exist, the company using the workers has to pay any missing wages.

The importance of labour law is not limited to the area of posting of workers. The adoption of a number of labour law Directives has helped to increase significantly the level of social standards at national and European level. For instance applying the principle of equal treatment with respect to basic working conditions has helped increase the level of protection of temporary agency workers, whereas the entitlement of every worker to four weeks paid annual leave as laid down in the working time Directive has been qualified by the EU’s Court of Justice as a particularly important principle of Community social law from which there can be no derogations and the implementation of which by the competent national authorities must be confined within the limits expressly laid down by the Directive itself

Url description: European Commission Press