Free movement of services requires closer supervision of employment terms

While a two-year transition period will apply to mobility of labour from the new Member States following European Union enlargement in May, no such restrictions will apply to the movement of services, even when this involves labour rented from agencies and secured through subcontracting arrangements. The Central Organisation of Finnish Trade Unions - SAK is concerned that service mobility provides a loophole enabling unrestricted labour mobility regardless of the transition period. SAK Deputy Director Matti Viialainen feels that with the general increase in agency work and subcontracting this is a very significant risk.

To prevent the dumping of cheap labour, SAK is proposing that foreign employment agencies should be required to register their operations, that principals should bear liability for the employment practises of their subcontractors, and that trade unions should be granted the right to bring civil lawsuits on behalf of employees. SAK also originally proposed a transition period to govern the movement of services.

The European Union is currently considering a draft Directive that would further deregulate service provision between Community countries. This proposal is based on the "country of origin" principle, whereby the operations of private service providers would be governed by the law of the country in which the enterprise is registered. This would supplant current Community arrangements in which the terms of service of a migrant worker are governed by the law of the country in which the work is done. SAK feels that the proposed Directive should be amended in this respect.

"If the country of origin rule is allowed, then it will also be necessary to secure liability of the subscribing organisation for ensuring that any subcontractor complies with the legislation and minimum employment conditions of the country where the work is done. The only effective way to supervise this will be to grant the right of action to labour market organisations in transnational civil disputes," Matti Viialainen argues.

A right of civil action would enable trade unions to file suit independently on behalf of an employee where the minimum conditions of employment have been infringed. Finland's Minister of Labour, Tarja Filatov, has expressed her support for the idea that trade unions should have such a right of action. Ms Filatov insists that a right of action for trade unions would have a deterrent effect and would provide concrete assistance to employees who fail to claim their legal rights, for example because of intimidation.

Matti Viialainen stresses that SAK is in no way opposed to the lawful entry of migrant workers into the Finnish labour market. Finland's new Aliens Act will simplify the necessary permit procedures for such workers. Seasonal workers entering Finland for no more than three months, for example, will no longer need to pass through the formal procedure for securing a worker's residence permit. In the case of other workers, such residence permits will allow employees to work in a certain occupation for any employer, and will generally be issued initially for a full year.