Social dumping is a matter of concern for unions all over Europe and the main question is how to best protect the work conditions and positions for present workers, as well as protecting the foreign workers from being exploited.
In countries with high union density, like the Nordic countries, the influx of foreign companies and workers that won’t be obliged to follow the collective union agreements could potentially weaken the unions’ position which in turn could be changing the entire labour market. Therefore, the recent developments in Denmark are very positive, where the major union confederation LO has reported a 33 % increase in eastern European members over the past three years, even though membership in general has seen a 8 % loss in that time.
With more eastern European members who request the same wages and benefits as Danish workers in similar positions, some of the negative effects of social dumping could be avoided. Danish union 3F is running a campaign on the topic and Danish LO has actively tried to organise foreign workers, and the next step is to also reach out to foreign workers on shorter, temporary contracts in Denmark. However, it isn’t only eastern European companies who want to take advantage of the free movement of services and people in the EU. Irish airline Ryanair used a loophole in Danish tax law to underpay their Danish employees, but through a recent agreement between the governments of Ireland and Denmark, this loophole will now be closed which is an important step in the fight against social dumping, according to LO.
The situation in Denmark is made even more problematic because of the lack of laws regulating the labour market. EU law would not allow governments or unions to force a foreign company to apply the domestic collective union agreements, but the company would be obliged to follow national law, including laws on minimum wage. In Denmark and Sweden there is no legal minimum wage and only very few other laws on labour rights, as this is largely left to the unions and employers organisations to regulate. This means that social dumping is not actually illegal.
The system of cooperation between unions and employers organisations is very similar in all Nordic countries, but Finland and Iceland have chosen a slightly different path as the collective agreements, first decided upon by the unions and employers, are then declared universally applicable by law. Norway has also taken steps in this direction during the past years, which the unions have supported. Now certain basic aspects of the collective agreements, most importantly minimum wages, are legally binding, at least for some central branches.
Even though the Norwegian solution has been considered quite successful, unions in Sweden and Denmark strongly oppose such a system. Instead, they focus on trying to bring foreign workers into the unions and assist them to get better wages and working conditions. Language barriers and many workers’ fear of losing their job if they would join a union hinder this process, but as the news from Danish LO show, it is possible to attract foreign workers to the unions. This is not enough to end social dumping and guarantee fair conditions for everyone who works in Denmark and other Nordic countries, but as a legal minimum wage is not wanted in Denmark and Sweden, it might at least be one step in the right direction.
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