A BBC investigation has shown Eastern European truck drivers living in their cabs for months, unable to afford the high living costs in countries such as Denmark and Germany where they are hauling consumer goods. While shocking, this report only confirms what has been known for many years – that EU law aimed at protecting such workers is being ignored or undermined by some employers.
EU law provides that workers posted by their employer on a temporary basis from one EU member state (the ‘home’ country) to carry out a service in another (the ‘host’ country), must benefit from certain minimum employment rights under the laws of the host country. For example, they must be paid at least the minimum rates of pay in the host country, such as the National Minimum Wage in the UK.
The truck drivers in the BBC report are typical examples of where the law may apply: where an employee from one of the lower wage EU countries, for example Romania, is sent to a higher wage country, such as Germany, to complete a service contract won by his or her Romanian employer. The construction industry is another example, such as where a Latvian building company has a contract to build a school in Sweden.
While more than 20 years old, this 1996 EU law reflects tensions that are very real in today’s Brexit environment. In particular how to uphold EU economic freedoms (the right to work across the EU and the right to set up businesses and provide services across EU borders) without undercutting host country pay rates when using cheaper foreign workers and without abusing those foreign workers. The EU law attempted to strike a balance by guaranteeing a floor of minimum rights in the host country while the worker was there.
Since 1996 concerns have grown over non-compliance with the law and the exploitation of posted workers. This led the EU to tighten the law last year through strengthening enforcement. However, many claim it hasn’t gone far enough and are demanding equal pay for posted workers when compared to host country employees. This has met with strong opposition from some EU member states, notably Eastern European countries who view this as an attack on their workers and businesses, and so seems unlikely to be approved.
As a result, while Brussels continues to wrestle with this issue, the challenge of protecting posted workers while upholding EU economic freedoms is played out in lorries criss-crossing Europe’s motorways.
The BBC report also raises questions as to why host countries are not doing more to enforce the minimum standards in their country. While some legal action does happen, it is often difficult and costly. For example, finding the employer is complicated by sub-contracting arrangements. If identified, successfully prosecuting that employer when they are based in another country and may be deliberately hiding behind complex corporate structures is challenging.
Reflecting the difficulty of holding home country employers to account, focus is now falling on those businesses benefiting from the services provided by cheap posted workers. While they do not employ posted workers directly, such businesses may have posted workers in their supply chains or in outsourced services.
Supplier codes of conduct that require the upholding of workers’ fundamental human rights are commonplace in retail supply chains. Some may also use audits to check supplier compliance. However, many such codes and audits will typically be focused on high-risk sectors, countries, commodities and activities. While risk prioritisation is recognised good practice on the part of retailers, the BBC’s report highlights the reputational harm posed by worker exploitation much closer to home. Brands wishing to do the right thing, and be seen to do the right thing, will need to factor in EU supply chain risks and not just those in developing countries.
Constanze Moorhouse is a partner at Eversheds Sutherland
