This article is written by Amrit Kaur, from Dr B.R. Ambedkar National Law University, RAI, Sonepat. The article talks about employee mobility between the European Union countries.
Table of Contents
The European Union (EU) is an international organization that governs economic, social, and security issues for 27 European nations. Initially limited to western Europe, the EU expanded rapidly into central and eastern Europe in the early twenty-first century. On 31st January 2020, the United Kingdom, which was a founder member of the EU, withdrew itself from the organization. The Maastricht Treaty, which went into effect on November 1, 1993, established the European Union. By establishing a single currency (the euro), a unified foreign and security policy and shared citizenship rights as well as promoting cooperation in the fields of immigration, asylum and judicial affairs, the treaty aimed to strengthen European political and economic unification. In 2012, the EU was awarded the Nobel Peace Prize in honour of its efforts to foster peace and democracy in Europe.
The EU’s parent organisation was established in the wake of World War II. The first goal was to promote economic cooperation, with the concept that nations that trade with one another become more economically interdependent, making them less inclined to engage in conflict.
The European Economic Community (EEC) was established in 1958 with the goal of promoting economic cooperation among six countries: Belgium, Germany, France, Italy, Luxembourg and the Netherlands. In a community characterized by inclusiveness, tolerance, justice, solidarity and non-discrimination, EU principles are shared by all EU nations. These ideals are inextricably linked to the European way of life. Some of these values are as follows:
Human dignity is sacred. It must be cherished and safeguarded since it is the true foundation of fundamental rights.
Citizens have the right to freely move and dwell within the Union under freedom of movement. The EU Charter of Fundamental Rights protects individual freedoms such as respect for private life, freedom of opinion, religion, assembly, speech, and information.
Rule of law
The European Union is founded on the principle of rule of law. Everything the EU does is based on treaties that its member nations have willingly and democratically agreed to. An independent judiciary upholds the rule of law and justice. The European Court of Justice was given ultimate authority by the EU nations and its decisions must be followed by everyone.
The EU Charter of Fundamental Rights safeguards human rights. These include the right to be free of discrimination based on sex, race or ethnic origin, religion or belief, handicap, age, or sexual orientation, as well as the right to personal data protection and access to justice.
The Lisbon Treaty and the EU Charter of Fundamental Rights establish these aims and principles as the EU’s foundation.
The European Labour Law
Generally, labour law defines one’s rights and duties as workers and employers. The key areas of EU labour law are as follows:
- Working conditions – Working hours, part-time and fixed-term job, worker posting,
- Notifying and counselling employees on collective redundancies, company transfers, and so on.
In recent decades, EU initiatives have tried:
- To achieve high employment and strong social protection,
- To enhance living and working circumstances, and
- To safeguard social cohesiveness.
The EU’s goal is to promote social development and enhance the living and working circumstances for the European citizens. This can also be seen in the Preamble to the Treaty on the Functioning of the EU.
In terms of labour law, the EU supplements policy efforts launched by individual EU member nations by establishing minimum standards for:
- Working and employment circumstances.
- Educating and counselling employees.
Individual EU member states have the option of providing additional levels of protection if they so want. While the European Working Time Directive, for example, entitles workers to four weeks of yearly paid leave, several nations have chosen a more liberal right to the advantage of workers.
With more than 240 million workers in the European Union, EU labour law rights directly affect a huge number of individuals and have a beneficial influence on one of the most essential and concrete aspects of their everyday lives.
Employers and society as a whole benefit from EU labour legislation as well. EU labour law helps in:
- Establishing a clear framework of workplace rights and duties,
- Safeguarding worker health, and
- Fostering long-term economic prosperity.
Furthermore, EU labour law is inextricably linked to the single market. To ensure that nations and companies compete fairly on the basis of their products, not by reducing labour law standards, the free flow of commodities, services, capital, and employees is supported by labour law restrictions.
