Restricted rights: obstacles in enforcing the labour rights of mobile EU workers in the German and Dutch construction sector

Abstract

German

French

There is considerable evidence that employers are violating the labour rights of mobile EU workers. However there is disagreement as to whether the lack of enforcement of these rights is caused by poor EU-level or weak national-level potential to oversee and sanction infringing companies and to enforce the rules. This poses the following three questions. Which enforcement gaps exist in relation to EU labour mobility? Which circumstances lead to these particular enforcement gaps? And what is being done to close those gaps? To answer these questions we examine the behaviour of institutions key to these processes, interviewing the respective labour enforcement agencies and trade unions in the German and Dutch construction sector as well as mobile EU workers themselves. We discuss three distinct difficulties encountered in enforcing labour standards: 1) disparities between enforcement institutions in different EU Member States; 2) enforcement challenges faced within the national context; and 3) representation gaps between host country collective representation channels and mobile EU workers.

Keywords

Labour mobility enforcement of labour rights institutions and actors trade union representation

Introduction

The European Union (EU) has constructed an internal labour market through institutionalizing the free mobility of labour and services. EU citizens can take up employment in another EU country via posted work, regular employment, self-employment or temporary agency work. Though these workers often perform similar jobs, their rights depend on whether their employment in the host EU Member State comes under Directive 2004/38/EC on the free movement of persons (host country-based employment), under Article 56 TFEU on the free movement of services and thus under the Posted Workers’ Directive 96/71/EC (posted work) or under Articles 49–55 TFEU on freedom of establishment (self-employment). Weakly regulated, this transnational labour market is driven by employers using it as a way of recruiting lower-wage workers from countries with low labour costs, often thereby circumventing host country regulations and wage expectations (Cremers, 2011). The academic debate has focused on how this ‘regime shopping’ is made possible through regulatory gaps between countries and sectors (Houwerzijl, 2014; Lillie et al., 2014; Cremers, 2011). However, there is little insight into how the (non-) enforcement of labour standards contributes to the persistence of these gaps. This poses the following questions. Which enforcement gaps exist in relation to EU labour mobility at national and international level? Which circumstances lead to these particular enforcement gaps? What is being done to close those gaps? This article examines the interaction of key institutions: the respective labour enforcement agencies and trade unions in Germany and the Netherlands. We have chosen Germany and the Netherlands for our discussion as in both these countries there are usually strong institutions for labour regulations. This article looks specifically at the construction sector in these countries, because of the high presence of mobile EU workers in this industry in both countries. Our empirical material is based on 83 interviews with mobile EU workers and 50 expert interviews in Germany and the Netherlands. Our discussion of mobile EU workers deals with EU workers employed within the national regulatory context (mostly people working for Dutch or German temporary work agencies), as well as workers employed via posted (agency) work or working in a self-employed capacity.

Findings point to difficulties in enforcing the rights of mobile EU workers: 1) at international level between national enforcement agencies, 2) at national level within enforcement agencies or actors involved in enforcement, and 3) at workplace level between host country collective representation channels and mobile EU workers. These enforcement gaps point to certain practical difficulties in safeguarding the rights of mobile EU workers, and in the different ways national enforcement actors have attempted to overcome these obstacles, highlighting the challenges faced by national systems to adapt effectively to the changing institutional environment within the EU.

Regulatory and enforcement gaps in the EU labour market

There is a debate on the interaction of institutions and their regulatory capacity with regard to the issue of EU labour mobility and violations of labour rights. The academic discussion revolves around the political processes behind the power dynamics of EU labour mobility (see Dølvik and Visser, 2009), while also analysing EU Member States’ capacity to regulate national labour markets in the light of EU labour mobility politics. A number of studies have identified differences across countries and sectors over how the presence of mobile EU workers puts pressure on certain regulatory institutions, such as collective bargaining and collective action (Krings, 2009; Bengtsson, 2013; Arnholtz and Hansen, 2013). In particular, EU cross-border labour recruitment has been identified as a strategy for circumventing regulatory institutions previously embedded in an individual country’s regulatory framework (Wagner and Lillie, 2014), with ‘low-cost labour’ exerting downward pressure on wages (Cremers, 2011). There is evidence that employers are violating the labour rights of mobile workers in various EU Member States, leveraging existing gaps in national and sectoral labour market regulations (Arnholtz and Hansen, 2013; Krings, 2009; Bernaciak, 2015; Wagner, 2015b; Berntsen and Lillie, 2016; Cremers et al., 2007).

