Legal Eye: EU labor mobility

"Despite fears expressed on the occasion of EU enlargement the free movement of workers, has not led to disruption of national labor markets." - EU Commission Report on Labor Transitional Arrangements.

A generally upbeat and positive report by the EU Commission regarding workers' mobility was issued on February 8, 2006. In it the Commission urges member states that currently limit access to their labor markets with respect to workers from Central and Eastern Europe to consider carefully if continued restrictions are in fact necessary or in their best interest. It says: "EU 10 nationals have positively contributed to the overall labor market performance, to sustained growth and to better public finances."

Decision time upon us

Transitional arrangements, otherwise known as derogation periods, permit EU member states to limit access to their labor markets for up to five years following en-largement on May 1, 2004, and in exceptional cases to maintain such restrictions for up to seven years in order to alleviate "serious disturbances" to a member state's labor market. However, as of 2011 all restrictions on the movement of workers are to be eliminated, according to the Treaty of Accession. The initial derogation period is scheduled to end on April 30, 2006, by which time each member state that currently imposes labor-market restrictions is required to give notice of its decision to continue such restrictions for an additional three-year period. The failure to make such an announcement by this deadline will be interpreted to mean that such restrictions have been eliminated.

Finland joins the club

At present Ireland, Sweden and the United Kingdom do not impose any restrictions on workers from Central and Eastern Europe. Soon, this list will grow as Finland has recently announced its intention not to extend its current restrictions past the upcoming deadline.

Protectionism remains  

The most comprehensive restrictions imposed on Polish workers are maintained by Germany and Austria, which as a condition of signing the Treaty of Accession with Poland, imposed "open-ended" restrictions on the employment of Polish workers in certain sensitive service sectors including, for example, construction and industrial cleaning. By 2011 such restrictions must be abolished, unless Germany and Austria can show that such protections are necessary to avoid serious disruptions to their respective labor markets. Poland, in response, has implemented retaliatory restrictions on workers from Germany and Austria as provided by the Treaty of Accession. Additionally, Poland maintains the previous regime of work permits with respect to workers from member states that continue to limit the access of Polish workers to their respective labor markets.

Follow Ireland's example

The Commission's Report includes some interesting surprises. Austria, despite im-posing the most comprehensive restrictions on access to its labor market, has recorded the second-largest influx of workers from Central and Eastern Europe (as a percentage of total population) of all of the original EU 15 member states, surpassed only by Ireland, which has opened its labor market. On average the number of working-age nationals from Central and Eastern Europe domiciled in the original 15 EU member states represents less than one percent of the working-age population, with the notable exception being Ireland, at 3.8 percent. Despite hosting the largest percentage of workers from Central and Eastern Europe, Ireland's unemployment rate is the lowest in the entire EU at 4.3 percent for 2005. The bloc's average rate of unemployment is 8.6 percent.

Paul Fogo is a senior attorney with Miller, Canfield. W. Babicki & Partners