Why freedom of movement is causing divisions – across Europe

Freedom of movement for EU workers has been front and centre in the Brexit debate. Fear of foreign workers undercutting the wages and working conditions of locals helped to fuel the leave campaign. Now EU nationals – Poles and others – who have called Britain home for years, sometimes decades, face an uncertain future in the UK.

But while attitudes to migrant workers in Brexit Britain are often seen as a case apart, free movement of people evokes hostility in other EU countries too. The belief that foreigners take away jobs from local workers is – and has long been – a textbook example of false information. Research has proved again and again that the belief is ill-founded. Yet to some, it feels true no matter how many studies show that it is not.

The Dutch Freedom party, for example, created a website a few years ago where Dutch citizens could report suspected undercutting in the labour market by workers from Poland, Romania and Bulgaria. The problem of unfair competition and “social dumping” also loomed large in the most recent French presidential election, with accusations of Polish workers bypassing French labour market regulation. Brexit is not a standalone manifestation of a malaise – it is simply the most extreme.

Much of the problem relates to inadequate EU labour market legislation and – ironically, given the discourse – the negative consequences are experienced mostly by the workers who move about themselves. Especially troubling is the exploitation of “posted workers”, employees from one EU state who are temporarily seconded by their employer (sometimes based in a third EU country) to carry out a service elsewhere in the EU, while remaining tied to the social security system of their country of origin. Out-of-date EU regulation has allowed the consistent undercutting of wages and working conditions, and the exploitation of these foreign nationals.

While this form of labour mobility and its problems is well known in expert circles, it has not received the attention it deserves owing to its complicated and often opaque nature. EU rules on posted workers were originally intended to strengthen the rights of EU citizens moving from one member state to another. The assumption was that highly skilled workers would provide short-term expertise where it was needed. After the service wascompleted, the workers would return to their permanent employment relationship in their country of origin.

But European labour markets today look radically different from when this legislation emerged in the 1990s. Large parts of the population are in temporary, short-term and insecure employment contracts. Moreover, the 28 member states now have radically different welfare states and wage levels.

It is in this context that “posting” turned into a mechanism that subcontractors based in the lower-wage countries began exploiting to offer cheaper services abroad. Setting up scaffolding or laying the floor at a construction site, for example, are services that can be offered more cheaply if subcontractors pay the national insurance contributions of workers in their country of origin. Employers can then make further savings by keeping the wages and bonuses of posted workers lower than those of local workers. For example, at the Severn power plant construction site in Uskmouth, the GMB trade union exposed how posted workers from Poland received incorrect overtime payments, were not granted due annual leave, and faced illegal deductions for lodging.

As I have detailed in my recent book, Workers Without Borders, there are several reasons why it is easier for employers to exploit posted workers than even temporary agency workers. For a start they are sent abroad for a limited period and are not automatically entitled to equal treatment with nationals. They feel detached from the country and the trade unions where the job is carried out, and will seek to claim their rights only in the most dire cases. Because of the temporary nature of the work, they often endure mistreatment in order to earn a target wage before moving on to another employment opportunity. Third, labour inspection in the UK, as in other EU countries, cannot adequately enforce the rights of posted workers because subcontractors posting workers abroad can easily de- and re-register from one country to the next.

Though these workers are performing vital tasks in fields such as construction, nursing and transport, they do not enjoy the same rights and benefits as others doing the same jobs. At the same time, they face hostility owing to their willingness to work for lower wages and with fewer social rights, primarily along east-west and south-north axes, sincewages are higher in northern and western Europe. One of the biggest receiving countries is Germany, where foreign workers are especially in demand in the construction industry.

In the course of my research I conducted more than 100 interviews with such workers and found that they were particularly vulnerable to exploitation, even in advanced industrial economies with strong employment protection. For instance, a posted Polish construction worker on a German building site does not enjoy the same rights as German or even Polish colleagues working for a German subcontractor, because the employment relationship is partially regulated from Poland.

Thus, popular, derogatory stereotypes of the “Polish plumber” might well have emerged not because of individual tradespeople offering cheaper services; but because EU regulation does not adequately protect EU citizens who move for work to another country.

My research shows that, in today’s economy, many posted workers are forced to accept just about any job, with no permanent employment; do not get their minimum rights enforced in the host state; and are afraid to voice their rights in fear of employer retaliation and unemployment. This is a particularly distressing paradox in the modern European welfare states: how can a country like Germany, with such powerful employers’ associations and trade unions, allow for a precarious labour market segment composed of EU migrants?

An overlooked piece of the puzzle is the re-regulatory politics at the workplace level. The debate around Brexit and the rise of nationalism in the EU is closely connected to populist discourse about, unsurprisingly, broad movements and vague numbers of workers. Yet the lived experiences of individual EU citizens who make use of freedom of movement should allow a more nuanced picture of the internal market and its labour market rules – and who knows, a little more sympathy and understanding.

Political divisions among EU states over posted workers break along the aforementioned east-west axis. Eastern European states lobby for deregulation, while western states support stricter regulations. Proposed new EU rules aim to promote de facto equal treatment between local and posted workers. A new directive would ensure that posted workers receive the same pay and conditions as local staff. But Hungary and Poland are challenging the reform in the European court of justice and trying to get the new directive annulled.

These actions have again opened up intense political debate, and threaten to curtail the rights of more than 2 million EU workers posted abroad. Countries such as France, Germany and the Netherlands favour the new directive because they are under the impression that these new rules will stop service companies from employing foreign EU workers below the local minimum wage. Hungary and Poland want to preserve their competitive advantage in the EU labour market

A key part of the new law would involved increased cooperation between national labour inspectorates. This is a step in the right directionbut labour inspectorates will still largely be unable to properly collect fines across borders. But there is also a need to better inform EU citizens – in the UK and elsewhere – about their rights, how to enforce them, and where to go for help, especially when they have limited language skills. This would make workers less vulnerable to exploitation and therefore possibly lead to better integration into the workforce and mutual understanding.

If other countries are not to follow Britain’s lead, freedom of movement will have to be considered. Europe is only as strong as its solidarity. While Hungary and Poland still argue for the right of their workers to move freely within the EU, increasingly hostile anti-immigrant sentiment can be found in both countries. Support for freedom of movement may well wane if it is not as profitable to Hungarian or Polish citizens.

Brexit will certainly complicate how freedom of movement of workers and services will be regulated and practised in the EU. Regardless, the issue of posted work has already revealed significant tensions.

• Ines Wagner is senior researcher at the Norwegian Institute for Social Research, and the author of Workers Without Borders: Posted Work and Precarity in the EU