The underlying issues relating to the unofficial strikes in protest against the use of Italian workers at the Total oil refinery in Lincolnshire need clarity if we are to provide an answer and avoid fear and confusion.
First, the outcry is completely understandable if the Italian company that won the tender for work has refused to employ British workers. Such a practice would be illegal under European law. It must be investigated urgently, as I trust ACAS is doing.
But, second, it cannot be claimed that only British companies should have been able to tender for this work. There are two million British citizens living and working in the rest of the EU, but only one million people from other EU countries living in the UK . A ‘beggar thy neighbour’ policy would rebound and put those British jobs at risk, as well as other jobs in Britain in companies that have successfully tendered for contracts across Europe .
Third, we also need to investigate the claim that the company concerned is circumventing British labour standards by undercutting UK legal requirements concerning pay, conditions and health & safety standards – which would also be illegal under European law.
But it is here that we find the devil in the detail. Europe-wide legislation , the Posted Workers’ Directive, (PWD), was intended to ensure that companies cannot circumvent national rules on pay and working conditions. The Directive stipulates that foreign employees must be granted the same rights as local workers – not hired on the cheap with little or no employment protection. For example, foreign contractors must adhere to the UK minimum wage, employment protection and health and safety provisions.
But recent rulings from the European Court of Justice (notably the Laval, Viking and Ruffert cases) have flagged up a gap in the law that allows companies to undercut domestic workers on those aspects of pay and working conditions that are not laid down in law, but are simply subject to collective agreements. Companies not bound by the collective agreements (because they are from another country) are not obliged to respect them. Understandably these cases have caused consternation amongst trade unions and fear among British workers.
For some time now, Labour MEPs and our colleagues in the Socialist Group in the European Parliament have been asking for these legal loopholes in the PWD to be corrected. The report by Swedish Socialist Jan Andersson, adopted by the Parliament last October, examined the ECJ judgments and called for amendment of the PWD to protect against wage dumping. The need for a review of the PWD is now in the common manifesto agreed by socialist parties, including Labour, for this June’s European elections.
At national level, an obvious solution is to give collective agreements legal recognition in UK law (as is done in many other EU countries). This would mean that service providers from another EU country would be legally bound by the terms of such agreements and would be unable to undercut wages.
In contrast, the Andersson recommendations were flatly opposed by the Conservatives with their then leader, Phillip Bushill Matthews, stating that the Tories were “supportive of the ECJ judgments and do not believe that the rights of workers have been put into question by them” adding that “a revision of the Posting of Workers Directive is unnecessary”. Yet three months later they have completely changed tack. Such a remarkable hypocrisy is either cynical opportunism or, worse, they simply don’t understand what they are talking about.
The answer to this situation is not to abandon freedom of movement – the principle that lies at the heart of our common market – but to ensure that the rules that govern that market are fair: framed to allow for economic growth but without sacrificing workers’ rights at the altar of free market fundamentalism. Achieving this balance would certainly aid our economic recovery.