A number of authors argue that weak national-level capacities to oversee and sanction companies and enforce regulations are enabling companies to violate the labour rights of mobile EU workers (Thörnqvist and Bernhardsson, 2015). Others argue that the EU regulatory framework covering labour mobility creates a space in which social and political controls are selectively not enforced, thereby giving capital a freer hand in designing the social relations of production (Lillie, 2010). Focusing on the causes of labour rights violations, these studies have been less concerned with the mechanisms available to enforce existing labour rights. In the following we will first outline European labour market dynamics in the context of the German and Dutch construction industry and then draw on our empirical research to discuss the enforcement gaps and the efforts being made to overcome these obstacles in both national contexts. Our aim is to shed light on the interrelationship between existing enforcement mechanisms and how they can serve to boost existing regulatory gaps.

European labour market integration and outsourcing in the construction sector

The transnational mobility of construction workers is a product of both the industry’s subcontracted nature and the current EU east-west and south-north labour supply system. The construction industry’s structure is characterized by subcontracting, short-term contracts and contingent labour. Subcontracting is used to access specialized knowledge, increase flexibility, manage risk and reduce labour costs. In Germany and the Netherlands, large companies (in terms of turnover) act as main contractors or building service providers while small and medium-sized companies assume the role of the subcontractors and provide the majority of workers (Bosch and Zühlke-Robinet, 2003; Fellini et al., 2007). Transnational employment agencies and construction subcontractors compete on cost against domestic subcontractors, bringing low-cost migrant workers to sites in countries with higher labour costs and paying them lower wages and benefits than those demanded by domestically hired workers. The majority of mobile EU construction workers are thus employed via subcontractors or employment agencies active at the lower levels of the contracting chains.

This means that supply chains can be opaque, as companies higher up the chain have only limited control over what happens in lower-level subcontracts (Wagner, 2015a). Companies tend to pass business risks down the supply chain, generating fierce intra-company competition between lower-level contractors which in turn puts pressure on working conditions. Contractors often come from different countries or have subsidiary branches in several EU countries, and recruit workers from countries with less extensive welfare entitlements. This means there are usually many nationalities working together under very different terms of employment (Berntsen and Lillie, 2016). The Europeanization of the construction labour market has thus added complexity and uncertainty to employment arrangements (Cremers, 2011).

Compared to Germany, a higher proportion of mobile EU workers are employed via employment agencies in the Netherlands, meaning that while their on-site work is managed by a (sub)contractor, their formal employment relationship is with the firm recruiting them. In Germany the construction sector resorts mainly to posted workers due to sector-specific restrictions on temporary agency work. Mobile EU workers in host country-based employment, such as agency work, are regulated under EU frameworks for labour mobility, those in posted employment are regulated as dependent employees of service providers, while self-employed workers come under EU freedom of establishment regulations. Even though often performing similar tasks, these three sets of mobile workers enjoy different labour rights. EU workers in host country-based employment are subject to the whole range of host country employment regulations, whereas posted workers come under the law of the sending state, apart from certain minimum conditions listed in the Posted Workers’ Directive (Directive 96/71/EC) which, inter alia, allow partial enforcement of legally extended collective agreements. Self-employed workers fall outside the scope of collective agreements and wage-setting institutions, as they set their own fees. In general, we will be using the term ‘mobile EU worker’ to refer to all three different types of cross-border workers, only referring to specific categories when needed.