Legal background for labour mobility within the European Union
Article 45 of the Treaty on the Functioning of the European Union, 1957 (TFEU) enshrines the concept of free movement of labour. Until 1993, the treaty’s provisions on the free movement of labour only applied to economically active people (i.e., employed people and job seekers). The Maastricht Treaty, signed in 1993, breathed fresh life into the EU’s laws on the free movement of people, enshrining Article 20 i.e. the right of EU citizenship and giving all EU citizens and their family members the right (in principle) to travel and stay freely throughout the EU.
These rules must be considered in light of the general principle of non-discrimination based on nationality established in Article 18 of the TFEU and Article 21(2) of the European Union’s Charter of Fundamental Rights. Secondary legislation, through Directive (EC) No 2004/38 on the freedom of Union citizens and their family members to travel and reside freely throughout the territory of member states, established additional precise rules to regulate free movement. The Directive consolidated earlier laws that dealt with different groups of EU members in different ways.
Regulation (EU) No 492/2011 (replacing Regulation (EC) No 1612/68) establishes particular rights for employees and their family members in terms of free movement. As a result, all Union citizens and their family members enjoy the freedom to freely travel and stay throughout the member states’ territory. If they have adequate means and comprehensive sickness insurance coverage, inactive EU nationals have the right to stay in another member state for longer than three months. Another directive on measures to facilitate the exercise of rights bestowed on employees in the context of freedom of movement for workers attempts to ensure that the right to free movement is applied more effectively and uniformly and includes precise requirements for effective implementation. As a consequence of the Agreement establishing the European Economic Area (EEA) and the Agreement on the Free Movement of Persons (AFMP) with the Swiss Federation, free movement of persons also applies to nations that are members of the European Free Trade Association (EFTA).
Recent developments in the field of labour mobility within the European Union include:
- In Austria, the transitional provisions of the Act on the Employment of Foreign Nationals, which govern the Croatian employees’ access to the labour market, expired on June 30, 2020.
- Regulation (EU) 2020/1054 of the European Union of 15 July 2020 amended a regulation and established new minimum requirements for maximum daily and weekly driving times, minimum breaks, and daily and weekly rest periods as well as another regulation governing tachograph positioning.
Key findings of the annual report on Intra-EU Labour Mobility 2020
Based on the most recent available data (2019/2018), the annual report identifies trends in the free mobility of employees and their family members. This year’s edition also includes results on high-skilled worker mobility as well as mobility and demographic change.
The most recent events show that mobility in the EU grew in 2019, but at a slower rate than in prior years. In 2019, 17.9 million Europeans resided in another EU nation, 13 million of them were of working age. The number of working-age EU movers increased by 1.2 per cent in 2019, far less than the 3.4 per cent increase in 2018.
According to the research, two out of every three people who leave, return to their home country. Just under half of working-age EU movers (46%) lived in Germany and the United Kingdom, with the remaining 28 per cent residing in France, Italy, and Spain. Romania, Poland, Italy, Portugal, and Bulgaria remained the top five countries of origin for mobile employees in general, and active mobile workers in particular.
In 2019, the major sectors of activity for EU-movers were manufacturing and wholesale and retail trade, which employed 15% and 12% of EU movers, respectively and 16% and 13% of nationals. The proportion of high-skilled EU-28 movers has grown over time, in 2019, one in every three (34%) EU-28 migrants were highly-skilled, up from one in every four in 2008. According to the report, people are much more likely to relocate at the start of their careers, and the chance of relocation decreases with age.
According to the report, people aged 20 to 39 migrated more than other age groups in all major sending nations during the last decade. Seventy-five per cent of those who are very likely to relocate are under the age of 35.
