Brussels condemns UK strikes against EU workers

Foreign contractors who employ their own staff on a temporary project are bound by the EU’s posted workers directive, which stipulates that the foreigners must enjoy the same legal rights and pay as British workers.

British unions, however, say the directive allows foreign contractors to undercut local industry agreements, as these have no legal force in the UK - unlike in other EU countries such as France and Germany, where such collective agreements are legally binding.

Foreigners working in the UK under the directive therefore would only have to be paid the national minimum wage, currently £5.73 per hour for workers aged 22 years and older, rather than the higher rates paid to British workers under industry agreements, say unions.

Scandinavian countries are similar exposed. The position has been made worse by a European Court of Justice ruling permitting employers to pay only legally required minimum wages.

What does Total say?

Total denies it has discriminated against British companies or British workers. It says that the IREM contract - only a small part of a £200m de-sulpherisation project to turn high sulphur crude into diesel and petrol - satisfied “UK domestic law and the common European rules” and was awarded as part of a “fair, competitive and rigorous tender process”.

It says none of the foreign workers employed by IREM under the contracts are paid any less than equivalent British workers operating under industry agreements.

Total says Irem is undertaking specialist work that represents less than 10 per cent of the man hours of the entire project. The issue is one of skills, not wages, it says.

This is hard to verify though IREM has stressed that it pays the agreed UK national rate. It is keeping costs down by housing the employees on a barge moored in Grimsby harbour.

Wage rates will be a key focus of the Acas inquiry.

Unite, Britain’s biggest union, has so far failed to uncover evidence that British wages are being undercut by IREM. It says that it is up to employers to disclose terms and conditions to prove that national agreements are not being breached - something it says Total has so far failed to provide.

What power does Acas have to resolve the dispute?

The UK government has asked Acas, the conciliation and arbitration service, to conduct a fact finding mission to establish whether or not British workers have been unfairly or poorly treated. Only when this work has been completed may a way forward be identified.

If the posted workers directive has been around so long, why has the issue only arisen now?

The posted workers directive has been around since 1996, strengthening and clarifying points of law that had been in force for decades even before then.

Because the directive does not affect wages in countries with a tradition of collective agreements - such as France and Germany - it caused little fuss.

Carline Carter, partner at Ashurst, a law firm, says that with few new points of law to have appeared, the resurgence in protectionist sentiment is the most likely reason behind the current crisis.

How many UK workers have found employment in other EU countries under the posted workers directive, and how does this compare with the number of foreign workers coming to Britain?

The directive covers only a small proportion of migrant workers who move between EU countries in search of employment. Information on cross border job flows provided by the European Commission is sketchy, but appears to support Lord Mandelson’s claim that British workers on balance have gained more jobs abroad than they have lost at home.

According to the commission’s latest employment report some 47,000 UK workers were “posted” to European countries in 2006. This was three times more than the 15,000 foreign workers posted to the UK, it reported.

To what extent is xenophobia an issue? Is the right-wing British National Party exploiting the situation?

The unions and supporters of the strikes say there is no element of racism or xenophobia in their action, but the BNP has certainly seized on the opportunity to link the disputes with its own far-right agenda.

The party’s website is packed with updates on the strikes, including a Google map with 17 flags pinpointing where it says “British jobs for British workers” actions are taking place. The website claims six of its “activists” helped persuade Milford Haven oil refinery workers to join the action.

The region is 98.5 per cent white but Humberside police say there has not been a history of racial incidents. The EU is unpopular as it is blamed for the decline of a once-mighty fishing industry by using quotas and other restrictions.

The BNP did not field a candidate in Cleethorpes in the general election and polled less than 600 votes in its last attempt to win a seat on North East Lincolnshire council in 2006.

How have the media reported this aspect?

The press has shown a widespread sympathy for the workers and an effort to distinguish between possibly BNP-inspired sentiments and genuine grievances.

The Daily Mail wrote of “5,000 workers braving blizzards to show their fury at the employment of foreign workers”. In a leader, the Mail said “the refinery workers’ behaviour is human nature at its most understandable”.

It added: “The current crisis has much to teach about the need to regulate our banks. Doesn’t it also have bitter lessons about the need to control our borders?”