Depending on the regulations governing specific national contexts, different channels of EU labour mobility are used. For example, in Germany 188,000 postings were registered in 1996, a figure dropping to 98,214 in 2014 (HDI, 2015)¹. The drop can be explained by the increase in self-employed construction workers, many of whom come from eastern Europe. Germany imposed transition periods for the 2004 and 2007 EU accession countries, temporarily restricting the free movement of workers (and services) in the construction, cleaning and interior decorating sectors. During these periods self-employment was the channel used by mobile EU workers to access the German labour market. Between 2004 and 2012 the number of registered craft tiling companies in Germany increased from about 12,000 to 68,000, of which 18,500 had a registered eastern European owner (IG BAU and ZDB, 2013). Similarly in the Netherlands, the number of self-employed Polish workers increased from 190 to 7000 between 2002 and 2008 (Regioplan, 2012: 12), a period when access restrictions were still in place. In 2007, when the transitional measures for Poland were lifted in the Netherlands, the number of mobile EU workers, particularly from Poland, increased significantly. Most of the workers from Central and Eastern Europe are now employed via temporary employment agencies in the Netherlands (coming under the free movement of workers). In Germany the influx of EU citizens from Romania and Bulgaria, as well as from Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Slovenia and from southern EU countries increased fivefold between 2004 and 2012, rising from 35,131 to 180,733 (SVR, 2013: 57–58).

The increased numbers of EU mobile workers in the German and Dutch construction sector and their differential access to labour rights under the EU mobility frameworks, pose difficulties for the relevant institutional actors when enforcing migrant labour rights.

German and Dutch labour enforcement mechanisms

In Germany the central agency responsible for enforcing labour market standards is the FKS (Finanzkontrolle Schwarzarbeit), the customs agency in charge of fighting undeclared work. FKS officers wear police uniform and have the power to force entry, search persons and premises, confiscate and retain evidence, and arrest people without warrant. Enforcing labour standards for posted workers also falls under the FKS remit.

Enforcement in the Netherlands is more fragmented. The former labour inspectorate, the Social Affairs and Employment Inspectorate (Inspectie Sociale Zaken en Werkgelegenheid), is responsible for enforcing the Dutch statutory minimum wage and holiday allowance, and controls working hours. Enforcement of collective agreements is, however, the task of the social partners. In the construction sector, the social partners established an independent compliance institute, the TBB (Technisch Bureau Bouwnijverheid), to enforce compliance with the sectoral collective agreement. A similar independent compliance office, the SNCU (Stichting naleving CAO voor uitzendkrachten) is empowered to enforce collectively bargained wages for the agency sector. The SZW Inspectorate works on the basis of tip-offs, and has the authority to request firms to open their books during compliance checks, an enforcement instrument that Dutch unions lack.

Data collection

The research underlying this article was carried out in 2011–2013. The major share of the empirical data was gathered through qualitative semi-structured interviews with 67 mobile EU workers employed in the German and Dutch construction industry. In addition, we held 16 group conversations with mobile EU workers. The majority of the workers interviewed originated from Poland, Romania and Portugal. We contacted the workers mainly via home visits, and used snowball techniques to broaden our sample. The interviews were conducted in the native languages of the workers with the assistance of interpreters. The workers were questioned on various subjects related to their work experiences in Germany and the Netherlands, with a specific focus on their employment conditions and their knowledge of rights and institutions, as well as their access to representation channels (mainly trade unions). Each interview lasted between one and two hours, and – wherever possible – was recorded and transcribed.

We also conducted 50 expert interviews with union representatives, works councillors, managers and labour inspectors at national and EU level. However, only a few employers were willing to participate in the research. The ones we interviewed operated mostly higher up in the contracting chains, only employing mobile EU workers indirectly via subcontractor or agency arrangements. In addition, reports from governments, unions and employer associations were studied to broaden the scope of the empirical analysis in both countries. Though our empirical study is not intended to be representative of enforcement practices in the construction sector at large, the findings corroborate other studies pointing to gaps in workers’ access to labour rights (Bernaciak, 2015; Berntsen and Lillie, 2016; Wagner, 2015a).