High-skilled migrants typically work as professionals in fields such as business and administration, science and engineering or education. Overqualification, on the other hand, appears to be very common, with around one-third (34%) working in an occupation that demands a lower skill level than their qualifications (28 per cent in medium-skilled and 6 per cent in low-skilled jobs). Moreover, according to the research, high-skilled movers have a greater probability of reintegrating into labour markets when they return to their home countries than low-skilled movers. However, effective reintegration is dependent on a variety of circumstances, including social networks, the macro-economic situation and the sort of employment held overseas.
Impact of demographic change on intra-EU mobility
According to demographic estimates, all age groups under 60 will witness a drop in proportion to the overall population, while those above 60 will have a proportional increase. As stated earlier, people of working age are most likely to relocate at the start of their careers and the chance of relocation decreases with age. With the younger population in exporting nations also falling, mobility flows may be reduced. However, population ageing may have an impact on the economic situation in both sending and receiving countries. With the expansion of higher education, there will certainly be a struggle for the increased number of highly educated but declining young employees. If mobility continues at its current rate, it will contribute to a significant population decline in most Eastern European countries and Portugal, as well as a small decline in Italy and Spain, and will speed up population growth in several Western European countries, with a particularly strong effect in Germany and Austria. A sustained trend of shorter mobility spells, as seen over the last decade, may help to mitigate some of the adverse repercussions on sending nations.
Different forms of labour mobility
Long term labour mobility
Long-term labour mobility occurs when a person relocates to a nation, in which they are not a citizen, for at least one year in order to work or look for a job. Long-term mobility should be differentiated from the legal phrase “permanent residency,” which refers to the right to live continuously in a country after a period of at least five years.
Short term labour mobility
Since there is no European-level data source available, assessing short-term mobility, or people relocating to another nation for less than a year is extremely challenging. Short-term mobility is frequently conducted by cross-border employees or posted workers, according to the 2019 Annual Report on intra-EU labour mobility, which reaffirmed that short-term mobility is often performed by cross-border workers or posted workers (i.e. persons working in another country without changing the main residence).
Cross-border labour mobility
Cross-border mobility occurs when a person lives in one nation but works or is self-employed in another, and travels across borders on a frequent basis for this reason. It is to be noted here that this concept contains different meanings.
Posting of workers
It occurs when persons employed by an employer ordinarily conduct their business in one member state but post their employees to another member state to undertake work on his behalf for a limited length of time. It also includes posted self-employed persons, who are individuals who typically engage in a self-employed activity in one member state but relocate to another member state to engage in comparable activity.
Return mobility, or long-term movers returning to their nation of origin, is another type of labour mobility. Return mobility can only be approximated using data on nationals returning to their home country but cannot be termed in exact figures due to a lack of accurate numbers. In 2018, return mobility rose, with about 7,38,000 nationals returning to their home country. In 2018, return mobility was 65 per cent of the total number of citizens who left their country.
Economic convergence between the member states within the European Union
Intra-EU mobility is mostly driven by economic differences between member states. Macroeconomic dispersion manifests itself, among other things, in a broad range of salary differences for identical occupations, varied work prospects, income, and living circumstances.
Salary disparities between the origin and destination countries, as one element of economic convergence or divergence, are a significant, if not the fundamental cause of mobility among people who migrate for work-related reasons.
There have been concerns that the negative economic impacts of population ageing might jeopardize future development and convergence between the member states.
Impact of withdrawal of UK from the European Union on labour’s mobility
The freedom of movement of employees between the UK and the EU ended on December 31, 2020, which will have an impact on the structure and character of intra-EU labour mobility in the near future. Nonetheless, in accordance with the Withdrawal Agreement, the rights of current EU migrants working in the UK and existing UK employees in the EU’s 27 countries will be safeguarded. As of December 31, 2020, the ability of new EU migrants to migrate to the UK and vice versa will be determined by the respective migration rules of the UK and the member states.