The Daily Mirror, which found itself torn between traditional support for trade unionists and concern about the anti-foreigner sub-text of the rhetoric on the picket lines, said: “The wave of unofficial walkouts is not – yet – about xenophobia and a dislike of foreigners. But the danger is it will become precisely that unless the complaints of British workers locked our by foreign contractors are heard.”

Mr Brown has travelled the world proclaiming the merits of open markets – most recently at the World Economic Forum in Davos – and he has made it the theme of his chairmanship of the G20 group of leading developed and developing countries.

But media around Europe have covered the series of wildcat strikes by British workers protesting about the use of Italian and Portuguese construction workers at the Lindsey oil refinery, owned by Total, the French company.

As Italian politicians complained about British protectionist tendencies, Mr Brown’s spokesman said the prime minister believed that closing markets would be the worst response to the deepening recession.

Mr Brown’s spokesman also condemned any “xenophobia” associated with the protests, which have broken out at other energy sites around Britain. So far there has been no disruption to energy supplies.

Downing Street argues that there is no evidence that Total has broken any British or EU law, although Acas, the conciliation service, is examining the awarding of the contract to an Italian company.

Mr Brown is also taking a neutral view on whether the EU’s legislation on the posting of workers abroad needs to be rewritten, following rulings by the European Court of Justice on how it should be applied.

Number 10 said the issue was being examined by the EU’s “social partners” in Brussels – namely the European employers and trade union organisations.

“The British government believes strongly in the case against protectionism and the prime minister will continue to make this case,” Mr Brown’s spokesman said.

Mr Brown is caught be-tween his strongly held belief in the benefits of open markets and the fact that trade unionists constitute an important part of Labour’s electoral and financial support.

His comment in 2007 that he wanted to see “British jobs for British workers” has worsened his predicament.

Hundreds of contractors at the Lindsey oil refinery in Lincolnshire walked out again in a protest that began last week. Workers staged sympathy strikes at other energy facilities across Britain.

Their experiences provided the basis for a television drama, Auf Wiedersehen Pet , which followed a group of British migrant builders working in Düsseldorf.

Several decades later, Mr Monks, now general secretary of the European Trade Union Confederation, is grappling with the reverse problem: British workers complaining about foreign contractors coming to the UK to "steal their jobs".

The free movement of labour between European Union countries, and whether employers of foreign workers should be allowed to undercut the pay of indigenous employees, lies at the heart of the recent series of wildcat strikes.

Mr Monks is concerned that the row should not be used as a stick to beat migrants or impede workers from looking for jobs in other EU countries. "I was in a hotel in Brussels on Monday night where about 20 Britons were working on a contract to install lifts," he says. He is, on the other hand, anxious that employers should not be allowed to take advantage of EU rules to ignore local pay agreements.

His concern is directed at the posted workers directive which allows foreign contractors to bring in their own staff from overseas for temporary projects, provided they are granted the same legal rights as British employees.

British unions say foreign contractors can ignore hard won industry pay agreements, as these are not legally binding on companies which have not signed them - unlike in other EU countries such as France, Belgium and Germany.

They complain that contractors bringing overseas workers to the UK, under the directive, have to pay only the national minimum wage, currently £5.73 an hour for workers aged 22 years and older, rather than the higher rates paid to British workers under industry agreements.

Scandinavian workers face similar problems. The European Court of Justice ruled in 2007 that the Swedish collective agreements were not binding after a Latvian company contracted to build a school in Sweden paid lower Latvian rates to its imported labour. The court similarly sided with employers in the so-called Viking case in 2005 when a Finnish ferry company replaced local labour with Estonian workers.

So have Britons been losing out as a result? According to the European Commission's latest Employment in Europe report some 47,000 UK workers were "posted" to continental European countries in 2006. This was three times more than the 15,000 foreign workers posted to the UK.

The posted workers directive covers only a small proportion of migrant workers who find employment in other EU countries. The findings, nonetheless, were seized upon by Lord Mandelson, business secretary, who argues that Britain gains far more from the free movement of labour than it loses.

Total, the French oil company, insists the foreign workers employed by IREM at its Lindsey oil refinery in Lincolnshire are paid the same as equivalent British workers operating under industry agreements.

But Unite, Britain's biggest union, complains Total has failed to provide detailed information on contract terms and conditions of the IREM workers. It says the row is just one of several disputed contracts involving energy companies employing contractors using foreign labour.