Lack of cooperation between enforcement agencies in different EU Member States

Cooperation between enforcement agencies in EU Member States remains underdeveloped in such areas as 1) the cross-border payment of social security contributions, 2) the manipulation of untaxed allowances, 3) the detection of letter-box companies, and 4) the cross-border payment of fines.

First, one of the difficulties with cross-border postings is to check whether social security contributions are actually paid in the sending country. Before posting a worker from one Member State to another, the posting company has to fill out and submit a so-called A1 form proving that the worker is registered in the sending country’s social security system and that the employer has paid social security contributions in line with the worker’s wages – including wages earned in the sending country. However, the circumvention practice observed by trade unions is for companies to issue two contracts, one referring to the host country context and the other to that of the sending country. While the host country contract specifies that country’s minimum wage with the obligation to pay social security contributions on that amount, the contract in the sending country specifies that country’s minimum wage and the related social security contributions on that amount which is considerably smaller. Social security contributions are therefore only calculated and paid in accordance with the minimum wage level of the sending country, instead of on a higher wage level in the host country.

Secondly, cross-border enforcement becomes complex when employers manipulate the rules on untaxed allowances in the sending country in order to reduce the wage levels on which social contributions are calculated in the sending country (Interview with trade unionists, 2012). Posting companies may often deduct a lump-sum amount for costs related to the posting. Each Member State has different allowances. Deducting this amount from the ‘minimum pay’ reduces the sum on which social contributions need to be paid. In the Netherlands such deductions cannot legally be made from the minimum wage, and an employer is supposed to pay them on top of the minimum wage. However, since such deductions are made in the sending state and only impact social security payments (not the wage tax in the Netherlands), this practice escapes the attention of Dutch enforcement agents. Unless further investigation takes place – something that rarely happens – it is unlikely that enforcement agents in the sending country would notice this manipulation.

Thirdly, the establishment of letter-box posting companies and the control of their practices is another area where cross-border administrative cooperation is insufficient. One well-known example is the case of Atlanco Rimec,² a transnational labour supplier with subsidiaries throughout Europe and known for its cost-saving strategy of exploiting lax social security regimes, as explained by a posted worker:

Well, most temporary employment agencies in the Netherlands are actually located abroad. They have branches here, but they are registered abroad [In other words: they ‘post’ workers from convenient locations]. This way their wage costs are a lot lower. They simply make money like that. I can even tell you the name of one company which is an exceptional scumbag when it comes to stealing from its workers and the Netherlands as a country: (…) Rimec. Atlanco Rimec. (Interview with Polish posted worker, April 2012)

In western and Central and Eastern European countries there are few requirements to be met when registering a construction company in the commercial register and posting workers to another country to avoid paying social security contributions in that host country. If the relevant labour inspectorate wants to check whether the registered company operates legitimately in the sending state or whether it is a genuine company it has to follow the official administrative procedure: in the case of Germany the respective customs office reports to the regional tax office, which forwards the report to the finance ministry of the Land which in turn sends it to the Federal Ministry of Finance. This then sends the report to its counterpart in Poland for example, which in turn passes it on to the respective institutions. Any answer has to go back the same way (ZDB, 2006). Within the EU, such requests can take up to one year to be processed. In the meantime the company has the possibility either to de-register from the commercial register and re-register in a different country or to register under a different name.

Fourthly, fines are no deterrent, especially as they are rarely enforced across borders. For example, according to Jorens and colleagues (2012: 122), only 15 per cent of Dutch administrative fines of foreign-based companies are eventually paid. There are, however, several initiatives aimed at improving enforcement cooperation across EU Member States, as we discuss in the next section.