However, mobility to the UK has slowly reduced since the 2016 referendum to leave the EU, despite the fact that free movement remains in force. Whatever the future migration regime entails, it is almost certain to expand regulation, increasing hurdles to both skilled and unskilled labour inflows and outflows. New EU movers in the UK will be subject to a new migration policy designed to level the playing field, according to the UK government. While new EU migrants are given the opportunity to enter the UK labour market under that regime if they meet certain English language and salary requirements, the removal of EU law protection will result in restrictions on family reunification as well as a general reduction in rights and entitlements. This will very certainly make the UK a less appealing destination for skilled EU migrants, who may prefer to relocate to other big destination nations.
Impact of the COVID-19 crisis on the labour’s mobility within the European Union
The COVID-19 situation has highlighted the significance of labour mobility for the economy and society. The COVID-19 crisis and the impact it has had on public economies and labour markets in Europe and abroad are likely to have a substantial impact on future mobility. In terms of economic and labour market harm, the European Commission’s Spring 2020 Economic Forecast highlights the considerable impact on both demand and supply, as well as the short and medium-term adverse effects of wide-ranging containment measures. Additional issues raised by the crisis include whether existing limitations on travel within Europe will be lifted if pre-crisis mobility trends will persist and whether EU migrants who have lost their jobs in another country would return home or stay abroad. In terms of direct effects, travel restrictions, both locally and internationally, the report predicts that the crisis will result in a significant drop in outflows in 2020, as well as a drop in inflows. The report predicted that there will certainly be sector-specific consequences as well. It mentioned an example of a recent study that emphasized the scarcity of healthcare personnel in several countries and recommended how to effectively facilitate their free movement during the crisis. If the crisis reveals serious shortages of healthcare personnel, member states may be compelled to increase recruitment from other EU member states, threatening shortages in their own countries.
The agricultural sector, which relies heavily on immigrant workers from other parts of the EU, also faced difficulties, prompting the European Commission to issue guidelines on the free movement of workers during the COVID-19 outbreak and guidelines on seasonal workers in the EU during the COVID-19 outbreak. In the long run, the economic difficulties encountered by many businesses, particularly, but not exclusively, hospitality and tourism – would almost certainly result in higher unemployment in several countries, increasing the tendency of individuals to migrate and seek work elsewhere in the EU. According to the report, this will be conditional, at least in part, on the recovery of key destination nations and the availability of adequate employment opportunities.
Regional and national variance is also expected, with nations that were either less badly hit or were able to escape large-scale industrial lockdowns, likely to have an easier time getting back to normal. Individual nations’ assistance programs, such as furlough plans, compensation for individuals forced to self-isolate and unable to commute to work and stimulus programs targeted at specific sectors of the economy, will all influence regional variance. Mobility patterns are also subject to alter throughout time. Workers in the EU and abroad have been urged to work remotely or from home throughout the pandemic and to avoid taking public transportation. This move is unlikely to be permanent, but it looks that some workers will continue to work from home, either because they like it or because firms are downscaling their office presence in cities as a cost-cutting strategy. If individuals can adjust to this remote working schedule and find it gratifying and if they can find a new job opportunity remotely, they may be less likely to relocate in the first place.
Intra-EU labour mobility economics
The economics of labour mobility is quite evident at the EU-28 level i.e including the United Kingdom; increased mobility for the purpose of employment improves the allocation of labour resources within the Union and boosts economic production and welfare as a result of more efficient resources utilization.
However, depending on the long-run dynamics of labour mobility, there may be advantages and disadvantages from mobility at the level of each member state and among sending and receiving countries, in particular, linked to the question of whether and when workers will return to their home country.
In the short run, high-unemployment sending nations should benefit from labour mobility. Labour mobility improves employment chances for individuals of such countries who do move to employment generating countries and this also relieves immediate demand on public resources by reducing pressure on retraining and educational facilities, as well as saving on unemployment compensation, healthcare and other social expenses. Most studies show that immigration has a minor but beneficial influence on recipient nations’ overall economic development and public budgets. The extent of this effect is determined by a variety of factors, including migrant workers’ pay income, family dependents and the welfare state’s general design.
