Social Europe on the wrong track?

The Dobersberger case proved that some workers could be more equal than others.

The European Union puts social progress, non-discrimination and equal rights at the core of its values. The aim of EU law must be to uphold these values and protect the workers it governs.

Yet picture this: one train, in which Hungarian and Austrian railway workers work side by side … but the Hungarians are paid significantly less than their Austrian colleagues. Workers’ fundamental rights are on the line when labour is seen as a cheap commodity.

Unfair and unfounded

It’s been one year since the Dobersberger ruling (C-16/18) of December 19th 2019, which saw the Court of Justice of the EU make an unfair and unfounded—indeed incomprehensible—prouncement: Hungarian workers providing catering and cleaning services on a train route from Salzburg and Munich to Budapest could receive Hungarian wages for their work done abroad. The case showed that when workers need it the most, Europe fails to protect them, the court allowing that freedom to provide a service should trump social rights.

The CJEU’s ruling not only contradicted the EU’s core values but also went outside its mandate—surprisingly ordaining that on-board services did not count for a considerable part of the workday of these workers. The task of the court in preliminary rulings is to give guidance on the interpretation of EU law and not on facts. Any assessment of facts is for the referring national court alone.

The ruling shed light on, but unfortunately also legitimised, abusive subcontracting. It has opened the door to cross-border subcontracting as a means to undermine and circumvent applicable sectoral collective agreements, thus resulting in social dumping and the fragmentation of workers’ protection.

Circumventing regulations

In the Dobersberger case, an Austrian enterprise obtained a contract for services,  founded a subsidiary in Hungary and additionally reached out to a Hungarian enterprise to carry out the contract—in simple terms, this was subcontracting. The Austrian company took advantage of the neighbouring labour market, as Hungarian wages and working conditions are inferior, establishing a subcontracting chain allowing it to circumvent Austrian labour regulations. This brings us to the situation where workers doing the same job, in the same place, could receive different wages and have different working conditions.

EU rules adopted to ensure that all workers are treated the same, no matter their nationality, are easily undermined if the principle of equal treatment is overlooked by the interpretation and application of EU law.It is unacceptable that European courts, through damaging interpretations, should open doors to abusive practices that expose the citizens they are bound to protect to unfairness.

The Dobersberger ruling set a dangerous precedent too. Wage-dumping is already widespread across Europe: construction workers, truck drivers, cabin crew and seasonal workers have all been on the receiving end.

The railway sector, once dominated by a culture of compliance with social rights, is now on the edge of falling into the social-dumping pit. With 2021 designated European Year of Rail, we call on the EU institutions to strengthen its social reputation, rather than undermining it.

Action urgent

To avoid a proliferation of abusive practices, the EU needs to step up its efforts for a more social Europe. The Dobersberger ruling demonstrates the need for urgent action to bring abusive subcontracting under scrutiny.

To ensure fundamental workers’, social and trade union rights take precedence over economic freedoms, the European trade union movement is also calling for a ‘social progress protocol‘ to be added to the EU treaties. This issue must lie at the heart of the debates of the upcoming Conference on the Future of Europe.

Trade unions will keep fighting together to ensure equal conditions for workers working side by side—be that on rail, in other modes of transport or in any other sector. It is high time to end the abuse of internal-market rules, where workers are played off against one another.