Attempts to close the cooperation gap across borders

At EU level, several attempts are being made to close existing gaps in cross-border enforcement. The aim of the Posting of Workers Enforcement Directive (2014/67/EU) is to improve the enforcement of posted workers’ rights in cross-border situations. It provides a guide for Member States to cooperate in enforcement issues. For instance, its Article 6 (which lays down the general principles of mutual assistance) specifies certain time limits within which Member States need to provide information to the requesting agency. In general, a request must be met within 25 days, and in urgent cases within two working days, of its receipt (Article 6(6)(a) and (b)).

Administrative cooperation and mutual assistance between Member State enforcement authorities is coordinated via the Internal Market Information System (IMI) established by EU Regulation 1024/2012. Through IMI, registers on service providers, in so far as they are listed by the Member States in the IMI, may be consulted pursuant to the Enforcement Directive (Article 6(7)) by the counterpart authorities in other Member States.

Moreover, the 2012–2013 Euro-Posting project, supported by DG Employment, Social Affairs and Inclusion of the European Commission, aimed to improve cooperation between social partners and public authorities in Member States in the field of the posting of workers. This was done through several meetings between the project’s participants (public authority representatives, trade unions, employer organizations from different Member States and European federations), in which best practices were shared, problems discussed and ways of improving collaboration and the enforcement of posted workers’ rights formulated. Though the German and Dutch public authorities’ representatives did not participate in this project, they were part of the follow-up programme. Though the measures agreed have so far not closed any gaps in cross-border enforcement, they are indicative of an ongoing and possibly increasing dialogue between those involved in enforcing labour market standards.

Enforcement challenges within the national labour market context

Labour enforcement agencies are in certain cases not adequately equipped to check for company violations of national labour market regulations involving mobile EU workers in transnational workspaces and to enforce their compliance. In particular, adequate and effective instruments to counter certain abusive practices are often lacking. The most pertinent ones found in our empirical research involve 1) the manipulation of payslips, and excessive pay deductions; and 2) bogus self-employment.

First, one of companies’ many cost-saving strategies is the deliberate manipulation of hours. Workers may work 200 to 240 hours a month, though the employer only records 160 hours on the payslip, thereby reducing the real hourly wage (Interview with trade union official, 2012). This practice disregards the statutory maximum monthly work period, while at the same time undermining the minimum hourly wage. Moreover, workers receive no overtime, night-time or weekend bonuses.

These practices are very difficult to detect as payslips and company accounts list the legally allowed maximum number of hours worked. Even when labour enforcement agencies check bank statements to see whether the sum on a payslip is actually transferred to the worker’s bank account, there are other practices used by companies to reduce the actual pay received. For instance, trade unions know that companies sometimes transfer to an account a sum in accordance with minimum wage standards, but then force workers to collect part of their salary in cash and return that sum to the employer. Another common practice used in both sending and host countries to reduce the minimum wage is to charge workers excessive amounts for tools, working clothes, travel arrangements or accommodation.

Secondly, in both countries, companies may use bogus self-employment arrangements to avoid having to pay the social security contributions required for regular employees.

Legally sound posting, in the Dutch construction industry, does not happen much, as it is much easier to employ bogus self-employed people. They are cheaper, and have no or hardly any legal rights. Moreover, you can send them home anytime you want when there is no more work. You can let them work a huge number of hours, because you’re not bound by the working times specified in the collective agreement. This is so easy, and if it doesn’t work out with one worker, you get another one, as easy as that. (Interview with trade union official, January 2011)

The workers we interviewed who were working under such arrangements were often unaware that they were working on a self-employed basis and not as regular employees. In the cases we looked at there was hardly any cross-border control of actual payments and whether the person was genuinely self-employed, as stated by this Dutch manager:

Well, the workers involved are very happy, as they earn €13 an hour for example. What this guy does with this in his home country, and whether he even pays his taxes and contributions as self-employed, well nobody is interested in that part. After one year, if the tax authorities ever find it out, the worker will be employed on a project in Brazil or somewhere else. (Interview with temporary employment agency manager, March 2012)

In such cross-border situations, enforcement agents often lack effective instruments within the national context to enforce compliance with existing regulations.

