Pay the Rate: how the EU is closing the loopholes used to exploit migrant workers – but is it too late for us?

By Jude Kirton-Darling Labour MEP – North East England

Concerns about free movement and EU migration were amongst the top reasons why many voted to leave in June 2016. Periodically, a dispute has erupted whether wildcat strikes at the Lindsey Total refinery in 2009 or the ‘Pay the Rate’ protests in my native Teesside on the Wilton site ahead of the EU referendum, which captured the public attention, exposed the flaws in our rules and has allowed xenophobes the oxygen they constantly crave. While UKIP and the extreme Right unashamed stoked people’s fears about labour migration, increasing the xenophobic and racist character of the referendum, through fake news, it would be wrong to dismiss all concerns.

There are legitimate grievances about free movement and a lack of adequate legal protection has allowed the undercutting of workers’ rights when equal terms and conditions have not been guaranteed. Sadly, this has been a reality in the UK’s flexible employment market for many years. That’s why the news this week, that the EU’s rules have finally been tightened up after years of campaigning from construction sector unions and their confederations is such welcome if sad news – is it too late for us?

It has become standard practice to blame the EU. However, far from being the EU’s responsibility, this is in large part a home-grown problem, There has been a political consensus in Westminster and successive UK governments to maintain a deregulated flexible UK workforce. For 30 years, politicians and business trumpeted that flexibility was key to UK economic success. Jeremy Corbyn’s election as Labour leader broke that consensus but there are still many advocates in influential roles. Part of the political consensus was that EU worker rights should be implemented at a minimal level of protection if at all, with limited powers and investment for labour market inspection authorities, whether the Health and Safety Executive, Gang Masters Licensing Authority or HMRC. Fraud – and even crime in the case of modern slavery – has flourished in the context of a lack of adequate control. Since 2010, labour inspectorates have borne the full brunt of Tory austerity, today the UK is at the bottom of the ranking of comparable EU countries. There’s fewer than 1 labour inspector per 100,000 persons in the UK, compared to close to 20 in France.

That said, poor implementation of labour market legislation has also led to loopholes being exploited by unscrupulous employers. Some of these could be easily fixed in Westminster, for instance with respect to the infamous ‘Swedish derogation’ in temporary agency workers’ rights. Equally if we don’t want UK jobs to be only advertised in Poland or elsewhere with little chance for the local population to apply, we don’t need to leave the EU: a bill in Parliament would do.

But when it comes to the posting of workers within the EU – when an employee from another member state is sent by their employer to carry out a service in the UK on a temporary basis – the fix had to come from Brussels as these are single market rules.

The EU Posting of Workers Directive has long been criticised for failing to guarantee equal pay for equal work at the same place. A deal reached this week between the European Parliament and Council means that this will no longer be the case. Posted workers will have to be paid the same wages and allowances as their British colleagues. Importantly for construction sector campaigners, the legislation will allow the universal application of the so-called ‘Blue Book’ NAECI national agreement for the first time. The deduction of travel and accommodation costs from salaries, a practice all too widespread, will no longer be allowed. Most local terms and conditions will apply from day one to posted workers, and posting will be limited to 12 months.

This a major victory for the European labour movement, with the European TUC welcoming “a fair deal”. Of course, as with anything when you’re trying to negotiate amongst 28 countries (most of which are governed by conservative or liberal parties), the new rules are a compromise and we did not get everything we’ve asked for. One key omission is that transport sector workers will remain unprotected until sectoral legislation is agreed. But overall the new rules will vastly improve the situation, and allow co-workers to be colleagues again whether in the construction, manufacturing or social care sectors, which represent 8 out of 10 posted worker jobs.

Brexit makes it all the more important that we get these rules right – these improvements can’t become another victim of those who want to deregulate our labour market by leaving the single market. The bottom line is that we will continue to need European workers in the UK. Without them, today the NHS could collapse. Industries in my own region of the North East, with its ageing population, can only thrive with a sustained supply of workers whether from Slough or Stockholm. But this isn’t just economic – we also need foreign workers for everything else that ‘fresh blood’ brings to our communities beyond work. Cultural diversity and new ideas are the bedrock of great industrial nations. With the strengthening of these vital EU employment rights, today staying in the EU single market allows us to respond to those legitimate grievances about labour market exploitation without putting EU citizens or jobs in our local manufacturing and service industries under the bus of a hard Brexit. I just hope that this agreement has not come too late.

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