Social partners concerned by labour migration from central and eastern Europe

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Labour migration to Belgium from central and eastern Europe has increased substantially since EU enlargement in 2004. However, much of this employment is illegal or performed under arrangements regarded by many as somewhat dubious, in sectors such as construction and transport. In summer 2005, the social partners in the building sector set up an 'unfair competition' working party in cooperation with the government to address labour migration from central and eastern Europe and possible abuses.

An 'unfair competition' working party was set up in summer 2005 in the building sector by the social partners, in cooperation with the federal government’s Employment, Labour and Social Dialogue Service, in order to address labour migration from central and eastern Europe and possible abuses related to it. The labour inspection services are also increasing their efforts to combat fraud in this area.

Like almost all the 'old' 15 EU Member States, Belgium took up the option of introducing transitional arrangements to limit the free movement of workers from the new Member States in central and eastern Europe that joined the Union on 1 May 2004. The Belgian government is to decide on a possible extension of its current transitional rules in 2006.

Labour from central and eastern Europe in the building sector

Workers from central and eastern Europe, and in particular from Poland, who are active in Belgium’s building sector, can be divided into the following three categories.

1. A first group of workers is outside the sphere of legal employment, without any type of contract or labour protection. The members of this group are mostly found on small worksites in the area of renovation and demolition. Their precise number is a matter of great dispute. The Construction Confederation (Confédération Construction/Confederatie Bouw), the largest employers’ organisation in the building sector, estimates the number of such illegal construction workers at 50,000, whereas others (trade unions and the labour inspectorate) say that this number is exaggerated. Whatever the exact number, this group of illegal construction workers has increased enormously in number during the last five years. As well as Poles, people from countries such as Bulgaria and Romania are now involved.
2. The second group consists of central and eastern European construction workers that work for a Belgian company on a legal basis. They work in line with Belgium's transitional rules on free movement of workers from the new Member States in central and eastern Europe, and must apply for a work permit. In 2004, however, only 43 work permits were issued. There are complaints that the administrative procedure is too slow. In any case, it is seldom used.
3. The third category, which is growing, is found in a 'grey zone' created by perceived loopholes in legislation. These workers have a contract of employment with a company based in their home country, and are posted temporarily in Belgium. Officially, this is considered temporary and 'specialist' work. In practice, the workers in question regularly change company. The 'specialist' nature of their work is difficult to verify. Moreover, these posted workers should enjoy the same wage and working conditions as Belgian employees, and social security contributions must be paid for them in their country of origin - this seems to be particularly hard to verify, especially because not all of the documents that are relevant for this verification are necessarily subject to translation. Other loopholes involve central and eastern European workers possessing double nationality, in particular a number of Poles who also have a German passport. Another way of circumventing the rules is to let foreign workers work as self-employed workers. This 'pseudo self-employment' is an increasingly common phenomenon according to a spokesperson from Construction Confederation. Furthermore, Dutch temporary employment agencies are also used.

'Grey zone'

The maintenance works in Antwerp’s chemical industry are a concrete example of the employment of central and eastern European workers in the 'grey zone'. The petrochemicals industry has been using outsourcing extensively for years when performing its large-scale maintenance operations that shut down an installation for days. Due to the need for a shutdown, each maintenance operation is a costly one that must be performed as quickly as possible. The arduous and dirty work is carried out by subcontractors that employ mainly Polish workers. Trade unions, which have access - through works councils - to the amounts paid for the whole maintenance contract, are convinced that these subcontracted workers are not being paid in accordance with Belgian rules on wages and conditions. With respect to the client companies that contract out these operations, such as Totalfina and BASF, the unions claim: 'The client companies wash their hands of any blame. They know that the whole affair stinks, but they hide behind formalities.'

Another example of this category of employment in the 'grey zone' can be found in the transport sector. In June 2005, a dispute in this sector was reported in the national press. A well-known east Flemish transport company, De Dijcker, took on a number of Slovakian drivers. According to management this was necessary, not only in order to be able to cut costs and avoid having to restructure the firm, but also because there is a shortage of Belgian drivers who are willing to drive dangerous cargoes internationally. The company uses a 'carousel' system in order to stay within the law. The Belgian firm sends a fax with the delivery-runs to a subcontractor in Zilina, Slovakia, which then briefs the drivers, who are in Belgium with the transport company. The drivers then carry out their runs with the Belgian lorries. Initially, the Belgian Transport Workers' Union (Union Belge des Ouvriers du Transport/Belgische Transportarbeiders Bond, UBOT/BTB) protested fiercely against this initiative. A few days later, however, an agreement was reached, under which the trade union agreed to the hiring of the Slovakian drivers. In exchange, the union was promised that there would be no redundancies in the immediate future. This hiring of subcontractors from low-wage countries in central and eastern Europe seems to be used more and more frequently. 'It is the only way to survive', argues a spokesperson of the transport trade federation Febetra.

This point of view is also shared by employers’ organisations in the building sector. They argue that Belgian building companies now lose enormous amounts of contracts due to foreign subcontracting and 'pseudo self-employment'. In addition, they find it very difficult to fill their vacancies for trained and managerial staff. Therefore, they openly ask for freedom for Belgian firms to employ foreign construction workers. They also want the transitional rules regarding the free movement of workers to Belgium to be dropped as soon as possible. The employers claim that the rules have not stemmed the migration flow and have only led to a higher level of illegality and fraud. Unions, for their part, point out the consequences that they believe this situation has and will have in future, particularly for Belgian workers with a lower level of qualification. The shortage of workers in sectors such as building and transport must be resolved through the training of Belgian job seekers and by convincing them to work in these sectors, in the unions' view. Moreover, the downwards pressure on pay and working conditions that is caused by the current system of employment for central and eastern European labour in the 'grey zone' should be opposed by stricter and better controls.

Commentary

Like other old EU Member States, Belgium is living with a transitional regime that is meant to streamline the migration of central and eastern European workers coming to Belgium. The focal point in the discussion around this migration is the pay and working conditions under which these migrant workers must work and the verification of these conditions. It is now apparent that in practice, even under the current rules, it is extremely difficult to maintain Belgian wage and working conditions. It is also striking that the main difficulties lie in construction, which is what one might call a protected, internal economic activity (a building site cannot be relocated abroad). It was already expected that Belgian companies that obtain their livelihood from exports would have to deal with competition from low-wage countries. It now seems that the danger of a negative wage spiral and of a disturbed labour market looms even over sectors such as the building industry, due to the pressure from labour immigration and competition from central and eastern European workers. The lower end of Belgium’s labour market (ie low-qualified workers) would appear to be the first victim of this situation. (Guy Van Gyes, HIVA-KU Leuven)