Ways to overcome enforcement challenges in the subcontracting chain: liability arrangements

Both Germany and the Netherlands have statutory chain liability (joint and several liability) in the contracting chain. In Germany, chain liability applies to the payment of minimum wages, social security contributions and wage taxes. The regulatory schemes in place in both countries became aligned in May 2015, when the law fighting bogus employment arrangements (‘Wet aanpak schijnconstructies’) was adopted in the Dutch Parliament, enacting chain liability for the payment of wages in accordance with collective agreements.

In Germany the liability rules seek to combat illegal cross-border activity in the construction industry – such as the fraudulent use of (sub)contracting arrangements. The main objectives of the regulations have thus been to prevent the abuse of employees’ rights and the evasion of the rules, to protect German SMEs against unfair competition from subcontractors from ‘low-wage countries’, and to combat unemployment in the German labour market (Houwerzijl and Peters, 2012). On top of these objectives the more indirect aim is to safeguard social security schemes and tax payments – i.e. to collect the relevant social security contributions and taxes – or, in more general terms, to safeguard the public interest (Houwerzijl and Peters, 2012). The German regulations on the payment of minimum wages contain an unconditional chain liability, with each link in the subcontracting chain potentially liable in the case of abuse (i.e. the principal contractor, client, intermediary contractor or user company).

However the practical enforcement of this institutional framework is not without problems. The major (in terms of turnover) construction companies in Germany hardly engage in construction work themselves, but instead outsource work to subcontractors on their large sites. Due to the liability system in place there is a trend in Germany for the main contractors to establish a system of checks. This involves getting signed statements from all employees from all subcontractors on the site saying that they have received the respective minimum wages and holiday payments (Interview with management and posted workers, 2012). Though this does not exempt the main contractor from liability, it makes any court proceedings more complicated as additional proof will be needed (Interview with trade union official, 2012).

Moreover, even if a main contractor actually fulfils its duty to pay any wage arrears, difficulties can still arise. For example, if the subcontractor is insolvent any back pay may possibly not be paid to the workers but be sequestrated by the tax or social security authorities. As a consequence, even though the main contractor has fulfilled his statutory obligation, the workers may still not receive their due wages (Interview with trade union official, 2012).

With the adoption of chain liability for wages in accordance with collective agreements in May 2015 in the Netherlands, liability arrangements became aligned with those in Germany. At the time the empirical data for this article were collected (prior to this date), chain liability in the Netherlands only applied to social security contributions and wage taxes.

These chain liability rules from before May 2015 also applied to (sub)contractors and temporary employment agencies established in other Member States and providing services in the Netherlands, but only when Dutch tax or social security laws applied to the foreign employees involved. To protect itself against liability, a user company or contractor could open a special blocked account, known as a ‘Guarantee Account’ or ‘G-account’. The user company or contractor would then transfer the social security contributions and wage taxes to be paid to the Dutch tax authorities to this account, while at the same time paying the temporary employment agency or subcontractor for the services of their employees (Houwerzijl and Peters, 2009).

Prior to 2015, the Netherlands only operated a joint and several liability scheme for minimum wages (i.e. not wages coming under a collective agreement, which are generally higher) and holiday payments in the temporary agency sector. Companies using agency workers could avoid liability by hiring the services of a temporary employment agency certified by the Netherlands’ Accreditation Council (NEN-norm 4400).

Despite these formal regulations, many of the workers interviewed stated that claiming their wages was in practice often difficult:

We went to the user firm directly to ask for help in our case [collective agreement wages were not being properly paid]. The user firm (…) did not assume any responsibility, even though under Dutch law they are liable when they subcontract to these sorts of companies. (Interview with Polish posted worker, February 2012)

With the extended chain liability measures adopted in May 2015, the above-mentioned worker should in theory be able to claim unpaid wages directly from the main contractor if his direct employer defaults.

