Services 'scandal'
Construction company Biomax was found guilty last Monday of underpaying Polish workers in Denmark. This is one of the first court cases over 'social dumping' in the EU.
The firm has been fined some zł.3,316 for paying substandard wages, and must also pay back-wages of some zł.190,000 to its four Polish employees.
The case came about after a suit was filed against Biomax by the TIB union. Biomax's owner, Danish businessman Ole Thuesen, had advertised cheap Polish labor and signed an agreement with the union to pay his workers Danish-level salaries, which he reneged on. The head of TIB, Peter Hougaard Nielsen, told EUbusiness.com: "This verdict sends a clear signal that social dumping will not be tolerated in Denmark."
The case will fuel the debate over social dumping, and the controversial EU Services Directive, even further. Many European countries, particularly France and Germany, have complained that the comparatively low level of wages in Poland makes it impossible for their domestic workers to compete effectively. One of the main criticisms of the Directive is that it will lead to widespread social dumping of this kind.
Last week, EU Commission President Jose Manuel Barroso said that "appropriate guarantees" needed to accompany service-sector reform to guarantee social rights. "Understandable fears regarding so-called social dumping need to be addressed," he told the Lisbon Council.
However, his words appear to be falling on deaf ears in France and Germany, with campaigners lobbying for a 'no' vote in an upcoming referendum on the EU's constitution. The French president, Jacques Chirac, has already made public his contempt for the Services Directive and German Chancellor Gerhard Schroeder has added his voice to the chorus of dissent.
"I fully agree with President Chirac, we can't allow freedom in services to open the door to social dumping and to the disregard of safety standards in Germany" and in Europe, Schroeder told the German parliament.
European leaders have shown little stomach for full implementation of the Services Directive, and have supported Chirac, for fear of sparking a European-wide rejection of the Constitution. "The stakes are very high. We must show at least a degree of flexibility if we risk the rejection of the constitutional treaty," said Prime Minister Marek Belka.
However, former Commissioner Frits Bolkestein, the man widely regarded as responsible for the services directive, has rubbished these attitudes as insular. During a recent interview on Dutch television, he called the threat of social dumping "pure idiocy."
Jan Maria Rokita, widely expected to be Poland's next Prime Minister, has launched his own broadside against the old member states. Last week he said it was a "scandal" that the European Commission liberalization plans were being blocked. "If we don't manage to create a coalition to fight against this social protectionism, there might be an impression that the entire EU will rather contract than develop," he said. (Reuters)
The firm has been fined some zł.3,316 for paying substandard wages, and must also pay back-wages of some zł.190,000 to its four Polish employees.
The case came about after a suit was filed against Biomax by the TIB union. Biomax's owner, Danish businessman Ole Thuesen, had advertised cheap Polish labor and signed an agreement with the union to pay his workers Danish-level salaries, which he reneged on. The head of TIB, Peter Hougaard Nielsen, told EUbusiness.com: "This verdict sends a clear signal that social dumping will not be tolerated in Denmark."
The case will fuel the debate over social dumping, and the controversial EU Services Directive, even further. Many European countries, particularly France and Germany, have complained that the comparatively low level of wages in Poland makes it impossible for their domestic workers to compete effectively. One of the main criticisms of the Directive is that it will lead to widespread social dumping of this kind.
Last week, EU Commission President Jose Manuel Barroso said that "appropriate guarantees" needed to accompany service-sector reform to guarantee social rights. "Understandable fears regarding so-called social dumping need to be addressed," he told the Lisbon Council.
However, his words appear to be falling on deaf ears in France and Germany, with campaigners lobbying for a 'no' vote in an upcoming referendum on the EU's constitution. The French president, Jacques Chirac, has already made public his contempt for the Services Directive and German Chancellor Gerhard Schroeder has added his voice to the chorus of dissent.
"I fully agree with President Chirac, we can't allow freedom in services to open the door to social dumping and to the disregard of safety standards in Germany" and in Europe, Schroeder told the German parliament.
European leaders have shown little stomach for full implementation of the Services Directive, and have supported Chirac, for fear of sparking a European-wide rejection of the Constitution. "The stakes are very high. We must show at least a degree of flexibility if we risk the rejection of the constitutional treaty," said Prime Minister Marek Belka.
However, former Commissioner Frits Bolkestein, the man widely regarded as responsible for the services directive, has rubbished these attitudes as insular. During a recent interview on Dutch television, he called the threat of social dumping "pure idiocy."
Jan Maria Rokita, widely expected to be Poland's next Prime Minister, has launched his own broadside against the old member states. Last week he said it was a "scandal" that the European Commission liberalization plans were being blocked. "If we don't manage to create a coalition to fight against this social protectionism, there might be an impression that the entire EU will rather contract than develop," he said. (Reuters)
