1. The Quest for Hard Evidence on Social Dumping in Europe
Marek BENIO, PhD
Department of Public Economy and Administration
Cracow University of Economics
Riga, 25 November 2016
This study was funded by the National Science Centre NCN: "The use of interactive methods of governance in shaping social policy" No. UMO-2011/03 / B / HS5 / 00899

2. Social dumping - definition
Import of migrant workers
Free movement of workers
Free movement of services
Export of operations
Free movement fo capital
Freedom of establishment

3. Getting competitive advantage on the basis of the lower labour costs strenghtens external EU competitiveness =no social dumping ____________________ Lowerring the labour costs illegaly - weakens it = social dumping bogus selfemployment and forced labour

4. Social dumping - questions
Is posting of workers the concept covers a wide range of intentionally abusive practices and the circumvention of existing European and national legislation (including laws and universally applicable collective agreements), which enable the development of unfair competition by unlawfully minimising labour and operation costs and lead to violations of workers' rights and exploitation of workers ? Guillaume Balas Report Posting of workers is the best cohesion tool EU has

5. Social dumping - definition
No legally recognised and universally shared definition of social dumping the concept covers a wide range of intentionally abusive practices and the circumvention of existing European and national legislation (including laws and universally applicable collective agreements), which enable the development of unfair competition by unlawfully minimising labour and operation costs and lead to violations of workers' rights and exploitation of workers Guillaume Balas Report

6. Inspiration for the survey
In our Union, the same work at the same place should be remunerated in the same manner
Jean Claude Junker
COM proposal minimum rates of pay -> remuneration
Equal pay? Equal terms of pay?

7. GOALS AND EFFECTS We need more posting, not less Fairer rules
A level playing field
The proposal will create a legal framework for posting that is clear, fair and easy to enforce (…) These changes will provide better protection for workers, more transparency and legal certainty and ensure a level playing field between domestic and posting firms while in full respect of Member States' wage-bargaining systems
Marianne Thyssen

8. THE SURVEY 16
PD A1  

9. THE SURVEY + ‚ - real costs high quality sample
reliable service providers
long activity
domestic and foreign controlls
posting based on PD-A1
high service standards
few companies self selectection PD-A1 16 questionaires

12. REMUNERATION
€ 5,98
€ 9,97
net

13. LABOUR COSTS STRUCTURE
Crossborder Fixed Crossborder Variable ____________________________________________ Tax & Constributions Net wage

14. tax & contributions Social security contributions
Personal income tax advance
Health insurance contribution
Labour Fund contribution
Guranteed Employees’ Allowances Fund contribution
National Disabled Rehabilitation Fund dues
Health tests, Safety trainings,
Company Social Allowances Fund dues

15. CROSS-BORDER COSTS OF LABOUR
Variable 27%
Fixed 2%
Accommodation
Travel
Board
Compensation for fixed term contract
Holiday compensation
Translation
Notification costs
Mandatory
Contact person to represent with local inspection
Complemenary fixed costs:
Apply for PD-A1
Insurance of foreign claims
Cross-border debt collection
Legal advice, opinions, analyses
Translation other than the employee documentation
Foreign exchange differences, conversion
Logistics on site

17. 29 %

19. Cost comparison

20. (…) the cost of hiring a worker on a smic (minimum rate of pay) – posted to France by an enterprise localised in Portugal, Romania, Poland or Spain is equivalent to the cost of hiring a worker of a French established enterprise.
„Au total, en termes de coût du travail, pour un employ rémunéré au Smic, recourir dans un cadre légal à un travailleur détaché en France par une entreprise localisée au Portugal, en Roumanie, en Pologne ou en Espagne est equivalent à faire appel à la main d'oeuvre d'une entreprise localisée en France, pour une prise en charge des dépenses encourues au titre du détachement qui s'élèverait seulement à 100 € par mois (hypothèse qui paraît faible)”

21. CONCLUSIONS
Posted workers earn more than we think, more than minimum rates of pay NET = 10 EURO/hour There are costs of labour which are related solely to the fact that the service is delivered in another Member State Crossborder = 29% total

22. COMPETITIVE ADVANTAGE MYSTERY
„same same but different” the same total cost different cost structure
rates of pay margin social security/taxes work efficiency

23. VS. Greedy Capitalist Scrooge
COMPETITIVE ADVANTAGE MYSTERY
Xenophob
aka Economic Patriot
VS. Greedy Capitalist Scrooge
aka Homo Oeconomicus
When do you choose a foreign company?
Price
Quality
(time + flexibility)
No local provider

24. Can posting of workers contribute to social dumping?
Is equal pay fair?
Marek BENIO, PhD
Department of Public Economy and Administration
Riga, 25 November 2016
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