Representation gap between host country trade unions and mobile EU labour

Most of the workers interviewed in both countries indicated that they experience very little effective representation in the countries where they work. Most feel quite isolated from existing representational structures, and are often unaware of how to access them. This is confirmed by our interviews with trade unions in both countries, who notice that very few mobile EU construction workers join the German or Dutch trade union, mainly due to the temporary nature of their jobs in Germany or the Netherlands and because they fear employer retaliation in the form of losing their jobs. In rare cases, these migrants may organize or join a trade union to fight for changes in their employment conditions, but, even then, they often lack the support of their colleagues, as mentioned by a Polish construction worker working in the Netherlands:

Colleagues are saying ‘Why do we do it, if we are unhappy here we could go back to Poland’. (Interview with Polish posted worker, June 2012)

In other cases, it turns out that fighting for change takes a long time, with sometimes no or very limited results (Berntsen and Lillie, 2016). A worker posted to Germany highlighted the discrepancy between work opportunities and worker voice:

Yes, I have the right to work but otherwise I am supposed to remain silent and not voice any concerns. (Interview with Polish posted worker, November 2011)

Even though workers occasionally express anger about their situation, many fear employer retaliation and feel powerless to claim their rights. These are decisive factors inhibiting workers from interacting with trade unions or reporting management practices to the authorities. In certain cases collective redress and specialized information centres can help bridge the gap between a union and workers.

Ways to overcome representation gaps: collective redress, information centres and cross-border trade union initiatives

Some trade unions have the possibility to initiate litigation on behalf of their members, sometimes called representative action or collective redress (Cremers and Bulla, 2012: 37). Collective redress is ‘a means of seeking remedy for a breach of law in cases where a higher number of claimants are affected by a single unlawful act of the defendant’ (Cremers and Bulla, 2012: 33). In the Netherlands, trade unions may defend individual employee rights in court and initiate judicial proceedings themselves as enforcement parties to the collective agreement. However, due to the expense and time-consuming nature of legal proceedings, Dutch unions prefer out-of-court settlements. It is only when these cannot be reached that unions will consider judicial proceedings. Especially in cases of cross-border labour disputes, trade unions are increasingly finding themselves compelled to seek settlements in court, as negotiations with management often fail. One example of this is when the Dutch trade union FNV, in a dispute with the Polish posting firm Remak in 2012, initiated court proceedings to enforce the minimum conditions of the Posted Workers’ Directive for the metal-electro collective agreement. However, the union only went to court after having exhausted their other enforcement options, including negotiations with management, media pressure and protest actions (see Berntsen and Lillie, 2016).

Under German law, the enforcement of labour law provisions at the workplace is dependent on the initiative of individual employees, with collective redress unavailable to unions. Though unions offer legal advice to workers, an employee seeking redress has to give up his anonymity and be in a position to endure lengthy and complicated legal proceedings.

The Confederation of German Trade Unions has come up with another way to represent mobile EU workers, establishing ‘fair mobility’ service centres throughout Germany. In them, project workers with relevant language skills inform mobile EU workers about labour law and social legislation in their native languages and across sectors with a view to upholding standards within the German labour market. The creation of these centres reflects trade union acknowledgement that organizing mobile EU workers is an inherently challenging task for host country unions. The centres interact with other civil society organizations to help workers with employment problems and with any other social issues they may be confronted with. They are not specific to the construction sector but are open to all (including undocumented) migrant workers in all industries in Germany (Interview ‘fair mobility’, 2013).

Finally, several trade unions in a number of EU countries (including the Netherlands and Germany) employ officials who speak the languages of the major groups of mobile EU workers in their country and have information (both online and offline) on workers’ rights in their country translated into various languages (see for example Galgoczi et al., 2009).

