Effective transnational co-operation is required to protect third-country posted workers from abuses.
Sweden, February 2024: two migrant construction workers have been waiting several months for their wages, totalling almost €30,000. Their employer, a subcontractor, does not respond.
Obscure subcontracting chains, wage evasion, exploitation and precarious working conditions characterise migrant and mobile work in many European Union countries. That more than 30 workers have died on construction sites across the EU in recent months emphasises the seriousness of the situation.
Many employees are temporarily posted by their employer from another EU country. Posting of workers has increased significantly in the EU in recent years, tripling between 2012 and 2022. The 4.6 million postings in 2022 accounted for 1.8 per cent of the EU labour force. Next to construction, road haulage is strongly affected.
The recent revision of the posted-workers directive (2018) and the minimum-wages directive (2022) have brought some improvements. Their implementation across borders, however, requires member-state administrations to co-operate. The political debate often overlooks how challenging this can be, risking rules becoming purely token.
Sovereignty circumvented
Posting falls under the EU freedom to provide services. Employers in one member state can post employees to another member state for up to 18 months. As the Court of Justice of the EU ruled in 1994 (Vander Elst v Office des Migrations Internationales), third-country nationals employed in the posting country can be posted under the same rules as EU citizens.
This circumvents national sovereignty over determining access to the labour market. Countries such as Poland and Slovenia—focus of our research—have opened their labour markets to neighbouring countries to compensate for domestic emigration following EU accession. This however allows of immediate onward posting of these third-country nationals, often under exploitative conditions.
A1 forms certify that posted workers have access to social security in the posting country. Statistics on these show Poland to be the second-largest posting country after Germany, while Slovenia has the highest number of postings relative to total employment.
Postings of third-country nationals have increased significantly in recent years: in 2020 and 2021, for example, more people of Bosnian than Slovenian nationality were posted from Slovenia. Postings from Poland are mainly to Germany and from Slovenia to Germany and Austria.
Considerable differences
The revised posted-workers directive requires ‘equal pay for equal work in the same place’ to prevent exploitation and unfair competition. Yet considerable differences in social-security contributions, ranging from 8 per cent to 23 per cent of gross wages among member states, remain a source of competitive advantage.
In addition, illegal practices and exploitation of third-country nationals are widespread. The 2019 annual report of the Polish labour inspectorate showed that almost half (48 per cent) of 1,027 postings of third-country nationals inspected had not been executed legally. In some cases, third-country nationals are posted without adequate social security, they are often not paid correct wages and sometimes their passports are confiscated.
Mobile workers, particularly third-country nationals, are at a structural disadvantage in vindicating their rights. Apart from language barriers, complex rules on posting, health and safety and labour rights are difficult to understand. Third-country nationals are heavily dependent on their employer if their residence permit is linked to their employment and their low level of trade-union organisation facilitates exploitation. They are thus very unlikely actively to assert their rights.
Complex and unclear
Member-state authorities can demand compliance with EU rules but this is where the challenges to transnational administrative co-operation come in. The rules are complex and fuzzy.
Companies cannot make posting alone their business but need to be economically active in the sending country—to what extent, however, is vague. Workers cannot be explicitly recruited for posting, but their previous employment duration in the posting country lacks specification: 30 days is merely recommended. Nor can countries of employment add requirements—the Court of Justice prohibited Germany from requiring that third-country nationals had worked for one year before being posted.
In addition, the authorities in the country of employment may collect only limited information. In 2018, Poland attempted to check the length of stay and place of residence of third-country nationals, using an additional form as a precondition for posting, but companies involved successfully challenged this.
The onus is on the destination country to check whether employers withhold wages or passports. But for sectors such as transport or live-in care, this is difficult to achieve.
Administrative co-operation
When carrying out inspections, destination-state authorities often need information from the sending countries, such as on the validity of the A1 document or the company’s economic activity at home. Yet while the authorities in Poland and Slovenia strive for good administrative cross-border co-operation, they have to process a growing number of inquiries from the destination countries, via the European Internal Market Information System, with a limited number of staff.
Slovenia records the economic activity of posting companies merely via self-declaration when A1 documents are being sought. Checks are only carried out at the request of destination countries. In Poland, recently digitalised procedures allow the authorities to withdraw A1 documents in the event of illegal posting. Authorities and employers can digitally check the validity of A1 documents themselves, which promises to ease fraud detection.
In general, the exchange of information still faces technical and legal problems. Despite the commitment of the competent authorities, the exploitation of third-country nationals and illegal practices can hardly be prevented.
Hierarchy of mobility
Our study highlights the many problems in curbing the exploitation of third-country nationals in the single market. There is a hierarchy of mobility in the EU and posted third-country nationals are particularly vulnerable to exploitation, caught between liberal EU free-movement rights and restrictive national migration rules. While the EU has recently improved the protection of mobile workers, a more social EU will not be decided on paper but in practice.
The posting of third-country nationals enables new business models that remain attractive, even in the face of converging economic development among member states. Cross-border co-operation is complex and monitoring regulation requires a lot of administrative capacity. Enforcing the principle of ‘equal pay for equal work in the same place’ requires stronger monitoring and institutions at national and supranational level. Above all, broader and deeper transnational co-operation is needed between authorities, such as via joint inspections.
The European Labour Authority has an important role to play here. Better involvement of Europol in cross-border cases of fraud and exploitation, as well as specific instruments—such as the digital European Social Security Card—are also important steps in combating exploitation.
Josephine Assmus is a postdoctoral researcher at the Institute for Labour and Economics at the University of Bremen, focused on European labour mobility, EU integration and the role of further training and qualification of employees in driving economic transformation.
Anita Heindlmaier is a postdoctoral researcher at the Department of Sociology at the University of Vienna. Her research and teaching focus on (precarious) work and migration, access to social benefits and Europeanisation.
Susanne K Schmidt is professor of political science at the University of Bremen and author of The European Court of Justice and the Policy Process (Oxford University Press).