EP EMPL Committee set to push forward proposal on the deterrence of undeclared work

This week, the European Parliament Committee on Employment and Social Affairs (EMPL) met for a presentation by the European Commission on the European Commission’s proposal for the Establishment of a European Platform to enhance cooperation in the prevention and deterrence of undeclared work

By Hendrik Meerkamp

24 Jul 2014

Please note that this does not constitute a formal record of the proceedings of the meeting. It is dependent on interpretation and acts as an unofficial summary of the debate.

Committee chair Thomas Händel (GUE/NGL) reminded his colleagues that no rapporteur has been appointed yet for the file and that this will be done on September 4. He then gave the floor to Ms Guin from the European Commission to present the proposal.

Muriel Guin, Head of Unit B2 ‘Labour law’, DG EMPL, European Commission, started by outlining the background context of the proposal. She explained that at least 4% of Europeans have done undeclared work and added that this kind of work appears in different forms and affects all EU Member States – most notably through adverse consequences for the society and economy at large (competition-related disadvantages for those companies that provide regular employment), national budgets (declining tax revenue and social security contributions for the state), and workers (negative impacts on employee working conditions and occupational health and safety and on rights pertaining to leave, working time, training, job security, unemployment benefits, retirement, and healthcare). She elaborated that often the national governments of the EU Member States have difficulties in establishing effective policies against undeclared work – especially against cross-border undeclared work – and that better cooperation among the Member States in this field could bring down undeclared work rates and ease the adverse effects caused by it. Ms Guin declared that it is in this context that the European Commission decided, after thorough consultations especially with the EU Member States and the European social partners, to issue a proposal to create the first holistic, inter-Member State EU cooperation platform to combat undeclared work.

Turning to the rationale and membership scope of the proposal, she explained that on the platform, all Member States would be able to participate through their authorities and law enforcement bodies that work on a daily basis with the problems of undeclared work (labour inspectorates, social security authorities, tax authorities, employment services, migration authorities, etc.) in a structured form of cooperation in order to develop a holistic approach to tackle the problem of undeclared work. She added that representatives of the European social partners, the European Economic Area (EEA) countries, the International Labour Organisation (ILO), the European Agency for Safety and Health at Work (EU-OSHA), and the European Foundation for the Improvement of Living and Working Conditions (Eurofound) would be able to participate in the platform as observers.

Ms Guin said that the objectives of the proposal include the facilitation of an improved implementation of existing laws related to undeclared work as well as the development of official work and social inclusion in the EU Member States, to be achieved by means of training and boosted cooperation and exchange of best practices, information, and expertise between the members, especially in matters of technical aspects of dealing with undeclared work and cross-border undeclared work. She added that ultimately it is crucial that Member States can easily identify undeclared work and cross-border undeclared work in particular.

Ms Guin concluded by saying that the urgency of creating a platform on undeclared work, as advocated by the European Commission, stems especially from a need to increase knowledge of the disadvantages of undeclared work in those countries that currently have not (yet) listed undeclared work as a specific offense.

Jutta Steinruck (S&D, DE) said that, generally, the Commission made a good start but this does not go far enough. She agreed that it is important to have a holistic approach for the platform on undeclared work but declared that such a holistic approach must also mention bogus self-employment and fake companies and that posted workers must be covered, too. Further, she criticised that the social partners will only enjoy observer status, and she called for a compulsory and binding participation of the Member States in the platform so as to achieve an effective approach to the platform.

Georges Bach (EPP, LU) expressed his agreement that undeclared work must be fought effectively. He agreed that binding participation by the Member States is desirable.

Sofia Ribeiro (EPP, PT) agreed with Ms Steinruck that trade unions should be given a more active role than that of a mere observer.

She concluded by saying that too much regulation and taxation for employers promotes undeclared work and in this context asked Ms Guin why the proposal does not mention the need to reduce red tape for employers.

Danuta Jazłowiecka (EPP, PL) said that there are already numerous forms and topical tools for cooperation between the Member States existing in the field of undeclared work such as the European Commission’s expert group ‘Committee of Experts on Posting of Workers’, the European Commission’s expert group ‘Working Group on Administrative Cooperation in the field of direct taxation’, the Council’s Employment Committee, and the EU’s Internal Market Information System (IMI) and its instruments of social security coordination.

She added that undeclared work must be fought but that this fight must be efficient, too. In this context, she expressed that she was disturbed by the high costs that the platform in the European Commission’s proposal would likely incur.

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