Medium to long-term effects
Provided the long-term demographic outlook in most EU countries, as well as the significant element of “pay as you go old age” support, in which current workers pay a portion of public expenditure (pension, long-term care, etc.) related to the ageing population, a long-term loss of working-age population which will almost certainly be deleterious to sending countries. The bigger this effect is, the better trained the mobile population is. The central concern for receiving nations is whether migrants will have similar career paths and labour market engagement as locals in the long run, and how their use of public services and means tested benefits compares to that of locals. Due to a lack of physical and intangible human capital most notably, language skills, mobile employees may initially command lower salaries than natives. However, numerous other variables may also play a role.
Brain train, brain drain or brain waste
High-skilled people with a tertiary degree have dominated recent south-to-north migration patterns. However, when compared to the population, the absolute numbers are tiny. As a result, talking about a general brain drain is challenging, especially given the high rate of unemployment among recent graduates. Furthermore, if the majority of southern EU migrants subsequently return to their home countries with new skills and knowledge, the phrase “brain drain” is a more appropriate one, particularly if the alternative was unemployment in their home country. Due to the extreme magnitude of east-west movement, brain drain is a greater concern. Remittances can assist certain nations to mitigate the loss of human capital. If migrants do not use their talents in the destination country – so-called brain waste – the benefit of “brain circulation” will be diminished.
EURES jobseeker mobility network
Labour mobility can play a significant role in the current scenario of high unemployment and wide disparities between EU member states. Today, substantial unemployment in other regions of the EU coexists with significant numbers of unfilled jobs in high-growth sectors. While responding to the demands of the labour market where there is a strong level of labour demand, labour mobility might ease the strain on employment in nations impacted by the recession.
Labour mobility, particularly intra-EU labour mobility, may be a strong adjustment tool for addressing imbalances, restoring dynamism, decreasing frictions and reducing societal suffering. Mobility can also aid in the launch of recruiting campaigns and meet the demands of a variety of companies by supplying them with the qualified workforce they require. Workers, for their part, might benefit from a smooth transition into work.
Therefore, here the EURES (European jobseeker mobility network) comes into play. It is a collaboration between the European Commission and public employment services in the European Economic Area (EEA) member states (EU member states plus Norway, Iceland, and Liechtenstein) as well as additional partners. Switzerland is also a member of the EURES initiative.
The EURES network, which was established in 1993, is in charge of exchanging information and facilitating collaboration among its stakeholders in order to assist in the realization of the free movement of employees. EURES encourages worker mobility and lowers obstacles to mobility by contributing to the establishment of an open and accessible European labour market for all, guaranteeing the sharing of job vacancies and applications and maintaining transparency in labour market information.
Objectives of EURES
EURES’ operational objectives are to notify, guide, and advise presumably mobile workers about job opportunities and the living and working conditions in the European Economic Area, to assist employers seeking to hire workers from other countries and also to provide advice and guidance to workers and employers in cross-border regions.
EURES provides placement and recruitment help, as well as information, advice, and guidance. This might include databases on employment opportunities, job search, living and working circumstances and individualized services. The latter is supplied in particular by 850 EURES advisers who have undergone specialized training and provide information and assistance to job searchers, job changers, and employers on all concerns related to the free movement of labour. In conformity with EU law, these services are offered without charge to all those who benefit from freedom of movement as per the EU law.
The labour mobility law within the European Union has its own advantages and disadvantages depending on the country and also the nature of the country i.e. whether it is a sending country or a receiving country. The EURES network strives to smoothen the employee movement within the Union. The withdrawal of the United Kingdom from the EU along with the crisis created by the coronavirus pandemic will have diverse long term effects on the labour mobility within the EU when compared to the pre-coronavirus trends of labour mobility within the European Union. Thus, all these effects could not be predicted now but these will surely be tested over time.
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