'Once Again, EU Court of Justice gives carte blanche for social dumping'

20 June 2008

'Once Again, EU Court of Justice gives carte blanche for social dumping'

'This is the fourth time that European judges have given their permission for the undermining of employees' rights. And as for those social democrats who think that the Lisbon Treaty, thrown out last week by the Irish, would solve this problem, they are in for a rude awakening.' So said Erik Meijer, Member of the European Parliament for the Socialist Party, in reaction to yesterday's ruling from the European Court of Justice.

Erik MeijerWhat is the problem? Luxembourg wants to protect its workers from what has been called 'social dumping', where workers brought in from abroad are paid less than the agreed or going rate for the job in the country in which they are working. Workers who must be paid this rate under bilateral or tripartite agreements are then shoved out. The European Court of Justice (ECJ) says now that Luxembourg's labour law is in conflict with the EU directive on 'posted workers', and that the European law must take precedence over the national law. The judge found that Luxembourg was interfering with the freedom of enterprises to offer their services in another member state. Unequal pay apparently counts for nothing in the eyes of this judge.

Rapped across the knuckles

Three similar cases have recently been brought before the ECJ. Known respectively as Laval, Viking and Ruffert, each concerned legal issues to do with a country's desire to protect its workers from social dumping, and in each case the country in question found itself rapped across the knuckles. "The SP sees it as against social justice if international enterprises, with the ECJ right behind them, can compete over labour standards in a single internal market," says Erik Meijer. "Why should the rights of corporations count for more than the right of workers to a fair wage, to the protection of the law and to equal treatment?"

Luxembourg today, Netherlands tomorrow

In the ECJ's ruling, Luxembourg was punished for demanding from foreign firms that they complete the paperwork necessary for the state to be able to verify that they are fulfilling the requirements of national labour law. Inspection and control are weak points when it comes to the free movement of workers and of services. Luxembourg for this reason demands that firms designate a representative in the country and that when workers are posted all relevant information regarding wages and conditions of service is supplied to the authorities. That sounds logical enough, but the ECJ ruled that these demands constitute 'unnecessary hindrance' to foreign companies supplying services. In addition, the legal requirement that the wages of foreign workers be index-linked found no favour in the eyes of the Court. And to top it off, national legislation regarding part time and temporary work was declared unacceptable. "With rulings such as these," Erik Meijer says, "the Court is interfering in the most fundamental way with the right of European countries to decide their own social model. We have already had Sweden, Finland and Germany, now it's Luxembourg, and soon it will be the Netherlands' turn."

Looking for loopholes

The case had been brought by the European Commission. The legal ruling is seen as an attack on the Luxembourg government, but in trade union circles it is also viewed as an assault on the working and living conditions of all of Europe's workers. According to the SP's Erik Meijer, the European Commission can no longer hide what is happening. "More and more firms will be looking for loopholes in the European legislation and will come to know their way around the courts. Trade unions have had their hands tied by the judgements in the Laval and Viking cases. They can only take action if this is seen by the ECJ as 'proportional' and in keeping with the laws governing the neoliberal internal market."

Look out - our rights are being destroyed

Meijer believes that something fundamental must change. "It's now the time for this, now that the Irish have said 'no' to the Lisbon Treaty. Irish fears for the erosion of workers' rights played a major role in this. Any new treaty must include an article making the sort of judgement we have seen in these cases impossible once and for all. Social rights are more important than the rules of the internal market, certainly now that we have the Services Directive, which must be implemented in every member state by next year. To start with, the national ratification processes for the Lisbon Treaty must be halted. Together with the trade unions we need to work hard to achieve this."

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