While Dutch trade unions do not have specific information centres targeting mobile EU workers, they are seeking to improve the enforcement of migrant labour rights through organizing migrant workers (usually through local or sectoral campaigns) and by improving information availability. Improved enforcement of and compliance with collective agreements has become more of a priority for Dutch trade unions, as for instance reflected in the establishment in 2013 of a compliance office focused on specific sectors seen as more liable to non-compliance – such as construction (FNV, 2013).

Discussion and conclusion

In the Dutch and German construction industry, non-compliance with national industrial relations norms on account of complexity in national and international labour market regulation is boosted by the elementary deficiencies existing in the enforcement of labour rights for mobile EU workers. While the EU labour market promotes the removal of barriers to the free functioning of markets, national and international institutions have not been effectively redesigned to promote and facilitate the enforcement of the rights of mobile EU citizens. Enforcement difficulties come about as a result of systematic regulatory avoidance (Lillie et al., 2014; Berntsen and Lillie, 2015) and are recreated and persist due to a complex and non-functioning multi-level enforcement system. While enforcement institutions exist at national level, they seem to be – in the words of Busemeyer and Trampusch (2013) – ‘exhausted’: they still exist but are no longer effective. This article contributes to the debate on the regulatory dimension of mobile EU labour, focusing specifically on the difficulties encountered in enforcing labour rights across borders within specific national institutional contexts and collective channels of representation. Similar to insights from the debate on regulatory gaps and EU labour mobility, the article highlights the enforcement difficulties at multiple levels within the EU labour market, discussing examples of enforcement deficiencies, as well as efforts to resolve these depending on the particular situation and case.

At an international level cooperation between the respective labour enforcement agencies in EU Member States is underdeveloped. On the basis of our empirical research, we identified four areas where cooperation is underdeveloped and thereby facilitates abusive practices difficult to detect and counteract. While the Enforcement Directive represents an effort to close these respective gaps, only time will tell whether this will materialize in everyday practice. One positive aspect is the time limit set for responding to administrative requests from other EU Member States. However, the Enforcement Directive will not alter the structural problems existing in terms of current mobility channels, their respective regulatory gaps and the resulting enforcement gaps. EU-level projects between enforcement agencies and social partners have been established with the aim of improving collaboration and the enforcement of workers’ rights. While these represent attempts to close the gaps, they are unable to solve the extent of the enforcement deficits.

Looking at the specific instruments available to national-level enforcement agencies, the empirical data show that they have only limited capability to combat manipulative dealings undermining wage levels and promoting bogus self-employment. In both the countries studied, chain liability schemes are an effective way of enforcing labour rights throughout the subcontracting chain. In certain cases loopholes exist, and variations across sectors and in the specific items that can be enforced throughout the subcontracting chain are important factors in determining a country’s ability to enforce the labour rights of mobile EU workers.

In both countries, mobile EU workers have little effective collective representation. The collective redress option available to Dutch trade unions in representing workers’ demands in Dutch courts is not available to German trade unions. Even though collective redress is an option, Dutch trade unions tend more to initiate legal proceedings in their capacity as an enforcement party of the collective agreement rather than on behalf of their members. This is because few mobile EU construction workers actually belong to a union (Berntsen and Lillie, 2016).

The article shows that the various rights regimes, and the fragmentation of enforcement structures and responsibilities often makes it impossible effectively to enforce rights. The legal and enforcement context with its site, company, regional, national or transnational aspects leads to a complex and often ambiguous legal regime. Cross-border enforcement is defined by multiple layers of rules referring to different national rules as well as EU rules, which render the clarification of responsibilities and the effective enforcement of various enforcement actors very difficult (Wagner, 2015b). In general, employment rights are difficult to enforce in this context. Moreover, there is no straightforward solution to the structural enforcement problems. A multi-level approach is required to resolve effectively the enforcement dilemmas at hand.

Footnotes

Funding

This research was funded by European Research Council Starting Grant #263782, Transnational Work and the Evolution of Sovereignty project, PI Nathan Lillie.

Notes

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